How to Build a Nation

How to Build a Nation

David Ekbladh

Nearly 60 years ago, Americans marched into a small, ravaged country thousands of miles distant, determined to transform it into a modern nation. They could not have imagined how successful they would be—or how long the transformation would take.

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21m 18sec

It was a grim autumn. The United States was trapped in an increasingly unpopular conflict, with much of the nation’s military strength committed to a grinding, seemingly endless struggle. America was confronted by a dangerous new enemy in the world, but critics on both sides of the political spectrum argued that the current battleground was far from the best theater in which to confront it. At the United Nations, the Security Council was in gridlock as other powers stymied U.S. initiatives. America’s allies, including the British, whose troops were fighting beside the Americans, were growing more and more uncomfortable with Washington’s bellicose rhetoric, worrying that the Americans’ loud talk would inflame the entire region. The United States could reassure itself with the thought that it headed an international coalition, but this was cold comfort when the U.S. Treasury was paying most of the bills for the foreign troops and local forces. There was no easy way out. Americans realized that military action had committed them inescapably to a prolonged effort to reconstruct and modernize a distant land. To abandon a country shattered by war and decades of authoritarian rule would be a poor advertisement for the type of political and economic system the United States wanted to promote.

But the situation in South Korea would improve the following year. Events in 1953 would diminish, to some extent, the anxieties that had marked the end of 1952. Exhaustion on both sides of the conflict brought a tenuous truce. Joseph Stalin’s death in March prompted changes in Soviet strategy. In Washington, Dwight D. Eisenhower took office, bringing with him a fresh approach to the Korean conflict, and in New York a new UN secretary general, Dag Hammarskjöld, began to revive the organization’s reputation, which had declined under his predecessor, Trygve Lie. But even as the military side of the conflict lurched to a conclusion with the signing of an armistice in July 1953, and a degree of equilibrium returned to international politics, the United States was forced to confront once again its seemingly open-ended commitment to building a modern nation-state in South Korea.

That commitment had begun suddenly—almost accidentally—in 1945. We’ve forgotten today just how deep it has been and how much it has cost in blood and treasure. By 1980, the Republic of Korea had received $6 billion in nonmilitary aid from the United States, much of it during 20 years of intensive effort in South Korea between 1945 and 1965. But the development programs weren’t about dollars only. America aimed to remake many aspects of South Korean life in order to lay the foundation for a modern society on a Western model. It was a process subject to constant alteration, negotiation, and opposition.

American involvement in Korea began in the backwash of World War II, but it took on increasing significance as the global Cold War evolved. Success in Korea would allow the United States to prove to the world the superiority of its approach to development. After Japan’s defeat in World War II, American and Soviet troops rushed into the power vacuum that had been created in northeastern Asia. Korea was abruptly freed from the colonial rule to which it had been subject since annexation by Japan in 1910. A hasty decision in August 1945 split the peninsula into a Soviet sphere of influence in the North and an American zone in the South. In a late-night meeting at the State Department, Americans suggested the 38th parallel as the boundary between the two—and were surprised when the Soviets accepted. They should not have been. The demarcation resembled an agreement made some 50 years earlier between Japan and tsarist Russia when both were vying for dominance in Korea.

For the Americans, stability in the South was essential to counter a communist-controlled North and to carry out the larger U.S. strategy in East Asia at a time of uncertainty and peril in the region. In the view of Secretary of the Army William Draper, a stable Korea could provide an indispensable, even “natural” market and source of raw materials for Japan, the region’s economic powerhouse. Though that had been Korea’s erstwhile role in the Japanese Empire, influential policymakers such as Secretary of State Dean Acheson thought it necessary still, and all the more important after the Communist victory in China in 1949 denied Japan another traditional outlet for trade. Acheson and his boss, President Harry S. Truman, were convinced that the United States could not afford to let one of its proxies founder, especially one that abutted a Communist competitor. So the need to mold South Korea into a viable state—preferably but not necessarily democratic—with a modern economy insinuated itself into wider American policy goals in the late 1940s.

At first, the agent of modernization in Korea was the U.S. Army. The occupation rested on an assumption that had been articulated at the Cairo Conference in 1943. The wartime Allies took for granted that, after liberation from Japanese rule, Koreans would require a period of trusteeship, and that they would be granted independence “in due course.” With this predisposition toward tutelage, the army saw South Korea as a developmental problem. Near the top of the army’s list of concerns was the impact of the country’s sudden division at the 38th parallel. Breaking Korea in two left the bulk of the heavy industry—chemicals, steel, mining, and electricity production—in the North. The South, with an economy dominated by textiles and agriculture, seemed ill suited to standing on its own.

But the geographical division often took second place as a source of anxiety to the effects of Korea’s colonial history. Yes, the Japanese had rapidly expanded Korea’s industrial capacity, but the Americans believed that the colonial government had purposely stunted Korean society. Koreans had been allowed to attend primary schools, but there were rigid limits on more advanced education, especially in the technical arts. Postcolonial Korea was bereft of the cadre of engineers, managers, and administrators essential to the functioning of a modern industrial state.

