Magazine

South Korea's Big Score


Global football fans swinging through South Korea and Japan for the month-long 2002 World Cup series starting on May 31 will find a study in contrast among the co-hosts. Japan is far richer, of course, but years of economic stagnation and weak political leadership have made it a rather listless place. In South Korea, it is all high-fives at the moment. Its economy grew 5.7% in the first quarter. It is No. 1 in the world in broadband penetration and boasts 30 million mobile-phone users in a land of 47 million people. Korea's big industrial conglomerates, or chaebol, are leaner and more focused. Hyundai is a global auto competitor and Samsung Electronics Co. is making waves around the world for its award-winning product design. Korean pop music and films are considered chic in Japan, Taiwan, and China.

It all adds up to a remarkable transformation since the economic collapse of 1998 and the humiliation of an International Monetary Fund-led bailout. Certainly South Korean President Kim Dae Jung and his team of economic advisers deserve much of the credit. After assuming power in early 1998, Kim & Co. quickly forced the chaebol to cut down their debt loads, sell off assets, and refocus on two or three core businesses. Weak banks were shut down, merged, or sold off to foreign investors. Today, the Korean stock market is one of the best-performing in the world, and the nation's credit rating, unlike Japan's, is rising, not falling.

More fundamentally, Korea's whole value system has changed as well. The chaebol are no longer the first choice of the best and the brightest coming out of the top universities. There is a thriving entrepreneurial business culture now in place, and some 11,000 startups have come onstream since 1998. Koreans are increasingly taking risks. Filmmakers explore once taboo subjects such as the military standoff with North Korea, or the criminal underworld in Seoul. Koreans are seeking more individuality in their lifestyles and workplaces.

Under South Korea's single, five-year term system, Kim will leave the Blue House early next year. His successor will need to keep up the reform drive to secure a prosperous future for South Korea. A good place to start is cleaning up corruption in the political world. Kim's popularity has plunged in response to influence-peddling scandals involving at least one of his sons and a dozen or so appointees or advisers. Even so, the Kim era saw a fundamental shift away from a top-down, state-led economy to one more open, dynamic, and driven by high tech. Korea had its back against the wall, came out swinging, and renewed itself in the process. So let's raise our official World Cup-sponsored beer mugs and toast Korea. It certainly deserves it.


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