61173671 Korea Impossible to Possible

KOREAImpossible to Possible

2008 EditionCopyright 2008Published by Korean Culture and Information ServiceMinistry of Culture, Sports and Tourism

15, Hyojaro, Jongno-gu, Seoul, Republic of KoreaTelephone: 82-2-398-1910-9Fax: 82-2-398-1882

All rights reserved Korean Culture and Information ServicePrinted in SeoulISBN 978-89-7375-043-6 03340Korean Government Publication Number11-1371030-000015-01For further information about Korea,please visit: www.korea.net

K O R E AImpossible 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 ArtsHorace H. Underwood _ Teaching the World: Korean Education Becomes

Global Education

Melissa Chiu _ Korean Fine Arts

Roger Garcia _ Korean Cinema

174 International RelationsDonald 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 _ Koreas Growth Seen from Abroad: Successful Nation-

Building

220 North and South, 60 Years OnMarcus 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

KOREAImpossible toPossible

IThe 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 countrys first democratic elections are held. (May 10, 1948)

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2

3

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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.

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4

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2

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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

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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.

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2

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The Saemaeul Movement, or New Community Movement, is launched. (Sept. 1971)

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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.

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13

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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.

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2 4

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Opening ceremony of the 1988 Seoul Olympics.

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1

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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.

29

1

1 The first inter Korean summit meeting between former South Korean President Kim Dae-jung and the Norths 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.

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1

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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

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1 Semiconductor Research Center of Samsung Electronics.

Samsung's 64 Gigabyte NAND Flash memory.

2 Koreas 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, Koreas high-speed train that was launched on April 30, 2004, after 12 years of construction work.

5 LG Electronics developed and launched the worlds biggest liquid-crystal display, or LCD, television on Sept. 6, 2004.

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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.

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1

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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.

39

1 UN Secretary-General Ban Ki-moon gives a lecture in front of a plaque of UN flags.

2 The countrys 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, Koreas first non-verbal stage show that features a mixture of traditional Korean percussion and dance.

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4

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41

3

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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 mens 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

43

Children run along the garden square located in front of City Hall during the Seoul Festival in May 2008.

KOREAImpossible toPossible

IIViews from Abroad

The Republic at Sixty Guy SormanM. S. GorbachevZhang YunlingKazuo Ogoura

Still Growing Peter J. KatzensteinJeffrey D. JonesShi YuanhuaSandip Kumar Mishra

A Changing Society Carter J. EchkertMichael Breen

Education, Culture and the Arts Horace H. UnderwoodMelissa ChiuRoger Garcia

International Relations Donald P. GreggKishore MahbubaniFen Osler HampsonLouis T. Dechert

North and South, 60 Years On Marcus NolandSelig S. HarrisonJohn RichAndrei Lankov

46

South Korea at sixty in the Western eye has an imageproblem due to the Bengali Nobel prize winner,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 countrys reputation, not as calm

but as dynamic, so far with limited success: dynamism lacks any

specific Korean flavor.

Calm or dynamicWithin 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. Isnt it dynamic enough? Or is it too Buddhist in a

South Korea at Sixty

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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 certain 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 Frenchjournalist, economist,philosopher and author oftwenty books oncontemporary affairs,covering the five continents.He is a regular columnist forLe Figaro in France, the WallStreet Journal and CityJournal in the United States,and other publicationsaround the world. Mr.Sorman taught economics atthe Paris Institute of PoliticalSciences from 1970 to 2000.He has held several publicoffices, including advisor tothe prime minister of France(1995-1997) and deputymayor of Boulonge, nearParis. He was appointed byPresident Lee Myung-bak asa member of the GlobalAdvisors and Friends ofKorea 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-taeks Painted Fire, Kim Jee-woons A Tale of

Two Sisters, Park Chan-wooks, 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 nationalsymbol. Pictured is UNESCOWorld Heritage site,Seokguram, located inGyeongju, Gyeongsangbuk-doProvince.

