ROC and Korea: Companionable Rivals

For many years now, scholars within the Republic of China have been criticizing the supposed backwardness of various domestic industries, or the seeming untimely nature of certain government economic policies. Give them just a hint of a snag in economic progress and they start screaming, "Korea can do it, why can't we!" If the truth be known, however, the exact same kind of statement concerning Taiwan is being repeatedly heard in the public opinion and political circles of the Republic of Korea.

In the spring of 1984 Choi Ching-lin, the senior editor of the economic section of one of Korea's three major newspapers--Chosun Ilbo--ran a series of twenty-three articles on "The Prosperous Face of Taiwan." Shortly thereafter Lin Tung-shen, standing member of the Korea Trade Promotion Corporation, did a series of his own articles in the economic journal Naeil Kyungje Shinnum. The series ran under the title "How the Economy of Taiwan Has Grown." Next it was turn for the members of Korea's Economic Planning Board and Ministry of Trade and Industry to shout, "Watch Taiwan, we've got to catch up!" Just what is it that the two countries find to be so enviable in one another?

According to the observations of ROC officials stationed at the economic section of the embassy in Korea, the methods by which the country works to attain its economic goals certainly contain strengths which are worth studying. To begin with, the organization of the Korean government is both simple and clear. The Economic Planning Board is responsible for planning the course of economic development and has power over the financial and economic organization of the entire country; it also plans and executes the governmental budget. The director of the Board, Kim Mahn Te, serves as the Deputy Prime Minister of the country as well. The Economic Planning Board has money, and it has power, naturally it has little difficulty in maintaining full command over the Korean economic situation.

As concerns the private sector, in Korea there are four large business confederations which play a very important role in mediating between the government and industrial concerns. The government hands down policy decisions and these four associations pass the related commands on to the parties involved. If the business community wishes to express its opinions on a policy issue, it is also able to use these organizations as a direct pipeline to the government, thereby facilitating a complete circle of static-free communication.

Unlike the Korean government, the government of the ROC cannot undergo such a heavy centralization of power, which would necessarily involve a reduction in the power of the legislature to monitor the workings of the other branches of government, simply for the sake of efficiency. On the other hand, up until now there has been no concerted effort at cultivating private organizations of consequence within the country. Perhaps this situation could be remedied by learning from the example of the Korean system.

The unshakeable strength of the Korean national identity is known throughout the world. This is in part due to the racial homogeneity of the country and also to the strong sense of national direction which all Koreans share. The Korean government has also become quite adept at using national events in arousing the patriotic fervor of the public.

As an example, at present the entire nation seems to be wholly preoccupied-with preparations for the 1988 Olympics. Across the country people are cutting corners in their own personal budgets in order to make contributions to the construction of Olympic facilities. The public has endured the numerous inconveniences involved in this period of construction without the slightest hint of complaint. The people of Taiwan, unfortunately, seem to lack this spirit of public cooperation, and here there are numerous instances of delays in public construction due to public opposition.

In addition to these obvious strengths in the Korean national character, these people are also natural-born risk takers. Since the earliest days of the country's partitioning, the Republic of Korea has taken out huge sums in foreign loans; now in order to counteract the growing trade protectionism of other countries, Koreans have been making numerous and varied investments overseas.

In contrast, businessmen in Taiwan tend to take a much more cautious and conservative approach to both international and domestic investment. Although this attitude certainly serves to minimize losses, it also leaves Chinese investors with a lack of adequate investment experience. Such being the case, it is feared that Taiwan may well lose its competitive edge in the fields of high technology and international enterprise.

As pertains to small private businesses, on the other hand, those found in Taiwan seem to be blessed with an incredible resiliency, which is naturally cause for a certain amount of envy on the part of many Korean economists.

Koreans also have good cause to be envious of the personal freedom of movement which Chinese on Taiwan enjoy. Last year when the yen underwent its period of rapid appreciation against other currencies, about 80,000 Chinese tourists made last-minute adjustments in their travel plans and flew off to Korea instead of Japan. There they had the grandest of times sightseeing in Seoul and Chejudo, buying inestimable quantities of famous Korean blankets and ginseng. Perhaps it never occurred to them just how fortunate they are in comparison to their Korean counterparts, for most of whom travel abroad is an impossible dream until after reaching the age of seventy; the simple reason being that Korean foreign reserves are extremely limited, while the size of their foreign debt is massive.

Those Chinese who travel to Korea may feel that walking the streets of either Seoul or Taipei amounts to basically the same thing, with the possible exception of the addition of a subway and an Olympic stadium in Seoul. But even this much of a difference will cause Chinese to sigh and say, "Korea has passed us by."

If these same travellers were to leave the tourist sights for one of Korea's many small farming villages, however, they would undoubtedly experience an entirely different type of reaction. In Taiwan today sharecropping has become virtually nonexistent, while over two thirds of the farmers in some of the more prosperous areas of the island have progressed so far as to own their own cars. Conversely, in Korea over half of the farming population remains tenant farmers to this day.

Which of the two economies is, in the end, actually the stronger? Here we run into the old problem of comparing apples and oranges; suffice it to say that each has its own strengths, its own weaknesses. While both Taiwan and Korea have their own distinct approaches to economic development, both have achieved results which have drawn praise from all over the world. Why are the two countries so obsessed with taking one another as mirrors of their own progress? It is only because that by locating another's strengths, we are better enabled to see our own shortcomings. On the surface what we see is competition, what is actually happening behind this competitive front are consistent attempts to emulate each other. Would not the road to becoming a developed nation be so much the lonelier without this constant companion?

[Picture Caption]

The ROC and South Korea, two of Asia's "little dragons," have always paid a great deal of attention to each other's economic policies.

This is South Korea's highest economic authority--the Economic Planning Board.

Even though their nation is thoroughly modern in construction, the Koreans' patriotism and respect for the elderly are quite traditional.

Koreans have a comparatively strong tendency for material consumption among Asians.

Low savings and large-scale construction have left South Korea with a large foreign debt.

The flexibility of the ROC's small-and mid-sized businesses is envied by economists in South Korea.

Victory in the competition between the ROC and Korea will be determined by high technology.

Tourists from Taiwan and residents of Seoul, what is it that you so admire in one another?

This is South Korea's highest economic authority--the Economic Planning Board.

Even though their nation is thoroughly modern in construction, the Koreans' patriotism and respect for the elderly are quite traditional.