G20 host Seoul positions itself as rags-to-riches mediator
| Seoul, South Korea
Seoul is hoping that the world鈥檚 richest nations will remember some of the poorest at this week鈥檚 Group of 20 Summit. The South Korean government has recommended an agenda that highlights economic growth in emerging countries, taking a page from its own rapid development with its policy suggestions.
The country鈥檚 aggressive industrialization policies of the 1960s and '70s that emphasized exports helped create what Koreans call the 鈥淢iracle on the Han River.鈥� Between 1962 and 1989, the country experienced an average of 8 percent growth per year. Over the past 50 years, Korea鈥檚 GDP per capita has risen from around $100 to just under $20,000 today.
The country鈥檚 rather recent emergence from economic destitution has put it in an unusual position among today鈥檚 advanced economies.
鈥淜orea can play an important role [at the G20 Summit] as a country that still has a living memory of poverty, but that is rich enough to know what economic prosperity means,鈥� University of Cambridge economics professor Ha-joon Chang told a Seoul audience last month.
Using rags-to-riches narrative
South Korea has used its rags-to-riches success to launch a series of campaigns encouraging poor countries to adopt what is known as the Korean development model. Several countries in Africa, including Rwanda, have already consulted with Seoul about how they might follow in the country鈥檚 footsteps.
鈥淎fter the Korean War, the country was devastated. Economic and social infrastructures were destroyed, and people felt inferior and desperate. It was more or less like some of the fragile states in Africa today,鈥� says Joo-hyun Lee, a senior researcher at the Korea Institute for Development Strategy, which consulted with the government on the creation of the G20 development agenda.
鈥淲e believe Korea鈥檚 development path can be a good model for African countries. We have development experience, experts who were engaged in Korea鈥檚 rapid development process and the know-how to help,鈥� she added.
South Korea's mediator role
As the first non-G8 country to host the G20 Summit, the Korean government has played up its role as a mediator between the world鈥檚 wealthy and developing economies.
President Lee Myung-bak instructed the Presidential Committee for the G20 Summit to come up with a list of policy initiatives to present at the summit. Using the slogan of 鈥減artnership focused on economic growth,鈥� the committee suggested a range of policies including strengthening infrastructure, increasing private investment, and opening up developing markets to international trade. The committee says Seoul will focus on the idea of 鈥渁id for trade鈥� at the summit, emphasizing the link between access to global markets and economic growth.
In a television address 10 days before the summit, Mr. Lee explained the reasoning behind Korea鈥檚 development proposals.
鈥淏ased on our own development experiences, Korea proposed that the assistance that has so far been centered on aid be replaced with policies aimed at strengthening the foundation for growth,鈥� Lee said. 鈥淭hrough these efforts, it would become possible to establish a fair global community and economic order.鈥�
Criticism of Seoul's 'Aid for Trade'
The government鈥檚 emphasis on free trade over aid in its G20 development agenda, however, has left some wondering whether Seoul has wandered from its own development model.
Korea received millions of dollars in aid from the United Nations Development Program and other international donors throughout its development process. Last year, Korea became the first major recipient of overseas development aid to become a major international aid donor.
Korea鈥檚 economy also benefited from relatively closed markets during the cold war. Professor Chang calls Seoul鈥檚 call for freer markets 鈥渇undamentally at odds with how Korea itself developed."
鈥淚n the early stages of economic development," he says, "Korea used a mixture of protectionism, regulation of foreign investment, lax international property rights, and occasional use of state-owned enterprises in order to nurture and develop high productive industries like steel, automobiles, electronics and ship building which are now the main pillars of the Korean economy.鈥�
