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Samuel Kim Korea and Globalization

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Samuel Kim Korea and Globalization Korea and Globalization Samuel S. Kim For better or for worse, perhaps no state in the also avoiding the neorealist and neomercantilist post-Cold War world has cast its lot with globaliza- “globaloney” castigation, which does not adequately tion as publicly as did South Korea (hereafter take into account the new patterns and dynamics of “Korea”) under both the Kim Young Sam and Kim contemporary globalization. I define globalization as Dae Jung administrations. Yet the interplay a series of complex, independent yet interrelated between Korea and globalization has remained processes of stretching, intensifying and accelerating complex and somewhat surprising with several worldwide interconnectedness in all aspects of paradoxical consequences. In striking contrast to human relations and transactions such that events, the extreme version of globalization put forward decisions and activities in one part of the world have by some of its proponents in the West – those advo- immediate consequences for individuals, groups and cates of a “hyperglobalization school” who foresee states in other parts of the world. Globalization is an inexorable demise and irrelevance of the terri- not the same as “globalism” or “universalism”; it torial nation-state – Korea’s globalization drive does not refer to values or structures. This is not was initiated by the government as a state-enhanc- to say that contemporary globalization cannot ing, top-down strategic plan. Seoul’s globalization serve as a conduit for the rapid spread of good and – especially President Kim Dae Jung’s notion of bad ideas or information and misinformation, nor participatory democracy and the market economy to suggest that contemporary globalization is as mutually complementary – was espoused at just entirely benign or without any polarizing and mar- that moment when globalization had contributed ginalizing consequences. The importance of glob- to an expansion of the liberal democratic state’s alization for a trading state like Korea with an functional responsibilities and to an erosion of its extremely high trade/GNP ratio is a close corre- capacity to deal effectively on its own with many of lation between the extent of its openness and the demands placed upon it. Kim Young Sam’s transparency and the degree of its global compet- globalization drive started with a bang and ended itiveness. with a whimper, but Kim Dae Jung has pursued a globalization drive of another kind, with greater determination and a sharper focus on knowledge- The Rise of a Segyewha Fever based economy. In Kim Dae Jung’s Korea, there is apparently no escape from the payoffs and penalties Although internationalization-cum-globaliza- of globalization. Globalize or perish! tion had its antecedents in the early 1980s, it was When appraising the promise and performance not until November 17, 1994 that President Kim of Korea’s globalization drive, we need to adopt a Young Sam formally outlined his own vision follow- broad framework that shies away from the neoliber- ing the APEC summit meeting in Sydney,Australia. al cant of hyperglobalization, with its heroic assump- The so-called Sydney Declaration was more than a tions about the functional demise of the state, while flash in the pan; this was made evident by a major 83 reorganization of the executive branch of the that controversial institution. No other leader in Korean government to make it better suited for an recent years has embraced the core concept of glob- all-out globalization drive. Since early 1995, a “glob- alization in an inaugural address as forcefully as did alization fever” has swept the country: no other Kim Dae Jung:“The information revolution is trans- buzzword has been more commonly used – and mis- forming the age of many national economies into an used – among politicians, policymakers, business age of one world economy, turning the world into a entrepreneurs, academicians and journalists. As if global village.” He also argued that, in an era of glob- competing in a word game against the North al information flow and a borderless global econo- Koreans and their single-minded projection of juché my, the culture industry has become one of the (“self-reliance”) as a signature national identity, the world’s most fundamental industries. Kim Young Sam government announced in early On January 3, 2000, President Kim Dae Jung 1995 a decision not to translate the Korean word for pronounced a new millennium vision: “The new globalization, segyehwa, but to keep the romanized century will be categorized as a period of globaliza- form for international consumption as the official tion, digitalization and time management.Whether rendition of its globalization policy. Too many for- Korea becomes a first- or third-rate country will be eigners narrowly interpreted “globalization” to dependent, to a large extent, on whether Koreans mean economic liberalization, according