Kyu-won Choi, Columbia Law School (LLM Class of 2010), describes her opinions about the South Korean economy.
1. What are the reasons for South Korea’s rapid economic development?
South Korea had a well-organized, government development plan, a benevolent government leader (then-President Park Chung Hee), a well educated & trained labor force that has a strong work ethic, as well as a desire to increase their standard of living.
2. Is Korean economy’s “too globalized’? Does globalization make the economy vulnerable?
Viewing the issue from a global standard, the Korean economy has to go a long way to go to become ”globalized”. AT Kearny/Foreign Policy ranked Korea the 35th in its globalization index. The World Bank, the Heritage Foundation, and the Transparency Institute also placed Korea between 20th and 40th place in their similar indices.
These institutions note that Korea had too much regulation and too many interventions from the central and local governments. In additon to the regulation, there are many NGOs that oppose globalization or the opening up of domestic economy and some Koreans have anti-globalization perspectives.
As you can see from many foreign exchange crises or financial crises, including Korea’s, globalization needs to have orderly and well-organized action plans and preparations. On the other hand, an approach that is too conservative or too cautious will hamper the ability of the country to institute a sound globalization process.
3. What should South Korea do to overcome the drawbacks of globalization?
Koreans, including all levels of civil servants, need a more ‘open mind,’ The country needs an orderly de-regulation process and it needs to open its markets and apply global standards.
4. What are expected benefits and challenges associated with a Free Trade Agreement between South Korea and the United States of America?
The benefits include market expansion and the ability to become more competitive, through increased competition.
5. There is a huge anti-FTA movement in South Korea. What are their main arguments?
The main arguments originate from less competitive industries, such as farming (livestock, dairy, etc), who feel that they will be hurt by the process.
Additionally, some employed in the services sector, such as in law, distribution, financing, also believe that they will get hurt a lot when American firms penetrate into Korea’s relatively closed markets. They believe that as a result of the FTA, many Koreans will lose their jobs and will be forced to have a lower standard of living; the result will be ’the rich-get-richer and the poor-get-poorer.’