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Friday 29th of August 2014 12:58:22 PM
 

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Who developed South Korea?

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The problem is that economists, journalists, politicians, analysts, and everyone else think they know

I am writing this article from Seoul, the capital of South Korea. Sitting on the reading table in my suite in my hotel, I can see through the window a forest of skyscrapers stretching beyond what my eyes can see. When I walk to the glass elevator, on the opposite side of the hotel, and roll down from the 23rd floor to the lobby, I can see another forest of skyscrapers stretching for miles on end. East, west, north and south of where I am you see this endless stretch of high-rise buildings in the thousands. Down on the eight-lane streets, you see thousands of cars speeding by, a vast number of which are Kia, Daewoo and Hyundai i.e. made in South Korea.

Across the street from my hotel is a Samsung office complex and beyond it Samsung apartments. I am watching television on a Samsung screen, boiling my tea in a Samsung kettle, warming my food in a Samsung microwave, which I just pulled out of a Samsung refrigerator while writing this article on a Samsung laptop and chatting with friends around the world on a Samsung S4 mobile phone handset – which I also use as my still and video camera, notebook, voice recorder and everything else in between. There must, therefore, be a link between Samsung’s success (and the success of such companies as LG, Hyundai, Kia etc) and the miraculous development of South Korea. Which may also suggest that countries that do not produce such national champions may be relegated to remaining poor.

South Korea did in 50 years what took Great Britain (the birthplace of the industrial revolution) 200 years to do – transitioning from an agricultural to an industrial society. How did they achieve this feat? When you ask Koreans, they have quick answers. We had a strong leader (Park Chung Hee), they say. Park was the father of the current president, Park Geun Hye. Others say it is because Koreans are loyal to their leaders – so what a leader asks them to do is what they follow. (False, Park faced a lot of resistance from workers and students, massive protests led him to declare marshal law in 1972) and he was assassinated by his chief of security in 1979 during mass protests in Seoul.

A young lady who studied in the United Kingdom told me South Korea developed because of a fear of being overrun militarily by the north. But the north has the same fear, so why has it got a per capita income of US$900 when the south has nominal per capital income of US$24,000 (US$ 32,000 on purchasing power parity)? Of course the north has one big problem – the bad policy of communism. But would Uganda, if it had the same policies as South Korea and a strong leader (President Yoweri Museveni does not strike me as a weak leader) produce the kind of industrial dynamism we see in South Korea?

Other Koreans told me it has to do with family values that penalise failure severely and over-emphasise success. Yet others say it is because of American support during the cold war. Some Korean economists told me their proximity to Japan, which was rapidly industrializing made their own industrialization possible. A few told me it is because there was no democracy, so leaders could pursue their vision without political pressure from mobilised demand groups. I would add that South Korea had a high concentration of technical skills – with technology diffuse in most of the country. It is possible all these reasons played a part. But I also think these same qualities and factors can be found in the countries that failed spectacularly.

I do not (or no longer) believe in the great leader theory in explaining the development of nations. Good leaders just play an important but small role. There is no leader who transformed Britain, France, USA, Germany, Canada, Australia, Netherlands, Belgium or Italy. The forces of change lay within the society itself. The role of a leader is to tap into them. Some leaders may succeed in doing that, some may fail – that explains the divergent developmental outcomes of South and North Korea. However, if the conditions for rapid change are not in existence, there is little leaders can do.

Koreans are hard working. They are very fast at managing their tasks. If you ask a young lady in a restaurant to do something, she goes running – I mean she goes literally running. I was taking breakfast on the 20th floor of my hotel near a window whose curtain was down. I wanted to remove it to have a good view. As I began rolling it, a young lady came running at high speed and took over from me. The next day, I did the same and another girl (different) came running (and I mean a mini-sprint) to take over the task from me.

When I was young, less read, and less travelled, I believed I knew a lot. So I spoke with the conviction of a fanatic. Yet every time I read a new set of books on a given subject, I realised that I actually know little. Every time I travel – from Thailand to Korea, Nigeria to Mauritius, India to the United States, Brazil to China, Dubai to Morocco, I encounter many different cultures, beliefs, norms, values, biases, prejudices, ideas, attitudes and cuisines that make me only realise how the values of my village and country are just one small part of a richer cultural universe. In many ways therefore, travel and reading have transformed and humbled me.

