global now human international billion between japan globalization financial new government through can poverty time world www his trade development foreign how east other investment china asian asia social change country developing growth years crisis countries europe poor oecd economies economic markets good should africa people much economy state does
|The Korean Paradox|
|Thursday, 27 October 2011 03:25|
This week we have invited Emanuele Schibotto from Italy to give us his thoughts on what he calls the "Korean Paradox". Let us know what you think, whether you agree or even disagree.
When in Europe we speak about Korea, a paradox is immediately apparent. European public opinion is much more focused on North Korea, one of the most closed, isolated and secretive states in the international community, whilst its Southern neighbor South Korea (The Republic of Korea) is rarely given the attention that it deserves. Below the 38th parallel lies a story of recent economic success and increased international prestige.
What is the name of North Korea’s leader? What is his nickname? Why is North Korea’s often on the international spotlight? No doubt many readers would know the answers. Now, what is the name of South Korean President? This question would most likely go unanswered. This is to show a quite apparent paradox. European public opinion has a better knowledge of North Korea, which is an authoritarian regime, one of the most secretive and poorest states in the world, than of the Republic of Korea, its Southern neighbor and a country on which we should focus our attention instead. The most famous Korea is one of the pariahs of the international community whereas the less well-known Korea is indeed one of the few democratic and highly developed countries in Asia.
Just a few facts to get things straight. Seoul’s economy size is over thirty-five times bigger than Pyongyang’s and GDP per capita shows at least a tenfold gap. South Korea is today the 15th largest global economic power and the fifth largest in Asia (by GDP in nominal terms). South Korea is also the leading global nation in shipbuilding, production of LCD screens and in the distribution of broadband per capita. It is the third leading nation in the production of semi-conductors, the fifth in automobile manufacturing and in scientific research.
Over the last ten years the nominal GDP and the income per capita have grown more than half, with public debt representing only roughly a third of the GDP. According to the IMF, Korea posted a 6.2 real GDP growth in 2010 and is expected to reach a 3.9% growth at the end of 2011. Over the past 30 years Korea has caught up with Japan to become one of the highly developed nations in East Asia (Korea ranking on the UNDP's Human Development Index is roughly the same as Japan). From 1980 to 2010 Korea's GDP per capita grew more than fivefold (by comparison, Japan's per capita GDP grew by just about 70%).
South Korea is also one of the world’s most enthusiastic champions of green growth policies. The Global Green Growth Institute, established in Seoul in 2010, stands to prove the country's commitment on pursuing a development model which fosters at the same time economic growth and environmental sustainability.
The increasing economic clout of South Korea is represented by its dynamic free trade agreements strategy. The free trade agreement (FTA) which Seoul recently signed with the EU has come into force on the 1st of July 2011, bringing with it an estimated increase in South Korean exports of 5.87% and an increase of EU exports of 1.4% along with the creation of between 300,000 and 600,000 estimated jobs. After the most recent visit of Korean president Lee Myung-bak to Washington D.C, U.S. Congress ratified the U.S.-Korea FTA (KORUS FTA), which was then signed by U.S. President (KORUS now needs Korean Parliament's approval so to come into force). According to economists, the KORUS FTA would increase South Korean GDP between 0.38% and 2.41% whereas the U.S. economy would grow 0.02 to 0.2%. U.S. exports to South Korea would rise by half and U.S. imports from South Korea would rise by one-third.
On November 2010 the Republic of Korea presided over the G20 summit. This is symbolic of the country's place amongst the major global economic - although not political - powers of the future.
For a country that is formally still at war with North Korea and that until 15 years ago was considered an anonymous developing nation, taking part in the G20 - let alone presiding over the G20 summit - holds an important symbolic value. The hosting of the Seoul G20 summit was an event that was genuinely felt collectively. The streets of Seoul were filled with posters and billboards that drew attention to the G20 summit.
If Brazil is the Latin American role model, and South Africa the example for the rest of its continent, South Korea is certainly starting to be perceived as the successful case study in Eastern Asia of the last decade. Of course, Seoul has major challenges in the years ahead: among the most important are the improvement of income equality; a troubled demographic transition, poor record in labour productivity and attraction of foreign direct investments(FDI).
That said, Korea is a country that combines a model of sustainable economic development with democratic politics in a region where a ubiquitous political instability reigns, mostly caused by North Korea.
Let’s talk more about the Korea that counts!
Emanuele Schibotto is doctoral candidate in Geopolitics at the Guglielmo Marconi University in Rome. He also is Editorial Coordinator of www.Equilibri.net , an Italian online magazine on Geopolitics and International Relations.
G20 Seoul Summit Declatation http://www.g20.org/Documents2010/11/seoulsummit_declaration.pdf
G20 Group http://www.g20.org/index.aspx
A Shrimp amongst Whales? Assessing South Korea’s Regional-power Status, David Shim, GIGA German Institute of Global and Area Studies, August 2009 http://www.giga-hamburg.de/dl/download.php?d=/content/publikationen/pdf/wp107_shim.pdf
OECD, Statistical profile of South Korea, http://www.oecd.org/country/0,3731,en_33873108_33873555_1_1_1_1_1,00.html
OECD, A Framework for growth and social cohesion in Korea
IMF, World Economic Outlook, September 2011
UNDP Human Development Index, 2010
The Bank of Korea, Annual Report 2010, http://eng.bok.or.kr/eng/engMain.action
The Global Green Growth Institute (GGGI) http://www.gggi.org/