[Viewpoint] Koreans must push global drive
In late 1994, former president Kim Young-sam outlined his vision for Korea, declaring the nation’s drive for globalization through one word “segyewha,” meaning globalization. In what was seen as an unprecedented move by a Korean president at that time, the segyewha policy attempted to go much beyond financial liberalization, encompassing a broader range of social, political and cultural aspects.
While many achievements were made during the globalization policy, including improved transparency initiatives such as real-name banking, many felt the segyewha drive fell well short of its goals. In the end, it was simply thought of as a buzzword used by government officials to project a higher status or national identity but without any tangible internal changes to back up the rhetoric.
By 1997, Korea was entangled in its worst financial crisis since the 1950-53 Korean War and had to be rescued by the International Monetary Fund to overcome a liquidity crunch. In return, the IMF demanded fundamental restructuring take place in the corporate and financial sectors as a means to promote more transparency and openness toward globalization.
Initially opposed to the IMF methods, then-president Kim Dae-jung quickly embraced the IMF model for a more globalized Korea after taking office and eventually pushed through his New Millennium Vision, which highlighted many aggressive goals for globalization and changing the mind-set of the Korean people to adapt better to change.
To Korea’s credit, much of the restructuring and change that was pushed on to them was quickly adapted to and overcome, and Korea was able to pay back the IMF loans in record fashion. Korea is now much more open and has made enormous strides as the 13th-largest nation worldwide in terms of GDP.
A question I often face is, “Is Korea a truly global country?” While it is easy for many Westerners to say “no” and then cite the reasons why, I decided to look at it from a different angle. Having lived in Korea both before (1989-1997) and after (2005-present) the Asian financial crisis, my overall feeling is that Korea has made enormous strides toward globalization, but as with any situation, there is always room for improvement.
To advance on its success and continue the momentum, my opinion is that Korea must first look internally to resolve prevailing bedrock issues before it can project outward or globally. This sounds simple, but in reality is very complex with a whole host of issues related to the nation’s business culture. Once this is accomplished, true globalization may be achieved.
For Korea to be global, first the government should communicate better with the public. To effectively implement initiatives such as globalization, the general public must fully understand and be convinced of the merits. This is a key area where the government has plenty of room to improve. Creating global mindsets is the best way to become global.
Occasionally I am asked what can be done in Korea to make the country friendlier to foreigners. Having lived in Korea for 14 years, I feel Korea has made strong efforts in this area. There are plenty of English signs, transportation is easy and convenient, and the Seoul Global Center is a one-stop shop for foreigners to get assistance on a wide range of needs.
But the key is that Korea must first be a friendly place for Koreans to live in all aspects of daily life, and then it will follow that foreigners will like it as well. Recent improvements along the Han River, at parks and other areas are making Korea a more eco-friendly place to reside and are a step in the right direction.
As a result of IMF-induced restructuring of its corporate and financial sectors, Korea has benefited immensely from foreign direct investment (FDI), which peaked in 2004. From that point, much of the advancement was halted due to a backlash against foreign investment due to companies such as Lone Star. Since 2004, net FDI (FDI inflow minus outflow) into Korea has steadily dropped, even falling into net minus figures in 2008.
A combination of government nationalism fueled by local media outlets portrayed foreign businesses as evil operators utilizing “eat and run” techniques, repatriating their profits back to their home countries. This type of nationalistic fervor is not a healthy way of encouraging FDI, as the primary reason for such investment is to repatriate profits. To truly be global, Korea must reciprocate, as the likes of Samsung, LG and Hyundai are allowed to make profits overseas and repatriate them back to Korea.
As an individual, I generally like to look at the glass as being half full. Over the last 10 years, Korea has made tremendous progress in globalizing and now has a solid foundation, the technological know-how and financial wherewithal to be a leader from which other countries can learn. Korea is a shining rags-to-riches story and must use this success for the betterment of not only itself, but for others to benchmark.
To achieve full globalization and the dreams of the segyewha policy, Koreans now have an opportunity to look deep inside themselves, make the difficult social and multicultural changes, and let the country emerge as a true global player. Just as Koreans quickly overcame the financial crisis of 1997, I believe all of Korea will rally to make the country an attractive investment choice and a sought-after vacation destination and place to reside for foreigners.
*The author is a managing partner at EDGE, a part of Publicis Consultants, in Seoul.
by Jeffrey Bohn