Despite all these achievements, Korea faces challenges. The oncoming ideological shift could destabilize the country's politics and harm an economy facing numerous challenges.
The left is fragmented among a number of parties that are increasingly taking radical positions in response to populist pressures, including opposition to the free trade pact with the U.S. The ruling party is perceived as a corrupt, business-dominated entity ruled by an ossified oligarchy under the daughter of the country's former autocratic leader, Park Chung-hee. Voters swing between two extremes when casting ballots in national elections, leading to an ever-shrinking political middle.
Curiously, the country's emerging economic problems mirror those of its giant neighbor, Japan. Perhaps most urgent is the severe demographic crisis.
Korea's birth rate is among the world's lowest, dropping to just 1.15 babies per woman in 2010, lower than in Japan. Without a national pension system, many argue, South Koreans will face an uncertain future in which ever-fewer children support elderly parents. As South Korea's labor force shrinks, moreover, businesses will be hard pressed to fill their needs, leading to difficult questions about whether to move operations offshore or import workers.
Similarly, Korea's agricultural sector, like Japan's, is inefficient and heavily protected from international competition. Korea ranks near the bottom of food self-sufficiency and is second to Japan among Asian importers of grain. Its politically powerful agriculture lobby is actively demonstrating against ratification of the Korea-U.S. free trade agreement, leading to the pact being held up for now in the National Assembly.
Many South Korean farmers work tiny plots, largely growing rice, which prevents economies of scale and the use of advanced farming techniques and technologies. This leads to vastly inflated prices for daily commodities, further fueling the political dissatisfaction that imperils President Lee's legacy.
If there is an upside to all these problems, it is that vibrant social discourse in Korea seems to be starting to address these issues, in part by looking at Japan. An international conference this week in Seoul hosted by the Asan Institute for Policy Studies (at which this writer was a speaker) took as its theme "Japan in Crisis." If they don't begin tackling their problems today, South Koreans may be holding a similar gathering in a decade or so to try and save their country.
