Sangbeom Lee & Jeongin Yook
Handong Global University, Pohang, Republic of Korea
Abstract
The COVID-19 pandemic poses risks for Korea due to its export dependence and involvement in the global value chain (GVC), as it deepens the vulnerabilities of the global supply chain (GSC) and the GVC crises. Therefore, Korea should respond through supply chain diversification and near-shoring to address the GVC reorganization trend. The Mekong economies are suitable cooperative partners as emerging markets, global production bases, and geographical neighbors. Given the Korea’s ODA-based cooperation project, there is complementarity between Korea’s GVC expansion and Mekong economic development.
This study analyzed panel data from 1995 to 2018 in the five Mekong countries to examine the relationship between Mekong economic ODA, GVC expansion, and CO2 emissions using the environmental Kuznets curve (EKC) model. The results showed a significant positive correlation between ODA and GVC, and an inverse U-curve relationship between GVC and CO2 emissions, conforming to the EKC pattern. Simulations indicated that Thailand reduced CO2 emissions above the GVC threshold, while the remaining four countries had increased emissions below the threshold. Expanding GVC through ODA in the Korea-Mekong cooperative relationship is necessary while addressing potential environmental issues from increased CO2 emissions.
The ASEAN Smart City Network (ASCN), part of the Korea-Mekong cooperation project, can promote economic growth in the water resources sector. ASCN in the water resource sector creates a favorable environment for economic growth, addressing climate change, reducing CO2 emissions, and expanding GVC and diversification. This establishes a long-term reciprocal relationship between Korea and Mekong. Based on this, a K-Smart City strategy for the Mekong economic zone was presented, including the establishment of basic and advanced water infrastructure models. Support projects such as K-drain, sewage treatment technology, K-smart water management, and K-smart energy technology were proposed for each model. Korea-Mekong cooperation through ASCN can contribute to global development by aligning with the Sustainable Development Goals (SDGs) and the ASEAN Sustainable Urbanization Strategy (ASUS).
Keywords: GSC, ODA, CO2, EKC, ASCN-water resource, K-smart city, UN SDGs