[Grand Prize] South Korea to defend the right to own development
The countdown to Nov. 11, 2010 has already begun. On this day delegates from nineteen countries and the European Union along with representatives of key international economic organizations will gather in Seoul to work out a plan for lasting financial stability, continued global recovery and sustainable development. But what about those who will not be there?
The Group of Twenty encompasses both industrial and key-emerging economies around the globe. Nevertheless, some geographical areas remain underrepresented, particularly the regions of Africa, South America and Eastern Europe.
Thus, most countries in pressing need of economic growth and development remain excluded from the G20 talks. That of course does not justify a call for universal membership. With the current G20 members covering approximately 90 percent of global gross domestic product and two-thirds of the world’s population, expanding membership would compromise the Group’s ability to reach consensus without providing much added economic weight or legitimacy.
Even if the majority of poverty-stricken states do not take part in G20 meetings, their standpoints should not be neglected when it comes to discussing economic development. For this reason, some of the existing G20 members should take on the role of the “advocate for the developing states”. The Republic of Korea appears exceptionally fit to it. For if we travel but half a century back in time, we will discover the present-day economic powerhouse as one of the poorest countries in the world, depleted by colonial rule and war.
Then the “miracle” happened. But calling Korea’s development a miracle belittles the process. Miracles are swift, easy and painless. And while the growth rate of the Korean economy was incredibly rapid, it was redeemed through authoritarian regimes trampling on human rights as well as workers’ blood, sweat and tears.
But Korea’s rocky road to prosperity was not of the kind that industrialized nations pave for developing countries today. Its success was largely due to a curious mix of protectionism and trade. Contemporary economists highlight strong export drive, emphasis on education and attraction of foreign capital as key factors that enabled the skyrocketing growth. But all too often they neglect the fact that the entire process was state-led, with the government directly intervening in the economy, providing support to the private sector in return for political alliance. The democratic-oriented and market-based reforms came much later.
Korea should use the upcoming opportunity of chairing the G20 summit to reveal to the international community what made the miracle on the Han River possible. It should share its experience with economic growth, telling the entire story, not the (at least in Central Europe) commonly heard “free trade version.”
If a third-world country tries to do today what Korea did some fifty years ago, its efforts are halted before the outcomes can show: the World Trade Organization calls for the abandonment of industry subsidies, the International Monetary Fund suspends loan disbursement on the grounds of corporationism, and human rights activist in far-away lands (hoping to improve poor workers’ conditions) boycott the few labor-intensive goods the country might be able to export.
However, as economic “miracles” are becoming scarce, there is a growing agreement that the cause of this scarcity is the lack of commitment of third-world countries to stay on track with the development plans laid out for them by the rich and powerful.
It follows that in comparison with today’s developing countries, Korea enjoyed one indispensable advantage. It was in charge of its economic growth, it “owned” its development program. The government’s ability to provide a clear vision and stick with it set the country on the right track, although this included practices the current international community would surely declare sinful.
Of course, the world has changed significantly during the past fifty years. It has become globalized to such an extent that the influence of the international community cannot be ignored. But when it comes to economic development, national governments should remain in the driver’s seat with international organizations playing an advisory (not directive) role.
While the exact measures that brought about Korea’s phenomenal economic growth cannot be applied universally as a one-size-fits-all solution to flagging economies due to regional differences, the general principle should. The country’s modern history serves as evidence that a development process that is “owned” by a nation may be as successful as to seem miraculous.
In this respect South Korea’s role in the Group of Twenty is to represent those nations that stand today where it stood half a century ago, defending their right to choose their own ways to economic development.