Miracle of the Han River

Miracle of the Han River

I must say that last two months for me have truly been a learning experience. I was away on training in Mussoorie. This was a compulsory training for IAS officers and was conducted by IIM Bangalore in association with Maxwell School of Public Policy, Syracuse University. We also had an international module for our training, for which Government of India had tied up with the KDI School of Public Policy, Seoul. This module from May 18th to 31st was one of the best training exposures that I have ever had. Till, we landed in Seoul, I had a different perspective on Korea. Now I am totally impressed by the Miracle, the Koreans have achieved in the last 30 years, truly the Miracle of the Han river, the river on which Seoul is situated.

South Korea is a nation that has braved all odds to transform into a developed nation with in a span of just 3 decades. From a per capita income of around 100 dollars in late 1960’s today they stand tall with a per capita income of more than 20000 dollars. And all this has been achieved inspite of the fact that they have no natural resources – No Oil, No Iron Ore, No Coal. Yet they are one of the leading producers of steel, have 40 % share of Ship building industry and companies like Hyundai, Samsung, LG, SK and POSCO are true world leaders. Their only resource is human resources and they have invested heavily into it – with a world class Education System, from Primary levels to the University levels and a firm resolve to excel and sense of discipline has helped them leap frog into the top bracket of developed nations.

How have they done this. South Korea has a population of 48 million and is strategically located between China and Japan, with hostile North Korea on its north. They have a GDP of 888 billion US dollars and a literacy rate of 98 %. Historically Korea has faced several invasions on its land. Korean history dates back to 2333 BC when it was a tribal state in the Ko Chosun Period. It faced the Han invasion during this period. In 37 BC, Korea comprised of Three Kingdoms of Koguryo, Paekche and Shilla kingdoms. After lots of infighting, Shilla dynasty ruled Korea in 668 AD. At this time, Korea faced the Tang invasion. This was followed by the Koryo dynasty in 918 AD when Buddhism reached Korea. Around this time, the Mongols invaded Korea. By 1392 AD, the Chosun Dynasty was ruling in Korea and at this time Confucianism prevailed. Japanese attacked Korea in 1910 and it underwent a long period of Japanese occupation. World War II was followed by the Korean War which ultimately divided Korea into the North and the South. North Korea went the Communist way whereas South Korea prospered under democracy. Thus historically Korea has been subject to foreign influence. China and Japan have always eyed Korea and later Russia, US and Western Europe regard Korea as a key strategic partner for the whole region.

It is interesting to know that almost 50 % of Koreans do not follow any religion. Around 23 % are Buddhists and 20 % are Protestant Christians. 6 % are Catholics and remaining 1 % follow other religions. There is a strong influence of Confucianism amongst Koreans and most people do follow the five cardinal principles of Confucianism:

1. Filial piety to parents
2. Loyalty to the King
3. Respect for the elders
4. Obedience to husband
5. Trust amongst parents

Of course, in modern times, this has led to the values like Respect for authority and family traditions, social harmony and relationship and emphasis on education and hard work. The general Confucian principle has been:

“When the moral character is cultivated, the family will be regulated; when the family is regulated, the state will be in order. When the state is in order, the whole world will be pacified.”

Along with these values and ethical principles, another feature of Koreans is that they are extremely hard working. As per the OECD fact book 2008, an average employee worked for 2357 hours in Korea. This is quite significant compared to other countries – USA : 1797 hours, Japan : 1784 hours, France : 1564 hours and Germany : 1436 hours. I am sure we are no where near those figures. These figures have greatly contributed to their booming economy. Their economy has undergone a process of liberalization and industrial restructuring with the political leadership resolving firmly to create world class infrastructure along with significant investments in Education and Health. Korea spends about 7.5 % of its GDP on Education, which is amongst the highest in the world. They were amongst the first to realize the limitations Agriculture has vis a vis increased incomes, and systematically ensured that Service sector and Manufacturing employs more people. In 1960’s around 65 % Koreans were employed in Agriculture and today it is less than 10 %.

Thus strong political leadership which had vision to invest in Education to create low cost educated work force has contributed greatly to Korean Economic Development. They have a high savings rate which leads to greater investment and in the 1980’s and 1990’s worked out an Export oriented industrialization that helped them to grow at a fast pace. They also had a lot of trust with the Big Businesses and Government really played the role of a facilitator in allowing companies like Hyundai, Samsung, LG to Dream Big and Plan Well. Korean companies are truly globalized and this they achieve through Capacity Building by collaborating with R & D centres, Universities, suppliers and consultants. R & D Expenditure in Korea is almost 3 % of GDP which is next only to Japan. Broadband Internet penetration is the highest in Korea – almost 98 % of households have access to Internet. The Korean students are amongst the best in the world, though questions have been raised on their system of over burdening the kids – many of them come back from school at midnight – leading to lack of innovations, creativity and emotional stress.

Korea faces many more challenges, the key being an aging population. Economic Growth is bound to slow down as the proportion of working population vis a vis dependent population is coming down. However, the enterprise of Koreans and their capacity for hard work and sense of discipline will ensure that they continue to achieve better things.

All this has lessons that can really help us also to change things for the better. Human nature is basically nothing but a combination of four drives. Drive to Acquire is inherent which manifests itself in the form of efforts to acquire money, status and power. Second is the Drive to Bond, which explains relationships, networking and the community approach to life. The third drive is the Drive to Learn, which motivates us to get Education & Knowledge and also to seek answers in Religion. Then there is the drive to defend which relates to formation of Nations, Families and Belief systems. It is the sum total of the four drives, and having the right mix, which leads to success and achievements.

There are many other aspects of Korea that thrilled us and made us think and reflect. Hopefully, I should be able to muse more on Korea in the days to come. Not only muse, but also to adopt some of the Korean ways for our benefit.


Abhishek Singh