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-yeols 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

Koreas 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

economic benefits . Strong national brands sel l : world

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 expectationsIn 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 Koreas

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 doesnt 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, especially 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 doesnt 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

nationalism, close to jingoism, take root easily 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 playerSouth 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 Koreas

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 anybodys 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-junes video artworkon display at theGwangmyeong Cycle RaceDome Stadium inGwangmyeong, Gyeonggi-doProvince.

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 well-geared to the first 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 Rands 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 yearsI have no doubt about Koreas 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

Sixty years may seem like a short period of time compared tothe vast history of the world. But for the Republic of Koreaand 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 Peoples Republic of

Korea. It was not easy to settle this political clash, 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

countrys 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 toRussia in Southeast Asia

KOREA Impossible to Possible

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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 Asias 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-woos 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

during this time had a deep effect on all the countries

surrounding the Korean Peninsula. After this followed the

establishment of Koreas 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 SergeyevichGorbachev was the lastGeneral Secretary of theCommunist Party of theSoviet Union and the lasthead of state of the USSR,serving from 1985 until itscollapse in 1991. Gorbachev'sattempts at reform perestroika and glasnost as well as summitconferences with U.S.President Ronald Reagan,contributed to the end of theCold War. The summitmeeting between Gorbachevand Roh Tae-woo, the-thenpresident of the Republic ofKorea, in 1990 in SanFrancisco paved the way forthe establishment ofdiplomatic relations betweenthe two countries. He wasawarded the Nobel PeacePrize in 1990. Gorbachev iscurrently the leader of theUnion of Social-Democrats.

MikhailSergeyevichGorbachev

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 betweenPresident Roh Tae-woo andMikhail Gorbachev, formerGeneral Secretary of theCommunist Party of the SovietUnion.

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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 years presidential election reflect

this truth.

After the establishment of diplomatic relations, tradebetween our countries grew exponentially. Brand namessuch 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

dynamic and vast business experiences 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

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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 fora planned East Siberia-PacificOcean 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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Whereas ancient Korea was established several thousandyears ago, the Republic of Korea was established just 60years ago. The Peninsula was split after the World War II. The

Republic of Korea was established in the south and the

Democratic Peoples 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 believe that South Korea will make more impressive

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 May8, 1945, is the Director ofAcademy Division ofInternational Studies,Chinese Academy of SocialSciences (CASS) andProfessor of InternationalEconomics. He was theDirector of the Institute ofAsia Pacific Studies, CASSand a member of ForeignRelations Committee,National Committee ofChinese Peoples PoliticalConsultative Conference. His major books include:International Environmentfor China in the Coming 10-15 years (2003), East AsianCooperation: Searching foran Integrated Approach(2004). East AsianRegionalism 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

economic system, and develop marketability and inter-

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, thebiggest in the world, produces40 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 Enterprises increased the innovation

dynamics in electronics and telecommunications, while large

scale development of foreign investment, industrial restructuring

and transfer was carried 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 lessonsSouth 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

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thought that South Koreas 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

competitive. During this period, 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

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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 political reform and economic structural

adjustment would have been carried out earlier, and if some

proper reform adjustment were employed 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.

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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 Koreas marketability and

Koreas first hypersonic speedairplane released at KoreaAerospace Industries inSacheon, Gyeongsangnam-doProvince.

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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 third experience of South Korea's economic

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 time, 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 seized the opportunities of the world

electronics industry and became a major provider 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 relationsFor complex reasons, China and South Korea hadnt 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

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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 Chinas 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 didnt 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 Chinas entry

into the WTO, South Koreas investment in China kept

expanding due to the prospects of Chinas 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 close internal connection for the economic

development of the two countries. Noticeably, Chinas

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 Chinas

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 Koreas investments in China have mutual

promotion ties. South Koreas investments drove the

development of exports, including chemistry, plastics, chemical

fiber, electrons, electric devices, cars and machines. Of course,

South Koreas investments in China dramatically promoted

Chinas 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. Chinas great

potentiality in development and active creativity in the

technology are the advantage for the two countries 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 DevelopmentKorea, 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

institutions. 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.

