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South Korea: the corruption that built its economy (2017)

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Re: South Korea: the corruption that built its economy (2017)

#21

Post by pcurve »

odysseus wrote: post #19
pcurve wrote: post #15

Earlier quoted context omitted.

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) bef…

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-...

Re: South Korea: the corruption that built its economy (2017)

#22

Post by michael1999 »

snapcaster wrote: post #6

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?

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...

Re: South Korea: the corruption that built its economy (2017)

#23

Post by sharadov »

michael1999 wrote: post #22
snapcaster wrote: post #6

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?

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, a…

The economist had an article on how Indonesia is the next economic powerhouse https://www.economist.com/leaders/2022/11/17/why-indonesia-m...

Re: South Korea: the corruption that built its economy (2017)

#24

Post by pydry »

snapcaster wrote: post #6

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?

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.

Re: South Korea: the corruption that built its economy (2017)

#25

Post by underbrush »

snapcaster wrote: post #6

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?

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.

Re: South Korea: the corruption that built its economy (2017)

#26

Post by anigbrowl »

snapcaster wrote: post #6

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?

North Korea

Re: South Korea: the corruption that built its economy (2017)

#27

Post by arthurjj »

boringg wrote: post #20
Symmetry wrote: post #14

Earlier quoted context omitted.

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…

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

Re: South Korea: the corruption that built its economy (2017)

#28

Post by vkou »

underbrush wrote: post #25
snapcaster wrote: post #6

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?

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.

Re: South Korea: the corruption that built its economy (2017)

#29

Post by pezezin »

michael1999 wrote: post #22
snapcaster wrote: post #6

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?

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, a…

> 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)

Re: South Korea: the corruption that built its economy (2017)

#30

Post by michael1999 »

pezezin wrote: post #29
michael1999 wrote: post #22

Earlier quoted context omitted.

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, a…

> 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…

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...

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