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241. Diplomacy in the Foreground. The New EU Migration Policy Framework

Author:
Jolanta Szymańska
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs (PISM)
Abstract:
The migration, asylum and visa strategies, presented at the end of January this year by the European Commission, set the framework for EU migration policy for the coming years. According to both documents' assumptions, migration diplomacy is intended to support the Union's security and global competitiveness priorities. The planned reforms aim to eliminate abuses of the asylum and visa system and to attract skilled workers and investment to the EU. The implementation of the strategy will be challenged by both instability in Europe's neighbourhood and the persistent reluctance of member states to accept migrants.
Topic:
Diplomacy, European Union, Asylum, Visa, and Migration Policy
Political Geography:
Europe

242. The war in Iran: a test of the Gulf states' economic resilience

Author:
Julia Sochacka
Publication Date:
03-2026
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs (PISM)
Abstract:
Forecasts of the long-term economic consequences of the war in Iran for the Gulf states are unequivocally negative. The scale of the losses depends on whether the strategies for building economic resilience implemented by these countries can withstand the shock caused by regional destabilisation. Faced with Iran taking control of the Strait of Hormuz, the EU’s top priority in the short term will be to ensure energy security, and in the long term to diversify its economic partnerships.
Topic:
Security, Economics, European Union, Resilience, Energy, and Regional Stability
Political Geography:
Iran, Middle East, and Gulf Nations

243. Israel's Recognition of Somaliland Heightens Tensions in the Horn of Africa

Author:
Jędrzej Czerep
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs (PISM)
Abstract:
Israel’s formal recognition of Somaliland as an independent state on 26 December last year triggered a series of dangerous processes in the Horn of Africa. These could lead to an escalation of armed conflicts within Somaliland’s declared borders and in its immediate vicinity. The EU should be guided in this matter by the criteria of legality and stability in the wider Horn of Africa.
Topic:
European Union, Borders, Armed Conflict, and Recognition
Political Geography:
Africa, Middle East, Israel, Palestine, and Somaliland

244. Global development policy and the New World Disorder: the Trump Administration's delivery of a high-voltage shockwave to multilateral norms, institutional commitments and long-standing principles

Author:
Stephan Klingebiel and Andy Sumner
Publication Date:
01-2026
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Global development policy is a particularly revealing field in which the Trump administration combines crude transactionalism with a high level of ideological commitment, namely an authoritarian libertarianism oriented toward elite interests. This is coupled with, at times, a chaotic absence of tactical or strategic coherence. With Trump's return to the White House in January 2025, a significant phase in international affairs, including global development policy, began. This policy brief traces the evolution of the US approach to development cooperation and exposes how Trump's approach represents an overtly aggressive assault, delivering a high voltage shockwave to global sustainable development policy, undermining multilateral norms, institutional commitments and long-standing principles of international solidarity. The United States (US) has played a decisive role in the conception and evolution of global development policy since the mid-20th century. From the establishment of the post-Second World War order onward, the US shaped the normative, political and organizational foundations of development cooperation, often setting agendas, defining standards, and providing leadership and personnel for key multilateral institutions. Early reconstruction efforts such as the Marshall Plan and the establishment of the World Bank embedded development within a broader framework of power politics, positioning aid as both a tool of reconstruction and geopolitical influence. Since January 2025, US development cooperation has undergone a dramatic rupture. The administration rapidly withdrew from multilateral institutions, cut budgets, and de facto dissolved USAID, transferring residual functions to the State Department. This shift was accompanied by conspiracy narratives and an explicit rejection of multilateral norms, marking a sharp departure from previous Republican and Democratic approaches alike. The brief conceptualises this shift as the emergence of a “New Washington Dissensus”: a model of transactional, nationalist development cooperation that treats aid as an instrument of power rather than a global public good. Under this paradigm, development engagement is ideologically conditional, hostile to climate and equity agendas, oriented toward migration control, and explicitly transactional. The Trump administration's National Security Strategy (December 2025) is consistent with this in the sense that it frames an “America First” approach that narrows US priorities to “core, vital national interests” and places strong emphasis on Western Hemisphere pre-eminence via a stated “Trump Corollary” to the Monroe Doctrine. For global development, foreign assistance and development finance are thus instruments of strategic competition and commercial diplomacy. US agencies are mobilized to back US commercial positioning. The consequences are dramatic and systemic. The US retreat has destabilized the global development architecture and intensified geopolitical fragmentation. For many countries in the Global South, this represents a watershed moment, creating both new room for maneuver and new dependencies as states pursue multi-alignment strategies amid intensifying great-power rivalry. At the same time, humanitarian impacts are severe. Overall, the brief concludes that development policy has entered a new phase, which is narrower, more instrumental and overtly geopolitical,and is reshaping not only US engagement but the future of global development policy itself.
Topic:
Development, Multilateralism, Institutions, Norms, and Donald Trump
Political Geography:
Global Focus and United States of America

