1 - Introducing the South Korean economy

Summary

The Republic of Korea (South Korea or Korea hereafter) is a relatively new state, having been born out of colonialism under Japanese imperial rule (1910–45) and all-out civil war (1950–53) between the southern and northern halves of the peninsula. While the origins of the Korean nation are linked to antiquity (Gojoseon, c.2333–108 BCE), it is the modern period that this book is concerned with. Notwithstanding the tremendously influential pre-modern history, which should not be overlooked for a most robust understanding of what Korea as a whole is today, what makes South Korea so interesting and important from a comparative perspective is that it developed, both economically and politically, with such rapidity as to eclipse the pace set by other late developers such as Japan and Germany. South Korea, thus, despite its relative size and recent ascent into the league of industrial powerhouses and leading exporters, has generated a tremendous amount of scholarly coverage and continued fascination.

In addition to providing a concise descriptive overview, the main questions this book seeks to help answer are: What are the causes of South Korea’s political and economic miracle and the consequences thereof? Can the twin economic and political achievements be sustained, despite all the challenges in the wake of the Covid-19 pandemic, continued threat emanating from the Democratic People’s Republic of Korea in the north and an increasingly aggressive foreign policy from China? Lastly, setting aside challenges, both domestic and international in origin, what can the case of South Korea tell us more generally? Most critically, can the success of development and democracy be replicated in the context of other countries?

THE PUZZLE OF THE ECONOMIC MIRACLE

While the term “miracle” is frequently utilized for the unexplainable, we employ it in the spirit of something that is truly wonderful, which begs the question as to what is so wonderful or miraculous about the Korean economy? As of 2022, South Korea is one of only two East Asian members of the Organisation for Economic Co-operation and Development (OECD), the Development Assistance Committee (DAC) and the 20–50 Club, which includes the seven countries in the world with more than 50 million in population and more than 20,000 per capita USD ($ hereafter) annual gross domestic product (GDP), and as of 2018 surpassed Japan in this measure.