Nitty Gritty of South Korean Development

In almost every discourse about the development in Nepal, Korean example is cited as the epitome of the economic transformation. Korea is the only country in the world to have transformed an aid receiving country to aid-giving country. What are the factors behind the success of the Korean economy? The purpose of this blog will be primarily to examine this question. 

Image Source: Wikipedia

The real growth of Korea started only in the 1960s, by which time the country had made significant reformation in agriculture and macroeconomic indicators. By then, the country had created a strong foundation for the export industry through a periodic focus on low to high-end products during the 1950s. It achieved the latter through its policy of overvalued currency in the 1950s and import substitution policies. Similarly, the government did not allow for the massive money-financed deficit and did not follow a real exchange rate policy. The combination of these policies ensured the profitability of the traded goods sector. As a result, government policies have sustained relative financial stability.

The sustained high level of investment since the early 1950s and large external financing kept the engine of the economy running for it to achieve sustained economic growth. A high level of investment was possible because of a) its people's tendency to save b) support from the United States and the United Nations. By the 1960s, Korea decreased external financing as external investors were turning away from the grant to loan. Korea could sustain economic growth firstly because of a) its competitiveness in the labor market and b) vibrant and trusted trading partners. It traded manufactured goods with the USA, Japan, and China, all of which were large, vibrant and growing economies. The opportunity to work in the European countries at the beginning of the 1950s and in the Middle Eastern Countries in the 1970s was an added advantage to Korea. These were the difficult times for Korea as the country was in the poverty trap in the 1950s and had to hold ground during oil shock in the 1970s. In the 1980s, Korea liberalized its economy and protected its infant industries and while also opening its market to import certain material intermediate materials for its export industry. 

What was the Important Factor for the Development of the Korean Economy?

Image Source: Export Delaware Blog

It is not a single policy per se that paved the way for the success of the Korean economy. The opportunity to study and learn from Japan, Taiwan, and other East Asian Countries, which went through a similar phase of development a few decades before Korea, gave Korea an edge to plan prudently to follow the positive footsteps of these countries or to avoid pitfalls. The constant support from the United States and the United Nations through grants, aid, loan, technological support and even military support at times played another role. While North Korea had to go through a long period of depressed growth because of its closed economy, South Korea, on the other hand, because of its open economy, trade liberalization and good relationship with the Western Economy leveraged the unique political situation to its benefit. 

Talking about the policies, it was not a high-interest rate or low-interest rate, weak currency or strong currency, emphasis on agriculture or Heavy Chemical Industry, emphasis on the import or exports of the goods, or high reliance on the foreign aid or low reliance on foreign aid but the prudent selection of each of these choices when the situation demanded. For example, the government pushed for labor-intensive industries and brought programs to enhance human capital when there was high unemployment, but the country switched to heavy and chemical industries when the competitive edge in these industries dwindled. At times the government intervened excessively to correct misallocation and at other times it relaxed the command over the economy. I think the leadership that was very erudite, prompt, far-sighted, and strong-willed to understand the need of the given time to form the policies that best fit the situation was the most important factor behind the success of the Korean economy.

Which Factor Should Other Countries Copy? 

The underlying aspects of Korean economic development were labor competitiveness, high investment through high national savings and external financing, appropriate government intervention and good macroeconomic policies. Investment is necessary for developing countries to make a large infrastructural investment or to industrialize to trade volumes. Emphasis is given to foreign direct investment or foreign aid to ensure a large influx of much-needed investment but the Korean success story suggests that the domestic saving is as important to break the poverty tap and in striding towards the high sustained economic growth. This is one aspect I think the developing countries can copy and should copy. 

Image Source: Freight Waves

The United States and the United Nation had a huge role in the development of Korea through its economic, technological and military aid and its support as a trading partner. The United States, in particular, was concerned about the development of South Korea to make it superior to North Korea, which was an ideological enemy to the United States. Not all the developing countries have this luxury to get support from the hegemonic power like the United States. 

