Look East Policy by Dr Mamak…learn from Korea…still relevant kah…???
_______________________________
Lessons from S. Korea on transforming from developing economy into high income economy
The Star, Monday November 15, 2010
KAREN Lee is a part-time English translater with the South Korea Trade-Investment Promotion Agency (Kotra) in Seoul. Although still a university student, she handles herself with maturity and professionalism and is among a rising number of South Koreans proficient in English.
Kim Min Hae is a Japanese translater, with Kotra Seoul as well. She also speaks English and like many other South Koreans striving to improve and upgrade themselves, hopes to do her MBA soon.
To Hank Ahn, the commissioner of Invest Korea, a Kotra unit, people like Karen and Kim are the embodiment of the qualities that built the South Korean economic miracle – hardwork and competition, underpinned by a strong education system.
He noted that South Korea, which has limited natural resources,had to rely on its population to provide its most valuable resource – skilled workforce, especially in the areas of science and technology.
“The most important factor for South Korea’s fast growth is our investment in human beings. In other words, education,” he told StarBiz recently on the sidelines of the Foreign Investment Week organised by Kotra.
This people-based economic power has driven South Korea to become the 15th largest economy in the world, with a per capita income of over U$17,000 in 2009. Malaysia’s average per capita income is about US$7,000.
South Korea’s foreign exchange reserves totalled US$289.8bil as of September this year, the fifth largest in the world.
Its total foreign direct investments from 1998 to 2008 totalled US$124bil, five times as much of that from 1962 to 1997, according to South Korean government data.
Nearly half of the global Fortune 500 companies have established a presence in South Korea.
Ahn reckons that many resource-rich countries in Africa as well as Latin and South America have not made “a big progress” in their economic development due to their failure to invest in education in a big way for their people.
“The important thing is that the majority of people should be well educated and trained,” he says, noting that 56% of young Koreans have a university degree. “It’s a big number.”
According to Kotra data, the national illiteracy rate in South Korea for people between the ages of 20 and 40 is zero, while the overall literacy rate is 98.7%.
Hahn notes that the average South Korean spends “big money” on their kids’ education, citing news reports that they fork out an average US$1,000 per month for after-class tuition. Such emphasis on education has driven South Korean parents to become “goose fathers and goose mothers.”
“We call them goose fathers and goose mothers because they live apart. The father maybe here in South Korea while the mother is in the United States,” he says, explaining that South Korean parents live apart as a consequence of trying to be cost effective in their children’s education. As far as education is concerned, South Koreans are willing to do whatever (it takes).”
Turning points
South Koreans point to a few landmark events that have helped transform their economy from a developing economy into an advanced, high income economy.
The first foundation was laid when the country decided to go into heavy industry sometime in the mid seventies.
“We could not make our economy into an advanced economy without transforming from light to heavy industry,” says Ahn.
The industrialisation programme gave birth to the country’s automotive, engineering, chemicals and electronics sectors, paving the way for South Korea to break into the global market with now established brand names such as Hyundai and Samsung.
According to Kwon Pyung-Oh, the director-general for free economic zones under the Knowledge Economy Ministry, the seeds for South Korea’s transformation into a developed economy were planted in the late eighties.
For Kwon, the spark that lit the transformation into an advanced economy came from the torch of the Olympic flame itself, specifically the 1988 Seoul Olympics.
“The 1988 Olympics gave full confidence to the South Korean people, which would lead to South Korea’s membership in the OECD (Organisation for Economic Co-operation and Development) in 1996,” he says.
The OECD is an international economic organisation of 33 countries founded in 1961 to stimulate economic progress and world trade. According to Wikipedia, the group defines itself as a forum of countries committed to democracy and the market economy.
Most OECD members are high income economies with a high human development index and are regarded as developed countries.
Even so, South Koreans would regard the 1997-1998 Asian financial crisis as the last great turning point before their economy became truly advanced and globally competitive.
