Why did this "build" or strategy for lack of a better word work so well for Korea? They mention other countries that have adopted this model but haven't seen the phenomenal success Korea has seen over the past decades. What was the secret sauce?
Well, land reform helped create a broad consumer class but at the same time subsidized industries were required to compete in international markets early to keep their privileges so they didn't get complacent. In places like Indonesia industrial policy was more a matter of sending money to the allies of those in power. Industrial policy can work to encourage growth but only if the government really wants it to and is competent in how it carries it out.
I think the book on development I'd most recommend on development in general is Gambling on Development but for what exactly South Korea did How Asia Works has the details.
South Korea have a fairly direct threat of invasion that at least somewhat limits how dysfunctional the elites can be without the risk of facing consequences themselves. Taiwan, Finland, Israel and so on.
1. American presence in the DMZ is an immediate no-go when it comes to a plausible 'threat of invasion'.
2. Even if the US were not involved - If you think Russia invading Ukraine is a debacle, don't think too much about what North Korea trying to invade South Korea would look like.
Because South Korea is successful at what it does. If South Korea looked like Thailand it would be a different story. And that is part of why it doesn't.
The Russian invasion of Ukraine is actually a good example. Just the other way around. What is happening to Russia is exactly what happens when you neglect your industry and population to the point that you no longer have enough of an advantage in equipment or people willing to fight. Something South Korea can't afford.
Ukraine as of the start of 2022 was significantly less developed than Russia. It was the poorest country in Europe, even behind other victims of Russian aggression, like Georgia and Moldova. [1] [2]
It just has the notable advantages of:
1. Being incredibly motivated to fight an existential defensive war.
2. Being the recipient of every surplus NATO armament under the sun. Its industrial capacity for war-making isn't located in within its borders.
It's true that Russia has significantly neglected its industry, but Ukraine has... Done the exact same thing. In a worse way, even - as despite inheriting a lion's share of Soviet industry, it didn't do anything with it.
(And to cycle back to North Korea, I'd like to point out that the economic rot in it is so deep, it's not even capable of feeding itself.)
American presence in the DMZ is an immediate no-go when it comes to a plausible 'threat of invasion'.
They’ve literally murdered people in DMZ and have sent special forces multiple times to assassinate presidents. Not to mention artillery fire on a village fairly recently.
Nowadays no one thinks NK could invade but it was certainly a plausible threat until 80s.
It mentions Indonesia, Thailand, and Malaysia. Indonesia and Thailand have both had recent civil wars and failed peaceful transfers of power. It presumably helps South Korea quite a bit to have a more or less constant US military presence for 70 years. Malaysia seems to be doing pretty well. If you eliminate Singapore, Hong Kong, and Macau, and only consider countries that aren't just a single city, it's only behind Taiwan, Japan, and South Korea for East Asian GDP per capita. Average 6.5% annual growth for 50 years.
There are different types of corruption. Access and speed money actually boosts development like a steroid. Just like a steroid you reap the benefit early but eventually it becomes corrosive. You can hide a lot of problem as long as the growth rate is high.
The article lists Thailand, Indonesia, and Malaysia. Thailand is doing very well. Malaysia has done ok. Indonesia has ups and downs, but is better than you might think. And don't forget that China has been very successful building societal wealth amid corruption so deep it is almost official. The model has other successes.
But the one thing South Korea had over all of them: the USA. The ROK was a US garrison state, and a military dictatorship well into the 80s. They were a major staging ground and supplier for the Vietnam war, and billions of dollars flowed through companies like Hyundai, growing them into industrial giants. The USA was even directly paying ROK soldiers who participated in Vietnam. The USA was eager to maintain a toe-hold on the Asian continent, and provided active support. When the "Arsenal of Democracy" needs a local supplier, you can create a lot of infrastructure.
The support from the USA/NATO also included friendly trade deals despite the political cost domestically -- remember Toyota and Hyundai gutting the fat and lazy big-3 in the 80s? The cold-warriors wanted to showcase the capitalist power of wealth creation for the region to emulate, in contrast to the creeping communism of the post-war, anti-colonial era. The USA was much more invested in the success of ROK than the average independent Asian country.
