ADB Asia Think Tank Forum (Oct 30-31, 2013)

Transcription

1 ADB Asia Think Tank Forum (Oct 30-31, 2013) Investing for Shared Growth: Korean Experiences in Rural Development and Education Sector Taejong Kim KDI School of Public Policy and Management The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper/presentation and accepts no responsibility for any consequence of their use. Terminology used may not necessarily be consistent with ADB official terms.

2 1. Overview: Shared growth in Korea 2. Rural Development elopment Korea Style 3. Laying Foundation with Investment in Education 4. Conclusion

3 1. Overview: Korea s Development Experience

4 Korea, Going from Aid Recipient to Donor 1601 Per Capita Income ($) 20,000 Receiving Foreign Aid 21,632 22,489 15,000 5,000 Korean War ( ) 10,000 Foundation of Republic of Korea (1948) Liberation from Japanese Colonial l Rule ( ) ,000 OECD Member 12, Financial Crisis 7,355 Global Financial Crisis Domestic saving/gdp ratio in 1950s: only 3%

5 Changes in Employment Structure Agriculture / Fisheries 5.2% Service 28.3% Manufacturing 17.7% 7.9% Manufacturing 63.0% Agriculture / Fisheries Service 77.3% Source : National Statistical Office

6 Broad based Social and Economic Transformation 3 Shared growth : Rapid growth with relatively low income inequality Gini coefficient 0.7 <Gini coefficient and GDP per capita growth rate: > 0.6 Brazil Mexico Colombia Peru Chile Venezuela Argentina Philippines Malaysia Thailand Indonesia Singapore Hong Kong Taiwan Korea Reversal of Kuznets hypo (1955) Per capita GDP growth rate (%)

7 Overview of Broad based Development ( ) 4 Economic Development Per Capita GDP $87 $7,714 $11,505 $21,632 $22,489 Investment (% of GDP) Exports (% of GDP) Imports (% of GDP) Trade (% of GDP) Social Development Life expectancy at birth Infant (less than 5 year old) mortality rate (per 1000 births) Parasite Infection rate 1969: 77% 1985: 4% 1990: 0.6% Volume of Timberper hectare 1959: 5.6cubic meters/ha 1966: 9 cubic meters/ha 2010 : 109 cubic meters/ha

8 2. Rural Development Korea Style

9 2-1. Rural income growth in Korea in the 1970s 9

10 2-2. Rural transformation: an example 10

11 2-3. Community resource mobilization 11

12 Village access road and power supply during Saemaul (New Village) Movement in the 1970s

13 2-4. Emergent Planning and Implementation Natural villages, not administrative districts, as units (about 33,000 of them in Korea) Initially equal distribution of materials support Cement, steel wire To be used for projects with communal benefits based on community deliberation Subsequent government support conditioned on satisfactory performance About 50% clearing the hurdle, deemed fit for continued government support Then a SURPRISE: about half of the initial failures succeeded in mobilizing internal communal resources and petitioned government for re-assessment, setting a pattern Saemaul spirit: diligence, self-help, and cooperation 13

14 2-5. Saemaul Undong and CDD Saemaul Undong as a version of CDD Voice from below and communal ownership: Village Development Committee and Village Tract Forum Bottom up choice of projects Going beyond Mobilization of communal resources for common good Creation of mutual trust among villagers Fostering trust in the government Leveraging limited government resources and promoting social capital Rural development, poverty alleviation, i AND building forwardmoving momentum for national development 14

15 3. Investing in Education and Laying the Foundation for Shared Growth

16 Too many leave school without basic knowledge and skills needed to succeed in life and work grade 8 students as a % of all 14 year- olds grade 8 students with some knowledge of whole numbers, decimals, operations, basi c graphs as a % of 14 year-olds clockwise: Disabled student in Slovakia; Students in a health class in Sri Lanka; Primary school girls in Mali; Secondary school students in Turkey. Photos: World Bank Source: TIMSS 2007 and UIS / EdStats in Macdonald 2011

17 Differences in reading literacy scores between the top 25% and the bottom 25% in parents socioeconomic status

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21 Math literacy in PISA and teacher pay Math sc core Teacher pay over per capita income

22 In late 1940s, most adults could not read, so number of bars were used to indicate candidates in Korea s first election 158

23 <Box 2> How to overcome low human capital? (1/2) 14 Rapid decline in Illiteracy rate among adults (%)

24 4. Conclusion

25 Conclusion and lessons Relatively weak redistributive function in Korean public finance Shared growth not due to ex-post sharing Shared growth through empowering and cajoling of low-income communities and individuals Challenges for Korea now