Cover Story Africa
Neo-liberal economists will tell you that South Korea’s rise as an industrial powerhouse is because it followed free market ideas. Not so, says Ha-Joon Chang, the South Korean economist. Nevertheless, his home country’s experience has valuable lessons for Africa. Osei Boateng reports.
The rise of South Korea, a lesson for Africa
I
n 1961, eight years after the war with North Korea, South Korea’s per capita income stood at $82, less than half of Ghana’s at the time ($179). During the war – one of the bloodiest in human history (an estimated four million people were killed in just over three years – 1950-53) – half of South
Korea’s manufacturing base was destroyed. It was no surprise, therefore, that an internal USAID report
in the 1950s described South Korea as a “bottomless pit”. At the time, the country’s main exports were tungsten, fish and other primary commodities. Today, South Korea is an industrial powerhouse, with per
capita income in five figures. As Chang says: “It took the UK over two centuries (between the late 18th century and today) and the US around one and a half centuries (the 1860s to the present day) to achieve the same result…Korea’s progress is as if Haiti has turned into Switzerland. How has this ‘miracle’ been possible?” Most analyses of South Korea’s rise, including Chang’s, ig-
nore the vital fact that South Korea was one of the countries se- lected by the USA – in a chain extending all the way down from Finland, Sweden, Norway and Germany to Taiwan, Japan, etc – that were given economic, military and political help to grow into economic powerhouses in order to act as a cordon sanitaire against the spread of communism. Having said that, the South Koreans still had to pull their
socks and make the “miracle” happen. Chang recalls how General Park Chung-Hee, the father of South Korea’s miracle, came to power in a military coup in 1961 and won three successive elec- tions after exchanging his military uniform for civilian clothes. Not democratic in the true sense of the word, Park propelled
the country’s success via his Five Year Plans for Economic Devel- opment. Halfway through his third term, which was due to end in 1974, he staged an “auto coup” against his own government, dis- solved parliament, and guaranteed himself the presidency for life. “His excuse,” says Chang, “was that the country could ill-afford
the chaos of democracy. It had to defend itself against North Korean communism and accelerate its economic development. [Gen Park’s] proclaimed goal of raising the country’s per capita income to US$1,000 by 1981 was considered overly ambitious,
18 | April 2011 New African
success was nurture certain new industries, through tariff protection, subsidies and other forms of government support.”
bordering on delusion.” But he was unfazed. In 1973, he launched a Heavy and Chemical Industrialisation Programme, which was ambitious in its aims, but under which the first steel mill, the first modern shipyard, and the first locally designed car (made mostly from imported parts) were built. “New firms were set up in electronics, machinery, chemicals
and other advanced industries,” Chang remembers. “During this period, the country’s per capita income grew phenomenally by more than five times, in US dollar terms, between 1972 and 1979. Park’s apparently delusional goal of $1,000 per capita income by 1981 was actually achieved four years ahead of schedule. Exports grew even faster, increasing nine times, in US dollar terms, be- tween 1972 and 1979.” According to Chang: “Te country’s obsession with economic
development was fully reflected in our education. We learned that it was our patriotic duty to report anyone seen smoking foreign cigarettes. Te country needed to use every bit of the foreign exchange earned from its exports in order to import machines and other inputs to develop better industries.
“ What Korea did to build
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