The factors to explain South Korea’s development that I have outlined above are all possibly true. How they interact to produce rapid change is something no one knows. The problem is that economists, journalists, politicians, analysts and everyone else in between thinks they know how it works. Yet each person identifies a few factors and working in retrospect argues that they are the ones that brought about development. The only one who can win the argument is the one who claims development is a byproduct of blessing from God (or the gods) because then we cannot consult them for proof. Next week I will show that the worst national developmental disasters have shared the same characteristics as South Korea.

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Comments (31)Add Comment
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written by Paul Muwanga, June 09, 2014
Your send paragraph is very interesting. It tends to show that South Koreans do not have much of a choice when it comes to electronics. Samsung, Samsung, Samsung!. On a serious note, I have been fascinated by a documentary "The men who built America". They were not politicians. But technological and business innovators such as Carnegie, Rockefeller, J P Morgan, Edison and later Henry Ford. We need many of these kind of people, and of course, a population with a different attitude.
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written by Rajab Kakyama, June 09, 2014
Who developed South Korea? Samsung. Yes, Samsung accounts for 20 percent of South Korea's exports. But this is not the answer Mwenda is looking for. Inadvertently, Mwenda is making a pertinent question as to why Uganda (under Museveni) has failed to develop in the last 28 years, yet Major general Park Chung-hee was able to transform South Korea from among the world's poorest in the early 60s to OECD membership in 1996? Mwenda makes a more providential conclusion than a scientific one when he attributes Seoul's development to "sheer luck."
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written by Rajab Kakyama, June 09, 2014
In so doing, he commits two fundamental mistakes- by attributing that Museveni's government has failed because of bad luck he's according too much credit to Museveni's leadership style and on the other hand, making hallucinations that South Korea has not undergone tremulous economic challenges. I must note that we have had this discussion before(How could the predatory state of Mainland China become a developmental state on the island of Taiwan?), could it be that East-Asia is now Mr. Mwenda's new found obsession? Not to mention, the frightful effect of the skyscrapers in Seoul.
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written by Rajab Kakyama, June 09, 2014
While S. Korea lacks the abundant natural resources that are typical of predatory states, a functional substitute existed in the form of U.S aid money, which was intended to shore up the country as a bulwark against communism. Broadly speaking, the goal of Korean developmental policies was to develop the country by using administrative means to accelerate the progress of Korean industries from labour-intensive to capital intensive and ultimately to technology- intensive industries. The central planning of these industries fell under the auspices of the Korean Development Board (KDB) which reported directly to the President.
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written by Rajab Kakyama, June 09, 2014
Korean development was further enhanced by the fact the banks were state owned. This meant that firms in the targeted industries received preferential and subsidised access to finance, including licenses needed for expansion. At the same time, firms were required to meet ever-increasing export quotas if they wanted to stay in business. The export quotas were useful not only for earning foreign currency but they also helped in exposing Korean companies to international competition, pushing them to improve on their products. The third element of Korean strategy was built around the establishment of large family-led conglomerates, commonly known as chaebol.
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written by Rajab Kakyama, June 09, 2014
Family ownership and control have been key characteristics of the Korean landscape. Of the 200 listed largest firms in Korea, 159 published sufficient data to trace ultimate ownership. All the above mentioned factors are, however, alien to the Ugandan economy. Uganda has faced false starts, one- too many. President Museveni has failed to translate his five year guerrilla-war success into tangible economical transformations for a period of 28 years in power. Uganda, still cannot manufacture "a single safety pin" as was observed by President Museveni in 1986. Maybe, President Museveni can only be a leader in the jungle and not in open play?
