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BOOK REVIEW

Reaching Critical Mass

The Korean Diaspora in the World Economy

Edited by C. Fred Bergsten and Inbom Choi

Institute for International Economics, Washington, D.C.; 2003

ISBN #0-88132-358-6

Review by Jerry Winzig

The Korean Diaspora in the World Economy is intriguing and thought-provoking book, though some sections can bog the reader down .  This volume is an outgrowth of the First World Korean Business Convention for Overseas Koreans, held in Seoul in October 2002 and  sponsored by the Overseas Koreans Foundation (OKF).  The economic component of this major conference was co-sponsored by the Institute for International Economics, and the OKF supported this book.

These two organizations are part of what makes the book interesting.  The Overseas Koreans Foundation is a non-profit organization founded in 1997 to support the affairs of an estimated six million Koreans living overseas.  One of its main objectives is to encourage and support business networking among Korean entrepreneurs.  (You can see its website, with an English version, at www.okf.or.kr.)

The Institute for International Economics (IIE) is a  non-profit institute for the non-partisan study and discussion of international economic policy.  It has devoted extensive attention to Korea since its founding in 1981 and has several major publications on Korea.  (Its web site is at www.iie.com; a search on "Korea" yields 276 matches; the first 37 focus primarily or exclusively on Korea.)

This book is also interesting because of the intriguing ideas it lays on the table.  Among them are these:

• Overseas Koreans are ten percent of the number of Koreans living on the Korean peninsula, much larger than that of any other Asian country.
• South Korea trades more with countries that have more ethnic Koreans residing there.
• North Korea is one of the world's poorest and least developed societies because it has excluded itself from globalization.
• Koreans have tended to despise overseas Koreans.  This is unlike the Chinese diaspora and needs to change.
• Korea would benefit economically by improving its educational system and the English-language proficiency of its people.
• The situation in North Korea has enormous political, military, and political risks.  At the same time, if reunification is handled well, joining the highly-skilled, capital-intensive economy of South Korea to the underdeveloped, labor-intensive economy of North Korea could provide the opportunity for substantial further expansion and boost Korea's role in the world economy.
• If current trends continue, Korea's per capita income will exceed that of Japan's in the next few decades.
• If current trends continue, Korea's population will exceed that of Japan's sometime in this century.
• If both of these trends continue, Korea's economy would become larger than Japan's.

The authors are quite clear, however, that trends can change.  Bergsten cites the example of Argentina, which in 1930 had the world's third highest per-capita income, but today ranks roughly 70th.  Much of the author's discussion revolves around what Korea and overseas Koreans can do to further these trends.

The book centers around the role of the six million overseas Koreans.  They estimate there are over 2.1 million ethnic Koreans in the United States (far more than shown in the latest U.S. census), almost 1.9 million in China, over 600,000 in Japan, over 500,000 in the Commonwealth of Independent States, and 140,000 in Canada.  Twenty-four countries have more than 2,000 ethnic Korean and 15 countries have more than 10,000.

The conference that preceded this book "wanted to look at the Korean diaspora in the broader context of globalization."  Bergsten says this is important because the flow of individuals is "one of the largest elements in globalization."  He believes globalization "brings huge benefits to all the countries that participate in it" and points out that "no country in history has succeeded in building a developed and high-income economy without participating h the global economy.  Globalization is imperative for economic success."

The authors compare the Korean diaspora to other diasporas in history, including the Jewish and Chinese diasporas.  They examine how ethnic Koreans are treated in various countries around the world.  Japan doesn't fare well in this examination.  For example, Japan's Alien Registration Act of 1952 took away Japanese nationality from ex-colonial descendants, including Koreans.  This exclusion, however, is not limited to Koreans.  From 1982 to 1998, Japan had only 1,651 applications for refugee status, and granted just 218.  (In contrast, the U.S. resettled over 137,000 refugees in 1992, its peak year, and in 2001 resettled over 68,000 refugees.)

The book concludes with an examination of business and investment opportunities for overseas Koreans, focusing on the United States, Japan, North Korea, and South Korea.  Especially interesting are Marcus Noland's observations on the unique challenges faced by any reform efforts in North Korea.  He also refers the reader to a more detailed paper on the IIE web site, called "Westbound Train Leaving the Station: Pyongyang on the Reform Track."

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