Dragoman Digest

South Korea’s new president charts pragmatic course after attempted coup crisis

Lee Jae-myung’s early moves suggest balanced approach despite past positions that unnerved allies

South Korea’s new president is so far defying expectations of a dramatic foreign policy realignment. Lee Jae-myung, a former factory worker, previously condemned US troops as an “occupying force” and sympathised with Beijing’s objections to South Korea’s 2017 deployment of the US supplied Terminal High Altitude Area Defence (THAAD) missile systems. These positions led many to expect he would turn away from traditional alliances. However, his first presidential calls followed orthodox priorities: Donald Trump, then Japan’s Ishiba Shigeru, before Xi Jinping. This diplomatic sequencing was notable given progressive leaders’ record of scepticism towards Japan and the prioritising of engagement with North Korea and China. Lee’s convivial engagement with Western leaders and Ishiba at the recent G7 summit reinforced this previously less obvious pragmatic streak.

The transformation reflects mounting pressures following his predecessor Yoon Suk Yeol’s failed martial law attempt in December. The US – alongside China – is South Korea’s largest trade partner, making Trump’s threatened reciprocal tariffs of 25 percent particularly alarming for an economy where exports comprise 80 percent of GDP. The already imposed 50 percent duties on steel and aluminium have contributed to the Bank of Korea slashing 2025 growth forecasts from 1.5 to 0.8 percent. Household debt at 90 percent of GDP further constrains consumer spending and limits policy options. The deteriorating regional security environment adds to these vulnerabilities. North Korea’s deployment of an estimated 14,000 troops to fight Ukrainian troops in Russia has alarmed the South Korean security establishment. Meanwhile, Beijing’s recent Yellow Sea fish farm installations represent another form of grey-zone pressure.

Lee’s cabinet appointments suggest he is keeping options open. National Security Adviser Wi Sung-lac advocates strong democratic alliances. His selection is no doubt designed to reassure Japan and the US. Conversely, Intelligence Chief Lee Jong-seok has championed a more independent foreign policy and prioritised inter-Korean relations. Whether this hedging strategy can survive exogenous pressures remains uncertain. At May’s Shangri-La Dialogue, US Defence Secretary Pete Hegseth warned that “economic dependence on China only deepens their malign influence”. These words appear to leave little sympathy for Seoul’s strategic predicament, with Korean economic interests increasingly becoming collateral damage in Washington’s broader competition with Beijing.

Tanzania becomes latest country in the region to embrace resource nationalism

High prices of gold and other commodities have led governments to take a more assertive stance

Tanzania has recently mandated that large-scale miners refine a portion of their gold output domestically. Announced on June 12 by Finance Minister Mwigulu Nchemba in his budget speech, the policy aims to ensure the country captures more value from its approximately 1.9 million ounces of annual gold production. The mandate is set to be implemented within 30 days and obliges large scale miners to allocate a fifth of their output for local refining, smelting, and trading. This policy appears to be aimed at implementing a previous order from Tanzania’s mining regulator, the Tanzania Mining Commission, directing miners to sell part of their output to the Bank of Tanzania.

Tanzania's latest policy is part of a broader continental shift driven by higher gold prices. Gold has increased by as much as 30 percent year-on year, peaking at US$3500 per oz in April. Last year, Mali’s interim president Colonel Assimi Goita said all mining companies would be required to process their gold domestically. They began construction of a Russia-backed 200-ton capacity gold refinery on June 16. In April this year, Burkina Faso’s transitional leader, Captain Ibrahim Traore, ordered the transfer of five foreign-owned mines to the state, including two gold mines from UK-listed Endeavour Mining that were ultimately sold  to local companies. For the time being at least, resurgent resource nationalism looks to be an engrained feature of the African mining landscape.

India’s job creation failure drives millions toward government employment

Stagnant private sector hiring belies prevailing narrative of heady growth

India’s job market presents a troubling contradiction that undermines its economic ambitions. While total employment surged 30 percent to 643 million between 2019 and 2024, the proportion of regular salaried workers declined from 24 to 22 percent. Simultaneously, self-employment ballooned from 52 to 58 percent – far exceeding the 10 percent rates in the US and Japan. Self-employed workers earn just US$156 monthly on average, less than two-thirds of salaried incomes. This workforce consists largely of people forced by lack of better options into working as tea vendors, delivery drivers, or small shop owners.

India’s failure to create quality employment opportunities has triggered a mounting scramble for government positions. Between 2014 and 2022, 220 million Indians applied for central government jobs, with less than 0.5 percent receiving offers. Government positions offer not just job security and benefits but also social prestige, making them particularly appealing when private alternatives increasingly mean precarious gig work. The growing pressure is a result of private sector retrenchment. India’s top 50 companies cut headcount by 0.8 percent in the fiscal year ending March 2024, reversing growth of 10-20 percent in previous years. Even profitable firms show minimal ambition – the five most profitable non-financial companies spend just 0.3 percent of sales on R&D versus 8.8 percent in America.