245. Making global benefits pay: the World Bank reform to support global public goods

Author:
Jakob Schwab
Publication Date:
01-2026
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Global public goods (GPGs) are goods that are produced locally but have global effects. GPGs are essential for securing global development. The climate and biodiversity crises, pandemics, as well as fragility, conflict and violence are threatening livelihoods and well-being around the world, and addressing them would have enormous positive economic and social effects. However, the cross-border externalities involved are not being fully taken into account by countries, and hence these GPGs are still underprovided compared with what would be globally optimal. One year ago, the World Bank launched the Framework for Financial Incentives (FFI) to strengthen the support of GPGs in its operations. This novel instrument encourages countries to implement investment projects and policies that have positive spillovers to other countries by offering targeted financial incentives. As a core element of the World Bank's Evolution reform, the FFI reflects the recognition that relatively modest investments in client countries can generate substantial global benefits – for other developing and emerging economies as well as for the Bank's shareholder countries. Its challenges lie in incorporating the non-financial aspects of GPGs and the multi-faceted motivations to provide them in bankable operations. This policy brief discusses the relevance of GPGs for development and presents the World Bank's approach to supporting their provision in client countries through the FFI. The key takeaways are: • GPGs are not all those that are commonly shared or agreed upon as goals but are defined by the specific problem structure that the involved cross-border externalities entail. • Investment in GPGs can generate substantial benefits – not only for developing and emerging economies, but also for high-income countries that make up the World Bank's largest shareholders. Consequently, both out of enlightened self-interest and as a cost-effective way to advance global sustainable development at a time when international development budgets are undergoing significant reductions, shareholder countries should increase their contributions to the FFI. This applies in particular to those provided to the Livable Planet Fund, which provides the essential grant financing for countries' GPG-related projects. • To retain and strengthen confidence among stakeholders, the FFI must deploy its resources efficiently. This implies offering grants only when projects' overall domestic benefits are insufficient to motivate countries to provide GPGs on their own, and extending loans instead when client countries have sufficient self-interest to ensure repayment. The assessment of costs and benefits is complex, but it should improve with experience and become increasingly standardized. To signal its effectiveness, the FFI should pursue full transparency in its allocation decisions and undertake systematic impact assessments.
Topic:
Development, World Bank, Reform, and Public Goods
Political Geography:
Global Focus

246. Beyond the wage channel: climate-smart public works programs and household resilience in Malawi

Author:
Tekalign Gutu Sakketa, Francesco Burchi, Sophia Schubert, and Donald Makoka
Publication Date:
01-2026
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
One of the main arguments for implementing public works programs (PWPs) instead of other social protection schemes such as cash transfers is that the assets created through these programs themselves can generate medium- to long-term benefits. This is particularly important as the costs for supervision and the construction materials can account for up to 70 per cent of program budgets. Despite this, there is scarce empirical evidence on PWPs' effects through the “asset channel”: indeed; most studies have focused solely on the traditional “wage channel”. To bridge this gap, this paper examines whether and how assets created under Malawi's Climate-Smart Enhanced Public Works Program (CS-EPWP) – a program recently implemented by the government of Malawi and funded by the World Bank – strengthen the resilience of households to climate shocks such as droughts and floods. The paper relies on case study analysis using primary qualitative data based on focus group discussions and key informant interviews with different stakeholders at the national, district and community levels. Interviews were conducted during fieldwork in September 2024 in two southern districts of Malawi highly affected by climate change. The analysis is complemented by site visits and quantitative survey data on asset quality. By combining these methods, we find that the CS-EPWP generates durable, community-maintained assets, which in turn enhance households' capacity to cope with and adapt to climate shocks. In particular, land-based assets provide multiple benefits for both households and communities, while forest-based interventions are expected to generate similar long-term gains, although further research is needed to confirm their (long-term) impacts. To maximize the impact of climate-smart public works programs, policymakers and donors should align asset creation with climate objectives and adopt participatory approaches to ensure their relevance, maintenance and long-term sustainability.
Topic:
Climate Change, Development, Resilience, and Public Works
Political Geography:
Africa and Malawi

