Why South Korea gets gold among breakout nations
As the world’s attention turns briefly away from Donald Trump and toward the Winter Olympics in Pyeongchang, it’s worth focusing not just on the sports but on this year’s host country. South Korea is, in some senses, the most successful nation in the world, and its success provides some crucial lessons. First, the economics -- South Korea is in a league of its own. In his 2012 book “Breakout Nations,” Ruchir Sharma observed that only two economies had grown at an average annual rate of more than 5 percent for five decades in a row — South Korea and Taiwan. Sharma noted that South Korea’s trajectory is perhaps even more impressive because, unlike Taiwan — which is still rooted in low-cost manufacturing and assembly — South Korea has been able to move into the post-industrial economy with ease, entering industries like consumer electronics, biotech and robotics. Seoul is also an entertainment powerhouse, providing much of the best music and television for East Asia. Sharma awarded it the “gold medal” among breakout nations.
The achievement is all the more impressive when you consider where it started. Half a century ago, South Korea was one of the poorest countries on the planet, and nobody would have predicted that it would conjure up an economic miracle. In 1960, its per capita GDP was $158, slightly less than Ghana’s. Today it is over $27,000 — almost 20 times that of Ghana. But poverty only begins to describe South Korea’s woes as it emerged from the Korean War. The country had no natural resources, no geographic advantages, a largely illiterate population, and a physical infrastructure that had been battered during the war. It faced the menace of North Korea, then staunchly supported by the world’s other superpower, the Soviet Union, and China, which had sent millions of soldiers to defeat it in the Korean War.
In addition to its economic boom, however, South Korea has also undergone a political transformation. It spent its first decades under a series of repressive dictatorships. By the 1980s, that system began to crack as the Korean people demanded change. The transition to liberal democracy was rocky, as it is everywhere, but South Korea pulled it off. In fact, South Korea has had more genuine alternations in political power than Japan, which remains essentially a one-party democracy. Moreover, in recent years, South Korea has held accountable both its elected president and the owners of its largest company, impressive actions even when compared to more established democracies in the West.
Achievement is about not just where you are but where you came from, the distance traveled. And by that definition, surely South Korea is the most successful country in the world.
People might be inclined to conclude from all this that Koreans are simply innately talented. In fact, the case of South Korea disproves this notion. Just across the 38th parallel live millions of North Koreans, ethnically indistinguishable from their neighbors to the south. Yet North Korea is a disaster, one of the world’s least successful economies and most repressive political systems. South Korea’s success is about having the right kind of policies, which the World Bank once concluded were a basic support for markets and trade as well as a large investment in education and infrastructure.
I would add one other major factor to explain South Korea’s success — America. The United States shielded and supported South Korea from its infancy, when it was a basket-case economy and a fragile country threatened by its neighbors. Americans went to war to defend this small nation, halfway across the world, and has maintained its defense commitment and troop presence there for six decades. Washington lavished financial resources on it as well. According to a South Korean think tank, the United States poured $60 billion in aid and loans into South Korea from 1946 to 1978, close to the amount it spent on the entire continent of Africa during the same period.
We are in times when Americans on both sides of the aisle are weary of engaging with the world, dubious about maintaining troops in foreign countries and convinced that foreign aid is a waste of money. Over the next few weeks, as they watch the glittering games in Pyeongchang, they might want to think about how far South Korea has come — and take some small pride in having helped it get there.
Achievement is about not just where you are but where you came from, the distance traveled. And by that definition, surely South Korea is the most successful country in the world