Imagine a country which, as the first graduate from the developing world since 1964, has worked its way out of poverty, malnutrition and illiteracy while suffering from severe resource constraints and geopolitical insecurity.
Then imagine a country which topped the suicide rates among OECD countries, fell to the world’s lowest fertility rate, and gave birth to the “Three Giving-up Generation” who give up courtship, marriage and having kids at all.
The success and miseries coincided in the very same country — South Korea, widely referred to as the “Miracle on the Han River” through which scholars hope to extract lessions for developing countries. However, Korean people have benefited yet suffered from the rapid growth, for many of whom the “pains” seemed to have exceeded the “gains” and the “Economic Miracle” turned out to be a “Hell Joseon”.
A Rising Star with a Tragic Past: How Did South Korea Rewrite its Development Story?
Joseon, literally means “Land of the Dawn”, used to be the name of two kingdoms that happened to be the first and the last in the Korean history. However, unlike the brightness hinted by this name, South Korea (hence Korea) only found itself in endless darkness until the end of the Korean War: geopolitical insecurity, severe resources constraints, high level of illiteracy and absence of a decent industrial base. For post-war Korea, rapid development was still beyond its wildest dreams.
In the 1950s, despite of a deeply troubled economy, Korea has accomplished two important tasks which laid foundation for its future growth: land reform and education expansion. The dismantling of landed elites by land reform, together with improved social mobility by education universalisation helped reshape the social structure, without which South Korea’s “growth with equity” would just be pie in the sky.
The turning point only showed up in the 1960s when Park Chung-hee, an army general, came to the presidency with a series of economic policies that led South Korea onto the fast track to growth. The rapid growth during this period, is usually accredited by people to the special government-firm relationship that strengthened the power of “chaebols” (known as the South Korean conglomerates such as Samsung and Hyundai) to accelerate industrialisation. On the one hand, the state subsidised while exploited the labor-intensive export industries until they became competitive enough to offer “good quality products at lower price” in the global market. On the other hand, newly built higher value-added industries were protected before they gained strong enough productive capabilities to excel in the global market. During this process, government has collaborated with firms, designed an array of trade, technology and education policies, and ensured that all policies work coherently in ways to achieve industrial upgrading without causing deadly fluctuations that might threaten the overall economy. Attention was also paid to the growing disparity between rapidly industrialising urban centres and poor villages in rural areas, which led the government to initiate the Saemaul Undong (also known as the New Village Movement) to improve basic living conditions, build rural infrastructure and increase community income in the countryside.
However, development is not just about doing numbers game to seek an increasing GDP, it is about the life experiences and social practice, struggles and hopes shared by numerous people in this real-world game. Luckily, in the 1960s and 1970s, the highly authoritarian Korean government has been a powerful controller of all who have participated in this game: enterprises were offered with incentives, but were urged to pay back by reaching the performance targets set by the government; labours were earning increasing wages thanks to rapid economic growth, but were at the same time mobilised and suppressed by the government to devote themselves to national development with their ‘blood, sweat and tears’. What has usually been left out, yet should be memorised in this harsh game, were thousands of Koreans sent to Germany as miners in exchange for financial aid of 150 million Deutsche Marks in the 1960s, were tens of thousands of South Korean troops sent to the Vietnam War in exchange for a US economic development loan of 150 million dollars, and hundreds of Korean companies sent to the Gulf during the Oil Crisis to earn to relieve the country from severe economic depression. Historical events might fade, but should not be forgotten, especially when we are telling a story about development.
Korean coal miners workingin Germany in the 1960s, photo: DBM
Conflicts and Crises All Along: Development as Problem-solving or Problem-causing?
Never could Korea ever imagine that its escape from a dark tunnel only set itself on the path towards darkness again. The special government-firm nexus, widely seen as the secret of its success, was at the same time a source of problems. Although the state-firm cooperation was never devoid of corruption, before the 1980s, corruption happened in a way that was not detrimental to rapid industrialization — as the authoritarian state also relied on delivering rapid growth jointly with firms to enhance its legitimacy. Ever since the political climate has changed with the advent of democracy after the 1980s, the Korean government maintained cooperation with chaebols, but no longer with disproportionate focus on accelerating growth when defending legitimacy required it to respond to voters, speak to diverse interests and attend to welfare concerns. The chaebols were still collaborating with government, but gaining incentives more to invest in scale expansion of themselves than to spend on productive activities to sustain high-speed growth at national level — thus intensifying “the rich got richer” situation.
The over-reliance on the overly powerful conglomerates also cast shadow over labour market. Korea’s speedy industrialization and upgrading, by swiftly drawing a huge rural population into cities and disruptively replacing the labour-intensive sectors with capital-intensive and information industries, called for massive jobs to be created and workers to be retrained or protected. However, the conglomerates which diversified their business into unrelated industries and solidified their domination in the domestic market have not only weakened the job creation capacity of themselves, but also prevented small firms from growing into modest size to absorb enough worforce. Development thus proceeded with an expanding cohort of self-employed who failed to be incorporated into modern enterprises, bringing Korea to the seventh highest self-employment rate in OECD by 2020.
An increasing competitive job market with highly limited positions have also passed on worries to the education system, creating the “academic arms race” that boosted Korean families’ spending on private tutoring to the world highest levels. In the meanwhile, the widespread ‘competitive mindsets’ were reinforced by an unbalanced social insurance system which protects the employed better than unemployed, and stretched the lower wage earners more than higher wage earners. Development, other than solving past problems, has been creating new problems in Korea all along.
A Real-Life Squid Game: Welcome to the World
You may have heard of the “Squid Game”, the hottest Korean drama on Netflix telling the stories of a group of 456 “losers” struggling in their real lives invited to compete in a series of children’s games to become the final “winner” who would be offered with a 45.6-billion-won prize. The probability of becoming the winner is only 1/456, the stakes, however, were extremely high: anyone who loses in any of these games will be directly shot to death. At the same time, as the contestants never know, when they were running, crying and fighting in the game, there were a group of rich speculators watching this live-broadcasting game from a luxurious VIP lounge.
The Korean society is no different from this cruel game, where everyone is born to be told that there is always a probability to gain huge success as long as one works hard enough. However, young generations in Korea, after working their ways through competitive entrance exams into universities, frustrated when realising that the job market is even more competitive. Those who succeeded in their job interviews soon lost in desperation when realising how their salaries are low in relation to the soaring house prices in Korea. Struggling to achieve their life goals, young people nowadays see courtship, marriage and having kids unnecessary in their lives and desperately see South Korea as a “hell” from which they wish to flee away.
It is true that the last generation in Korea have witnessed how their efforts have been directly translated into rapid national development, surging individual incomes and better living standards. However, in Korea, development proceeded as old problems were overshadowed by new challenges, during which the social structure remained unbalanced: the landed elites dismantled by an authoritarian government were replaced by a group of strong capitalists that may not be easily weakened by a democratic government. The benefits of development expanded rapidly, but at the same time highly stratified: education has been universalised, but only to make the entrance into top schools even harder for those who lack sufficient educational resources; welfare has been allocated, but only to leave those who are less well-off with even less social protection.
Trapped in a real life “Squid Game”, most Korean people are still convinced by the “rule of game” that no matter how difficult, their efforts will lead them to the top as the final winner. The truth is, the rules were actually manipulated by those who were already sitting at the very top of this hierarchy. Unlike the hard-working contestants, they only enjoyed watching, but never participate in the game themselves.