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Development Overview

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Overview of Korea’s development experience

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Development Overview
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General

Overview: 1998~Present

The announcement of the Korean government receiving rescue funds from the IMF in December 3, 1997 marked the beginning of the Foreign Exchange Crisis. This event towards the end of Kim, Young-Sam’s regime marked a dramatic change of political power from the long-time ruling elite group to the long-time opposition party. Its faction leader Kim, Dae-Jung became the 15th President of Korea through the general presidential election shortly after the crisis, despite long-standing accusations of him having heavy skewedness towards left-wing party spectrum.
 
Following the policy advices of IMF on contractionary fiscal policy, high interest rates, transparency of financial reports and restructuring of financial institutions and companies with high debt ratio, etc., Korean government initiated massive restructuring of the market under the leadership of this new political power. Many prominent companies had to go through either financial and organizational restructuring or face bankruptcy. Coupled with the change in political power, domestic business risk and uncertainty made the market situation very unstable.
 
Economic and social hardships from the government-driven massive restructuring based on the IMF’s recommendation were felt through every corner of the society. Big companies went bankrupt one after another, and subsequently unemployment became top policy issue for the first time in economic development history of Korea. As a consequence, most of the policy attention was placed upon economic and social recovery, especially by strengthening the Information Technology related industries. Subsequently, despite the true change in political power, no actual changes were made to the existing constitution to enhance the check and balance function of the government that was so much in need to promote democracy.
 
At the same time, many Koreans perceived the change of political power as the full-realization of democracy in Korea, which was half true since there was no attempt to amend the constitution that allowed a heavy concentration of collective decision-making power to the president. And yet, many attempts were made by Kim, Dae-Joong to restore democracy under the existing constitution, such as strengthening the autonomy of local governments, creation of the Ministry of Gender Equality, initiation of the National Basic Living Security Act, recognition of the existing unions, and so forth. Towards the end of his term, however, many political scandals incurred with his close followers, even including his two sons, weakening the legitimacy of the new political power elite groups.
 
The change in political power also had strong repercussion in the personnel in the executive branch of the central government as well as the local government. The long-perceived political issue of regionalism affecting hiring and promotion of public servants from the South-West Region of Korean Peninsula gave rise to those in government with such backgrounds. Such a trend was even evident in the judiciary branch of the government, giving a misperception of total takeover by the new political power elites. Consequently, it created a perverse effect on public servants paying more attention to political interest than to the public interest, affecting wide ranges of policy choices that were made during Kim, Dae-Joong’s administration.
 
Under the recognition by the Korean people that the new political power elite group was no different than the previous ones, Roh, Moo-hyun became the succeeding president of Korea in 2003 representing younger generations of Korean society called 386 generation: those in their 30s, went to college during 80s, and born during 60s. These new political power elites were different from the previous groups since there were no visible faction leaders such as three Kims (Kim, Jong-Pil, Kim, Young-Sam, and Kim, Dae-Joong) amongst themselves. Furthermore, they announced a political slogan “Participatory Government” to symbolize what they were planning to do during the Roh’s administration.
 
Unfortunately, Roh’s administration failed to bring changes to the constitution itself, but rather they tried their best to demonstrate the model behavior of democratic government under the existing constitution. Such reluctance on the Roh’s part to exercise the concentrated political power that comes along with the presidential office invited many challenges and open criticisms from the then minority party, the media, and even from the public. Most of the criticisms centered around failed attempts to boost the economy and a number of major policies creating more problems than before.
 
On the administration side, Roh’s regime initiated many reforms and innovations in the way public administration adopted and implemented policies. Stressing the “Quality Services to People, Transparency and Accountability” along with his “Participatory Government,” he initiated and implemented many administrative reforms to streamline the ways public officials carried out their duties: constructing e-based government system for services, administration and evaluation; enhancing e-based centralized means to file civil complaints; enhancing transparency with public release of information; extended the scope of open-contract positions within the central government that was initiated by Kim, Dae-Joong’s administration; creation of the Ombudsman Center; delegation of policy-making authorities to local governments; creation of senior civil service to enhance capacity; and so forth.
 