247. What do the 2015 SDG negotiations teach us for a beyond-2030 framework?

Author:
Paula von Haaren and Axel Berger
Publication Date:
01-2026
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The 2030 Agenda for Sustainable Development – ​​the global framework establishing 17 universal and interconnected goals to guide sustainable development efforts – was adopted in 2015 following a uniquely participative and ambitious process. A decade on, it is increasingly evident that most of the Sustainable Development Goals (SDGs) are unlikely to be achieved by 2030 as originally envisioned. Discussions about a follow-up framework beyond 2030 are gaining momentum ahead of the SDG Summit in September 2027. This paper evaluates the process design, inclusiveness, negotiating strategies, fora and fault lines in 2015 and discusses to what extent the lessons learned can be applied to negotiations for a potential follow-up framework. We find that several process design elements and negotiation strategies, as well as actor composition, fostered trust and ownership, reduced polarization and enabled agreements on ambitious targets. In particular, the process benefited from the inclusion of diverse, non-hierarchical actor communities, a long, science-based stocktaking phase, the breaking up of traditional negotiating blocks, transparency, and emphasis on common interests. We also identify several recurring fault lines that are overwhelmingly still relevant today. Apart from the above best practices of the process leading to the adoption of the SDGs in 2015, we identify several shortcomings that should be addressed in the beyond-2030 negotiations: inefficiencies due to competing tracks for the development of the goals; top-down agenda-setting processes leading to less ambitious outcomes; barriers to participation of and accountability towards some marginalized and informal actors; and the watering down of goals and indicators – including non-tangible targets and unresolved inconsistencies and trade-offs within the agenda. Finally, the paper argues that the beyond-2030 negotiations will take place in a context that is similar to the process that led to the SDGs but is nevertheless in many ways more challenging than in 2015, amidst intensifying crises, political shifts and loss of trust.
Topic:
Development and Sustainable Development Goals
Political Geography:
Global Focus

248. Geopolitics and development in Central Asia: exploring opportunities for middle powers

Author:
Hyeyoung Woo
Publication Date:
01-2026
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Central Asia has emerged as a key region where the convergence of geopolitics and development cooperation is most visible. Major powers are redefining their approaches: Japan combines official development assistance (ODA) with commercial partnerships to advance connectivity and reform; the EU is emphasizing a sustainable infrastructure and governance-oriented approach; the US is expected to catalyze private investment rather than direct aid; China deepens its regional presence through the Belt and Road Initiative; while Russia leverages historical and security ties to maintain influence. Meanwhile, middle powers – countries that do not wield vast influence like major powers but possess substantial capacity to shape international events – are exploring new opportunities for engagement. Türkiye positions itself as a bridge between advanced economies and the Global South, emphasizing connectivity and energy cooperation through the Middle Corridor and the Organization of Turkic States. South Korea's 2025 ODA Strategy for Central Asia identifies the region as a strategic partner for shared growth, integrating pragmatic diplomacy with value-based cooperation. By leveraging their soft power and policy experience, these middle powers offer a distinctive model for development partnership. Central Asian governments are responding to a changing international environment by diversifying partnerships through regional integration and more strategic engagement with development partners.
Topic:
Development, Governance, European Union, Geopolitics, Economic Growth, Strategic Partnerships, Middle Powers, and Private Investment
Political Geography:
Central Asia

