THE ASIAN AFFAIRS PUBLISHER'S MOOD (Summer 1999)
IS SOUTH KOREA MOVING OR FAKING IT? (issue nº 08)
Fernand Braudel, in his remarkable book "Civilization & Capitalism" asserts that any society based on an ancient structure which opens its doors to money sooner or later loses its acquired equilibria and liberates forces that can never afterwards be adequately controlled. Then every society has to turn over a new leaf under its impact.
There is no better description of what is currently taking place in South Korea. This country which was the poorest of the poor not so long ago, its per capita income being inferior to that of its communist sibling, North Korea, for most of the 1950s and 1960s, is today in a state of flux.
However, what is going to be the "new leaf" is not necessarily what is called the "new global order", which is a misnomer for "pure capitalistic system".
The Republic of Korea has many problems but also a very important asset: its hard-working society. Unfortunately, there is a pervasive feeling that the Koreans themselves are only prepared to say or think what they feel their interlocutor is prepared to listen to as if action and words were two different things. Maybe such sentiment is not warranted. Or maybe the facade is a second nature born out of the long running feud with its estranged North. After all, how do we know what it is to live in a country still technically at war with its neighbour?
But there could be a less sinister reason than the shadow of war: the culture. Korea, for all its progress in the economic field, remains very much entrenched in a traditional feudalistic structure where part of the population (and the weaker sex) are still very much at the bottom of the social conscience.
Although the problems ascribed to Korea are attributed to the so-called "Asian crisis", they have in essence little in common with those encountered in the ASEAN countries. At first look, they don't even have much in common with Japan's economic problems. Yet, on closer analysis, both countries suffered from the same syndrome: both have a postwar constitution which did not emanate from the existing social order but actually laid the foundation of an egalitarian society where there was no tradition of having such a society. And today, both societies are mired in the same political imbroglio and with the same dilemma: how to reconcile the divergence between the institutional framework and the mentalities.
As we are told that the chaebols were a facade, to maintain a semblance of capitalist society, while in fact Korea was very much under government-led planned economy for the past thirty years, we have to wonder why it is that, in Asia, the two examples of pure capitalism, Hong Kong and South Korea, owe their rapid development to the fact that they were, and still are, among the most controlled economies of the world, making a mockery of the truism that there is a strong connection between economic prosperity and economic freedom.
That South Korea was a myth, as much as Hong Kong, is maybe for the same reason. Neither of them could stay in the history books as the bounty snatched from the enemy (in the case of South Korea, the communist world, in the case of Hong Kong, imperial China). But sooner or later, reality sets in, as you cannot live in a fantasy world for ever.
South Korea joined the Organization for Economic Cooperation and Development (OECD) in December 1996. If it was the ultimate goal, it was also the end of the fantasy. But as much as Korea did not realize that its constitution was not in line with its social order, it did not realize that statistics do not tell the truth. If money-wise, its economy had reached the right number, socially wise, it was very much still in the past, having only adopted all the trappings of the modern economy for the benefits of its rulers, and discarded or ignored everything threatening the tradition.
Today, everyone agrees that the divergence between their economic aspiration and their social structure was unsustainable in the long-run was not really understood. But does that mean that the necessary reforms in all aspects of the Korean economy and political scene will now proceed? Is, in other words, progress inevitable?
Some say yes. But if it is easy to roll-over debts and to increase productivity, if it is relatively easy to adopt new accounting standards, to modify drastically the "traditional" principles that rule the Korean society is another matter. And here, I am less optimistic.
What is needed is a change of mentality but it does not seem we have it and the chaebols have a point. The government is meddling everywhere with the overbearing feeling that it has to do so because the others are incompetent. Hong Kong suffers from the same syndrome. Bureaucrats never reform themselves unless they are confronted to the political will of the people.
South Korea does not really need a French Revolution type of revolution, but a strong political power to counter the bureaucrats and the power in place. It does not have that and is unlikely to have it. Even Chung Woo-tail who laments that state of affairs, concludes that the leaders rule and have the final say, because that is the way things are done.
One important factor missing in this issue is North Korea. We tried to interview some of its leaders. It looked like it would have been possible till the naval incident of June. After that, it was clear that it was unlikely that we would get a favorable response. They declined the meeting but we will try again if the political situation allows it.
All in all, what to think? Democracies have a problem with rising economic inequality because they believe in political equality, but then the "one person, one vote" rule does not really work in Korea where we rather have "one province, one vote". Some say that Kim Dae-jung will change all that. It is possible, but there is no sign of it. On the contrary, he is trying to increase the number of seats of the functional constituencies in the Parliament. Again there, Hong Kong, with one-third of its deputies at the Legislative Assembly (LEGCO) elected by a select group of professionals, comes to mind. Such a move is not conducive to a more egalitarian society.
Historically, some very successful societies have existed for a long time with enormous inequalities in the distribution of economic resources. I don't think the polarization that the crisis has brought everywhere threatens the social and political order, all the more because none of the Koreans believe in reality in equality in any sense whatsoever. In all likelihood, Korea will recover faster than most expect, because as we are told naively, authoritarian governments are sometimes very efficient and Korea has proved that it strives under such a system.
A word about the Indonesian election. Dr. Anwar is telling us that it is the statu-quo forces that have emerged as the winners. This opinion may shock the readers who might think, in view of the headlines the western-minded media give to Megawati, that she is a reformist leader.
There is something quite pathetic about the way the West is constantly creating icons in this part of the world. It is a fact, for any honest observer, that Megawati lacks everything that is needed to run a country, except, being the daughter of the first President of Indonesia, the notoriety brought by her birth. But it would not be the first time that Prime Ministers and Presidents are elected because of their dynastic credentials. The Philippines went through the Aquiño period, at a dear cost whatever the people are today saying, and Sri-Lanka, Bangladesh, Myanmar and Pakistan are still coping with a similar problem. It is generally the hallmark of a feudal society which clings to the dynasties of well-known families as if they were God. Unfortunately, they are not. And in Indonesia, President Habibie has still a very good chance to remain where he is, as Golkar and its allies are far from being defeated.