Hansun Foundation for Freedom & Happiness has issued the 2009 Hansun Total National Power (TNP) Index. This is the fourth and last in a series of articles which analyze all aspects involving national power, and present tasks and strategies the nation should tackle to sharpen its competitiveness. ― ED.
By Cho Jae-hyon
Staff Reporter
South Korea's hosting of the G20 summit in November next year underscores its increased diplomatic and economic power in the world. As the Seoul Summer Olympics did in 1988, it is expected to provide a boon to its economy and image.
The upcoming summit is also indicative of a power shift to emerging economies from the affluent G8 advanced economies.
With the United States and other developed nations drawing criticism for igniting the latest economic crisis with their loose financial regulations, Korea needs to take the global slump as an opportunity to move forward and catch up with its bigger rivals.
Korea overcame the Asian financial crisis faster than any other nations in the region in the late 1980s. Likewise, it is showing the fastest recovery among the G20 nations this time.
Hopes are growing that its successful bid to host the summit will add fresh momentum for the country to pull itself out of the prolonged economic slump and gear up for another expansion cycle.
President Lee Myung-bak said Wednesday that the country should use the hosting of the summit as leverage to join the ranks of developed nations.
However, there are many obstacles Korea must tackle to achieve that goal. Over the last half century, the country has shown one of the fastest economic growth patterns in the world. But there is no guarantee that it will continue to become the hero of a success story.
The Hansun research team cautioned that a number of countries, which once reached the threshold of developed nationhood, retreated at the last moment, failing to overcome internal economic, social and cultural problems.
It said that Korea also faces ``many negative factors'' that will keep the country from sustained growth.
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Economic Power and Freedom
The research team computed the rankings of economic power of the G20 members. Gross domestic product (GDP) figures in the past five years are the key component of indicators measuring the economic power of each nation.
Others include inflation growth rates and the indicator measuring how well the nation's income has been distributed.
The size of Korea's economy in terms of GDP was the smallest among the G20 countries in 1980. Now it's the world's 13th largest.
The changes in its rivals are also remarkable. China's economy was the second largest in 2008, a jump from 13th in 1980. In contrast, Italy's economic size dropped to 10th from 5th, and France to 8th from 4th.
In economic power standings, South Korea claimed 11th. A higher ranking than that of GDP size reflects relatively stable prices.
``To see our ranking climb in the economic power rankings, the economy should grow at a faster clip than other nations among other things,'' said professor Shin Do-chul of Sookmyung University. ``To do so, rules and policies must be revamped ― a prerequisite for the facilitation of accumulation of human, material and technologies.
``Investment has been sluggish in recent years as companies are reluctant to take risks amid uncertain economic environment. A greater part of private sector savings should be channeled into the industrial sector and more policy efforts must be made to attract more investment from foreign investors.''
Korea was relatively strong in the rankings of economic freedom, claiming 8th place. It drew strong points in business freedom, monetary and fiscal areas. But the freedom indicators measuring the financial and labor sectors were low at 60 and 40 points out of 100, respectively.
In the meantime, the research team said that one of the biggest tasks the nation must tackle is the unification of the two Koreas. It will provide the main leverage for the nation to become one of top 10 economies under the scenario that the North's economy would grow quickly in the wake of unification, it said.
``The unification will dramatically boost the nation's economic and total national power,'' Shin said. Once combined, the population will reach 71.2 million ― 48.5 million in the South and 22.7 million in the North.
Governance/Culture Power
The latest global financial crisis had its origins in excessive leverage and weak risk management on the part of governments.
This governance is emerging as an important factor determining the nation's national power.
Korea's governance capability came in at 10th in 2008, with the average ranking between 2003 and 2007 at 6th.
``In terms of security, law observance and government efficiency, Korea posted higher points, but it recorded low rankings in subcategories about the extent of participation by citizens and corruption indexes,'' professor Choi Chang-hun of Kwandong University said.
The research team said that as the recent Korean wave or hallyu has indicated, cultural power will play a greater role in bolstering the nation's national power.
To polish the nation's image ― often represented by violent standoffs between ruling and opposition politicians, culture should be wedged in, said Chang Mo-jin, a researcher at the Korea Culture and Tourism Institute.
Internationally, Korea's image is violent and militant, as mirrored in clashes between riot police and striking union workers, he said. Korea ranked 13th in the cultural power standings.
``Korea's cultural image remains low,'' Chang said.
On top of the low ranking, Korea's standings in the subcategories of cultural power are uneven.
In culture and arts, Korea ranked 12th, with China claiming top spot. The ranking is based on exports of culture and arts services and goods. ``We still lag far behind developed nations in the arts and culture fields,'' Chang said.
Of the cultural power subcategories, Korea commands a strong sports power, claiming 7th place. In tourism, it stayed at 9th, but in terms of attractiveness, Korea stood at 17th.
``Overall, a nation's cultural power lies in attractiveness. And we remain at low levels in terms of appeal,'' Chang said. ``Violent images and other social problems cannot be covered up. Therefore we need to change internally to upgrade our cultural power in the long-term.''
♤ 이 글은 2009년 10월 1일자 THE KOREA TIMES에 실린 글 입니다.