to the are ready to adapt to changes.” The vision statement Ministry of Information and Communications, includes several overarching goals, such as making when in actuality segyehwa was intended to be far Korea one of the top ten information and knowl- more comprehensive, embracing political, cultural edge superpowers in the world, developing the and social dimensions. next-generation Internet and the information super- The stage was thus set during much of the Kim highway by 2005, and bridging the “digital divide” Young Sam administration for this game to be played through productive welfare and balanced regional out in the politics of everyday life in Korea. Not sur- development. For Korea, there is no easy exit from prisingly, the meaning of segyehwa varied from globalization that would not entail a major econom- group to group: it was a strategic principle, a ic disaster.The forward strategy for Korea is not a mobilizing slogan, a hegemonic ideology, or a new choice between exit and embracement but rather a national-identity badge for a state aspiring to constant adaptation to the logic of globalization advanced world-class status. Kim Young Sam’s dynamics and quickening economic, cultural and globalization was primarily a status drive, howev- social product cycles. er, an easy and cheap way of projecting a new Korean national identity as a newly industrialized and democratized country deserving membership A Promise/Performance Gap in the Organization for Economic Cooperation and Development (OECD). Despite the rhetorical support of globalization Soon after Kim Dae Jung was elected, in as a shortcut to advanced world-class status, the Kim December, 1997, he faced the “greatest crisis since Young Sam government experienced a dismal prom- the Korean War,” the danger of a financial melt- ise/performance gap culminating in the November down. He quickly reversed his earlier stand against 1997 financial crisis. It is true that between 1966 the International Monetary Fund (IMF) to become and 1996 Korea achieved one of the fastest econom- perhaps the world’s most outspoken champion of ic development rates of any country in the world, 84 SAMUEL KIM with its per capita income rising from $100 in 1960 Korea’s global competitiveness ranking steadily to $10,543 by 1996, along with its entry into the declined from 26th place in 1995 to 41st place in OECD in 1996. By the end of 1997, however, Korea 1999, only to rebound to 28th place in 2000 and was experiencing its greatest economic crisis, with a 2001 and 27th place in 2002 (as of April 19). This sharp rise in the unemployment rate (from 2.5 per- declining ranking on global competitiveness score- cent in 1997 to a peak of 8.6 percent in early 1999), boards (at least until 2000) reveals fundamental a precipitous fall of foreign-exchange reserves (to structural weaknesses of an input-driven develop- less than $5 billion in December 1997) and a pro- mental model striving for bigger size (market share) gressive decline of its global competitiveness and its as opposed to a knowledge-based economy striving ranking on globalization scoreboards. for greater productivity. Korea’s steady decline in The performance of the Kim Dae Jung govern- virtually all global competitiveness input categories ment during its first four and a half years in office in the 1990s goes well beyond the immediate impact (February 1998 to August 2002) is mixed though of the 1997/98 Asian financial crisis. Despite the impressive in terms of key macroeconomic meas- remarkable short-term rebounds from 1999 to urements. Thanks to a synergy of favorable short- 2001, economic, political, and social reform and term domestic and external factors (e.g., the crisis- restructuring as a whole under the reformist admin- engendered national consensus, the determined istration of Kim Dae Jung have proceeded in fits and reformist leader, a rapid rise of private consump- starts, lacking policy consistency, structural depth, tion, the bailout program of the IMF and the World and scope. Bank, and the booming US economy fueling The starting point for explaining such a Korea’s exports), Korea’s GDP (gross domestic chronic promise/performance gap is to recognize product) made a rapid recovery; from –6.7 per- that since 1987 profound changes have occurred cent in 1998 it rose to an impressive 10.9 percent in relations between the state and society in gen- in 1999, 9.3 percent in 2000, 3.0 percent in 2001, eral, and among state, capital and labor in partic- and a currently projected 6.1 percent for 2002. In ular. The increasing scale and sophistication of addition, the unemployment rate dropped from Korea’s economy amid rapidly changing globaliza- 7.5 percent at the end of 1998 to 3.1 by April, tion dynamics exerted ever-increasing pressures 2002 and foreign-exchange reserves reached the on Korea for a new development model at a time $100 billion mark by September, 2001 to stand at when the authoritarian developmental state of the $107.7 billion by April, 2002.
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