Communism, literally?: A take on Nepal Communist Party(NCP)

Source: Nepali Times

After the unification of the two largest communist parties of Nepal, the crucial question of whether the party should embrace People's Multi-Party Democracy or 21st Century People's democracy has surfaced in the discourse of the party. Ironically though, these ideologies are a far cry from 20th-century typical communist maxims and there is not a significant difference between these ideologies. At present, Nepal Communist Party (NCP) embraces none of the typical communist features—one-party system, centralized government, command economy, state-owned means of production or shared wealth based on need rather than contribution.  For better or worse, these parties had morphed from a communist-inspired force to a liberal democratic force. In the process, they have conformed to the basic capitalist tenets such as the right to property and market economy and have embraced democratic values and civil liberties. Although the communist ambitions of these parties may have been compromised, the voters gave them an overwhelming majority to stand up to their socialist and democratic promises. Therefore, the NCP led government need to emphasis on shared prosperity and treat democracy as its core principle, irrespective of the semantics of their name or their official political ideology.

Democratic Values

Google Images 

Karl Marx envisioned the communist system to be the dictatorship of the proletariat. The communist regimes formed after the death of Marx gave little to no respect for personal liberties and established centralized authoritarian states. Nepalese communists shed blood like the most communist, but they fought against the undemocratic state institutions of Panchayat and King Gyanendra's rule to establish the democratic values of pluralism, press freedom, and personal liberties.  The communists are to be commended for their fight for democracy, but the signs are telling that the NCP led government is burgeoning in the scale of authoritarianism.  

Google Images

In addition to bringing different departments under the Prime Minister Office’s (PMO’s) direct supervision, the government has stacked its loyalists in most state and non-state institutions, skewing more power towards the already powerful government. Meanwhile, NCP has tightened the freedom of speech within the party and NCP-led government has needlessly imposed politics into academia, has brought the media bill to hurt the freedom of the press, and has tabled a bill to curtail political independence and economic resources of the National Human Rights Commission. On top of that, the tabled Information Technology(IT) Bill can be to criminalize reporting on government misconduct and expression of critical opinions by civil society and citizens by levering the vague provision of protecting national sovereignty. Similarly, some ministries have barred their staffs from criticizing the government or party or commenting, liking or sharing posts to that effect on social media. At other times, it has deflected any criticism aimed at its workings. It appears that the current government does not like the idea of ideological feedback or the political debate as it gets offended by the customary criticism from media, civil society or intellectuals. The communist government is weakening the very the institution it fought to establish.

Equitable Economy

Before the Oli government took power, the economic growth rate of Nepal was one of the lowest among its peers in Asia—landlocked or otherwise.  Yet, Nepal had significant progress in income inequality reduction and poverty rate reduction in seven years and fared better than fast-growing economies like India and Bangladesh in this respect. The job, however, is far from over for the current government. The current K.P. Oli government has prioritized economic growth and has set a goal of economic growth as high as eight and a half percent. To this end, economic growth of over six percent has been achieved for the last two years. The trend of the economic growth also looks good, but emphasizing on the economic growth alone has its pitfalls. For example, the average income of the people in the bottom 50% of income bracket decreased in real terms from 1980 to 2010 despite an almost four-fold increase in the GDP per capita of the USA over the same period.

 

Source: Al-Jazeera News 

Therefore, as much as the government’s success will be measured by economic growth and their support of entrepreneurship, it will be most gauged by the economic empowerment of the poor and marginalized people who are the communist party's core political base. If the larger share of growth is disproportionately shared by those in the upper-income bracket, the end goal runs counter to the communist ideology. As such, the government should look at ways to maintain the balance between growth and its distribution. The researches show that countries can improve both economic performance and equality without a tradeoff with the right system and policies. Rampant cronyism and corruption are not the ingredients of such a system, however!

The Takeaway

Google Images

At present, Nepal is the only country to be ruled by a democratically elected communist party at the central level. While democratically elected communist parties, at times, have turned into a one-party system as in Czechoslovakia, these parties, at other times, have held into the government for considerable time as in Cyprus, Guinea or West Bengal. While the first avenue seems unlikely, whether the party in Nepal can prolong their hold of power depends on two distinct entities. The voters are the first entity. The government has made laudable steps by introducing the social security scheme and progressive tax system for their political base. However, if the government does not address the day to day expectations of the people such as more jobs, better roads, lower corruption, increased wage, rule of law, good governance or affordable cost of living, the frustrations may manifest in the next election. The second important entity is the political actors outside of the parliament. It is not to be forgotten that communist rose to power by tapping in the public frustration on the issues of exclusion, inequity, and unemployment. The last bit of their political success came about by inciting the masses against the authoritarianism of the then King and Panchayat system.  The communists must solve, not systematize, these problems ranging from inequity to authoritarianism if the country is to achieve the goal of happy-prosperous country.

