KOREA

Impossible to Possible
2008 Edition
Copyright 2008
Published by
Korean Culture and Information Service
Ministry of Culture, Sports and Tourism
15, Hyojaro, Jongno-gu, Seoul, Republic of Korea
Telephone: 82-2-398-1910-9
Fax: 82-2-398-1882
All rights reserved Korean Culture and Information Service
Printed in Seoul
ISBN 978-89-7375-043-6 03340
Korean Government Publication Number
11-1371030-000015-01
For further information about Korea,
please visit: www.korea.net
K O R E A
Impossible to Possible
The history of human beings has been based on different people's
encounters and conversations. Exchanges between different people enriched
cultures and developed civilization worldwide. Korea has long cultivated rich and
peaceful relations with other countries, awarding itself the nickname the Land of
the Morning Calm.
The early 20th century, however, shattered the peaceful culture of Korea.
Japan's imperialist occupation of the Korean peninsula tortured our people and
left wounds on our history. Even after Koreas liberation in 1945, the countrys
recovery process from the destruction of its culture and institutions was long
and painful. Still worse, only five years after liberation from Japan, the country
suffered the heartbreak of the Korean War, which left the peninsula divided into
north and south. The state of war persists even through today.
In the ashes of the war, Korea completely recreated itself to overcome its
tortured history. The nation ran forward, through political whirlwinds and
economic slumps. The unprecedented miracle of the Han River led to economic
development and industrialization. Many Korean people sacrificed their lives to
usher in an era of democracy.
In the 21st century, Korean people have been charged with the mission to
continue to move ahead. Our neighbors ask us to contribute to world peace and
prosperity through dialogue and exchange. Korea's development is largely
F O R E W O R D
attributable to learning from the experience of other countries. Now, it is high
time that we pay back what we owe our allies.
"Korea: Impossible to Possible," a collection of well-known international
authors writing about Korea's development over the past 60 years, is part of the
Korean government's efforts to listen to outside perceptions and opinions about
my country. Through their contributions, Ive seen that these authors havent
shied away from using tough words when they felt it necessary to describe
Koreas development. This is something that I appreciated very much.
Third-party perspectives oftentimes help us to recognize overlooked
details. We will sincerely listen to the authorsvaluable advice contained herein
and try harder to open up Korean society to the outside world.
I believe the authors could not wholly express all their thoughts about
Korea in the limited space provided. However, this book will work as an initiative.
We hope to see Korea approaching a wider range of its neighbors in the near
future. Thank you very much.
October 2008 Minister of Culture, Sports and Tourism
008 I. The Changing Face of the Republic of Korea
044 II. Views from Abroad
046 The Republic at Sixty
Guy Sorman
_
South Korea at Sixty
M. S. Gorbachev
_
Republic of Korea: An Important Partner to Russia
in Southeast Asia
Zhang Yunling
_
A Miraculous Six Decades
Kazuo Ogoura
_
Korea: Past, Present and Future
082 Still Growing
Peter J. Katzenstein
_
Advantages of Adversity: South Korea at Sixty
Jeffrey D. Jones
_
Korea-U.S. Economic Cooperation: 60 Years of Passion,
Conflict & Profit
Shi Yuanhua
_
Heading Towards a New Miracle Creation and Glory:
In Celebration of 60th Anniversary of Korea
Sandip Kumar Mishra
_
Service Sector of Korea in Global Knowledge
Economy: Challenges and Prospects
118 A Changing Society
Carter J. Echkert
_
Seoul in the 1970s
Michael Breen
_
New Country, New Lives: How Life Has Changed for Koreans
in the Past Sixty Years
C O N T E N T S
144 Education, Culture and the Arts
Horace H. Underwood
_
Teaching the World: Korean Education Becomes
Global Education
Melissa Chiu
_
Korean Fine Arts
Roger Garcia
_
Korean Cinema
174 International Relations
Donald P. Gregg
_
Ties with the Eastern Bloc: The Presidency of Roh Tae-woo
(1988-1993)
Kishore Mahbubani
_
The Paradox of Korea: Strong Yet Vulnerable
Fen Osler Hampson
_
Global Order and the Future of Regional Security
Louis T. Dechert
_
Korea’s Growth Seen from Abroad: Successful Nation-
Building
220 North and South, 60 Years On
Marcus Noland
_
Inter-Korean Economic Relations at 60
Selig S. Harrison
_
Towards a Stable Confederacy
John Rich
_
Beyond All Expectations
Andrei Lankov
_
Exclusive Dreams: Two Koreas in Search of Unification
KOREA
Impossible to
Possible
I
The Changing Face
of the Republic of Korea
11
1 •
The foundation of the Republic of Korea. (Aug. 15, 1948)

2 •
Korean Citizens celebrate the country's independence on August 15 from its
Japanese colonial rulers. (Aug. 15, 1945)
3 •
The country’s first democratic elections are held. (May 10, 1948)
1
2
3
12
13
1 •
U.S. sailors unload presents that will
be given to orphans.(May 5, 1953)
2 •
Refugees use an ox cart to carry
their belongings.
3 •
War refugees suffering from hunger.
4 •
A U.S. soldier chats with elderly
Koreans and some children during
the war.
3
4
1
2
14
15
1 •
Soldiers hoist the Korean national
flag after retaking Seoul.(Sept. 28,
1950)
2 •
Soldiers heading to the frontline pass
refugees from across the border.
3 •
Elementary students during the
Korean War
2
1
3
16
17
1 •
The construction of the Gyeongbu
Expressway, which started on Feb.1,
1968, connecting Seoul and Busan,
was completed on July 7, 1970.
2 •
After the war, wigs became a major
industry well into the 1960s.
3 •
Workers try to restore the Han River
Bridge after the Korean War.
1
2
3
18
The Saemaeul Movement, or New
Community Movement, is launched.
(Sept. 1971)
19
20
21
1 •
The textile industry became the
country's main light industry in the
1970s.
2 •
Young people play guitar on a train in
the 1970s.
3 •
A view of Posco Steel mill in the
1970s. Posco Steel is responsible for
making Korea a leader in the global
steel market.
2
1
3
22
1 •
Gwangju Pro-Democracy uprising,
1980.
2 •
Large ships under construction in the
Daewoo shipyard in the 1980s.
3 •
Samsung Electronics first full-color
TV factory in 1980.
4 •
Doosung, an oil prospecting ship built
by Korea National Oil Corp. in 1983.
3
1
2
4
23
24
25
Opening ceremony of the
1988 Seoul Olympics.
26
27
1
2
3
1 •
Bulguksa, the Temple of the Land
Buddha, sits mid-slope on Mt.
Tohamsan. UNESCO designated
the temple as a world heritage
site in 1995.
2 •
South and North Korea officially
joined the United Nations in 1991.
3 •
A counter in January 1998 for
buying gold as the country tries to
recover from the Asian financial
crisis of 1997.
28
29
1
1 •
The first inter Korean summit
meeting between former South
Korean President Kim Dae-jung
and the North’s leader Kim Jong-il
on June 15, 2000.
2 •
North Korean Workers at the
Gaeseong Industrial Complex.

3 •
The Mt. Geumgangsan tour started
in 1998. The picture is the scene of
Bodeokam temple in the mountain.
4 •
The Gaeseong tour, which started
in 2007, is a one-day overland
tour. The picture is the scene of
Seonjukgyo bridge.
2
3
4
30
31
1
2
3
4
1 •
Citizens cheer the national team at
the 2002 World Cup in front of Seoul
City Hall.
2 •
The mother and the son who cheer
the Korean soccer team.
3 •
The Red Devils, the official cheering
squad of South Korea's national
football team.
4 •
Koreans still like to recall the
victorious moment of the 2002
Korea-Japan FIFA World Cup when
the Korean national team advanced
to the semi-final
32
33
1 •
Semiconductor Research Center of
Samsung Electronics.
Samsung's 64 Gigabyte NAND Flash
memory.
2 •
Korea’s next generation nuclear
fusion facility KSTAR (Korea
Superconducting Tokamak Advanced
Reactor).
3 •
Gwangyang Port, a logistics hub for
Northeast Asia in southwest Korea.
4 •
The Gyeongbu and Honam lines of
the KTX, Korea’s high-speed train
that was launched on April 30, 2004,
after 12 years of construction work.
5 •
LG Electronics developed and
launched the world’s biggest liquid-
crystal display, or LCD, television on
Sept. 6, 2004.
1
3
4
5
2
34
35
1
2
3
1 •
Jeju Volcanic Island and Lava Tubes
have been registered as a UNESCO
World Heritage sites in 2007.
2 •
A foreigner learns how to make
pottery at the world ceramic
Biennale held in Gyeonggi province.
3 •
“The More the Better” by Korean
video artist Paik Nam-june.
36
37
1
2
3
4
1 •
Cheonggye stream, which
was restored and opened to
the public for the first time
in 47 years, attracted 10
million visitors in its first two
months.(Oct. 1, 2005)
2 •
The 4th Green Energy Expo held
in Daegu, Korea.
3 •
Wind power generators on
Mt. Taebaek. Wind power is
in the spotlight because of
the low carbon, green growth
movement.
4 •
The hydrogen automobile
which becomes known as the
environmental automobile.
38
39
1 •
UN Secretary-General Ban
Ki-moon gives a lecture in front of
a plaque of UN flags.
2 •
The country’s first astronaut Yi
So-yeon inside the space shuttle
before launch in April 2008.
3 •
Seven-hundred gamers from
73 countries participate at the
2007 World Cyber Games, an
international e-sports event.
4 •
A performance of a Korean B-boy
in 2008 - Korean B-boys are
known for mixing breakdance
routines with different art genres
like ballet and musical.
5 •
Nanta, Korea’s first non-verbal
stage show that features a
mixture of traditional Korean
percussion and dance.
1
3
4
5
2
40
41
3
4
5
1 •
A summit meeting at the Asia-
Pacific Economic Cooperation in
Busan.(Nov. 12, 2005)
2 •
The 17th president, Lee Myung-
bak waves after taking the oath of
office.(Feb. 25, 2008)
3 •
South Korea's Kim Yu-na
performs during the women's
short program at the World Figure
Skating Championships in Tokyo
March 23, 2007.
4 •
Korean swimmer Park Tae-hwan,
who won the gold medal in the
men’s 400-meter freestyle swim
at the 2008 Beijing Olympics.
5 •
Korean weightlifter Jang Mi-ran
sets world records by winning the
gold medal at the + 73-kilogram
class at the 2008 Beijing Olympics.
1
2
42
43
Children run along the garden square
located in front of City Hall during the
Seoul Festival in May 2008.
KOREA
Impossible to
Possible
II
Views from Abroad
The Republic at Sixty Guy Sorman
M. S. Gorbachev
Zhang Yunling
Kazuo Ogoura
Still Growing Peter J. Katzenstein
Jeffrey D. Jones
Shi Yuanhua
Sandip Kumar Mishra
A Changing Society Carter J. Echkert
Michael Breen
Education, Culture and the Arts Horace H. Underwood
Melissa Chiu
Roger Garcia
International Relations Donald P. Gregg
Kishore Mahbubani
Fen Osler Hampson
Louis T. Dechert
North and South, 60 Years On Marcus Noland
Selig S. Harrison
John Rich
Andrei Lankov
46
S
outh Korea at sixty in the Western eye has an image
probl em due to the Bengal i Nobel pri ze wi nner,
Rabindranath Tagore, an influential poet and a world traveler.
After he visited Seoul in the early twentieth century, Tagore
wrote a poem called “The Land of the Morning Calm”. The poem
became famous the world over and the name took. South Korea
became known globally as Morning Calm and the West still
perceives the country this way. These days, the name feels
inaccurate, to say the least. This motivated former President
Kim Dae-jung to rekindle the country’s reputation, not as calm
but as dynamic, so far with limited success: dynamism lacks any
specific Korean flavor.
Calm or dynamic
Within South Korea, the debate still lingers as how best to
represent the country on the international stage. South Korean
officials and their public relations advisers can often be heard
complaining that they lack the equivalent of the Japanese Fuji
mountain, the French Eiffel Tower or the American Statue of
Liberty. Whenever consulted on this matter, I suggest the well
known crossed-legged Boddhisatva, which can be admired in the
National Museum of Korea , as the South Korean logo and icon.
This Buddha, reminiscent of the Thinker by the French sculptor
Rodin, has no competitor; I think that through its unique
aesthetics and transcendental strength it could convey the spirit
of the nation. My suggestion, however, has never been taken into
consideration. Isn’t it dynamic enough? Or is it too Buddhist in a
South Korea at Sixty
T
H
E

R
E
P
U
B
L
I
C

A
T

S
I
X
T
Y

KOREA
Impossible to Possible
47
country where religions are so diverse? So far, the logo problem
for South Korea remains unsolved; probably it cannot be solved
easily while Korean identity is not that easy to describe nor to
understand, at least for non-Koreans.
It cannot be denied that in spite of the outstanding global
success of South Korean brands, many buyers of these brands
hardly know they are made in Korea. Western consumers who
esteem Samsung cell phones are not sure whether they are
Korean, Chinese, or Japanese. Hyundai cars have found their
niche on the world market because they are perceived as reliable
and not too expensive; but they are not grasped as Korean the
way a Mercedes car is bought because it is German. South Korea
as a trademark, in spite of recent progress due to its leading
export companies, is still moderately acknowledged. Is this weak
brand recognition due to insufficient efforts to promote South
Korea as such? To a certai n extent, yes, South Korean
governments never packaged the Korean identity as a clear
message nor promoted it in a systematic way, as Japan did in the
60s and still does. True enough, the message escapes easy
definition. How to promote Korea when the country itself is
divided? How to promote modern South Korea alone as it is so
different from ancient Korea? How to send a unifying message
when the South Korean people are so greatly diversified by
region and religion?
The solution to these dilemmas could very well emerge
from the artistic world. South Korea now is popular abroad not
only thanks to its industrial exports; artists do play a decisive
Guy Sorman is a French
journalist, economist,
philosopher and author of
twenty books on
contemporary affairs,
covering the five continents.
He is a regular columnist for
Le Figaro in France, the Wall
Street Journal and City
Journal in the United States,
and other publications
around the world. Mr.
Sorman taught economics at
the Paris Institute of Political
Sciences from 1970 to 2000.
He has held several public
offices, including advisor to
the prime minister of France
(1995-1997) and deputy
mayor of Boulonge, near
Paris. He was appointed by
President Lee Myung-bak as
a member of the Global
Advisors and Friends of
Korea in June 2008.
Guy Sorman
Western consumers who esteem Samsung cell phones are not
sure whether they are Korean, Chinese, or Japanese.
Hyundai cars have found their niche on the world market
because they are perceived as reliable and not too expensive;
but they are not grasped as Korean
the way a Mercedes car is bought because it is German.
48
role. Beware of the ambiguities however. The so-called Korean
Wave is carrying American rock music to an enthusiastic Chinese
audience: the music is played by Koreans but it is hardly related
to Pansori. Korean television sitcoms may be closer to the true
Korean soul; we know how they have been useful in bringing
together the Japanese and the South Koreans in a more thorough
way than many years of diligent diplomacy. Eventually, I consider
that to really understand the South Korean identity, the South
Korean movies and contemporary art have been more revealing
than pop entertainment.
Im Kwon-taek’s “Painted Fire”, Kim Jee-woon’s “A Tale of
Two Sisters”, Park Chan-wook’s, “Old Boy”, have brought to an
international audience a unique civilization, Asian but definitely
not Chinese and definitely not Japanese. These movies have
produced in the West a culture shock comparable to the
European discovery of Japanese prints in the late 19th century. In
fine arts, similarly, the video art pioneer Paik Nam June and his
follower Jheon Soo-cheon have opened the eyes of art lovers
everywhere; thanks to these artists, South Korea has been
discovered as if it were a new continent. Korea was there but we,
Korea needs a new national
symbol. Pictured is UNESCO
World Heritage site,
Seokguram, located in
Gyeongju, Gyeongsangbuk-do
Province.
49
in the West, could hardly see it.
Can these artists, to whom I shall add the writer I Mun-
yeol, help us understand who is South Korea at sixty? It is the
Morning Calm and Dynamism simultaneously. When Jheon Soo-
cheon displays his installations in Seoul , Venice , Paris or New
York, ancient funeral statuettes in a contemporary light, he
connects the oldest tradition with cutting edge modernity: like I
Mun-yeol’s novel , “Hail to the Emperor”, he makes evident the
continuity from Shamanism to Confucianism, Buddhism,
Christianity and the postmodern nihilism of Old Boy.
Because of this outstanding continuity, we celebrate South
Korea’s sixtieth birthday today as well as its 3000-year-old
civilization. This is a reason why, when visiting the National
Museum of Korea in Seoul, I regret that it does not incorporate
the most recent creation of contemporary artists: the continuity
would be for all to see. It would make clear that South Korea
does not lack identity but does suffer from a still weak identity
promotion policy.
What use would be such a policy? It would convey some
economi c benef i ts. Strong nati onal brands sel l : worl d
consumers buy French perfumes because they are French,
Germans cars because they are German, Japanese technology
because it is Japanese. Korean products sell for many reasons
but rarely because they are Korean. Among industrial advanced
nations, South Korea, so far, has not yet built a decisive
cultural advantage.
Rising expectations
In sixty years, however, South Korea went from one of the
poorest countries on earth to one of the most successful. Its
civilization alone would not have permitted such progress if the
right strategy had not been followed, a free market economy and
a progressive shift from enlightened despotism to full-blown
democracy. For the younger generation who takes South Korea’s
50
present status for granted, it is difficult to imagine a different
evolution. But a glance at the neighboring countries which
benefit from superior basic resources show how communism
could bring nations to their knees. History has thus proven that
South Korean leaders made the right choices at an early stage
when liberal democracy did not necessarily look like a winning
choice: whatever the rational (resist North Korea? emulate
Japan? follow the United States?), South Korea had it right. This
needs to be reaffirmed as Korean society at sixty doesn’t escape
the turmoil which goes with maturity. Is South Korea in a crisis?
Of course it is; only stagnant nations mired in poverty, under
despotic regimes, ignore crisis. Because it is an actual democracy,
and a modern economy, South Korea has entered into the cycle
of rising expectation: only when life is improving do you start
wondering why it is not improving more rapidly. When free
speech is allowed, why not become vociferous? As seen from
abroad, especi al l y from Western Europe, the street
demonstrations and strikes which take place in South Korea do
no surprise us: we have lived through those kind of events before
and we still live with them. In democratic countries, elections
never fully solve social conflicts; the purpose of elections is to
quiet those conflicts so that they would not degenerate into civil
war. What we now see in South Korea is business as usual in
Western democracies. Are South Koreans disappointed with
democracy? This is common as well: democracy is always
disappointing while people expect too much of it. It is an
imperfect regime but it is non-violent and it doesn’t pretend to
dictate individual life. Maybe South Koreans are not yet
accustomed to the inherent modesty of democratic institutions.
They also are not fully reconciled no nation is with the
imperfections of the free market economy. Free market economy
brought South Koreans out of poverty; this was hardly debated
when the growth rate hovered around ten percent. When the
growth rate plummets to four percent, enthusiasm for the
51
market tends to decline. The very high growth rate could absorb
many imperfections of the system such as required long work
hours, unequal redistribution, brutal exodus from traditional
activities to mass industry. But a slower growth rate underlines
these imperfections : hard work is less well-tolerated, the gap
between rich and poor, between regular and irregular workers fall
under harsher scrutiny. A slower growth rate generates social
frustration from the less educated toward the better educated,
from the less paid toward the wealthy entrepreneurs. The search
for scapegoats (the Americans, the chaebols), and a fiery
nati onal i sm, cl ose to j i ngoi sm, take root easi l y when
expectations are not met. Shall we conclude that South Korea is
in a crisis, or in a transition? It seems to me as a transition
travails to the next stage when South Korea will become a major
global player on the world scene.
Global player
South Korea at sixty has unique resources that remain untapped:
its civilization as mentioned above is the most evident. By
promoting its cultural resources, from its museums to its cuisine,
by pursuing the globalization of its economy, South Korea could
be better recognized as a global player. A stronger economy,
more cultural value would bring a stronger diplomatic position;
South Korea does not need to remain dwarfed between China
and Japan. More global clout would make reunification easier
against those who do not want it. Not only against North Korea,
A slower growth rate generates social frustration
from the less educated toward the better educated,
from the less paid toward the wealthy entrepreneurs.
The search for scapegoats (the Americans, the
chaebols), and a fiery nationalism, close to jingoism,
take root easily when expectations are not met.
52
which is an economic midget but against China and Japan as
well; those two countries are not enthusiastic about Korea’s
reunification.
The goal of a unified Korea, which is now closer than ever,
could be the ambition of a new generation, the success of the
present administration and a tremendous booster for the Korean
economy. How will it happen? It is anybody’s guess but , based
on my knowledge of North Korea and my memories of Russia , I
bet on an implosion of North Korea under the stress of mass
poverty . The North Korean people are no longer ignorant of the
global reality . Many in South Korea fear the cost of this
reunification; but the benefits in terms of market opportunities,
and new work force, would rapidly offset the costs. Moreover it
would bring peace in North East Asia, which remains unstable
and very much depending on the good will of the U.S. military. A
stronger and larger Korea could balance its influence between
Japan and China with the ultimate goal of a North East Asian
economic zone, following the lines of the European Union. Such a
grand design could become the new national ambition of the
South Koreans and overcome short-term domestic conflicts or
short-sighted nationalism.
This grand design should not exclude some significant
changes within South Korean society. Among those, education
Paik Nam-june’s video artwork
on display at the
Gwangmyeong Cycle Race
Dome Stadium in
Gwangmyeong, Gyeonggi-do
Province.
53
comes first. South Korean schools, colleges and universities are
still very much in the grip of a traditional system which goes
back to the Confucianist rote. This authoritarian pedagogy was
perhaps wel l -geared to the fi rst stage of South Korean
industrialization when it required an obedient workforce. But in
a transition toward a more high-tech and service-oriented
economy, South Korea needs a more initiative-based workforce
and more entrepreneurship-minded individuals; this requires a
fundamental shift in the education style, toward a more
individualistic and less Confucianist type of students-teachers
relationship.
A more open education would be able to retain in South
Korea many of its best students who now emigrate to the United
States; it would also attract students and scholars from other
parts of the world, not only from the Asia Pacific region. A whiff
of cosmopolitism would enhance the creativity of the Korean
education and its Rand’s performance. More and better educated,
Koreans would produce less “irregular” workers, while most of
the these “irregular” workers presently suffer from a lack of
proper education. Better educated Koreans will be more ready to
understand the harsh process of destructive creation, which is
the core of rapid economic development: adaptation through
education should be the Korean answer to the challenges of
globalization.
This adaptation will not be a smooth nor an instantaneous
process; no country so far has been able to strike an easy balance
between the flexibility requirements of the global market and the
collective desire for stability. Some turmoil will happen that
cannot be avoided, but more open political debates, better public
explanations, better education and constant negotiations should
lead to more consensual solutions. To achieve such a delicate
balance between competition and social stability, South Korea
should not necessarily follow other models, be it Japan, the
United States or Europe. There is room for creativity in a still
54
young State: South Korean economists, state officials, union
leaders, and entrepreneurs could experiment with new solutions
such as a competitive welfare system, permanent training,
negative income tax for the poorest, and social flexisecurity
(flexibility for the employers, security for the employees)
mechanisms as now practiced in Scandinavia.
Beyond these still to be created public institutions,
governments, at the national and local levels, should focus on the
quality of life in Korea. The Korean people have worked, and still
work, hard; they deserve reliable health care, special attention to
the old and retired, safety and a more beautiful environment.
The beautification of Seoul under the leadership of former mayor
and now President Lee Myung-bak and his successor Oh Se-hoon
has demonstrated that government officials can make a
difference in the daily life of the Korean people. This is a model
to be followed.
Korea in sixty years
I have no doubt about Korea’s economic or diplomatic status in
sixty years from now. But I wonder what Korean will mean then?
All nations today are torn apart between their ancestors’ roots
and fusion into a global melting pot. Most probably, the recent
nationalistic outbursts among young Koreans express a disarray
towards these contradictory trends. The tension between local
and global will only increase as more Koreans will live abroad or
be exposed to diverse cultural experiences. Moreover, more
foreigners will come and live in Korea; Korea cannot escape
Koreans who always defined themselves through
their bloodline and family history, will then be
compelled to change their self definition:
a Korean in the future could well be Korean by its
culture without being Korean by its genetic origin.
55
immigration and its developing economy will need immigrant
workers, at the top as well as at the bottom of the economic
scale. Will this confrontation between Koreans and foreigners,
abroad and at home, be smooth and easy? Will xenophobia
prevail, or intermarriages? Probably, both will happen, like in the
rest of the world.
Koreans who always defined themselves through their
bloodline and family history, will then be compelled to change
their self definition: a Korean in the future could well be Korean
by its culture without being Korean by its genetic origin.
Moreover, a Korean could be Korean and something else
simultaneously. This is not to be feared: we are all shifting from a
world dominated by the cult of our ancestors, to a world based
on shared identity. Many Koreans will remain Korean and
become global citizens as well; and many global citizens could
become Korean by choice.
56
S
ixty years may seem like a short period of time compared to
the vast history of the world. But for the Republic of Korea
and for its citizens, it has been full of meaningful events.
In the late 1940s and the early 1950s, the Republic of
Korea was the center of the Cold War dispute between two great
nations resulting in great bloodshed between its own citizens.
The final result was the division of a once unified nation into two
separate nations; one to a nation called the Republic of Korea,
and one to a nation called the Democratic People’s Republic of
Korea. It was not easy to settl e thi s pol i ti cal cl ash, and
consequently, it took considerable time for these two nations to
move on to the next round.
Despite these hardships, despite the remaining influence of
the Japanese dictatorial occupation; and even despite the
disastrous ruins remaining from bloody war, the Republic of
Korea found strength in itself and took a relatively short period
of time to escape from the third world label to what can now be
called a contemporary economy and a developed social-political
system. Heading towards this new label brought results that
were admirable even to itself. These admirable results include the
country’s rise to an important position in the world economy and
the rise to higher level of influence in international relations
between other countries.
The reconstruction of the Soviet Union and the end of the
Cold War created an atmosphere that made a pathway to a deep
relationship with our nation. I remember June 1990, when in a
hotel called Vermont in San Francisco near the end of my visit to
Republic of Korea:
An Important Partner to
Russia in Southeast Asia
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the U.S., we met with the president of the Republic of Korea, Roh
Tae-woo. He had come from South Korea with the sole purpose
of meeting us. We discussed all of the problems associated with
the Korean Peninsula, and came to an agreed conclusion to
engage in a diplomatic relationship, which was carried out
effectively in a speedy manner.
Soon after, I had the privilege of meeting with President
Roh Tae-woo two more times; once in December in Moscow,
when the South Korean president officially visited our country,
and once in April 1991 in the exotic Island of Jeju in the
southeastern part of Korea. During our stay, the president invited
me to visit the Korean Peninsula once again on my return flight
from Japan.
While looking over East Asia’s situation at the time, and
the position Korea had inside of this East Asian pool of countries,
we decided that the agreement we had made was beneficial for
both countries. During this visit, I had a chance to marvel at
President Roh Tae-woo’s immense political capabilities to steer
the Republic of Korea in such a crucial time of its history.
The exchange we had with the Republic of South Korea
duri ng thi s ti me had a deep effect on al l the countri es
surrounding the Korean Peninsula. After this followed the
establishment of Korea’s relations with China, the acceptance of
both Koreas to the UN, and other important roads such as the
possibility for South Korea to push forward in a peaceful
democratic union with North Korea and an enabling of a direct
dialogue between the two governments were opened.
Mikhail Sergeyevich
Gorbachev was the last
General Secretary of the
Communist Party of the
Soviet Union and the last
head of state of the USSR,
serving from 1985 until its
collapse in 1991. Gorbachev's
attempts at reform
perestroika and glasnost
as well as summit
conferences with U.S.
President Ronald Reagan,
contributed to the end of the
Cold War. The summit
meeting between Gorbachev
and Roh Tae-woo, the-then
president of the Republic of
Korea, in 1990 in San
Francisco paved the way for
the establishment of
diplomatic relations between
the two countries. He was
awarded the Nobel Peace
Prize in 1990. Gorbachev is
currently the leader of the
Union of Social-Democrats.
Mikhail
Sergeyevich
Gorbachev
Despite these hardships, despite the remaining influence of the
Japanese dictatorial occupation; and even despite of the disastrous
ruins remaining from bloody war, the Republic of Korea found
strength in itself and took a relatively short period of time to escape
from the third world label to what can now be called as a
contemporary economy and a developed social-political system.
58
The road ahead was not a simple one; many serious rows
of obstacles were required to be overcome, the biggest of which
was the nuclear missile ambition of North Korea. This ambition
drew the interest of many powerful nations into East Asia. The
final proposed solution was the six-party talks (the two Korean
governments, China, U.S., Russia, and Japan) which allowed for a
neat compromise that took consideration of all sides. Russia, in
my opinion, was different somewhat from the rest of the
powerful nations in that its interest solely lay in the formation of
a united, democratic, and peaceful Korea that would play its own
rightful role in international relations.
It is inevitable to talk about Russia and Korea in terms of
culture and economy. Even before the diplomatic establishment,
we had a positive outlook in these areas. For example, the Soviet
Union, ignoring the counteractive position that North Korea had
to the Olympic Games held in Seoul, took a broad stance by
taking part in the event. To add to this, the representatives from
our trade union were already successfully carrying out their
business affairs in Seoul. From the South Korean side, a great
active interest in economic relations with our country was
working with Hyundai and its CEO Chung Ju-young. I met with
him in Moscow, where he came several times with a helper by
Summit meeting between
President Roh Tae-woo and
Mikhail Gorbachev, former
General Secretary of the
Communist Party of the Soviet
Union.
59
the name of Lee Myung-bak, who at that time was still a young
man. He would later become the future president of South
Korea. His excellent abilities in matters of grand business affairs,
his accumulated experiences in politics in the National Assembly,
and the awareness of his responsibilities as a mayor of Seoul
brought him the trust and respect from all levels of the Korean
Republic. The results from last year’s presidential election reflect
this truth.
A
fter the establishment of diplomatic relations, trade
between our countries grew exponentially. Brand names
such as Samsung, LG, Hyundai, and Daewoo found prominence
in our markets and became known to all Russians. This lively
trade between our countries synthesized a strong tie in the
cultural sphere and also influenced our scientific/technological
spheres. For example, enormous three-sided projects were
carried out in the areas of transportation, electricity, and market
infrastructures. The foundations that made these projects
possible were the awareness of the scientific/technological
potential and the natural resources of Russia combined with the
dynami c and vast busi ness experi ences of the Korean
entrepreneurs. Although the economic crisis of Russia in the
1990s interrupted its actualization, today, the economical
foundation and cooperation of both countries is far in its process
toward materialization. It is a very crucial time where not a
moment can be wasted.
In relation to myself, after the fall of the USSR and the
Soviet Union, my relationship with South Korea did not
deteriorate. In short, I have been invited several times to Korea
by my friends, have met with its leaders and with the members
of the parliament, and have consulted with the representatives of
gigantic corporations with a wide amount of communication.
I had a very close relationship with the previous president
of South Korea, the man that was awarded the Nobel Peace Prize
60
Kim Dae-jung. With him in June of the year 2006, we
attended a forum in the city of Gwangju. The forum was held for
former Nobel Peace Prize winners both in honor of the 30th
anniversary of the May 15th Democratic Uprising and for a
peaceful Korean Peninsula. The introductory speech for the
attendees of the forum was held by the UN Secretary General of
that time, Kofi Annan, while the opening ceremony was
officiated by the President of South Korea Roh Moo-hyun.
The Korean problem takes an important place both in the
activity and future value of socio-economic funds and in
politological research. In the last years, with the support of
After the establishment of diplomatic relations, trade
between our countries grew exponentially. Brand
names such as Samsung, LG, Hyundai, and Daewoo
found prominence in our markets and became known
to all Russians.
Construction is under way for
a planned East Siberia-Pacific
Ocean oil pipeline (4,700 km).
61
Korean funds and the participation of leaders in the Russian-
Korean field, two projects were completed: “The Relationship
between Russian and Korea” (2003) and “The Question of Korea
in the Inter-racial Atmosphere of East Asia” (2005). In these
projects we were firmly able to visualize through solidly
documented back-up files, the historical root cause of the current
problem and the future solution of the Korean Peninsula and of
East Asia.
All of the experiences that I had with the enhancement of
our relations with South Korea equal with that of our technical
analysis, and without a doubt, South Korea takes an important
place as our valuable partner in East Asia.
I hope that Korea will have big successes in all areas,
especially in socio-economic development. I also hope that Korea
will solve its national problems and come to a unified and
peaceful conclusion that will bring the divided peninsula to an
agreed union.
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W
hereas ancient Korea was established several thousand
years ago, the Republic of Korea was established just 60
years ago. The Peninsula was split after the World War II. The
Republ i c of Korea was establ i shed i n the south and the
Democratic People’s Republic of Korea was set up in the north.
The South Korea became a newly born country thereafter.
Whenever South Korea is mentioned, people show their
respect to this country. South Korea worked a miracle in its
development process and changed into a modern and developed
country, from a poor and laggard one. The South Korean
experience of modernization attracted the eyes and praise of the
whole world.
Under the new situation, South Korea has set up a new
development goal and is trying to achieve an upgrade. Can South
Korea achieve its new goal? Koreans are a people of great
enterprise, with an innovative spirit and lofty goals. Although the
Koreans’ new journey is full of challenges, we still have reasons
to bel i eve that South Korea wi l l make more i mpressi ve
achievements in its new development.
A brilliant achievement in four strides
The realization of economic modernization is an important goal
for the construction of South Korea. South Korea's modernization
process, which lasted from early 1960s to the late 1990s, took
four great strides.
The first stride was to achieve wealth and get rid of
poverty. The government played a significant role in this process.
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President Park Chung Hee built up a government leadership
system similar to a military headquarters. This government
directly designed, organized and operated the economic
development; organized and mobilized the necessary resources in
the economic development and promoted the implementation
of the economic plans and projects.
South Korea established the strategies of industrialization
development and export orientation, and carried out its
economic development from the low end, i.e. to develop a labor-
intensive export processing industry by using cheap labor
resources. South Korea not only created employment, but also
increased foreign exchange earnings, and realized the initial
capital accumulation in its modern industry development.
After several years of development, South Korea's labor-
intensive products, such as wigs, luggage, clothing, plywood and
so on, entered the international market and became brand goods
which are popular world-wide today. By 1970, South Korea's
national income per capita grew from 60 U.S. dollars to 250 U.S.
dollars. The per capita income quadrupled.
The second stride was to develop modern large-scale
industries, develop the export vigorously and achieve a good
standard of living. On the basis of the first stride of successful
development, South Korea further set new development goals,
i.e. developing the capital intensive industry, laying solid
foundations for industrial modernization, enhancing the
international competitiveness of products, quadrupling the per
capita income again, and realizing that good standard of living.
Zhang Yunling, born on May
8, 1945, is the Director of
Academy Division of
International Studies,
Chinese Academy of Social
Sciences (CASS) and
Professor of International
Economics. He was the
Director of the Institute of
Asia Pacific Studies, CASS
and a member of Foreign
Relations Committee,
National Committee of
Chinese People’s Political
Consultative Conference.
His major books include:
International Environment
for China in the Coming 10-
15 years (2003), East Asian
Cooperation: Searching for
an Integrated Approach
(2004). East Asian
Regionalism and China
(2006).
Zhang Yunling
During this period, South Korea realized its dream of
being a powerful nation. The gross national product ranks
the 11th in the world. The per capita gross national product
surpassed 10,000 U.S. dollars. South Korea joined OECD
and became a member of the developed countries’ club.
64
During this period, the government continued to play a
leading role in economic development and gave strong support
to the development of big industries. After 10 years’ effort,
South Korea made prominent progress in the development of
heavy chemical, steel, shipbuilding and other heavy industries.
The automobile industry was also built up.
During this period, South Korea achieved a fast growth in
its foreign trade and became very competitive in the areas of
steel, shipbuilding, chemical or even automobile industries. In 10
years, South Korea's gross domestic production increased by
nearly 7.5 times and per capita national income grew by 6.7
times. Thus South Korea entered the ranks of middle-income
countries and achieved a decent standard of living.
The third stride was to achieve steady economic growth,
reduce direct government intervention, carry out reform of the
economi c system, and devel op marketabi l i ty and i nter-
nationalization. After economic development achieved a certain
foundation, how to make further enhancements was a new
situation that South Korean encountered. In this case, further
insistence on excessive government intervention in the economy
would become an obstacle to future economic development.
Therefore, since the 1990s, the government has carried out
The Hyundai shipyard, the
biggest in the world, produces
40 to 60 ships a year.
65
marketability, privatization and internationalization reform. The
enterprises began to carry out structural adjustment and
substantially to increase foreign investment. Although such an
adjustment was painful, South Korea was successful.
