Saturday, October 31, 2009

The South Korea Story

This week at UNU-Tokyo, the topic of discussion was 'Sustainablity Challenges of Korean Development'.

A Professor from International Christian University walked us through the remarkable post-WW2 story economic development in South Korea.

Using data from the Korean Development Institute (KDI) we saw an impressive array of charts and graphs showing the tranformation of an economy that moved from producing wigs and toys in the 1960's to hi-tech semoconductor chips and ship-building in the 2000's. Within fortyseven years (1960-2007), the national Per-Capita shot up from $70 to & 20,045 (286 times!); the GDP grew from $1.5 billion to $969.6 billion (646 times!); and exports, from $0.04 billion to $371.5 billion (9,287 times!!).

During this period, employment in agriculture/fisheries reduced from 63% to 9.3% and correspondingly, the share of manufacturing grew from 7.9% to 19.2% and the service sector, from 28.3% to 71.5%!

It seems quite obvious that a vast majority of farmer's grandchildren were now designing and manufacturing semiconductor chips, flat-screen TV's, ships and mobile phones. One of the keys to this transformation has been the education system in South Korea. Between 1970 and 2000 the average schooling years of the total population went up from 5 years to 11 years (During the same period, China's went up from 4 to 6 years; Japan, 7 to 9 years; and USA from 10 to 12 years). More than 80% of kids go to collge and , at present 7.7% of GDP is spent on education!

The cynics might say that there is nothing so great about transforming a country, especially when there is a dictator to ensure that technocrats had complete freedom to work through their development plans. But the world is strewn with countries under dictators (North Korea, Gabon, Etc.) who have only enriched themselves personally.

Is USA the key? - Did the American security umbrella, training and generous scholarships set the stage for transforming the country?

It will be ineresting to know the real dynamics of this change...

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