[Viewpoint] What does a ‘rich’ Korea mean?

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[Viewpoint] What does a ‘rich’ Korea mean?

American investment bank Goldman Sachs recently published an interesting report. It predicted that if South and North Korea are unified, the GDP would grow bigger than seven of the eight most developed countries, with an exception of the United States, in 30 to 40 years. The report calculated that a unified Korea would enjoy enormous synergy from the combination of South Korean technology and money with the natural resources and labor in the North. The report did not mention unification, yet predicted Korea’s per-capita income to be $90,294 by 2050, second highest in the world and tailing closely the United States, whose per-capita income would be $91,683.

Korea’s capacity and potential have been recognized not just by the prestigious investment bank but by the entire international community. It is no coincidence that President Lee Myung-bak was welcomed with special treatment in his recent visit to the United States. President Lee joined eleven other leaders, including U.S. President Barack Obama, Russian President Dmitry Medvedev and Chinese President Hu Jintao, at the head table at a luncheon hosted by United Nations Secretary General Ban Ki-moon on Sept. 23. The United Nations treated Korea with due honor for being the first to escape the global economic crisis.

But it is too early to celebrate. We are faced with new challenges. When a country’s per-capita national income reaches $20,000, it is confronted with serious social discord. Social polarization that began after the foreign currency crisis in 1997 is still in progress and is even worsening in Korea. The income gap has grown to the largest since statistics started being kept in 1990, and more than half of low-income families are debt ridden.

Unfortunately, the social security net in Korea is still at an infant stage, providing only one-fourth of the average benefits provided in other OECD countries. The welfare benefits include national pension, unemployment benefits, health insurance and basic pension for the senior citizens. Especially a large part of the poor are not protected by the social security net at all. Only 1.58 million of the 5.36 million citizens living with less than the minimum cost of living receive the national basic livelihood security benefit. Some 3.78 million working-class citizens are in a twilight zone. The government’s function of redistribution of wealth is considerably weak compared to developed countries.

At this rate, Korea would be trapped in internal discord before we accomplish inter-Korean integration and become the second largest economy in the world. Korea is facing a moment of historical decision. Just as American activist Jeremy Rifkin had posed the question to the United States, Korea has to choose between the American dream, which values economic development, accumulation of material wealth and independence, and the European dream, which prioritizes sustainable development, quality of life and a sense of community. Perhaps, Koreans have been pursuing the American dream more faithfully than even those in the United States, itself. In fact, Korea had little choice. We defended the country from communist threats with the help of the United States, and we could focus on economic development within the solid boundary of the Korea-U.S. alliance. The choice proved to be successful. Now, Korea has grown, and it is time we become mature and get through challenges on our own.

What we must not miss at this point is that the United States itself is skeptical of the American dream and values. That’s why the European media is supportive of Barack Obama, who is often compared to Franklin Roosevelt. President Obama chose a path of social integration leading to a harmonious world. He is pursuing various reforms by fighting against the vested interests. To the 50 million poor Americans with no health insurance, Obama’s medical reform is a light of salvation. Ten years ago, government spending made up 48.2 percent of the GDP in Europe compared to only 34.3 percent in the United States. In 2010, the second year in the Obama Administration, the U.S. government spending will be 39.9 percent of the GDP, close to Europe’s 47.1 percent. Many people believe that the U.S. government is adopting the European social democracy with an emphasis on redistribution of wealth and social welfare.

Let’s return to Korea’s problem. Should we still follow the old American model? Will we take what the United States considers no longer valid? A new and evolved Korea, not a miniature version of America, is a better partner for the fast-changing United States. Just like President Obama has, we need to seriously consider European capitalism with a human face. Rifkin declared that an American dream that does not pay attention to social security should have been abandoned long ago in the world of increasing risk, diversity and mutual dependency. In order to avoid catastrophic polarization, Lee Myung-bak needs to make preemptive and bold efforts for social integration.


*The writer is head of the Strategic Planning Team of the JoongAng Ilbo.


by Lee Ha-kyung

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