Both President Park Chunghee and President Kim Daejung made a significant impact on the Korean economy and society as a whole. They were political opponents for a long time. One is credited for Korea’s rapid industrialization yet criticized for a dictatorship and the other for democracy and economic recovery after the 1997 financial crisis. Is this a fair assessment? How did their policy undertaking help or hinder Korea’s economic, political, and social progress?
The Park Chunghee regime lasted for almost two decades. He took power through a military coup in 1961. He launched the highly successful five year economic plans and led a remarkable industralization in the early decades. Under his leadership, a two-decade improvement in the infrastructure and standard of living was made.
President Park viewed Japan as a model to be emulated. Korea had to rebuild its economy from the devastated loss of the Korean War. The Park regime emulated the Japanese model which made the rapid economic recovery from the defeat of WWII. And yet, as I have argued many times, the Japanese model with mercantilist twist is a flawed one to begin with. Perhaps, he should have recognized that its economic growth model couldn’t escape the inevitable run-in with the brick wall. The flaws of this model eventually led to the 1997 financial crisis through corruption and collusion between the sate and chaebols and mismanagement of the financial sector.
What was the underlying motivation behind his intense economic drive and push for technological capacity building. Was it for the general good of the people; or was it for the political expediency?
It is true that civil liberty was greatly repressed during the Park regime. And yet, ironically, the rapid industrialization over the same period led to an expansion of the middle class, which triggered a democratization process in the later decades. His biggest fault may lie in that his chaebol-centered economic drive which allowed Korea to accelerate the industrialization process ushered in oligarchy, which lasts till the current time.
If he had been genuinely concerned about Korea’s wellbeing and economic prosperity for the most people, which many of his admirers give him credit for, he would have established a framework for a more market-functioning, sustainable system with balanced domestic consumption since the export-driven command economy has fundamental shortcomings. That would have been his great contribution. Further, he should have laid the groundwork for democracy and the rule of law because they are critical pillars of Korea’s economic and social progress.
The Koreans had high hopes for the Kim Daejung regime given his long record as a democratic activist. When he took office, Korea was at critical juncture coming out of the 1997 financial crisis which shook the entire nation. Korea’s political and economic structure needed an urgent transformation to move forward. He launched major reforms in four areas in early 1998: the public sector, the financial sector, chaebols and the labor market. And yet, his reform effort wasn’t substantial enough to change the structural weaknesses of Korea.
To make matters worse, his administration undertook several bad policies which put Korea on the wrong course. His administration employed policy interventions to fuel property and credit bubbles, which stripped Korea of its potential growth in jobs and resources. His administration failed to transition the Korean economy to a market-based one. Instead, he bolstered the short-term strength of export engine and bubble economy to extend a failing growth paradigm with little regard to long-term consequences. He should have known that the inevitable bubble burst would take its toll on the Korean economy and standard living of a large class of people. Moreover, he should have kept manufacturing base home since declining manufacturing sector replaced by increasing financial service sector is on the path to economic downfall. Despite all the rationale behind outsourcing and offshoring, social considerations would have been a top priority if he had genuinely cared for Korea’s democracy.
Since his regime, Korea has been on downward economic trajectory with inflated real estate and stock prices on the one side and growing debt on the other while its economy was recovering on the surface. He should have known that the policy undertaking during his regime would produce greater social ills down the road, which would impair democracy. His policy choices have caused the widening income disparity, which has exacerbated the social democratic process by wiping out the middle class.
Who has been the ultimate beneficiary from both regimes? Oligarchies. Chaebols grew thanks to deliberate policy apparatus by the Park regime and some transformed to top contenders on the global stage due to their revamping efforts to become innovator from imitator in the Kim regime. While they became global brands, the manufacturing jobs have been shifted overseas. Presidents from different political parties have been replaced whenever the general public gets frustrated. Yet the bureaucrats and big businesses which control a big portion of the economy remain in place. They have become the system of privilege that has rewarded them, exploiting the many in the interests of the few. The other ultimate beneficiary has been global corporatist which has been destructive force across advanced and emerging economies. Again, I have stressed that global forces are no excuses for bad policy undertaking.
The so-called free market principles have taken their toll on the Korean economy. Since the Kim regime, the worst characteristics of command economy and western crony capitalism have deteriorated the economic fundamentals of Korea. In a sense, there seems to be little difference between command economy and crony capitalism after all.
One should keep in mind that “national success or failure is the result largely of policy decision”, as Acemoglu and Robinson argues. Accordingly, two presidents’ legacy should be assessed based on their policy choices and their impact on the living standard of the most people and civil liberty and individual rights in terms of jobs, housing, pensions, opportunities and participation in the political process.
At the root of Korea’s genuine economic/political/social development lies moral leadership and social responsibility, regardless of which administration holds power. The same is true for other emerging economies as well as advanced ones.
(위에서 인용했듯이, 결국, 한 국가의 흥망여부는 대부분 정책 결정의 결과라는 것을 아실 겁니다. 한국 정치사에서 뚜렷한 획을 그은 두 대통령 시대의 정책을 거시적인 측면에서 올바른 시각을 가지고 제대로 평가하는 일이 (많은 이들이 박정희 대통령을 산업화에 큰 공헌을 했지만 민주화에는 역행한 분으로, 또 김대중 대통령을 민주화의 상징처럼 평가하지만 이는 어느 정도 맞는 부분도 있지만 제대로 된 평가가 이루어져야 한다고 보여집니다.) 현재의 정책 수립을 제대로 할 수 있는 중요한 일이라 생각되어 쓰고 있는 원고의 일부를 올립니다.)
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