The fourth stride was to promote innovation, strengthen
internationalization strategies and step into the ranks of
developed countries. The South Korean economy entered a new
period of development on the basis of marketability, privatization
and internationalization adjustment from the 1990s.
South Korean Enterpri ses i ncreased the i nnovati on
dynamics in electronics and telecommunications, while large
scale development of foreign investment, industrial restructuring
and transfer was carri ed out to open up new space for
development.
During this period, South Korea realized its dream of being
a powerful nation. The gross national product ranks the 11th in
the world. The per capita gross national product surpassed
10,000 U.S. dollars. South Korea joined OECD and became a
member of the developed countries’ club.
South Korea's economic modernization is a success and its
rapid economic growth has been described as "the Han River
miracle". As a rising leader in the emerging economies, South
Korea helped formed Asia's "four little dragons" together with
Singapore, China's Hong Kong and Taiwan. Today, the Korean
people are ambitious and want to be ranked among the
developed economies in the world.
The experiences and lessons
South Korea, once a backward country which obtained such a
great success in a short time, has had a lot of experiences and
has learned some important lessons during the development
process.
The major experience is its scientific planning and its
determination to stick to economic modernization. Outsiders
66
thought that South Korea’s political situation was too unstable
for its economy to take off. The coup, the murdering of leaders,
large-scale mass demonstrations and so on took place during this
period.
However, one thing is very clear. Despite the changing of
regimes, each Korean government regarded the realization of
modernization and national rejuvenation as its goal. The
government carried out its five-year plan from the 1960s up to
the mid-1990s, when the industrialization was completed.
The early 60s to the late 70s was a period of industrial-
ization and the establishment of a modern industrial foundation.
Park Chung Hee was in power during this period and political
stability was easily maintained.
A coup took place in the early 1980s. The political situation
was basically stable for more than 10 years thereafter. So South
Korea could develop large-scale industries that were more
competi ti ve. Duri ng thi s peri od, South Korea pursued a
government-led economic model and the government played an
important role in the entire process. The government's scientific
planning and a strong organization were a vital guarantee for the
establishment of a modern industrial system within a very short
period of time.
Of course, there were contradictions between South
Korea's authoritarian political system and the modernization of
the development process. The government-led management
would also result in serious intervention, causing system
corruptions that were the main causes of Korean political turmoil
and mass movements.
For example, Park Chung Hee employed “constitutional
reform and restoration” to stop the activities of political parties
and suppressed mass movements to safeguard his centralized
power system when he was in power. The said measures resulted
in a confrontation between the government and society,
produced contradictions among political interest groups and
67
brought about the tragedy of political change.
Moreover, some large industrial groups which grew up with
the support of the government colluded with senior government
officials and banks in making credit fraud, transferring funds and
carrying out illegal activities. In the fast-growing period, Koreans
usually valued the speed and underestimated the quality. Many
roads and bridges suffered quality problems. Many big potatoes
in Daewoo, Hyundai, Samsung and GoldStar groups had been
sentenced to jail for transferring funds illegally.
It now appears that there would be less social turmoil if
South Korea' s pol i ti cal reform and economi c structural
adjustment would have been carried out earlier, and if some
proper reform adj ustment were empl oyed rather than
suppressing measures to solve the problems in its high-speed
economic growth. Of course, South Korea enjoyed a peaceful
transition from an authoritarian system to a democratic system
and did not experience serious social turmoil. However, the long
delayed and unsolved political and social division and their
tremendous cost were also considerable.
The second experience of South Korea's development is to
develop a major strategy and to form large industrial groups.
There are two pillars of modern industry. The first is the large
enterprise groups and the second is the small and medium
enterprises. Large enterprise groups are the backbones of
developing large-scale industries and major products. But the
development of large enterprise groups is not an easy thing. It
In the fast-growing period, Koreans usually valued the
speed and underestimated the quality. Many roads
and bridges suffered quality problems. Many big
potatoes in Daewoo, Hyundai, Samsung and GoldStar
groups had been sentenced to jail for transferring
funds illegally.
68
needs capital, technology and time.
Without direct and strong government support, the large
enterprise groups are very difficult to develop in developing
countries like South Korea which began from a very low starting
point. There would be no South Korean rapid take-off of steel,
shipbuilding, automobile, electric appliance and electronic
industry if there were no large enterprises like “aircraft carriers".
These large "aircraft carriers" became the backbone industries in
upgrading the level of South Korean industries and made South
Korea stand in the front row in the world in the areas of steel
production, shipbuilding, telecommunications and electronic
products.
However, the large enterprises strategy has a lot of
problems. First of all, they excessively rely on policy in the
development of enterprises, for they can get full policy support
and enough credit funds. The large enterprises use government's
policy support and the trust to carry on expanding, and thus
cause a credit crisis. For example, during the Asian financial crisis
of 1997, a chain of huge bad debts drew South Korea into a
serious crisis and South Korea's economy was severely damaged.
As large enterprise groups resided in the monopolistic position,
the policy favored large enterprise groups, small and medium
enterprises’ development was slow, and the operation of market
mechanism was hampered. South Korea’s marketability and
Korea’s first hypersonic speed
airplane released at Korea
Aerospace Industries in
Sacheon, Gyeongsangnam-do
Province.
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internationalization strategy, which started in the 1990s, made
painstaking efforts to resolve this problem, but the price was also
huge. Modern large enterprise groups have strong control ability.
If there is no perfect supervision system, it will lead to their
monopoly in the market and corruption in their systems. Now,
the South Korean government has made new efforts regarding
these problems and has achieved progress.
The thi rd experi ence of South Korea' s economi c
development is vigorously promoting technological innovation.
Business vitality and competitiveness come from constant
innovation. South Korea is successful in promoting economic
innovation. The most important in enterprise innovation is the
people. A backward country usually has less talent. In order to
produce and introduce innovative talent, South Korea has taken a
strategy of attracting overseas personnel.
From the beginning of the 1960s, the government has
adopted preferential policies to the introduction of modern
technology professionals, and management personnel. Due to a
series of comprehensive measures, a large number of South
Koreans studying abroad returned home. They were given
important positions and assigned to important posts in the
government and companies. These people brought South Korea
advanced technical knowledge and new management concepts
and methods, which played a key role in the promotion of South
Korean scientific technology and management.
At the same ti me, the South Korean government
formulated preferential policies to raise large amounts of money,
and actively supported the government and university research
institutions, and the group of companies engaged in researching
and developing. The government encouraged companies to
promote new technology innovation through the development of
scientific and technological innovation and take the innovation
as the core method to enhance the international competitiveness
of Korean products. Through unremitting efforts, South Korea
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has become a powerful scientific and technological country from
a country which mainly depended on production of low-end
products.
South Korea sei zed the opportuni ti es of the worl d
el ectroni cs i ndustry and became a maj or provi der of
semiconductors, storages, flat-panel TVs and network mobile
phones. South Korea produced competitive cars, high-speed
trains and so on by importing technology and by becoming
independent. Up to the late 1990s, South Korea's research and
development accounted for 3 percent of its gross domestic
product, reaching the level of developed countries.
Of course, the scientific and technological innovation
system led by the government and large groups has some
shortcomings, i.e. large investment, low efficiency, quick success,
false research results, big group monopoly and a lack of
innovation. South Korea's experience indicated that although the
government played the vital role in the support of research
innovation organization, the government's support must be able
to encourage open competition and build a vigorous innovation
system.
Large groups are the core forces in innovation, especially
for high-tech, which needs huge investment and research forces.
However, innovation is stifled if it is monopolized by large
groups. SMEs are the most dynamic components in technological
innovation and reform. The innovation of small and medium
enterprises will be suppressed and the economy will lack in
flexibility if there is no competition or open markets.
China and South Korea relations
For complex reasons, China and South Korea hadn’t established
diplomatic relations until 1992. However, during the short period
of 16 years, the trade and economic relationship between two
countries has greatly developed. At present, China is the largest
trade partner of South Korea, and also the largest investment
71
market. At present, trade between China and South Korea has
passed 150 billion U.S. dollars and expected to reach 200 billion
U.S. dollars. Actually, this will be attained by 2010.
As a neighbor, the development of China’s market has a
special meaning to Korea. In early 1994, many companies
noticed the importance of the market of China and began to
invest in large quantities. After the economic crisis in 1997, the
adjustment of the industrial structure became an important
strategy for getting over the crisis and rejuvenated its economy.
The economic crisis didn’t spread to China directly and the
economy was still growing. And it definitely became the
dreamland for the South Korean companies to transform
production and expand industry. Therefore, the investment of
South Korea in China expanded dramatically. After China’s entry
i nto the WTO, South Korea’ s i nvestment i n Chi na kept
expanding due to the prospects of China’s economy. Some big
companies, like Hyundai, expanded its capability of producing in
China.
The Chinese and South Korean economies complement
each other. The fast growing trade investment played an active
role in the economic development of the two countries.
Especially, the economic ties on the basis of investment-trade
share the cl ose i nternal connecti on for the economi c
devel opment of the two countri es. Noti ceabl y, Chi na’ s
investment in South Korea has also been increasing in recent
years. Although the absolute amount of the investment is small,
it has increased rapidly. China ranks No.3 in foreign direct
At present, China is the largest trade partner of
South Korea, and also the largest investment market.
At present, trade between China and South Korea
had passed 150 billion U.S. dollars
and expected to reach 200 billion U.S. dollars.
72
investment in South Korea. It is estimated that the China’s
investment will grow more rapidly with the strategy of “go-out
policy” of China.
China has a large amount of deficit in the trade with
South Korea. Now, China is the largest country of foreign trade
surplus origin, and South Korea is China's second largest source
of trade deficit after Taiwan. This situation is mainly caused by
the unbalanced structure of the investment and trade. Statistics
show that the South Korea’s investments in China have mutual
promoti on ti es. South Korea’ s i nvestments drove the
development of exports, including chemistry, plastics, chemical
fiber, electrons, electric devices, cars and machines. Of course,
South Korea’s investments in China dramatically promoted
China’s exports. Especially in the labor intensive industrial
investment, the rate of export is very high and it will be of great
advantage to China to make its exports more competitive.
At present time, the South Korean companies investing in
China are facing a new challenge. Due to the increasing cost of
labor in China, as well as the local companies’ higher competition
and the change of the export environment of market, they face
the pressure of technological innovation. But this is inevitable,
Korea-China summit meeting.
73
and it is good for the South Korean companies to restructure.
There is enormous room for economic development and
cooperation between China and South Korea. China’s great
potentiality in development and active creativity in the
technol ogy are the advantage for the two countri es to
strengthen economic and trade ties. Of course, in order to lay
the foundation for long-term development, the two countries
need to strengthen the system of cooperation. For example, the
governments and companies should further strengthen the
cooperation mechanisms between the two countries and speed
up preparations for a bilateral free-trade zone process in
particular.
Reviewing the past 60 years, the Korean people deserve to
be proud of their achievements; and to look forward to the
future. The Korean people are ambitious to achieve new
development blueprints. To quote former President Kim Young-
sam, who opened South Korea democratization process, to finish
this article: “In the hope of a beautiful dream and an ideal future,
we will create a new Korea.”
74
Korea as a Model of Economic Development
Korea, with its distinguished pattern of economic development,
has proved itself a good model for many developing countries.
Apart from Japan, Korea is indeed a unique example of a non-
Western country becoming a member of the OECD as a major
trading nation. What, then, are the principal factors contributing
to this success in Korean economics?
The most predominant factor was the effectiveness of the
“triangle” formed by the government, industries and financial
i nsti tuti ons. The Chaebol s, the banki ng sector, and the
government formed a solid triangle of economic development.
This triangle would not have led to shining results however, had
it not been for certain favourable external factors.
The rapid economic development of Japan as well as
Japanese economic and technical cooperation contributed
si gni fi cantl y to the earl y stages of Korean economi c
development. Then came the waves of globalization. The export-
led pattern of growth of the Korean economy rode successfully
on the waves of globalization and Korean development was, in
turn, an aspect of the globalization (in the sense of growing
interdependence)of the world economy.
The Korean economy based on this triangle, however,
became the victim of its own success. This was witnessed very
clearly during the so-called Asian economic crisis of the late
1990’s. The solid triangle had led to the excessive dependence on
the short-term capital from abroad and had left intact the
structural rigidity of the economy.
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Here again, however, Korea demonstrated itself to be a
good example of a developing country overcoming external
financial difficulties combined with internal rigidities. The
courageous openi ng of the Korean fi nanci al as wel l as
commodity markets to foreign investors and traders, coupled
with the restructuring of Chaebols and of the labour market,
contributed a great deal to Korea’s efforts to overcome the crisis.
More than the introduction of various new economic
measures, however, what should be emulated by developing
countries is the political skill of appealing to national solidarity
and the determination to restore international credibility by
faithfully observing the IMF’s “conditionalities”.
Looki ng back at the hi story of Korean economi c
development over the last thirty years or so, one might today
wonder whether Korea can become another model of economic
progress in the coming decade and, in that connection, what
major tasks remain ahead.
If Korea can become, for the third time, a good model of
development for other similarly placed economies of the world,
it appears that Korea should, at least, be able to deal successfully
with the following problems or tasks.
The first is the growing income gap between the rich and
the poor, not only inside the Korean society itself, but all around
the world. To what extent the Korean government will be able to
provide an effective safety-net to the underprivileged is a serious
probl em to be tackl ed, parti cul arl y i n vi ew of the rapi d
demographic changes of the Korean society.
Kazuo Ogoura is president of
the Japan Foundation, and a
former Ambassador to
Vietnam, Korea, and France.
Graduated from the
University of Tokyo’s Faculty
of Law and the University of
Cambridge’s Faculty of
Economics, he joined the
Ministry of Foreign Affairs,
where he served in various
positions, including Director-
General of Cultural Affairs
Department (1989-92),
Director-General of
Economic Affairs Bureau
(1992-94), Deputy Vice-
Minister for Foreign Affairs
and Japanese G7/G8 Sherpa
(1995-97).
He is also an Invited
Professor of International
Politics in the Economics and
Business Department of
Aoyama Gakuin University
(2003-).
Kazuo Ogoura
The Chaebols, the banking sector, and the government formed
a solid triangle of economic development.
This triangle would not have led to shining results however,
had it not been for certain favourable external factors.
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Second is the question of agriculture. It is likely that the
farm subsidies and the international competitiveness of Korean
agriculture could become serious obstacles for Korea in its efforts
to promote free trade agreements with its trading partners. In
other words, Korea, instead of asking for various types of
exceptions for its agriculture, can make use of the opportunities
of free trade negotiations as an instrument to carry out the
structural reform of its own agriculture.
The third task will be the dismantling of its developing
country status. Korea has, so far, in various trade and other
areas-such as the imports of rice or green house emission
control-advanced the argument that Korea still remains a
developing country. In view of Korea’s latest economic progress,
this argument has increasingly been viewed in the international
community as more or less outdated.
One might argue in this connection, that Korea wanted to
retain its developing country status in preparation for the
reintegration of the much poorer North Korea. Though politically
understandable, this argument is likely to be viewed in the
international community as an excuse to avoid shouldering more
international responsibilities and may weaken international
financial support for reintegration.
All in all, what lies now before Korea as the great task for
the future is the de-Koreanization of its own economy, in the
sense of further integrating its economy with that of the rest of
the world, thereby contributing significantly to the sustainable
growth of the world economy.
Korean Political Development
After the presidency of Syngman Rhee Korea experienced for a
long period of time, military, authoritarian governments. How
should we assess such regimes in the light of the contemporary
political situation in Korea?
The military shouldered political responsibility due to the
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need for a government-initiated development strategy and to
the security requirement in face of the threat from the North.
Here again, however, the Korean political process was linked to
i nternati onal ci rcumstances, parti cul arl y the East-West
confrontation. The prolongation of the military regimes was,
therefore, linked both to domestic and international factors.
Strategic consideration, both economic and politico-military,
weighed heavily on the political process in Korea.
One should not, however, lose sight of the activities of the
democratic forces which were not negligible even under the
military governments. Student movements, labour union
activities and the political opposition of Kim Dae-jung and other
political personalities, however troublesome they may have been
to the successive military governments, paved the way for
transition from military to civil governments. In other words, the
democratic forces that survived the Park government, checked
the pattern of the Chun Doo Hwan presidency which ended after
one term, and it paved the way for the presidency of Roh Tae-
woo, who came from the military but became president by being
elected through proper process. In other words, both the Chun
and Roh regi mes coul d be consi dered as transi ti onal
governments which paved the way for a more democratic
political process.
The Kim Young-sam government can be remembered as
one that played a decisive role in cracking the fusion of politics
and economics. During this period, the roles of political parties
were consolidated and, in the true sense of the word, democratic
forces were integrated into the institutionalized political process.
The military shouldered political responsibility due to
the need for a government-initiated development
strategy and to the security requirement in face of
the threat from the North.
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This process was completed when Kim Dae-jung, long
considered the symbol of opposition, was elected president. His
presidency was also significant, as people from the Jeollanam-do
region, traditionally viewed as “outsiders” in the political process,
took over the centre stage of Korean politics.
Kim Dae-jung’s presidency, however, did not destroy the
traditional respect for authority, whether it may be political or
academic. Active for a long time as an outsider politician, Kim
and his group of politicians tried to project the image of
responsible politicians as soon as they took over the helm of the
presidency. In this process they relied upon, rather than
destroyed, the traditional aura of authority attached to the
position of presidency, ministership, or professorship.
Thi s aura of tradi ti onal authori ty attached to the
presidency, and other “titles” or positions was politically targeted
during the Roh Moo-hyun presidency. In fact, Roh’s presidency
was a quiet revolution, in the sense of destroying the traditional
authority attached to the various political positions. The thread
of populism that ran deep and wide during the period of Roh’s
presidency cannot entirely be attributed to the Internet
psychology of the people. The trend of such populism should be
understood in the wider historical context of Korean politics,
namely, the degree of the maturity of the democratic process.
This implies that the immediate national task in Korean
politics can be said to lie in the growth of healthy, sound
opposition parties which can present practical alternatives
instead of having recourse to regionalism or populism.
Korean Diplomacy
The most important diplomatic issue for Korea after the “Korean
War”, has been the international aspect of the North Korean
problem: namely, how to secure international support for Korean
security and, at the same time, obtain the blessings of the major
powers for easing tension with the North.
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These two objectives have to be pursued with careful
balance, particularly after the dissolution of the Soviet Union.
The creation of the six-party conference is an important device
to “internationalize” the North Korean problem, thereby securing
the delicate balance between containment of the North and
rapprochement with it. Despite occasional frictions with the U.S.,
the Republic of Korea has, in general, deployed skillful diplomacy
through whi ch the Korean government has obtai ned
international support both for its “soft” policy towards the North
and “pressure diplomacy” against it.
There are some signs, however, that may disturb the
delicate balance of soft and hard policies towards the North. This
is related to growing nationalism (in the ethnic sense)in Korea.
The revi val of a strong ethni c i denti ty wi th the North
(particularly among young people)presents the risk of giving rise
to frustration over American policies towards the Far East as well
as its troop presence. There is also the danger that such
nati onal i sm be canal i zed or di verted, consci ousl y or
inadvertently, toward an anti-Japanese movement.
The U. S. and Japan shoul d vi ew the ri se of Korean
nationalism with cool but sympathetic eyes, because Korea,
which faces the gigantic task of reunification, has a strong need
of ethnic nationalism. The U.S. and Japan should stay “cool” at
the time of occasional eruptions of such Korean nationalism. At
the same time, the Korean government should refrain from
canalizing or diverting the anti-government sentiment of the
people towards outside targets such as the U.S. or Japan.
The promotion of the free trade agreement or new
economic accords with these two countries may help mitigate
such risks of political diversion. In relation to the free trade
agreements, there is the issue of building an East Asian
Association or Community. One has to note, above everything
else, that an East Asian Community is already in the making in
the “functi onal ” sense of the word. The degree of the
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interdependence of trade among East Asian countries (Korea,
Japan, China, Taiwan, and the ASEAN nations)has already
exceeded the degree of i nterdependence among NAFTA
countries and has, more or less, reached the level of the
European Union at the beginning of the1970’s.
In addition to trade relations, East Asian countries (Korea,
Japan and China)have expanded tourism among themselves and
have also rapidly increased student exchanges. The life-styles of
the young people in Korea, Japan, Taiwan, and the coastal areas
of China have witnessed a certain “cultural” affinity, as evidenced
by the popularity of Korean TV dramas and Japanese fashions.
Such trends towards an East Asian Community should be
welcomed and encouraged by Korea for several reasons. Firstly,
moves towards building an East Asian Community will help hold
i n check the ri se of Chi na-central i sm and the parochi al
nationalism of East Asian nations.
Secondly, it can help strengthen the sense of international
responsibility for China to act as a responsible major power in
the world.
Finally, efforts to build an East Asian Community will help
form a vision of a stable, peaceful East Asian politico-military
Automobile exports.
81
geography after the Korean reintegration.
There are, however, a few tasks that Korea must deal with
in the process of forming an East Asian Community. First of all,
Korea must soften the “colonial” mentality of fanning anti-
Japanese sentiment, for the sake of consolidating national unity
or identity. As Korean society becomes more and more mature
both politically and economically, freedom of expression, even
on the issues concerning Japan, is expected to be secured socially
and politically, not to mention legally.
In this connection it should be pointed out that “protest
diplomacy” (to sever the channel of communication itself as a
means of manifesting protest) should not be utilized except in an
emergency, as lack of communication increases the risk of
misunderstanding and gives rise to the sense of detachment in
the minds of potential friends.
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I
t is a great honor to be invited to contribute a short paper to
this commemorative volume marking a milestone in Korean
history. But how should we judge a span of six decades? South
Korea is one year older than my country of birth, West Germany,
and three years younger than I am. Not long ago reaching sixty
yeas of age was for an individual the mark of having reached a
ripe old age. Adapting a quip from American song writer and
satirist Tom Lehrer it is true that “at my age Mozart had been
dead for 28 years.” Today for an individual sixty lies in that
undefined zone of middle and old age.
Not for Korea. Korea is Asia’s Poland. Lodged between two
ancient civilizational states, and forever fiercely protective of its
autonomy and endowed with a clear sense of self, Korea marks
its national history in long centuries not short decades.
Koreans have suffered more than most other people during
the second half of the 20th century. The suffering during the
Korean war made headlines all over the world. After the war
ended in a stalemate peace, Koreans suffered through the trauma
of national partition, as did Vietnam and Germany which are
now reunited. South Korea’s economic miracle was not made by
efficient markets operating in peace. The South Korean story
over the last six decades reminds us instead of the advantages of
adversity.
Vulnerability was the central condition which set South
Korea onto the course of making one of the most remarkable
economic runs in the history of capitalism. Looking at the
photographs of the South Korean countryside and of Seoul at the
KOREA
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South Korea at Sixty
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end of the Korean war, and traveling by bus through the South
Korean countryside and walking around downtown Seoul, as I did
earlier this year, leaves an indelible impression of the indomitable
will of the South Korean people to better their once miserable
lives and of the efficaciousness of South Korean institutions of
making the escape from poverty possible. War it turned out was
both, a source of terrible human suffering and an incubator for
something dramatically new in Korea’s history and in the history
of capitalism.
South Korea’s phenomenal accomplishments are worth
noting. But they are not unique. Taiwan became South Korea’s
twin at least in the eyes of scholars studying the process of rapid
economic advancement in East Asia. And Taiwan, like South
Korea, was also extremely vulnerable. Vietnam took a somewhat
different path, through many decades of a prolonged war of
national liberation, against France first and then against the U.S.,
before experiencing unification under Communist rule, followed
soon by the Sino-Vietnam border war of 1979 and eventual
living under China’s growing economic shadow. Although
Vietnam’s move to rapid economic take-off is occurring only
now, in the wake of China’s economic ascendancy, the long run-
up is marked by at times extreme vulnerability to that nation’s
survival.
These economic miracles are thus rooted in one common
condition, often extreme vulnerability, and show one common
institutional feature, the existence of a strong, developmental
state, intent on leading the nation rapidly to high and self-
Peter J. Katzenstein is the
Walter S. Carpenter, Jr.
Professor of International
Studies at Cornell University.
Katzenstein is President-
elect of the American
Political Science Association
(2008-09). In 1987 he was
elected to the American
Academy of Arts and Science.
He was the recipient of the
1974 Helen Dwight Reid
Award of the American
Political Science Association
for the best dissertation in
international relations; and of
the American Political
Science Association's 1986
Woodrow Wilson prize for the
best book published in the
United States on
international affairs.
Peter J.
Katzenstein
And I remember South Korean journalists angrily
and politely posing tough questions to
a top IMF official at a meeting at the Smithsonian Institution
that I had a chance to attend in
the winter of 1997 in Washington, D.C.
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sustaining economic growth. Variations in the character of the
state and state-economy linkages are considerable. This is
illustrated well by South Korea’s more centralized and Taiwan’s
more decentralized pattern of organization and development. But
in all cases the underlying condition of vulnerability and a strong
developmental state gave the initial impetus to different ways of
coping with adversity.
One should not think of the underlying condition of
vulnerability and developmental statism as something that
economic advancement of the 1960s and 1970s eliminated. In
the South Korean case, it is true of course that the freezing of the
military situation along the DMZ into a permanent stalemate
eventually led to a normalization of South Korean life and a
diminution of the sense of vulnerability. Yet South Korea
remained exposed to typically venomous threats shouted from
up North and six thousand North Korean pieces of artillery
trained on Seoul. And a new kind of vulnerability came with the
embracing of export-led growth as the guiding doctrine for the
South Korean economy starting in the early 1960s.
Although for several decades world markets were kind to
South Korea, world markets can create their own tsunamis as
financial markets did in 1997. An IMF bail-out of historic
proportion saved South Korea but at what, initially, looked like
Workers weld metal beams at
a construction site at Incheon
International Airport.
85
intolerable foreign interference. I remember seeing newspaper
pictures of South Korean housewives donating their jewelry at
street corners to help raise capital to pay for the melt down in
South Korean reserves. And I remember South Korean journalists
angrily and politely posing tough questions to a top IMF official
at a meeting at the Smithsonian Institution that I had a chance
to attend in the winter of 1997 in Washington DC. That self-
sacrifice and that anger were tokens of an economic nationalism
that defeated handily any attempt of Wall Street bankers eager
to finally buy into South Korean industry on a large scale. South
Korea was rocked by the crisis. But vulnerability galvanized an
underl yi ng economi c nati onal i sm that became a cruci al
ingredient in the defense of South Korean autonomy.
I
n Western Europe, under less harsh conditions, vulnerability
helped produce similarly beneficial outcomes. If one arrays
countries by their quality of life, based on about 200 indicators
of well-being, most of the small European states Scandinavia,
the Low Countries, Austria and Switzerland, and recently also
Ireland and Finland typically show up in the top ten. The
secret of their success lies in a perception of vulnerability to
outside influence. That vulnerability has taken different forms
market disruptions brought about by economic collapse in the
1930s, the experience or threat of Nazi occupation, the threat of
Communist aggression, Findlandization, or in the case of Ireland
British neglect followed by the subsidies that accompanied EU
membership. The social, political, institutional and policy
consequences of vulnerability differed from those we see in East
and Southeast Asia. Instead of developmental states, in Western
Europe it was democratic corporatism that came to express and
shape the collective power and will of the people. Vulnerability
was a crucial factor to generate an ideology of social partnership
that brought the owners of capital, workers and farmers into the
same national boat. And it taught the different and normally
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quarreling political parties and factions that pulling on the same
oar was going to be more advantageous in the end than fighting
over the spoi l s of capi tal i sm i n a dog-eat-dog form of
distributional struggle.
O
ne obvious difference between the West European and
East Asian pattern is the fact that the small European
states of North West Europe were democratic throughout the
second half of the twentieth century. This was not true of the
succession of developmental states that stepped onto the stage
of regional and global capitalism in Asia: South Korea and
Taiwan, most of the Southeast Asian Newly Industrializing
Countries (NICs), China, and now Vietnam. The latter two remain
firmly committed, at least for now, to a Leninist form of
capitalism. They are unwilling to cede authoritarian political
control to match the liberalizing impetus of their economic
policies. In sharp contrast, South Korea, Taiwan and many,
though by no means all, of the NICs have made remarkably
peaceful pol i ti cal transi ti ons from authori tari ani sm to
democracy.
In the case of South Korea, democracy is rambunctious and
noisy. Democratic politics in Seoul is not a sport for the faint-
hearted. But during the last two decades South Korea has
undeniably become democratic, with vigorously contested
elections and a vibrant civil society and social movement politics.
While liberal theory and policy prescriptions that seek to advance
a liberal agenda are bound to be disappointed in the short-term,
in the long-run, the South Korean case suggests, setting markets
free and making space for economic advancement will create a
middle class that eventually will demand more than a good
paycheck. This is both the promise that South Korea holds and
the threat that South Korean history poses to its big Chinese
“brother” in the North.
South Korea’s economic take-off to long-term, sustained
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economic growth fits into a pattern of delayed industrialization
with distinctive characteristics not anticipated by liberal theory.
It was an economic historian, Alexander Gerschenkron, who
observed that delayed industrialization was marked by specific
institutional characteristic. Compared to the British economy
which was the first to industrialize, the continental economies
which came later had to compete on different terms. Markets
were no longer as free as they had had been when Britain
entered on the stage. Instead the late comers had less time and
less freedom to find their way.
Concentration of industrial and financial capital and
protectionism were the result. Late European industrializers,
starting with France and continuing with Germany, Italy, other
countries and eventually Russia, evolved different types of
capitalisms than the one that had emerged initially on the British
isles. Late-late industrializers, starting with Japan and later
encompassing in succession the economies of East and Southeast
Asia were operating under still different sets of rules. While it is
true that the initial cohort of late and late-late industrializers
concentrated economic and political power to compensate for
their vulnerability in freely operating markets, somewhere along
the way the Gerschenkronian model stopped working. Instead of
late-late development contemporary capitalism is looking for a
new label to characterize the great transformation that we are
witnessing in East Asia.
Compressed industrialization differs from South Korea’s
late-late development pattern by one basic condition the
disjointed co-occurrence of the old and decrepit with the new
Technological shortcuts, juxtaposition of opposites
and political contradictions create
a potential for enormous political volatility
as a concomitant of compressed development.
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and super modern. Donkeys pull their carts in front of gleaming
skyscrapers. Beggars can be found nappi ng i n front of
sumptuously luxurious villas. Ancient machinery sits under one
roof with the most advanced computer controlled machining
center. Doctors attend to the hungry and the obese. The young
are beholden to tradition-bound ways and mores and fully
engaged with a free-wheeling transnational consumption culture.
The rapidity of late-late development has given way to the
simultaneity of compressed development. Technological
shortcuts, juxtaposition of opposites and political contradictions
create a potenti al for enormous pol i ti cal vol ati l i ty as a
concomitant of compressed development. It is true that South
Korea’s late-late industrialization patterns no longer provides
many navigational tools that might help China, Vietnam or India
to sail in new, uncharted waters.
B
ut South Korea’s history teaches an enduring lesson of a
different sort how to live with great vulnerabilities. For
six decades now it has danced on the top of a volcano, marked
by periods of calm and quiet as well as periodic, unpredictable
eruptions. Compressed development, especially in China, creates
enormous opportunities. But it will undoubtedly also create
The Korea Stock Exchange
building in Yeouido, Seoul.
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violent eruptions.
South Korea is condemned to live dangerously, as it has in
the more recent past and throughout history. Vulnerability is not
an exceptional but a habitual condition. In the last six decades
South Korea has made the most of it. This is not a unique gift of
the Korean nation. It is a condition that many nation states have
no choice but to accept and live with. South Korea’s economic
evolution thus fits into a broader pattern in world politics. As
South Koreans look back at the last six decades, they have much
to be proud of. And as they look around the world, they can see
many nati onal experi ments from whi ch they can l earn.
Vulnerability and the possibility to learn from others augur well
for the next 60 years of exploiting the advantages of adversity.
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T
he economic relationship between Korea and the U.S. has
been one marked by compassion, neglect, reliance, passion,
controversy, frustration and profit. Like the personality of both
nations, it has been emotionally driven, not always based on
economi c consi derati ons and to a very l arge extent
overshadowed by a U.S. obsession for Japan and China, two
markets which dwarf Korea, but which are rarely as profitable for
U.S. companies.
The Beginning
The economic relationship with Korea really began during and
immediately after the Korean War. The earliest memories of
Korea and America had its roots in chocolate bars, milk and flour.
U.S. aid flooded into Korea in the form of food supplies thanks in
large part to large U.S. surpluses with nowhere to go. America’s
farmers profited from large doses of aid that poured into Korea
often making it difficult for Korean farmers to compete, but
making food supplies for Koreans relatively easy to obtain under
the circumstances of war and devastation. Once the immediate
crisis of food was resolved, the large amounts of food aid
discontinued, but economic planning and strategic investments
continued through U.S. aid programs. The remnants of these
programs are still evident in the twin buildings now occupied by
the Ministry of Culture and Tourism and the U.S. Embassy which
were the previous headquarters of the U.S. Aid Program which
hel ped Korea wi th basi c economi c pl anni ng and the
establishment of strategic industries needed to get Korea’s
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economy moving.
This early beginning is responsible in large part for the
gratitude Korea’s older generation feel toward American
generosity. It is difficult to forget the hand that feeds and
protects, notwithstanding that a certain amount of resentment
builds because of this dependence. Subsequent generations of
Korea did not experience this direct aid from America that had
immediate visible results and they are able to look more
objectively at the U.S. economic relationship analyzing it with a
greater need for mutuality and benefit for Korea. Given the size
and dominance of the U.S. economy, there is a healthy dose of
cynicism in the “mutual benefit” analysis with an assumption
that as the historically weaker of the two, Korea always ended up
with the short side.
As the Korean economy grew in the 70’s and 80’s so did
U.S. investment in important industries for Korea in the form of
joint ventures and the licensing of critical technology. The U.S.
remained the largest foreign investor in Korea throughout this
period investing in important projects which boosted economic
performance, international competitiveness and exports. Yet
Japan and subsequently China always were the recipients of
much bigger investments given the size and potential of their
economies. It was difficult for U.S. managers located in or
responsible for Korea to capture the attention of corporate
leaders to increase investment in Korea.
Profitability has always been relatively good for U.S.
companies in Korea, but the hope of bigger profits in Japan and
Jeffrey D. Jones served five
terms as President of the
American Chamber of
Commerce in Korea and
three terms as President of
the Seoul Club. He organized
and presently serves as
chairman of a nonprofit
foundation, Partners for the
Future, providing
scholarships, job training, aid
and other assistance to the
unemployed and their
families in Korea. Jones
serves as advisor to several
organizations and
government agencies in
Korea including the Foreign
Investment Advisory Council
of Seoul City and the
International Advisory Board
of the Federation of Korean
Industries.
Jeffrey D. Jones
As the Korean economy grew in the 70’s and 80’s
so did U.S. investment in important industries for Korea
in the form of joint ventures
and the licensing of critical technology.
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China often overshadowed the real profitability of Korea. This
remains true today.
Trade Frictions
There was continuous pressure from the U.S. to open and
liberalize Korea’s markets, which went largely ignored until the
early 90’s when true liberalization of Korea’s economy began and
for the first time it became possible for foreign companies to
have wholly owned subsidiaries in Korea. This continuous trade
pressure or trade frictions as they were often referred to created
some resentment in the minds of the public and many officials
and was often the source of confl i ct between the two
governments.
Throughout the 70’s, 80’s and early 90’s, however, the
military and strategic alliance between Korea and the U.S. was
the primary focus of the two governments and to a certain
extent the general public of both nations often leaving the
economic potential between the two countries ignored. The
requirement that U.S. companies had to enter the Korea market
as joint venture partners with Korea firms also acted as a serious
impediment to significant investment and building stronger
economic ties with Korea.
An exclusive port for Hanjin
Shipping near Long Beach Port
in California, U.S..
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The Opening
Once joint ventures with local partners were no longer the
required form of doing business in Korea, U.S. companies began
to look more seriously at Korea’s market with much greater
potential. The post economic boom of the ‘88 Olympics was
taking affect and U.S. companies began to take Korea much
more seriously. Korea was beginning to shed its “Mash” image
deeply embedded in the minds of the U.S. public from the
extremely popular U.S. television series about the Korean War.
Just as this activity was beginning to take serious hold, Korea
entered the financial crisis in late 1997 which came to be known
as the “IMF” crisis and this marked the beginning of significant
investment in Korea by U.S. companies.
Failing Korean companies with significant assets and
sparkling new factories caught the eye of U.S. investors and U.S.
companies began flooding into Korea. This era also marked the
beginning of private equity investments in Korea in addition to
the traditional strategic investment that heretofore had been
Korea’s sole source of investment. The beginnings of private
equity investment following the IMF crisis also sparked a new
round of criticism and resentment from the Korean public toward
U.S. investment. The public and press criticized such groups for
their excessive profits taking advantage of companies that faced
difficulty. Profits became labeled as inappropriate and excessive
as the economy recovered.
