IntroductionSouth Korea’s remarkable development is one of the century’s successful stories, gaining many metaphors and nicknames from the western media, namely : “From rags to riches”, “Miracle on the Han River”, “from poverty to prosperity”, “Asia’s next giant”, “Land of morning calm”, and “Korean phoenix: a nation from the ashes”. Today, it is among the richest countries in the world and its economic success has been often advertised as a model for third world development.South Korea was once regarded as one of the poorest country in the world. Japanese colonial domination (1910-1945) followed by the Korean War (1950-1953) resulted in national division, military confrontation with North Korea, and political instability, which led to economic underdevelopment and poverty in the southern provinces of Korea that made up the Republic of Korea or commonly known as South Korea.Overcoming various obstacles on the rocky path of development, South Korea’s economic growth and rapid industrialization took off in the early 1960s under the military government of Park Chung Hee. South Korea’s economic success is a prototype case of state-guided market economy, often categorized as state development capitalism where the state has more control over the economy rather than market forces.
The World Bank ascribed the economic miracle in East Asia to the government’s effective public policy.Robert Lucas described the Korean economic miracle as achieved through “learning by doing”.Joseph Stiglitz in his edited volume Rethinking the East Asian Miracle concluded that “whether one calls it a miracle or not, the increases in income and reductions in poverty in East Asia were real and impressive”.Another distinctive feature of South Korea’s development was the concentration of chaebols (huge family-owned conglomerates) under the hands of the government. Popularly known “Korea Inc.”, represented the symbiotic relationship between the government and businesses which were the core of South Korea’s developmental state.Developmental StateChalmers Johnson is the pioneer of the concept of developmental state.
A developmental state reflects a state-interventionist economy with the combination of public control and private ownership. Strategic industrial policy constitutes the central component in the developmental state model. Johnson- “The developmental state is a state that is focused on economic development and takes necessary policy measure to accomplish that objective.”Based on institutional arrangement, his model of developmental state comprises the following characteristics:Economic development in terms of growth, productivity and competitiveness, is the primary priority of the state.Conflict of goals avoided by absence of any commitment to equality and social welfare.
Goals formulated are rendered concrete by comparison with other likewise economies.State intervention is circumscribed by the commitment to private property and market.Organizational and institutional links between bureaucrats and private firms constitute crucial components in policy formulation and implementation.A political system in which politicians “reign” while bureaucrats “rule”.In case of South Korea, developmental statists stated that South Korean state had its own developmental objectives based around the hegemonic ideology of “rich nation and strong army” (bugukkangbyeong). According to the statists, the state is assumed to prevail over society based on the dichotomy of state and society.South Korean government adopted extensive market conforming economic policies through macroeconomic stabilization, institutional reforms for export promotion, and selective liberalization of foreign exchange and interest rates, with strategic intervention plans through plan rationale, industrial targeting, mobilization and selective allocation of resources.
In layman terms, the state virtually dictated the nature and direction of market forces. This was only possible with the state’s unique organizational features, where bureaucrats formulated and efficiently implemented coherent and consistent economic policies. First RepublicPresident Syngman Rhee followed an import substitution industrialization policy. In the post-Korean War years, Rhee’s administration heavily relied on U.S.
aid for reconstruction, food and relief, and supplies of building materials. On a positive note, South Korean society witnessed rapid expansion of education and land reforms. Economic Development Council was created in 1958 by Rhee’s administration to draw up plans for long term economic development.Third and Fourth RepublicFrom 1960s onwards when President Park Chung Hee came into power, his military government focused on freeing South Korea from the economic dependence on US aid, which was reflectedin the motto charipkyongje ie.
, self-reliant economywith the slogan of “construction on the one hand, national defense on the other” (“ilmyonkonsol, ilmyonkukpang”)under the First Five Year Plan (1962-1966).Park’s government initiated a full-fledged export-led economic growth strategy. His economic development policies were driven by economic nationalism. It was Park’s admiration towards the Japanese state-directed economic development that laid the base of a state-directed planned program of economic development for South Korea. Later Park appointed Lee Byung Chul (Samsung) as the chair for the Promotional Committee for Economic Reconstruction, which marked the beginning of the partnership between the government and the entrepreneurial elite where the state was firmly dominant.
Comprehensive government-directed planning was adopted under the Five-Year Economic Development Plan:- (i) nationalization of all commercial banks, and (ii) reorganization of the banking system to give the state control over credit.Also established an Economic Planning Board (EPB) which acted as a pilot agency of the state.Normalizing relations with Japan proved to be advantageous for Park’s administration as Japan became a major foreign investor in South Korea.Vietnam War boom also remain an important contributor for South Korea’s economic expansion.1970s saw a shift in the economic policies. Park chose the path of heavy industry development under the Third Five Year Plan, driven by the motive of accelerating defense industrialization and continued goal of economic autonomous. This phase is referred as the HCI phase (heavy chemical industrialization) where investment on heavy and chemical industries was prioritized. For this, more and more chaebols grew and eventually came under the government radar.
However, in the South Korean system the chaebol had to be efficient and produce results for gaining government support.Side by side, transformation of the rural areas also accompanied the industrialization process in South Korea. Saemaul Undong ie., the New Village Movement initiated in the 1970s exemplified an ideal symbiotic relationship between the state and the society. This movement was an attempt to mobilize the rural communities for the purpose of carrying out modernization efforts, encouraged self-help and adopted new progressive values.
