Comparing Pakistan with Korea

Dr. Niaz Murtaza

A most unhelpful occurrence in Pakistan’s history was the visit in the 1950s by South Korean officials to study our economic policies. Western experts then ranked Pakistan higher than Korea. Soon after the visit, Korea started developing astronomically while Pakistan gradually floundered.  Thus, the visit created the illusion that Korea outpaced us by copying our recipes which we failed to utilize ourselves, and its memory still causes an immense sense of unfulfilled national destiny. Popular myth maintains that we could easily have been like Korea if only we had better leadership and/or better ethics, especially unity, honesty and hard work.  Actually, our slower progress is rooted in a broad array of structural factors which include politics and ethics but also anthropology, history, geography, chemistry and economics.  Understanding this complexity will help in reducing our frustration levels and analyzing our future development potential.

Let’s start with anthropology and history. Pakistan has been consumed by ethnic tensions since independence, unlike Korea. However, ethnic diversity and shorter national history rather than weaker ethics are the cause. Korea has been a homogeneous separate country for more than 500 years with the Korean ethnic group constituting 90% of its population. Pakistan has been in existence for just 60+ years and is highly ethnically heterogeneous. Long-standing, homogeneous societies handle inequality better as inequality produces jealousy but also hope among have-nots as they see similar people benefiting. Wealth also spreads widely more quickly through cultural mechanisms such as marriages, gifts, personal loans etc. Consequently, while both experienced inequality post-independence, inequality caused minor problems in Korea but constant ethnic turmoil and even dismemberment in Pakistan. Moreover, our colonial history was also different. Japan undertook major industrialization and land reforms in Korea, while the British de-industrialized India and strengthened feudalism. Imagine how smooth Pakistan’s progress would have been if at independence there were no landlords or ethnic tensions (two of our biggest problems) but higher industrialization? That is how Korea started out in 1945!

Geography and chemistry further expanded Korea’s advantages after independence. Compared with our off-on American relationship, it enjoyed consistently stronger chemistry with America as the threat of communism was more serious in East Asia. Both faced a hostile neighbor after independence due to partitioning. However, we had to beef up defenses mostly from our own pocket, leaving little for development investment, while the USA reduced Korea’s defense burden by maintaining troops there. Korea also got much more economic aid, technology and access to American markets. Moreover, once Japanese companies started hunting for cheaper production sites from 1960s onwards, South Korea made sense given physical proximity and colonial linkages–advantages Pakistan could not match even if it had better national ethics, leadership and policies.

The last difference relates to economic policies. Korea adopted a consistent strategy of working closely with the private sector to wean it towards progressively more advanced industries. Pakistan’s economic policy changed several times–from market-led to state-led to IMF-led strategy. Until 1971, we followed a market-led strategy. The state did work closely with the private sector in facilitating industrialization. However, we remained stuck with light industry without the technology from America and Japan that Korea got.  Bhutto adopted a state-led strategy with a focus on heavy industry and ethnic equality given earlier failures along these dimensions. Roles reversed as now it was Pakistan copying Korea’s policies. As in Korea earlier, banks were nationalized to harness savings for industrialization and a state steel mill set up along with down-stream automobile industry. In Korea, nationalization was limited and industrialization drew on a capable bureaucracy. In Pakistan, nationalization was over-done and the private sector and bureaucracy weakened in pursuit of the second goal (ethnic equality) precisely when they were needed to meet the first objective. While this reflects faulty policy, it also reflects the additional policy considerations faced by an ethnically heterogeneous country recently dismembered due to ethnic tensions. Moreover, Korea set up advanced industries with superior American and Japanese technology while Pakistan only got Soviet technology for its steel mill. Finally, since the 1980s, we have followed an IMF-led strategy which undermines national development and which Korea never followed.

Korea’s astronomical development within one generation then was the result of more favorable developments stretching back to the pre-colonial period. Thus, a wide array of factors must converge, over decades and even centuries, before a country (at least large ones without oil) can develop. Security, good governance, human capital, finances and technology are all imperatives. At least some of the following must also be present as they facilitate the imperatives: favorable location, chemistry with great powers, large diaspora, natural resources, high savings rate, homogeneity and national history.

