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Society | Economy - Development

Can Africa really learn from Korea?

afrol News, 24 November - In their search for new role models, African economists and politicians are increasingly turning eastwards to Asia, where for example Korea makes an astonishing example. At a high-profiled seminar, a Korean economist repeated the call to Africans to follow his country's example, although historians say this is impossible.

Following the trends of the day, the African Development Bank (AfDB) had invited a South Korean specialist to its Economic Conference (AEC) in Tunis headquarters this week. African politicians and economists are currently heading more frequently to China, India, Japan, Taiwan, Korea, Malaysia and Singapore than to any other destination. "Here," they hold, "we can seek a model for African development."

As such, the renowned South Korean Economist, Ji Hong Kim, was hearty welcomed at the AEC, which gathered economists and high state officials from all over Africa and beyond. Mr Kim was applauded when dismissing the notion that Africa had everything to lose and nothing to gain from globalisation, noting that a good number of the continent's economies could compete favourably in the global market "if the right policy mix is conscientiously put in place."

"Globalisation provides immense opportunities and significant risks, and African economies should be ready to participate in the global economy," Professor Kim said in a lecture titled: 'Lessons from Asia: The Experience of Korea'. Africa needed to adopt an outward-oriented strategy and export promotion policy to overcome its small domestic market size and to earn foreign exchange.

"By and large, the governments should seek for the industrial policy of 'getting the basics right' within a market-conforming framework. And both incentives and disincentives were designed to promote efficiency in the allocation of limited resources with the help of market forces as much as possible", the economist said. He cited institutional preconditions in African economies that needed to be improved.

According to Professor Kim, economic conditions in South Korea in the early sixties were similar to those of a number of African countries currently marked by a lack of resources. The country's population then was growing at an annual rate of 3 percent accompanied by widespread unemployment. Per capita GNP in 1961 was US$ 82. Annual exports amounted to about US$ 43 million and the nation was in a chronic balance of payments deficit since its independence in 1948.

There has been a sea-change in the country's economic prospects marked by remarkable development in the last three decades with per capita GNP ballooning to over US$ 16,000 while aggregate trade volume shot up to US$ 289 billion. The manufacturing sector's share of GNP also increased from 14 percent in 1961 to 28 percent in 2005, while that of agricultural, forestry and fisheries sector decreased from 37 percent to 3.5 percent during the same period. As a result of this exponential growth, South Korea is currently recognized as one of the OECD member countries.

Professor Kim underlined the critical role played by the government in the entire process noting that throughout the 1960s and 1970s, the government in Seoul was deeply involved in the economic development process, including the drawing up and monitoring of development plans, and by ensuring that the private sector achieved the goals set in the plans that were continuously revised in response to changing economic conditions.

He cited two key factors that contributed to Korea's success: One of the reasons was that the country continued to make efforts to build up national consensus regarding the direction of major economic policies while the other factor involved proper government support and guidance, innovative local entrepreneurship and a diligent labour force, which maximized business opportunities open to them.

"The key to the economic miracle of Korea, if there had been one, seems to lie in these two factors which enabled the Korean people to successfully adapt to the challenges while minimizing the risks", Professor Kim emphasised, holding that this also could serve as a model for Africa's future development. This view, while applauded widely at the Tunis conference, is controversial.

Historians will in no way agree with economists claiming Africa can learn from Korea. In fact, Korea is the least comparable model for Africa among Asian countries. Among historians, there is a universal agreement that South Korea's impressive growth after the Korean War (1950-53) would have been impossible without the strategic interests of the United States in such a rapid growth.

In 1953, the underdeveloped and war-ravaged South Korea was Washington's barricade against communism in East Asia, threatened by a much stronger North Korea and China. The US made a historic exemption and included this Third World country into its economy by transferring technology and funds, but most importantly by opening its market to South Korea. The establishment of a booming industry in the country would have been impossible without a free access to the US market.

As such South Korea has profited much from free trade, which is in line with Professor Kim's recommendations, but the country still has been allowed to protect its interior markets while in the process of constructing its export industry sector. Another favourite role model for Africans - Taiwan - is the only comparable story to South Korea, where Washington has been truly generous when it comes to market access.

Historians will also wrack the myths of any Japanese or Chinese role models for development in Africa. Japan got industrialised at the same time as Europe and completely avoided colonisation. China has been one of the world's big powers since the early 1950s and has its own strength, domestic market and dynamics. It is just not comparable with any other entity, and it is among the current neo-colonialist powers.

There remain the examples of the Southeast Asian tigers - Malaysia, Singapore, Thailand, Indonesia and increasingly Vietnam - and the Indian subcontinent. Here, quite a few lessons can be learnt by Africans. While having incomparable strength and market access and a much deeper penetration of statehood into the population, these countries do have some parallelism with Africa in their recent history.

As ex-colonies, they have managed to create new economic structures freeing themselves from backwardness. The price has been high, especially on the environment and on culture, but there is a steadily increasing part of society departing from poverty. Food insecurity is now mostly history.

Historians generally warn against thinking that "history repeats", and hold that each region and people have their own preconditions. In particular, something already done is something already done, and can therefore not be repeated in the same way. A new model has to be found indigenously to spur a similar process. Lessons can however be learnt, where there are comparable aspects.

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