Representative of the “evil” of private equity has been the
very successful Lone Star Funds who have come to symbolize all
of the bad that is conceivable of private equity. To this day, Lone
Star struggles in Korea to liquidate a significant investment while
NGOs and other groups seek to prevent Lone Star from taking
any profits outside of Korea. This incident has unfortunately
dampened the investment environment in Korea and has resulted
in a significant decrease in U.S. investments coming to Korea.
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Economic Integration
The integration of the U.S. and Korean economies began very
early in the 60’s and 70’s by an early reliance in the U.S. on
cheap imports from Korea and on Korea’s reliance on financing
provided by U.S. financial institutions. This initially started with
U.S. imports of garments and then shifted to electronics and
other consumer i tems. It was not unusual to fi nd retai l
establishments such as K-Mart and other mass marketers in the
U.S. with stores filled with Made in Korea labels. As Korea
continued to improve, wage levels eroded the competiveness of
these products, which migrated to China, but still with the
previous Korean owners. U.S. financial firms financed the
burgeoning investment by Korean firms in semiconductors,
shipbuilding, steel, automobiles and overseas construction.
Over the years, Korean products improved in quality and
image such that today, Samsung and LG have replaced Sony as
the television of choice for U.S. consumers. Hyundai and Kia are
making inroads into the U.S. market capturing a large slice of U.S.
car sal es and openi ng pl ants i n Al abama and Georgi a.
Chipmakers have similarly established large facilities in the U.S.
and with the passage of the North American Free Trade
Agreement (“NAFTA”), Korean firms began securing an increasing
share of the U.S. market by putting plants in Mexico generating
increased sales in the U.S.
Immigrants
This integration of the U.S. and Korean economies is also very
apparent in the larger cities in the U.S. Korean immigrants to Los
Angeles and New York began to have a significant impact on the
quality of life in these cities through their hard work and
sacrifices, particularly in the inner cities which were deteriorating
as suburban flight was leaving the inner city to the very poor
with little or no services. Korean immigrants braved the difficult
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conditions and began to invest in small businesses in these inner
cities which helped to generate much needed activity and a
renewal of hope for the inner city. The Korean immigrants were
an example of thrift and hard work to not only other immigrants,
but to the original inhabitants, and while some resentment of
the Korean profit taking was generated, their enthusiasm and
example was also infectious on the residents who were also
inspired to work harder and invest in their communities.
The Korean laundry, gas station or deli have become
fixtures of cities in America and with their success, the Korean
operators are now being replaced by newer waves of immigrants
as the second generation of Korean immigrants move on to
investment banking and other more profitable occupations in the
U.S.
In addition to immigrants, foreign student populations
have also had a positive economic impact across a wide swath of
America. The Koreans have the largest population of foreign
students in the U.S. following closely behind China and India
despite having a population a fraction of either China or India.
Korean students have infiltrated both the public and private
school system i n the U. S. , whi ch has contri buted to an
improvement in the quality of education for U.S. students
because of the increased competition. The number of Korean
students in America and their tremendous study habits have
helped to keep these institutions academically progressing and
also kept them financially healthy. It is not unusual to find the
Dean’s Roll at most top universities filled with Kims, Lees and
The Koreans have the largest population of
foreign students in the U.S. following closely
behind China and India despite having
a population a fraction of either China or India.
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Parks. The large number of Korean doctorates and significant
population of Korean students studying in the U.S. have created
a common bond between Korea and U.S. investors and this large
student population has had a tremendous impact in helping
Korea understand U.S. culture much better than American
understanding Korean culture, which has made economic
cooperation much easier for Americans in Korea.
KORUS FTA
Both countries now face a tremendous opportunity to further
improve the integration and cooperation of their economic
activity with the ratification of the Korea U.S. Free Trade
Agreement (KORUS FTA). The KORUS FTA is the most significant
trade agreement for the U.S. since NAFTA and is clearly a real
positive for the Korean economy that will lead to greater
prosperity for Korea. The KORUS FTA will eventually be ratified
by both countries despite the politics that surround the
agreement in an election year. Once the treaty is ratified by the
legislatures of both countries, a significant and new chapter of
economic cooperation will become possible. Leading financial
firms are predicting that within 30 years, the U.S. and Korea will
Kim Jong-hoon, the Minister
for Trade, shaking hands with
Wendy Cutler, the chief U.S.
negotiator for the Korea-U.S.
free trade agreement in Seoul.
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be number one and number two on the globe in per capita gross
domestic production. This is a dream that most Koreas today can
not accept as a probable reality. It can and will occur with the
KORUS FTA and we must hope that the legislatures of both
countries have the wisdom and maturity to do the right thing for
the citizens of their respective countries.
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he Republic of Korea met its 60th anniversary this year. For
60 years, Korea went through a major historical change and
the Koreans who survived the hardship created the term “the
miracle of Han River” which drew the world’s attention. Korea as
a nation started the “collecting gold” campaign and the people
who survived the “banking crisis” drew attention from all over
the world. Korea’s past 60 years were years of success as well as
development and miracles. The economic development of Korea
laid the foundation for China’s economic development.
For 36 years since 1910, Korea, under the control of Japan,
went through an extreme time of hardship and difficulty.
However, the Korean people did not give in to Japan’s bloody
oppression and persistently pursued independence. Most
particularly, a large part of the independence took place in China
and therefore had the support of China. The 3.1 campaign and
April of 1919 had a profound effect on enabling Korean
governors to establish a temporary government in Shanghai, and
this had an important effect on the relationship between Korea
and China for three reasons.
From a democrati c perspecti ve, i t was a symbol , a
personification, and a standard for Korea’s anti-Japanese
independence campaign. From a democratic perspective, this was
an attempt by the Koreans to escape the oppression and try to
establ i sh a Republ i c. From a Chi na-Korea rel ati onshi p
perspective, this became evidence of the development of a
friendship between Korea and China. The combatitive mind and
the accomplishments that the temporary Korean government
KOREA
Impossible to Possible
Heading Towards a New
Miracle Creation and Glory:
In Celebration of 60th Anniversary of
Korea
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showed to China for 27 years became the innate basis in
establ i shi ng today’ s Korean government and ci ti zens.
Furthermore, it became the central political basis for the friendly
relationship between Korea and China.
Thereafter, Korea experienced hardship in the separation of
its nation when it was divided by the U.S. and the Soviet Union
and even now, the Korean Peninsula is still divided. However,
within 60 years, through the experience of hardship and
persistent effort, South Korea developed from a literally non-
existent, indigent, poor country to a leading developed country.
It has developed into a country with economic, political, and
cultural strengths. Recently, Korean movies, dramas, music and
dance centralized as the “Korean wave” have spread throughout
the world and reflected a beautiful image of Korea to the world.
Based on the statistics, Korea has undergone many
historical changes over the past 60 years. Korea now has
developed into a lead trader in exporting mobile phones, motor
vehicles and chips. The GNI per person and GDP from 1953 to
2007 increased from U.S.$ 67 to U.S.$ 20,045 (300 times) and
U.S.$ 1.3billion to U.S.$ 969.9 billion respectively (750 times).
Total exports increased from 1948 to 2007 of U.S.$ 20million to
371.4 billion (17,000times) while imports increased from U.S.$
280 million to U.S.$ 356.8 billion (1,715 times).
The rapid economic development in Korea had a profound
effect on the quality of life of the Korean citizens. The birth rate
decreased from 4.53 in 1970 to 1.26 in 2007. In 1949, 2 people
out of every thousand owned a mobile phone, but in 2007, 9 out
Shi Yuanhua
The GNI per person and GDP from 1953 to 2007 increased
from U.S.$ 67 to U.S.$ 20,045 (300 times)
and U.S.$ 1.3billion to U.S.$ 969.9 billion respectively
(750 times).
Born in Wuxi city of Jiangsu
Province in 1949, Shi Yuan-
hua is the professor of the
School of International
Relations and Public Affairs
of Fudan University. He is
also the director of Center
for Korean Studies at the
university. Shi is the author
of a number of books on
China’s diplomatic history,
Korea’s independence
movement and other
Northeast Asia issues
including The Diplomatic
History of the Republic of
China, Korean Independence
movement and China, and
etc. He has also published
hundreds of papers on
academic journals in
domestic and abroad.
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of 10 people owned a mobile phone. The vehicle industry which
previously did not focus on motor vehicles, buses, and freight
cars developed into focusing on cars. And the 44,000 cars owned
in 1974 increased to 15.496 million cars, which reflects one car
per household.
These statistics reflect the amazing speed that Korea has
developed within the last 60 years. The Koreans were able to
achieve the nation’s independence and strength through
persistence and effort, and as a result, was able to receive
people’s praise and respect from all over the world.
Currently, Korea is experiencing a historical change which
can be described as a “fourth change.” The first was changing
from a developing country to a leading developed country;
second was changing from an unstable republic to a stable
republic; third was changing from a nation that depended on the
U.S. to an independent self-standing country; fourth involves
changing from a separated country into a united country. The
newly elected President Lee Myung-bak is focusing on this issue
in search of establishing a “new Han River miracle.”
Economi cal l y, Korea i s i n a changi ng phase from a
developing country into a developed country; however, the
income per capita is progressing from U.S.$ 20,000 to U.S.$
40,000. Unlike the previous political, elite, military, and common
presidents, President Lee is what can be referred to as a “CEO
Korean factory in China.
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President.” With a nickname of “Bulldozer” and “The Myth of
Salaryman,” President Lee has established policies and goals
focused on economic development. President Lee established a
“747 policy” which means that each year, the Korean economy
would increase by 7% and increase the Korean people’s income
to U.S.$ 40,000 within 10 years and make Korea the 7th ranking
economic country (currently 11th). By enabling the diffusion
ratio of house to 115%, he promised an area of two houses per
household. President Lee stated, “The developed country that we
dream of is a country that achieves a balance between individual
happiness and the nation’s development, a country that achieves
a balance between material wealth and innate development, a
country that has wealthy citizens, encompassing society, strong
nation, and receives respect from all over the world.
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n order to achieve such goal, President Lee set “low carbon
green growth” as the center of the vision and established
strategies in order to establish a miracle on the peninsula,
following a Han River miracle. It was an attempt to establish a
paradigm for the nation’s development focused on creating more
jobs through green technology and energy. In order to avoid the
energy crisis and set a foundation for green growth, President Lee
promised that he would “raise the remaining 5% energy
development rate up to 18% throughout his term and at least to
50% by 2050 therefore creating a country independent of
energy.
Furthermore, he promised to increase the renewable
energy rate from the current 2% to at least 11% by 2030, 20%
by 2050. Increase the investment into research and development
for greenery technology by twice as much, and ultimately aim to
become the leading developed country in the green technology
market with 3 quadrillion worth by 2020. In other words, even if
the price of oil falls in the future, there is a necessity to separate
the country from the oil dependent era.
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P
olitically, Korea is entering a new era of democratic progress
after a process of popular election for three generations.
President Lee stated, “If the past 60 years have been a time
which involved basic freedom, the next 60 years should be a time
to achi eve devel oped freedom, and onl y then wi l l the
establishment of the Republic of Korea be complete.”
In order to become a leading developed country, President
Lee stated that “first and formerly, the basics need to be
observed.” In other words, it is important to ensure that the gaps
are filled, which may have been overlooked in the fast-paced
development stage. President Lee’s political development goals
are as follows:
“Global Korea”: President Lee stated that Korea has the
resources for a leading country and for the next 10 years will
make a “Universal Korea” and a “country that will be active and
recognized globally.” Additionally, he stated that policies will be
developed to enable easier access into and out of Korea in order
to allow global people to work in Korea, and added that although
the land is small, the soul of Korea will be large.
“A Leading Korea”: President Lee announced to make Korea
one of the top leaders. The first step will include law and rules, as
the major key to a leading country is in its law and rules, with no
exceptions, even to the president.
“Balanced Korea” President Lee announced “a change
within balance” and emphasized the importance of Korea’s long
lost values and the need to re-find them. He also emphasized
that providing trust is a society’s capital and there will be a need
to raise the trust of the Korean society to the standards of a
developed country. Additionally, by focusing on “individual
happiness”, he promised to increase the standards of living by
developing education, culture, social security, etc, in order to give
a chance for peopl e to fi nd the opportuni ty to devel op
themselves in Korea.
“Highly efficient Korea”: Making an efficient government is
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one of President Lee’s top priorities. President Lee announced a
new re-organi zati on i n government to ensure the new
government would be efficient by “starting off with a thin
organizational structure.”
In regards to foreign policy, Korea has been regarded as a
co-follower to the U.S., therefore often did not have a separate
foreign policy. With the basis of a developing economy and
increasing comprehensive national power, Korea has commenced
a “autonomous balanced” diplomacy in the inter-state relations
and the Korean-U.S. alliance has started to alter from an
asymmetric relation to an equal and mutual benefit relation.
Korea is currently facing a historic mission of establishing
an independent and autonomous state, and therefore President
Lee Myung-bak cannot cease or give up his diplomatic efforts to
improve upon a new alliance relation in the 21st century, by the
means of altering from an asymmetric relation to an equal and
mutual benefit relation. Furthermore, between Northeast Asia’s
multilateral alliance system and the U.S. based alliance system,
Korea is at a neutral stance. And it is discreet by not joining the
Korean-U.S. missile defense system and the U.S.-Japan-Australia-
India’s Asian-pacific security system within the Northeast Asia
international relations. President Lee stated that importance will
be added in rebuilding the relationship with the U.S. as well as
developing relations with China, Japan, and Russia.
President Lee plans to focus on developing Korea and
China relations. Last April when President Lee visited China, he
was able to raise the relationship of the two countries by
He also emphasized that providing trust is
a society’s capital and there will be a need to raise
the trust of the Korean society to the standards
of a developed country.
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establishing a strategic conversation system and a strategic
cooperative partnership.
During the Olympics, President Lee visited China and Hu
Jintao, the head of state, paid a visit to Korea. Frequent talks and
a joint cooperative relation between the two summits will clarify
the strategic cooperative partnership, and through specific
measures the likelihood of implementation will increase.
In regards to the North-South issue, Korea is currently
facing a possible transition from a divided country into a united
country. Ensuring smoother North-South relations and ultimately
unity is the government’s goal. President Lee has continuously
showed kindness and generosity to the North, attended a six-
party meeting in order to communicate with the North more
effectively and to discourage the use of the nuclear weapons.
Furthermore, he emphasized that disabling nuclear weapons was
the main focus and differed from former president Roh by
adjusting and researching the North-South economic assistance
program, previously established by President Roh’s government.
He also addressed the “disarming nuclear weapons,
independence, 3000. ” This meant that only if the North
renounces its nuclear weapons will the large scale economic
provision for the North starts, thereby helping the income per
person to increase up to U.S.$ 3000, and developing and
moderni zi ng hi ghways, rai l roads, provi di ng access to
international financial institutions, etc through provision of U.S.$
40 billion from development funds.
I
n celebration of the 60th anniversary, President Lee stated that
80 million Koreans in the North and South need to be united.
He went on to state that the future belongs to the dreamer, and
that a dream by an individual may only be a dream, but a dream
led by 80 million people can be reality. President Lee stated if
Korea is united, the blocked roads will be opened, and imported
goods from Busan can be transported through rail to Europe,
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Russia, and the Mediterranean. Additionally, he stated that
“through the six-party meetings and international help, they will
establish a North Korea economic aid program that will start
achieving a universal economic society in Korea.”
Korea which is currently facing a historical change is facing
the challenge of creating a new glory and making new initiatives.
The Korean government is facing major responsibilities from
various areas. President Lee emphasized that Korea must not lose
the current opportunity to become a leading country.
A space rocket uses 90% of the fuel when it is launched,
and once in space, hardly any fuel is used. President Lee stated
that if we exceed the U.S.$ 30,000 line, it will be easier to reach
the U.S.$ 40,000 and U.S.$ 50,000 line. Under President Lee’s
effective guidance, the Korean citizens will be able to make Korea
into a much stronger, more beautiful, and a North-South united
country.
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Knowledge Economy and Service Sector:
In the modern era, the global economy has strong orientation
toward becoming a knowledge economy. Knowledge economy
does not mean narrowly high-technologies or Information and
Communication Technologies (ICTs) only. In a broader sense, it
means how effectively an economy is able to tap and use the
potential of the growing stock of knowledge and advances in
ICTs. At more definitional level, the knowledge economy means a
knowledge is created, acquired, transmitted and used more
effectively by enterprises, organizations, individuals and
communities for greater economic and social development. The
new era of knowledge economy substantially depends on
favorable economic incentive and institutional regime as well as
educational system geared up to encourage creativity, risk taking
and innovation.
Al though, al l the sectors of an economy shoul d be
enriched, improvised and transformed to play a critical role in the
era of knowledge economy, the service sector is more directly
linked with the emergence of global knowledge economy. In the
new era, the service sector has become the main engine of
economic growth across the world. In the age of information
revolution, around 67 percent of global output is now driven by
the service sector. The countries which have been global leader in
manufacturing era have been gradually but decisively orienting
their economies towards more competitiveness in the service
sector. Average contribution of services sector in the economies
of the OECD countries is 73 percent, whereas it is 77 percent in
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Service Sector of Korea in Global
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the case of the U.S.. The service sector has not only emerged as
the highest contributor to the GDP of these economies but also a
source of higher employment generation.
Service Sector in Korea:
The performance of service sector of Korea in the age of global
knowl edge economy has not been very sati sfactory i n
comparison to its contribution in economies of other OECD
countries. The service sector in Korean economy contributes only
around 55-60 percent i n the GDP of the country and
unfortunately the growth in the sector has been sluggish in the
last decade. The average real growth rate of the manufacturing
sector in Korea between 2000 and 2007 has been 8.17 percent,
whereas corresponding figure for the service sector has been 4.33
percent.
The productivity of the Korean service sector has also been
low in comparison to other OECD countries. It has been far more
serious problem as service sector productivity of Korea has been
around half of the United States or Britain. In some services,
Korea’s productivity has been only one-fourth of that of the
OECD countries. The low productivity is a problem which affects
not only service sector of Korea but has also been a big challenge
for the manufacturing sector. In a report of the Ministry of
Strategy and Finance and the OECD, Korea’s overall labor
productivity per hour stood at $20.4 in 2006, substantially lower
than the $50.4 for the U.S. and the OECD average of $38.
Basically, Korea was ranked 4th lowest among the 30 member
Sandip Kumar Mishra is an
Assistant Professor of
Korean Studies at the
Department of East Asian
Studies, University of Delhi,
India. He specialized in
Korean Studies at the
Jawaharlal Nehru University,
India, and went through
Korean language training at
the Yonsei University. He has
been a visiting scholar at the
Institute for Fast Eastern
Studies, Kyungnam
University and Kim Dae-jung
Presidential Library and
Museum.
Sandip Kumar
Mishra
The performance of the service sector of Korea
in the age of global knowledge economy
has not been very satisfactory in comparison to
its contribution in economies of other OECD countries.
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OECD countries.
However, the labor productivity in the service industries
has been much lower. According to the Statistics Research
Institute (RSI), “Using labor productivity, value created by one
employee during a one-year period, in the manufacturing
industry with the baseline set at 100 in 1985, the services sector
efficiency stood at 378 in 2005, substantially lower than the U.S.
figure of 1,014.” It is important to note that service sector labor
productivity of Japan and average of Britain, France and other
European countries have been 1,083 and 928, respectively. There
are studies saying that the low productivity of the service sector
of Koreans might bring down the productivity of the entire
economy, a phenomenon which is called ‘Baumol’s disease’.
Although there are significant problem areas in the service
sector of Korean economy, it contributes enormously to the
employment generation in the country. In 2007, around 75.2
percent labor force in Korea was employed in the service sector.
Korean IT sector has also been a very important silver line while
interrogating status of service sector in Korea. Korea is known to
be an IT superpower with high internet penetration and
Samsung Electronics releases
Europe’s first terrestrial DMB,
or Digital Mobile Broadcasting
mobile phones.
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advanced IT technology. More than three quarters of all
households in Korea have high-speed Internet connections, which
is higher than any other country in the world. As one of the
major components of service sector, IT accounts for 15 percent
of GDP and 39 percent of total exports. Korea’ s strong
manufacturing sector is also significant as it provides a solid
foundation to Korean efforts to excel in the service sector as
well. It provides a strong possibility for a manufacturing-service
sector continuum, which would be beneficial for both the sectors.
Challenges and Prospects
The Korean development strategy has been so far a spectacular
success story of economic growth led by the manufacturing
sector and the policy of export-led growth. However, in recent
years it is being threatened by increased competition from low-
wage economies as well as the fast rise of knowledge as the
principal source of competitiveness and economic growth. Korea
needs to concentrate on the service sector and try to integrate it
with its success in manufacturing sector. Korea needs to focus on
improving productivity of its service sector by raising the
effecti veness of i nvestment i n educati on, i nformati on,
infrastructure and R&D. Korea’s investment in these sectors has
been one of the highest as percentage of GDP among all the
OECD countries. However, the country is not able to get full
advantage of it, because of lack of economic incentive and
insufficient or misplaced institutional regimes. Korea needs to
improve conditions for generation and exploitation of knowledge
and information such as intellectual property rights and the
regulatory framework about IT to emerge as a key player in the
new era of the global economy. Another area which needs
attention is to ensure sufficient competition, flexibility and
diversity of economic activities which sometimes do not happen
because of the dominance of big Chaebols in the country. Korea
could also work on more proper allocation of investment in the
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R&D and education and streamline them to make them more
productive.
The next challenge for the Korean service sector would be
its seamless integration with the global system. Although, it is
important to think about inviting more trade and foreign
investment in Korean service sector, equally important is to go
beyond by its integration with the world knowledge pool and
services. In this regard, it would be important for Korea to
venture into joint research projects with foreign research
institutions and universities. The process would also lead to more
exchanges of researchers and professors of Korea with the
outside world. Korea should also attempt to improve its
participation in the international organizations and institutions,
especially those which are playing the key roles in setting up
rules and norms of international business and trade, such as
World Trade Organization (WTO), International Standards
Association (ISA) and OECD. In this regard, role of English
language should also be underlined along with other foreign
languages.
The Korean service sector is also marred by its limitation to
offer its service products to a wider range of consumers in
English. It is important to accept that English language has
become the main language of global trade and business in
present era. If Korea strives to become an important source of
exports in not only manufacturing goods but also services, it is
essential to overcome language barriers. The exports of Korean
manufactured goods have strong presence in the world market
because these exports are less affected by the language skills of
producers but a service exporter has to be more careful about
the language skills to reach in every nook and corner of the
world.
The two main pillars for achieving the goal of Dynamic
Korea in the service sector are innovation and integration with
global knowledge economy in future. On both the fronts, it
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would be important to acquire and improve English and other
foreign language skills. Many of the Korean service sector
products such as IT, Internet games, movies and dramas are at
par or sometimes better than their foreign counterparts, but they
have not been able to reach to a wider consumers because they
could not be accessed in English. For example, Daum or Naver
provide, arguably, better services than Yahoo or Hotmail, but
they could not be accessed in English and it becomes their
limitation in realizing their vast potential business prospects.
Similarly, the English language could also play a vital role in
integrating Korean R&D with outside world. Korea which
invested 27.3 trillion won or 3 percent of GDP in R&D in 2006
plans to further increase it up to 5 percent of its GDP by 2012.
But the R&D of Korea should necessarily have close cooperation,
coordination and integration with the world knowledge pool to
provide optimum results.
The role of state in the Korean economic success has been
very pivotal in past and it would again be critical in transforming
Korean economy in the new era by strengthening service sector
and i ntroduci ng structural reform requi red for the
manufacturing-service continuum. By unleashing the creative
power of markets and ensuring rule of law, transparency,
accountability, and a conducive legal and financial system, state
can provi de better envi ronment for i nnovati on and
entrepreneurship in Korea. The first phase of Korean economic
success in manufacturing era was led by huge Chaebols but in
second phase the key players would be small and medium
At present Korea spends around 14 percent of GDP
on education which is relatively quite high.
However, there is need to more focused
approach emphasizing educational quality, creativity
and integration with larger world knowledge pool.
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enterprises (SMEs). These SMEs are, if not more, equally
significant for providing boost to the service sector.
These SMEs could complement the large Korean Chaebols
and provide them productive innovation and supporting services
in the process of Korea diversifying toward a more knowledge-
based and service-oriented economy. Although, R&D expenditure
in Korea is high, private sector contribution in overall R&D
spending is around 75 percent and the government share is
merely 23 percent. Since the government share is less in overall
R&D, private sectors’ share is monopolized by big business
houses Chaebols and SMEs find it very difficult to get benefit
from overall R&D spending in the country. To help SMEs,
government needs to give them a more flexible bankruptcy law,
development of financial infrastructure to support their credit
and more importantly have better provision for their venture
capital.
Around 34 percent of the venture capital industry in Korea
Professor Oh Jun-ho of the
Korea Institute of Science and
Technology with his humanoid
robot “Albert Hubo” on ABC’s
“Good Morning America”.
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is funded by the government and around 10 percent by foreign
venture capitals. By having easy access to credit especially by
defining collateral while lending them, government could help
SMEs to prosper and as in most of the advanced economies of
the world, they would play an important role in deepening the
process of creation and diversifying of service sector in the
country.
The service sector in Korea has not only to balance
between big business houses and SMEs but also needs to be
more inclusive. The nature of knowledge economy makes it more
challenging for government to restrict ‘digital divide’ which is
more prone to take place when knowledge and information
become the key variables for success in business and which could
be more easily monopolized by a small section of the country.
Furthermore, Korea has to keep the possibility open by its
proactive polity that a new kind of entrepreneurship comes out
from the all strata of the society by minimizing the digital divide.
Korea needs to concentrate on the few other key areas also
and should adopt a comprehensive structural reform package on
the line of needs of knowledge economy such as flexible,
inclusive, transparent and market-driven economy which would
ensure support for i nnovati on at the i ndi vi dual as wel l
institutional levels. The new structure of economy would provide
better level-playing field to participants without discriminating
them on the basis of their size, capital or orientation. Education
would also be important in enabling people to venture into more
innovative arena of economy.
At present Korea spends around 14 percent of GDP on
education which is relatively quite high. However, there is need
to more focused approach emphasizing educational quality,
creativity and integration with larger world knowledge pool. The
goal of education should be focused on inculcating innovation
and entrepreneurship skill in individuals which would be the main
engine of growth of service sector in the country. Moreover the
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reform should be based on better coordination among state,
business and society.
Role of Government:
Considering the significance of the service sector in the entire
economy, Korean government has already taken steps to
overcome sluggishness of the sector and to ensure the country’s
sustainability in growth and employment. Government has taken
various policy measures to promote service sector of economy.
The Korean government ventured into the ‘Brain Korea-21’
project to provide a concentrated fund and help a specific center
of higher learning to invest in cutting-edge research and
improvisation. Korea also started a ‘three-year strategy, to
promote knowledge-based economy in the country. The previous
government of Korea also began a comprehensive three-phase
plans to upgrade competitiveness service sector and there have
been some positive assessments of these efforts. Joseph E.
Stiglitz, a renowned economist, wrote in 2002 that Korean
efforts to become a hub of global knowledge economy has been
paying off and “Korea is on its way to become a high-tech
service sector economy”. However, improvement in the service
sector of Korea has not been satisfactory in terms of its pace and
extent. As mentioned in the beginning of the article, it still
suffers from low productivity and low competitiveness.
The new government in Korea under the leadership of Lee
Myung-bak has taken a more fundamental and comprehensive
approach to catapult Korean service sector in the age of global
knowledge economy. With the establishment of a new ministry
by the name of Ministry of Knowledge Economy, Korea has made
a serious attempt to have some structural change in the Korean
economy by having coordination and integration in steps related
to new knowledge economy. It would also facilitate the service
sector by making it more business-friendly and open-market
oriented. Under the aegis of the Ministry, Korea plans to develop
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a comprehensive mid-to-long term vision to identify as well as
strengthen new engines of economic growth. In the vision, search
and support to the next-generation industries and strengthening
of the service sector are the two areas which have been rightly
highlighted. It is important that SMEs have been recognized by
the new government as the backbone of the economy and
government has promised to assist entrepreneurs in starting up
as well as operating these SMEs. Korea has also been negotiating
FTAs with the U.S. and EU and envisioned to have similar FTAs
with China, Japan, ASEAN and other emerging economic
countries such as BRIC (Brazil, Russia, India and China) countries.
Korea is also working on its financial sector reforms and making
efforts to invite investment banking in the country. Korea wants
to become a l eader i n the Bi o-Nano-I nformati on (BNI )
technologies and government has launched ‘New IT Strategy’ in
which 280 billion won would be spent in training of qualified
experts in the field, in addition to overall 3.5 trillion won
earmarked for the new strategy.
In August 2008, the National Science and Technology
Committee outlined initiative named ‘577 initiative’. In the
initiative, government would spend 5 percent of GDP in R&D
from 2008 to 2012 and the fund would be provided to the top
seven science and technology areas on priority basis which would
result into making Korea one of the seven leaders in the field of
science and technology in the world. More specifically, the new
administration has disclosed the first phase of its plan to advance
the service sector on April 28, 2008 and announce the second
and third phases in September and December this year which
would be addressing most of the challenges and opportunities of
It is not a linear process for a country which has been
a leader in manufacturing era of economy to
overnight transform itself into a service sector giant.
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the service sector of Korea in the global knowledge economy.
Concluding Remarks
The question is not whether Korea can, but rather how Korea
would be able to strengthen its position in the global knowledge
economy on the basis of reform in the economy to build a more
vibrant, competitive and proactive service sector. Korea has done
it once and there is no doubt that Korea can do it again by its
drive to innovate and move up in the value chain.
A sustained Korean endeavor to perform well in the
upcoming sectors of the global economy would gradually pull
Korea again as one of the leaders of these sectors. Korean service
sector has rightly got strong governmental support from the new
admi ni strati on whi ch i s commi tted to i mprove Korean
productivity and competitiveness in the global knowledge
economy.
However, the improvement of the Korean performance in
the service sector of economy would be a process in which not
only government initiatives but also strong willingness on the
part of business, role of individual and societal supports, all them
would be crucial. It is not a linear process for a country which has
been a leader in manufacturing era of economy to overnight
Visitors test the LG laptop and
PDA mobile phones with
WiMAX technology at an LG
kiosk.
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transform itself into a service sector giant. However, sustained
efforts on the part of state, business, individual and society
would definitely make it possible in the case of Korea. Moreover,
it is also very much possible for Korea to work on evolving a
manufacturi ng-servi ce sector conti nuum and thei r
complementarities could help each other to evolve to their
potential in the new age of global economy.
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S
everal years ago I had an occasion to visit North Korea for
the first time. I entered the country from China, crossing the
Tuman River, and spent a couple of days in the city of Rajin,
where the North Koreans were trying at that time to develop an
international free-trade zone. I have many indelible memories of
that trip, but one of the things that initially struck me was how
similar in many ways the country seemed to South Korea in the
late 1960s and 1970s, when I had lived in Seoul. The poverty in
both cases was palpable, and there was a certain shabby, gray,
improvised quality to the dress of the people and architecture,
which often looked broken down or half-finished. Even though
Seoul was of course the capital of the South and a far more
cosmopolitan place than Rajin, in the 1960s and 1970s many
parts of it were even dirtier and more dilapidated than anything I
later saw in that northern city. Indeed, Seoul in the late 1960s
still had the feeling of a city that was trying to recover from the
ravages of the devastating war that had ended in 1953. Jeeps left
over from the war were in fact still being used for private
transportation, and beggars, some with maimed or missing limbs,
visible victims of the war, were not uncommon sights on the
streets in those days.
Despite such similarities, the two places were actually very
different. In the north the economic crises of the 1990s had
taken their toll, and Rajin was a grim, almost somnolent city. The
local factories were for the most part closed, and there was little
human activity of any kind, economic or otherwise. In the center
of town a motley collection of people, mainly old men and
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soldiers apparently on leave, sat quietly and expressionless on
benches warming themselves in the spring sun. Off to the side a
makeshift (and technically illegal) market that had sprung up in
the wake of economic problems and failures in the official food
distribution system seemed relatively subdued as markets go.
One had the sense of a people with little to look forward to and
little enthusiasm or energy to tackle even the routine aspects of
daily life. The general impoverishment appeared deadening and
hopeless, a depressing, pitiful sight to behold.
Seoul in the 1960s and 1970s also had a decidedly
impoverished look. And of course the whole country, especially
after 1972 and the establishment of the Yusin state, toiled under
the weight of a strict, authoritarian government that brooked
little political dissent. But the poverty of the south never seemed
deadening or hopeless. Quite the opposite. For the vast majority
of the people who were not directly engaged in the political
struggles of the period, the 1960s and 1970s offered new
opportunities and enticements. Hope and change were in the air.
Except from 4 a.m. to midnight, when a security curfew was in
effect, Seoul was a dynamic, bustling city, its streets literally
teeming with people actively pursuing their interests and
pleasures. Even after the midnight curfew, Seoul’s nightlife often
continued behind shuttered storefronts in numerous (and illegal)
bars and restaurants.
The fact is that Seoul, as well as the rest of South Korea,
was undergoing a profound transformation in the 1970s. Indeed,
it would not be an exaggeration to say that the country was
Carter J. Eckert is Yoon Se
Young Professor of Korean
history at Harvard University.
For eleven years, from 1993
to 2004, Eckert served as the
director of the Korea Institute
at Harvard. Eckert is the
author of a number of books
and articles, including
Offspring of Empire: The
Colonial Origins of Korean
Capitalism , which received
the John K. Fairbank Prize in
East Asian History from the
American Historical
Association, as well as the
John Whitney Hall Book Prize
from the Association for
Asian Studies. He is also a
co-author of Korea Old and
New: A History, a widely-
used university textbook on
Korean history.
Carter J. Eckert
Even though Seoul was of course the capital of the South
and a far more cosmopolitan place
than Rajin, in the 1960s and 1970s many parts of
it were even dirtier and more dilapidated than anything
I later saw in that northern city.
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experi enci ng the most far-reachi ng soci oeconomi c
transformation in its long history, and one of the greatest
socioeconomic changes in the history of the world itself. The
contours and statistics of this great transformation have been
studied by many scholars and are well known. Here in what
follows I will only briefly note the impact of some of these
changes on the landscape and everyday life of the capital city, as
I personally experienced them between 1969 and 1977.
The look of Seoul in the 1960s and 1970s was actually very
different from what it is today. Before the late 1970s, Seoul’s
everyday life was concentrated north of the Han River. The area
we know as Gangnam today was to a great extent sti l l
countryside, composed largely of fields and paddies. The main
business district was centered in Mugyodong, with many bars
and restaurants catering to the business community running
along the Cheonggyecheon street, where today the beautifully
restored Cheonggye stream begins its eastward flow. Groups of
students from the major universities flocked to Jongno 2-ga in
the evenings, where they drank makkeolli at long, low tables and
sang to the rhythmic tapping of chopsticks. Often short of
Seoul in the 1970s.
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money to pay the bill, one of the students in the group invariably
left his watch, a prized possession in those days, with the
manager of the drinking establishment, to be reclaimed at a later
date when he could return with the necessary cash. Myeong
dong, as it had been for decades reaching back even into the
colonial era, was the main gathering place for intellectuals and
arti sts of many stri pes, as wel l as for the ci ty’ s most
sophisticated residents. Here, spreading out in all directions from
what was then the Nati onal Theatre, one coul d trace a
fascinating network of small streets, in some cases barely wide
enough for two people to pass each other.
On these streets one found a wide assortment of small
shops, restaurants, and watering holes, including the second-floor
OB Cabin, where virtually all the popular singers of that day
performed live at one time or another. Today, with the city
having expanded not only south of the river but virtually all the
way to the port of Incheon, it is hard to grasp how small and
compact the city of the early 1970s was. All the areas mentioned
above are roughly contiguous with each other, and one could
without too much effort traverse the whole center of the city in
a single long walk.
Only the few and the wealthy had private cars, and there
were as yet no subways, so for longer distances within the city
most people relied on the bus system or shared taxis with others
going in roughly the same direction (hapseong). Getting from
one place to another, especially by bus, could be a daunting and
messy business. The various buses tended to arrive in waves, all
belching out large gusts of polluting exhaust fumes that were
impossible to avoid inhaling, but that was only the first hurdle
faced by would-be passengers. Bus and taxi queues did not exist,
and the appearance of a bus or taxi often unleashed a stampede
of social Darwinian proportions, as everyone rushed and
struggled to board at the same time.
Once the harried and exhausted young bus girls who were
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in those days responsible for collecting the fares finally managed
to pull the doors shut and the bus took off, one often found
oneself standing in an overstuffed space, holding on for dear life
to the hand-straps hanging from the ceiling or even on to other
nearby passengers, as the bus rattled and shook its way to the
next stop at breakneck speed.
One finally tumbled out of the bus at one’s destination
feeling squeezed, disheveled and lucky to have survived. During
the summer rainy season bus rides became even more of a
challenge. As one moved away from the center of the city, many
streets in those days were still unpaved, and both buses and
passengers had to contend not only with pounding rains but with
streets that were thick with mud. Considering the ordeal that a
bus ride entailed in those years, it is remarkable how matter-of-
factly, even good-naturedly, people accepted it as a regular part
of everyday urban life, and how, even given all the hassle and
chaotic competition for a seat, people often showed great
kindness and generosity to fellow passengers who were too old
or too weak to stand, or who needed assistance of some kind.
