Ingredients for growth in South Korea

 •  Filed under International economics

Just came across this article by Richard N. Cooper from May 2013:

Korea is a remarkable country. It was one of the world’s poorest countries in 1960, poorer than Ghana, Senegal, and a number of other African countries. Moreover, its future economic prospects were thought at that time to be dismal: it had no consequential natural resources, a high population relative to the arable land available, and above all the Confucian ethic, with its reverence for the past and its resistance to change. Koreans demonstrated just how wrong such assessments can be.

Cooper continues:

Korea showed that a stable social structure, right incentives for effort, saving, and risk taking, and engagement with the world economy can produce dramatic growth even in an economy with seemingly limited prospects. To be sure, the Koreans occasionally made mistakes ... [but they] recognized and corrected their mistakes relatively early, rather than continuing to pour good money after bad.

High performance

According to my reading of IMF's data, South Korea's real GDP grew annually by 3.7% after the crisis (2009-14). Living standards continue to increase at an impressive reate. (Between 1999-2007, the economy was expanding each year by 5.4% on average.)

Daniel Tudor says that "South Koreans have written the most unlikely and impressive story of nation-building of the last century."

A Slovak newspaper recently published a long essay about South Korea with a headline that said `How a Successful Country is Created'.

Under the surface, there are serious problems often related to corruption, but it looks like South Korea will continue to inspire.

More praise

The Economist wrote a few years ago that "[t]o outsiders, South Korea’s heroic economic ascent is a template for success. But now it has almost caught up with the developed world it must change its approach."

South Koreans lay great store by education and hard work. They put in 2,200 hours of work a year, half as much again as the Dutch or Germans. Their reaction to the 2008 slump was to work harder still. During the 2009-10 recovery, reckons Richard Freeman of Harvard University, Korea had the second-largest increase in hours worked in manufacturing, after Taiwan. And the quality of labour has been even more important than the quantity. Along with Finland and Singapore, Korean schools regularly top international comparisons of educational standards

... [Koreans] stress a long legacy of openness and innovation. Before the wars of the 20th century Korea was a bridge between the more closed worlds of China and Japan. It developed movable metal type two centuries before Gutenberg; its last imperial dynasty benefited from checks and balances more extensive than in its Chinese prototypes. The more Korea brings these qualities of domestic innovation to the fore, the better its chances of blazing a new trail for itself.