Thursday, November 11, 2010

South Korea and the G-20 Summit

IT'S OUR TIME. The economic renaissance of South Korea is in the hideout compared to the rise of China and India, so this is the time for Lee Myung-bak to stop being so humble and play a more important role in shaping the world's agenda at the G-20 economic forum.

As the host, South Koreans have a story to share ahead of the G20 summit which will be held on their soil on November 11.

Now a member of the 20 world’s largest economies, South Korea’s imposing economic transformation, which is well-known as “The Miracle of the Han River”, could become an example for every citizen of developing country who envisages writing the same history as theirs.

In my university, I still remembered when my economics lecturer presented me South Korean economy case-in-studies on several occasions. During that time, my economics lecturer –who is also a prominent economist in Indonesia– always underlined the importance for us the Indonesian students, as the future economists and policymakers, to learn from Korea of how their brawny industries and massive exports tally fuel their faster-than-ever economic growth.

It's simply breathtaking seeing Korean companies such as LG and Samsung could compete with Japanese heavyweight like Sony, or when Hyundai and KIA Motors racing neck to neck with US' General Motors. In Indonesia, a nation whose export number holds only a small percentage in our economic lifeblood and for so long has become our Achilles’ heel, South Korea’s success story on its export and industry has become a benchmark for us to succeed.

It is, without doubt, a remarkable achievement for a nation whose economy once damaged badly because of the Korean War, and has few resources in disposal to repair the situation at hand.

With little natural resources and diminutive domestic market, South Koreans could be forgiven for being timid back then. Compared to their northern brother, they were very much overlooked in the global stage: at that time, their economic size was even smaller North Korea and in fact was also ranked among the poorest countries the world.

It was not until Park Chung-hee –recognized as the South Korea’s version of Deng Xiaoping– came to turn the fate of the South Koreans upside down. He helped to unleash the immense potential of South Korea’s industry by laying the foundation of an export-oriented economy, and promote an economic reform which is perceived as the highly-successful gambit that bolsters its rapid economic growth today.

By the time Park Chung-hee became president in 1961, the income per capita of South Korea was merely US$ 72. South Korea’s economy was very small back then –so small that in one of his addresses, Barack Obama mentioned to the young African leaders forum that by the time he was born –that was, the year of 1961– South Korea’s economy stood at the same par as Kenya, even less wealthier.

But thanks to its highly-successful industrialization and massive export numbers, today is a completely different story. The data from World Bank in 2009 shows that South Korea’s gross domestic product (GDP) per capita stood at the level of US$ 17,078, outpacing African developing countries –including Kenya– whose GDP per capita today are still less than US$ 1,000.

Indeed, this rags-to-riches story should be put as lesson for leaders from developing countries who fancy their citizens to have a more affluent future, including Indonesia.

For many developing countries, one of the criticisms pointed to G20 economies’ leaders these days is their ignorance towards less-developed countries, as the forum is mostly dominated by heated debates discussing the interests of developed countries rather than the less-developed ones’.

As a former poor and under-developed country that has gone through one of the most inspiring economic revolutions the world has ever witnessed, citizens from developing world in many parts of Asia and Africa –whose countries are not so fortunate enough to be included in G20 economies– will put profound expectations in the shoulders of South Korean representatives in the upcoming G20 summit.

They will very much hope that the South Korea can help in setting leadership and directing integrated economic policies which will represent and assist developing countries as a whole.

In an era where Asian countries and “new kids on the block” in the economy like China and India start to play a more pivotal role in shaping the world’s agenda, South Korea could host the next G20 forum with brimming confidence.

Yes, it is understandable if South Korea’s achievement in economy is very often underrated and superseded, as China’s and India’s inexorable economic engines are turning too many heads already these days.

But compared to its counterparts in the G20 economies, this is the nation which started the race way far behind its compatriots, yet still managed to stand at the same level with them eventually. This is one of the Asia’s economic tigers which very much depends on export in its economy, yet still weathered the recession relatively successful compared to its other export-oriented peers.

For all its economic accomplishments, in the next G20 economic forum South Korea has more than what it takes to play a more important role in shaping the world’s economy.

G20 economies must not forget the developing world, and on the upcoming G20 summit all the developing countries’ citizens will hope the host can act as their envoy, so that in the future another “Miracle of the Han River” can be engendered.

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