"South Korea, Not a Resource-Poor Country but a Resource-Less Nation... Need for a Supply Chain Response Control Tower"

Interview with Josanghyun, Head of Global Supply Chain Analysis Center

[Asia Economy Reporter Park Sun-mi] "The term 'resource-poor country (貧國)' is even too generous. South Korea should be considered as having no resources. It relies on overseas imports for almost all raw materials needed to produce its main export items, exposing it to a higher supply chain risk than any other exporting country."

Cho Sang-hyun, head of the Global Supply Chain Analysis Center, the only domestic supply chain analysis specialized institution, stated this in an interview with Asia Economy on the 15th, diagnosing that "South Korea's awareness and response to the supply chain risks it faces have been a step behind compared to the degree of risk."

In fact, the Ministry of Trade, Industry and Energy only began pushing for the establishment of a dedicated supply chain analysis center after experiencing Japan's export restrictions in 2019, the COVID-19 pandemic in 2020, and last year's shortage of urea solution. The result was the launch of the Global Supply Chain Analysis Center on the 9th of last month. The Ministry, in cooperation with related organizations such as the Korea International Trade Association and KOTRA, formed the country's first specialized supply chain analysis institution composed of trade experts.

Cho said, "The Supply Chain Analysis Center is still in its early stages, and for more efficient operation, a higher-level national control tower is necessary," adding, "Once the new government transition committee is formed, we plan to make related recommendations together with relevant organizations and companies."

As the center was launched, Russia's invasion of Ukraine occurred, and Cho has been focused on inspecting related supply chains. He emphasized, "To carry out the center's core tasks of country-specific, industry-specific, and item-specific supply chain analysis and support for early warning system operation, it is important to establish practical networks with government ministries, industry associations, and private companies." He added, "Especially since supply chain-related information often requires confidentiality, close coordination and consultation between institutions are also necessary."

He likened the center's role to that of the Korea Meteorological Administration. Collecting and conducting in-depth analysis of industrial supply chain information, quickly disseminating alerts upon detecting anomalies, and recommending response measures are analogous functions. Cho evaluated, "However, supply chain analysis is complex and challenging because it must reflect not only simple supply and demand flows but also changes in national industrial policies, recent events such as the Russia-Ukraine conflict, and regional unexpected variables like lockdown measures in Shenzhen due to COVID-19."

He also suggested that for South Korea, which depends on imports for almost all raw materials needed for its main export products, securing key raw materials such as rare metals is essential for mid- to long-term supply chain stabilization. He recommended that the next government take a more proactive approach to overseas resource development.

This is because the possibility of supply instability has increased due to resource weaponization movements centered on major resource countries, such as China's control over rare earth production and nationalization of production companies, and Bolivia and Chile's nationalization of natural resources like lithium and copper. In particular, domestic overseas resource development has been rapidly declining since 2014 due to worsening profitability of resource projects, restructuring of resource public enterprises, and suspension of new investments, necessitating a response.

He emphasized, "For supply chain stabilization, it is necessary to secure resource supply sources through overseas resource development and also to establish a system that can recycle waste resources."

This content was produced with the assistance of AI translation services.