U
npaved streets were not a problem in the city’s center, but
lighting was another matter. Seoul in the 1970s was still a
relatively dark city at night. To conserve electricity, the larger
office buildings turned off most of their lights at night, and neon
signs were scarce. On the outer margins of the city, as in much
of the deep countryside, one found places with virtually no lights
at all, where candles were still used in place of electricity.
Only when a North Korean Red Cross delegation made a
historic visit to Seoul in the early 1970s were all the lights of the
city, including all the central office buildings, left on at night as
part of an official strategy to impress the North Koreans with the
South’s high level of economic development. Even though the
lighting was contrived and temporary, at the time it was
astonishing to see the city so brightly lit. Today, of course, even
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that level of urban brightness would pale in comparison to the
glittering night lights of contemporary Seoul.
There are many other aspects of Seoul in the 1970s that
one might cite to highlight the great transformation of the city
that has since taken place. Seoul in those days, like the country
as a whole, had few trees and green areas to clean the air and
add color to what was essentially a black and grey city. This
monochromatic landscape was reinforced by the ubiquitous
black suits of the city’s politicians and professional classes, the
black uniforms worn by middle- and high-school students, and
the chauffeured black sedans used by the city’s elite. It was also
reinforced by the pervasive militarism of the time, which was
punctuated by periodic air-raid drills and anti-communist
banners strung across the streets, and exemplified by the
ubiquitous presence of uniformed soldiers on duty or on leave in
the streets and students in military drill clothes.
Women were by no means absent from the city scene, but
their roles were far more limited than today, and relations
between the sexes were also considerably more formal and
restricted. The easy familiarity, displays of affection, and public
dating one sees on the streets of Seoul today between young
men and women was the exception, not the rule. Seoul was then
very much a city of men, and a city for the benefit and pleasure
of men, with women remaining largely in the background in
subordinate or service roles of one kind or another.
Foreigners were even more difficult to find than women on
the streets of Seoul in the late 1960s and early 1970s. Like today,
This monochromatic landscape was reinforced by the
ubiquitous black suits of the city’s politicians and
professional classes, the black uniforms worn by
middle- and high-school students, and the
chauffeured black sedans used by the city’s elite.
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the large American military presence at Yongsan was seldom
seen or felt in the city’s center, and there were at that time still
few foreign tourists or businessmen coming into South Korea on
a regular basis. Japanese visitors, so common a sight today, were
particularly rare because of the strained relations that existed
between the two countries at that time. I remember once seeing
in the early 1970s a Japanese businessmen emerge from his hotel
in traditional Japanese dress for an evening stroll in Myeongdong.
Almost immediately an unfriendly crowd began to gather around
him, and he quickly scooted back inside his hotel, not to appear
again.
In 1970 the old colonial Chosun Hotel, originally opened in
1914, was renovated and re-opened as Seoul’s first international
luxury hotel. Its opening was a grand affair, presided over by
President Park Chung Hee and First Lady Yuk Young-soo, and it
was a watershed event with respect to South Korea’s growing
internationalization. At the time, however, the new Chosun stood
out from its humble surroundings like an alien spacecraft that
had happened to land in the middle of Seoul, and the renovation
project itself had required strong government support even to
get off the ground. In retrospect, of course, the Chosun can now
be seen as one of the earliest symbols of a future South Korea
that would come to be one of major powerhouses of the world
economy and a magnet for international corporations.
I
nside the Chosun Hotel in 1970 one found many of the goods
and conveniences of modern life that were for the most part
still not available to most South Koreans, including such things as
telephones, air-conditioning, refrigerators, music systems, and
private baths. Public baths in those days, for example, were for
most Seoulites a necessity, not the optional and luxurious
health-spas they are today, and they also provided beginning
jobs for poor and relatively uneducated young Koreans from the
countryside seeking employment in the capital. Despite their
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deep love for music, few South Koreans could also in those days
afford to pay for the technology to listen to music in their
homes. Like the public baths, which served an important need in
the general populace, public tearooms, often specializing in
certain types of music, including Western classical music,
provided a place where Koreans, for the price of a cup of coffee
or tea, could listen to and request their favorite pieces of music
for an hour, or, if they chose, for the whole day.
Korean-made commodities were only just starting to
appear in stores, and still had none of the appeal or status for
Korean consumers that foreign-made products (especially
American or Japanese) held. American goods that had found their
way from the Yongsan army exchange (PX) into the Korean black
market were much in demand, especially among city’s elite, and
one could find numerous places throughout the city, including
the great markets of Namdaemun and Dongdaemun and the side
alleys of Myeongdong, where such items could be purchased at a
premium from very savvy, grandmother-like ladies, who
invariably drove a hard bargain. Even today on certain side
streets one can occasionally still encounter these entrepreneurial
grandmothers selling their PX wares, including on one of the
same streets in Myeongdong where they had flourished in the
1970s. But in a world where South Korea ranks as the 12th
largest economy, such scenes today seem little more than quaint
residues of a bygone era.
It is impossible to pinpoint a precise moment of change in
the 1970s that marked the development of what we know today
as the modern, contemporary city of Seoul. The changes were all
too numerous, swift, and simultaneous. But the movement in
population from the center of the city to the areas south of the
Han river in the mid-late 1970s seems in retrospect a clear
harbinger of things to come. The development of Gangnam
coincided with the growth not only of the economy per se but
also of a new, increasingly affluent middle class that would, a
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decade later, also help transform the authoritarian political
landscape and secure South Korean democracy. Some of the first
new middle-class apartment complexes to arise were on the islet
of Yeouido in the middle of the Han River, and living there in the
1970s one could see before one’s eyes the socioeconomic
transformation that was taking place.
As the apartment compl exes devel oped and the
apartments began to fill rapidly with more and more Korean-
made goods and appliances, so too did new communities
develop with their own shops and stores, including what were
Seoul’s first supermarkets. For the first time one began to see
large numbers of children who could be described as chubby, and
leisure activities and fads such as bicycling, swimming, and
bowling began to proliferate in quick succession within the new
communities. By the time I returned to the United States in
1977, the new communities were spreading rapidly south of the
river, and their residents were just beginning to acquire their own
Korean-made Hyundai cars for personal use.
T
he changes of course have continued, not only in the
Gangnam area but in the old center of the city as well.
Occasionally on trips back to Seoul, I find myself in the Chinese
restaurant on the top floor of the Chosun Hotel, whose great
glass windows look out across the city, as they did in the 1970s.
But the view before me is now utterly different. The basic
Like the public baths, which served an important need
in the general populace, public tearooms,
often specializing in certain types of music, including
Western classical music, provided a place
where Koreans, for the price of a cup of coffee or tea,
could listen to and request their favorite pieces of
music for an hour, or, if they chose, for the whole day.
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gridlines of the old city are still there, marked by the ancient
palaces and old neighborhoods. But the skyline has been totally
altered by gleaming towers of steel and glass, and the stark
ambience of the 1970s city has been softened by affluence,
colors, greenery, and a more open political atmosphere. The
hotel itself, which once dominated the landscape around it, now
seems almost quietly tucked away, one of countless great hotels
and buildings in the city.
Looking out the windows, I am able for a fleeting moment
to recapture in my mind’s eye the cityscape I remember from the
1970s, but it quickly dissolves before the overwhelming reality of
the present. I feel humbled by the power of time, but also
grateful to be able to feel that power and to be able to chronicle
it as a historian of this remarkable country.
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O
ne day in the early autumn of 1945, in the uncertain
period between the end of World War Two and the formal
establishment of North and South Korea as separate countries,
24-year-old Lee Kie-hong, then unemployed, was strolling past
Ewha Girl’s High School, near the modern-day location of the
U.S. ambassador’s residence, when someone called out to him.
“Hey, man. “Do you speak English?” An American soldier
billeted at the school had noticed the English-language tabloid
under his arm.
“Yes,” he said. “I can speak English.” Actually, he could read
English but had never experienced conversation with a native
speaker. A group of ten young soldiers surrounded him and
excitedly peppered him with questions.
“What is your name?” one asked.
“Where do you come from?” said another.
“How come you speak English?” A brilliant student from a
poor Cholla village, Lee had studied English at a prestigious
school in Hiroshima.
“Hiroshima? Wow! How did you escape the atomic
bomb?” Towards the end of the war, Lee and his fellow students
were doing more work in a nearby munitions plant than in the
classroom. Lee had sneaked away to avoid air raids, protected
from police scrutiny by the prestige that went with his school ID.
He didn’t know an atomic bomb had landed on the city.
A few days l ater, his l imited conversational abil ity
notwithstanding, Lee’s new friends arranged for him to be hired
as an interpreter. He became the only Korean on the personal
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staff of the American military governor. During the power
transfer conferences, he relayed a request from the departing
Japanese administrators for safe passage for hundreds of
thousands of Japanese, which was granted. He later went on to
study in the United States and returned to Seoul to work in
government, where he became the planning director responsible
for distributing U.S. aid and later the author of Korea’s First Five-
Year Plan. In May 1961, when the military staged a takeover, he
was in Washington preparing a state visit for the ousted Prime
Minister, John M. Chang. In a White House meeting with
President John F. Kennedy’s national security advisor, McGeorge
Bundy, Lee asked if the U.S. could use troops to stop the coup.
Bundy said they could not act without a formal request from the
Korean government. With the premier hiding in a convent and
his cabinet scattered, no such appeal came. Lee and a colleague
kept this conversation secret when they returned to Korea to find
that they were among a handful of bureaucrats the new junta
considered competent enough to retain their jobs.
His experience reflected the uncertainty of the time sixty
years ago when the Republic of Korea was founded. “Just think of
it,” he said, reflecting decades later, in the summer of 2008, on the
chance encounter with American GIs. “There I was walking down
the street and I step unexpectedly into an extraordinary life.”
With Japanese no longer useful, the rare facility with
English helped Lee and others like him. But fortune also shone on
the uneducated, like Chung Ju-young, a peasant boy who went
on to found the nation-building Hyundai Group. Other business
Michael Breen is the
Chairman of Insight
Communications, a PR
consulting firm which he
founded in Seoul in 2005. He
first came to Korea in 1982
as a foreign correspondent.
He was the Seoul
correspondent for The
Washington Times for eight
years, and for The Guardian
for four years. He left
journalism to start
consulting on North Korea
and later went into in public
relations. He is the author of
The Koreans (St. Martin’s
Press, 1999) and Kim Jong-il:
North Korea’s Dear Leader
(John Wiley & Sons, 2004).
Michael Breen
“Just think of it,” he said, reflecting decades later, in the
summer of 2008, on the chance encounter with American GIs.
“There I was walking down the street and I step unexpectedly
into an extraordinary life.”
130
people were handed companies owned by departing Japanese.
For the 20 million Koreans in the South, including several
millions recently returned from overseas exile or forced labor,
luck went both ways in such unstable times. Many young
Koreans, both those who had succeeded in Japanese schooling
and others whose anti-Japanese parents had either refused or
been too poor to send them to school, were drawn to leftist
ideas and suffered when the anti-communist right took power.
Those who had benefitted during Japanese rule such as business
people and bureaucrats, both the diligent who sought to get on
and the less scrupulous such as police and others who preyed on
Koreans, for example, torturing men suspected of dissent, and
rounding up girls for Japanese military brothels, risked being
branded as collaborators. Such was the uncertainty that
permeated every household about the precarious situation of the
country and their own circumstances.
We may imagine elderly Koreans at that time, conducting
a similar exercise as the one we are doing and looking back to
1888 and their youth. He would have remembered a different
Korea, one less developed for Korea by the end of the
Japanese rule would have appeared in many regards as modern
and industrialized and wobbling towards the 20th century, but
socially more stable.
D
espite centuries of buffeting between its larger neighbors,
Koreans had remained a distinct people. In part they
remained so because of language, theirs, with its roots in the
Altaic linguistic family of inner Asia, differing from those of their
neighbors. It was rendered in Chinese characters, but its spoken
form was unintelligible to Chinese and Japanese. For centuries, a
rigid caste system headed by scholarly gentlemen schooled in
Confucian ethics, who considered keeping up appearances more
important than actual work, had stifled the populace. Education
provided the only way out from the middle to upper class in the
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form of the government service examination. Each family
carefully preserved its genealogical chart, which traced male
offspring only, hence the preference for boys. The upper class
yangban read books on ethics and fancied themselves as artists,
amateur, mind you, because being a professional musician,
dancer or painter was the job of lower class “performers.” Poetry
was also important. If yours was bad, your chances of becoming
a bureaucrat were almost nil. Some local literature had protest
themes as did some pansori balladry, Korea’s version of the blues.
The Confucian principles of righteousness, service to the king,
filial piety, deference to elders and social superiors, and
benevolence to those younger and inferior underscored social
behavior in Korean society. The people believed that the king
ruled through the mandate of heaven. Instability in the form of
political upheaval and natural disasters suggested that heaven
was unhappy. With modern science and medicine yet to reach
Korean shores, the people were also suspicious and employed
peculiar remedies for illness.
Many elements in this thumbnail description of Korea over
a century ago years may resonate with outsiders who are
A panoramic view of the area
around the Han River.
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familiar with Koreans today. But if these patterns remain, they
do so in moral echoes. For example, modern Koreans still have
excessive expectation of leadership and disruption casts a moral
shadow. In 1995, when a bridge over the Han River and a
luxurious department store collapsed within weeks of each other,
killing hundreds, then-President Kim Young-sam made a
television apology for his “moral failings.” Also, Koreans remain
hierarchical. They have an instinct for someone’s social position
relative to their own because the language requires it. They use
different verb forms and even nouns depending whether the
person is above or below.
But in substance, change has been enormous. Through the
Japanese rule, there was a social revolution. The caste system
was overturned, with butchers, previously untouchable, now, for
example, able to send their children to school. The royal family
and aristocracy, who had stood by limp-wristed as the country
was signed over to foreign control, lost their claim to superiority.
People looked to religious figures, and in particular to Christians
for leadership.
As the Americans withdrew after the established of the
Republic, the prospects for South Koreans looked bleak. Per
capita income in 1948 was $86, on a par with Sudan. In his book
Troubled Tiger about Korean development, author Mark Clifford
cites this assessment by a U.S. military official: “There are
virtually no Koreans with the technical training and experience
required to take advantage of Korea’s resources and effect an
improvement over its rice-economy status.” He reckoned the
Despite centuries of buffeting between its larger
neighbors, Koreans had remained a distinct people. In
part they remained so because of language, theirs,
with its roots in the Altaic linguistic family of inner
Asia, differing from those of their neighbors.
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country would become a “bull-cart economy” and that the non-
farming half of the population would face famine.
Then came war and things got much worse.
The new South Korean army often fought courageously,
but it suffered from inexperience and corruption. Cadets at the
military academy, poor boys destined for a bright future, were
bussed to the front and ordered by incompetent senior officers
to rush at hills. Their ranks were decimated within days, depriving
the army of hundreds of young officers.
T
he war immediately brought the Americans back, supported
by a number of other non-communist nations fighting under
the flag of the United Nations Command. These forces saved
South Korea. Refugees poured south and didn’t stop until they
reached Busan, where they piled into squalid refugee camps and
built shacks on the hillsides with stones and flattened American
army oil drums. But amid chaos, South Koreans, whose country
at one point was reduced to greater Busan, recovered their
dignity. Schools started quickly and commerce began from the
streets. Perhaps the most telling symbol of their hopeful
dependence was the construction along the airport road in Busan
of hoardings to conceal the squalor of the refugee camps from
the view of visiting dignitaries. Officials didn’t want to make
visiting foreigners, who held the key to their survival, feel sick.
As many as three million North Koreans and 500,000
South Koreans are believed to have died from causes related to
the war. In addition, there were 900,000 Chinese dead and
wounded. Over 33,000 Americans, 1,000 British and 4,000 other
nationalities were killed. According to South Korean figures,
129,000 civilians were killed during the North Korean occupation
of the South, 84,000 kidnapped, and 200,000 press-ganged into
the northern military. (It is possible that some of these people
went voluntarily, but their families may believe, or have found it
wiser to assume, that they were unwilling.) The economies of
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both sides were pulverized. The North was flattened by U.S.
bombing and industry everywhere was wrecked.
Of those who survived in South Korea, some five million
were homeless, 300, 000 women were widowed, 100, 000
children orphaned, millions of families separated. One million
North Korean refugees added to the pressure. Tens of thousands
of schools and other buildings were destroyed. Damage was
assessed at $3 billion which in 1953 was a considerable sum.
Over forty percent of manufacturing facilities and fifty percent of
mines had been damaged or destroyed. Inflation was rampant.
Taking 1947 as the base of one hundred, the wholesale price
index grew from 334 in 1950 to 5,951 in 1953. The retail price
index similarly rose from 331 in 1950 to 4,329 in 1953.
A
mid the violence of the civil war and the reprisals as one
side and then the other took control, any lingering ideas of
Korean brotherhood disappeared. Even today, most Koreans who
experienced the war are firm in their hatred of the other side.
Life for most Koreans in the 1950s was a struggle for
survival. “Have you eaten rice?” became the common greeting.
An increasing number of people wore western suits, but many
still wore traditional white cotton clothes. The country was
sustained by U.S. economic aid. Over two million tons of wheat
and barley each year helped save Koreans from starvation and
cotton, sugar, and wool boosted manufacturing industries
sufficiently to supply consumer goods, laying a foundation for
the rapi d i ndustri al i zati on throughout the 1970s. The
government muddled through. Its leaders focused on how to
raise funds for the ruling party, and its bureaucrats, whose
salaries covered about 20 percent of basic living expenses, looked
for handouts and the next meal.
The Americans came to rely on a small group of officials
from wealthy families who did not worry about their salaries and
resisted using their positions to enrich themselves. They tried to
135
interest colleagues and ministers in forward-looking plans, but
were met with cynicism it’s hard to consider a growth plan
for beyond next week when you’re worried where dinner is going
to come from until U.S. officials warned that aid might be
reduced if there was no evidence of long-term planning. In 1957,
four cabinet members jointly presented the idea of a Five-Year
Plan to President Syngman Rhee. After listening for an hour, the
crusty old independence activist said, “You ministers are talking
about five-year plans. That sounds like Stalin’s idea.” From then,
the concept was taboo.
If leadership held the country back, people still managed to
move forward. By the end of the 1950s, the measure of progress
was that people only went seriously hungry in the late spring
before the barley harvest.
Then, in 1960, the Rhee government collapsed in the face
of protests following a rigged election. The country was ruled for
nine months by a democratic government headed by Prime
Minister John M. Chang. But this administration lacked real
strength and was replaced in May 1961 by the military regime of
Park Chung Hee, an army general. Park and his fellow coup-
makers mostly came from peasant backgrounds. They were an
unusual group of men who had been trained as young officers in
People enjoy the slopes of
“High 1” Resort in Gangwon-
do Province.
136
the Japanese military. Theirs was in some regards a Marxist
outlook. Indeed, as Park Chung Hee’s brother had been executed
as a communist, the U.S. government first feared that there had
been a communist coup in Korea. As nationalistic Koreans, they
had a vision of a strong military-led country in which business
and labor served the interests of the state. They were suspicious
of capitalism and of the rich, and contemptuous of civilian
politicians. On taking power, Park passed a law that allowed him
to effectively punish anyone who had become rich since the end
of the war. A few days later, the chairman of the Samsung
Group, Lee Byung-chul, who Park regarded as the country’s
leading businessmen, announced he was donating his wealth to
the government. Other business figures followed suit. Over 4,000
alleged criminals were rounded up by the military and under a
new morality campaign alleged smugglers of banned items such
as foreign cigarettes and coffee. A short while later, Park unveiled
the country’s First Five-Year Plan.
Thus Koreans were ushered into a new era, one in which,
they were made to sacrifice and suffer. But such was the promise
of development that, if they resisted without good moral cause,
such as that provided by religion or political dissent, they risked
guilt and social condemnation, for the prevailing ethic was that
their blood, sweat and tears was in the service, not of an
authoritarian regime, but of nation-building. They also risked
punishment and failure. The executive branch was able to wreck
or take over businesses whose leaders upset it and manipulate
the media and judiciary to ruin careers and lives.
Of those who survived in South Korea, some five
million were homeless, 300,000 women were
widowed, 100,000 children orphaned, millions of
families separated. One million North Korean
refugees added to the pressure.
137
South Korea’s vigorous anti-communism was instilled
through educati on and rei nforced by propaganda and
information control and a total ban on all Marxist literature or
study. The irony is that its own growth was centrally controlled
and very socialist in nature.
At this time per capita income was still the same as the
Sudan and behind India and Pakistan. The homeless still slept in
the streets, beggars still operated, and people starved to death
each spring. Most vehicles on the street were official cars,
military jeeps and delivery trucks. Only a handful of rich people
had private cars. Few houses had running water and electricity.
T
hat is took a hard nut like Park, cracking the whip, to kick-
start economic growth is not surprising. It is anyone’s guess
where the republ i c woul d be today wi thout hi s type of
leadership. But it is clear that the dramatic growth that took
place, and with it the transformation in the lives and experience
of Koreans, would not have happened at that time without such
a strongman directing it. Viewed close up, the story of this
development was not one of Japanese-style decisions based on
consensus. Rather it was one of struggle both within and
between the various key sectors of society. If the business people
battl ed among themsel ves, they al so battl ed wi th the
bureaucrats, and so on. Such is the fractious nature of Koreans
that such battles still seem to be a part of the fabric today. It no
longer takes a strongman to pull everybody together in a
common endeavor. As society becomes more sophisticated, law
plays an ever more important role. But that fractiousness and
mistrust remains. But, in another irony, this quality lies behind
the vibrancy of modern Korea democracy. Already, in just five
democratic presidential elections in the last twenty years,
oppositionists have won twice.
Since the war, Koreans have moved off the farms and
become city dwellers. During the war, the main cities swelled
138
with the influx of refugees from North Korea. These new South
Koreans had come with nothing and started completely anew.
Many worked in markets. Seoul’s Dongdaemun Market, for
example, was dominated by North Koreans. From the start of
Park’s rule, as manufacturing industries grew, people moved into
the cities looking for jobs and to attend colleges, leaving their
parents in the villages and their older brothers to manage the
farms. In many ways, they brought the ways of the village with
them, giving many city neighborhoods a rural feel. People sold
their wares on the pavement. They wandered across the roads
without a thought for traffic. The accident rate was predictably
high. As indication of the level of education, the government ran
advertisements teaching housewives to turn off taps after they
had finished washing vegetables.
Meanwhile, most people, with the exception of democratic
activists, appear to have accepted the course the country was
taking. It was a tough approach to rapid economic development
with the objective being to build up a strong industrial base so
that the country may defend itself against North Korea. The
objective, we should note, was not the happiness of the citizenry.
South Koreans would have to wait for the 20th century before
the country began to make that subtle shift. Under Park, his
successor Chun Doo Hwan(1981-88), and even the fi rst
democrati cal l y el ected presi dents from 1988 onwards,
improvement in the lives of the citizenry, both material and in
terms of rights, were, one could argue, a by-product, rather than
the purpose of Korea’s growth policies.
But the citizenry recognized the benefits of growth.
Organi zati ons that coul d have cri ti ci zed and pressured
government tended to fall into line. Media, for example, took a
top-down approach to their readers, seeing their role as to
educate rather than reflect their views. The first consumer
groups, which grew out of women’s organizations, did not focus
on the variety, safety, quality and price of products, but rather on
139
perceived national interest, promoting, for example, resistance to
foreign products in order to support Korean companies.
T
he dislocation caused by the migration into cities and by the
rapid disappearance of old ways made Koreans open to new
communities and sources of comfort. There was organization
down to the block level and even today in apartment complexes,
there are annual elections to choose block leaders. Now, of
course, rather than delivering policy from on high, their role is to
keep their constituents happy by coming up with better ways to
dispose of garbage and how to lobby to get an ATM machine in
the local supermarket. Announcements are frequently made
through the speakers in each apartment, a level of intrusion that
most citizens appear to take for granted.
But the di sl ocati on gap was pri mari l y fi l l ed by the
country’s Protestant churches who stepped into this gap with
extraordinary zeal. Wherever churches operated, in rented floors
of commercial buildings, in makeshift premises, and in converted
homes, they placed a cross on the roof that was lit up in red at
night, creating vibrant evidence in the night-time cityscape of
their growing influence. As apartment complexes spread across
cities, so churchgoers would proudly put stickers on their doors
of their respective churches. The founding pastor of the Full
Students of L’Ecole de Seoul
participate in a parade in an
assortment of masks and
costumes.
140
Gospel Church, on Yeouido Islet in Seoul decided against creating
new churches in neighborhoods, preferring instead to expand his
one church and hold services through the day on Sunday to
accommodate the growing congregation. The numbers swelled in
home groups, mostly composed of housewives, who met once a
week to study a Bible text and pray for sick members and for
their husbands’ promotions. When the numbers approached
twenty, a cell split into two. In the days before most Seoulites
had their own cars, cell groups would buy their own van and, on
Sundays, an army of vans would deliver group members to the
church which was eventually rebuilt to resemble an indoor
stadium. By the time it reached half a million members, the
church was boasting the largest single congregation in the
history of Christendom.
T
he other side of this story, the emptying out of the
countryside, would have enormous implications for the
villages and farms of Korea, where for centuries people had
developed their values and work habits. Extended families often
lived in the same village. Each had its small school where children
were taught Confucian ethics. The patterns of bursts of activity
at planting and harvest and periods of inactivity, when the men
drank and gambled, as well as the joyous moments of group
activity and the willingness to be told what to do, such as when
everyone piled in to re-thatch one family’s roof. Such patterns, if
you look, remain with Koreans today.
Consider the statistics. In 1960, some 63 percent of
Koreans lived in the countryside with 28 percent in cities and 9
percent in towns. By the end of the decade, that combined
number in cities and towns was already 50 percent. By 2005,
only 10.2 percent of the population remained in the villages. But
there was concern at the time that while the country remained
committed to industrialization, it was losing its traditions. But, if
there is a sentimental concern for the farmer (expressed in
141
opposition to foreign agricultural imports even if it does mean
Koreans pay high prices for their food), there was no romance
about rural life in the hearts of them men driving the economic
miracle. Indeed, it was because they knew the reality of the
farmer’s lot, that the new leadership was bent on improving it.
Park Chung Hee created the Saemaul (New Village) Movement
to modernize agriculture and raise rural living standards through
a combination of self-help projects and government funding. This
program began with a cement surplus in 1970. Park ordered that
every village be given 335 free bags. The following year, villages
which were deemed to have used them well (about half), were
given another five hundred bags and a ton of steel.
The biggest visible change in the countryside, and indeed in
the cities, was the removal of the traditional thatched roofs.
Although they kept homes cool in summer and warm in winter,
Park considered them a symbol of backwardness. He ordered
them replaced with corrugated metal, and later with tiles. This
coercive program officials would forcibly remove the roofs
from the homes of people who resisted changed the face of
Korea forever, and to date there has been almost zero interest in
reviving it.
Today the villages of Korea are going through a new type
of revolution, one that challenges the historical homogeneity of
Koreans and their view of the significance of ethnicity. Young
bachelors and not-so-young bachelors have found in recent years
that women were not enthusiastic about a life on the farm. In
The first consumer groups, which grew out of
women’s organizations, did not focus on the variety,
safety, quality and price of products, but rather on
perceived national interest, promoting, for example,
resistance to foreign products in order to support
Korean companies.
142
search of brides, farmers have turned to China and southeast
Asi a wi th the resul t that now one i n ei ght marri ages i s
international.
The change which economic development has wrought in
the lives of Koreans is truly remarkable. Koreans are healthier
than ever before in their history. If a Korean from sixty years ago
stepped into a modern apartment, she would not know what
most of the everyday items were for, let alone how to use them.
Baby strollers have replaced the old blankets mothers used to
carry their babies. Koreans once slept on mattresses on the floor.
Now most have beds. Even the kitchen sink would be a novelty,
having made its appearance for ordinary Koreans in the ‘60s.
“Where’s the kimchi?” she might ask. It’s now stored in special
freezers, rather than in the old earthenware pots buried in the
frozen ground.
The biggest surprises would come in the bathroom. In the
first wave of modernization, if you bathed at home you did so in
a bathroom with walls and floor tiled in porcelain, which had
various sized bowls, some for washing clothes, a tap and a
shower attachment or hose. For that reason, many people went
to wash in communal bathhouses. Now many apartments have
two bathrooms, one with a bath and the other with a shower
cubicle. Most homes now also have sit-down toilets, a Western
import that was once so foreign to Koreans that they would
sometimes climb up on the seat and squat over the bowl.
The diet has also changed. Many people, especially the
young, opt for cereal and toast for breakfast instead of rice and
kimchi. A varied diet means that people are much taller than
they used to be. Parents have full wardrobes, separately his and
hers. Even in the ‘80s, Korean men would wear work suits if they
went out with their family on Sunday because it was all they
had. Now they’re in fashionable-length shorts and sandals and
the suits are for work only.
Where once their grandparents were concerned with the
143
next meal, modern Koreans are concerned with wellbeing,
looking at ways to quit smoking, exercise more, and eat what is
good for them. At the same time, they are still heavy social
drinkers, with the middle class having moved on from beer and
the local liquor, soju, to Chilean, Australian and French wine. The
lifestyle has moved in the span of two generations from pre- to
post-industrialization with all the anxieties and concerns, once
buried, ignored, or non-existent that such change entails.
In acknowledging the 60th birthday of a country like
South Korea, it is appropriate to draw attention most of all to its
people. This is not a country that prided itself on ideology or
system. It was not guided by a Constitution created by Founding
Fathers. Nor was it able to depend on oil, gold, or sheer size. In
fact, the country is small, over-crowded and devoid of resources.
The acknowledgement, from today’s Koreans and from outside
observers, must be to those hard-working, badgered people
whose dreams and loyalties, and whose sweat and tears drove
Korea’s economic growth in the Park era and its democratic
development in later years.
In the long history of the Korean people, they are the
greatest generation, and in the short history of the Republic of
Korea, their country’s most magnificent resource. Throughout
their working lives, among the burdens they faced was insecurity
about their country and their own worth. This was variously
expressed in nationalistic outbursts, which still occur, and in
withdrawal and self-criticism. It is something that is hard to
capture and define, but it is something that young Koreans do
not feel. They stand on the willing shoulders of the growth
generation and, for that reason alone, are able to look the world
in the face and say with pride, “I am a Korean.”
144
Introduction:
For the first fifty years of its existence, the Republic of Korea was
in the role of "student," learning from the world, sending its best
and brightest people overseas to study and return. True, Korea
learned from the world very well, bringing home economic
development, political democracy, and high technology. But
Korea's position was that of a country learning from others.
In the past ten years Korea has changed its position in
global education and has begun to take the role of teacher as
well as learner. While the process is incomplete, and one can
hope that Korea will never cease to learn the best that the world
has to offer, learning is no longer just a one-way street, with
foreign knowledge coming into the "hermit kingdom." Korea has
had two decades of favorable world publicity, including the
democracy movement of 1987, the 1988 Olympics, OPEC
membership, the 2002 World Cup, and the cultural impact of the
Korean Wave. Students of the world are coming to Korea to learn
the l atest technol ogy, successful business methods, art,
architecture and culture. The Republic of Korea in the 21st
century, 60 years after i ts establ i shment as a poor and
undeveloped country, is now a well-known and well-respected
member of the international community of nations and is truly
beginning to "teach the world."
Beginnings: The frog in the well
Korea is proud of its 5000 years of history; it is not surprising
that this long history continues to influence Korean life.
KOREA
Impossible to Possible
Teaching the World:
Korean Education Becomes Global
Education
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Education has its own tradition, and Korea's educational system
has reflected Korean geography, Korean culture, and Korean
history.
Centuries ago in the Unified Silla Dynasty, Korea was
thoroughly internationalized and integrated into the Chinese
world culture of Tang China. Leading Korean scholars and poets
communicated with and traveled to Tang China and considered
themselves part of the Chinese cultural and educational world.
Later, in the Goryeo Dynasty that harmonious relationship was
disrupted by the military power of the Mongol occupation. The
Joseon Dynasty from its beginnings in 1392 sought to cut off
foreign political and military influence in Korea by cutting off all
contact with the outside world; thus began 500 years of the
"Hermit Kingdom." This period solidified the importance of the
Korean nation, the homogeneity of the Korean people, and the
necessity of resistance to foreigners. During the Joseon Dynasty
Confucianism and the Chinese classics became the fundamental
basis of education, but such dominance of a foreign (Chinese)
philosophy was not accompanied by any openness to other
foreign ideas or people.
When Korea was finally "opened" to the west in the 1880s,
Korean culture received a great shock which resulted in the
opening of Korean education as well. That opening from the very
beginning took the form of Korean students going out of Korea
to study. As early as 1885, Seo Jai-pil (who used the English
name Philip Jaisohn) became the first "study abroad" student,
goi ng eventual l y to George Washi ngton Uni versi ty i n
Horace H. Underwood served
six years as Executive
Director of the Fulbright
program in Korea prior to his
retirement in 2004.
Previously Dean of the
Graduate School of
International Studies at
Yonsei University, Underwood
spent most of his
professional life working in
Korea and in international
education. The son of
missionary parents, he grew
up in Korea and, after
earning his Ph.D. in English
literature from the State
University of New York
(SUNY) at Buffalo, he
returned to Korea to teach.
From 1971 to 2004 he was on
the faculty of the Department
of English Language and
Literature at Yonsei
University.
Horace H.
Underwood
After the Korean War, the number of Korean students going
overseas grew to a flood. In fact, the expertise brought back to
Korea by students who had earned doctorates in the U.S. is
widely credited with helping Korea's growth and economic
development from the 1960s onward.
146
Washington, DC. He was followed by a long series of famous
individuals, including Syngman Rhee, Paik Nak-jun (L. George
Paik, later president of Yonsei University), and a host of other
students starting in the 1890s. They attended institutions such as
Roanoke College and Randolph-Macon University, smaller
institutions which welcomed Korean students, as well as more
well-known places such as Harvard, Yale, and Princeton.
Education had been supremely important in Korea for at
least 500 years, of course, as the Confucian ideology and civilian
politics of Korea had combined to make education the primary
means of advancement and success in society. The Confucian
emphasis on education continued after the opening of Korea
(and in fact continues to this very day) and led to a strong desire
to acquire the new knowledge demonstrated by the more
powerful nati ons of the west. Thus, Korean students
demonstrated their adherence to Korea and to Korean ideology
by the very fact of their seeking to study abroad.
The number of Koreans studying abroad remained quite
small, however, until after the establishment of the Republic of
Korea in 1948. As the new Republic of Korea poured scarce
resources into education for all citizens at the elementary level,
so also at a higher level students sought the best education
possible, which at that time was overseas. After the Korean
War, the number of Korean students going overseas grew to a
flood. In fact, the expertise brought back to Korea by students
who had earned doctorates in the U.S. is widely credited with
helping Korea's growth and economic development from the
1960s onward.
The number of Koreans studying abroad continued to grow
throughout the following decades, reaching 39,000 degree-
seeking students in the U.S. alone as early as 1990, according to
"Open Doors," the annual U.S. statistical book of international
students in America. Including language study, short-term study,
and study in other countries, the number of Korean students
147
abroad may have been as high as 100,000 even then. More
recently, Korea has been listed in Open Doors as third in
university enrollment in the U.S., just behind China and India
(which have immensely larger populations.) If pre-university
education is included, the Republic of Korea has more foreign
students in the United States than any other country in the
world. In addition, unlike the early years when Korea was
desperately poor, most of these students choose to return to
Korea on completion of their studies. Certainly this has raised the
level of internationalization in Korea and has helped create
personal links between Koreans and people and countries around
the world.
Nonetheless, all this internationalization of education took
place in a manner that is uniquely Korean. This immense flood of
internationalization for Korea was entirely a one-way process -
students went OUT of Korea, but few international students
came into Korea. Korean internationalization was a one-way
process, outbound only.
Foreign students enrolled at
Yonsei University's Korean
language program learn,
traditional memorial service
for ancestors.
148
This situation was, as mentioned above, a reflection of
history, economics, and culture. Korea's profound belief in a
homogeneous Korean nation had discouraged any belief that
forei gners shoul d be encouraged to study i n Korea. The
economics of a poor war-ravaged country were such that few
foreigners considered Korea to have much worth studying. The
culture of Korean isolation meant that Koreans considered
themselves to be like "A Frog in a Well." This well-known Korean
image is clear and emotionally satisfying; Koreans automatically
"know" that the solution for the frog's problem (the problem of
seeing only a small patch of water and a small patch of sky) is to
go out of the well. Thinking of the problem of Korean education
as a "frog in a well" effectively prevented Koreans from thinking
that another solution for the frog is to invite other frogs into the
well. Thus Korean students (the "frogs") went out of the well
(Korea) in immense numbers, but at first very few Korean
educators thought it important to establish programs to invite
foreign people to learn from or in Korea.
