Talk Story
I MET a Korean university professor last week. Back in Seoul, she teaches English to Koreans, but now she's on sabbatical at the University of Hawaii writing a textbook for English-speakers who want to learn Korean. An Asian economy
returns from the brinkMore Americans than ever will want to snap up a copy when it comes out. Korea, a nation of dynamic turnarounds, is suddenly cool.
When the rest of the world focuses on the World Cup soccer matches now being played in Seoul, they are seeing a different country from the one that hosted the 1988 Olympic games.
Since then, Korea has emerged from authoritarianism into democracy, survived the Asian economic crisis and evolved "from a low-end, exporting economy sealed off from the world to one that is plugged-in, dynamic and increasingly high-tech," says Business Week magazine -- not your everyday arbiter of what's cool, but a credible judge of economic success.
In the dark days of Asia's 1998 financial collapse, Korea's implosion was among the worst. Tent cities and soup kitchens sprang up and there were runs on banks. The gross domestic product dipped into negative numbers, unemployment soared to almost 7 percent and banks wrote off 13 percent of their loans as "nonperforming."
The International Monetary Fund stepped in with a $30 billion bailout, but it came with strings. For example, Korea would have to make labor laws more flexible, immediately close insolvent banks, privatize many businesses and make corporate finances more transparent.
President Kim Dae Jung, who took office in the depths of the crisis, used IMF's demands to whip things into shape. He invited foreign investment and competition into the country while decoupling Korea's banks from the country's industrial conglomerates. These were forced to downsize or go out of business.
No longer sucked dry by bloated, under-performing conglomerates that pumped out uncompetitive knock-off products, Korean banks had cash to lend to consumers and small business. This fueled a spending boom and 11,396 new business start-ups since 1998.
Koreans with money to buy cutting-edge products spurred companies to innovate. The result: A Samsung isn't just a cheaper alternative to a Sony anymore. Korean automobiles, software, music and films now compete vigorously in world markets.
As Kim puts it: "Now we have clean banks and companies that are competitive in terms not only of price but also of quality."
I OFTEN think of Korea as Ireland's Asian counterpart: a divided nation in the shadow of an island empire, often conquered and oppressed, but nurturing a unique, lively culture and a determination to bounce back from adversity.
Korea, like Ireland, made a large investment in the information revolution. It now leads the U.S., Japan and the European Union in broadband access and has 25 million of its 48 million people using the Internet, 30 million using cell phones.
The two countries have both emerged as leaders in developing high-tech industries, with growth figures that eclipse those of once-dominant Britain and Japan. However, what they share most of all is a sense of humor, which is too often lacking in Hawaii today.
HOW ELSE can people put the worst behind them and overcome crises? Kim says there are two key factors: There must be popular support of efforts to succeed, and people must be willing to accept the pain that goes with reform.
Add to the prescription "intellectual ability, creativity and adventurousness" and "a developing economy can quickly catch up with an advanced country," Kim says.
Hawaii shares many of Korea's attributes, but little of its recent economic success. Like Korea, we need to find the opportunities a more competitive world offers rather than being cowed, divided and beaten.
And -- if you, too, want to be cool -- it wouldn't hurt to laugh.
John Flanagan is the Star-Bulletin's contributing editor.
He can be reached at: jflanagan@starbulletin.com.