Economic Nationalism and Globalization in South Korea: A Critical Insight

Abstract

In this article we explore whether South Korea's long-standing tradition of economic nationalism remains an appropriate development strategy, or whether this approach has been rendered irrelevant by the current wave of neoliberal globalization led by multinational corporations. We examine the changed economic agendas of each Korean regime, with a particular focus on national identity and economic nationalism, mobilized and implemented by the state. We argue that, despite the rapid development of globalization and cosmopolitanism in South Korea, economic nationalism is still prevalent. Korea's adoption of neoliberal economic activities, such as lifting trade barriers to encourage the inflow of foreign direct investment, was necessary to assist certain areas of the economy. Furthermore, changing the direction of the growth trajectory remains subordinate to the goal of state building. Empirical analysis of results collected from survey data and one-on-one interviews conducted in 2010 help to validate our hypothesis. KEYWORDS: economic nationalism, economic globalization, Korean state, multinational corporations.Following KOREA'S independence from Japan in 1945, it was inconceivable that the Republic of Korea (South Korea) would become one of the world's most dynamic economies. However, the nation has recorded an annual average economic growth of 9 percent over the past four decades and, despite suffering heavily during the 1997 financial crisis, was the fifteenth-largest economy in the world in 2011 based on gross domestic product (GDP).One notable characteristic of the country's rapid economic growth was strong economic nationalism, stimulated initially by a negative response to earlier interactions with foreign regimes and then by the desperate need for economic survival. Economic nationalism has been a binding force that has given direction to Korea's modernization policies over the past half-century (Cho 2008; Lopez-Aymes 2010). Its growth mantra of development, productivity, and competitiveness constitutes the foremost and single-minded priority of state action (Onis 1991, 111), directing the state's management and protection of the domestic economy, labor, and even capital flows. Promoting domestic capitalists has been at the center of the national interest in economic development (Jones and Sakong 1980; Amsden 1989; Wade 1990; Onis 1991; Woo 1991; Dent 2000). The state's authoritarian and corporatist structures that underpin the processes of capital accumulation, the allocation of monopolies, and a reliance on foreign capital (e.g., in aid and loans) have long been identified as the key forces that pushed Korea's growth trajectory in a highly nationalistic direction (Jones and Sakong 1980; Amsden 1989; Chu 1989; Wade 1990; Woo 1991).1Ironically, successful economic growth and accumulated economic wealth have led to escalating wealth accumulation and increased consumption of foreign material goods, particularly Western products (Schutte and Ciarlante 1998). In comparison with the 1980s, when Korea first began to import a small number of products such as cigarettes and cars, an ever increasing level of buying power has given present-day Koreans access to a wider range of foreign products. Many of these products were not available in the Korean market a decade ago (Jeong Duk Yi 2002). If a nation's level of globalization is measured by its openness to the global economy-its consumption level of international media and foreign products, for instance-as well as by the movement of its capital, trade, investments, and people across borders and the degree of extension into the global markets,2 then Korea's economy certainly demonstrates substantial globalization.In the four-year period following the 1997 Asian financial crisis (1997 to 2001), Korea attracted approximately $52 billion in inward foreign direct investment (FDI), almost double the entire amount of inward FDI in the previous four decades. …