It is differences along all these factors (some controllable, many beyond our control) that explain the differences between Pakistan and Korea and to varying degrees with other East Asian countries. Thus, Pakistan had little chance of emulating Korea back then even with better ethics and leadership. Both did have some impact but themselves were results of more structural factors, many beyond our control. Thus, better leadership in Korea was partially due to Japanese colonial land reforms and industrialization, which weakened landlords and allowed urban interests to assume power soon after independence.

Fortunately, these factors are starting to line up for Pakistan. The center of the global economy is moving to our neighborhood in China and India; Pakistan is among the most important developing countries for America; urbanization is increasing, leading to likely ascendance of urban groups and gradual improvement of governance. Other factors will become more likely as governance improves: eliminating militants and mafia and improving relations with India to increase security; developing skilled labor force through higher education budget; expanding tax base and reducing corruption, waste and defense costs to generate resources for development; adopting state-led industrialization approach and avoiding IMF dictation; reducing ethnic tensions through decentralized democracy and avoiding illusionary top-down short-cuts. Thus, Pakistan’s long-term future will likely be better than the past.

Dr. Niaz Murtaza, Research Associate, University of California, Berkeley, murtazaniaz@yahoo.com. Article appeared in Dawn recently.


18 Comments

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18 responses to “Comparing Pakistan with Korea

  1. Khalid

    Dr Sb. I have two questions:

    1)In the present political situation is it possible to get rid of IMF?
    2)How to reduce corruption in a country where Ministers get the positions to do corruption rather than to do something for the country?

    Regards,
    Khalid Bashir
    Riyadh, KSA

  2. Mustafa

    I agreee with the analysis to a certain extent, but at the same time we should not be dictated by circumstances and worse make difficult circumstances an excuse for failure.

    @Khalid: Good questions and I am sure we can answer those.

  3. Talha

    This is the Pakistan we had and Islamists wrecked it.

    We even had girls in bikinis on our public beaches.

  4. Ahsan

    Fantastic Talha Sahab!! Where did you find this?

  5. Talha

    I found it through Google, I have hobby of researching old news and documents from Pakistan’s past.

    That is how I found this video, it shows Pakistan at its absolute peak. The country was the most progressive and least corrupt in Asia. Ayub Khan had an objective, to make this country truly, Land of the Pure.

    Unfortunately that phases ended and our descent into chaod began.

  6. neel123

    There is indeed an eminent possibility for things to turn for better in Pakistan, only if there is a course correction by its strategic community, by letting bygones be bygones.

    Good relations with India can turn the current scenario upside down. On the other hand the current blackmailer’s attitude of ” Hum to doobenge sanam, tum ko bhi le doobenge ” attitude will only sink Pakistan, and no one else.

    So there is a big ” if ” .

  7. pakistn had everything going for it, after independence
    though is was less industrilised then india, it caught up quickly, it had fertile lands and its per capita was better then india
    it was more homogenious if compared to india, it was a muslim countr, with just 5 major ethnic group
    if compared to india with its dozens of groups,

    the thing that went wrong was its ethnic domination, by punjabis, no outlet for ethnic fruastration due to lack of democracy, and its illogical oposition and hatred for india , the issue of kashmir for which it fought 4 wars, and over religiousity trying to make pakistn a pure islamic state, which led to support to various islamic terror groups

    solution simple

    keep religion in your heart, not in admisnistration, declare war on al terror group, land reforms, have some sort of understanding with india, it does not have to mean u give up claims on kashmir
    trhis will reduce military spending

  8. Ahmed

    we do outrun them in one field as mentioned here

  9. Tilsim

    “However, ethnic diversity and shorter national history rather than weaker ethics are the cause.”

    Dr Niaz, that’s a pretty strong assertion. I am not sure I agree. Please expand.

  10. Rajiv

    Pakistan is now like North korea and its arch nemesis fastly becoming South Korea.

    All that Pakistan achieved under Ayub Khan was thanks to the money poured in by the American and European for siding with them instead of USSR. In that era industrial growth spurred owing to liberal tax benefits. Basically During those times Pakistan’s economy was on steroids. And since Pakistan was small country and so all that growth did a attract some international attention but no one bothered to look into the reasons for that handsome growth since all that growth was nothing compared to international economies of those time.

    All the growth shown by Pakistan during 80’s was owing to huge borrowing done by the goverment and Pakistan payed the price of all those excesses during the 90s.

