Using the case of South Korea and China, demonstrate how both the state and the market play important roles in the development and growth of a nation.

Coursework Header Sheet
244276-8


Course

POLI1047: Politics & Dev in Asia/Africa

Course School/Level

H/UG

Coursework

Essay

Assessment Weight

50.00%

Tutor

N Dasgupta, L Macmillan

Submission Deadline

12/01/2021

Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University's Regulations regarding Cheating and Plagiarism.

001078137   
Tutor's comments                                       

Grade Awarded___________

For Office Use Only__________

Final Grade_________

Moderation required: yes/no

Tutor______________________

Date _______________

5. Using the case of South Korea and one China, demonstrate how both the state and the market play important roles in the development and growth of a nation.
The state and market play a critical role in influencing the development and growth trajectory of any nation. The contemporary environment is globalized and interconnected, marked by increased mobility of labour and economic resources worldwide. The states and markets interact intricately in determining the dynamics of development and growth through trade and resource mobility. The states and markets both function together in influencing economic development. The states often have overarching roles in providing a favourable economic growth environment, while market forces such as capitalism, free markets, and liberalization may challenge government interventions (Brandsma, Kancs and Persyn, 2014:372-380). As geopolitics' reassertion, state power is emerging as dominant international responses to the economy's dynamics (Held & McGrew, 2003: 9). However, both the state’s interventions and market forces must coexist in a delicate balance.
South Korea is a case of economic growth and development, examinable under market and state control lenses. South Korea has undergone a compelling economic growth marked by transitions from poorly resourced and low-income countries to high-income economies within a relatively short period. Korea’s past and recent economic growth strategies and policies demonstrate how the state strives to overcome global and domestic problems. South Korea underwent a tremendous economic transformation, starting as an agricultural-based economy. Economic success is substantially attributed to export-oriented policies. An enhancement of the business environment and the development of policies that encourage innovation are critical factors that underpin South Korea’s success in international trade.  South Korea has put substantial efforts into innovation and technology to improve its export competitiveness, thereby facilitating a favourable balance of foreign trade, which explains remarkable economic development. Production of Korea’s exports is facilitated by a competent labour force supported by the relevant expertise, skills, and knowledge.
South Korea is one of the states that have taken active roles in national economic development and growth. The South Korean government played a fundamental role in nuclear power and multipurpose dam, which has continued to supply electricity and water (Chang, 2010). South Korea has had an overarching focus on infrastructural development as a pioneering stimulator of economic growth. Government participation in economic development and activities that support or complement economic growth is evident. Government activities that bolster economic growth and development include providing the infrastructure, promoting industrial activities through subsidizing, and providing incentives, among many more (Sen, 2002). The reasons underlying active government participation in economic development are underpinned by the need for minimum capital and technology inputs. These reasons alleviate the vicious cycle of poverty and to raise the competitive edge in an international environment.
Following 2WW, most Asian countries adopted centrally controlled socialism or totalitarianism versus a market economy for economic development. Many countries in Asia have remained poor despite the inflow of resources from Western countries. For instance, Vietnam might have made significant achievements in socio-economic advancement in the 1990s, but its imbalances in growth have emerged, marked disparities in poverty reduction in development (Trần, 1998). Structural fragilities in the economy and institutional constraints, alongside the East Asian crisis, have contributed to the recent decline in economic growth (Jenkins, 2004). However, South Korea is an exceptional caste that has continued to progress well economically. Korea is a known nation of scarcity in terms of energy resources and uneven rainfall-flooding summer. Thus, the government knew that with a consistent supply of power and water, its citizens' living standards were unlikely to improve. Thus, the critical intervention that the government could have implemented was to develop a strong infrastructural network. South Korea is among the countries that have been lucky to experience economic transformation. The Korean economic model involved strong government leadership and interventions, protectionism of early and pioneering industries, internal cooperation versus competition, subsidizing agriculture, and massive state intervention in education. However, these interventions contrast with neoliberal policies, but replication in other countries is a contestation topic.
The economic success among some of these Asian countries emanates from its policy adoption. Countries such as Taiwan and South Korea embraced the policy that allowed them to overtake Latin America in the economy (Kay, 2002). The authors observed that South Korea and Taiwan had superior state capacity, improved policy performance and established harmony between appropriate industrial policy, agriculture, and industry. However, Latin America failed to create an agrarian structure more conducive to growth with equity.
South Korea’s mainstream economy recovery and development started after World War II. General Park Chung Hee took power in the 1960s and expressed great desires and will to transform South Korea from backward agriculture into a modernized industrial state that would improve the living standards of its people and equally defend itself from external onslaughts (Eckert, 2016: 2-4). Park used both legitimacy for his regime and independence for South Korea to initiate transformative programs geared towards the economy. Park’s administration programs were primarily stimulating development leveraged on transforming the country from an agricultural backwater into a modern industrial nation. Prior to the Park administration, the Syngman Rhee government had received foreign help from the U.S in the 1950s that was used to broad infrastructure comprising national made up of primary and secondary schools, modernized roads and communication frameworks. Thus, by 1960S, General Park Chung Hee leveraged on the robust economic foundation based on the Syngman Rhee administration's decision to receive and use the foreign aid on infrastructural developments. Park enhanced government control over the business through banking nationalization and integration of agricultural cooperative movement via agricultural bank (Chang, 2010: 92-94). The state’s control over all institutional credit improved Park’s command over the business community.
It should be noted that South Korea was not only based on government economic interventions and functional engagements, but it also encouraged private enterprising. The government created an economic development environment that was marked by incorporating elements of state capitalism and free markets. The economy had a group comprising of chaebol, which was large private agglomerations and boosted by a range of public corporations dealing with iron and steel, communications resources, fertilizers, chemicals, and heavy industrial machinery and tools (Fukuyama, 2014: 98-116). The S...