249. The decline of French agriculture in Europe

Author:
Bernard Bourget
Publication Date:
02-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The farmers' protests of the winter 2025-2026 are an amplified replica of those of two years ago, mainly in France, due in particular to competition between, on the one hand, the FNSEA[1] (Fédération nationale des syndicats d’exploitants agricoles) and the Young Farmers, and on the other hand, the very aggressive Coordination Rurale and the Confédération Paysanne. These protests focused on two issues: - The management of the contagious nodular dermatitis (CND) crisis, more specifically the opposition to the slaughter of all infected herds, even though this radical method has proven effective in Savoie and Haute-Savoie, where it has eradicated the disease. - The free trade agreement between the European Union and the four MERCOSUR countries (Brazil, Argentina, Uruguay, and Paraguay), which is currently awaiting approval. It is also the expression of a deep unease among French farmers, who have faced a series of difficulties in recent years that have not been experienced with the same intensity by their counterparts in other Member States. The causes of these difficulties therefore need to be analyzed. In Jean-Luc Demarty’s opinion[2], the main cause is the loss of competitiveness of French agriculture on the European market, which is reflected in an increase in agricultural income in France of only 17% between 2010 and 2024, well below the European average (77%) and that of Spain (79%), Poland (86%) or Italy (170%). The reasons why the agri-food trade balance of France has collapsed must also be examined. It was only positive of 200 Million euros in 2025. In recent years, French agriculture has had to grapple with health, climate and economic crises. The health crises have affected cattle (epizootic haemorrhagic disease and contagious nodular dermatosis), sheep (bluetongue) and poultry farms (avian influenza), while pig farms are still threatened by African swine fever. Climate change is having a severe impact on French agriculture, with successive droughts, floods and spring frosts. While health and climate crises also affect agriculture in other Member States, it is in the area of foreign trade that French agriculture is clearly hardest hit, particularly by moves by China and the United States to target wines and spirits, the leading export item for the French agri-food industry. The cereal sector, which is the second largest agri-food export item, is suffering from competition from the Black Sea countries and, above all, from Russia's offensive for wheat on African markets. The Algerian market was thus lost in 2025 in the context of that country's dispute with France, while the price of wheat is currently below $200 per tonne, (below the average production cost for French farmers), and the European Commission wants to tax imports of nitrogen fertilisers from Russia and Belarus as part of the carbon border adjustment mechanism.
Topic:
Agriculture, Climate Change, European Union, Protests, Free Trade, and Health Crisis
Political Geography:
Europe and France

250. Hybrid threats: from geopolitics to internal security

Author:
Jean Mafart
Publication Date:
01-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Although the concept of hybrid threats is now widely accepted despite its rather vague nature, there remains a blind spot in European discussions and strategic thinking: the phenomenon is still rarely addressed from the perspective of internal security policy. It has long been recognised that hybrid threats – whether cyberattacks, arson, disinformation, interference in electoral processes or the exploitation of migration flows – can strike within our borders. The European Union acknowledged this: the Justice and Home Affairs (JHA) committees regularly address the issue and the Commission gives it considerable attention in its internal security strategy of April 2025. In fact, it is mainly on the basis of hybrid threats that the document justifies the proposal to double the staff of Europol. However, the emergence of these threats in the internal security policies of the EU and its Member States raises important questions, both in terms of principles and operations, most of which remain unanswered. It is instructive to browse through the wealth of analytical and policy papers available on hybrid threats: the geopolitical dimension of the phenomenon still predominates, and while authors sometimes address the resilience of European states and societies, there is almost nothing to be found on how to respond to these threats in the context of internal security policy or on the necessary adaptation of the instruments of this policy. In other words, it is as if the concept of hybrid threats, which originally concerned defence and foreign policy circles, had forcefully found its way into European internal security policy and had not yet been fully assimilated into the internal sphere. If we add to this the fact that European internal security policy itself remains little known despite the considerable proportions it has taken on in recent decades, the current state of strategic thinking is not conducive to the consolidation of a strategy to deal with hybrid threats in their internal dimension. However, a strategy of this kind would be very useful, following the example of what has long existed within NATO and the Common Security and Defence Policy (CSDP) for the external dimension: does the issue of hybrid threats, now referred to in every context but without a coherent approach, risk leading European internal security policy astray, diverting it from its primary purpose ? and how can the competences of the Union, its Member States and other actors be harmoniously combined when hybrid threats blur the line between internal and external security, or even between national security – which is in principle the remit of the Member States – and the competences of the Union?
Topic:
Security, NATO, European Union, Geopolitics, and Hybrid Threats
Political Geography:
Europe

