[OUTLOOK]Reconsidering a ‘failed’ model

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[OUTLOOK]Reconsidering a ‘failed’ model

One of my personal objectives when I accepted a position with Unesco a year ago was to introduce Korea’s history of economic and political development to the international community. Once I began my work, however, I realized that there was no need.
Korea’s experience was already known to developing countries as a desirable model. The numerous social scientists, civic leaders and bureaucrats from developing countries I met were all well acquainted with the Korean model of economic development and were eager to learn more.
Having been educated and trained in a “U.S.-centric” manner, this came as a refreshing shock to me. I had always had the feeling that the Korean development model was somewhat “guilty,” when seen from mainstream Washington’s point of view that only the free market is efficient and fair.
The foremost reason for this feeling was the “original sin” of Korean development: that it was pursued by a dictatorial regime. The Asian financial crisis of 1997 seemed to demonstrate the fundamental failure of the Korean model. It was thought by many at the time that this crisis was brought about by inefficiency and corruption resulting from cozy ties between politics and business, and the Korean model was abandoned as a failure.
The Asian financial crisis gave leftists an opportunity to comprehensively denounce the “development dictatorship” system they had been fighting all those years. To them, the crisis proved that “development dictatorship” had not only been tyrannical, but had failed to maintain sustainable development.
Paradoxically, this claim by domestic leftists coincided with the logic of the neoliberal market supporters represented by the United States and the International Monetary Fund.
For the neoliberals who supported the International Monetary Fund, Korea’s successful development model had always been a sore spot. For a long time, Korea pursued policies that were far from those prescribed by free market supporters, yet managed to achieve sustainable and fair economic development for decades.
For the International Monetary Fund, Korea’s financial crisis was a godsend. In return for granting access to funds, the International Monetary Fund required Korea to implement measures to open and liberalize its market.
This was in keeping with the market-friendly structural adjustment policy that the IMF and the World Bank had been pursuing, consistently and insistently, as the price for the financial assistance they provided to developing countries.
The leftist governments that have taken power in Korea since the financial crisis have been concentrating, together with the IMF, on dismantling the traditional Korean model of development. The leftists of Korea and the international neoconservatives had joined hands to fight a common enemy, the “development dictatorship.”
The result of such a joint venture is familiar to the various developing countries that had to accept the economic policies of the IMF and the World Bank. A sharp increase in the gap between the rich and the poor, the death of domestic industries and the exodus of capital and elite workers from the country that Korea experienced after the financial crisis are some of the aftereffects developing countries have experienced in the past decades.
While Third World countries have been claiming with one voice that the primary obstacles that prevented them from escaping poverty, and the bondage of underdevelopment, are market-oriented policies and the international financial institutions like IMF that represent them, Korea has vigorously accepted these same policies.
What should we do now? Although it’s a little late, the government must start stepping up economic development once again.
Of course, this does not mean we should go back to our old ways. Not only is that undesirable, it is impossible. The jaebol, which were the core of the “development dictatorship” model of the past, no longer answer only to the government, and the laborers of today are not like the laborers of the past.
The waves of globalization and free enterprise have passed the point of return. We cannot return to being the developing country that we once were.
Nevertheless, the role of the government is still absolute. We should immediately stop this folly of dismantling, in the name of the free market and in the name of the ideology of bygone days, one of the most successful development models in the world.

* The writer is a professor of international relations at Yonsei University. Translation by the JoongAng Daily staff.


by Ham Jae-bong

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