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written by Rajab Kakyama, June 09, 2014
Will Mwenda be so kind that when he returns next week, he expounds on the syndicate being played out by Umeme's SPO sale, relating it to the "too big to fail" corruption related cases of the Samsung, Hyundai and SK chaebols?
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written by Maceni, June 09, 2014
The starting point of the Korean Miracle was in massive investment by the U.S military industrial complex. Think of this as a transfer of technology, capital and knowledge of everything from the manufacturing of a needle to earth moving equipment in a space of less than 5 years.Obviously it helps if the recipient is a homogeneous society with an existing ancient strong state steeped in Confucian values. The trajectory of success can and should be attributed over a time period the precedes U.S involvement. But the 'accident' of the Korean war tapped into existing conditions that yielded the present results.
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written by Moses , June 09, 2014
Since i started making sense of what was going on around me, i have known South Korea as the ONLY country to have transformed from a poor country (LDC) in '60s into a HIC today. Which other country has achieved the same fit? The answer is, unfortunately, no other. I do believe someone would get a PhD for a study that will shade light, how and why ONLY one country has achieved this in 50 years.
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written by Magezi Kiriinjju, June 09, 2014
I think USA played a major role in S.Korean rapid economic transformation of-course coupled by a strong leadership and a technically gifted hardworking population. US did this especially to show China and USSR at the time that their model was far better ( Capitalism vs Communism) and Koreans ended up being in the right place at the right time and ceasing the opportunity. So despite the developmental challenges they faced, there was always capital to try again. China did the same and look at the result today.
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written by OPIO, June 09, 2014
Kale bambi omwana ono mwenda ansesa. what exactly is development? skyscrapers and technology? is that it? i bet u andrew if stayed in seoul for 2 yrs you would be begging 2 get back to good old uganda. That country with the highest rates of depression and unhappiness, highest suicides rates worldwide, child obesity, enviromental problems, a rapidly aging society, uncertainity and fear abt the future. Is that price worth 2 pay 4 economic dev't? If only kagame and m7 know abt the social problems of South Asia they would think twice abt trying 2 copy these economic models. Problem is pple like u mwenda who advise them.
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written by Federation, June 09, 2014
Powerful paper. Thank you Mwenda !
The development of S Korea is a living lesson to every and each one of us. The divergence between the South and the North is mind-blowing.
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written by gafabusa, June 09, 2014
Mwenda, please compare the development achieved by Museveni's 30 years in power with Kibaki's 10 years and Meles Zenawi's 20 years. Even the colonialists in 1950s built a bigger longer lasting dam than NRM many useless dams. Compare Uganda's population growth along side theGDP increase and see how the country has not improved in real terms. Find out about the dam Ethiopians are constructing and the recent visit of Uganda's MP's to admire the health care system of Ethiopia. A country can only prosper as good as its leader who sets the pace, for ours the leader has held back the country. 30 years is a long run even in economics, if one cannot deliver prosperity in that period, any additional period is counter product, as diminishing leadership returns have set in by then.
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written by Ocheto, June 09, 2014
Leisure classers are takers who add no value to the national wealth. Industrialization is the only gateway to a modern economy.The so-called miracle of the Asian tigers is no miracle at all. The post industrial economies became financial economies so their industries always in search of cheap labor (that is where their profit margins accrue from) moved to where the cheaper and well trained labor market was: Asia. As the trend suggests as Asian economies too turn financial, service oriented, perhaps then the Uganda's of this world will become its manufacturing destinations,thus get the opportunity to built truly modern economies.
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written by Maceni, June 09, 2014
@Moses - are you being sarcastic? What about Singapore, Qatar, Saudi Arabia, Brunei
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written by derek, June 11, 2014
possible reasons for s korea's devekopment:-