251. The European strategic approach to technological security: the challenges posed by China

Author:
Earl Wang
Publication Date:
01-2026
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
[1] Not only the US, but the EU and its Member States are also facing Chinese restrictions on foreign critical tech infrastructure. European telecom companies such as Nokia and Ericsson witness a drop by two-thirds in their market shares in China as compared to 2020. On the other way around, Chinese ‘high-risk suppliers’ of telecom networks such as Huawei and ZTE only encountered a 5-10% decline in Europe since EU institution and countries adopted the 5G cybersecurity toolbox in 2020. When it comes to European security in the cyber realm, we can also observe direct Chinese threats. Recent public cases of cyberattacks against France and the Czech Republic reminded us – again – of cybersecurity challenges from China which was also underlined by the North Atlantic Treaty Organization. Among other topics, critical technologies, cyber and digital infrastructure top the EU’s list of tech security preoccupation with regard to China. This paper provides an analysis of the strategic formulation of EU institutions and European countries on tech security vis-à-vis China from 2013 to 2022. Cases of countries covered in the paper include France, Germany, Greece, the Netherlands, Czech Republic, and the United Kingdom. The paper is structured as follows. The first part studies the gradual awareness of security implications of Chinese investment in European critical technologies following China’s Made In China 2025 policy. In the second part, the paper examines the security threats posed by Chinese companies’ engagement in European digital infrastructure and the coordinated approach of the EU to secure 5G networks. The third part introduces the EU framework for investment screening as a new tool to address security concerns deriving from foreign investment in and acquisition of critical technologies and digital infrastructure. In the fourth part, the paper investigates European cybersecurity agencies and how cybersecurity has become a fast-growing concern of the EU and European countries in its relations with China. This paper showcases that the European Union and its Member States have incorporated the increasing link between security and technology in their strategic formulation of policy on China. More importantly, the effectiveness of the EU’s strategy in tech security highly relies on the coordination and cooperation among Member States and between the EU and national levels.
Topic:
Security, Science and Technology, European Union, and Cybersecurity
Political Geography:
China and Europe

252. From a set of values to a normative framework: the European Union, world champion of women's rights

Author:
Helen Levy and Juliette Bachschmidt
Publication Date:
03-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
In 2026, Europe is set to become an even stronger bastion for women's rights. A pioneer on the world stage, the European Union is translating its values into a set of guarantees to ensure the best possible situation for women. Behind certain regulations lies a political project with a new ambition: to transform the ethical values that form the very foundations of the European project into a tangible reality. In this area, European standards, which are always the result of discussions and compromises between the co-legislators – the Parliament and the Council – are proving to be a driving force for progress where decades of recommendations and good intentions have failed. The world order is being disrupted by Donald Trump's return to the White House and the rise to power of leaders who are far from committed to the cause of women and who are challenging the progress made over the last century in terms of gender equality. Against this backdrop, the European Union is seeking to uphold its core values by charting a new course based on its normative power. And so, in 2026, gender equality in Europe is set to take on a new dimension, no longer just an ideal to which everyone should aspire, but a legal obligation backed by performance requirements and, failing that, sanctions. Although imperfect, the European Union remains a bastion for women's rights. As we approach the celebration of Women's Rights Day on 8 March, the European Union can take pride in some of the steps forward it has made on behalf of women, particularly in the areas of economic empowerment, political participation and leadership, health and well-being, education and skills development.
Topic:
European Union, Women, Ethics, and Gender Equality
Political Geography:
Europe

253. EU-India Renewed Strategic Partnership and Its Significance in the Shifting Global Landscape

Author:
Karine de Vergeron
Publication Date:
04-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The current mandate of President Trump is radically altering the close and longstanding ties that had been forged between India and the United States over the past years as America is now moving towards a more isolationist policy. It is striking to note that the US National Defence Strategy, released last January, puts the protection of the U.S. homeland and its Western Hemisphere before confronting adversaries such as Beijing or Moscow. India is not even mentioned. This new American geostrategic priority represents a major change from former US Democrat and Republican administrations, including President Donald Trump’s first term, which had made the deterrence of China and thus, close cooperation with India, a core component of U.S. efforts. In this context of geopolitical volatility and fragmentation, the new rapprochement between India and the EU is crucially deemed to strengthen stability within the international system.
Topic:
Bilateral Relations, European Union, Geopolitics, Donald Trump, and Strategic Partnerships
Political Geography:
Europe and India

254. Hungary as a Trailblazer: the Rise of Illiberal Democracy and its Discontents

Author:
Péter Magyar
Publication Date:
03-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
In the fast-changing political landscape of Europe, Hungary has set a controversial example of a new style of governance[1]. Viktor Orbán’s Hungary is often seen as the pioneer of illiberal democracy, rejecting liberal democratic norms in favour of centralizing power, manipulating narratives, and eroding the checks and balances of the state. Orbán’s rise and methods have had a profound impact on the political trajectories of other European nations, influencing populist leaders from Poland to Serbia, but also from France to the Netherlands. Yet, Hungary’s transformation and its broader implications for the future of European politics remain largely misunderstood by many in the West.
Topic:
Governance, Populism, Illiberal Democracy, Viktor Orbán, and Regional Politics
Political Geography:
Europe and Hungary

