From an Obama news conference at the G-8:
when my father traveled to the United States from Kenya to study, at that time the per capita income and gross domestic product of Kenya was higher than South Korea's. Today obviously South Korea is a highly developed and relatively wealthy country, and Kenya is still struggling with deep poverty in much of the country. And the question I asked in the meeting was, why is that? There had been some talk about the legacies of colonialism and other policies by wealthier nations, and without in any way diminishing that history, the point I made was that the South Korean government, working with the private sector and civil society, was able to create a set of institutions that provided transparency and accountability and efficiency that allowed for extraordinary economic progress, and that there was no reason why African countries could not do the same. And yet, in many African countries, if you want to start a business or get a job you still have to pay a bribe; that there remains too much — there remains a lack of transparency.
The comparison of South Korea (and, similarly, Taiwan, Hong Kong and Singapore) to various African countries is well-known to those who have studied economic development. Why did the East Asian "Tigers" develop and industrialize while others did not? Obama's answer stresses "efficient" governance as a key factor (although many people might quibble with the "transparency and accountability" he refers to, especially in the period from 1961-1979). There are other possible explanations for South Korea's growth as well, including:
-- significant amounts of aid from the United States, provided because South Korea was a strategic ally
-- openness to trade, in the sense of stressing the importance of export markets
-- protection from foreign competition, through import substitution
Obviously, the last two are somewhat contradictory, although perhaps they could both be true: A country could encourage exports at the same time that it discourages imports. But they are contradictory in the sense that there is a general split among those who use Korea as a model for how to achieve development. One side argues that openness to foreign trade was the cause of Korea's amazing growth, while the other side says it's the protection from imports that did it.