It not only benefitted the agrarian families but also formulated the path of social mobility and eventually reduced poverty by providing price support to cash crops. Family planning which was initially an integral component of the Five Year Plans got incorporated into the Saemaul Movement as well. The policy planners believed that reducing birthrate was essential for fast economic growth and modernization.Saemaul Undong (New Village Movement)Saemaul Undong or the New Village Movement was a community-based movement for change and development, based on specific institutional principles and community participation. It was initiated by Park Chung Hee’s government in 1970. On 2nd April 1970 during his meeting with provincial governors, in his speech he mentioned of a New Village Remodeling Movement and its launch:”…we can call it a movement building a new village or building a frugal village, either way is fine. … the farmers just sitting around lamenting their fate, blaming the government for not helping them to be better off, and complaining as if others are responsible for them being badly off cannot enrich themselves.
…Help to those without will is a waste. I mean that towns with robust willpower should increase here and there. Even though the numbers of such towns at first may be meager it shall be as such while the towns fallen behind of lazy residents be so small in numbers that we can rarely see them. That the opposite of reality of now shall happen… .”As the name suggest, sae means new for change, development, progressive renewal; maul means village/community indicating village, region, regional and social communities; and undong means movement. Saemaul jeongshin (spirit) consisted of diligence, self-help, and cooperation which were primarily promoted by the government. Diligence represented pioneering spirit for strong work ethics.
“An early bird catches the worm.”Self-help represented ownership spirit to inculcate a sense of responsibility and ownership.”Heaven helps those who help themselves.”Cooperation represented communitarian spirit for mutual help.”Two heads are better than one.”Why was it adopted?When the rural development plans of the 1960s failed, but on the other hand the Five Year Economic Plan became successful in the urban areas, it generated a wide inequality gap between the two. Park’s government then found the saemaul movement suitable in improving and boosting the rural economy, and also as a device to strengthen his rural support base. For this, the government initially provided funds and basic materials to all villages, and organized necessary institutions.
The villagers would then participate as labors and contribute other resources if needed. At the end, the development of each village was assessed annually, and the ones with significant results were recognized by the government and given further supplies. This resulted in enhancing the voluntary will of the people to participate and their commitment to be “resource wise” in their use of land, labor and capital, which made the movement successful.Goals and purposeThe ultimate end goal of the saemaul movement was to transform the traditionally poor rural village into a progressive economical community by improving both the quality of life and standard of living, accomplished through exchange between rural and urban regions.
On an economic note, the purpose of the movement was to eradicate idleness, poor work ethic, under-utilized human power, and transform it into more productive laborers. ResultsThree key aspects of the movement:Spiritual enlightenment instilling the “can do” spirit.Improvement in the village infrastructure.
An increased income (standard of living)Others included development of primary agricultural cooperatives; development of grassroot democracy; improvement in the quality of migrated farm labor; and progressive attitudes of the rural populations.Infrastructural improvements includes:-Roads paved for automobiles.Thatched roofs modernized with slate.Well water system simplified into pipe system.Electricity made available to all.Telephone installed in every village.Community hall in each village for town meeting.
Saemaul Undong also generated a Green Revolution in the country. In 1971, Unification Rice (Tongil-byeo) was created, and by 1977 its yields per hectare increased by 30% which led the government to announce the proud achievement of rice self-sufficiency. The combined efforts of the community and government raised the country’s living standard as well. In doing so, the saemaul leaders played a central role. This transformation of an outdated agrarian society into a modern one became the ideological base for the development of South Korea.
Likewise, the saemaul movement instilled a positive attitude and “can do” spirit in the minds of the Koreans through the saemaul spirit. Mental transformation was more important than the increase in the agricultural production for building a wealthy society and transforming the traditional and conventional way of thinking.”We can do it! We will do it! We must do it” + “Diligence, Self-help, Cooperation”Structure, Education and Training Centres The government categorized the villages based on the degree of their accomplishment and independency:-The basic villageThe self-help villageThe independent villageIn January 1972, the government started a systemized education of the saemaul undong spirit in the Doknongga Yeonsuwon (Diligent Farmer Training Institute) of Nonghyup University.
Later in 1973, it became Saemaul Jidoja Yeonsuwon (saemaul Leader Training Institute) for educating saemaul leaders. It comprised of both men and women from farmers to high-level public officials who had little farming experience or interest. The leaders then spread the working spirit by visiting nearby towns n villages, local schools too preached the same.The NCM Training Center was established in 1972 under the leadership of Jun Kim, Professor of Agricultural Economics at Seoul National University’s College of Agriculture. The normal length of training of training was four days but it could be extended up to two weeks as well at the request of the visitors. Also, a one-day program was provided to meet the schedules and requirement of the visitors.
In May 2012, the Korean government decided to promote the Saemaul Undong experience as an Overseas Developmental Aid model. Since then 16 countries in total has adopted the system: Mongolia, Cambodia, Nepal, Philippines, China, Japan, Russia, Vietnam, East Timor, Afghanistan, Sri Lanka, Uzbekistan, Iraq, Madagascar, and North Korea. Their main projects aimed for improvement in living environment, infrastructural improvement, income generation, and cultural exchange.CONCLUSIONTonybee explains that South Korean development was a process of challenge of poverty enabled growth and military authoritarianism, and its response. The economy and society developed with the guidance of the state and the efforts of the people.
Reaching up the level of one of the Four Asian Tigers, it is actually difficult to compare South Korea’s economic development with other nations due to its unique features, actors and the given environment then. Thus, the combination of developmental ideology, strategic intervention, and the unique organizational structure of the state becomes critical in understanding South Korea’s dynamic economic growth. However, it is equally important to note that it was the people’s determination to change overall that accelerated and accompanied the government’s undertakings and policies.
Saemaul Undong serves as the classic example of the symbiotic relation between the state and society. Although Saemaul Undong began as a top-down government-led initiative, it was able to attain the perceived goals by promoting a bottom-up development strategy and utilizing community involvement. Hence, popular participation became the reason for the success of Saemaul Undong.
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