255. Skilled immigration and the competitiveness of the European Union: attractiveness and policy options

Author:
Olena Oliinyk
Publication Date:
02-2026
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Migration today remains one of the most complex and politically sensitive issues on the European agenda. It encompasses a wide range of processes: from irregular migrants and forced displacement caused by wars and climate crises to the mobility of students, entrepreneurs, and skilled professionals. This multidimensional nature explains why regulating migration flows within the European Union remains an exceptionally complex task that requires balancing humanitarian obligations, the controls of external borders and migratory flows, as well as labour market needs.
Topic:
Immigration, European Union, Labor Market, Migration Policy, and Skilled Migration
Political Geography:
Europe

256. Labor Market Imbalances and Immigration Policies

Author:
Young-ook Jang
Publication Date:
01-2026
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Korea now faces rapid demographic decline due to ultra‑low fertility and accelerated aging. According to Statistics Korea, the population peaked at 51.75 million in 2024 and is projected to fall below 40 million by 2065. This demographic contraction is expected to intensify labor market imbalances. Several studies project widening labor shortages over the next 5–10 years. The Korea Employment Information Service (2025) suggests that the labor force will decline from 2030 and approximately 820,000 more workers will be needed to fill the labor demand by 2033. The Korea Labor Institute (2024, 2025) also estimated that a shortage of 2.98 million workers (2024–2028) will expand to 6.18 million (2025–2033). The degree of labor shortages varies by sectors and regions. ICT services, healthcare and welfare, logistics, hospitality, and agriculture are the sectors that are exposed to the highest risk of labor shortages. Some provinces are already experiencing difficulties in hiring qualified workers due to declining population. Apart from the demographic change, labor market imbalance is intensified by structural changes due to geopolitical and technological factors. Geopolitical factors—including strategic competition between the United States and China, the COVID-19 pandemic, and the Russia–Ukraine war—have heightened global supply chain instability, prompting major economies to strengthen domestic and regional competitiveness in key advanced industries such as artificial intelligence, biotechnology, semiconductors, and secondary batteries. This, combined with the decline in the economically active population across advanced economies, has exacerbated labor shortages in strategic high-tech sectors. In response, major countries are actively implementing policies to attract highly skilled foreign talent, which puts pressure on the supply of talent in Korea. Labor shortages increase production costs, reduce corporate profitability, heighten inflationary pressures, and undermine potential economic growth. Attracting more foreign labor in both skilled and unskilled occupations is increasingly being considered as a potential response to labor market imbalances, particularly labor shortages. However, several challenges remain to be addressed. These include intensifying competition among advanced economies to attract talent, conflict between free-market principles and existing (often rigid) visa regimes, and the wide-ranging economic, social, cultural, and political consequences of immigration. Resolving labor market imbalances is essential to sustaining long-term growth potential. Although foreign workers cannot fully offset aggregate labor shortages, they may be able to alleviate supply constraints in specific industries and skill categories. Promotion of labor mobility can be a plausible option as long as it is accompanied by policy measures to minimize associated side effects. Jang et al. (2025) conducted two empirical analyses to estimate the effect of immigration on the labor market imbalances. First, the study examines the impact of the free labor movement in the EU on labor market imbalances. The EU is an early adopter of immigration and a supranational entity operating one of the most advanced and proactive immigration regimes. In particular, examining the effects of the EU’s flexible and inclusive immigration policies can provide meaningful policy implications for Korea. Second, the report analyzes Korea’s Employment Permit System (EPS) to assess the extent to which domestic policy measures have contributed to alleviating labor shortages. Noting the expansion of the EPS—a low-skilled labor inflow mechanism—during the post–COVID-19 recovery phase, the study quantitatively evaluates how effectively this policy has mitigated labor shortages across regions. This brief will summarize the key methods and results of those analyses and derive policy implications from them.
Topic:
Demographics, Immigration, Economy, and Labor Market
Political Geography:
Asia and South Korea

