Korea's Economic Transformation: Lessons for Developing Asia

Video | 10 April 2014

Former Korean minister and policy maker Joong-Kyung Choi discusses what developing Asia can learn from Korea's remarkable economic and social transformation. He began by stressing the importance of Overseas Development Assistance (ODA) in stimulating early growth.

Transcript

Title: Korea's Economic Transformation: Lessons for Developing Asia

Description: Former Korean minister and policy maker Joong-Kyung Choi discusses what developing Asia can learn from Korea's remarkable economic and social transformation. He began by stressing the importance of Overseas Development Assistance (ODA) in stimulating early growth.

Joong-Kyung Choi
Former Minister
Ministry of Knowledge Economy
South Korea

The ODA played a very very important role for Korea’s economic success because the ODA is the money coming from outside when an economy is in a very poor condition. So, when an economy like early stage of economic development in Korea, the economy has no money to finance its development plans so it needs outside money like ODA. So, the ODA is very essential element for Korea’s economic success and should be a critical element for other economies as well, that’s my understanding. But as you know very well, ODA, itself is not sufficient we have to have foreign direct investment and also national resource mobilization, the domestic resource mobilization to finance development project.

Q: What role has democracy, transparency and good governance played in sustaining growth and promoting equality in South Korea?
A: At the early stage of economic development, the dictatorship could work. But when an economy grows to a certain point and become substantially large, it’ll be difficult for the dictatorship to be effective and efficient as before. The reason is because the economy has grown and the economy has to handle with much more information and needs much more complex technologies to handle, so dictatorship cannot handle much amount of information, much amount of technology. So, the market comes, the regulation comes; and the market and the regulation means democracy, transparency, and good governance.

Q: What kind of structural transformation is required for continued economic success in South Korea?
A: I'll talk about 3 things:

First, Korea needs to have new growth drivers, new industries for economic growth as you know the President Park Geun-hye, the incumbent president, is talking about creative economy. The creative economy is another expression of creating new growth drivers. So, that’s the first point.

The second point is, we have to increase cooperation with North Korea. The North Korea has good amount of well-educated cheap labor and combining that cheap labor with South Korea’s technology encaptor we could do some good again, that’s my second point.

The third point is, we have to agree the desirable shape of the World Fair State coming in Korea because now Korean economy has over 20,000 pocket of GDP. And the World Fair is everybody’s interest now but if populistic approach prevails as we have seen in advanced European economies they can suffer with expensive entitlements.