Central to India’s job creation failure is its inability to scale manufacturing despite its vast labour pool. This structural weakness has seen manufacturing’s contribution to GDP fall from 17 percent two decades ago to just 13 percent in 2023. Factories with over 100 employees require government permission to fire workers, while those with 50 female workers must provide on-site nurseries. Many states ban women from factory night shifts. These regulations force companies to remain small – averaging 150 workers versus 3,000 in Bangladesh – sacrificing economies of scale. Poor education levels compound the problem. While China prioritised universal primary education and vocational training in its industrial development, India focused on elite institutions. Today only 10 percent of engineering graduates find jobs within a year. Solving India’s jobless growth problem will be crucial to the country’s ability to get anywhere near its lofty development ambitions.

Foreign and local investors criticise Vietnam’s apparent backward step on renewables

Renewables investors experiencing cash shortages impacting operations

Vietnam’s sudden reversal on power purchase contracts with favourable feed-in-tariffs has triggered sharp backlash from over 40 domestic and international power producers, some of which now teeter on the edge of default. Companies have invested billions into wind and solar farms on the condition that state-owned utility Electricity Vietnam (EVN) would purchase their electricity at above market price for 20 years. EVN has a monopoly on electricity transmission and acts as the sole purchaser.

EVN is now considering retroactively amending existing contracts to pay project developers 4.7 US cents per kWh, down from the promised 7.09 to 9.35 cents. Investors are already experiencing delayed payments as the Vietnamese government considers EVN’s proposal. Signatories to a letter sent to Vietnam’s leadership claim that over US$13 billion worth of investment is at stake, and that companies are already experiencing cash shortages which are compromising plant operations. Foreign signatories to the letter which have collectively invested over US$4 billion include India’s Adani Green Energy, Japan’s Fujiwara Energy and Toho Gas, Portugal’s Sunseap Commercial Industrial Assets and the Netherlands’ SEP International.

EVN and the Vietnamese government are claiming that power purchase contracts were illegitimate because they lacked construction completion acceptance (CCA) documents. EVN’s attempt to modify contracts appears more than anything else to be driven by its parlous financial state. In 2023, EVN posted US$1 billion in losses, after US$800 million of loses in 2022. EVN’s financial position is driven by an ongoing structural contradiction in Vietnam’s energy system. EVN’s generation arm, which mostly consists of coal fleets, directly competes with renewable energy plants who ultimately sell power to EVN itself. EVN is limited in the costs that it can charge households and state favoured businesses. Retrospectively amending contracts would almost certainly have a deleterious effect on Vietnam’s reputation and investor confidence. As an FDI-reliant economy positioning itself as a manufacturing hub, Vietnam may look less attractive multinational companies seeking to decarbonise their operations.

Toyota and Daimler Truck’s merger marks strategic hydrogen pivot

Toyota attempts to claw back ground as China dominates hydrogen fuel-cell vehicles

On June 10, Toyota Motor and Daimler Truck agreed to merge the Hino Motors and Mitsubishi Fuso Truck and Bus Corporation under a new holding company that is targeting listing on the Tokyo Stock Exchange by April 2026. The merged entity will pool resources to help jointly develop electric, autonomous and hydrogen vehicles. The US$6.4 billion merger is projected to sell over 200,000 vehicles annually.

Lithium-ion electric vehicle (EV) batteries dominate the current zero-emissions landscape Chinese battery powerhouse CATL recently forecast that half of new trucks sold in three years’ time would be electric. Hydrogen will still likely have niche applications. Hydrogen fuel cells offer faster refuelling and higher energy density. This is especially advantageous for heavy duty transport such as trucks and buses. The weight of hydrogen cells makes them less viable for commercial vehicles.

China is currently leading the hydrogen race, despite Japanese companies having been at the forefront of commercialising hydrogen vehicles. In 2024, China sold 7069 hydrogen fuel-cell buses and trucks, amounting to more than all other regions of the world put together. In April 2025, Beijing launched the country’s first cross-region hydrogen truck route spanning 1150 km between Chongqing and Qinzhou. In May, president of Toyota’s hydrogen arm, Mitsumasa Yamagata, warned that hydrogen fuel-cell vehicles are on track to experience the same fate as battery-powered EVs – which were also pioneered by Japan – if Japanese companies don’t act quickly. For its part, Toyota opened a factory in Beijing last year with SinoHytec to produce 10,000 fuel-cell systems a year. The Toyota-Daimler merger marks Toyota’s latest attempt to provide itself with the economies of scale needed to stay competitive with Chinese rivals.