There are many examples of the imbalance of "one-way
internationalization." For instance, there were 39,000 Koreans
studying in the U.S. in 1990, yes, but there were only 410
Americans studying in Korea that year, only 1% as many. As late
as 1998, while 87% of the non-medical faculty of Yonsei
University had doctorates from outside of Korea, only two of the
600 tenured faculty were non-Korean. Exchange programs
throughout Korea were imbalanced, as more Korean students
wanted to study overseas than there were foreign students who
wanted to study in Korea. Despite fear of an "invasion" of foreign
The internationalization of education in the Republic
of Korea is turning out to be a remarkable
modification of 500 years of history and culture in
just 10 years.
149
universities, in fact no branch campus of any non-Korean
university was able to establish itself in Korea. There had always
been a small trickle of foreigners who wanted to learn about
Korea - missionaries, U.S. Army veterans, Peace Corps volunteers
- but their numbers were always small, very small. Korean
internationalization was "one-way" internationalization.
Beginning to teach the world
The process whereby Korea has come to "teach the world" began
with that small trickle of missionaries, military, and peace corps
alumni. A few Korean universities in Seoul, typically private
universities with Christian backgrounds, began soon after the
Korean War to open programs for international students. Yonsei
University's "Korean Language Institute" opened in 1959,
originally to teach the Korean language to foreign missionaries,
but soon growing into an important early institution for
foreigners to learn about Korea. In 1966 Yonsei began an
"International Division" for incoming exchange students, though
the number of students was very small (never more than 10 per
year for the first 20 years).
In the 1970s the leader in receiving international students
was Ewha Womans University, partially because Ewha had a
small international dormitory which could provide housing for
i ncomi ng students (the i ssue of housi ng for i ncomi ng
international students and scholars has continued to be a major
i ssue to the present day, parti cul arl y for programs and
universities located in a crowded city like Seoul.) In 1985 Yonsei
University greatly expanded its international program, beginning
a Summer Program which had 61 students the very first year (six
times as many as ever before). Though at that time Yonsei was
the clear leader in international education, similar programs were
also being started by other universities (Sogang University, Korea
University) and those early institutions were joined by many
other summer and academic year programs for international
150
students.
In the meantime, while most international scholarship
programs focused on providing funds for Korean students to
study overseas (largely in the United States), a few programs
such as the Fulbright program also provided funds for American
students coming to Korea for research. Fulbright Korea's goal has
long been to achieve a rough balance between the flow of
Korean grantees going to the U.S. and U.S. grantees coming to
Korea. The list of American scholars of Korean studies who have
benefited from Fulbright grants is a roll call of the leading
academics in the field, and Fulbright continues to this day to
provide funding for Americans who want to learn from Korea.
In 1987 Yonsei University began the first full academic
degree program in Korea with instruction in English, the master's
programs of the Graduate School of International Studies. As it
turns out, I was the first Associate Dean of the Yonsei GSIS.
Enrollment in the GSIS at first was mostly Koreans (the GSIS had
a student enrollment quota from the Ministry of Education) but
the availability of graduate education in English drew more and
Fifty-five Saudi students on
scholarships provided by the
Saudi Arabian government
pose during an orientation at
Kyung Hee University.
151
more students until soon the number of international students
was equal to the number of Korean students.
By the late 1980s Korea's economic miracle had become
widely known throughout the world, and so the number of
international students wishing to study Korean business and
economics easily exceeded the number studying Korean history
and culture. In 1996 the Republic of Korea Ministry of Education
made substantial grants to universities for the development of
"international human resources," and another seven Graduate
Schools of International Studies were opened in Korea, attracting
more international graduate students. Throughout Korea,
uni versi ti es were wel comi ng i nternati onal students by
establishing special summer programs, academic year exchange
programs, and graduate programs. By 1998, ten years ago, Korea
had begun to teach the world.
Korea internationalizes
A number of Korean presidents have spoken of the importance of
internationalization, but often the concept appeared to be more
words than action. The emphasis of President Kim Young-sam on
"globalization" was never put into practice on the governmental
level, and when President Kim Dae-jung included "openness to
foreign culture" as one of Korea's goals for the new millennium in
2000, many people looked at the goal critically. But even though
it is easy to become critical of "one-way" internationalization
and of the "words-only" nature of goals, in fact over the decade
si nce 1998 there has been a genui ne change i n Korean
universities. Indeed, Korean universities seem to be changing
faster than Korean society as a whole.
These changes have been taki ng pl ace i n Korean
universities without much public fanfare, debate, or consensus.
The number of international students, international agreements,
and genuine international programs has quietly grown and
influenced all of academe. The internationalization of education
152
in the Republic of Korea is turning out to be a remarkable
modification of 500 years of history and culture in just 10 years.
Perhaps the most remarkabl e devel opment i n the
internationalization of Korean education, the change easiest to
see on Korean campuses, has been the growth in the number of
international students in Korea. While American universities have
been holding "study abroad" fairs in Korea for many years,
hoping to attract some of the excellent Korean students to study
in the U.S., Korea has begun holding its own "study abroad" fairs
in recent years, particularly in China and Vietnam, recruiting
international students to come learn in Korea, as well as
recruiting and welcoming students from countries around the
world. As a result, there is no longer any Korean university
wi thout a conti ngent of forei gn students, a si tuati on
unimaginable in previous years. The number of international
students in Korea has grown from only a few hundred ten years
ago (and most of them in short-term study such as exchange
programs or language study) to a situation where there are
thousands of international students in Korea, mostly in graduate
degree programs.
International students in Korea are not limited to the
major "SKY" universities (Yonsei now has several thousand
international students in a dozen different programs) or even
other Seoul universities like Sogang University (803 international
students) or the University of Seoul (178 international students)
but are found in provincial universities as well, with large groups
of international students now attending universities such as
Kyungpook National University (1103 international students),
Pusan University of Foreign Studies (456 international students),
Dong-Eui University (330 international students), and the
University of Ulsan (242 international students). Even a smaller
provincial university opened at the behest of President Chun Doo
-hwan i n the 1980s, Daej eon Uni versi ty, now has 109
international students. This June when a group of American
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international educators visited KAIST, the Korean Advanced
Institute of Science and Technology, the university emphasized
the value of the excellent international students who are enrolled
in the degree programs of KAIST, learning about Korea' s
advanced science and technology. Indeed, with the decline of the
college-age population in Korea and the tendency of Koreans to
go overseas for graduate study, many Korean institutions are
discovering (as U.S. universities have discovered before them)
that international graduate students, particularly in science and
engineering, make the difference between a weak department
and a strong graduate program.
Government policy has also played an important role in
increasing the number of international students. While most of
the actual program management is handled by the individual
universities, changes in government attitude have had a major
effect on the campus atmosphere toward international education
and have given encouragement to campus initiatives for the
growth in the number of international students. In 2004 the
Ministry of Education and Human Resources Development
promulgated the "Study Korea Project," which signaled a
fundamental change in many decades of Korean government
policy towards international education. The Study Korea Project
sai d speci fi cal l y and emphati cal l y, "the focus of Korean
governmental policies regarding international education is geared
to 'recruiting foreign students to Korea,' rather than sending
Korean students abroad." As part of this new model of in-bound
international education, the Ministry set a goal of having 50,000
With the growth in the number of international
students in Korea there has been a matching and
equally important growth in the profession of
"international educational administrator" in Korean
universities.
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international students in Korea by the year 2010.
In August, 2008, what is now the Ministry of Education,
Science and Technology had to set a new goal of 100,000
international students by the year 2012, because the old goal of
50,000 had already been met in 2007, three years ahead of
schedule. The Republic of Korea government has not only made a
dramatic change in policy regarding international education, it is
backing up the new policies with funding. Korean universities are
to be given grants to help them in offering more courses taught
in English and more Korean-language preparatory programs for
international students. Government scholarships are to be
increased again, from a low level of 50 per year before the Study
Korea Program began in 2004 to as many as 3000 by the year
2012. Korean Education Centers to encourage "Study in Korea"
are being opened in China, Vietnam, and the Philippines.
With the growth in the number of international students in
Korea there has been a matching and equally important growth
in the profession of "international educational administrator" in
Korean universities. Ten years ago the "international" function of
many Korean universities was handled by a single staff member
at a desk in the university planning office, functioning as
international secretary and protocol officer for the university
president. Now every Korean university has a real international
office with staff. Because of the Korean administrative system,
the majority of the policy-makers in such international offices
are faculty members who are serving only two-year terms while
remaining in their academic departments.
These faculty members have universally received their
doctoral degrees from overseas universities and are therefore
sometimes quite comfortable internationally, but their limited
two-year commitment to international education makes it
difficult for international programs in Korean universities to
maintain continuity or achieve professionalism. Since most
Korean government ministers serve in their positions even less
155
than a year, the government is in no position to offer such
continuity or international professionalism on behalf of the
universities.
Professionalism is found instead at the university staff
level, the non-teaching staff who do the majority of the day-to-
day management and program administration for international
offi ces. Ten years ago i t was extremel y di ffi cul t to fi nd
competent international people who were fluent in a foreign
language and who could serve at the staff level. Today such
people are on the staff of every Korean university, mostly young
staff members (though some are already in their 40's) who have
studied foreign languages, traveled overseas, learned the needs of
international students, and grown in their specialized profession
as international administrators.
Fulbright Korea has promoted the growth of such staff by
its support of the "International Education Administrator" (IEA)
program, which each year sends a small number of Korean
international office staff members to visit American universities
and learn from their American international office counterparts.
International students
experiment in the “Auto ID
Lab,” a high-speed data
transmission lab at the
Information and
Communications University.
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Such staff members return to help their universities do a better
job in recruiting, orienting, retaining, and helping international
students. They also form the core of KAIE (Korean Association of
International Educators), a professional group of international
staff members in Korean university international offices. The
several hundred members of KAIE provide each other with
training in international program administration, orientation, visa
processes, study abroad issues, housing, communications, and all
the myriad other issues that must be solved for any country to
receive international students.
There are many other examples of internationalization that
could not have been found ten years ago. For example, one
major conference for international education is the annual
"NAFSA" conference in the U.S., where over 8000 people,
representatives of international offices of universities around the
world, gather to meet and learn from each other and arrange
study abroad programs. In 1990 there was not a single Korean at
the NAFSA annual conference, and even in 1998 there were only
a few Korean educators in attendance.
At the 2008 conference the number of Koreans at the
NAFSA conference had grown to over 100, with more than 40
separate Korean universities sending representatives or staffing a
booth in the conference exhibition hall in Washington, D.C.
Koreans now attend other educational conferences around the
worl d, i ncl udi ng KASCON (Korean Ameri can Student
Convention), EAIE (European Association of International
Educators) and the Study Korea recruiting fairs held throughout
Southeast Asia.
Particularly in the last decade, Korea has begun in a
serious way to welcome the world's frogs, to recruit
and teach international students and to develop a
broad range of two-way international programs.
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An excellent example of the complete role reversal of
Korea from a learning country to a teaching country can be seen
in the number of Christian missionaries going in and out of
Korea. For a century, foreign missionaries came to Korea to
teach, and Korean Christians learned. As the Korean church grew
under the religious freedoms of the Republic of Korea, the
number of foreign missionaries declined dramatically. As the
Korean economy grew under the economic freedoms of the
Republic of Korea, the ability of the Korean church to support
Korean missionaries grew dramatically. Now Korea is a country
sending 15,000 missionaries overseas, second only to the United
States as a sending country. Not all learning is in an academic
context, and again in this case people around the world are
learning from Korea.
As a further indicator of Korea teaching the world, Korean
faculty teach at a great number of major educational institutions
around the world. I used to visit universities in the United States
to arrange exchange programs for Korean students. I found that
every college and university I visited in America had Korean
professors on the faculty, not only teaching Korean culture and
language, but in business, science, engineering and other fields.
While some of those Korean faculty had lived in the U.S. for
years, in the last decade there has been a dramatic growth in
requests from American and world universities for Korean faculty
to teach in their growing Korean studies programs. Korean
studies as an academic field has become important around the
world, and the need for professors of Korean studies has
outgrown the supply.
In a final example of "learning from Korea," consider one
small program of Fulbright Korea. The Fulbright program in Korea
has for many years sent Korean scholars to the U.S. for study and
research, and brought American scholars to Korea to teach, but
that somewhat "developing nation" model has in recent years
given way to a balanced model where not only do American
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students and scholars come to Korea to learn, but Korean
professors are sent by Fulbright to American universities to
teach. Korea has much to teach, and the world has discovered
that there is much to learn from Korea.
Conclusion:
It is always satisfying to see Korea's development and economic
growth; Korea is a rich country now, within the ranks of "rich
countries" by every guideline including the United Nations'
ranking of national economies. As Korea is now a rich country, it
is symbolic and appropriate that the international relationships
of its university education system should change from an
emphasis on one-way study abroad to a two-way mutual
exchange of learning, an exchange of people and ideas with other
countries to the benefit of both. Many Koreans will no doubt still,
like the frog in the well, leave Korea to see and learn from what
the world has to offer. But Korea also has much to offer the
world. Particularly in the last decade, Korea has begun in a
serious way to welcome the world's frogs, to recruit and teach
international students and to develop a broad range of two-way
international programs.
The Korean economy has been successful internationally
for many years; Korea's higher education institutions are now
Foreign exchange students
and Korean students study in a
library in Yeungnam
University.
159
becoming successful internationally as well. The success of
Korean students in world universities, the success of Korean
faculty teaching in world universities, the success of Korean
professional international staff in managing international
programs, the success of Korean universities in attracting
international students, all these mean that Korea is in the process
of aligning its international educational practices with world
needs and standards. With such alignment and development,
Korea can indeed, now and in the future, teach the world.
160
I
n the last sixty years, Korean artists have made an important
contribution to our understanding of art and culture in a
changing world. Today, perhaps more than ever before, these
artists are receiving the international attention they deserve.
They have been able to achieve this due to their own individual
creati vi ty but al so because of the i nfrastructure for
contemporary art in Korea one of the most extensive in the
region. This includes 25,000 students enrolled at art schools, 12
museums showing contemporary art, 30 contemporary art
spaces, 3 biennials and 300 commercial galleries. This ecology of
arts organizations supported by the public and private sector has
provided a substantial platform for Korean artists.
When we think of important Korean artists it is always a
difficult task to single out some over others. However, two artists
who immediately come to mind as having enormous influence
over their generation are Nam Jun Paik (b.1932-2006) and Lee U
Fan (b.1936). Both forged their careers in Korea and abroad
beginning in the 1960s and are considered key art historical
figures. Few other artists in Asia have benefited from this
recognition. They paved the way for a younger crop of artists
who burst onto the international stage in the late 1990s when
the art world became more internationalized. Artists Kim Sooja,
Lee Bul , Atta Ki m and Do Ho Suh have become regul ar
participants in the increasingly complex international art circuit.
Korea’s international presence was forged with the
establishment of a national pavilion at the Venice Biennale
thirteen years ago. This provided a significant opportunity for
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international audiences to see Korean art in an international
context. These exhibitions have included works by Michael Joo
and Bahc Yiso. The development of home-grown biennials in
Busan, Gwangju and Seoul where international art is imported
for l ocal audi ences has been si gni fi cant to a domesti c
understanding of contemporary art. For some years, Korea
played host to the most biennials in any Asian nation.
Korea has long been known as one of the most “wired”
countries in the world. With access to new technologies, artists
are able to play one of the leading roles in creating art that
forges a relationship with technology. Media City Seoul allows us
to see this first hand while individual artists, U Ram Choe, Jun
Bum Park, Jung Yeondoo and Young-Hae Chang are gaining an
increasing amount of international attention for their work in
this field. Contemporary alternative art spaces are also more
numerous in Seoul than in any other Asian city. Spaces such as
Ssamzie, Pool and Loop have played a role as incubators for
artistic experimentation for over a decade now.
A
sia Society’s first exhibition of Korean art was in 1968 and
we have continued to show traditional and contemporary
Korean art over the decades. Recognizing the importance of
Korea within the region, Asia Society launched a center in Seoul
this year-- one of ten centers in the United States and Asia. We
are looking forward to developing a presence in Korea that allows
us to discuss both Korea and Asia’s importance in the twenty-
first century.
Melissa Chiu is Museum
Director of the Asia Society in
New York where she has
worked since 2001.
Previously, she was Founding
Director of the Asia-Australia
Arts Centre in Sydney,
Australia(1996-2001).
As a leading authority on
Asian contemporary art, she
has curated nearly 30
exhibitions and has published
extensively in the field.
Her recent book is Breakout:
Chinese Art Outside China,
Charta, 2007. She has been a
visiting professor at the
Graduate Center, CUNY and
Rhode Island School of
Design as well as lecturing at
numerous American
universities including
Harvard University.
Melissa Chiu
Korea’s international presence was forged with the
establishment of a national pavilion at the Venice Biennale
thirteen years ago.
This provided a significant opportunity for international
audiences to see Korean art in an international context.
162
T
he rise of Asia in the late 20th century has been seen mostly
in economic terms the strength of its manufacturing
industries, a demand for infrastructure development, the
emergence of a middle class, increasing disposable incomes, vast
consumer markets and greater trade flows. These factors have all
characterised Asia as the continent of the 21st Century.
But there has also been a dynamic growth of popular
culture in Asia and the globalization of trade has been followed
by cultural intercourse. While Hollywood films and American TV
shows dominate most territories, Asian pop culture has reached
beyond traditional domestic and regional markets. For example,
Japanese manga and anime (think Pokemon for starters); Hong
Kong action films (Jackie Chan, John Woo, Jet Li among others);
and Korean TV soap operas have all found international
audiences. More recently Hong Kong movie stars have been
followed to Hollywood by Korean stars like Rain (in Speed Racer)
and Yunjin Kim (in the very popular Lost television series).
“Asian faces have been on the rise for awhile,” notes Chris
Lee, previously president of Sony’s Tristar Studio and producer of
Superman Returns (2007) and the Tom Cruise film, Valkyrie
(2008). “I actually believe video games with their largely
Asian looking character faces have changed the perception of
what the hero and heroine are supposed to look like. Hollywood
is increasingly looking for stars who matter in foreign territories
to put in their movies.”
Hong Kong cinema dominated the Asian industry in the
1980s but when its markets declined in the 1990s, its talent
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either went to Hollywood or the industry re-invented itself using
the mainland Chinese hinterland to go global, a process that took
almost a decade to succeed (largely with Hong Kong producer
Bill Kong initiating a series of historical action epics with
Crouching Tiger, Hidden Dragon, Hero and others). As Hong
Kong cinema re-strategized, a “new” Asian film industry emerged
Korea.
Korea has a long and rich tradition of filmmaking, notably
with Na Woon-gyu's Arirang that initiated the “golden age of
silent cinema” in the late 1920s; and between 1955-1969 when
the filmmaking center of Chungmuro was vibrant, and movie
companies and stars drove the industry. These were the years of
the “greats” Kim Ki-young (whose 1955 Yang Sang Province
helped bring about this new era), Shin Sang-ok, Im Kwon-taek,
Lee Man-hee and Chung Chang-wha among others. Like their
peers in the region they began as apprentices and became
masters of their craft. They showed versatility over a range of
genres, from romances through historical epics and biopics to
action. They worked in an industry striving to meet audience
demand in an emerging modernised, cosmopolitan society. Their
filmographies, like the studio directors of Hollywood, Hong Kong
and Japan, are prolific. Im Kwon-taek for example, completed his
one hundredth film last year.
While the foundations laid by this “golden age” were
eroded by stricter government requirements in the 1970s, the
ground was cleared for a new cinema during the reforms of the
1980s. The censorship system was liberalized to gradually
Roger Garcia was director of
the Hong Kong International
Film Festival and is now a
writer, producer and film
festival consultant. He has
been published by Variety,
Far East Economic Review,
Film Comment, Cahiers du
Cinema and the British Film
Institute among many others.
As producer he has worked
in Hollywood, U.S. television,
and on independent films in
Asia. He is program
consultant for film festivals
in the United States and
Europe.
Roger Garcia
The years 1996 - 2000 cannot be underestimated in their
importance. From the establishment of the Pusan International
Film Festival in 1996 (now the major film festival in Asia), to the
first films by a battalion of young directors,
Korean cinema has been in the ascendant.
164
remove strictures on political expression, and the closed
distribution system was opened up to more foreign imports
while retaining a screen quota system for local products. During
this decade, Korean cinema began to attract notice on the
international scene. For example, Im Kwon-taek’s Mandala
(1981) and other films were shown at international film festivals
throughout the 1980s.
In the transitional era of the late 1980s and early 1990s,
filmmakers like Jang Sun-woo and Park Kwang-su provided the
first step towards the new Korean cinema. Park’s Chilsu and
Mansu (1988) expressed frustrations with contemporary society
and its references to political prisoners and arranged marriages
were ground-breaking.
Just one decade separates Chilsu and Mansu from Shiri but
the difference seems like light years. In Shiri the depiction of
North Korean terrorists departed from the usual stereotypes and
reflected the new freedom to discuss sensitive political issues.
Equally important, Kang Je-gyu’s film proved that the local
industry could produce a well-made action thriller comparable to
some Hollywood products. In 1999, Shiri was the biggest box
office hit to date with 6.2 million admissions nationwide. This
A crowd of people mill around
the stage at Haeundae Beach
in Busan for the 11th Pusan
International Film Festival.
165
was well above the previous local and foreign box office record
holders, Im Kwon-taek’s Sopyonje (one million) and Titanic (4.7
million). With Shiri we witness the maturing of an ambitous
industry.
T
he road to Shi ri had i ts ups and downs, but what i s
remarkable in this journey through the 1990s was the
industry’s resilience. It rebounded from an all-time low of 16% of
the local market share in 1993 (when foreign imports increased
after distribution was liberalized). It turned the Asian financial
crisis of 1997 to its advantage. When big corporations pulled out
of the film business, venture capital companies stepped in to
fund the debut of young filmmakers. This combination of
money and talent rebuilt the industry and propelled it into the
21st Century.
The years 1996 - 2000 cannot be underestimated in their
importance. From the establishment of the Pusan International
Film Festival in 1996 (now the major film festival in Asia), to the
first films by a battalion of young directors, Korean cinema has
been in the ascendant.
Tom Quinn, Senior Vice President of New York-based
Magnolia Pictures (U.S. distributor of several landmark Asian
films including Thai actioner Ong Bak and Bong Joon-ho’s all-
time Korean hit The Host) believes, “The real watershed moment
for Korean cinema was at the turn of the millennium when four
unique and different filmmakers emerged as major talents. They
were Lee Chang-dong with Peppermint Candy, Kang Je-gyu with
Shiri, Park Chan-wook with JSA, and Kim Ki-duk with The Isle.
Within a two year period each of these films found both critical
and financial success domestically, as well as abroad. While other
territories such as Denmark have managed similar feats in recent
memory, Korea’s success was something far more stellar.
Overnight it had become a self sustaining territory with the kind
of box office that could maintain a multi faceted industry with
166
an ability to cater to the mainstream, as well as push the
aesthetic envelope. It was an entire industry with stars, auteurs,
themes, genres.”
Unlike their immediate predecessors, these filmmakers
were striving to make personally ambitious films with a
commerci al appeal . Mark Si egmund of the Seoul Fi l m
Commission has observed Korean cinema on the ground since
1999, “The younger generation, who didn’t have to go to the
streets to fight for democracy started to concentrate more on
the individual, on leisure including entertainment and cultural
‘consumption.’ Korean Cinema was young, fresh, innovative,
exciting to watch. Always surprising.” A new society was
emerging in Korea, one that had been through the IMF crisis
and its cinema was now focused not so much on the past as on
the future.
Maggie Lee, Asia Chief Critic at the respected trade journal
Hollywood Reporter looks at the regional popularity of Korean
cinema at this time in the perspective of Hong Kong cinema.
“Most pioneers of the Korean Wave grew up watching Hong
Kong films of the golden ‘80s, so there are actually recognizable
elements in those films that the Hong Kong and Taiwanese
audience could identify with. At the same time, Hong Kong was
Kim Ki-duk’s film, “Spring,
Summer, Fall, Winter and
Spring” (2003), opens the
Gwangju International Film
Festival.
167
only making safe bets like triad and cop films, so the variety of
Korean genres filled a vacuum. Korean lifestyle and youth culture
as seen through the movies seemed so fresh and cute. Korean
romantic comedies like My Sassy Girl, Bungee Jumping Of Their
Own and love stories with a fantasy twist, like Il Mare, Ditto
were very popular. There are many reasons for this. The scripts
were real l y ori gi nal , and the budgets were much hi gher
compared to what Hong Kong companies would spend on
romance or melodrama. Korean stars were not only gorgeous,
they really had charisma and acting chops.”
As interest in these high quality productions increased,
local sales companies such as Mirovision sprung up. Korean films
could now be aggressively marketed as distinct product rather
than sold through foreign intermediaries. At the same time the
Korean Motion Picture Promotion Corporation which had been in
operation since 1973 was re-structured and re-named the
Korean Film Council. KOFIC is unique in Asia for its breadth of
support activities that encompass overseas promotion, grants for
local production, operating a studio and school, participating in
film investment funds, and training programs. KOFIC has for the
outside world, become an important point of contact and
information on current developments in the local industry.
The years between 2001 and 2006 are marked by films
that broke box office records and expansion into regional
markets. Kwak Jae-yong’s My Sassy Girl (2001) was a romantic
KOFIC is unique in Asia for its breadth of support
activities that encompass overseas promotion, grants
for local production, operating a studio and school,
participating in film investment funds, and training
programs. KOFIC has for the outside world, become
an important point of contact and information on
current developments in the local industry.
168
comedy based on an internet novel. It recorded a high 4.9 million
admissions at home and then became a very big hit around Asia,
catching a craze for all things Korean in the region and a total
box office of U.S.$26 million, including U.S.$14 million in Hong
Kong, a staggering amount for the small territory. That same
year, Friend recorded 8.2 million admissions and a total
box office revenue of U.S.$44 million, a record until The
Host in 2006.
The blockbuster hits made the Korean cinema seem
unstoppable. Silmido (2003), a thriller about the training of a
group to assassinate North Korean president Kim Il-sung in the
1960s was the first film to cross 10 million admissions. In early
2004, it vied with Kang Je-gyu’s Korean War actioner, Tae Guk
Gi. Stars and advanced special effects helped bring its total ticket
sales to almost 12 million.
S
uccess was not only confined to local blockbusters. In 2003
Kim Ki-duk’s low budget Spring, Summer, Fall, Winter and
Spring, a quiet film about a Buddhist monk going through the
seasons of his life, did not do well at home but grossed almost
U.S.$10 million overseas, an international record until The Host.
The industry hit its high point in 2005 and 2006. 2005 is
remembered for the record volume of foreign sales as film
exports totalled some U.S.$76 million. Japan accounted for
U.S.$60 million of those sales and Korean films came only second
Korean films for most of these years had now
captured 50% to 60% of the local market, beating
Hollywood for the first time in decades. Helped by
the new multiplexes that had been built around the
country, revenues between 1999 and 2003 more than
doubled from U.S.$276 million in 1999 to U.S.$671
million in 2003.
169
to Hollywood in the number of foreign films released. The
dramas A Time to Remember (2005) and Hur Jin-ho’s April Snow
(2006) each earned U.S.$26 million at the box office in Japan.
Maggie Lee of The Hollywood Reporter distinguishes
between audiences in Japan and the rest of the region, and
emphasizes the importance of Korean TV dramas. “While
supporters of the Korean Wave all over Asia were young
audiences, in Japan it is predominantly middle-aged housewives
who were and are still hooked on Korean (TV) drama. The films
that did well in Japan were usually ones which starred their
favorite soap heroes, like Bae Yong-jun or Lee Byun-hyun or
Won Bin.”
Could 2006 top even the balmy days of 2005? The answer
came early in the year with gay menage-à-trois period costumer
The King and The Clown which set a record of 12.3 million
admissions. However that record did not last long when the
summer release of Bong Joon-ho’s mutant monster movie The
Host set a new record of 13 million tickets. At this point, Korean
films commanded a box office share of around 65% of the
domestic market, one of the highest in the world.
Korean films for most of these years had now captured
50% to 60% of the local market, beating Hollywood for the first
Movie poster of The Host and
Secret Sunshine.
170
time in decades. Helped by the new multiplexes that had been
built around the country, revenues between 1999 and 2003
more than doubled from U.S.$276 million in 1999 to U.S.$671
million in 2003.
There seemed to be no end to the creativity of the
industry’s talents. Stars like Jeon Do-yeon, Bae Yong-joon and
Lee Byung-hun were established in their careers and their
popularity was spreading. Moon So-ri won a best actress award
at the Venice Film Festival for her stunning portrayal of a woman
with cerebral palsy in Lee Chang-dong’s Oasis (2002). Korean
films were also doing well on the international film festival
circuit. Bong Joon-ho’s police procedural Memories of Murder
announced a distinctive talent. Park Chan-wook emerged as
perhaps the major auteur of the new generation with a series of
films that are highlighted by the powerful Sympathy for Mr.
Vengeance and the intriguing DMZ drama JSA, culminating with
the internationally acclaimed 2004 Cannes film festival winner
Old Boy. The latter film is based on a Japanese manga about a
man who seeks revenge for his mysterious imprisonment.
Baroque, outrageous, vi sual l y exci ti ng wi th an i coni c
performance by Choi Min-sik, the film was at that time the most
talked about Korean film around the world.
Despite these successes however, the downturn began in
2007. The inflow of capital into the film industry led to higher
production but lower returns as more films competed for
exhi bi ti on space. Japanese ci nema had al so ramped up
production, making some 600 films in 2006. With so many local
films looking for release in Japan, there was little space for
To date The Host remains
the most successful Korean film
ever with a box office gross of around U.S.$90 million
of which about one-third is from international.
171
Korean films and the bottom fell out of that market. To cap it all,
the screen quota system was reduced from 106-146 to 73 days a
year for local films. The downbeat mood was compounded by
the 2007 release of the English language monster movie shot in
Los Angeles and Seoul, D War (aka Dragon Wars). Though
successful at home, its performance overseas was disappointing.
But there is still good cause for optimism. The 2008 release
of Kim Ji-woon’s The Good The Bad and The Weird could be seen
as one step out of the doldrums. Its updating of a 1960s’ Korean
sub-genre of Manchurian westerns is a smart move to create a
fast moving, witty action film that could appeal to commercial
Western audiences (whose taste in Asian cinema is mostly
action) but whose main target is the Asian region. With its China
locations, mix of Hong Kong action style and Italian spaghetti
western rambunctiousness, and popular stars, it exists as
exciting a piece of filmmaking as anything done in the world of
cinema today.
Korea’s impressive track record on the international film
festival circuit continues. In 2008 for example, Hong Sang-soo’
Night and Day competed in the Berlin international film festival,
while Lee Chang-dong’s Secret Sunshine won best actress award
for Jeon Do-yeon at the Cannes International Film Festival.
O
verseas, The Host did well in the most difficult market, the
U.S.. Tom Quinn of Magnolia Pictures had to face the
conundrum that as a foreign film with subtitles, The Host was in
the art house category where the audience is averse to genre
fare. And young genre movie fans in the U.S. rarely watch foreign
subtitled films. “So instead of trying to sell the most valuable
genre element the monster to what would’ve been an
unreceptive theatrical audience,” Quinn explains, “we focused
most of our campaign on the critical acclaim and a story about
family. So we were actually able to sell the film theatrically as an
art film. Consequently it performed like an art film, almost out
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grossing Kim Ki-duk’s Spring, Summer, Fall, Winter and Spring
for the top North American spot for any Korean film of all time.
Because of the solid theatrical gross we were then able to
position the DVD across all major retailers and solicit a younger
audience who buys DVDs. It was essentially a two-prong sell.” To
date The Host remains the most successful Korean film ever with
a box office gross of around U.S.$90 million of which about one-
third is from international.
Moreover, the intrinsic values of Korea’s films and industry
bode well for the future.
Hollywood, largely through the efforts of Korean-American
producer Roy Lee, has bought up to 15 Korean films (and
counting) for American remakes. Only a portion of these films
will make it to the screen but it shows that Korean films still
have some of the best ideas in the world that can transcend
national boundaries.
Chris Lee explains, "It has not been lost on Hollywood that
Korea is now the Number Five territory in the world in terms of
box office. When you compare the kind of returns seen by local
Director Park Chan-wook wins
the Grand Prix award for "Old
Boy" at the Cannes
International Film Festival.
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movi es l i ke The Host and Ki ng and the Cl own, Korean
productions whether they become remakes or are made as
co-productions are just part of Hollywood's relentless pursuit of
emerging markets."
The Korean film industry has indeed come a long way. The
advances of the past decade in particular have given the nation
an industry whose business and creativity have earned the
respect and recognition of the international community. The
Korean film industry is on a par with the top producing nations,
with a host of talent and some of the most exciting films to have
come out of Asia in recent years, and its domestic market is still
one of the best in the world. With the increased activity of
Hollywood in Asia, it is now perhaps not so much a question of
national Asian cinemas “going Hollywood” as Hollywood “going
Asian.” As that happens, the Korean industry with its solid
infrastructure and creative spirit will be there as a major player.
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O
ne of the joys of living in a democracy derives from the
fact that all citizens have the ability to look back at their
country’s history and render their personal verdicts on what have
been the successes and failures of past leaders, both civilian and
military. Of all the countries in Asia, citizens of the Republic of
Korea do this most freely and fully. This is a healthy and
constructive process, and collective judgments on past leaders
tend to change with the passage of time, the accumulation of
factual knowledge, and the gradual fading of prejudice or bias.
Having been invited to write an article on some aspect of
the Republic of Korea’s first 60 years, I have chosen to write on
the presidency of Roh Tae-woo, because from my foreign
perspective he deserves a more sympathetic and positive
evaluation than he has thus far received from his fellow citizens.
In 1987, the heavy-handed presidency of Chun Doo Hwan
was coming to an end. Violent street demonstrations took place
demanding that future presidents be elected directly by popular
vote. The country wanted an end to military leadership and
manipulated elections. President Chun arranged for Roh Tae-
Woo, a former general, to be the nominee of the ruling party.
Shortly thereafter, in late June 1987, Roh made a speech that
signaled the end of authoritarian rule in Korea. Roh stated that
the Korean people, for the first time since the presidential
election of 1972, would be able to vote directly for their
candidate of choice.
As a presidential candidate, Roh was opposed by Kim Dae-
jung and Kim Young-sam, both popular civilian leaders. Neither
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Ties with the Eastern Bloc:
The Presidency of Roh Tae-woo
(1988-1993)
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of these opponents was willing to support the other’s candidacy,
and so a close, three-way election took place. Roh won by a very
narrow margin, gaining only 36.6 percent of the total popular
votes. Roh’s election in the fall of 1987 was thus not particularly
popular the stream of public sentiment was running rapidly
toward full civilian leadership but here was one last general to
be contended with for five years.
As president, Roh moved quickly to change the atmosphere
in South Korea. Press censorship diminished rapidly, and the
national focus shifted to the 1988 Olympic Games, which ran
peacefully and efficiently in a variety of handsome sites along
the Han River. South Korea’s international image suddenly
changed from that of a country constantly threatened by war to
a place where major international conferences and festivals could
be successfully planned and executed.
In establishing his administration at the Blue House, Roh
made a key decision that was central to many of the successes
he achieved in his presidency. He appointed as his national
security advisor Kim Chong-hwi, an American-educated professor
at Korea’ s Nati onal Defense Uni versi ty. Ki m was hi ghl y
intelligent, an astute observer of the international scene, and a
man who had the full confidence of his president. President Roh
kept Kim in place for his entire five year term. This gave Roh’s
foreign policy a sense of direction and continuity that has not
been matched by some of Korea’s other presidents.
The highly successful 1988 Olympic Games brought home
to the Roh administration a deep anomaly in South Korea’s
Donald Phinney Gregg served
as the U.S. Ambassador to
Korea from September 1989
to 1993. While ambassador,
his efforts were directed
toward helping the U.S.-
Korea relationship mature
from a military alliance into
an economic and political
partnership. Gregg was also
active in support of U.S.-
Korea business activities. In
August 1982, he was asked
by then Vice President
George Bush to become his
National Security Advisor,
supporting the Vice President
in the areas of foreign policy,
defense and intelligence.
During his service with Vice
President Bush, Gregg
traveled to 65 countries
including Korea. . In March
1993, Gregg retired from a
43-year career in the United
States government to
become the president and
chairman of The Korea
Society.
Donald P. Gregg
Roh decided to make central objectives of his presidency the
establishment of diplomatic relations with all his neighbors,
entry into the United Nations, and the start of some sort of
dialogue with North Korea.
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international position. Many of the countries that were happy to
send their athletes to compete in Seoul did not recognize South
Korea diplomatically. Neither China nor the then-Soviet Union
recognized Seoul, and only one country from Eastern Europe had
an embassy in that city. South Korea was not a member of the
United Nations, nor was North Korea, and China had been
adamantly opposed to Seoul’s entry into UN membership.