1-http://en.m.wikipedia.org/wiki/Flying_geese_paradigm

2-http://www.grips.ac.jp/forum/module/prsp/FGeese.htm

3- http://www.globalconversation....ialization
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written by Marvin ya Kuku, June 11, 2014
"The factors to explain South Korea’s development that I have outlined above are all possibly true. How they interact to produce rapid change is something no one knows.The only one who can win the argument is the one who claims development is a byproduct of blessing from God (or the gods)". What an odd conclusion. Looking at it the other way, I suppose our lousy buildings in Kla are a byproduct of bad luck from God (or the gods) and that all factors that make Ug a basket case can't be coherently put together to explain our situation. I better go to church and have a word with the big man.
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written by Ssekajja Godfrey, June 11, 2014
I think the question should be;-why do far east states achieve rapid social transformation?-why do europeans & south asians only capable of not so rapid transformations?-why are africans incapable of social transformation?
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written by Maceni, June 11, 2014
@Ssekajja - The framing of your questions is loaded with an implicit low civilizational self worth. The idea that transformation is related to some innate in-capability of Africans - why internalize inferiority to seek explanation??! By the way Botswana - An African country has had the most drastic transformation of any society in the modern history of the world.If you default to the idea of innate capabilities of of human groups as an explanation for rapid or slow pace of transformation ----chances are you will find difficulty understanding the real causes.
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written by Ocheto, June 11, 2014
Maybe to answer the elitism-obsessed Mwenda's question (why his fellow so-called elites) have failed to explain why development takes place where and when? Because it's organic; it's people based, and not as erroneously, fraudulently over-sold, some special intellectual group armed with some arcane, esoteric crystal ball knowledge. Look at the European Union, the most intellectually, bureaucratically overdesigned institution in the modern age, and yet it is still as dysfunctional a morass as ever. There is an ever growing groundswell against it from all its subjects all over Europe.
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written by derek, June 11, 2014
@sekkajja in 2500B.C- 25 AD germans and britons were hunting gathering when ancient greeks ancient egyptians,romans,chinese,mesopotamia were building cities inventing engineering, writing and discovering farming......the germans and britons were accused of being incable of social transformation by those quick to judge.
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written by Winnie, June 12, 2014
1. Andrew my darling this was a good Article
2. Uganda can still ,make it Countries like UAE( Dubai) are rich coz of oil which Uganda has so what is difficult?
3. Ugandans just need to be serious in whatever they do Musisi is doing the right thing but can you imagine basic hygiene like placing rubbish in the dustbin we have to 1st be threatened with arrests so as to comply, a man of 80 years of age is also under UPE and he thinks its normal yet these are signs of demons
4. The Karamajong sang well in Namugongo we need a DVD.
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written by Solomon Kisakye, June 13, 2014
I think Andrew Mwenda has given us all something to think about.However Ia more interested in knowing/understanding the cultural structure in S.Korea. My instinct tells me there is a lot there to explain their quick rise on the Economic ladder.
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written by allias, June 13, 2014
Mwenda you have given me alot to understand about these country it self.
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written by Matovu, June 13, 2014
It is generally agreed that many factors (what you refer to as "Forces of Change") explain the rapid rise of South Korea as you explain this weeks column and the one of Friday September 20, 2013 titled East Asia and Africa Compared, when you brilliantly argued that the "initial conditions" of history, politics and geography explain why east asian countries achieved economic transformation compared to Africa. (refer to, http://independent.co.ug/the-l...a-compared ). I agree with you.
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written by Matovu, June 13, 2014
What I fail to understand is your ambivalence on the role of leadership in all of this. Leaders/Governments played a very important role in these transformation stories. (Contrast Mao/Deng , Park/Kim il Sung, Nehru-Indira/Manmohan roles in economic development of their countries).
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written by Matovu, June 13, 2014
Park and his administration had a clear vision of transforming Korea as shown in their ambitious 5 year Economic plans. Perhaps one should explain how a country with almost no natural resources developed heavy industries. The stories of POSCO, Hyundai , Samsung, Daewoo should be read and understood although from what I know, the considerable influence and support of President Park and his government at their founding can not be underestimated.
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written by Andrew M. Mwenda , June 14, 2014
@matovu: I am not ambivalent to the role of leadership. Kindly go back to the paragraph where I refer to it and re-read carefully what I say: it's important but small. It taps existing potential in society, it does not create it.
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written by Andrew M. Mwenda , June 14, 2014
@Opio: I think u have raised the most fundamental issue about rapid development. Is it worth it especially when it is accompanied by environmental degradation, social and emotional dislocation etc. And while I am profoundly impressed by your argument i find your tone cheap. We can have an intellectual argument without these barbs filled with implicit accusations and imputations and finger pointing and name calling. First it is not M7 and Kagame who clamor for this alone. It is the obsession of almost every elite in poor countries and the development industry. So M7 and Kagame reflect this collective obsession
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written by Andrew M. Mwenda , June 14, 2014
The issue really is how to strike a balance between the desire and need for rapid social change and mitigating the costs of that change. People in poor countries want themselves and their nations to be as rich as the industrial countries but do not appreciate the cost. Look at the hundreds and thousands of people lining up for visas to go to rich countries and those escaping on boats and dying in seas. Change comes with social and environmental costs. May be we are better off the way we are and need slow incremental changes rather than the rapid change we demand daily.
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written by Lukyamuzi Kabakasman, July 01, 2014
I can see you want to exonerate M7, but fact is that leaders take the most important decisions that can build or destroy or stagnate a country. Gaddaffi tried but see what bad politics or bad governance led to? Or is it you want to rubbish Lee Kuan Yew's role in Singapore? Mwenda should resume to writing without having to protect the interests of the first family. The last time I knew you were not part of them, I dont why their interets blur your judgements today

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