Thu Oct 27 16:52:38 CAT 2016

SA can learn fromS Korea's success

By unknown | Jun 04, 2008 | COMMENTS [ 0 ]

Mashudu Ramano

I recently spent time in South Korea. It was such a memorable experience that I think my fellow South Africans can learn from it.

I was impressed by how a country, the average per capita GDP of which was less than the average of Africa in the 1960s and 1970s, has risen in the past 40 years to be a significant player in the global economy.

I would like to make a few observations about our two countries.

South Korea is a very small country on the southern tip of the Korean Peninsula in South East Asia. It is about 100 000 square kilometres in size - about a 12th of the size of South Africa.

It has very few natural resources and a population of about 49 million people.

But despite this South Korea's nominal GDP is about $900 billion, just about a third more than the GDP of all the African countries put together.

Though South Korea has to import most of its raw materials , it nevertheless has the largest shipbuilding industry in the world.

It also has the fifth largest steel and stainless steel company in the world. Its exports, by value, are some $400 billion, almost 10 times the value of our exports.

These exports are value-added products such as consumer electronic goods, vehicles, chemical products, machinery and equipment. In fact, in 2006 Korea was ranked fourth after the US, Japan and Germany in terms of new patents registered worldwide.

In contrast South Africa's land area is 1,2million square kilometres. We have an enormous amount of natural resources. We have the world's largest reserves of the platinum group metals and until recently were the largest producers of gold.

Our population is 48,5 million but our economy's nominal GDP is slightly less than a third of the Korean GDP. We import a lot of value-added products made from the raw materials we export everywhere.

Our industries are proud to export these raw materials to create downstream jobs elsewhere.

I am pretty sure there are many reasons to explain the difference between the success of the Korean economy and our own. I would like to share my own observations.

The first is education. The best gift any country can give its young people is a robust and sound system of socialisation, human capital development and knowledge discovery.

Korea has about 422 universities and colleges. This means that for every 125 000 people Korea has one university or college. Attendance at middle school and high school is 99 percent and 95 percent, respectively. Its literacy rate is 98 percent.

In one company I work with they have 900 employees with PhDs and I'm told that in Samsung alone, there are more than 5000 employees with PhDs.

Now contrast this with our situation. With almost the same population I have counted 37 tertiary institutions that offer degrees - that is 24 universities, eight private sector institutions that offer degrees and about five foreign institutions that offer degrees locally.

There are also about 56 other institutions that offer post-high school qualifications, bringing our total number of universities and other educational institutions to about 93. We have one institution for every 500000 people.

Statistics show that about eight million adults aged over 15 in our country are functionally literate, 65 percent of white South Africans and 40 percent of Indians aged over 20 and above have a high school or tertiary qualification.

On the other hand 14 percent of blacks and 17 percent of coloureds aged over 20 have high school or tertiary qualifications.

It seems obvious that human capital development and skills training are a serious area for us to focus on if our country has to change its fortune and future.

Recently the new president of Korea renamed the economic ministry, the ministry of knowledge and economy. Combining institutions of different orientation, culture, practice and even geography is currently a bureaucratic nightmare that I am sure we will live to regret.

Secondly, I found Koreans passionate and committed to the national agenda. The big issue for them was, and is, securing the necessary raw materials the country needs. Everyone is focused on this.

There is a dearth of this kind of commitment from our people and our corporate sector. There is very little commitment to downstream beneficiation of our rich endowment of mineral resources for the benefit of our country.

Now is Africa and South Africa's time to pursue a resource-led industrial development strategy - one that leverages our natural endowment to kickstart downstream industrial activities.

I have heard arguments that South Africa and Africa are far away from the markets that would consume these products, but looking at the capital goods we consume here I think that argument does not hold.

We also need to revisit many of our current policies, including social security policies.

Young unemployed people would rather have a baby and risk contracting Aids to qualify for a child grant.

Perhaps we could set minimum requirements for such grants, that people who qualify must do a certain amount of community service - like cleaning up our townships and environment - to instil a certain amount of duty. Too many of our people grow up thinking that they do not have to do anything - the state will look after them.

Passion, commitment and education that empower people are lessons I learnt in Korea. But this needs leadership, one of the most important ingredients we need right now in our country.

lMashudu Ramano is chairman of Avusa.


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