Roh decided to make central objectives of his presidency
the establishment of diplomatic relations with all his neighbors,
entry into the United Nations, and the start of some sort of
dialogue with North Korea. Former German chancellor Willy
Brandt was a greatly admired figure in South Korea, and his
astute diplomatic maneuvers in bringing about the establishment
of diplomatic ties between East and West Germany had been
closely observed. Brandt had called his diplomacy “Ostpolitic,”
and Roh, tipping his hat to Brandt, called his plan “Nordpolitic.”
In October 1989, former chancellor Brandt paid his first
and only visit to South Korea. As a German he was deeply
interested in South Korea’s status as part of a divided people. He
spoke freely and fully about his policy of “Ostpolitic,” in which he
sought to establish relations with members of the Warsaw Pact,
before directly reaching out to East Germany. I am certain that
Brandt’s visit was a real inspiration to President Roh and his key
Roh Tae-woo and Boris
Yeltsin, former presidents of
Korea and Russia, during a
Korea-Russia Joint
Conference.
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advisors as they sought to gain recognition from North Korea’s
neighbors and supporters, just as Brandt had done in seeking to
establish better relations with East Germany.
Brandt visited the DMZ on the last full day of his visit, and
at dinner that night was visibly shocked by what he had seen
earlier in the day. Describing the DMZ as “a time warp,” Brandt
said he felt that it was a far worse barrier than the Berlin Wall.
He said, “we hate the wall, and draw graffiti on it, but at least we
can pass through its gates, and television and telephone lines are
not blocked.” Brandt was of the opinion that Korean unification
would be a more difficult and demanding process because the
DMZ was such a hermeti c barri er than the German
reunification process would be after the removal of the Berlin
Wall. Brandt was immediately asked when he thought the Berlin
Wall would come down. His response was short and direct: “not
in my lifetime,” he replied. In fact the Berlin Wall came down less
than 60 days later. I believe that seminal event also contributed
to President Roh’s determination to pursue “Nordpolitic” with
the greatest possible speed.
A
key ingredient in implementing “Nordpolitic” was the
strong support President Roh received from U.S. President
George H.W. Bush. The two presidents first met in October 1989
in Washington, D.C., and their relationship got off to a strong
start. Roh was anxious to gain diplomatic recognition from the
USSR and China, and important groundwork was laid during that
October meeting. President Bush had met Soviet President
Gorbachev several years earlier and had a well-established
relationship with him. He was also fully familiar with the Chinese
leadership, due to his previous service in Beijing and later trips he
had made while serving as vice president. Bush was fully
supportive of Roh’s objectives. The two presidents respected
each other and also enjoyed playing tennis together.
On June 4th 1990, President Roh met President Gorbachev
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in San Francisco, at a meeting that President Bush had helped to
arrange. Two days later, Roh met with Bush in Washington to
discuss further diplomatic steps to be taken. As a result, Seoul
and Moscow announced formal di pl omati c rel ati ons on
December 30, 1990. Chinese recognition of South Korea followed
in 1992, again with strong American support. Washington also
worked to get the Chinese to drop their long-standing opposition
to either North or South Korea joining the United Nations. Both
Koreas are now active UN members.
M
y term as U.S. ambassador to Seoul started in September
1989. One month after my arrival, six Korean college
students broke into the embassy residence, and did extensive
damage before being arrested by Korean police. The students
were acting in protest against American pressure to open the
Korean beef market to foreign imports. (This is still a difficult
issue 19 years later.) This incident sensitized me to the volatility
of student protests in Korea, as did the fact that the threat of
student ri ots prevented me from ever maki ng a publ i c
appearance on a Korean university campus during my entire tour
of duty as ambassador. This volatility was attributed by many to
North Korean influence among radical student groups.
I n 1989, South Korea and the U. S. were becomi ng
increasingly concerned about a nascent nuclear weapons
program in North Korea. In discussions with national security
advisor Kim Chong-hwi, it became clear to us both that the
unacknowledged but widely known presence of U.S. tactical
nuclear weapons in South Korea would make it very difficult to
pursue a policy of denuclearization in North Korea. We both
recognized that as soon as pressure was applied to North Korea
about its secret nuclear weapons program, the presence of U.S.
weapons in the South would become an issue. The U.S. had a
long-standing policy of “neither confirm nor deny” (NCND)
regarding all nuclear deployments, but this would have been
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utterly useless in the face of the determined student protests
that would be certain to arise. I knew, from long association with
the U.S. military, that we would not move any weapons system
under pressure from a foreign country, and informally asked Kim
if he thought that his government might agree to the idea of
removing the U.S. weapons before they became an issue. After
suitable checking at Blue House, Kim replied, equally informally,
that he thought such an idea could be discussed.
A hi ghl y sensi ti ve but extremel y sensi bl e seri es of
discussions then took place over the next several months
i nvol vi ng Bl ue House, the U. S. Embassy, two successi ve
commanders of U.S. Forces Korea, and the Department of State.
All concerned saw the wisdom of removing the weapons ‘ahead
of necessity,’ and all recognized and respected the pragmatism of
their counterparts. The constructive tone of these discussions
was particularly striking to me, as in the mid-1970s I had served
as CIA station chief in Seoul. At that time, Park Chung Hee was
president, and he was losing faith in the U.S.-ROK alliance. Park
had sent over 300,000 South Korean troops to help America in
Vietnam, only to see us withdraw from that tragic war in defeat.
He had real doubts as to our ‘staying power’ in Asia, and as a
consequence had started a secret nuclear weapons program of
his own. It would have been unthinkable at that time to have
even considered discussing the removal of any U.S. weapons
system from South Korea. Park would have taken such an idea as
evidence of the weakness of the U.S. as an ally.
In striking contrast to what Park’s attitude would have
Korea was the most generous Asian supporter of the
Desert Shield/Desert Storm operation, far surpassing
Japan. President Bush extended his personal thanks to
President Roh for extending this vital support to
Desert Storm during a visit to Seoul in early 1992.
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been, President Roh Tae-woo recognized that our willingness to
discuss with him the issue of nuclear weapons on the peninsula
was a reflection of the strength of the U.S. ROK alliance and an
indication of our trust and confidence in him.
In the fall of 1990, I was able to send a message to
Washi ngton sayi ng that the presi dent of Korea and the
commander of U.S. forces in Korea both recommended the
removal of tactical nuclear weapons from Korea. About twelve
months later, President George H.W. Bush announced that all
U.S. tactical nuclear weapons were being withdrawn from
deployment outside the continental limits of the U.S.
On December 18, 1991, President Roh announced that
there were no nucl ear weapons i n South Korea. Thi s
announcement was made at the same time that North and
South Korea were signing two major agreements; a “Basic
Agreement” designed to open the way to “reconciliation,
nonaggression, exchanges and cooperation,” and a “Joint
Declaration” calling for the denuclearization of the Korean
peninsula.
Inter Korean prime minister
meeting.
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These two agreements, though neither has been fully
implemented, are still significant parts of the process of healing
between Seoul and Pyongyang and stand as monuments to the
effectiveness and sagacity of Roh Tae-woo’s presidency. During
his tenure, eight inter-Korean prime ministerial meetings were
held, and the prospects of significant North-South reconciliation
reached a higher level than ever before.
P
resident Roh also demonstrated his commitment to the U.S.-
ROK alliance by the strong support he extended to the U.S.
as it prepared to expel Iraq from Kuwait in 1990. During “Desert
Shield,” the long logistical build-up to the U.S. attack on Iraq,
Korea was the first foreign nation to offer a commercial airliner
to be used in transporting U.S. troops to the battle zone. Korea
also offered generous financial support to the costly U.S.
operation and sent a significant detachment of non-combat
troops once the actual fighting (“Desert Storm”) began in
January 1991. Korea was the most generous Asian supporter of
the Desert Shield/Desert Storm operation, far surpassing Japan.
President Bush extended his personal thanks to President Roh for
extending this vital support to Desert Storm during a visit to
Seoul in early 1992. The two presidents showed great respect
and affection for each other in their final meeting as presidents
of their countries.
By the end of Presi dent Roh’ s term as presi dent,
Nordpolitic had succeeded beyond all expectations. Russia, China
and virtually every country in Eastern Europe had recognized
Seoul. Russian President Boris Yeltsin came to Seoul shortly after
President Bush’s visit and opened a new era in relations between
Seoul and Moscow. Just before he left office, President Roh
convened a Blue House meeting for all of the newly-arrived
ambassadors. He was generous enough to include me in what
was a very gracious and substantive meeting that typified to me
President Roh’s highly effective presidential style.
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When one thinks over the Republic of Korea’s first sixty
years, it is striking to calculate the number of key events that
took place during President Roh’s term in office. The Olympics
were successfully conducted and vastly enhanced Korea’s
international reputation. American tactical nuclear weapons were
quietly removed from South Korea, enhancing the chances for
improved North-South dialogue. Russia, China and many Eastern
European countries established embassies in Seoul. Both North
and South Korea joined the United Nations. Relations between
North and South Korea achieved new levels of mutual agreement
that was translated into exchanges. Lastly, Korea enhanced its
standing as a strong U.S. ally by its exemplary support to Desert
Shield/Desert Storm.
Why then, is president Roh held in such low esteem today
by the South Korean people?
A major contributing factor is that both president Roh, and
his predecessor, Chun Doo Hwan, were jailed during the
presidency of Kim Young-sam for financial irregularities
particularly the accumulation of huge ‘slush funds’ during
their presidencies. Roh was far more contrite than Chun when he
went to jail, which may contribute to the general feeling among
Koreans I have talked to that he was weak or indecisive. Chun,
who remains in vigorous good health, and moves around the
country with a large entourage, tipping lavishly, and acting
presidential, remains a far more popular figure than Roh, who has
not been in good health for the past several years.
It is very difficult for a foreigner to completely fathom why
Koreans feel as they do about their presidents. The answer lies in
While I am not at all confident in assessing why Roh
Tae-woo is not more respected than he is, I feel quite
confident in asserting that over time his standing in
the history of modern Korea will rise significantly.
183
the hearts and minds of the Korean people, and they have never
been asked in a systematic way to express their feelings. My
central speculation about Roh’s lack of popularity centers on the
fact that the Korean people find him to be an anomalous figure.
He was a general, elected at a time when Koreans were yearning
for civilian rule. This placed a cloud over Roh’s presidency from
its very beginning. But then, Roh did not act like a general. He did
not shout or bluster, and stressed the powers of diplomacy in his
Nordpolitic Policy. There were no major crises during Roh’s
presidency. Relations with Washington were excellent, and
Korea’s economy continued to expand. The election of Kim
Young-sam, in late 1992, ran smoothly, and the transition from
mil itary to civil ian rul e in South Korea was successful l y
completed.
O
ne of Roh’s major achievements as president was the
progress made toward reconciliation with North Korea,
which had reached a high water mark at the end of 1991.
Tragically this progress was not maintained. The key to the
signing of the “Basic Agreement” and the “Joint Declaration” had
been the cancellation of the 1992 Team Spirit training exercise.
This annual spring exercise, which the North Koreans feared and
resented, involved sending thousands of U.S. troops to South
Korea where training exercises were held to repel a simulated
North Korean attack on the South. At the annual Security
Consultation Meeting held at the Pentagon in the fall of 1992,
the Team Spirit exercise was reinstated for March 1993. This
decision was immediately denounced by North Korea, and the
pace of North-South contacts slowed dramatically. Kim Young
Sam, inaugurated in February 1993, quickly gave indications that
he would take a somewhat harder line toward North Korea than
had President Roh. The following month, North Korea went on a
‘semi-war’ footing when Team Spirit was held, and on March 13,
1993, Pyongyang announced that it was withdrawing from the
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Nuclear Nonproliferation Treaty. North-South relations steadily
worsened until mid-1994, when only the emergency visit of
former President Jimmy Carter to Pyongyang averted a major
military crisis. North Korean leader Kim Il Sung died shortly after
Carter’s visit, and Kim Jong-il’s accession to power ushered in a
new chapter of North-South relations with which President Roh
had no direct connection.
I believe that these events now serve to obscure from
Koreans’ collective memory the great progress that was made
between Seoul and Pyongyang during President Roh’s presidency.
Koreans now remember the ‘Sunshine policy’ of Kim Dae-jung,
and the first North-South summit meeting held in June 2000.
While I am not at all confident in assessing why Roh Tae-
woo is not more respected than he is, I feel quite confident in
asserting that over time his standing in the history of modern
Korea will rise significantly. South Korea’s rise from ‘economic
basket case’ to one of the top-dozen economies in the world has
come so quickly that it is still difficult to sort out the policies and
South and North Korean
players hold a unification flag
after a scoreless exhibition
match in Seoul.
185
people who have made the most significant contributions to this
astonishing process. As time passes, and perspectives lengthen, I
am sure that Roh Tae-woo will come to be seen as a quietly
effective president who smoothly sheparded Korea from military
to civilian rule, strengthened the U.S.-ROK alliance and left his
country in far better shape than it was when he took office.
As an admiring foreigner who has been in contact with
Koreans since 1952, I believe that the three presidents who have
done most to bring South Korea to its present powerful position
are Park Chung Hee, Kim Dae-jung and Roh Tae-woo.
186
T
he Republic of Korea was born as an unlucky country. After
the brutal Japanese occupation, which lasted from 1910 to
1945
1
and the immensely destructive Korean War, few would
have expected South Korea to emerge as an economic miracle.
But it did and is now widely admired and respected all over the
world for its economic achievements. However, the paradox of
South Korea is that it is both one of the strongest and also one of
the most vulnerable countries in the world. The goal of this essay
is to try and understand this paradox and to suggest how Korea
might overcome this paradox.
The overwhelming strength of South Korea is in the
economic field. One of the comparisons I frequently make is
between the Philippines and South Korea. In the 1950s, the
Philippines was seen as the great hope of Asia. It had a close
relationship with America, access to American markets and a well
educated elite. By contrast, South Korea was seen as a basket
case and doomed to eternal poverty. Hence, the conventional
wisdom of that era predicted that Philippines would emerge as
an economic success story.
Instead, the exact opposite happened. Some simple
statistics illustrate well how dramatically the fortunes of South
Korea and the Philippines have reversed. In 1960, the GDP of
Philippines was U.S.$6.9 billion while that of South Korea was
U.S.$1.5 billion. The GDP of the Philippines was almost five times
larger. By 2007, the respective figures were U.S.$ 144.1 billion
and U.S.$969.8 billion. The South Korean GDP had become
almost seven times larger. What happened? Why did South
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Strong Yet Vulnerable
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Korea succeed when the Philippines failed? The reasons are too
complex to be explored in a brief essay like this but a few
examples can be mentioned. South Korea had to fight for its
survival while the Philippines did not have to. South Korea faced
the constant threat of a North Korean invasion. But there were
also deeper reasons. The Philippines’ elite which controlled most
of the land and wealth, was more interested in protecting its own
welfare rather than the welfare of the population. By contrast,
South Korea undertook key land reform programs in 1945 and
1950
2
and in doing so created an economy that benefited both
the elite and the masses. In addition, as the distinguished
Harvard scholar, Ezra Vogel, pointed out in his famous study of
the four tigers,
After World War II, only the governments of South Korea
and Singapore consciously studied the Japanese experience in
detail, but the main outlines of the Japanese strategy were well
understood by all four of the little dragons. They all knew that
Japan began with labor-intensive industries and used the income
from exports in this sector to purchase new equipment, while
upgradi ng i ts trai ni ng and technol ogy i n sectors where
productivity gains would allow higher wages. They all saw the
crucial role of government in guiding these changes. Having the
Japanese model provided both the confidence that they too
Kishore Mahbubani was
appointed the first Dean of
the Lee Kuan Yew School of
Public Policy on 16 August
2004. Currently, he is the
Dean and Professor in the
Practice of Public Policy at
the Lee Kuan Yew School of
Public Policy (LKY SPP) of
the National University of
Singapore. He served in the
Singapore Foreign Service
from 1971 to 2004. He was
Permanent Secretary at the
Foreign Ministry from 1993 to
1998 and he also served
twice as Singapore’s
Ambassador to the UN.
Kishore
Mahbubani
By contrast, South Korea was seen as a basket case and
doomed to eternal poverty.
Hence, the conventional wisdom of that era predicted
that Philippines would emerge as an economic success story.
1
Source: http://www.lifeinkorea.com/information/history2.cfm
2
Source: http://www.fao.org/DOCREP/006/J0415T/j0415t05.htm
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could succeed and a perspective on how to proceed. (Vogel 1991,
91)
3
Leadership was also a key factor. While South Korea is
understandingly questioning the legacy of President Park Chung
Hee it is also clear that a lot of the rapid growth took place under
his stewardship. The Korean economy grew at an average of 9.3
per cent per annum
4
during the period of his presidency from
1962 to 1979. By contrast, his equivalent in the Philippines,
President Ferdinand Marcos, emerged as a powerful symbol of
what incompetent rule looks like. Both he and his wife were
reported to have amassed huge fortunes which were kept
overseas and never invested in the Philippines.
With hindsight, the rapid economic development of South
Korea seems almost inevitable. But it is vital to remember how
weak and vulnerable Korea seemed in the early years. In The
Koreans, Michael Breen describes a foreign scholar’s conversation
with Korean students in the 1980s: “There weren’t many
foreigners on campus and people always asked me where I was
from and what I was studying. I’d say, ‘I’m studying Korean
thought’ and they’d give me a puzzled look and say, ‘But we have
no thought.’”
I was personally present and indeed fought for South
Korea’s cause when South Korea was diplomatically weak and
experienced one of its most humiliating diplomatic defeats. This
happened at the Summit Meeting of the Non-Aligned Movement
(NAM) in Sri Lanka in August 1976. The Cold War was then at its
peak. Both the United States and the Soviet Union were
competing for global influence. NAM, whose membership
With hindsight,the rapid economic development of
South Korea seems almost inevitable.
But it is vital to remember how weak
and vulnerable Korea seemed in the early years.
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comprised most third world countries, was one vital arena where
the competition took place. As part of the Cold War competition,
both South and North Korea sought membership in NAM.
After protracted negotiations, NAM reached a consensus
that both North and South Korea should be admitted in Sri
Lanka. However, the pro-Soviet members of the movement were
cleverer than the pro-American members of the movement. They
sai d that both shoul d be admi tted sequenti al l y and not
simultaneously, and in alphabetical order, namely Democratic
People’s Republic of Korea (DPRK) followed by the Republic of
Korea (ROK).
In good faith, the pro-American members accepted the
compromise. Hence, DPRK was admitted as a member first.
However, as soon as it was admitted, DPRK (as a member)
immediately objected to ROK’s admission. This was a clear act of
duplicity. When Singapore tried to protest loudly against this
duplicity, a senior Tanzanian official who chaired the meeting
(and who may have been an accomplice to this duplicity),
refused to even allow Singapore to protest. Others tried to
protest also and failed. Some day, South Korea should try to
recall and remember those who tried to help it when it was
relatively weak. Gratitude is not the norm in international affairs
but South Korea could try to defy the norm.
Fortunately, South Korea had the last laugh in international
recognition in standing and prestige. The country that was
refused entry into NAM became the second East Asian country
to be admitted into the Organization for Economic Cooperation
and Development (OECD) in 1996. The OECD does not really do
that much but admission into its ranks is nonetheless a global
3
Vogel, Ezra F. 1991. The Four Little Dragons: The Spread of
Industrialization in East Asia. Cambridge, MA: Harvard University Press.
4 Source: http://kellogg.nd.edu/publications/workingpapers/WPS/166.pdf
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recognition that the country has arrived. Very few countries
today can ever dream of being admitted into the OECD. The fact
that South Korea was admi tted was i ndeed a maj or
accomplishment.
S
imilarly, South Korea’s ability to become the second Asian
country to host the prestigious Olympics in September-
October 1988
5
was also a clear signal that South Korea had
arrived as a member of the first league in international rankings.
The games were a great success. With all these international
accomplishments, it is not surprising that South Korea is
recognized as one of the strongest countries in the world. How
then can it be perceived as one of the most vulnerable countries
of the world?
The meaning of this paradox may become clearer when
one looks at South Korea’s most recent major international
accomplishment: the election of Ban Ki-moon as the UN
Secretary-General in 2006. The UN made an excellent choice in
choosing him. He is a brilliant and accomplished diplomat.
A cultural promotion project
between Korea and the
Association of Southeast Asian
Nations (ASEAN).
191
However, having served as Ambassador to the UN for over ten
years, I also know that permanent members of the UN Security
Council have a firm policy of never electing UN Secretary-
Generals from strong countries as a representative from a strong
country could be less pliable to their dictates.
This international weakness of South Korea springs from
the geopolitical constraints it faces. The continued division of the
Korean peninsula represents probably the last living legacy of the
Cold War era. Many expected that with the collapse of the Berlin
Wall and reunification of Germany, Korea would also be reunified
soon. However, after almost two decades, the reunification of
Korea seems less and less imminent. It is true that having
watched the costs of German reunification, South Korea is also
worried about the financial costs of reunification. But even if
South Korea decided today that reunification was desirable, it is
not certain that it would happen soon.
The Korean Peninsula, which was a geopolitical pawn for
most of the 20th Century, continues to remain a geopolitical
pawn even though the geopolitical context has changed
significantly. In the early phase of the Cold War, the Soviet
Union and China supported North Korea and America supported
South Korea. Things changed after the Sino-Soviet split emerged
but during the Cold War, this gave North Korea an additional
advantage as it could play the Soviet Union off against China.
Fortunately, all the great powers wanted stability on the Korean
peninsula. This allowed South Korea to enjoy rapid economic
growth under a stable geopolitical architecture.
In the post Cold War era, North Korea should have
emerged as a loser. It lost one patron, the Soviet Union. Then, in
a humiliating blow to North Korea, China established diplomatic
5 http://www.olympic.org/uk/games/past/index_uk.asp?OLGT=1&OLGY=
1988
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relations with South Korea on 24th August 1992 while North
Korea failed to gain a similar breakthrough with America.
However, the isolation of North Korea also forced it to turn to
desperate measures, including exploring the nuclear option. In
1994, the U.S. came close to bombing North Korea. This could
have sparked a major war in the Korean peninsula. Fortunately,
wiser heads prevailed in Washington D.C.
There is no doubt that South Korea enjoys enormous
respect and standing in Washington D.C. Its success is also
greatly admired. But it is also true that no great power puts the
interest of its smaller ally ahead of its own interests. Indeed, the
strategic concerns of small allies are often ignored. The Bush
Administration demonstrated this clearly on 29th January 2002
when President Bush made his famous speech about the “axis of
evil”. Initially, he wanted to name three Islamic countries in this
axis, namely Iran, Iraq and Syria. But he was advised to include a
non-Islamic country. Hence, as an afterthought, North Korea was
included in the axis of evil and Syria was dropped.
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ome day, South Koreans should do some intensive research
to find out whether any policymaker in Washington D.C.
seriously thought of the implications for South Korea when
President Bush decided to mention North Korea. Did anyone
mention to him that he could endanger South Korea? It is likely
that no one did. If so, it illustrates well how South Korea can
become an inadvertent geopolitical pawn because the remark
triggered a new crisis in the Korean Peninsula without South
Korea being consulted.
There is also no doubt that in the geopolitical contest
between South and North Korea, South Korea is far more
powerful. Many view North Korea as a potential failed state. Yet,
with very few diplomatic cards, North Korea has often played its
cards brilliantly and occasionally it has made Washington D.C.
dance to its tune. This takes great skill. What is remarkable is
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how the Bush administration, which adopted a belligerent
attitude toward North Korea, began to realize that its only
options were diplomatic after North Korea detonated a small
nuclear device on 9th October 2006.
The new geopolitical contest developing in the world will
be between China and America. No one can tell how this contest
will play out. Will America allow China to emerge peacefully (as
Germany and Japan did after World War II) or will it try to
contain China (as it did with the Soviet Union)? The likelihood is
that it will be a mix of both elements. When this happens, the
Korean Peninsula will occupy a permanent place in the new Sino-
American geopolitical chessboard.
Fortunately, some geopolitical events have also worked to
the benefit of South Korea. The biggest recent geopolitical
accident was the 9/11 attack on America. When that happened,
America shifted its strategic sights to the Islamic world and
China became a huge geopolitical winner. But China also used
this geopolitical window brilliantly to prove its usefulness and
relevance to America. One key area where the Bush Administ-
ration has truly appreciated the help of Beijing was on the
Korean Peninsula. Many senior American figures recognize that
the recent breakthroughs in the discussions with North Korea
could not have happened without China’s help. To reciprocate
the goodwill, Washington D.C. was happy to apply pressure on
President Chen Shui Bian of Taiwan who was aggravating Beijing
with his pro-independence tendencies.
Hence so far, the recent positive trends in Sino-American
Some day, South Koreans should do some intensive
research to find out whether any policymaker in
Washington D.C. seriously thought of
the implications for South Korea when President Bush
decided to mention North Korea.
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relations have been beneficial to the Korean Peninsula. After the
crises in 1994 and 2006, the situation on the Korean Peninsula
looks relatively stable. But there is a lot of wisdom contained in
an ancient Sri Lankan proverb: “when the elephants fight, the
grass suffers but when the elephants make love, the grass also
suffers.” As the Korean Peninsula represents some valuable grass
in the current geopolitical competition, it is vital for South Korea
to pay careful attenti on to every twi st and turn i n the
geopolitical games involving America, China, Japan and lately,
Russia again. In the economic field, South Korea remains strong
but in the geopolitical sphere, it remains vulnerable. The
challenge for South Korea in the future is to manage this
paradox.
South Korea will have to continue its recent record of
ski l l ed di pl omacy as a new geopol i ti cal game emerges.
Fortunately, South Korea enjoys good relations with both
Washington D.C. and Beijing. The good relationships enabled
South Korea to pull one of its successful diplomatic coups: the
simultaneous admission of China, Taiwan and Hong Kong during
South Korea’s chairmanship of APEC in 1991. As an APEC senior
official then, I remember being amazed that South Korea could
pull this off.
One of the cardinal rules of good diplomacy is that it is
good to have maximum number of options. This should be one
of South Korea’s key goals to help compensate for its geopolitical
vulnerability. Hence, despite the troubled history of Japan-Korea
relations, it would be wise for South Korea to keep relations with
Japan on an even keel. This creates an additional diplomatic
option. ASEAN provides another equally valuable diplomatic
option.
Many Koreans are puzzled by ASEAN’s diplomatic success
and pay far less attention to ASEAN than they do to European
Union. In doing so, the Koreans fail to understand that ASEAN
can be far more valuable to South Korea than the EU can be. The
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EU is an economic giant but it is a geopolitical dwarf. Witness
the failed record of the EU in North Africa, the Middle East, the
Balkans and the Caucasus. By contrast, ASEAN is an economic
dwarf but a major geopolitical actor. Since South Korea’s
vulnerabilities are in the geopolitical and not economic areas,
ASEAN can be more useful to South Korea than the EU.
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outh Korea has paid some attention to ASEAN but it has
never ranked it as a major diplomatic priority. By nature, the
Koreans respect strength, not weakness. Hence, they find it
difficult to respect ASEAN. But the paradox here is that ASEAN’s
strength lies in its weakness. ASEAN’s relative weakness enables
it to be seen as a non-threatening partner by all major powers,
including America, China, India and Japan. Hence, all the major
rising powers are happy that ASEAN provides the only credible
diplomatic platform for all great powers to meet in the Asia-
Pacific regions.
China is clearly the most powerful skilled geopolitical actor
in the world today. It runs circles around the other great powers.
Participants at the ASEAN Plus
Three (Japan-China-Korea)
forum pose for a photograph.
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One sign of its geopolitical competence was its early recognition
of the strategic value of ASEAN. Hence, China became the first
great power to propose, negotiate and conclude a Free Trade
Agreement with ASEAN. All this was done in record time.
Japanese diplomats told me that this stunning diplomatic
achievement by China came as a “bolt from the blue” to Japan.
South Korea could also try to match China’s geopolitical record
by working for an equally close relationship with ASEAN.
Recently, Australia made a foolish proposal to bypass ASEAN in a
new Asia-Pacific arrangement. This demonstrated how poor the
geopolitical thinking is in Canberra as compared to Beijing.
The poor geopolitical thinking in Canberra also illustrates
well another geopolitical challenge that South Korea faces. With
its membership of OECD, South Korea has also become a virtual
member of the Western community. This membership brings
many global rewards but it also brings geopolitical risks. The
geopolitical thinking in the West ignores one major reality: we
South Korea’s main challenge is to display
the same exceptional skill in the geopolitical arena
that it has demonstrated in the economic sphere.
Korean enterprise in China.
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are reaching the end of the era of Western domination in history.
Hence, there have been many Western geopolitical failures, in
Afghanistan and Iraq, the Middle East and Georgia. There will be
significant cultural pressures upon South Korea to follow the
Western lead on many geopolitical issues. But in geopolitics,
geography trumps culture. One of the delicate balancing acts
that South Korea will have to manage is between the cultural
pulls of the west and the geographical pulls of the east.
Despite these many challenges, I remain confident that
South Korea will do well. By any standards, South Korea has
emerged as one of the most successful countries in the world.
Success does not come easily. It is a result of hard work and
exceptional skills. South Korea’s main challenge is to display the
same exceptional skill in the geopolitical arena that it has
demonstrated in the economic sphere.
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T
he people of South Korea are not alone in believing that
perceptions of global security have changed radically over
the past 20 years.
1
The Cold War bipolar system gave way to an
early post-Cold War upsurge in both internal conflicts and in
attention to conflict management. In the immediate post-Cold
War peri od, the worl d’s attenti on shi fted from tracki ng
superpower rivalry, counting nuclear warheads and arguing over
“Star Wars” (as U.S. President Ronald Reagan’s Strategic Defense
Initiative was called in the press) to witnessing regular outbreaks
of civil war on nearly every continent. Global security was
redefined in regional, local or functional terms, and the tasks
undertaken to provide security widened to protecting civilians
from massacre from their own governments as well as shoring up
weak or failing states. Security became increasingly divisible. This
period was followed in turn by a short interval of successful
international peacemaking just prior to the events of 9-11. The
experiences in Mozambique, Cambodia, Bosnia, and Northern
Ireland seemed to argue for a strong role for outside third parties,
often identified simply as the “international community,” in
helping to settle internal conflicts and to guarantee settlements
between states as well.
After the 9/11 attacks on the United States, and the
ensuing reprisal against Afghanistan and the invasion of Iraq by
the U.S. and its allies, there was a partial return to the concept of
global security focused on counter-terrorism and coping with
failed (or failing) states, which were viewed by many as breeding
grounds for terrorists, dealers in weapons and drugs, and other
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international miscreants. At the same time, there was a growing
awareness of the potentially destabilizing effects of poverty,
trade and investment, nation-building, disease, climate change,
and loss of biodiversity, and increasing support for including
these issues, as well as issues affecting human security, as factors
in global security. For Asia’s leaders, including Korea’s own
leadership, many of these broader security issues have long been
a continuing source of preoccupation and concern alongside
more “traditional” kinds of security threats.
With these changes has come lively debate about the locus
of capacity and legitimacy in global security affairs. Given an
environment of ever-broadening security challenges as well as
fresh questi ons about the sustai nabi l i ty of successful
peacemaking, there is mounting concern about the availability of
leadership and resources to counteract and manage conflict at
the regional as wel l as national and gl obal l evel s in the
international system. This issue is especially pertinent at a time
of preoccupation and reappraisals in the U.S., Canada, Britain,
Australia, and other global security providers as a result of the
heavy costs of the Iraq and Afghanistan conflicts and related
instability in Lebanon, the Palestinian territories, and Pakistan. In
Fen Osler Hampson is a
professor at the Norman
Paterson School of
International Affairs at
Carleton University in
Canada. Hampson has
taught academic courses on
international affairs at
Harvard, Georgetown and
Carleton Universities. He has
also served as a fellow at the
United States Institute of
Peace, Carnegie Endowment
for International Peace and
done consultancy work on
the War-torn Societies
Project for the United
Nations.
Fen Osler
Hampson
For Asia’s leaders, including Korea’s own leadership,
many of these broader security issues
have long been a continuing source of preoccupation
and concern alongside more “traditional” kinds of security
threats.
1 This discussion paper is based on the work of an ongoing research project
on Regional Security Capacity and Global Conflict Management, which is
supported by the Norman Paterson School of International Affairs,
Carleton University, the International Development Research Centre in
Ottawa, and the United States Institute of Peace in Washington, D.C.
200
particular, the prospect of a U.S. reassessment of its priorities and
potential retrenchment from overseas burdens under a new U.S.
administration, which will take office in January 2009, raises the
question of what alternative sources of leadership may assert
themselves at the global, regional and sub-regional levels. Such
alternatives could potentially take advantage of potential
security vacuums that might emerge or, more likely, simply
develop their own trajectories independent of and without
reference to the values and preferences of the leading nations of
the Atlantic Alliance. Russia’s recent invasion of the territory of
Georgia/South Ossetia is a case in point. The Western alliance
can no longer take its primacy for granted as great power politics
reasserts itself in Russia’s relations with its immediate neighbors.
At the same time, the global ‘order’ based on key bodies
such as the UN system and the Bretton Woods institutions is
challenged by old charters, outdated leadership roles, normative
disharmony, and lumbering bureaucracies. These bodies face
existential challenges to their authority and even survival while
the global security field is increasingly crowded with other actors
so-called coalitions of the willing, new collective defense and
collective security bodies, non-official actors, private security
companies, and long-standing regional organizations focused on
The Six-Party Talks
(2008.7.12). Envoys to the
North Korean nuclear talks
meet in Beijing.
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economi c i ntegrati on, securi ty cooperati on and confl i ct
management. Several recent reports have noted the downward
trend in the outbreak and lethality of warfare.
2
As welcome as
these trends are, they may obscure another circumstance: the
persistence of conflicts some quite low-level in various
parts of the world, for instance Afghanistan-Pakistan, Sudan and
its neighbors, Iraq, Iran, the Great Lakes region of Africa, and the
ongoing tensions (albeit somewhat reduced as a result of recent
progress in the six party talks) in the Korean Peninsula.
For several decades now, the Korean conflict has been
characterized by what some call a “cold peace.” At one level, the
key interests of North and South Korea are not as contradictory as
they once were and the risks of war have been substantially
reduced by improving relations between the two countries. For
many outsiders, however, the reality of a peaceful vision of the
future continues to remain elusive and many aspects of the
conflict largely remain “intractable.” The problem is not simply one
of settling the current conflict or addressing “legacy” issues of the
past, but also of determining North Korea’s own future, how to
check the proliferation of weapons of mass destruction, and chart
a course towards a new regional security order meets a number of
core objectives: the prevention of future crises that could lead to
war on the Korean Peninsula, the prevention of the instabilities
resulting from the collapse of the North Korean regime, and the
prevention of nuclear proliferation on the Korean Peninsula.
Towards the end of the 1990s, U.S. and South Korean
policies appeared to move generally in the same direction as the
Clinton Administration tried to engage North Korea’s leaders in
dialogue and diplomacy. However, there was a clear divergence
2
Mack, Andrew, ed., Human Security Report 2005 (New York, Oxford:
Oxford University Press, 2005). Hewitt, Joseph, John Wilkenfeld, and Ted
Robert Gurr, Peace and Conflict 2008 (Boulder, CO: Paradigm Publishers,
2007).
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in policies during the early years of the administration of
President George W. Bush. President Bush went out of his way to
di stance hi msel f from pol i ci es of the previ ous Cl i nton
administration which had worked closely with South Korean’s
leaders to engage North Korea. In labeling North Korea’s regime
as part of an “axis of evil” alongside Iraq and Iran, U.S. relations
reached an all time low. But the deep chill in U.S.-North Korean
relations moved closer to room temperature towards the end of
the Bush presidency as the six party talks with North Korea
gained momentum and North Korea agreed to freeze its nuclear
program. However, U.S. demands that Pyongyang verify its
commitments to suspend plutonium reprocessing remain a
serious point of contention and there is always the risk that
relations could quickly deteriorate if either side fumbles.
U
nlike some other parts of the globe, the continued U.S.
military presence and strategic alliances with key countries
in the region, like South Korea and Japan, are positive and
stabilizing and generally seen to be so. The United States is an
important counterweight to China’s rapidly growing military and
economic clout and muscle. And if Russia, which is clearly
beginning to flex its own muscles, starts to play a greater
geostrategic role in northeast Asia, including on the Korean
Peninsula, the U.S. presence is likely to be even more critical to
regional stability. Even so, there will continue to be some tension
between the U.S. view of the requirements for stability and local
views, especially those states in the region who aspire for greater
regional control or influence over how security challenges are
defined and responses organized. Invariably, some countries in
the region may feel that they have a better understanding of
conflicts in their regional neighborhood. Another factor may be
the selective attention to Asia-Pacific regional security issues by
the United States in recent times a trend that may continue
with the next U.S. administration.
203
U.S. engagement with the security challenges of the Asia-
Pacific region, including Northeast Asia, is also likely to remain
hostage to continued U.S. preoccupation with the politics and
security of the Middle East, the Persian Gulf, and Afghanistan.
