Being now one of the major economic powers of the world and one of the wealthiest Asian countries, Korea has undergone a number of changes and faced various challenges throughout its five-thousand-year history of struggling for its sovereignty, customs, beliefs and prosperity despite obstacles and numerous ups and downs. The long way resulted in successful interaction with influential neighbors and economic, political, social stability, was of prime importance for the country’s governments. Korea never turned its back on challenges and struggled for what it achieved. The most prominent change during the past decades was globalization which made a great impact on state’s policy capacity, organization of economy, financial stability, etc. According to the article’s analysis of the impacts of globalization on Asian economies, Korea as well as Taiwan experience with globalization may be a good lesson to the rest Asian developing countries striving to overcome the difficulties of the transitional period and trying to integrate into the global community with minimal loses.
Wen-Heng Chao, an analytical researcher of Asian economic issues states that: “Korea had built the economy into developmental machines through mobilizing available domestic resources to pursue the goal of economic growth”¯ (Chao). Globalization is a widely discussed phenomenon which anyway cannot be avoided. In the research-paper on globalization process in Korea Samuel S. Kim points out the inevitability of this process and expertly defines globalization the following way: “it is a series of complex, interdependent yet interrelated processes of stretching, intensifying and accelerating worldwide interconnectedness in all aspects of human relations and transactions such that events, decisions and activities in one part of the world have immediate consequences for individuals, groups and states in other parts of the world”¯ (Kim). Korea’s globalization drive was initiated by the government as a state-enhancing, top-down strategic plan. But it is quite evident that in any state, including Korea, there can be no escape “from the payoffs and penalties of globalization”¯ (Kim). That is why integration into the world community results in external and internal control risks from global and domestic environment. And in the increasingly borderless global marketplace, foreign factors may gradually influence domestic economies. Korea is a bright example of the way a country may integrate into the global network and maintaining membership in multilateral international organizations (Chao).
Despite of the fact that it naturally became dependent on super-national organizations, Korea established connections with global market, benefited both from state intervention and free international environment and managed to cope with barriers of capital flows lowering, financial markets restructuring, technology transactions improvement, national currency volatility increase. Sydney Declaration, for instance, favored reorganization of Korean executive branch of government to making it better correspond to globalization drive standards. According to Chang Hyun-Sik, Korean International Cooperation Agency Managing Director, Korea’s experience is unique as within five decades the country managed to achieve a level of development which was equal to what other developed countries were doing for about two centuries (Hyun-Sik).
The Asia financial crisis of 1997 gave the country an opportunity to become “Miracle on the Han River”¯ and a pattern for many developing countries. It rapidly turned from aid receiver to donor and all this is after the devastating war of the fifties of the twentieth century during which the country’s infrastructure and resources were ruined. Korean emphasis on poverty reduction, mid- and low-skill technology may be of use for developing countries (Hyun-Sik).
After the Korean War, and decline of global competitiveness on the world arena, the country received foreign assistance and managed to get over its structural, economic, political weaknesses (Kim).
In terms of globalization dynamics and increasing scale of Korea’s economy, it worked out a new development model and replace the old regime with new democratic state, still having a number of issues to solve. The task of globalization performance turned out to be more difficult than globalization pronouncements. At present, though the global market shares of the country’s industries are rather high, the level of product competitiveness leaves much to be desired if comparing with advances states (Kim). Analyzing such powerful countries as Japan and China, it still does not present the same level of security and is not so attractive for investors. For all that, Korea is a potential destination for foreign investors, since 1990s, for instance, more than two thousand foreign companies have established operations such as consumer products and high-tech industries (Hobday & Lee). Its government acted in favor of Korea’s transformation into “a world-class business and financial center in the Northeast Asian region”¯ and still due to its lack of stability Korea remains one of a difficult markets in Asia to invest and export to (Hobday & Lee).
Despite being a sensitive and versatile region, Korea is considered to be “a third largest economy in Asia and eleventh in the world, taking an important part in international economy”¯ (Haibin). Corporate reform carrying out leads to Korean financial market becoming more open to foreign countries and allows more flexibility in labor market and effectiveness of state current problem solving. Virtually, Korea is a strategic partner of both the United States and China, they watch it carefully and response respectively. One of the major economic powers, Korea still represents a definite challenge for American investors. At the same time Korea is known as export superpower, the domestic consumption of which has also grown. It succeeds in such industries as science and technology. The country has modern infrastructure and is one of the leading steel and automobile producers, shipbuilders and oil refiners. It is proactive in the field of engineering, biotechnology, machinery, robotics, etc. Korea is also known for its textile industry development with one of its textile corporations, known as Korean successful conglomerates.
According to Samuel S. Kim’s article on Korea and Globalization, the significance of globalization for a trading state like Korea with “extremely high trade/GNP ratio is a close correlation between the extent of openness and transparency and the degree of global competitiveness”¯ (Kim). Consequently, it needs reliable partners on the world arena meeting such issues as insufficient competitiveness, political instability, abundant capital flow, etc. The crisis, Korea has undergone, echoed in its inter-Korean relations as well as world relations, including well-coordinated cooperation with Japan establishment. Geopolitical realities caused Korea to maintain close ties with the United States after the World War II (Haibin). In a changing global environment US-Korea business and political relations met definite challenges but their discussions in the global context promote current issues solving and willingness to compromise. In the course of time the ties became stronger and in 1992 Korea even established diplomatic relations with China. Economic partnership in public and economic sectors gives opportunities for better mutual understanding. Generally, foreign policy is of high priority for the country. So, Korea maintains diplomatic relations with more than one hundred seventy countries.
Despite improvements and macroeconomic indicators, Korea requires definite restructuring, democratic internal consolidation as well as competitiveness enhancing in the global marketplace.