257. Outward FDI and Hollowing-out: Towards the Strategic Reallocation of Korean Industries

Author:
Nam Seok Kim
Publication Date:
02-2026
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Following a prolonged period of negotiations under the “reciprocal tariff” regime, Korea, similar to other major exporters like the European Union and Japan, secured reduced tariff rates conditional upon committing to large-scale local investments in the United States. The U.S. administration has consistently placed the reconstruction of American manufacturing and domestic job creation at the top of its policy agenda. This commitment is so steadfast that Washington recently hinted at the possibility of re-imposing higher tariffs, citing Korea’s lukewarm implementation of the agreed-upon investment pledges. Crucially, this surge in investment is not merely a political concession but reflects a fundamental restructuring of global value chains. As geopolitical uncertainties intensify, Korean firms are pivoting from a traditional strategy of cost minimization to one of risk minimization. By establishing production bases directly within the United States, these companies aim to insulate themselves from future trade barriers and secure stable access to their most critical market, effectively decoupling their supply chains from geopolitical flashpoints. The scale of capital Korea has pledged to invest locally in the U.S. is staggering, potentially large enough to induce fundamental shifts in the valuation of the Korean won. The bilateral agreement encompasses a monumental package: USD 200 billion in direct cash investments and USD 150 billion in shipbuilding cooperation. These plans are rapidly materializing, evidenced by the U.S. government’s recent release of “America’s Maritime Action Plan,” which explicitly designates Korea as a key partner in rebuilding U.S. naval and commercial maritime capabilities. Beyond the maritime sector, this investment wave spans across Korea’s core strategic industries, including semiconductors, electric vehicle batteries, and advanced electronics. Major Korean conglomerates are rapidly breaking ground on large-scale manufacturing facilities across key U.S. states. This broad-based migration of manufacturing capacity signifies a deep integration of Korea’s industrial ecosystem with the U.S. supply chain, moving far beyond simple assembly operations to include high-value-added production processes. It is unprecedented for Korea to execute outward FDI (OFDI) of this magnitude based on a bilateral government agreement. Consequently, this unparalleled volume of capital outflow has sparked intense debate and varied projections among economists regarding its potential impact on the domestic economy.
Topic:
Foreign Direct Investment, Tariffs, Exports, Industry, and Semiconductors
Political Geography:
Asia, South Korea, and United States of America

258. Korea’s Critical Minerals Agreements: From MOUs, To Three Strategic Pillars

Author:
Wonseok Choi
Publication Date:
02-2026
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Korea’s push for critical minerals security is anchored in a broader economic security agenda that treats upstream inputs as strategic dependencies for high-tech industries (notably semiconductors and secondary batteries). In 2023, the government introduced a national strategy to secure a reliable supply of critical minerals with an explicit target of reducing Korea’s heavy reliance on imports from a small set of supplier countries—from around 80% to 50% by 2030. This strategy operationalizes “critical minerals” through a two-tier classification: 33 critical minerals selected for economic security management, and 10 strategic critical minerals designated for intensive management to stabilize supply chains for key industries. The strategy combines market intelligence and buffer capacity. It includes plans to develop a global minerals supply map and an early-warning system for supply risks, while strengthening public stockpiling—raising the coverage target to 100 days (from 54 days) for critical minerals. In parallel, Korea has sought to expand international cooperation and diversify supply sources through plurilateral platforms and bilateral arrangements, positioning diplomacy (including MOUs) as a complement to domestic preparedness. Korea has yet to establish a dedicated, legally binding instrument for critical minerals supply chain stabilization comparable to the U.S.–Japan Critical Minerals Agreement. While it maintains cooperation through existing FTAs (e.g., with Australia, Colombia, Indonesia) and various non-binding MOUs with major producers since 2021, these mechanisms are primarily declaratory or facilitative, lacking enforceable rules on investment protection and export restrictions essential for robust supply chain security. Building on these foundations, Korea’s external cooperation toolkit needs to evolve gradually from an “MOU-centered” approach toward enforceable critical minerals (or minerals) agreements. In particular, supply chain stabilization requires an agreement architecture that links core obligations to meaningful implementation and, where appropriate, dispute settlement, so as to mitigate supply chain uncertainties originating from partner countries. This brief therefore proposes three priority pillars for Korea’s next-stage minerals arrangements: (i) disciplines on export restrictive measures (potentially anchored in the goods chapter), (ii) investment and investor protection provisions (through an investment chapter or equivalent safeguards), and (iii) facilitation of workforce mobility—especially the timely movement of technical personnel essential for supply chain cooperation and project implementation.
Topic:
Markets, Treaties and Agreements, Economic Cooperation, Economic Security, and Critical Minerals
Political Geography:
Asia and South Korea

