[Asia Report] Time to Look South Again... Challenges for the New Southern Policy 2.0

Restoring the New Southern Policy Discarded by the Yoon Administration
ASEAN, Korea's Partner for Overcoming Structural Crises

In June 2025, South Korea's new leadership must once again turn its gaze to the South. After a prolonged period of turmoil and a change in administration, the Lee Jaemyung government faces a moment when it must not simply pick and choose from the previous administration's foreign strategies, but rather fully launch a fundamental redesign of its relationship with ASEAN through a 'New Southern Policy 2.0.' The New Southern Policy, which was effectively discarded by the Yoon Sukyeol administration, is too strategically valuable and clear in its significance to be dismissed simply due to differences in government character.

ASEAN is no longer a peripheral or backup partner for Korean diplomacy. As global supply chains are being reorganized, US-China tensions are escalating, and Korea itself is facing structural crises such as population aging and low birth rates, ASEAN stands as virtually the only partner that can become a 'strategic community' to jointly address all these challenges.

Southeast Asia: A Neighbor Holding Solutions to Crisis

The reasons become clear when looking at the challenges facing Korea: rapid population decline, industrial restructuring, energy supply instability, and technological hegemony competition. Not a single one of these can be solved with domestic resources alone. ASEAN is a neighbor and partner with the potential to break through such structural crises together.

The most urgent task is linking populations and workforces. Beyond simply importing labor, there must be a stable inflow of skilled professionals, and institutional support for youth exchanges and employment pathways. The current rigid visa system also needs to be revised. Korea must shed its image as a 'closed market.'

The ASEAN logo is displayed against the skyline of Kuala Lumpur, Malaysia, where the 46th ASEAN Summit was held. Photo by AFP

Cooperation in technology and supply chains is also essential. Stable production and distribution of strategic items such as semiconductors, electric vehicles, and rare earth elements are only possible when connected with ASEAN's resources, geography, and infrastructure. In addition, countries like Indonesia, Vietnam, and Malaysia are rapidly growing in next-generation industries such as AI, fintech, and digital currency. If combined with Korea's technological capabilities, new cooperation models can be established.

The fields of finance and investment must also go beyond simple development cooperation. It is important to create platforms that directly link local startups, infrastructure, and regional financial markets in ASEAN through digital payments, fintech, and standardized investment systems. Korea's financial capabilities must function not merely as supplementary tools, but as strategic assets.

Responding to climate change and advancing the green transition are also crucial. ASEAN countries are highly vulnerable to climate crises, but possess abundant natural resources and renewable energy potential. If Korea's technological and investment capabilities are combined with these, it will be possible to create joint benefits that help overcome the climate crisis.

The First Stage for Pragmatic Diplomacy

Above all, the method of cooperation is crucial. It is no longer about listing a wide array of benefits, but about building a structure with clear feasibility and priorities. Whether it is called 'New Southern Policy 2.0' or not, a practical approach is key.

President Lee Jaemyung has declared since taking office that "pragmatic diplomacy" will be at the center of his foreign strategy. Pragmatic diplomacy means a strategic attitude that goes beyond diplomatic rhetoric to simultaneously consider national interests, flexibility, and reality. In this sense, Southeast Asia is the stage where pragmatic diplomacy must be tested most urgently.

Korea and ASEAN are already culturally close neighbors. Co-productions between K-content and ASEAN's local creators, cultural heritage ODA, and sports exchanges provide a foundation for deepening mutual understanding beyond mere trends. Cooperation must expand multilayeredly not only in economic terms, but also in the realm of soft power.

The reason we are looking to Southeast Asia again is not simply to revive a 'policy of the past.' It is because more and more people are realizing that the solutions to Korea's structural crises, industrial transformation, and diplomatic realignment over the next decade can be found in this region.

The experiment of pragmatic diplomacy can begin right here, in the South. ASEAN is no longer just an 'alternative market.' It is, right now, the very site of our closest future.

Jung Hojae Secretary General, Asia Vision Forum