The rapid economic development of Japan as well as

Japanese economic and technical cooperation contributed

significantly to the early stages of Korean economic

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

1990s. 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.

KOREA Impossible to Possible Korea: Past, Present

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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 opening of the Korean financial as well as

commodity markets to foreign investors and traders, coupled

with the restructuring of Chaebols and of the labour market,

contributed a great deal to Koreas 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 IMFs conditionalities.

Looking back at the history of Korean economic

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

problem to be tackled, particularly in view of the rapid

demographic changes of the Korean society.

Kazuo Ogoura is president ofthe Japan Foundation, and aformer Ambassador toVietnam, Korea, and France.Graduated from theUniversity of Tokyos Facultyof Law and the University ofCambridges Faculty ofEconomics, he joined theMinistry of Foreign Affairs,where he served in variouspositions, including Director-General of Cultural AffairsDepartment (1989-92),Director-General ofEconomic Affairs Bureau(1992-94), Deputy Vice-Minister for Foreign Affairsand Japanese G7/G8 Sherpa(1995-97).He is also an InvitedProfessor of InternationalPolitics in the Economics andBusiness Department ofAoyama 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.

76

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 Koreas 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 DevelopmentAfter 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

international circumstances, particularly 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 regimes could be considered as transitional

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-jungs 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.

This aura of traditional authority attached to the

presidency, and other titles or positions was politically targeted

during the Roh Moo-hyun presidency. In fact, Rohs 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 Rohs

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 DiplomacyThe 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 which the Korean government has obtained

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 revival of a strong ethnic identity with 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

nationalism be canalized or diverted, consciously or

inadvertently, toward an anti-Japanese movement.

The U.S. and Japan should view the rise 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 functional sense of the word. The degree of the

80

interdependence of trade among East Asian countries (Korea,

Japan, China, Taiwan, and the ASEAN nations)has already

exceeded the degree of interdependence among NAFTA

countries and has, more or less, reached the level of the

European Union at the beginning of the1970s.

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

in check the rise of China-centralism and the parochial

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.

82

It is a great honor to be invited to contribute a short paper tothis commemorative volume marking a milestone in Koreanhistory. 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 Asias 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 Koreas 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 Impossible to Possible Advantages of Adversity:

South Korea at Sixty

STILL GR

OW

ING

83

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 Koreas history and in the history

of capitalism.

South Koreas phenomenal accomplishments are worth

noting. But they are not unique. Taiwan became South Koreas

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 Chinas growing economic shadow. Although

Vietnams move to rapid economic take-off is occurring only

now, in the wake of Chinas economic ascendancy, the long run-

up is marked by at times extreme vulnerability to that nations

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 theWalter S. Carpenter, Jr.Professor of InternationalStudies at Cornell University.Katzenstein is President-elect of the AmericanPolitical Science Association(2008-09). In 1987 he waselected to the AmericanAcademy of Arts and Science.He was the recipient of the1974 Helen Dwight ReidAward of the AmericanPolitical Science Associationfor the best dissertation ininternational relations; and ofthe American PoliticalScience Association's 1986Woodrow Wilson prize for thebest book published in theUnited States oninternational 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.

84

sustaining economic growth. Variations in the character of the

state and state-economy linkages are considerable. This is

illustrated well by South Koreas more centralized and Taiwans

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 ata construction site at IncheonInternational 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

underlying economic nationalism that became a crucial

ingredient in the defense of South Korean autonomy.

In Western Europe, under less harsh conditions, vulnerabilityhelped produce similarly beneficial outcomes. If one arrayscountries 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 spoils of capitalism in a dog-eat-dog form of

distributional struggle.

One obvious difference between the West European andEast Asian pattern is the fact that the small Europeanstates 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 political transitions from authoritarianism 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 prescriptio

61173671 Korea Impossible to Possible

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