Transcript 한국의 개발 경험
Korea’s Development Path Kang, Kyung Shik 1. Why Korea? One of the poorest in the world 12th largest economy in 50 yrs Per capita income: $87 in ’62 surpassed $10,000 in ’95 Portion of agriculture to GDP: 46.5% 5.5% Portion of manufacturing to GDP: 11% 37% Portion of trade to GDP: 16% 70% Succeed in overcoming poverty, but financial crisis in the process of democratization and economic opening 2. Basis for development 2-1 Nat’l division & choice of political system 2-2 Destruction of system & economic facilities 2-3 Zeal for education 2-4 military coup and political stability 2-5 Favorable external environment 2-1 National development & choice of political system S. Korea separately forms free democratic gov’t and capitalist economy amid chaos following the ’45 independence Intense S-N Korea competition in military, economy S. Korea’s per-capita income in 1960s half of N. Korea 25 times more in 2000 Reasons for the gap lie in different political systems Private property ownership + meritocracy vs. principle of “do what can be done and distribute as needed” 2-2 Destruction of system & economic facilities Manufacturing plants destroyed during Korean War (‘50-‘53) Farming land reform and war destroy traditional society Massive migration and social flexibility Remove barriers to social mobility Overall downgrade and same starting point Transform into thoroughly competition-driven society 2-3 Zeal for education Delay drafting of univ students during Korean War Increase in univ students and universities, backbone for fast-paced growth from 1960s on Passion for education, and overseas study, especially to U.S. supply high-caliber manpower Education during mandatory military service, at workplace and through national “saemaul” (new town) campaign Education as ticket to wealth, social climb and power 2-4 Military coup & political stability Aggressive seek economic development for 18 yrs Economic setback since switch to single 5-yr presidential term outbreak of ’97 financial crisis Mexico: one party, 6-yr single term Advanced countries: Despite ruling party changes, continue reforms as in Australia and New Zealand 2-5 Favorable external environment Cold War necessitates assistance ahead of economic reasons Favorable environment (GATT launch, World Bank, IMF & ADB assistance) U.S. aid, utilization of preferential tariffs & other mechanisms Diplomatic ties with Japan and modeling after the Japanese economy 3. Overcoming poverty: challenges & policy response 3-1 End vicious cycle of extreme poverty 3-2 Export drive, int’l orientation for development 3-3 Gov’t-led development 3-4 Industrialization strategy 3-1 End vicious cycle of extreme poverty End cycle of low incomelow savingslow growthlow income Dependence of U.S. aid: aid on the decrease Mindset of devoid of hope: self depreciation Creating atmosphere for “can-do” spirit 3-2 Export drive, int’l orientation for development Strategy to substitute exports failed in early 1960s Adjustment of monetary, foreign exchange policies in mid1960s Choose to target external market rather than internal market Switch capital resource from domestic savings to FDI/foreign borrowing (N. Korea adheres to self-reliance, market closure) 3-3 Gov’t-led development Lack of high-caliber entrepreneur or corporations Gov’t maps out business plan, provides low-interest capital, restricts exports for domestic market share, tax breaks, and constructs SOC with gov’t budget Pool gov’t resources: selective choice & focus Gov’t-private sector united: success goes to businesses, risk shouldered by gov’tdrives entrepreneurial energy 3-4 Industrialization strategy Focus on labor-intensive industries with export competitiveness(e.g. textile, shoes, plywood, shoes, wigs) Narrow gap in urban & rural areas: increase food production & national “new town” movement Fast-forward petrochemical industry development in the aftermath of the fall of Vietnam and U.S. pullout 4. Task: implementation & management 4-1 Establish Economic Planning Board 4-2 Implement 5-yr Development Plan 4-3 Fast resolution to problems 4-4 Presidential leadership 4-1 Establish Economic Planning Board Launch gov’t body for overall management of economic planning & policymaking Centralize planning, budgeting and foreign borrowing into one body Statistics, inflation, and science & technology included EPB head as deputy Prime Minister for coordination among economic ministries DPM exercises strong leadership and coordination at economic ministers’ meeting Reports directly to president on economic issues (bypasses Prime Minister) 4-2 5-yr economic development plan Acts as banner that economic development is first priority on nat’l agenda Pool nat’l resources for economy and means for gathering Korean people’s united efforts, energy Starts as economic plan, develops into socioeconomic plan and then as indicative plan Differs from planned economy (e.g. construction of SeoulPusan highway, petrochemical industry development) 4-3 Fast resolution to problems President’s frequent visits to construction sites President chairs monthly economic monitoring meetings Monthly export meetings, addresses difficulties faced by industries Quarterly monitoring of major projects Task force teams for major projects 4-4 Presidential leadership Awareness as public figure, strong sense of historical mission Capacity to identify and utilize high-caliber manpower (Employs experts & technocrats, key coup members retreat) Nat’l land development: tends like gardening, President himself maps out the construction plan for Seoul-Pusan highway Decision-making style: listens to attendants before reaching conclusion, thorough execution 5 Crises & responses in development process Early stage: excessive motivation, lack of U.S. attention lead to failure diplomatic ties with Japan and dispatch of troops to U.S.-Vietnam war improve Korea-U.S. relations Excessive investment: exit troubled companies, 8.3 emergency measures First oil shock: threat for nat’l bankruptcytakes part in Middle East construction boom End of Vietnam war, U.S. pulloutseek petrochemical development 6. Shortcomings in compressed growth Economic difficiency: ‘picking the winner’ approach goes against market economy, undermines free competition Simple, small economy: challenges in developing into complex, larger economy Concentrated power at Office of President: National Assembly as auxiliary body Political stability: difficult to attain in democratic system with singular terms Oct. 26 and 2nd oil shock: policy shift for stabilization 7. Conclusion: problem solving capacity as key Small, open economy: ability to adapt to changes Businesses, gov’t need fast, decisive adaptability to changes Strong political leadership Forming social consensus through problem solving ability, implementation key to success