Abstract
A classic case of historical economic backwardness, the Korean peninsula faced external subjugation and internal stagnation for most of the second millennium. Invasions by the Khitans (10th and 11th century), Mongols (1231–59), Manchus (1627–36) and Japanese (1592–98) made Korea (hereafter refers to Korea prior to division as well as to South Korea, or the Republic of Korea) seek refuge in the Chinese ‘tributary system.’ However, the nineteenth-century rise of industrialism in Europe and the relative decline in China’s power brought intense Western imperialist pressure on Korea to force open its ports for international trade and commerce. General Sherman incident in 1876, Korean-American War of 1871 and Japanese raids to Busan in 1876 created hostility between Koreans and foreigners. These bitter historical experiences with outside powers caused Korea to harbor deep-seated distrust toward foreigners, culminating in an explicit policy of self-isolation, earning it the designation, ‘Hermit Kingdom.’ 1 The far-reaching external changes unfolding at the turn of the 20th century brought enormous pressure on Korea to adapt to new demands from the competing foreign interests. Unprepared to react effectively, Korea (under the Chinese tributary system, Sadae Chui) showed unwillingness to adjust to the structurally changed situation around the peninsula and, consequently, became the victim of colonialism, World War II and a subsequent painful national division.
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Notes
William Elliot Griffis’s book (1882) Corea: The Hermit Nation, is the first documented source that used the term ‘Hermit Kingdom.’ Many Koreans also use this term to refer to pre-modern Korea.
The term Yangban finds its origin in the civil service examination conducted under Munkwa (civilian) and Mukwa (military) categories during the Koryo Dynasty (935–1392). However, during the Joseon Dynasty the entire landholding class was known as Yangbans, who for obvious reasons controlled various privileges offered by the state, including the exclusive right to give civil service exams, large tracts of land and other stipends, etc. In the absence of any socio-political contest, the Yangban-dominated status quo continued even during the colonial period. Only comprehensive land reforms post-independence were able to finally end Yangban domination. For further details about this tiny aristocracy, see Martina Deuchler (1995) The Confucian Transformation of Korea: A Study of Society and Ideology, Harvard-Yenching Institute Monograph Series, Cambridge, MA: Harvard University Asia Center;
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In the 1960s, Korea’s real GDP registered an average 9 percent growth rate; in the 1970s, it moved to 9.3 percent and touched 10 percent in the 1980s. Similarly, Korea’s industrial transformation was equally remarkable, as by 1996 Korea became the world’s No. 1 manufacturer of memory chips, the No. 2 shipbuilder, No. 3 supplier of semiconductors, No. 4 in electronics and No. 5 in automobiles. For details see, Alice H. Amsden (1992) Asia’s Next Giant: South Korea and Late Industrialization, New York: Oxford University Press;
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The quantum leap from the ‘feudal agrarian economy’ with per capita GNI US$60 in 1960 to one of the ‘advanced industrialized economies’ crossing per capita GNI US$11,385 in 1996 and touching US$24,000 in 2013 has been achieved within a generation. For the details of this remarkable transformation, see L. Jones and I. SaKong (1980) Government, Business, and Entrepreneurship in Economic Development: The Korean Case, Studies in the Modernization of Korea: 1945–75, Harvard East Asian monographs, vol. 91, Cambridge, MA: Harvard University Press;
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Books carrying such titles provided convincing explanations regarding Korea’s first successful transition from the agrarian to the industrial era. For details, see Alice H. Amsden (1992) Asia’s Next Giant: South Korea and Late Industrialization, New York: Oxford University Press;
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Literature on the Korean financial crisis is divided into two perspectives; first, a systemic crisis perspective that blames macroeconomic imbalances, moral hazard in banking and external shocks as a major cause of the crisis; second, a financial liberalization and structural weaknesses perspective that cites unproductive credit in the banking system, financial liberalization that created scope for currency and maturity mismatches, and a self-fulfilling loss of market confidence, manifested in the refusal of foreign lenders to roll over short-term loans to banks, forcing illiquid borrowers into bankruptcy. For further details regarding literature on the financial crisis, see G. G. Kaufman, T. H. Krueger, W. C. Hunter (1999) The Asian Financial Crisis: Origins, Implications and Solutions, New York: Springer;
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The prime indicator of corporate control is a nation’s stock market, which in the case of Korea permitted only 13 percent foreign ownership in 1996 and increased to 50 percent in 1997. More specifically, 58.1 percent Samsung Electronics, 55.3 percent Hyundai Motors, and 70.1 percent POSCO equity moved to foreign hands. Similarly, foreign ownership in the Korean banking sector in mid-2005 was 74 percent for the Korea Exchange Bank, 100 percent for Korea-America Bank, owned by Citibank, 100 percent for Korea First Bank, owned by Standard Chartered, 76 percent for Hana, 84 percent for Kookmin, and 63 percent for Shinhan Bank. For further analysis on this matter, see J. Crotty and K. Lee (2005) ‘The Effects of Neoliberal “Reform” on the Post-Crisis Korean Economy,’ PERI Working Paper Series, 111: 1–21.
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In the post-financial crisis (1997) phase, the NGO sector in Korea expanded rapidly. There exist more than 20,000 NGOs in South Korea (NGO Times, 2000). It is notable that the number of NGOs increased dramatically in the 1990s, as indicated by the fact that more than 56 percent of NGOs were established in the 1990s. More than numbers, the NGO sector in Korea commands more societal trust than other political institutions, including political parties. In 1991 the Citizens’ Coalition for Economic Justice (CCEJ), a Korean NGO, was formed to seek an ethical overhaul of the economic system. For this purpose, CCEJ founded the Korean Economic Justice Institute (KEJI) to evaluate the ethical performance of large Korean corporations. For details, see Soo Joo Sung (2000) ‘Understanding the NGO Revolution in Korea,’ Global Economic Review, 29(4), 3–19;
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© 2014 Jitendra Uttam
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Uttam, J. (2014). Perspectives, Arguments and the Structure. In: The Political Economy of Korea. Palgrave Macmillan, London. https://doi.org/10.1057/9781137451248_1
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DOI: https://doi.org/10.1057/9781137451248_1
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