Looking at Korean society as a whole, the Americans saw a land mired in traditional and hopelessly backward values. “Something of the corrupt medieval monarchy of old Korea, flavored with a dash of the Chinese warlord tradition, still survives,” said a 1947 army report saturated with the biases of the day. “Although the Koreans have been called the ‘Irish of the Orient,’ being sociable, fond of fun and drinking, of talking and fighting—they differ from the Irish by being afflicted with what appears to be a deeply rooted inferiority complex, doubtless engendered from the systematic and prolonged humiliation at the hands of the Japanese. The results—evident in political life—are extreme sensitivity (‘face’), instability verging on irresponsibility, proneness to mob psychology, and occasional bursts of unreasoning anti-foreign feeling.”

For a viable and stable state to emerge, the Americans concluded, Koreans needed to develop a future-oriented worldview that put its faith in material progress and modern institutions. That view drew the Americans far beyond relief into nation-building, or “modernization,” as it was called at the time. They launched programs of land reform and industrial and agricultural development. In the countryside, the stultifying grip of the yangban (local landlords) was gradually loosened. The Japanese-designed school system was subjected to wholesale revision, bringing not just new textbooks but a new philosophy. From elementary school onward, curricula that produced loyal imperial subjects were replaced by curricula that instilled a faith in progress and technological accomplishment. The occupation authorities established technical training programs to create a new generation of skilled workers, and the first Korean students, soon to become a stream of thousands, were sent to American colleges and universities to learn the latest techniques in medicine, agriculture, and engineering.

During the first few years after World War II, the effort in South Korea was overshadowed by events in China, where the United States was struggling to buttress Chiang Kai-shek’s sagging Nationalist regime against its Communist challengers. The American aid program there was overseen by the Economic Cooperation Administration (ECA), which had been created to implement the Marshall Plan in Europe and, in 1948, had its mission extended to underdeveloped areas of the globe. Eventually, the ECA’s ideas would play an important role in South Korea.

The ECA’s top officials recognized that the lessons of European recovery weren’t very relevant to Asia. Although ravaged by war, Western Europe in the 1940s possessed a mature infrastructure—a skeletal network of roads, electrical grids, and factories—and ranks of experienced engineers, managers, and bureaucrats. These specialists provided the critical sinew that held industrial society together. Perhaps most important, European societies were forward looking and shared an essential modern faith in technology.

In 1948, Paul Nitze and others in the State Department formulated an “Asian Recovery Program,” which, though never fully implemented, embodied the conventional development thinking of the day: Poorer and less developed parts of the globe required their own specialized approaches; they lacked the essentials of an industrial economy and were weighed down by “backward” cultural and political beliefs.

Advocates of this course believed that the United States had a singular capacity to catalyze development through its mastery of high technology and its ability to promote social change. As proof, they often cited the United States’ own legacy of internal economic development, in particular the Depression-era Tennessee Valley Authority (TVA), launched in 1933. Along with dam building and the generation of electricity, the TVA sponsored technical training programs, adult and civic education, libraries, and extension services that brought the latest agricultural methods to farmers. By the 1940s, it could claim to have sparked remarkable economic and social change in a poor and “backward” segment of the American South. Journalist John Gunther asserted in 1947 that the TVA “proves that the idea of unified development works”; its possible application was “almost boundless . . . its horizon could be illimitable.”

But the Americans were not parochial. The Truman administration also took considerable pains to install developmental capacities in the UN’s specialized agencies and various economic and regional councils. And U.S. aid programs borrowed from a collection of reform concepts that had been germinating internationally before World War II. To meet its own agenda, the ECA retooled ideas from the 1930s’ “rural reconstruction” movement in China, which shared the principle that agricultural practices had to change along with many other aspects of daily life. Education, local institutions, and even local languages had to be made to fit the demands of the modern world.

With the collapse of the Nationalist government on the Chinese mainland in 1949, the effort to create a viable anticommunist state in South Korea became all the more urgent. In 1948, Washington had officially ended the military occupation, and the Republic of Korea (ROK) was established under a pro-American nationalist, Syngman Rhee. That provided an opportunity for the U.S. Army, never entirely comfortable with its role, to withdraw. (The Soviets, meanwhile, began pulling their own troops out of North Korea.) The ECA, facing the total collapse of Nationalist China, stepped eagerly into the breach.

The initiative in Korea would become the ECA’s largest mission, and veterans of the China experience were confident that lessons learned in China could be effectively grafted onto programs in South Korea. Paul Hoffman, chief of the agency, told his staff in Korea that “we have the proof and here is the proving ground.”