Neverthel ess, i t wi l l be i mportant for the next U. S.
administration to reinforce its security commitments in the Asia-
Pacific region and to remain fully engaged in the ongoing six-
party talks with North Korea. At the same time, the new U.S.
administration will have to be sensitive to regional aspirations
and concerns by strengthening diplomatic dialogue with key
countries in the region, including South Korea, encouraging
regional actors to define their own priorities, and supporting the
design and development of regional institutional mechanisms
and norms for managing the region’s security challenges. Over
10 years ago, two leading American political scientists, David
Lake and Patrick Morgan, argued that regions had become more
salient as components of international politics; the post-Cold
War period offered an opening to more cooperative regional
orders; and in dealing with the world’s regions, powerful states
had to recognize that regions are different and require foreign
policies tailored to those differences.
3
More recently, others have
asserted that security threats are regional rather than global, and
that the identification of threats comes from within societies and
states rather than from a global or out-of-region origin.
The stark reality is that security challenges on the Korean
Peni nsul a have both regi onal and gl obal i mpacts and
consequences. These and other continuing challenges in the
Northeast Asian region invite a combination of both regional and
global efforts at conflict management in which the United States
and its key allies are fully engaged and committed players.
3 David A. Lake and Patrick M. Morgan, Eds., Regional Orders: Building
Security in a New World (University Park, PA: Pennsylvania State
University Press, 1997).
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T
he historian C.V. Wedgwood once remarked, “We know the
end before we consider the beginning, and we can never
wholly recapture what it was to know the beginning only.”
I offer my comments and conclusions as one who was
present at the embattled beginning of the Republic of Korea
(ROK), and blessed, thus far, to see its present circumstances and
future promise. In undertaking this consideration of “Korea’s
Growth at 60 Years as Seen from Abroad,” I acknowledge that I
am a soldier. In this light I view Korea at 60.
As I complete this appraisal, contemporaneous events
attesting to the often termed miraculous survival and record
shattering successes of the Republic of Korea are handily
available: hour by hour Korean athletes triumphantly mount the
dais in Beijing and the proud strains of Aegukka waft through the
capitol city of an ancient regional foe of thousands of years, as
other regional powers and allies watch, or, occasionally, share in
Gold, Silver, and Bronze awards.
Broadening the horizon beyond China and the 2008
Olympics, the Secretary General of the United Nations, Ban Ki-
moon, is an honored Korean; the recently elected President of
the ROK, Lee Myung-bak, is the former head of one of the
world’s leading industrial and commercial firms, presiding over a
nation which leads the world in shipbuilding, electronics, and
peacekeeping operations. He proposes imaginative breath-taking
commercial projects on a scale of multi-continental land-linking
from the English Channel to the Port of Busan. Astronaut Yi So-
yeon returned from the orbiting Space Station in April. There is a
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revival of pride among the citizens of South Korea. And, the
citizens of South Korea continue to charitably feed and sustain
fellow Koreans enslaved in North Korea.
In contrast, the Democratic People’s Republic of Korea
(DPRK) remains bankrupt, starving its population, with the single
accomplishment of having exploded a nuclear device built in
large part directly proportional to the emaciated bodies of its
starving citizenry.
I spent thirteen months in the 1950-53 phase of the Korea
War, four years in the Vietnam War
1
, three years in Border
Patrol and security missions in the Federal Republic of Germany
while it was in the first decade of recovery from the destruction
which it brought upon itself in World War II, and, in all, many
years overseas in Cold War locales.
Within the past decade I was finally able to formalize the
question which first partially arose in my mind, in Vietnam, in
1975: the United States had spent eight times or more of our
national treasury, two to three times and many lives (our most
precious resource), and very nearly four times as much time
involved in assisting the Republic of Vietnam as we did in
assisting the ROK. Yet, in 2008 the Republic of Vietnam no
Louis Tarleton Dechert, Sr.,
is a former President of the
National Korean War
Veterans Association. He
retired from the United
States Army, in the rank of
LTC, in 1973. Dechert began
his Army career in 1950
leaving college to enlist in
the U.S. Army early in the
Korean War. Years later he
graduated with a BA from
Park College, an MBA,
Industrial College of the
Armed Forces, and was
accepted for the PhD
program in Latin American
Studies, of the University of
Texas. Dechert’s exemplary
Army career spanned
twenty-three active duty
years while he valiantly
served his nation.
Louis Tarleton
Dechert, Sr.
Yet, in 2008 the Republic of Vietnam no longer exists
and the Republic of Korea is a leading world nation,
one committed to freedom and democracy.
1 In my last tour of active combat duty I was the G3 for the 1st Field Force
Vietnam (IFFV), with the ROK forces contingent under operational
control. Thus I was able to see the transformation of the ROK Armed
Forces and observe them as one of the elite combat forces to serve
Freedom in the Vietnam War.
206
longer exists and the Republic of Korea is a leading world nation,
one committed to freedom and democracy. What made the
difference? The answer must be: the Korean People. And that is
the major perspective NATION-BUILDING which I follow
in my review of Korea’s Growth Seen from Abroad.
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n author in 1977 expressed the following thoughts about
the nature and character of the Korean people. “Vigorous
and outgoing, certainly but far more aggressed against than
aggressing. Invaded often, but hardly ever themselves invaders,
the Koreans constitute the classic case of a people of spirit and
individuality boxed in, and battered this way and that, by an
environment and neighbors none of their own making.
“China and Japan have the normal complement of sins to
their records, but surely none are more longstanding in each than
how they have allowed their attitudes to and uses of that
landbridge between themselves, the Korean Peninsula, to traduce
and mulct that peninsula’s people.”
2
One of the world’s most ancient people groups, extremely
cultish, Koreans experienced again and again intrusions, ravages,
and destruction at the hands of traditional regional and territorial
powers of China and Japan as they maneuvered against one
another for dominance. It is entirely probable that a major
The Korean War Veterans
Memorial in Washington,
D.C.’s West Potomac Park.
207
enduring consequence of these happenstances of history
accounts for the modern successes in the building of a new
Korea. Concerning the building of the nation after ca1970, one
historian concludes, “ while they (China and/or Japan) slowly
smothered and finally snuffed out Korean independence, the
Koreans had at l ast begun to devel op a true nati onal
consciousness, the first prerequisite for the building of a modern
state.”
3
At the end of the first three years of the Korea War
4
the
two exhausted parts of the Korean Peninsula (the North and the
South, according to U.S.-USSR agreements,1948) were in
considerably worse condition than they had found themselves in
1948 when the two geographical governments and capitols were
established.
Asi de from physi cal devastati on by the fi re power
expended by the parties to the conflict, millions of Koreans,
North and South, had been killed, hundreds of thousands of
northerners had fled to the South and taken up residence there,
and governmental, educa-tional, medical, financial, diplomatic
institutions and organizational structure, along with virtually all
infrastructure, had been obliterated. In addition, several million
Koreans conscripted for gang labor abroad by the Japanese and
Chinese were still scattered about the Asian world.
2
Michael Keon, Korean Phoenix: A Nation from the Ashes, Prentice-Hall
International, Inc., Englewood Cliffs, NJ, 1977, p. 10.
3
Han Woo Keun, The History of Korea, The Eul-Yoo Publishing
Company, Seoul, 1970, pp. 414-15.
4 Historically, technically, and actually, the Korea War continues
interrupted by a ceasefire. Minimizing or obscuring this fact may severely
handicap any appraisal of what the Republic of Korea has accomplished,
1948-2008. Valid ceasefires are defined by virtually every military
institution in the world as the temporary cessation of hostilities. Fifty-
five years hardly qualifies as temporary. In the Vietnam War, for
example, U.S. Forces observed a Christmas Ceasefire each year, after
1965.
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The North had the USSR, Communist China, and the
worl d-wi de Communi st Party i n i ts vari ous appl i cati ons
(Comintern
5
and Warsaw Pact
6
, as two examples) to fill the
void. In the South, in the beginning of 1948, the sole assets were
a staunch anti-communist President Syngman Rhee, and the
weak rebuilding process of the ROK Army.
T
wo matters of consequence occurred which, I believe,
formed the basis from which all the elements of today’s
ROK success flow. First, the stubborn Rhee virtually extorted a
promise from the United States in the form of a mutual security
alliance. From this Alliance, still strong and in effect 55 years
later, the rebuilding of the ROK Army proceeded.
The second matter of consequence was initially a concept
of the Americans, later of the UN, and today universally
acknowledged as a key geopolitical concept: the conceptualiza-
tion of undeveloped, third world, and finally developing nations.
After World War I the world expected that the lot of the
inhabitants of each nation would remain, or return to, what it
was before that conflict. However, after World War II, a world
concept, more or less modeled after the American concept,
gradually developed concerning what were initially categorized
as undeveloped nations.
Whatever the evolutions and changes in terminology over
time, the concept has remained and is strong today: each nation
and its people are entitled to develop to their highest potential
and the developed nations have a universal responsibility to
assi st them i n doi ng so. There are numerous regi onal
Right or wrong, and to varying extents,
the fact is that the governments
and people of the ROK and USA exhibit unique
and distinctive relationship characteristics.
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development, policy, trade, monetary, and aid organizations
modeling assistance from the developed nations of the world
helping those still under development. The UN has several
development agencies also engaged in these enterprises. In fact,
the decade of the sixties was designated by the UN as the
Development Decade.
7
Thus, President Rhee and his scattered supporters were
presented with a nation-developing/building philosophy
(although not characterized by that phrase then or now) which in
ultimate terms would become the channel for the national
consciousness which had evolved through the years of trials and
sufferings undergone by the Korean people.
8
As a later ROK
President would observe, “Our past history seems at first glance
to be more a record of misfortune than glory, but we also find in
our past a strong inspiration, and we value even the misfortunes
for the strong sense of determination they have nourished in our
people’s hearts.”
9
Again, the situation in South Vietnam, at its founding has
been described as “ Korea’s emergence from colonialism was
5
”The Comintern (Com munist Intern ational, also known as the Third
International) was an international Communist organization founded in
Moscow in March 1919. The International intended to fight ‘by all
available means, including armed force, for the overthrow of the
international bourgeoisie and for the creation of an international Soviet
republic as a transition stage to the complete abolition of the State’.”
Wikipedia
6
”Officially named the Warsaw Treaty of Friendship, Cooperation and
Mutual Assistance (Russian:
Translit.: Dogovor o druzhbe,
sotrudnichestve i vzaimnoy pomoshchi), the Warsaw Pact was an
organization of communist states in Central and Eastern Europe.”ibid.
7
Keon, op cit., p. 33.
8
Han, op cit., FN#3.
9
Park, Jung Hee, To Build a Nation, Acropolis Books, Ltd., Washington,
1971, p. 70.
210
an out-of-the-frying pan-into the fire operation; everywhere,
social, administrative, commercial, and industrial vacuum or
destitution prevailed.”
10
In some respects the ROK in July 1953 began again with
some less obvious favorable factors. Rhee’s desperate pragmatic
stubbornness had locked-in American support. American
leadership in the fledgling UN would be an advantage for several
years. In addition, the U.S. initiation of unilateral mammoth
reconstruction programs, such as the Marshall Plan, would
challenge other world powers as well as modeling such assistance
pacts. Thus, the ROK was to undertake the nation-building
process with a reliable source of developed world techniques,
technical assistance, and foreign aid, as well as assistance of all
sorts flowing from the U.S. relationship including military
training, equipping, and assistance.
The author Keon, earlier referenced, has an insight into aid
arrangements which is subtle, but which has been an assumption
for U.S. military assistance since at least 1969. He writes (in
1977), “Because the so-called ‘developed countries’ have been
the overwhelming providers of the materials and expertise (and
even the goals) of development, it is assumed that the power
plants, irrigation systems, and health schemes developed through
Establishment of the ROK-U.S.
Combined Forces Command.
211
such aid must not only imitate those of donor nations, but also
that sociopolitical structures and values within the ‘developing
countri es’ shoul d be much l i ke those of the ‘ devel oped
countries’.”
11
In 1983, as assistance programs for under-developed
nations and developing nations were beginning to gain realistic
momentum, Mr. George Champion, Former Chairman of Chase
Manhattan Bank (1961-1969) provided a comment which I
believe perfectly describes the aptness of the Korean people:
“there are many who believe that money isn’t the primary need
of these countries and that true progress will be made through
improved education and training; the strength of a nation is a
multiple of the character, energy, and ability of its people, not its
natural resources.”
12
R
ight or wrong, and to varying extents, the fact is that the
governments and people of the ROK and USA exhibit unique
and distinctive relationship characteristics.
Human effort can only accomplish so much, never mind
the lofty intentions and human and material resources brought
to the task. In the case of South Korea, the tasks were so
monstrous that even the determined Rhee and his impoverished
citizens, along with their American helpers, could only wrest
minimal progress. It is probable that at the onset they realized
very little of the true magnitude of what they had to accomplish:
Nation-building!
In the years 1953 through to President Rhee’s ejection
from office in 1960, the Korean people worked day and night in
10
Keon, op cit., p. 36.
11
Keon, ibid., p. 7
12
George Champion, Foreign Debts: A Proposal for U.S. Banks, p 28, the
Wall Street Journal, Jan 11, 1983.
212
myriad programs and projects, in virtual misery. And at the end
of the Rhee era they were still among the most impoverished in
the world.
I have been fortunate to have been a frequent visitor to
the ROK and an active participant in many aspects of Korean
government and military life for the past several years. During
this time I was able to talk with Korean men and women from all
walks and professions who lived and worked building their
nation,1953-1960, and later under President Park Chung Hee’s
leadership (1961-1979) actually my contemporaries, albeit
half a world away at the time.
The common thread of remembrance in virtually all of
their comments was of the absolute deadening, mind-numbing
exhausti on of the hard work, the burdens of hours and
exhausting experiences in absolute grinding poverty, seemingly
without end.
D
uring the Korea War period extending from 1950 to 1953,
most of the hard labor in supporting the front-line fighting
forces was performed by men assigned to the Korean Service
Corps (KSC). Almost to a man, American soldiers, airmen, and
Marines still remember and comment on the sheer wearying
stamina of the KSC men equipped with A-frames on their backs
carrying incredible loads up and down the mountains of the
peninsula at all hours in all weather conditions. Many a GI has
remarked about seeing men with A-frames carrying large
refrigerators (or similar loads) on their backs, often at a trot and
uphill!
Those recollections of the Koreans by soldiers fighting the
war best describe the entire nation of Korea, 1953-1979. The
Korean people literally built their nation by the sweat of their
brow and muscle power.
The world still marvels at the labor required to build the
Great Wall of China, the Pyramids of the Nile, and similar works.
213
I suggest that the sheer labor of the Korean people, 1953-1998,
building a leading Nation from virtually nothing, which has
become the envy of much of the world, must also rank as one of
the modern world’s marvels.
Today, I find that many appear to take for granted what
we see Korea 2008 to be oft exclaiming “A miracle!” by
means of explanation. Granting that the Almighty eternally does
miraculous things, Korea 2008 represents what human, Korean,
men and women, did by blood, sacrifice, and terrible demanding
physical effort, during the years 1961-1979 in particular,
marginally assisted
13
by U.S. aid and assistance. The Almighty
worked by creating the national spirit in the individual Koreans
and then providing human leadership equal to the tasks.
Sadly it has been my reasoned observation that the youth
of Korea today have not impressed me as fully realizing and
appreciating what was done by their elders. The on-going
demands of nation-building may come to stultification and the
Republic of Korea may consequently fall into the discard of
nations which tried but failed, for whatever reasons, should this
trend fail to be reversed.
All of my foregoing discussion brings me to conclude my
appraisal discussing the working out and direction of American
military assistance to the ROK and the effects which made
Nation-Building possible.
13
U.S. Aid has never been constant to any recipients due to the annual
appropriate processes of the U.S. Congress and the annual budget
actions of White House Budget officials. Additionally, in Korea 1953-
1954, U.S. Aid initially was a transference/diversion of the military
appropriations already spent or being spent for supporting all of the UN
forces to reconstruction and other aid for the ROK. After 1960, U.S. aid
gradually expanded, plateaued, and then leveled of at a lower level. In
the six decades under review, huge cost increases of military hardware
caused proportionately larger expenditures for fewer total items. In more
recent years, the ROK has undertaken the manufacture of many large
end-item weapons, under contract with U.S..
214
As addressed, there are several characteristics that our two
governments hold in common. In order to provide a better
understanding of the oft inferred stops and starts and detours of
the ROK nation-development, consider the American experience:
“We need to remind ourselves of our own perilous, protracted
effort to implant the torch of liberty in America. We need to
recall that American Colonists began their resistance to harsher
British colonial laws in 1763; that 12 years later the shot rang
out at Lexington; that eight years of bitter struggle followed
before the Treaty of Paris was signed ending the Revolutionary
War; that six more years were consumed in our endeavor to
forge a document of government which has stood the test of
time, including a civil war. It took 26 years to forge our Nation
Freedom worth fighting for is worth the time and tears to
build.”
14
The Republic of Korea has built a Nation comparable to the
United States in some sixty years, accomplishing with U.S.
assistance and support of their nation-building programs and
objectives what it took the U.S. itself over 200 years to
accomplish! Before leaving this point and to reinforce the
concl usi ons to my earl i er questi on WHAT MADE THE
DIFFERENCE? (See discussion, page 200) it was President John
F. Kennedy’s stated objective (to the Special Group Counter-
insurgency,1961) to support the Republic of Vietnam(RVN) to
the extent that the RVN would develop within 40 years to equal
what the U.S. had accomplished in 200 years.
U.S.-ROK nation-building efforts 1950 through 1998
recognized what the U.S.-RVN efforts did not: when nation-
building activities are to be applied in the presence of an active
Too much sunshine results in sunburn, sunstroke,
and possibly heatstroke.
The antidote to those injuries is sun screen lotion.
215
hostile neighboring power, successful progress can only be made
when there is a sufficiently powerful shield of deployed military
strength and police and paramilitary elements including a
national combined intelligence effort.
F
ortunately, during the years 1954-1979, in particular, the
ROK had leaders who recognized that fact. During that span
of time, there were: the so-called Second Korean War (1966-
1969); the attack on the Blue House (President’s Residence) by
North Korean infiltrators across the DMZ to assassinate President
Park (Jan. 17-20, 1968); the Pueblo Seizure (Jan. 23, 1968); the
shooting down of a U.S. Navy EC-121M aircraft over open seas
with 31 U.S. KIA (April 15, 1969); and Operation Paul Bunyan
“Tree / Hatchet Incident” (Aug. 18,1976), perhaps the closest
that the U.S.-ROK-UN Command has come to all-out war since
July 27,1953.
15
During the period 1960-1975 the U.S. was
concurrently engaged in the Vietnam War, as were the Armed
Forces of the ROK for the later part of the period.
On October 9, 1983, an assassination was attempted
against then President Chun Doo Hwan and a large delegation of
ROK Government Ministers during a visit to Rangoon, Burma
(now Yangon, Myanmar). Twenty-one persons were killed and
forty-six wounded. Almost all the killed and wounded were
Koreans. The Korean CIA later established that the assassins were
agents of North Korea. Finally, on Oct. 9, 2006, the North
14
General Harold K. Johnson, Chief of Staff, U.S. Army, Armed Forces Day
Speech, ca1966, message to the Army. Private excerpted copy, Colonel
Louis T Dechert.
15 Major Daniel P Bolger, Scenes from an Unfinished War: Low-Intensity
Conflict in Korea, 1966 -1969, Leavenworth Papers Number 19, Combat
Studies Institute, 1991.
Global Security.Org, http://www.globalsecurity.org/military/ops/paul_bu
nyan.htm, Operation Paul Bunyan. “Tree / Hatchet Incident” 18 August
1976, Alexandria, VA, current.
216
Koreans exploded a nuclear device, demonstrating a new
dimension of aggression.
16
In more recent years Korea chose leaders who were at the
least partially ill-informed/advised concerning the nature of the
security threats and the active deterrence roles/operations of the
U.S.-ROK-UN Commands. Particularly after 1998 the political
leadership of the ROK became almost myopic in cultivating and
apparently attracting/supporting/serving the North Koreans with
whom the ROK is at war. A visionary policy termed the Sunshine
Policy was announced and applied, often appearing to be anti-
military and anti-U.S..
E
lements of the Korean population, keying on the public anti-
American attitudes of ROK Governmental elements, began
to conduct media events and demonstrations against Americans
and U.S. Forces in Korea. It appears, to many, that the tumult of
that decade of induced anti-Americanism has led to an element
of di srespect for the RVN Armed forces, the uni versal
conscription, and ROK military accomplishments in building and
preserving the nation.
During the Sunshine Policy it would have been well if the
ROK political leadership had learned more about sunshine and
applied that knowledge. Too much sunshine results in sunburn,
British veterans of the Korean
War visit the UN Park in Busan
on the invitation of the Ministry
of Patriots and Veteran Affairs.
217
sunstroke, and possibly heatstroke. The antidote to those injuries
is sun screen lotion. In the nation-building situation in which the
ROK is engaged, the national armed forces and allied forces
provide that sun screen, extending the simile. The recently
elected government of President Lee Myung-bak appears to have
pragmatically learned and is applying that lesson.
Generally nations are built, grow and prosper as Lines of
Communication (LOC) sea, air, river, canals, railroads,
hi ghways, pi pel i nes, power l i nes, radi o, tel evi si on, tel e-
communications expand. That was President Kennedy’s
development plan for the RVN, as noted earlier. In a developing
scenario, 1946 through the present time, many of the under-
developed states start with essentially nothing. Nationally, this
was the case with America, post 1776; and it certainly was the
case of Korea in 1948, and even more so in 1953.
In America, infrastructure development required educated
engineers. Unfortunately all the established higher education
institutions at the time were founded and existed first and
foremost for religious instruction. For this reason the U.S.
Military Academy at West Point was first established. America’s
political leadership realized that educated engineers as well as
other educated skills were essential to development.
Military trained engineers built the LOC, and American
commerce and industry followed. Examples are many. Two might
be easily cited: Lewis and Clark were military engineers, and their
Corps of Discovery was a U.S. Army formation, posted by
President Jefferson to extend American Lines of Communication
west from the Mississippi River to the Pacific Ocean. And, the
16 See FN# 4 and subtended discussion. “While gentlemen cry peace,” the
Korean Peninsula is at peace only in the only most elastic technical
definition of peace. While the ROK longs for peace and reunification and
daily offers acts of good will to fulfill those longings, the DPRK clearly
follows the Communist stated philosophy that peace is only war by
another means.
218
first transcontinental railroad construction and completion,
1853-1869, was constructed mainly by civil war veterans and
their officers, with thousands of Chinese laborers employed on
the west to east construction portion.
The ROK has likewise been well served by the officers and
armed forces trained since 1953 to protect and serve their
nation. Whatever tasks remain for the ROK to forge ahead with
nation-building it may depend upon its armed forces to be
completely equal to the challenges.
I think that the Republic of Korea will survive and thrive
well into the future. The mainstay of that survival, and even of
the possi bl e peace treaty and reuni fi cati on, wi l l be the
professionally trained and equipped ROK Armed Forces who
serve with pride in their great nation. They may be depended
upon as they proved in Vietnam, Iraq, Afghanistan, Lebanon,
and in many other dangerous sites to do their best for the
Republ i c. It has been a pl easure and great personal and
professional reward serving with them.
Several months ago I was moved to provide my vision of
what I then termed The Real Korea War Veterans Memorial. I
close with that vision.
The Republic of Korea today is itself a memorial to
American and Korean sacrifices which is written not in
stone but on living hearts in our flesh and blood, and as
such is the Supreme Korea War Veterans Memorial. For
this reason, if no other, we must take every measure,
devise and carry out every plan, and work until we can
work no longer to build up, then build up again, and then
again, our mutual alliance.
Should our alliance fail because it progressively
grew gray, then feeble, then went on life support, and
finally disappear, then I suggest to you that something of
our mutual national bodies will have died. Something
which has energized us to accomplish the best there is
219
through the past few years will have been excised. And,
just as surely as our physical bodies will perish when the
heart is ripped from them, the very essence of mutual
accomplishment shall leave us, orphans as it were, to try
to make our individual ways — rather than the allied way
— in a hostile world.
Korea is great not because the U.S. is great; the U.S.
is better, or great, because Korea is great. That is the kind
of relationships we have between ourselves and the ROK,
my fellow veterans of Korea. We must preserve, defend,
and ever build higher our relationship.
220
T
he Korean Peni nsul a presents a remarkabl e “natural
experiment” for social scientists. Under Japanese occupation,
some of the most advanced industrial facilities in Asia were
developed in the northern part of the Korean Peninsula; the
south was the breadbasket. At the time of the partition in 1945
into zones of Soviet and American military occupation, in the
north and south, respectively, levels of per capita income and
human capital in the north exceeded those attained in the south.
In 1950, North Korea attacked South Korea in a bid to
forcibly unify the peninsula, drawing the U.S. and China into the
conflict. Most of the capital stock was destroyed as armies from
both sides twice traversed nearly the entire length of the
peninsula. There was considerable population movement as well,
mostly from the North to the South, and it is impossible to
ascertain with any precision the capacities of the two countries
when hostilities ended in 1953 with the original borders more or
less re-established.
The two Korean states subsequently not only pursued
divergent development strategies but also pushed those
strategies to extremes. South Korea not only adopted a capitalist
system but also went on to pioneer an outward-oriented
development strategy, emphasizing international trade as a
catalyst. North Korea, in contrast, not only chose central
planning but also intentionally time-phased its plans to frustrate
linkages with those of other fraternally allied socialist states and
in doing so created the world’s most autarkic economy, notable
in the degree to which markets were repressed.
N
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,

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0

Y
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Impossible to Possible
Inter-Korean Economic
Relations at 60
221
Over the past five decades economic performance in South
Korea has been nothing short of spectacular. Between 1963
when a wide-ranging economic reform program was initiated
and 1997 when the country experienced a financial crisis, real per
capita income growth averaged more than six percent annually
in purchasing power adjusted terms. At the start of that period
the country’s income level was lower than that of Bolivia and
Mozambique; by the end it was higher than that of Greece and
Portugal.
As astonishing as South Korea’s economic performance has
been, its political development has been as impressive, if not
more so: In the space of a single decade between 1987 and 1997,
leadership of the South Korean government went from an
authoritarian strongman (General Chun Doo Hwan) to his
elected but hand-picked successor (General Roh Tae-woo) to an
elected centrist civilian politician (Kim Young-sam) to a former
dissident (Kim Dae-jung). South Korea is arguably the premier
global success story of the past half century.
In stark contrast, North Korea experienced a famine during
the 1990s that killed perhaps 600,000 to 1 million people out of
a pre-famine population of roughly 22 million, making it one of
the 20th century’s worst. This disaster was very much the
product of the country’s political system, an anachronistic
Stalinist dynasty that has systematically denied its populace the
most elemental human, civil, and political rights.
Despite the historic economic integration of the two parts
of the peninsula, for the first half century following partition,
Marcus Noland is a Senior
Fellow at the Peterson
Institute for International
Economics. He was a Senior
Economist at the Council of
Economic Advisers in the
Executive Office of the
President of the United
States and has held research
or teaching positions at Yale
University, the Johns
Hopkins University, the
University of Southern
California and Tokyo
University, etc. He is unique
among American economists
in having devoted serious
scholarly effort to the
problems of North Korea and
the prospects for Korean
unification. He won the 2000-
01 Ohira Memorial Award for
his book Avoiding the
Apocalypse: The Future of
the Two Koreas.
Marcus Noland
The number of South Koreans visiting
the North has grown from less than 3,000
to roughly a quarter-million, though sadly, the number of
North Koreans visiting the South is far, far fewer.
222
economic interaction between North and South Korea was
tightly circumscribed. However, over the past decade, driven by
developments in both the North and the South, there has been a
substantial expansion in inter-Korean exchange. Careful data
analysis suggests that the North Korean economy bottomed out
in 1998 at the end of the famine period, and began a slow
process of recovery from 1999 on. In 1998, following the
inauguration of President Kim Dae-jung, South Korea launched
the “Sunshine Policy” of engagement with the North. Since then
there has been a tremendous expansion of inter-Korean
exchange. Two-way trade has expanded from $222 million in
1998 to $1.8 billion in 2007. Officially, aid has risen from $47
million to $306 million, the figure is even larger if other forms of
transfers are counted. The number of South Koreans visiting the
North has grown from less than 3,000 to roughly a quarter-
million, though sadly, the number of North Koreans visiting the
South is far, far fewer. A consensus has emerged in South Korea
about the desirability of economic engagement with the North.
At issue are the terms of that engagement.
Given the decades of enmity and distrust, it is not
surprising, indeed appropriate, that the initial cooperation
projects, most prominently the Mt. Kumgang tourism project and
the Gaeseong Industrial Complex (GIC), were in effect “loss
North Korean laborers
working at a shoe-making
company in the Gaeseong
Industrial Complex.
223
leaders” extended by the larger, wealthier partner to signal
benign intentions toward the smaller, poorer, less secure state.
Both projects are enclaves near the border, fenced off, literally
and figuratively, from the rest of North Korea, operating on a
mix of public and private financing. It appears that North Korea
is sufficiently comfortable with these arrangements to replicate
them elsewhere, for example in the form of a Mt. Paekdu tourism
venture (on the Chinese border) and Gaeseong-like industrial
enclaves in Haeju and elsewhere. The industrial parks are
justifiable insofar as the most natural South Korean investors in
the North are small- and medium-sized industrial enterprises
which are increasingly uncompetitive in South Korea, but could
remain viable given access to lower wage North Korean labor.
Extending the provision of physical infrastructure and effective
political guarantees for these small enterprises makes a certain
sense, particularly if the alternative is for these firms to move
their operations to China or Vietnam. KIC has expanded rapidly,
now housing enterprises employing roughly 30,000 workers, and
is beginning to open to foreign as well as South Korean investors.
Yet even these enclave projects have encountered their share of
setbacks; the operation of the Mt. Kumgang project has been at
least temporarily disrupted by the July 2008 shooting there of a
South Korean tourist.
I
n the long-run, it would be desirable to broaden the modalities
of engagement beyond publicly-subsidized enclaves. The
“Sunshine Policy” derived its name from Aesop’s fable of the
North Wind and the Sun in which the Sun and Wind compete to
see which can strip the coat off a traveler. While the Wind
fruitlessly attempts to blow away the coat off, the Sun uses its
warmth to i nduce the travel er to di srobe. Anal ogousl y,
engagement was originally conceived as an instrument: the point
was to encourage sufficient systemic evolution within North
Korea to establish a meaningful basis for reconciliation and,
224
ultimately, national unification. While this means that North
must feel secure to reform, ultimately the success of the policy
must be judged on how effectively it has encouraged the
evolution of North Korea in constructive directions.
The problem, of course, is moral hazard. Proffering aid
which may help address real needs in North Korea and make the
regime feel more secure may also discourage precisely the
long-run evolution in the North Korean system that the policy
seeks. Not all forms of engagement are equally commendable.
One can think of a number of criteria for the evaluation of
specific integration policies or projects. Perhaps the simplest is
the division between humanitarian and development assistance.
North Korea’s chronic food emergency is once again intensifying,
a product of economic and political mismanagement, bad
weather, and rising global food prices. Under such circumstances,
it would seem reasonable to divorce humanitarian assistance
from politics, and South Korea has offered aid.
L
ong-term development assistance is a different matter,
however, and pl aci ng a greater emphasi s on pol i cy
conditionality and reciprocity would be warranted. Experience
the world over is that support is most effective when coupled
with domestic reform. In the absence of reform, aid may have
little impact, or may even perversely encourage temporizing
behavior by reluctant authorities.
To the extent that North Koreans have any interactions
with foreigners, it is often with government agencies or NGOs.
Given the North Korean milieu, it is quite natural for North
Koreans to think of such engagement as a form of political
bargaining. But an important long-run task of engagement is to
educate North Koreans about the functioning of market
economics, and to reorient their conception of engagement away
from one-way resource transfers or political tribute and toward
mutually beneficial exchange. Private sector involvement is
225
important to promote this learning and bring the discipline of the
market to the engagement process.
South Korea shoul d commi t to the pri nci pl e that
engagement should be done on efficient, transparent terms. The
fundamental issue is that as long as the state maintains direct
and indirect influence over specific capital allocation decisions by
financial intermediaries, it will be tempted to use this influence
to promote its policy toward the North. Cooperation projects
should minimize discretionary state involvement either directly
or indirectly through public sector financial institutions or other
state-owned enterprises.
Subsidization of engagement with the North can be
justified from a social standpoint (it may promote evolutionary
economic and political change in the North) but it should be
clear, limited, and transparent, and implemented as neutrally as
possible with respect to specific projects and firms. The simplest
way of accomplishing this would be to put provisions into the
tax code that would create an incentive for South Korean firms
to invest in the North instead of moving operations off-shore to
other destinations such as China and Southeast Asia. In contrast
to implicit hidden subsidies and political quid pro quos should be
delivered through the public-sector financial institutions, this
approach would be a way to capture the possible social benefits
of engagement with the North on the basis of microeconomic
effi ci ent behavi or of pri vate fi rms. Market-compati bl e
engagement would have the added benefit of encouraging
learning on the part of the North Koreans. The notion that the
road to riches is through the efficient transparent provision of
The notion that the road to riches is
through the efficient transparent provision of services
is a lesson that North Korean officials should be
encouraged to learn.
226
services is a lesson that North Korean officials should be
encouraged to learn.
Lastl y, a successful engagement strategy shoul d
incorporate a multilateral dimension. Multilateral cooperation
not only reduces the chances that North Korea will play the
interests of outside parties against one another, but will also
provide additional resources for the tremendous investment
ultimately required for North Korea to successfully integrate into
the global economy. International financial institutions such as
the World Bank and Asian Development Bank have a role to play
in this process as providers of non-politicized technical assistance
and policy advice, as well as capital. The ongoing Six Party Talks,
if ultimately successful, could spawn regional economics
initiatives as well, including the development of Northeast Asian
transport and energy links, as well as facilitating cooperation on
other transnational issues such as the environment and drug
trafficking, embedding the process of inter-Korean reconciliation
in a broader regional fabric.
A
s in the Aesop’s fable from whence it drew its name, Kim
Dae-jung’s “Sunshine Policy” was originally conceived as an
instrument: the purpose was to encourage enough internal
change within North Korea to establish a meaningful basis for
reconciliation and, ultimately, national unification. An alternative
vi ew regards engagement l ess as a tacti c to achi eve a
transformative goal, than as a goal in and of itself, a stance into
which the Roh Moo-hyun government appeared to drift. The
answer to the question of which of these conceptions of
engagement as a means or as an end prevails in the
coming years, will have a profound impact on not only the
nature of North-South relations, but on North and South Korea
themselves.
From this long-term perspective, the controversies that
have marked the early days the Lee Myung-bak administration
227
and its new “coexistence and co-prosperity” policy should not be
overdone. It is not surprising that the North Koreans have
signaled unhappiness over what they rightly regard as the
hardening of South Korean government policy under the new
government. But engagement should and will continue because
it is consistent with the fundamental interests of both Korean
states. In the South it reflects the strong desire of the South
Korean people to assist North Korea and hedge against the risks
of instability and collapse. And the North, whatever its short-run
tactical maneuvering, will require South Korean support for the
foreseeable future. The current dispute is not over engagement
itself, but the terms on which it will proceed.
Chung Ju-yung, the founder of
Hyundai Group leads a herd of
cattle.
228
W
hen North Korea’s President, Kim Il Sung, died in July,
1994, after ruling with an iron hand for five decades,
South Korea’s business, military and political elite was deeply
divided over how to respond. Hawks argued that the North
Korean system would collapse after half a century of one-man
rule and economic mismanagement. Pointing to the example of
West Germany’s absorption of East Germany, they called for
efforts to destabilize the Communist regime as a prelude to the
absorption of the North by the South. Moderates countered
successfully that a German-style absorption would be too
expensive for the South to bear.
In the ensuing four years, a consensus developed that the
prudent course for the South would be to come to terms with
Kim Il Sung’s son and heir, Kim Jong-il; help him to sustain his
regime economically, and promote North-South economic
cooperation that would gradually make the economic systems of
the North and South more compatible, setting the stage for
eventual reunification on terms acceptable to both sides.
This consensus became the basis for the Sunshine Policy of
President Kim Dae-jung, who took office in 1998, and of his
successor, Roh Moo-hyun, who stepped down in 2007. As
articulated by Kim, the Sunshine Policy would set the stage for
gradual steps toward a loose confederation that would lead, in
time, to full integration of the two systems.
1
However, as the
economic gap between the North and South has widened, hopes
for a German-style absorption of the North have resurfaced in
the South.
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Roh Moo-hyun, beset with economic problems and facing
opposition to the Sunshine Policy from the Bush Administration
in Washington, failed to move toward a confederation, and the
advent of a new conservative president in 2008, Lee Myung-bak,
has left the future of North-South relations uncertain.
This essay will focus on two critical factors that will
condition the prospects for a confederation leading to eventual
unification: whether or not North Korea will collapse, as the
advocates of absorption predict, and whether South Korea will
maintain a military alliance with the United States that impedes
unification.
