Seoul Consensus

The Washington Consensus, first proposed by economist John Williamson of the Institute for International Economics in 1989, has been a dominant development paradigm for the two decades. It is based on neo-liberalism and is guided by three overriding principles: (1) Stabilization of the macro economy; (2) Opening of economies and economic liberalization, a pretentious phrase which means deregulation of banks and markets. (3) Privatization of state-owned Companies. Originally conceived as a panacea for the economies of Third World countries, it was hastily distorted by special interests. Its validity lost considerable trust in its relevancy to the real world when at least some of those policy recommendations resulted in a global recession in 2008. After that, the Barcelona Agenda (2004) was suggested as an alternative model but was not quite welcomed. Also, the Beijing Consensus (2004) has a limit to its applicability for others because it is based on a centrally controlled socialist economy.

In 2009, the "Seoul Consensus: 21st Century New Development Paradigm" was suggested as a result of intense discussions and debates of 70 experts from various areas. The purpose of the Seoul Consensus (2010) was to provide a new, workable model for a world confused by the economic chaos created during the previous two years. The question remained: how to promote a nation's economic growth with a new development model that would create an economic paradigm shift.
The philosophical foundation of Seoul Consensus is "Communitarian Liberalism," whereas that of the Washington Consensus model was "Neo-liberalism." Consequently, the Seoul Consensus does not encourage implicit trust of the marketplace, its growth or efficiency, yet does strive to create a balance between a free market, government, economic interests, community, and individual citizens. Seoul Consensus is a development model that can be summarized as the "Miracle of The Han River" which uses the successful industrialization of Republic of Korea as a model. There are two versions of Seoul Consensus with different development phases. The first one, Seoul Consensus 1 is for the advancement of countries with intermediate development, usually referred to as developing countries. The paper models policies designed to establish a functional relationship between the democratic process and the market economy. The goal is to create symbiotic, balanced development and cooperative maintenance of economic stability that creates an environment conducive to balanced economic growth, while maintaining the qualitative values of history, culture and the human spirit. The second one, Seoul Consensus 2 is for the developing countries to make one step up forwards middle-developed countries.

Seoul Consensus 1 – Advancement Strategies for the Middle-Income Nations

1. To value mental capital
2. To expand global integration in the needed areas continuously
3. To narrow the gap between the globalized and the non-globalized/ localized sector
4. To utilize the global knowledge ecosystem and to improve the efficiency of investment in education
5. To promote symbiotic development – harmony between growth, distribution, and environment – led by investment
6. To aim at maximizing employment, not growth, as the goal of economic development
7. To change the role of government to public-private partnership and to enhance autonomy of local governments
8. To establish a substantial liberal democracy and to overcome the negative impacts of populism
9. To aim at a "Globally Contributing Country and a World Model Country" with the reunification of the Korean peninsula
10. To produce national strategies based on the values of our collective cultural history and institutions, and insights gained
from research and experience in the field

Seoul Consensus 2 – Development Strategies for the Least Developed Nations

1. To globalize to the greatest extent possible because every country's successful economic development was the result of
a shift toward globalization
2. To establish these essential elements: political stabilization; strong national leadership; and excellent government
officers
3. To induce investments for human resource development, such as education as much as possible
4. To encourage people to dream and to feel confident about the future because people's patriotism and national identity is
a key driver for development through better governance.
5. To have insure that the national government has in place an effective, integrated plan for growth including plans for
economic development, industrial policies, human capital development and more.
6. To design all policies with clear incentives to utilize the "carrot and stick" method.
7. To reduce political and economic corruption as much as possible
8. To have enough export oriented strategies, to maintain an adequate amount of foreign exchange holdings in order to
prepare for the increasing instability of global markets.
9. To utilize actively financial globalization by attracting foreign direct investment as much as possible, yet maintaining
appropriate regulations for short term debt
10. To offer target performance management in cooperation with the public and private sector to maximize growth.

At the beginning of the year 2010, the Hansun Foundation published introductory articles about the Seoul Consensus serially in a daily newspaper, The Chosun Ilbo in a partnership with the newspaper company. In September 2011, we published a book, with compiled research results and also held an international symposium on the topics of the book.