As for Indonesia, geography is much of it. It is the 5th most populous country in the world, over thousands (and thousands!) of islands, speaking hundreds of languages. Just transportation and coordination costs can explain much of their troubles industrializing. Also note that they were never occupied by the Americans during WWII. Instead, they were forced to fight a bloody independence fight against the Netherlands which didn't make any friends in NATO. They then dabbled with the Soviets which certainly didn't help them long term economically, and it meant that they were frozen out of the post-war alliances. The USA was happy to leave a brutal dictator in place as long as Suharto kept the communists out. Social and industrial development of the bulk of Indonesia served no cold-war aims.
Unfortunately a lot of authoritarian/fascist regimes have done phenomenally well in the past decade - China, Russia and India is slowly following that path.
As much as I hate it, and west touts democracy as a necessary catalyst for growth, the past decade as shown otherwise.
But the one thing South Korea had over all of them: the USA. The ROK was a US garrison state, and a military dictatorship well into the 80s. They were a major staging ground and supplier for the Vietnam war, and billions of dollars flowed through companies like Hyundai, growing them into industrial giants. The USA was even directly paying ROK soldiers who participated in Vietnam. The USA was eager to maintain a toe-hold on the Asian continent, and provided active support. When the "Arsenal of Democracy" needs a local supplier, you can create a lot of infrastructure.
Funny how I have read the same argument regarding Japan and the Korean War... (I'm not saying it is wrong, just that I find the similitudes interesting)
The USA spent $168 billion dollars (roughly a trillion 2020 dollars) on the Vietnam war. There was enough money for both Korea and Japan (and the Philippines, and Thailand, and ...)
-- we have an above the law but not above the law mentality here - can get "help from the government" etc - get away with a lot - as long as you act within the general interest of the country - otherwise you "get caught" - go to jail - its weird but it works --
The United States (and via extension, Japan) adopted a favorable trading relationship with Korea.
Sometimes the US wants to strip-mine a country of its natural resources and use it as a source of cheap labor, in which case it will not adopt a favorable trading relationship. This makes export oriented industrialization an uphill battle.
Sometimes it wants to build up its industry so that it is militarily self sufficient. Japan and Korea fall into the latter camp.
1. Countries in colder climate are generally more economically prosperous. South Korea is colder (though hot in summer) than S/E Asian countries.
2. South Koreans have always been overzealous about education.
3. South Korea is ethnically more homogenous than S/E Asian countries. People have been comfortable with idea of putting interests of the large group (i.e. nation) before that of the individuals.
russia is one of the wealthiest nation on earth and their economy is one of the strongest in the world because not related to inflated bubbles like tech or healthcare but to raw materials, natural resources, engineering, steel and other hard materials production.
the war was supposed to sink them according to european leaders and yet they are stronger than ever.
just look at the euro/ruble please and try to explain that we are winning. this war sole purpose is to destroy europe. america doesn't care about russia they care about a weakened europe.
I'm curious to know more. Sure, they're not well-tested theories and never will be, given their nature, but broadly it seems to track. The powerful forces of climate and geography on a people's culture and the effect of that culture compounded over generations seem at least an adequate explanation between the wealth gap of equatorial countries and those in colder climes.
but the wealth gap only started in the last 600 years or so. why didn't it "track" the other 6000 years between 5000BC and 1000-1300AD when science, philosophy, and literature were dominated by the mesopotamians, egyptians, indians, chinese, ummayads, persians, byzantines, ottomans?
Most of the societies you mentioned formed in places with four seasons and winters that you couldn't grow anything in, so you're actually furthering my point. The theory being, of course, that such climates force people to need to prepare to survive through the winter and that forcing function has positive effects on their advancement.
Perhaps it's more accurate to say that this factor is conducive to forming empires, not just cultures. Of the four classical cradles of civilization (China, Egypt, India, Mesopotamia), only half fit this winter criterion, so it's clearly not a prohibitive factor for the formation of a civilization; perhaps just for its technological development and dominion over others.
Comments
Why did this "build" or strategy for lack of a better word work so well for Korea? They mention other countries that have adopted this model but haven't seen the phenomenal success Korea has seen over the past decades. What was the secret sauce?
Well, land reform helped create a broad consumer class but at the same time subsidized industries were required to compete in international markets early to keep their privileges so they didn't get complacent. In places like Indonesia industrial policy was more a matter of sending money to the allies of those in power. Industrial policy can work to encourage growth but only if the government really wants it to and is competent in how it carries it out.
