Chapter 3. Data Analysis and Application13
4. Korea's relative standing
A country's relative standing can be identified by examining the trends in how its economy, society, and environment have changed. The trend of changes by area of economy, society, or environment can be analyzed by comparing the trends by indicator, by ranking and by level of improvement in the country under study.
- 55 -
First, this study examined the trend of changes in the indicator value of category areas.
As seen in <Table 12> below, Korea's mean value of growth engine indicator was higher than the total mean of all the countries, both in the 1990s and in the 2000s. In the 1990s, Korea's mean of indicators 0.31 was slightly higher than the total mean of all the countries 0.30.
However in the 2000s, it recorded 0.42 higher than the total mean of all the countries 0.38.
The average growth rates of Korea's growth engine indicator recorded 4.10% and 2.76% in the 1990s and 2000s respectively. This is a good performance exceeding the total means of 3.11% and 2.33% respectively.
Korea's social cohesion indicator fell short of the total mean of all the countries both in the 1990s and in the 2000s. The growth rate of the social cohesion indicator recorded -0.12%, far less than the total mean of 0.12%.
Korea's environmental indicator also recorded a mean lower than the total mean both in the 1990s and in the 2000s. However, its growth rate of environment index recorded 1.32%, more than double the total mean, 0.60%, in the 2000s, indicating a good improvement in environment.
Korea's GDP per capita increased at a fast pace, exceeding twice the mean of the growth rates of all countries, since 1990 but it still did not reach the total mean of all countries under study.
The study showed that while Korea secured growth engine without accompanying social cohesion and environmental conservation the 1990s, it simultaneously pursued growth engine, social cohesion, and environmental conservation in the 2000s.
Although Korea's absolute level of social cohesion and environmental conservation is still in the low rankings among all the countries surveyed, it is expected that if the current trends continue, its areas of society and environment will be able to move up into the middle level similar to that of growth engine. Consequently Korea has experienced a paradigm shift in development strategy since the 2000s. Until the 1990s, the country had implemented growth-centered development strategies without considering social cohesion and environmental conservation. Since the 2000s, however, along with an increase in income,
- 56 -
Korea has shifted the direction toward development strategies which take the quality of life and environment into account
<Table 12> Korea's average annual growth rate by category area (1990-2008) Index average9 Index growth rate
Total Korea Total Korea
Growth engine
1990s 0.30 0.31 3.11 4.10
2000s 0.38 0.42 2.33 2.76
Average 0.34 0.37 2.76 3.50
Social cohesion
1990s 0.46 0.38 0.12 -0.12
2000s 0.47 0.39 0.57 0.74
Average 0.47 0.39 0.32 0.26
Environment
1990s 0.58 0.53 0.60 0.69
2000s 0.62 0.58 0.60 1.32
Average 0.60 0.55 0.60 0.97
GDP per capita
1990s 0.24 0.13 2.16 5.49
2000s 0.29 0.22 2.11 4.12
Average 0.27 0.30 2.13 4.88
Next, this paper compared Korea's status with the rankings of the other countries surveyed. As seen in <Table 13>, Korea showed a middle ranking in the growth engine area among the countries in that Korea ranked 21th in 1990 and rose to 18th in 2008. In the social cohesion area, Korea remained almost changeless for the past two decades, ranking 23rd to 24th. These rankings are in the low level of all the 30 OECD countries included in the calculation of the social cohesion indicators. In the environment area, Korea ranked 30th to 31st of the total 37 countries, recording the lowest level of all the countries.10 After all, this
9 Index average and growth rate were all estimated based on standardized index value.
10 Social cohesion indices were calculated of 30 OECD members except for Chile and the proportions of High, Middle, and Low levels were compared of 30%, 40% and 30%, respectively.
- 57 -
study shows that Korea achieved a robust performance in the economic area since 1990 but did not attain development in environment in proportion to the economic area.
Given the trends in three areas as pointed out above, Korea should seek development strategies that combine social cohesion and environment at the same time. Aware of these problems, the present government has strengthened policies for revitalizing the middle class which encompass both growth and social cohesion. On the other hand, the government implemented green growth strategies which combine growth and environment.
Korea's major characteristics found in areas other than these categories are summed up as follows: Korea recorded high levels in the rankings of financial development and fertility and aging in the 1990s. However, these areas all dropped to middle levels as of 200811, whereas macroeconomic stability and technological innovation recorded high levels for the first time. The most remarkable performance of these areas was technological innovation, ranking 5th in 2008. In the class of individual freedom and life security, Korea still remained at the lowest levels despite of an increase of two rankings from 27th in 1990 to 25th in 2008 among the 30 countries studied. In the class of social tolerance and trustworthy government, Korea ranked 24th to 25th in the same periods, recording middle levels among the 38 countries surveyed.
<Table 13> Korea's relative standing
Category Class Sub-class 1990 1995 2000 2005 2008 1990 2008
Growth engine (38) 21 20 20 19 18 Middle Middle
Stable growth (38) 21 22 19 17 17 Middle Middle
Income (39) 29 25 25 23 22 Low Middle
11 Aware of seriousness of low birthrate and aging, the present administration has prepared active measures of the governmental level.
- 58 - macroeconomic
stability (39)
22 19 17 3 8 Middle High
Economic openness (39)
21 25 24 24 15 Middle Middle
Industrial competitiveness (39) 20 20 19 17 16 Middle Middle
Informatization (39)
21 21 11 15 18 Middle Middle
Technological innovation (39)
15 17 20 12 5 Middle High
Human capital (39) 21 20 20 20 19 Middle Middle
Social cohesion (30) 24 22 23 24 23 Low Low
Individual freedom and life security (30)
27 23 25 27 25 Low Low
Freedom (39) 20 20 24 25 26 Middle Middle
security (30) 29 23 27 29 29 Low Low
Fertility /aging (39)
11 11 11 15 16 High Middle
Social tolerance and trustworthy government (38)
25 21 25 22 24 Middle Middle
Social capital (38) 17 16 16 13 16 Middle Middle
Tolerant society (39) 33 35 36 33 34 Low Low
Government(39) 27 27 26 23 23 Middle Middle
Environment (37) 30 30 31 31 30 Low Low
Environmental conditions (37) 24 24 26 26 22 Middle Middle
Resource efficiency (39)
28 26 28 27 27 Low Middle
Environmental hazard (37)
25 26 26 25 20 Middle Middle
Regenerative capability (39) 31 34 34 34 33 Low Low
- 59 -
Renewable energy (39) 28 36 36 37 38 Low Low
Supply of water &
sewage (39)
31 31 33 31 28 Low Low
Note1: "High" refers to high 30 %; "Middle", middle 40%; and "Low", low 30% of the countries studied.
Note2: The number in parenthesis ( ) indicates the number of applicable countries by indicator.
- 60 -