I
In predicting a collapse, many observers who compare
North Korea to East Germany ignore the cultural and historical
differences that set the two cases apart. In East Germany, the
Soviet occupation imposed an alien totalitarian model in a
cultural environment more hospitable to democratic concepts. In
Korea, the Confucian ethos and the traditions of absolute
centralized rule that go with it have facilitated totalitarianism in
the North and authoritarian rule in the South. Together with the
power of nationalism, these basic differences explain why the
Selig S. Harrison is a Senior
Scholar of the Woodrow
Wilson International Center
for Scholars and Director of
the Asia Program at the
Center for International
Policy. He has specialized in
South Asia and East Asia for
57 years as a journalist and
scholar and is the author of
five books on Asian affairs
and U.S. relations with Asia.
He has visited North Korea
10 times, most recently in
September 2006. From 1974
to 1996, as a Senior
Associate of the Carnegie
Endowment for International
Peace, he pursued
investigative assignments
every year in a variety of
countries, where he worked
as a journalist, such as India,
Pakistan, Iran, China, Japan
and the two Koreas.
Selig S.
Harrison
In predicting a collapse, many observers
who compare North Korea to East Germany ignore
the cultural and historical differences
that set the two cases apart.
1 Selig S. Harrison, Korean Endgame: A Strategy for Reunification and U.S.
Disengagement, Princeton University Press, Princeton, N.J. 2002, pp. 80-
86, for Kim’s Proposal and a modified version advanced by Roh Tae-woo
for a “Korean Commonwealth.”
230
fate suffered by the East European Communist states is not likely
to be repeated in North Korea.
K
im Il Sung consciously attempted to wrap himself in the
mantle of the Confucian virtues. The tightly controlled
system that he founded has lasted longer than any other
twentieth-century dictatorship because he carried over traditions
of centralized authority inherited from the Confucian-influenced
Korean dynasties of the past. The North’s system is much more
in tune with long-established Korean political norms than the
hopeful democratic transition initiated in 1987 in the South after
three decades of authoritarian rule under Syngman Rhee and a
series of U.S. supported generals.
The unifying power of nationalism and the Confucian
legacy of absolute centralized rule help explain why North Korea
has held together for the past five decades and is not likely to
collapse. But another crucial factor contributed to its stability
during four of these five decades: the massive and wide-ranging
economic subsidies provided by the Soviet Union and China. The
sudden termination of these subsidies following the end of the
Cold War triggered a precipitous decline in the North Korean
Panmunjeom is now ajoint
security area managed by the
UN Command and North
Korean guards.
231
economy that has imposed unprecedented strains on the
political system. As economic hardship has increased, so has a
long-standing policy struggle between pragmatic technocrats
and Workers’ Party ideologues over whether to move toward
market-oriented economic reforms and a liberalization of foreign
economic policy designed to stimulate foreign trade and
investment. The outcome of this struggle and the success of
North Korea i n deal i ng wi th i ts economi c probl ems wi l l
undoubtedly have a critical impact on its political cohesion.
Many predictions of an imminent collapse rest on the
incorrect perception of a monolithic North Korean leadership
implacably resistant to economic reform. In reality, however,
behind the façade of a monolithic power structure, the struggle
between reformers and the Old Guard has been steadily growing
in intensity. Even before the loss of Soviet and Chinese aid, the
pressures for reform were starting to build up. Ironically,
however, they were unable to make much headway in liberalizing
the domestic economy until the food crisis starting in 1995 led
to the widespread, spontaneous eruption of private farm
markets. Faced wi th a breakdown i n i ts machi nery of
government food procurement and distribution, the Kim Jong-il
regime had two options: close down the private markets by force
or look the other way. Kim Jong-il chose to look the other way. In
doing so, he sided with reform minded officials who argued that
the private markets would not only ease the food shortage for
some sections of the population but would also jump-start
movement toward a market economy.
Since 1996, there has been a steady increase in the
number of private markets, together with a diversification of
their merchandise, which now embraces consumer goods as well
as farm produce. Yet no Workers’ Party doctrinal pronounce-
ments have acknowledged or legitimized this significant sea
change in North Korean economic life. Kim Jong-il is presiding
over a process that might be called “reform by stealth”. He is
232
tacitly encouraging change in the dome-stic economy with-out
incurring the political costs of confronting the Old Guard in a
formal doctrinal debate. At the same time, he is openly
sponsoring newly flexible polic-ies toward South Korean and
foreign investment as part of the broader moves toward greater
openness that were symbolized by the June 2000 and October
2007 North-South summits. By all conventional economic
indicators, North Korea is a hopeless basket case, destined for
inevitable collapse under the weight of its economic problems
unless the pace of systematic remedial action is greatly
accelerated. Pointing to the experience of Romania, however,
Marcus Noland suggests “caution in drawing too deterministic a
link between economic hardship and political failure.” In Noland’s
analysis, “between the extremes of reform and collapse lies
muddling through.”
2
Predictions of a collapse are often based on an either-or
dichotomy: Kim Jong-il either proves to be a strong leader and
pushes through systematic economic reforms or is so weak that
the economy continues to stagnate, discontent grows, and
rampant factionalism brings down the entire structure of the
North Korean state. But the reality may well lie in a more
nuanced assessment. Kim Jong-il is not a charismatic leader like
his father and is not even attempting to emulate the Kim Il Sung
leadership model. He has created a new constitutional structure
The unifying power of nationalism
and the Confucian legacy of absolute centralized rule
help explain why North Korea has held together
for the past five decades and is not likely to collapse.
But another crucial factor contributed to its stability
during four of these five decades: the massive and
wide-ranging economic subsidies provided by
the Soviet Union and China.
233
in which the armed forces provide his personal power base and
have replaced the Workers’ Party as the focus of political
authority. North Korea has already had a bloodless military coup.
Thus, a stable transition from the Kim Jong-il regime to a
successor regime could well occur without rampant factionalism,
since the armed forces leadership would continue to provide the
power base and political anchorage for the new leadership as it
does for Kim Jong-il.
It is precisely because he does not have his father’s
charisma or monolithic personal control that Kim Jong-il is
pursuing a cautious course of “reform by stealth.” Pyongyang is a
jungle of turf fights between contending interest groups and
ideological battles between hawks and doves seeking to influence
Kim’s policy decisions. Nevertheless, his measured reform
process is likely to gain momentum during his tenure and set the
stage for a more formal doctrinal shift to pragmatic economic
polices either under his leadership or that of his successors. For
the foreseeable future, regardless of the pace of reform, Kim
Jong-il is needed as a legitimizing symbol of continuity with the
Kim Il Sung era and is not likely to be replaced.
II
Will a new consensus develop in the South for support of
sustained progress toward a confederation? In my view, this is
unlikely so long as the U.S.-South Korean alliance continues in its
present form. During the decades since 1945, the polarization of
Korea along Cold War lines constituted a built-in barrier to
reunification. Nevertheless, the division of the peninsula, while
making Korea itself militarily unstable, defused the peninsula
temporarily as a flashpoint of regional instability. The Sino-
2 Marcus Noland, “Why North Korea Will Muddle Through,” Foreign
Affairs 76 (July-August 1997): 115-16
234
Japanese competition for dominance in Korea that had persisted
throughout history subsided in the face of the entrenched U.S.
and Soviet presence in the two Koreas.
In the post-Cold War environment, however, a divided
Korea is likely to become a focus of international conflict
involving not only the neighbouring powers but also the United
States. For example, if the United States maintains a continuing
military presence in the South, China is likely to view the
maintenance of a separate North Korea as critical to its security,
and the danger of a U.S.-China conflict over Korea will grow,
especially if the United States and Japan continue to define the
threat from China as a principal raison d’être for their alliance.
The U.S. interest in a stable Northeast Asia would thus be
served by the emergence of a strong, reunified Korea that could
serve as a neutral buffer state, forestalling a repetition of past
Korea-centred major power rivalries in the region.
T
o pursue this interest, the United States would have to
reshape its policies in the peninsula so that it does not stand
in the way of movement toward a loose confederation, as it does
now, while at the same time doing what it can to promote such
movement. This would require, above all, a basic redefinition of
the role of U.S. forces in Korea that would induce the South to
move more rapidly toward accommodation with the North. In its
present form, the U.S. military presence sustains a climate of
indefinite confrontation.
The United States has an open-ended commitment to one
side in a civil war. It is providing a massive economic subsidy that
enables its ally to minimize the sacrifices that would otherwise
be necessary for the maintenance of the conflict. The South’s
upper-and middle-income minority, in particular, has acquired a
vested interest in the status quo. Without its U.S. subsidy, Seoul,
which now spends an average of U.S. $13 billion per year for
defence, would have to double or triple its military budget to
235
replace the conventional forces deployed for its defence by the
United States, not to mention the much higher outlays that
independent nuclear forces would require. In addition to the
direct cost of its forces in Korea, averaging U.S. $2 billion per
year, the United States spends more than U.S. $40 billion
annually to maintain the overall U.S. force structure in East Asia
and the western Pacific on which its capability to intervene in
Korea depends. So long as the South regards this U.S. economic
cushion as an entitlement, it will be under no compulsion to
pursue a modus vivendi with the North.
Despite the end of the Cold War, the role of U.S. forces in
Korea has not changed to keep pace wi th geopol i ti cal
realignments in Korea. The U.S. military presence in the South
was a response to the projection of Soviet and Chinese military
power on the side of the North. Now Russia no longer has a
security commitment to the North. While retaining a nominal
security commitment to Pyongyang and keeping up economic
aid, China has in reality moved steadily closer to Seoul. Both
Moscow and Beijing are increasingly attempting to play the role
of honest broker between the North and South. That is what
they want the United States to do, and that is what the North
also wants the United States to do.
North Korean students
practice for a parade for
September 9, which marks the
establishment of the country.
236
What would a redefinition of the U.S. military role mean in
concrete terms? In essence, the mission of U.S. forces would no
longer be limited to the defence of the South but would be
broadened to embrace the deterrence of aggression by either the
North or the South against the other. In its new role as a
stabilizer and balancer in Korea, the United States would provide
the security umbrella necessary for stable progress toward a
loose confederation, helping promote a climate of mutual trust.
While retaining a nominal security commitment to
Pyongyang and keeping up economic aid,
China has in reality moved steadily closer to Seoul.
Both Moscow and Beijing are increasingly
attempting to play the role of honest broker
between the North and South.
North Korean cheerleaders at
the Summer Universiade
Daegu 2003.
237
Conceivably, U.S. forces could remain for a limited period
following the establishment of a confederation. North Korea, for
its part, has left such a possibility open. Kim Byong-hong, policy
planning chief in the foreign ministry, told me on 7 May 1998
that “Korea is surrounded by big powers Russia, China, and
Japan. We must think of the impact of the withdrawal of U.S.
troops on the balance of power in the region. It is possible that if
U.S. troops pull out of Korea, Japan will rearm immediately.” A
day earlier, Kim Yong-nam, then Foreign Minister and now
chairman of the Supreme People’s Assembly, said more obliquely
that “the United States is standing in the way of a confederation,
but it would be in your interest to help us work for one because
it would enhance stability in the region, and the United States
can advance its interests in both halves of Korea if it were
confederated.”
238
I
n my years living in Korea, before, during and after the war I
got to know many of them, and I liked them. The ones I got to
know best were two young men (boys really) whom we had
hired to drive our jeeps. They were extremely intelligent,
observed the work of our cameramen, and soon learned to shoot
film themselves. Postwar, when most NBC staffers returned to
Japan or the USA, we hired the two young (You Young-sang and
Lim Youn Chul) as “stringers”, meaning we paid them for sending
us film when newsworthy events happened.
Then the Vietnam War came and NBC needed cameramen
to cover that. With some worries about their safety, I sent them
to Saigon. They both succeeded magnificently, so much so that
soon whenever NBC cameramen went to Vietnam they asked to
be able to work with the Koreans. They went to the top among
our cameramen and both and successful careers with NBC News.
Until World War I had never met a Korean, then I signed up in
the Navy for study at the U.S. Naval Japanese Language School
at Boulder, Colorado. Most of our instructors were either former
missionaries or businessmen who had lived in Japan. There was
only one Korean there, a pleasant young man named Choi. He
was fluent in Japanese and at first we thought he was Japanese,
but we soon learned that he was Korean. It was Choi who made
that clear, and it was Choi who taught us, during off hours, about
the twentieth century relations between Japan and Korea.
It was after four combat landings in the Pacific and three
years later before I reached Tokyo as a correspondent for
international News Service. Two years after that I got my first
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glimpse of the Korean hills as my boat from Japan entered the
spectacular harbor at Busan.
After I got ashore I realized that back then all Koreans
spoke Japanese by order of the Japanese occupiers. I took the
easy road and conversed in Japanese with the Koreans. It really
didn’t matter because after a few years most of the Koreans
began speaking English. When I arrived Korea was very different
from post-war Japan that I had seen. It was more unsettled, more
confusing. The American military forces, the twenty fourth corps,
arrived late from Okinawa. The Cairo Conference among
Churchill, Roosevelt and Chiang Kai-shek agreed that Korea
would become a free and independent country “in due course”.
The situation in Korea, as one might say, was uncertain and
confused. The “in due course”, is still waiting to happen.
Soviet forces arrived in Korea well ahead of the Americans
but they halted, as it had been agreed, near the thirty eighth
parallel. That decision had been taken by diplomats drawing a
line on a map which did not take into account features such as
rivers and mountains, and other obstacles that the line crossed.
The Russians were to take the surrender of the Japanese forces
north of that line and the Americans doing the same to the
south. In effect, most of the industrialization of Korea was north
of the line and the south was mainly agricultural. Arriving at
Busan my first task was to find a way to get to Seoul. A train
seemed to be the only answer. I found one and boarded it. The
facilities aboard it were extremely primitive. The car I rode in
held mostly American soldiers and at one stop (probably Daegu),
Peabody Award winning
reporter John Rick has
participated in or reported on
all of America’s 20th century
wars since World War .
Rich was in Tokyo when the
Korean War began and went
to Korea the first week of the
fighting. For the next three
years he covered the war, a
longer period than any other
American news
correspondent. In December
1950 he had left I.N.S and
joined NBC News. After the
armistice signing in Korea,
Rich spent a year on a
fellowship at the Council on
Foreign Relations in New
York. He now lives in the
house, on the coast of Maine,
where he was born August 5,
1917.
John Rich
After I got ashore I realized that back then
all Koreans spoke Japanese by order of the Japanese occupiers.
I took the easy road and conversed in Japanese with the
Koreans. It really didn’t matter because after a few years
most of the Koreans began speaking English.
240
some GI’s at the station threw aboard several “blitzcans” of
water, the only liquid we had for the whole trip. Water was not
the only shortage. As we approached Seoul and darkness fell, we
realized that the train’s headlight (if indeed it had one), was not
working. We chugged into Seoul’s railroad station in complete
darkness.
I was booked at the Chosun Hotel and soon became an
acquaintance of the genial English-speaking manager whom we
called Joe Minh. Later, to our horror, when the North Koreans
occupied Seoul in June 1950, Joe Minh was seized and taken
north, and unfortunately his fate is still unknown. At the time I
reached Korea the Americans and Soviets were beginning their
onsite “conference” to decide just how Korea was to become
“independent”. I was there when the Soviet delegation arrived in
Seoul, by train, from the north to begin the deliberations. It
ended in complete failure. The Soviets and the Americans could
not even agree on whom among the Korea people they would
negotiate with to decide the fate of the Korean Peninsula. The
talks ended and the Soviets went north. I was in South Korea at
the voting in Korea’s first election when Syngman Rhee won the
presidency and the new Republic of Korea government was
formed. U.S. Army forces withdrew completely from Korea,
leaving only a small military advisory group of about five
hundred men.
M
eanwhile the Soviets began equipping and training North
Korean forces with T-34 Tanks and Yak Fighter Planes. The
attack from the north on June 25th, 1950, caught the South
Koreans and Americans by surprise. The next three years
witnessed a brutal war up and down the Korean Peninsula.
Almost no place was untouched and millions were left dead and
wounded on both sides. Needless to say South Korea was in a
very sorry state when the Armistice Agreement was signed in
July, 1953. The economy was in a shambles. There were almost
241
no factories anywhere. There were difficult times but American
aid continued to come in. It took a few years for the Koreans to
get organized but then I began to see factories begin to rise, and
in the ports, shipyards beginning to turn out impressive vessels.
Korea was on its way.
Korea soon had a civilian airline. Korea moved outward,
set up embassies and consulates abroad and learned how to
operate in the world economy. In the first weeks of the war what
little army South Korea had was shattered. I saw and took
pictures of South Korean conscripts being prepared for battle.
They were handed an Ameri can ri fl e, gi ven some verbal
instructions on how it worked, and then allowed nine practice
shots at a target. From there they went straight into the front
lines. I saw that South Korean army again in Vietnam. What a
contrast. The Koreans returned the compliment and sent a
division to help the Americans. It was a crack military force. It was
the equal of almost any army anywhere. A well-trained and well-
led fighting force. The Korean miracle had begun and was well
underway. It has grown and succeeded beyond all expectations,
economic, industrial, technological, political and military. South
Korea has built a prosperous state that now even gives foreign aid
to other poor and struggling nations. Truly a miracle.
242
O
n the 15th of August, 1948 the Republic of Korea was
proclaimed in Seoul. Then, just a few short days later, on
September 9, the Democratic People’s Republic of Korea was
officially established in Pyongyang. Thus, two rival Korean states
were born. The division was brought about by many factors,
superpower rivalry being the most important one, although
confl ict between the Korean Left and Right al so greatl y
contributed to the tragedy.
From the very beginning, neither side was willing to accept
the division as permanent. The 1948 ROK Constitution clearly
and unequivocally stated that the entire Korean Peninsula should
be seen as ROK territory. The DPRK Constitution not only
contained a similar claim (with the DPRK, naturally, being
presented as the only legitimate government of both North and
South), but it also went one step further: according to the 1948
North Korean Constitution, Seoul was claimed to be the DPRK’s
capital city. Pyongyang was at the time considered as merely the
provisional headquarters of the North Korean government (only
in 1972 was Pyongyang finally declared to be the capital of the
North). Neither side made a secret of its willingness to unify the
country, by force if necessary, and each side was ready to accept
unification strictly on its own terms.
In the late 1940s the South Korean government did talk
about a “northern expedition”, but it was the North where
immediate unification by force became the most important task
on the political agenda. Since the Soviets controlled the North in
the 1940s, such an operation would be impossible without
Exclusive Dreams:
Two Koreas in Search of Unification
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Moscow’s explicit permission and support. From 1948 onwards,
North Korea’s diplomats worked hard to obtain this permission
from Stalin. The Soviet dictator was initially unenthusiastic: he
did not want to risk a world war over some small peninsula in
East Asia. Only in January 1950, thanks to the successful Soviet
nuclear test and the Communist victory in China, did Stalin
change his mind and reluctantly approve the invasion plan.
However, the attempt to conquer the South by force came
to naught. The North Koreans scored some impressive military
success at first, but were eventually driven back and barely
avoided a disastrous defeat. The Korean War led to widespread
destruction and great loss of life, but the country remained
divided.
After the war, both Seoul and Pyongyang remained
committed to unification, but this commitment became largely
theoretical. By the mid-1950s, the Cold War reached its climax,
the boundaries between the two rival camps solidified, and it was
clear that neither the Soviet Union nor the U.S. wished any
serious confrontation to redevelop in Korea.
In a world driven by superpower politics, few people hoped
that unification would be possible any time soon, so the rival
governments concentrated on economic development instead.
Initially, the North held a considerable advantage: it inherited
some 80-90% of the colonial era industrial potential. The
estimated per capita GNP of the North in 1960 was $172 ,
compared to $85 in the South
1
.
The late 1960s saw a short-term revival of the militant
Only in January 1950, thanks to
the successful Soviet nuclear test and the Communist victory
in China, did Stalin change his mind
and reluctantly approve the invasion plan.
Andrei Lankov was born in
1963 in Leningrad (now
Petersburg), then USSR. He
graduated from the
Leningrad State University in
1986, majoring in Chinese
and Korean studies. He
taught Korean history at the
Australian National
University and since 2004 is
teaching at the Kookmin
University in Seoul. He has
published a number of books
on Korean history, including
“North of the DMZ” and
"From Stalin to Kim Il Sung:
Formation of North Korea”
as well as a large number of
articles, both in academic
journals and general media.
Andrei Lankov
244
stance of the North. The feud between China and the Soviet
Union, which reached its height by the mid-60s, allowed North
Korea to acquire considerable autonomy within the Communist
camp, so the Pyongyang leaders came to believe they would be
able to take over the South even if the Soviets and Chinese
would not directly support such an undertaking. This time, their
major hopes were pinned on fermenting internal discontent in
the South (obviously, under the influence of the events in
Vietnam). This hope was encouraged by frequent outbursts of
political turmoil within South Korea like, for example, the
April Revolution of 1960 or the mass rallies against the Korea-
Japan Treaty of 1965.
In the late 1960s, the North Korean Special Forces
undertook a string of large-scale operations in the South. The
most notorious of these was an unsuccessful raid in 1968 on the
Blue House, the residence of the ROK president. Around the
same time Pyongyang also attempted to ignite Vietnamese-style
guerrilla warfare by landing commando units on the South
Korean coast. However, these attempts also ended in failure: the
South Korean public was decidedly unsympathetic towards the
North Korean dream of “red unification”.
D
isappointed at the failure of their militant strategy, the
North Koreans agreed to begin negotiations with the
South. The results of secret talks were made public in 1972 when
Seoul and Pyongyang published the “July 4 Joint Declaration”.
The Declaration stated that both sides were committed to the
“three principles of unification”. According to these principles,
In a world driven by superpower politics, few people
hoped that unification would be possible any time
soon, so the rival governments concentrated on
economic development instead.
245
unification should be reached independently, peacefully, and on
the basis of national solidarity.
The Declaration was widely welcomed at the time as a sign
of Korea’s move towards peaceful co-existence. This, however,
was not really the case, as was demonstrated by subsequent
lapses into the confrontational approach (including, for example,
a 1983 assassination attempt against the then ROK President
and his top politicians, engineered by North Korean agents in
Rangoon, Burma). Nonetheless, the “July 4 Declaration” was a
sign of change. From that time onwards, the two Korean regimes
began to gradually move away from their old unconditional
hostility and towards a measure of cooperation. This intra-
Korean cooperation, the politicians usually insisted, was the best
and safest road to eventual unification. For all practical purposes,
meanwhile, this was just a convenient fiction, driven by the
political need to pay lip service to the unification ideal which had
been firmly enshrined in the ideologies of the rival states.
Unification in fact remained elusive. However, the new paradigm
1 Hamm Taik-young. Arming the Two Koreas: State, Capital and Military
Power. Routledge, 1999, p.131.
Children at a nursery school in
Unsan in famine-struck North
Korea.
246
permitted a diffusion of tension on the peninsula and also
facilitated some limited exchanges between the two sections of
the divided nation.
Around the same time, the economic balance between the
two countries began to undergo a dramatic reversal. From the
early 1960s the South Korean economy entered an extended
period of record growth which is sometimes described as the
“Korean economic miracle”. Meanwhile, the North Korean
economy, once modeled upon the Soviet patterns of the Stalin
era, began to stagnate. As a result, around 1970 the South
overtook the North economically. The economic gap between
the two halves of Korea has been growing ever since, reaching
almost unbelievable proportions. In 2007, the Bank of Korea
estimated that per capita GNP in the North was seventeen times
below the South Korean level. However, this estimate is widely
seen as excessively optimistic such that many experts believe
that the actual gap is 1:35, if not higher
2
. However, even if the
optimists are correct, a 1:17 ratio is still the world’s largest per
capita economic gap between countries which share a land
Two thousands tons of rice aid
from the South is shipped for
transfer to the North.
247
border. This economic disparity creates huge inequalities
between the two Koreas, and this inequality in turn greatly
influences their relations.
T
he late 1980s saw a short-lived revival of the unification
dream, this time in the South. Communist Eastern Europe
was falling like house of cards. The dictatorships in Rumania and
Albania, the two closest analogues to the North Korean regime,
collapsed in a matter of days. Finally, in 1989-90 a bloodless
revolution led to an unexpected unification of Germany. North
Korea seemed to be destined for a similar transformation from
within, and this was widely anticipated in the South, whose
economic superiority was clear to everybody. Around this time,
contacts between two governments intensified, and this led to
some new high-profile agreements, including Agreement on
Reconciliation, Non-aggression and Exchanges and Cooperation
between the South and the North (1991) and the Joi nt
Declaration of the Denuclearization of the Korean Peninsula
(1992).
However, the hopes for German-style unification did not
last long. By the mid-1990s the mood in Seoul changed
completely. First, it became clear that North Korea, unlike the
countries of Eastern Europe, was not going to collapse any time
soon. In the early 1990s, North Korea lost the Soviet aid which
was instrumental in keeping its economy afloat. This let to a near
collapse of the state-run economy. In 1996-99 the country also
experienced a disastrous famine. Nonetheless, Kim Jong II’s
government survived and remained in control of the country.
Second, the German experience made the Seoul decision-makers
realize that the unification of the North and South would be
2
For a critical assesment of the different estimates, see: 0÷¹ ÷¯¬-
±÷7!7 ¯72¹¹¸, #143 (March 2008).
248
more expensive and painful than anybody had ever imagined.
Thus, the entire paradigm changed once again. Unification
as the supreme national goal still remains accepted universally,
even though from the late 1990s one can easily see a decline in
commitment to this stated goal among the youngest generation
of South Koreans. However, under the new circumstances Seoul
was not in a great hurry to reach this goal. A prolonged period of
peaceful co-existence and collaboration came to be seen as a
necessary first step on the way to complete unification.
Such was the background which led to a switch to the
“Sunshine Policy”. This policy was launched by Kim Dae Jung’s
government in 1997. It was continued by President Roh Moo-
hyun throughout 2002-2008, during which time it was formally
re-named the “Policy for Peace and Prosperity”, but the old name
was also still used widely. The major goal of this policy was to
encourage the gradual evolution of North Korea. The policy’s
name refers to one of Aesop’s fables, “the North Wind and the
Sun”. In the fable, the North Wind and the Sun argue about who
is able to remove a cloak from a traveler. The North Wind blows
hard but fails to succeed, since the traveler wraps his cloak even
more tightly to protect himself. The Sun, however, warms the air,
thus forcing the traveler to remove the unnecessary cloak.
The policy was based on the assumption that a soft
approach will persuade the North to institute large-scale social
and economic reforms, more or less similar to that undertaken in
Chi na or Vi etnam. An i mportant part of the underl yi ng
assumptions in this policy was a belief that reform would prolong
the existence of the North Korean state and make possible a
gradual elimination of the huge economic and social gap
This economic disparity creates huge inequalities
between the two Koreas, and this inequality in turn
greatly influences their relations.
249
between the two Koreas. As Aidan Foster-Carter noted, “Despite
the rhetoric of unification, the immediate aim [of the “Sunsine
policy”] was to retain two states, but encourage them to get on
better”.
3
W
as the “Sunshine Policy” successful and, if so, to what
degree? Perhaps, this question has no clear-cut answer
and will thus be disputed by generations of historians. The critics
of the policy insist that it essentially saved the North Korean
dictatorial regime from collapse. This opinion was expressed by
Nicholas Ebrestadt who wrote in 2004: “What thus seems
beyond dispute is that the upsurge of Western aid for the DPRK
under “Sunshine” and “engagement” policy played a role
possibly an instrumental role in reducing the risk of economic
collapse and increasing the odds of survival for the North Korean
state.”
4
It is often implied by the critics that the survival of the
Kim family regime prolonged the suffering of the North Korean
people.
5
They also say that unconditional aid from the South,
instead of bringing about beneficial reforms, actually led to an
opposite result: since the Pyongyang elite can now count on aid,
it has even less incentive to reform itself. Meanwhile, the
supporters of the “Sunshine Line” point at the considerable
improvement in the relations between the two Koreas and to the
explosive growth in their economic exchanges and political
contacts. They also allege that the “Sunshine Policy” helped to
decrease the risk of war and created conditions which rendered
3
Aidan Foster-Carter. Towards the endgame. The World Today. London:
Vol. 58, Iss. 12 (Dec. 2002.); p. 23
4
Nicholas Eberstadt. The Persistence of North Korea: What has been
keeping Pyongyang afloat? Policy Review, #147 (October & November
2004)
5
For example: Jasper Becker. Dancing With the Dictator. New York
Times. New York, N.Y.: Jun. 9, 2005.
250
large-scale aid possible (aid which, they continue, has saved
many lives).
I ndeed, the “Sunshi ne Pol i cy” made possi bl e an
unprecedented increase in political exchanges between the two
sides. The most important of these contacts took place in 2002
when ROK President Kim Dae-jung met the DPRK Defense
council chairman Kim Jong-il. This was the first ever summit
between the heads of the two Korean states. The next summit
took place in 2007, once again in Pyongyang.
All these events occurred against the backdrop of the
humanitarian disaster in the North. In the late 1990s, North
Korea experienced a famine of unprecedented proportions. It is
estimated that between 600,000 and 900,000 people starved to
death throughout 1996-99.
6
The famine was over by 2000,
largely thanks to massive outside aid, however the underlying
problems unfortunately persist. The collectivized North Korean
agriculture cannot produce enough food to meet even the most
basic demands of the country’s population, and in recent years
there was no palpable improvement in food production. In recent
years South Korea has become a major food provider, shipping
about 400,000 metric tons of food every year (roughly 8% of the
entire annual demand). Apart from food aid, a number of
government agencies and NGOs are also involved in providing all
kinds of humanitarian aid and development assistance to North
Korea.
There was also a dramatic growth in the volume of intra-
Korean economic exchange as well. This exchange is usually
described as “economic cooperation,” but this description is
somewhat mi sl eadi ng: so far, the profi tabi l i ty of these
undertakings for the South Korean side remains doubtful.
Nonetheless, one should not judge these projects from a purely
economic point of view, since most of them are likely to have
long-term political consequences.
The last 15 years have been times of explosive growth in
251
the scale of intra-Korean trade. Until the mid-1990s, such trade
was virtually absent. By 2003 the volume of this trade reached
$0.72 billion, while in 2007 the volume of trade and other
economic exchanges increased to $1.8 billion. In the recent years
South Korea has been the second largest trade partner of the
North.
7
C
urrently, there are three major joint undertakings between
the two sides. In the Geumgang Mountains, South Korean
tourists frequent a resort which is located in one of the most
famed scenic parts of the country. The resort is for the exclusive
use of the South Koreans, and their interactions with North
Koreans are kept to a bare minimum. Many critics of the project
therefore describe it disapprovingly as a “money pump” which
keeps the North Korean regime provided with monetary funds.
6 For a detailed summary of the events which led to the Great Famine as
well as analysis of its impact, see: Haggard, Stephan, and Marcus Noland,
Famine in North Korea: Markets, Aid, and Reform. New York: Columbia
University Press, 2007.
7
=÷lº¯((7¹!7 '±. KlT/¸ ¯((P¸ ¡¬
South Korean civic groups ship
800 tons of fertilizers onto the
Russian Svetlana ready to
head for the North.
252
This is partially true, but it is also true that without the trail-
blazing Geumgang (in operation since 1998) no other projects
would be conceivable.
Indeed, two more recent projects are remarkably less
restrictive. One of those projects is the Gaeseong city tours.
Gaeseong, the capital of Korea during the Koryo dynasty (918-
1392) and the site of numerous historical monuments, is located
just across the DMZ, some 50 km away from Seoul. Since 2007,
three hundred South Korean tourists have been allowed to visit
the city every day. The tours are heavily controlled, but still give
visitors an unprecedented opportunity to glimpse North Korean
life. Meanwhile, the population of this, one of North Korea’s
largest cities, also sees busloads of well-dressed, well-fed, and tall
South Koreans whose behavior and image clearly contradicts the
official propaganda.
Since 2004 South Korean companies have also began to
operate in the Gaeseong Industrial Park, located just across the
DMZ. As of February 2008, there were 68 South Korean
companies operating in Gaeseong. These companies employed
23,529 North Korean workers as well as 884 South Korean
managers and technicians.
8
The South Korean investors hope to
cash in on the cheap labor provided by the North Korean side.
The official minimum wage in Gaeseong, as of 2007 was a mere
$57 (and even part of this measly sum is pocketed by the
authorities), while the actual amount paid was only marginally
higher
9
. This might sound an abysmally low figure, but one
should remember that the Gaeseong Industrial Park still provides
the best paid regular jobs in North Korea, and its employees are
Despite of all caveats, Koreans of the North and
South still see themselves as one nation, and this
perception, if it does not materially fade, will
eventually decide their fate.
253
envied in their neighborhoods. In Gaeseong, a large number of
North and South Koreans work together for the first time in 60
years. The North Koreans not only learn modern technical skills,
but they also have ample opportunity to observe their Southern
compatriots. No doubt they come to conclusions which are very
different from what they are told by the official propaganda, and
in the long run this will have a great impact on the internal
situation in North Korea.
N
evertheless, by 2006-2007 one could see that Korean
society was feeling a growing dissatisfaction about the
results of the “Sunshine Policy”. The policy failed to prevent the
devel opment of nucl ear weapons i n North Korea. More
importantly, the long-expected Chinese-style reforms did not
eventuate. On the contrary, once the North Korean government
began to slowly recover from the severe famine of the late
1990s, it undertook attempts to restore the old system of a
centrally planned economy and omnipresent political control.
Unfortunately, such policies are quite rational if judged
from the point of view of Pyongyang’s decision-makers. The
North Korean elite is afraid that even moderate liberalization and
relaxation of political control will have a devastating effect on
political stability. The mere existence of an affluent South makes
the situation in Korea very different from that of China or
Vietnam where communist authoritarian regimes do not directly
face living proof of their systems’ past inefficiencies. If the North
Korean populace learns the true magnitude of the gap between
North and South, the Pyongyang government’s legitimacy will be
severely damaged, and a crisis might follow (much like occurred
8
÷±7º÷Þ¸ 7¹+¯¹=7?÷±=º==¯)¸ 5º¯¬)¸ ¡A¬
9
The Gaeseong North-South Korean Industrial Complex. CRS Report for
the Congress. Washington, Congressional Research Service, 2008, p.9.
254
in East Germany). Hence, instead of being engaged in dangerous
reformist activity, the North Korean leadership prefers to do
everything possible to keep the situation under control and,
logically enough, they use South Korean aid to maintain the
status quo. For example, a large amount of aid is used to feed
the army, police and bureaucracy whose support is vital to the
regime’s internal stability.
This means that in the foreseeable future all Seoul
governments will face an uneasy dilemma. If substantial and
unconditional aid is provided, the North Korean elite will use it
largely to increase its own grip over the people. If aid is not
provided, many more North Koreans will starve to death, while
the regime will still be able to maintain control. In both
situations, the yawning gulf between the two Korean economies
is likely to get even wider. Lee Myung-bak’s government, in
power since February 2008, decided to test another approach to
the North which, it is widely hoped, will help to break away from
the vicious cycle described above. While basically willing to
provide aid, it also stated that aid should come with certain
conditions attached. Ideally, such an approach will make it more
difficult for the North to use the South Korean aid to maintain
the privileged life-style of the ruling elite.
A
s a part of this new approach, President Lee proposed the
“3000 vision” plan. In essence, this plan envisions large-
scale aid being delivered to the North if the North Korean
government chooses to abandon its nuclear weapons. If such a
proposal is accepted, the South promises to increase the per
capi ta i ncome i n the North to $3000 wi thi n a decade.
Unfortunately, this particular proposal does not appear to be
realistic, since the North is very unlikely to accept a deal which
includes de-nuclearization as an essential part of the package.
However, the underlying conditional approach to aid seems to be
the main line of Seoul’s strategy in dealing with the North over
255
the next few years of Lee Myung-bak’s government.
Unification, the long-term stated dream and goal of both
Koreas, therefore remains elusive. In the new situation, the South
Korean public seems to be loosing interest in the goal, and is
definitely not in a special hurry to reach it. Meanwhile, the North
Korean decision-makers are quietly but decisively opposed to it.
The North Korean commoners might want unification, but they
have no means of exercising influence on government policy.
And, l ast but not l east, the great powers, i ncl udi ng the
increasingly important and influential China, are not very
supportive of unification either: they judge that a divided Korea
will serve their interests better. All in all the situation does not
sound encouraging. However, there is reason to hope. It seems
that in the long run the fate of Korea will be decided not by
negotiations between the two Korean governments, but by social
changes and domestic developments within both countries
and in particular, within North Korea itself. In the recent decade
or so, the North Korean populace has learned a lot about the
lifestyle of the South. The exchanges conducted as a part of the
“Sunshine Policy” played some role in these changes, but in most
cases the information has filtered through the remarkably porous
border with China.
There are political changes as well. The Pyongyang
government’s ability to control its people is clearly in decline.
There might be still a long way to go, but it seems that sooner or
later the North Koreans will be able to express their feelings and
dreams, and there is little doubt that these dreams have the
potential to become the leading force for national unification. As
history had demonstrated a number of times, very often the
complicated diplomatic constructions and calculations of power
elites are swept away by the force of popular feeling. Despite of
all caveats, Koreans of the North and South still see themselves
as one nation, and this perception, if it does not materially fade,
will eventually decide their fate.

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