I think the book on development I'd most recommend on development in general is Gambling on Development but for what exactly South Korea did How Asia Works has the details.
Are both the books approachable and enjoyable to read? I find that sometimes this stuff can be factual and content rich but not very digestible.
Thanks for reccos
How Asia works is very approachable. The author was a business reporter so he tells an interesting story with the countries covered
Thanks for the reading material recommendation! Very interesting topic
South Korea have a fairly direct threat of invasion that at least somewhat limits how dysfunctional the elites can be without the risk of facing consequences themselves. Taiwan, Finland, Israel and so on.
1. American presence in the DMZ is an immediate no-go when it comes to a plausible 'threat of invasion'.
2. Even if the US were not involved - If you think Russia invading Ukraine is a debacle, don't think too much about what North Korea trying to invade South Korea would look like.
Because South Korea is successful at what it does. If South Korea looked like Thailand it would be a different story. And that is part of why it doesn't.
The Russian invasion of Ukraine is actually a good example. Just the other way around. What is happening to Russia is exactly what happens when you neglect your industry and population to the point that you no longer have enough of an advantage in equipment or people willing to fight. Something South Korea can't afford.
Ukraine as of the start of 2022 was significantly less developed than Russia. It was the poorest country in Europe, even behind other victims of Russian aggression, like Georgia and Moldova. [1] [2]
It just has the notable advantages of:
1. Being incredibly motivated to fight an existential defensive war.
2. Being the recipient of every surplus NATO armament under the sun. Its industrial capacity for war-making isn't located in within its borders.
It's true that Russia has significantly neglected its industry, but Ukraine has... Done the exact same thing. In a worse way, even - as despite inheriting a lion's share of Soviet industry, it didn't do anything with it.
(And to cycle back to North Korea, I'd like to point out that the economic rot in it is so deep, it's not even capable of feeding itself.)
[1] https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Eu...
[2] https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Eu...
They’ve literally murdered people in DMZ and have sent special forces multiple times to assassinate presidents. Not to mention artillery fire on a village fairly recently.
Nowadays no one thinks NK could invade but it was certainly a plausible threat until 80s.
It mentions Indonesia, Thailand, and Malaysia. Indonesia and Thailand have both had recent civil wars and failed peaceful transfers of power. It presumably helps South Korea quite a bit to have a more or less constant US military presence for 70 years. Malaysia seems to be doing pretty well. If you eliminate Singapore, Hong Kong, and Macau, and only consider countries that aren't just a single city, it's only behind Taiwan, Japan, and South Korea for East Asian GDP per capita. Average 6.5% annual growth for 50 years.
There are different types of corruption. Access and speed money actually boosts development like a steroid. Just like a steroid you reap the benefit early but eventually it becomes corrosive. You can hide a lot of problem as long as the growth rate is high.
The article lists Thailand, Indonesia, and Malaysia. Thailand is doing very well. Malaysia has done ok. Indonesia has ups and downs, but is better than you might think. And don't forget that China has been very successful building societal wealth amid corruption so deep it is almost official. The model has other successes.
But the one thing South Korea had over all of them: the USA. The ROK was a US garrison state, and a military dictatorship well into the 80s. They were a major staging ground and supplier for the Vietnam war, and billions of dollars flowed through companies like Hyundai, growing them into industrial giants. The USA was even directly paying ROK soldiers who participated in Vietnam. The USA was eager to maintain a toe-hold on the Asian continent, and provided active support. When the "Arsenal of Democracy" needs a local supplier, you can create a lot of infrastructure.
The support from the USA/NATO also included friendly trade deals despite the political cost domestically -- remember Toyota and Hyundai gutting the fat and lazy big-3 in the 80s? The cold-warriors wanted to showcase the capitalist power of wealth creation for the region to emulate, in contrast to the creeping communism of the post-war, anti-colonial era. The USA was much more invested in the success of ROK than the average independent Asian country.
As for Indonesia, geography is much of it. It is the 5th most populous country in the world, over thousands (and thousands!) of islands, speaking hundreds of languages. Just transportation and coordination costs can explain much of their troubles industrializing. Also note that they were never occupied by the Americans during WWII. Instead, they were forced to fight a bloody independence fight against the Netherlands which didn't make any friends in NATO. They then dabbled with the Soviets which certainly didn't help them long term economically, and it meant that they were frozen out of the post-war alliances. The USA was happy to leave a brutal dictator in place as long as Suharto kept the communists out. Social and industrial development of the bulk of Indonesia served no cold-war aims.