259. The Structural Transformation of U.S. Foreign Economic Policy and Its Economic Effects

Author:
Gusang Kang
Publication Date:
03-2026
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Over the past decade, U.S. foreign economic policy has undergone a structural transformation that extends beyond partisan political cycles. What initially appeared to be a temporary shift toward protectionism under the first Trump administration has consolidated into a broader orientation centered on economic security, strategic competition with China, and domestic industrial revitalization. The renegotiation of the existing trade agreements, withdrawal from multilateral frameworks, and imposition of Section 232 and Section 301 tariffs marked a clear departure from the liberal trade order that had characterized U.S. policy for decades. Rather than reversing this trajectory, the Biden administration utilized core tariff measures and expanded industrial policy through the CHIPS and Science Act and the Inflation Reduction Act, reinforcing a production-centered strategy aimed at reshaping global supply chains. At the core of this transformation lies a reconfiguration of incentives governing global capital allocation and trade patterns. The Tax Cuts and Jobs Act (TCJA) fundamentally restructured the U.S. international tax regime through provisions such as GILTI, FDII, and BEAT while lowering the statutory corporate tax rate, thereby altering firms’ location and investment decisions. At the same time, Section 301 tariffs sought to change relative prices in global value chains, reduce U.S. dependence on China, and induce supply chain realignment. Together, these measures illustrate how U.S. foreign economic policy increasingly integrates trade, tax, and industrial instruments into a coherent framework of economic statecraft. Against this backdrop, this report empirically evaluates the economic effects of these policy instruments. It examines how the TCJA affected U.S. outward and inward foreign direct investment and how Section 301 tariffs influenced trade flows at the product level, particularly with respect to trade diversion involving Korea. By employing panel regression and event-study methodologies, the study aims to identify causal impacts and dynamic adjustment patterns. The findings provide evidence that recent U.S. foreign economic policy has produced measurable structural effects on global investment and trade flows, offering important implications for Korea’s strategic economic positioning.
Topic:
Foreign Policy, Economy, Global Value Chains, and Structural Transformation
Political Geography:
China, Asia, South Korea, North America, and United States of America

260. Korea in the Global Innovation Network: Navigating Technological Interdependence

Author:
Jongduk Kim
Publication Date:
03-2026
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
As U.S.–China competition intensifies, rivalry is also sharpening within the global knowledge system. This raises a central question: how does deepening U.S.–China tension reshape the global innovation network (GIN)—the cross-border web through which knowledge is created, shared, and recombined? Governments worldwide have long emphasized the strategic importance of science, technology, and knowledge. Yet science and technology policy has often been approached primarily as a domestic agenda. In today’s global economic environment—marked by heightened strategic competition—this perspective is increasingly incomplete. The key issues are not only how much a country invests in innovation, but also how its position within global knowledge networks is changing, how geopolitical frictions affect knowledge flows, and what strategic direction policy should take in response. This study therefore focuses on the cross-country and cross-industry structure of technology and innovation. Traditional policy approaches have tended to prioritize expanding total R&D spending. However, innovation cannot be generated by the R&D efforts of a single country, industry, or firm alone. A defining feature of innovation—often underappreciated in policy debate—is its networked and cumulative nature: advances in one sector shape the trajectory of innovation in others, often with long-run effects. Semiconductor progress, for example, does not remain within the semiconductor industry; it underpins innovation in telecommunications, computing, and automobiles. Conversely, knowledge developed in these downstream industries feeds back into semiconductor advances. These interactions occur not only within national borders but also across them, as knowledge diffuses through multiple channels linking countries and sectors. Accordingly, effective R&D allocation and innovation strategy require explicit attention to international and intersectoral “network effects.” Against this backdrop, this World Economic Brief traces how Korea and other major economies—including the United States, China, Japan, and Europe—have evolved within the global innovation network over 2000–2020. Using this network perspective, we examine (i) changing patterns of interdependence and (ii) shifts in countries’ relative positions across key technologies.
Topic:
Science and Technology, Innovation, Strategic Competition, Research and Development, and Interdependence
Political Geography:
Asia and South Korea