    Ayub Khan sowed the seeds of feuadalism and the latter dictators encouraged fundamenatalism and Politicans and Army did their bit by looting what was left of Pakistan.
    Only way Pakistan can be set right if there is major rethinking on every aspect of Pakistan, which is hardly coming looking at the stupid way most the Pakistani Polticans and generals and ex dictators or even the Pakistani behave.

    Pakistan is ruled by few feudal families and Army. Best solution for this crisis would be dividing Pakistan within these families,a move which Army would strongly oppose and in order to buy the army and Pakistan’s nukes and sum of over 10-20 billion dollar should be very sufficent, which i think American, Europeans and as well as India would be very willing to spend on Pakistan’s rogue army and its nukes. After this Pakistan would be too small and too powerless to be any nuisance to world peace.

  11. Rajiv

    In the second last para i meant Pakistani media.

  12. deepak75

    I think that the comparison is with the wrong Korea. The Military rule, the lopsidedness of the society towards the elite and the military, the consistent allocation of largest share of the budget to the armed forces, the inclination and grappling to somehow grow via the client state existence really do not in anyway compare to the fundamentals of the South Korean approach.

  13. Talha

    Rajiv,

    Don’t be idiotic, India is no South Korea and it won’t be for years to come.

    It’s only because of India’s size and population that it is able to register high economic growth through it’s services sector.

    South Korea is a different story.

  14. Promod Kapoor

    Most of the newly independent states took a wrong turn at some point in their history. India took to socialism, China was floundering till Mao died. Pakistan is still debating its ideology and how to make it a land of the pure. Wheras only two things are most important education for all and good governance. And good governance requires honesty on the part of the ruling classes. Hope India and Pakistan will get it at some time soon.

  15. Talha,

    i agree with u india is no south korea it has miles to go,

    but i do not agree that growt in india is just bec of the size of its population, in that case s korea, malasya, swiss ect ect should have been very poor countries as they have small pop

    groth in india is bec of librelisation of our eco, which came in late, we lost over 50 years due to govt control

    at curret growth rate it will take us 50 years to be developed, as pop too will increase, before it start tappering off

    pakistn need 10 yaer of very good governance and it can start catching up, will need real leadership, as its pop will be just ideal at 200 million before it starts falling or stabalising

    many yaers ago in the 1980s a israeli minister had comment enviously if only l had pakistni land mass and pop , they would do wonder, it would have been a super power

  16. deepak75

    @ Talha

    “Rajiv,
    Don’t be idiotic, India is no South Korea and it won’t be for years to come.
    It’s only because of India’s size and population that it is able to register high economic growth through it’s services sector.
    South Korea is a different story.”

    I think you are cofusing export with growth. The services sector in India when analysed is only a major contributor to exports and not to the gdp. In fact, India is still largely an agragrian economy though that is changing with increasing pace every quarter. The strength that India draws is surely from its consuming population which anyway gaurantee multiple incremental return in investment in infrastructure. In short, since there is such a consuming population, all you need to do to grow business is create the right need and then the right delivery system.

    It is totally different than South Korea but not for any reason that you mentioned. South Korea always relied on export because that nation could not generate enough business traction with internal consumption. Also to kindly keep in mind will be the high nature of industrialization of South Korea at the time of its genesis when compared with the status of Indian Industrialization at the time of our independence.

    So with inherently different demographic and economic scenario, the growth path will be different anyway.

    However, if your comment of comparison was in terms of average development of these two nations, then I am sure you will understand that the advantages that we just considered as being fruitful to the economy actually become a burden for the development (large population & administrative area or heterogenous composition of the population, I am sure you would also know the challenges that India faces owing to its natural composition). So even in the average human development, it is only natural that it takes us more time than South Korea. But every year if we take 2% of the population up, not too long I am sure. Anyone in India will not mind waiting one generation. Mine did not.

  17. suvrat

    @Deepak
    South Korea was not significantly more industrialized than India. Their per capita income was quite comparable to India in 1947. South Korea and Japan put their masses to work by starting off less capital intensive and more labour intensive manufacturing like making batteries, toys etc and then moving up the value chain. Same strategy was followed by China. India on the other hand focussed more on heavy industry due to utopian vision of Nehru and still has labour laws that work against labour intensive manufacturing.

  18. Rajiv

    @ Talha

    South Korea is nothing compared to us they have done in the 80s what China is doing now. Now S.Korea has just moved up ladder in what China is doing.