- The Vietnam War and the ‘Miracle of East Asia’ - https://instruct.uwo.ca/economics/317b-570/keunhoparkclayton...
The economist had an article on how Indonesia is the next economic powerhouse https://www.economist.com/leaders/2022/11/17/why-indonesia-m...
Unfortunately that seems less likely given their recent turn toward Islamic fundamentalism. IMHO, anyway.
Unfortunately a lot of authoritarian/fascist regimes have done phenomenally well in the past decade - China, Russia and India is slowly following that path. As much as I hate it, and west touts democracy as a necessary catalyst for growth, the past decade as shown otherwise.
Funny how I have read the same argument regarding Japan and the Korean War... (I'm not saying it is wrong, just that I find the similitudes interesting)
The USA spent $168 billion dollars (roughly a trillion 2020 dollars) on the Vietnam war. There was enough money for both Korea and Japan (and the Philippines, and Thailand, and ...)
https://www.ide.go.jp/library/English/Publish/Periodicals/De...
-- we have an above the law but not above the law mentality here - can get "help from the government" etc - get away with a lot - as long as you act within the general interest of the country - otherwise you "get caught" - go to jail - its weird but it works --
The United States (and via extension, Japan) adopted a favorable trading relationship with Korea.
Sometimes the US wants to strip-mine a country of its natural resources and use it as a source of cheap labor, in which case it will not adopt a favorable trading relationship. This makes export oriented industrialization an uphill battle.
Sometimes it wants to build up its industry so that it is militarily self sufficient. Japan and Korea fall into the latter camp.
There are probably several factors at play:
1. Countries in colder climate are generally more economically prosperous. South Korea is colder (though hot in summer) than S/E Asian countries.
2. South Koreans have always been overzealous about education.
3. South Korea is ethnically more homogenous than S/E Asian countries. People have been comfortable with idea of putting interests of the large group (i.e. nation) before that of the individuals.
I'd be interested in any research that backs up your point 1. Russia is not all that economically prosperous. Neither is Mongolia.
Singapore and Taiwan are very much so. And Singapore is right on the equator.
I thought it was a fairly well established link, but sure.
https://web.stanford.edu/~mburke/climate/BurkeHsiangMiguel_F...
https://www.dailymail.co.uk/news/article-8477297/Why-colder-...
russia is one of the wealthiest nation on earth and their economy is one of the strongest in the world because not related to inflated bubbles like tech or healthcare but to raw materials, natural resources, engineering, steel and other hard materials production.
the war was supposed to sink them according to european leaders and yet they are stronger than ever.
Yeah, all those dead soldiers and destroyed war machines, that’s all good for Russia… somehow.
Grade A copium here
copium of what? europe is sinking thanks to biden policies and russia is thriving.
Do you live in bizarro world? Get all your news from Facebook or telegram?
just look at the euro/ruble please and try to explain that we are winning. this war sole purpose is to destroy europe. america doesn't care about russia they care about a weakened europe.
Seek mental help
Environmental determinism hardly stood the test of time, as far as theories go.
I'm curious to know more. Sure, they're not well-tested theories and never will be, given their nature, but broadly it seems to track. The powerful forces of climate and geography on a people's culture and the effect of that culture compounded over generations seem at least an adequate explanation between the wealth gap of equatorial countries and those in colder climes.
but the wealth gap only started in the last 600 years or so. why didn't it "track" the other 6000 years between 5000BC and 1000-1300AD when science, philosophy, and literature were dominated by the mesopotamians, egyptians, indians, chinese, ummayads, persians, byzantines, ottomans?
Most of the societies you mentioned formed in places with four seasons and winters that you couldn't grow anything in, so you're actually furthering my point. The theory being, of course, that such climates force people to need to prepare to survive through the winter and that forcing function has positive effects on their advancement.
Perhaps it's more accurate to say that this factor is conducive to forming empires, not just cultures. Of the four classical cradles of civilization (China, Egypt, India, Mesopotamia), only half fit this winter criterion, so it's clearly not a prohibitive factor for the formation of a civilization; perhaps just for its technological development and dominion over others.
North Korea