“Between 2001 and 2002, after (recovering) from the Asian Financial Crisis, I think that was the point when major economies would look at South Korea as an advanced economy,” Kwon said, adding that South Korea’s decision to implement tough International Monetary Fund (IMF) reforms and liberalisation of its economic sectors during the crisis years had turned out well for the country.
Positioning for the future
But even with advanced economy status, South Korea did not rest on its laurels. Its economy and people continued to evolve, getting ready for a new world economic order led by China.
Ahn of Invest Korea noted that western scholars had already postulated a “global Asian era.”
“The global Asian era has come already. To take advantage of (this new era), we have to sometimes cooperate with China, sometimes compete against China,” he said.
The mechanism put in place by South Korea to both compete and cooperate with China, and to bring the country further up the economic value chain, was its six free economic zones (FEZs), led by the US$230bil Incheon FEZ, launched in 2003 and the first of the South Korean FEZs.
“China has become the world’s factory. South Korean manufacturing will eventually become not cost effective compared with the Chinese. Japan has technology, which they can sustain, so where is South Korea?” Heekyung Jo Min, the director-general of the business opportunity bureau at Incheon FEZ told StarBiz when asked on what went behind the setting up of the Korean FEZs.
“So we need to transform from simple manufacturing to a more technology and knowledged based industry to compete,” she said, adding that healthcare was one such industry targeted by the Incheon FEZ.
Healthcare, together with education, remain the two major sectors untouched by IMF reforms in South Korea more than ten years ago.
But in 2003, the South Korean government decided to allow foreign access to these two sectors, but limited only to the FEZs.
Since then, the Incheon FEZ has attracted three foreign education providers to set up operations – Chadwick International, State University of New York at Stony Brook and Utah State University. It is also hoping to get John Hopkins Medical School to help run an international hospital.
At the individual level, more South Koreans are adjusting to China’s rising global influence by learning Mandarin, apart from English.
And what is a favourite destination for South Koreans to learn both Mandarin and English at the same time, and at a reasonable cost? According to some South Korean officials – Malaysia. And what’s the lesson to be learnt here?
___________________
Korea’s college graduation rate highest in OECD
by Bae Hyun-jung, The Korea Herald, 7 Sep 2010
Korea’s university and graduate school completion rate tops among member states of the Organization for Economic Cooperation and Development, according to the organization’s annual educational index.
Over 98 percent of Koreans aged from 25 to 34 graduated from junior college, university or graduate school, showed the OECD’s 2010 Education at a Glance report released Tuesday.
Korea was thus ranked first in the category among 39 respondent countries — 32 OECD member states and seven non-member states.
The contents of the report were classified into four chapters — the achievement of educational institutions, the resources invested on education, the access to educational opportunities, and the education environment.
The general graduation rate for high school and for university was also high — 79 percent and 37 percent respectively, both surpassing the OECD average of 71 percent and 28 percent, said officials.
The Koreans’ rate of entrance to university or graduate school was 71 percent, greatly exceeding the OECD average of 56 percent.
The junior college entrance rate, too, was high — 38 percent, following Chile (48 percent) and New Zealand (46 percent).
The percentage of those who go for their doctoral studies, however, was 2.2 percent, slightly lower than the average of 2.4 percent.
The number of adults (aged 25-64) who participate in lifelong study was relatively low — 29 percent for men and 31 percent for women, as opposed to the OECD average of 41 percent for both genders.
The public education fee level in comparison to the country’s GDP was also high in Korea — 7 percent, whereas the OECD average figure was 5.7 percent.
The proportion of foreign national students was a mere 1.3 percent, way lower than the average of 8.5 percent, but was nevertheless a 0.3 percent increase from the previous year’s figure, said officials.
Also, in terms of the increase rate of foreign students in 2000-2008, Korea was ranked first.
The educational infrastructure and environment here have advanced over the years.
Although the number of students allocated to each teacher was higher than the OECD average, the figure in all schools, excluding high schools, has decreased from that of the previous year, said officials.