No future without social integration

Oh Jong-nam

The author is the chairman of Human Development Institute, former executive director of the IMF, and a member of the JoongAng Ilbo Reset Korea Steering Committee.

The International Monetary Fund lowered this year’s growth estimate for South Korea to 1.5 percent in the last month’s issue of the World Economic Outlook. The global lender has cut its outlook for the Korean economy for 2023 every quarter since April 2022. At such a rate, the Korean economy would be squeezing out a growth nearly halved from last year’s 2.9 percent. Given its confidence in Korea’s growth potential, the IMF’s consecutive downgrade in the outlook for the country should not be taken lightly.

South Korea has been a poster nation who had achieved both economic success and democratization. The income per person fell short of $100 when the government first released its five-year economic development roadmap in 1962. It was in 1973 that the country was able to meet the extreme poverty line set by the World Bank, or $1 per day and $365 per year. The country weathered global oil shocks and the 1997-98 Asian financial crises and other setbacks to achieve the per capita income of $30,000 in 2017. Also, ever since the direct presidential vote was institutionalized in 1987, no candidates have challenged the outcome of the elections held every five years, regardless of how marginal the vote difference was.

South Korea is regarded as an exemplary case of successfully overcoming poverty, accomplishing economic development and achieving political democratization at the same time. Although its territory on the world map is quite small, or 109th in land size, the country is home to 51.55 million people, the world’s 29th largest, generating the world’s 10th largest GDP of $1.7 trillion. In 2022, the country was the world’s eighth largest trader with trading volume worth $1.4 trillion. In 2021, the UN Conference on Trade and Development changed South Korea’s status from a developing country to a developed one. The upgrade was the first since the UN body was founded in 1964.

But not all’s well for the country. Although the per capita income has gone above $30,000, many complain that their living conditions have not improved from 1994, when they earned $10,000 per person. Owning a house has become an unreachable dream as making ends meet remains challenging for many. Korea has had the highest suicide rate among the Organization for Economic Cooperation and Development members since 2003. A higher median income does not mean better well-being and individual contentment. It won’t be the high-income nation we had envisioned if people have lost hope even when they are richer.

“The Affluent Society,” a 1958 book published by Harvard economist John Galbraith, challenged the conventional economic model to call for more focus on self-restraint for general well-being than on blind adherence to growth.

The narrow vote difference in presidential elections mirrors the extreme divide in Korean society. The 2021 survey on social integration by the Korea Institute of Public Administration, which was released last year, highlighted the sharp division of our society. The ideological conflict between the conservatives and the liberals was cited as the most serious conflict, followed by the friction between the rich and the poor, union and management and different age groups. The results of the survey suggest that social discords originate from the selfish nature of stakeholders and a lack of understanding among individuals and groups.

In sociological terms, social conflict refers to a struggle between two or more people who oppose and compete with one another to gain power, social status or limited resources. Social conflict could be a natural phenomenon in a democratic society respecting the pursuit of individual interests and different opinions. When appropriately managed, social conflict can energize national progress as the process of settling social conflicts can improve the system and social integration. But the layers of conflicts across ideology, income groups, workers and employers and ages are scarring many people. We tend to draw a line and disagree or distrust those on the other side. While local governments, small or big, fight one another with deep-rooted regionalism, diverse interest groups, including civic groups, endlessly condemn the other party. The chain of conflict is hampering any further progress in our society.

Other advanced countries also undergo political, labor-management, environmental and other conflicts, but they deal with them through compromise and mediation. Heated issues are usually left to expert groups instead of the central government. Thanks to the process, their society accepts the outcomes of an agreement. The governments also include stakeholders from the early stages of devising a policy.

Sweden runs an independent investigative body that looks into every new bill and policy proposal. The committee investigates whether the proposed project serves the national interests and well-being of the people. The results are humbly accepted by political parties as well as the general public. The Netherlands engages public opinions from the planning stage of major national projects. Such examples show that it is wiser to pay heed to the voice of the other party based on trust to come to a reasonable compromise than otherwise.

The time has come for Koreans to concentrate on integrating the divided society. We are warring with one another toward impulsive destruction. We can hardly afford conflict and division in our society in a tumultuous period that demands a complete integration of national capabilities. In his 1982 book “The Rise and Decline of Nations,” Mancur Olson (1932-1998), an American economist and political scientist, offered interesting insights about the common feature of Germany and Japan. The two countries were able to rebuild their devastated economies after various interest groups — a major culprit in harming their country until World War II — were disbanded after their defeat in the war.

Social integration is essential for the sustainable advance of our society and economy. As long as social conflict serves collective selfishness and hampers social unity, the future of the country is gloomy. We must establish a culture of debate and dialogue based on mutual trust and tolerance. Leaders of our society must set a good example to unify the country so that it no longer faces a downgrade by the IMF.

When facing conflicts of interests, both individuals and groups must try to solve them through dialogue and compromise. Stanford University Professor Francis Fukuyama, in his 1995 book “Trust: The Social Virtues and The Creation of Prosperity,” equates trust with “social capital” to argue that trust among community members can fuel economic growth. He regards mutual trust as the staple food for economic growth, democracy and a healthy community.

Confucius said, “Three things are necessary for government: weapons, food and trust. If a ruler cannot hold onto all three, he should give up weapons first and food next. Trust should be guarded to the end.” He also advised that a country cannot stand upon losing the trust of the people.

How can we build up the quintessential social capital of trust? We must start by accepting differences with others and try to harmonize for a unified society. We must teach our children to have trust, communicate with reason, and learn to compromise from an early age. Schools must teach civilian rights and obligations. Advanced countries like the U.S., France, Germany and Japan teach the virtues as citizens of a democracy to effectively deal with conflicts from an early age. Matured citizenship is demanded more in the age of artificial intelligence and fourth industrialization than ever. We must defend the hard-won economic progress and democratization and create a better country based on mutual trust. Every member of a society must chip in and lay the brick of trust.
Translation by the Korea JoongAng Daily staff.