Due to the continuous economic hardship coupled with skyrocketing real estate prices and chronic unemployment, Lee, Myung-Bak, well-known CEO of Hyundai Companies, became the president in 2008 right after his service as the mayor of the Seoul Metropolitan City Government. His policy initiatives during his service as the mayor included, but not limited to, restoration of Chungkyechun, metropolitan rapid transit system, new-town projects, and so forth. His success continued its legacy as the political slogan under his administration was “Green Growth.”
 
1. Political System
The era of Kim, Dae-Joong and Roh, Moo-Hyun after the Foreign Exchange Crisis marked, for the first time in the modern history of Korea, a total change of political power through general elections. Because they were the frontline fighters against the dictatorship, many Koreans perceived this as an inevitable fulfillment and blossoms of democracy in Korea, and yet none of them and their followers attempted to amend the constitution that remained unchanged since 1988.
 
In other words, there was still too much concentration of the political power to the president and his close followers, especially in terms of making policy decisions that would have far-reaching repercussions throughout the society.  People were still frustrated with the government’s policy decisions and implementations that did not reflect the interest of the public. Rather, they still observed pork-barreling and logrolling behaviors without any real institutional channels and means to interrupt and disrupt the policy process to limit such behavior of representatives.
 
The departure of Roh, Moo-Hyun from the Democratic Party led by Kim, Dae-Jung illustrated such a general perception, especially when the newly created political party, Uri Party (meaning Our Open Party), represented the younger (386) generations of the Korean Society: old-ways vs. new-ways of politics and political elites. Roh drew his political power from those outside of the existing governing institutions, political actors and players. As a result, Roh had to face political enemies within, those of right-wing party (originated from the late Park’s regime to Chun and Kim, Young-Sam), as well as the media.
 
The war between the media and the late president Roh and his royal followers was notorious from the very beginning of his administration without the traditional honeymoon period. Eventually, Roh had to face the motion of impeachment in the National Assembly led by the opposition party, overruled by the Constitutional Court in 2004. Continuous accusations of Roh’s close affiliation with the North Korea and those of extreme left-wing parties crippled his political power, on top of his reluctance to utilize the real power of the president guaranteed by the existing constitution.
 
Similar trend of party structure could be found in the opposition party as well where those members remained unchanged and yet the name of parties had changed depending upon the political situations at hand. Political parties still maintained the characteristics of revolving around the incumbent president, and policy decisions were still made within a closed network of political elites, academics, and selected number of public servants.
 
In short, we may label this period as the era of political experimentation since almost all of the conceivable political groups seized political power one after another, taking turns: from those with the late president Park and his successor Chun, representing the incumbent extreme right-wing dictatorship; those with Roh, Tae-Woo and Kim, Young-Sam, representing the coalition of conservatives with mix of anti-dictatorship group before the Foreign Exchange Crisis; those with Kim, Dae-Joong representing long-time left-wing democrats; those with the late president Roh, Moo-Hyun representing relatively younger generations in Korea; and those with Lee, Myung-Bak representing business groups perspectives. Each took its bite on the political power, and yet none truly succeeded in institutionalizing democracy.
 
2. Governance
Since there was no amendment made to the constitution since 1988, the fundamental functions and structures of the government remained the same. And yet, with the change of political power and the president, the structure of the central government (executive branch) went through big and small changes during these periods after the Crisis. Such changes in the executive branch would give signal to others and the public on the areas of his policy emphasis. For instance, the late Kim, Dae-Joong’s administration created the Ministry of Gender Equality signifying his emphasis on social justice, along with the adoption of the National Living Security Act. However, during his term, partly due to the economic crisis situations at hand, much of the attention was paid on economic recovery through massive restructuring and reorganization of financial industries and business entities.
 
