Korean Chair Questions Myths
By Sally Acharya

(From American Weekly, Nov. 28, 2006)
Page 2 of 3
What really fed the Korean ‘tiger’
When it comes to the Korean peninsula, there is much to teach and learn. After all, the economic success of the resource-poor “East Asian tigers” of Hong Kong, Singapore, Taiwan, and South Korea startled the world, and caused economists and policy makers to wonder how it could be duplicated by other impoverished nations. There is a widespread impression that the “Korean miracle” was made possible in part by a government policy that promoted selected heavy industries, such as iron and steel. The belief has been used to bolster an argument that a planned economy, or certain elements of it, can be key to economic success for a developing country.

The trouble is that’s not what happened in Korea, Yoo says. There was indeed a policy to promote certain industries, but the “miracle” was fueled significantly by the increase in light industry—shoes, garments, plywood—and a focus on exports, he says.

Ironically, economists at the time would not have recommended such an unusual path, he says. The “East Asian tigers” broke with economic dogma to pursue an export-driven model of development, focusing not on becoming self-sustaining, which was the fashionable goal of poor nations at the time, but on manufacturing exports to developed nations.

Because of a fortunate confluence of circumstances, it worked. But not because of a policy to favor a select group of industries—a policy that, he says, often had negative impacts that have been disguised by the economy’s overall success. The mere existence of a particular policy in a country that experienced economic success does not, he warns, mean the policy caused the success, or that it should be copied.

“There are many, many things a government can do, and I’m not denying the [Korean] government might have done some things that were positive at the time,” he says. “But there are many developing countries trying to get lessons from the Korean experience. If they think they could get similar results by copying that policy, it would be a disaster.”

Pursuit of nuclear weapons
If the Korean peninsula provides one example of a successful if often misunderstood economy, it is also home to a regime that Yoo describes as successful in a negative way. North Korea has succeeded in becoming, quite possibly, the most authoritarian regime in the world.

“I don’t think, throughout history, any regime has been more repressive,” he says of the heavily militarized nation, in which more than a quarter of the population is enrolled in some form of the military.

The small and contained peninsula, with its easily guarded borders, is far more tightly sealed than Stalin’s sprawling Russia, Mao’s vast China, Saddam’s Iraq, or today’s Iran. Surveillance is pervasive and effective, and the amount of information that gets into, or out of, North Korea is miniscule.

Why is Kim Jong Il, the country’s hereditary dictator, intent on pursuing nuclear arms? Yoo thinks the reason is economic. North Korea has a standing army of one million; with reserves and paramilitary, the number is close to 6 million. In contrast, the United States has an active force of 1.4 million that climbs to about 2.5 million with reserves. North Korean’s military is exceeded only by China, Vietnam, and Iran, and in comparison to its population, is the largest in the world.

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