Reimagining Education

"What is the capital of Gandaki Province?" I asked the students in class 8 of a school in the same province where I was a volunteer teacher. "Pokhara," they replied in unison. "Which city other than Pokhara would make a good capital of our province?" I asked again. The class mumbled but when I asked again for an answer, the class went into utter silence. " Anyone wants to give a try?" I asked. "Will this question appear in our next exam, sir?" a student responded following the class' inability to answer the question. The students were habituated with ideally listening to the teacher believing s/he says with homework involving copying a part of the text in which handwriting was given emphasis that they preferred the same. Therefore, they were very hesitant to speak when I asked the open-ended questions, gave the opportunity to ask questions, and probed to debate my assertions.

A Greek philosopher Socrates says the purpose of education is to examine one's life and to learn to question the authority. Socrates would be disappointed with the classroom setting of Nepal as it neither prepares students to question the authority nor brings about critical skill sets. An examined life would be the one in which one questions the traditional dogmas or challenges conventional wisdom. We cannot expect the students to fight against the social injustice or discriminations of all forms if compliance with the authority is the norm. Students need to be trained to challenge conventional wisdom and to create new ideas to fulfill the Socrates' claim. These skills can only be garnered only if the students are allowed free thought and taught the questioning skills. 

While Socrates’ claim still holds true, Michio Kaku in his book Physics of the Future claims that the recent biggest boon of the education has been the creation of scientists and innovators who have led the world’s transformative development in recent human history. The Oxford Encyclopedia of Economic Historycites studies that show that ninety percent of income growth in England and the United States after 1780 comes from technological innovation through science and technology.  To that end, a country needs to have a workforce with a higher level of creativity, imagination, and innovation to reach a higher level of science and technology. Since our teaching pedagogy does not nurture these skills, Kaku would be skeptical about our ability to produce top class scientists and innovators who can dramatically transform the economic landscape of the country.

Our students lack abstract reasoning, argumentation, and questioning skills because of two basic reasons. Firstly, our learning outcomes are measured by a student's ability to memorize the dates, names, formulas or the parts of the text without necessarily needing to understand the context or their significance. This method of assessment fosters rote learning and subdues the questioning, reasoning or debating skills among the students. Similarly, our cultural liking of obedience and respect is another hindrance to accumulating those skills. An attribute such as discipline, meaning compliance with the teachers, is pushed for and instilled upon the students, downplaying the questioning skill or open discourse in the class.

Since education is for the sake of students, it should be that they should be given the opportunity to have input most of the time. Socrates famously said that the role of a teacher is akin to that of a midwife, bringing out what is already in the student. As per Socrates’ module or what is currently known as learner-centered teaching methodology, students take an active role in a class and the teacher serves as a facilitator. They do so by engaging in discussion with the tutor and each other, by working in a group, by learning without constant monitoring and by evaluating their own work. By encouraging questioning skills, free thought, imagination, and creativity, this approach fosters transferable skills such as problem-solving, critical thinking, and reflective thinking among students. 

It is established that learner-centered methodology is ideally an approach our schools should follow starting from very early classes. The biggest challenge we now face is to make sure that those learners, who are to become future leaders, scientists and innovators, pursue higher education, see value in education, and stay or return to Nepal.  Most of my students were unsure if education would lead them towards a satisfying job in Nepal. "My brother completed a master's degree in management but he still has not got a job in his field. He is taking Korean language classes to go to Korea on a working visa. I do not see higher education worth my time or money, which my parents do not have," says Roshan who is vying to become Indian Army after having completed the 12th grade.

The urban private school educated students have a different narrative. Milan recently completed his 12th grade in science from a top private school in Kathmandu. "I do not see the opportunities to optimize my potential in Nepal. The universities here lack research opportunities,” he says. “Even if students study here for a Bachelor’s degree, many bright students leave the country for graduate and postgraduate degree. A few returns. I am not sure if I will return either," says Milan who is now preparing IELTS to go to Australia.

It is not the teaching methodology alone that matters in the schools for an educational system to serve its purpose. We also need to address factors such as demand for educated manpower, quality of higher education institutions and socio-economic status of parents. Learners like Roshan and Milan need to be assured that continuing into higher education in Nepal serves their purpose before hoping that learner-centered teaching practice serves the purpose of education claimed by Socrates and Kaku.

The article was originally published in Republica on 7th July, 2019.