The concept of governance itself became a buzzword for the Roh’s administration, as it had been with many other nations around the world since mid 90s. Subsequently, attempts were made to promote ‘Participatory Governance’ in Korea under the political leadership of Roh, but most of the way government adopted and implemented the policies remained unchanged. Policies were adopted by a small group of political elites, and it was implemented the way it used to be: top-down hierarchical implementation, rather than networked implementation through collaboration. The general public also was not familiar with the concept since they still did not know how to participate or even they could participate in the policy-making process. Due processes were defined to invite participation of stakeholders in policy-making process, but the typical approach taken was one of policy advocacy rather than open-end policy debates.
 
With the Lee, Myung-Bak becoming the president, participatory approach quickly lost its meaning, and policy decisions were being made under the charismatic leadership of the president. Such stemmed partly from his own background and experiences of being a charismatic CEO of result-oriented approach. Following his own success during his mayoral experience, “Green Growth” became the buzzword to mobilize resources and personnel to invest on a number of public projects related to environment.
 
3. Public Administration
With the one-hundred eighty degree change of the political power right after the Foreign Exchange Crisis in 1997, attempts were made by these new political elite groups to control the personnel in the government, who they perceived as serving the interest of their political opponents over half a century, including previous dictators. For instance, certain high-level positions became open-positions to those experts who did not pass the Public Administration Examination by passing the Government Organization Act and the Civil Service Act in May 1999. As a result, there were 139 open-positions in 40 ministries and agencies in 2003. Still, it failed to achieve the intended results due to closed organizational culture based on favorism, regionalism and school-ties.
 
Major changes took place during the Roh’s administration where he stressed open transparent participatory system with accountability. With an aim to enhance productivity and efficiency of the ministries and public agencies, 149 Targeted Tasks under 6 broad areas were selected to reform the government system and the ways of civil servants. Those six areas were: public administration; human resource management; public finance and tax; decentralization; e-government; and management of records and information. Emphasis was placed more upon the process of reform than the outcome of reform. Delegation of authority and autonomy in decision-makings were encouraged in the context of enhanced accountability, especially related to those issues from decentralization. Implementation of these plans was emphasized through constructing a road map with specific deadlines, rather than simply going through the ritual of making proposals and plans.
 
Of those reform issues, establishment of e-government, reforms in tax administration and procurements, consolidating human resource management function to the Civil Service Commission, limiting the authority to hire political appointees at will, creation of the Senior Civil Service Pool, enhancing service qualities by standardizing and evaluating performances, efforts to enhance transparency through institutionalizing reforms, recall system in local governments, etc. had tremendous impacts on the ways of public administration. Subsequently, red-tapes had almost disappeared from the public’s eyes and ears.
 
4. Law and Legislation
The most difficult areas to bring out reforms, especially relying on external forces, would be in the legislative and judiciary branches of the government. Ideally, amendments to the existing constitution would be required to bring about reforms in these branches, and subsequently what most influence one could expect from them would be changing the daily practices and protocols. Subsequently, there was no major visible institutional change in the areas of law and legislation throughout the periods after the Foreign Exchange Crisis.
 
However, under the late president Roh’s administration, a couple of experimentations were introduced to test the idea of changing the practices of law and legislation. To become a public prosecutor, a judge, or a lawyer, one had to pass the National Bar Exam where there was no pre-qualification to take the exam, contrary to those in US. Many studied hard to pass the exam since one would move up the social ladder very quickly once he or she passed the exam. The selection of judges was based on applicant’s performance on the bar exam and official training after the bar exam. Hence a person in their 20s could become a judge under the current system.
 
Naturally, there had been serious concerns over such practice, and one of the suggested changes was to create law schools and limiting the qualification to those graduating from the law schools. Another experiment came with a jury system where socially sensitive cases would be handled through jury system, rather than determined by three judges presiding over the case. Both had not been institutionalized yet.

Source: Written by Kang, Youngouck(Asian Development Bank) in 2014 for K-Developedia