Chung GS ’78 discusses Korean economy

“In 1957, Korea’s per-capita national income was less than $100, comparable to that of the poorest countries in the world today,” Chung said, noting that “barely two generations later, with a population of 49 million and a per-capita GDP that tops $20,000, [South] Korea has raised itself to the other end of the spectrum.”

South Korea marks its 60th anniversary this year as “a republic that has pursued the values of modern democracy and a market economy,” Chung said.

Chung retraced South Korea’s economic history, beginning with the 1945 withdrawal of Japanese troops from the peninsula. He highlighted Korea’s transformation into a rich country with similar social and economic woes to those of the United States.

Economics professor Alan Blinder ’67, who taught Chung during the Korean economist’s time at the University, noted that the Korean economy has also been hit by the current financial crisis.

“Korea’s challenges are very similar to those of the United States,” Blinder explained.

“Our concern is whether Korea will be able to sustain satisfactory economic growth with matured democracy in the future,” Chung said. “There seems to be no short-term answer to the immediate problem of the worldwide recession.”

Chung noted that it is important that “the government … create an environment in which companies can invest freely and actively.” He added that educational reform — to foster creativity and individual thinking — should be one of the central solutions to the economic crisis.

While at Seoul National University, Chung implemented several reforms, including lowering the student-professor ratio by decreasing the number of students. Korean policymakers have aimed to maximize the number of college graduates, “but this nearly exclusive pursuit of volume means that we have too often ignored other important characteristics such as leadership, substance or quality, and creativity,” he explained.

The lecture was the first in a three-lecture series on Korea’s economic policies and political situation.

Chung, who received a Ph.D. in economics from the University, will spend the semester as a visiting fellow at the Princeton Institute for International and Regional Studies, the University announced Wednesday. He will continue his research in macroeconomics, financial markets and financial crises.

Chung held a number of positions in both the public and private sectors and has played an important role in transforming South Korea’s economy since the Asian financial crisis in 1997.