New Horizon for South Korea
IF South Korea's newly elected president, Kim Young Sam, plans to transform his country into a truly prosperous industrialized nation, he will have to get to work.
South Korea, the world's 13th-largest economy, has seen its economy slow down in the past year as global recession reduced demand for Korean exports. But Mr. Kim's strong showing at the polls Dec. 18 gives him a honeymoon period in which to make some tough choices.
First, he must decide whether to continue the system of protecting Korea's huge corporate groups, called chaebols, from foreign competition.
Such protection helped rebuild the country in the postwar period, but in recent years chaebols have become sluggish and unable to match the innovations of foreign competitors. To dilute the power of chaebols, Kim could find ways to foster small and medium-size companies. And he should increase government investment in research and development, rather than relying on cheap labor for Korea's competitive edge.
As an emerging "little dragon," South Korea's growth has inspired many developing nations. Since 1987, per capita income in South Korea has doubled. Kim's campaign promise of tripling the average income may be far-fetched, but he will certainly need to boost growth during his five-year term in order to absorb North Korea if it collapses in the next decade, as Western observers predict.
And growth would help Kim reduce the income disparities between Korea's various provinces. Before he assumes office on Feb. 25, Kim needs to make peace between opposition leaders from the poor region of Cholla and ruling party leaders from the more developed Kyongsang region. A few opposition members in Kim's Cabinet could go a long way toward reducing Cholla's distrust. Kim also should abolish the practice of doling out control of local governments to party cronies and hold local elections early next ye ar as promised.
Outgoing President Roh Tae Woo may have one gift for his successor before he leaves office. As world trade talks resume next year, Mr. Roh could lift the ban on foreign rice imports, removing what would otherwise prove a difficult issue for Kim.