Korea Development model worth emulating
The remarkable economic development achieved by Korea within a short time has generated widespread interest about Korea’s development model.
After coming to Korea in 2008, I attended a number of seminars on Korea’s development experience to learn more about it. In my quest to learn about its development process, the series of articles published by The Korea Times under the title “Rags to Riches” has come in handy as the most comprehensive account of Korean development history.
By publishing this series on the eve of the G20 summit to be hosted by Korea, The Korea Times has done a great service to promote Korea’s image by helping foreign readers with a better insight into the Korean development history.
Unique elements of Korean development model
The most striking element of the Korean development model is the central role played by the government in the country’s economic development. The government did everything to ensure fast economic growth, even if that necessitated politically unpopular decisions.
However, it is not only the right policies that propelled Korean economic development; the thing that made the difference was the single-minded effort by its leaders and followers to implement those policies. The Korean development history is perhaps inseparable ― if not synonymous to ― from its charismatic leader President Park Chung-hee.
President Park wanted to transform Korea from a poor country into a prosperous and successful nation, for which he was prepared to go to any lengths. He successfully instilled this “will to change” among the Korean people, who in turn worked hard to achieve this objective.
What made the difference?
In the 1960s, a Korean delegation visited Bangladesh (then part of Pakistan) to see the implementation of our second five-year plan, which fueled industrial growth in Bangladesh. After five decades, Bangladesh still remains a poor developing country while Korea is a member of OECD and is going to host the next G20 summit. What made the difference?
While governments in both Korea and Bangladesh took a proactive role in their countries’ development efforts, their approaches were vastly different. Bangladesh lagged behind due to adherence to inward-oriented policies. Like many post-colonial countries, Bangladesh emphasized equity and justice in distribution of wealth as opposed to rapid economic growth.
Soon afterwards, frequent intervention by the military disrupted the growth of institutions needed to support development efforts, and a prolonged ideologically charged debate on development models defused actual economic progress.
Korea was pragmatic in resorting to more outward-oriented economic policies, adopting export-led growth strategy and encouraging private sector business and industries. Korea had had the privilege of following a singular policy model of development from the very beginning. The government concentrated on building large infrastructures while leaving business and industry to private entrepreneurs. Indeed, large businesses such as Hyundai, Samsung, LG and Daewoo created enormous wealth for a few families, but they also provided jobs to millions and helped rapid industrialization of the country.
In the 21st century, Korean government is still actively guiding and coordinating the economic development efforts. In order to ward off the malice of global crises, Korean government is focusing on new growth paradigm for future – low carbon growth. The government is prodding private sector to adopt more hi-tech energy efficient technologies.
Adaptability of the Korean Development Model
No development model can be entirely applicable in another situation, for every model has some elements that are country-specific or time-specific. The success of Korea economic model itself suggests that development may not necessarily come from outside. However, some development insights and experiences can be shared at any stage of development.
There are many elements in the Korean development model that are very much relevant to Bangladesh’s development efforts. The role of government as evident in the development model of Korea is the most relevant of all.
Indeed, in the wake of an ongoing global recession, the role of government in the economic life of its citizens is being reinvented. The emphasis on human resources development, the government’s lead role in building basic infrastructure, and favorable fiscal and monetary policies are some key elements that we can borrow from the Korean experience.
Bangladesh and the Korean Development Model
Bangladesh has almost similar underlying economic conditions that Korea had experienced in the 1960s: limited natural resources, population pressure, adverse land-man ratio, inadequate and underdeveloped infrastructure, and other constraints.
The first thing we can learn from the Korean development model is the importance of developing human resources. Bangladesh and Korea have already begun cooperation to develop human resources in Bangladesh. A number of ICT and technical training centers have been established in Bangladesh with the support of the Korea International Cooperation Agency (KOICA). Every year, our government sends officials and professionals to Korea to learn from the Korean way of development.
Belated though it may be, Bangladesh is by and large following the footsteps of Korea. Since the 1980s, Bangladesh has shifted its focus from import-substitution policy to export-led growth. This policy shift has already registered significant breakthrough in our export trade. Using the abundant labor force, Bangladesh has developed a large and competitive apparel and textile industry that accounted for export worth $12.5 billion in 2009.
While the government of Bangladesh will continue to spend a significant share of its budget on poverty alleviation, it is increasingly supporting the entrepreneurs and businessmen to achieve faster economic growth. Loan facilities have been expanded to encourage export-oriented industries. The government is now joining hands with private sector to leverage the effect of private fund and expertise through public-private partnership (PPP).
The government of Prime Minister Sheikh Hasina is giving high priority to meeting the growing demand for electricity by establishing many new power plants including a nuclear power plant. A massive drive to build basic infrastructure including construction of highways and bridges, expansion of existing port facilities and construction of a new deep seaport are well underway. We welcome leading Korean companies to join our efforts in developing infrastructure and investing in our key industrial sectors.