From Promising Beginnings to Divergent Paths: Brazil and Korea

In many ways the comparison between these two newly industrializing economies is a natural one. They are among the fastest growing countries in the post-war period. Both have been successful in building a diversified industrial base. Governments had a powerful role in devising and implementing development strategies and in so doing they were not shy about interfering with the free operation of markets. And, at crucial times during the post-war period, authoritarian regimes, including military dictatorships, took the reins of power to ensure the success of development strategies. There are, of course, some important differences between both countries. Perhaps one of the most obvious is their difference in natural endowments. Brazil is rich in mineral and water resources, with a low population density and is also blessed with abundant agricultural land. Although Korea has a significantly lower population, population density is much higher and the country is deficient in most natural resources, including agricultural land. A second important difference lies in their geopolitical situation. Brazil is undoubtedly and unopposedly the major regional power in South America, and its potential self-sufficiency provides it with plenty of flexibility in dealing with the dominant world power in the region, the United States. Korea, on the other hand, despite being a significant economic power, is in effect a midsize country flanked by two giants, namely Japan and China. In what follows we will concentrate instead in other differences that have to do with policies.