But the agency’s tenure in Korea would be rocky and short-lived. Tensions on the peninsula were mounting, and, in the South, power struggles between the Left and Right fed open revolt on several occasions in the late 1940s. In the spring of 1948, the North cut all electric power supplies to the South. Power rationing was instituted, and industrial production was sharply curtailed, which, in turn, cut into the fertilizer output that was indispensable to the South’s primary economic sector, agriculture. At ECA headquarters, staff members were warned to limit their own use of electricity at night because it looked bad to have the lights burning in mission offices at a time when most Koreans were without power. As it happened, power shortages would hamper development efforts in the Republic of Korea for many years.

The ECA struggled on until the North Korean invasion in June 1950 pushed it from mainland Asia for a second time. With a mandate from the UN to wage a military campaign against the Communists, the United States recast the development program to make the UN a significant factor in Korean reconstruction. Early in the conflict, the Truman administration organized the United Nations Korean Reconstruction Agency (UNKRA) to assume responsibility for the development of Korea. From its inception, UNKRA had goals far larger than simply repairing damage from the war then raging on the peninsula. “A vast opportunity awaits us to bring, by such means as the United Nations has been developing, new hope to millions,” Secretary of State Acheson declared in a speech to the UN General Assembly. “These efforts, and this experience, if concentrated on areas of particular need, can have a combined impact of exciting proportions. The place to begin, I submit to the Assembly, is Korea.”

As if to emphasize a connection to mainstream thinking on development, the sitting director of the TVA was among the first individuals considered to head the new UN agency. For all the talk of international action, the United States intended to keep a firm grasp on control of Korean development. The individual eventually chosen to run UNKRA, J. Donald Kingsley, was American, as were many of the staff, and more than half the agency’s budget came from Washington.

Officially established in December 1950, UNKRA found little immediate latitude for action. The military situation did not stabilize until mid-1951, and even then the UN military command (controlled by American officers) jealously guarded the rights it had assumed with respect to war relief. UNKRA, in partnership with various U.S. and UN agencies, was left to engage in the not unimportant activity of long-term development planning. The war may have changed the tenor of South Korean development, but it did not alter many of the formulations that drove it. The development plans hatched in the 1950s were strikingly similar to the assumptions of the army and ECA. Again, the fundamental challenges to the Republic of Korea were its lack of infrastructure and its deficient technical capabilities, characteristics it shared with most underdeveloped nations. As a 1954 report by the UN Edu­cational, Scientific, and Cultural Organ­ization asserted, Korean society remained in “the grip of history,” having not yet escaped the legacy of its colonial confinement. Planners asserted, however, that the legacy could rapidly be undone with a healthy dose of foreign aid and expertise. One of UNKRA’s basic assumptions was that a sustainable economy, driven by modern, progress-minded Koreans, could be in place within five years of the conclusion of the conflict.

As UNKRA and other agencies finished their studies, Dwight Eisenhower assumed the presidency. His administration reversed some important stances toward South Korea. Although the Republic of Korea would be exempted from the “trade not aid” policy that Republicans had hoisted as the new standard for foreign economic policy, the administration had strong reservations about the UN and doubted the international organ­ization’s ability to fulfill American goals. There were worries as well that the Soviets had too much leverage over some UN programs and, with this, the potential to cause mischief. UNKRA was summarily demoted to a subordinate position in an aid framework in which bilateral American aid would predominate. Still, the plans authored by UNKRA, grounded as they were in mainstream development thinking of the time, served as benchmarks for much aid activity in South Korea well into the 1960s.

The end of the Korean War in July 1953 left the United States inextricably lodged on the peninsula as the major protector and patron of the ROK. South Korea was now a highly visible test case of the American idea in Asia. The scale of the development effort dramatically increased. Aid poured in, at a rate of more than $200 million per year (with a high of $382 million in 1957). When military aid and the cost of maintaining the U.S. garrison were included, the United States was spending, by the late 1950s, up to $1 billion annually (in 1950s dollars) on South Korea—at a time when the entire federal budget was under $70 billion.

A swarm of nongovernmental organizations (NGOs) also joined the effort in South Korea. They had been operating there since 1945, but the war and its aftermath increased the scale of their activity. Tens of millions of dollars were brought to Korea every year by NGOs as disparate as the Boy Scouts and the Ford Foundation; many of the NGOs were coordinated and financially supported by the United States and the UN. Large engineering and consulting firms, such as Bechtel and TAMS, with their experience in economic development projects in the United States and abroad, were brought in to train South Korean technicians and to build the highways, railroads, and power plants.

By the mid-1950s, the quest for a viable South Korea was the largest development program in the world. But sheer size did not guarantee that American plans would unfold as planned. The ambitious agendas laid out by UNKRA and the Eisenhower administration predicted a viable South Korean economy before the end of the decade, but the prostrate condition of Korean society soon made clear to many that the goal was unobtainable.

The destruction wrought during the Korean War was a major hurdle. As many as three million Koreans, in the North and South, had been killed, and millions more had been made refugees. Most struggled at the margins of destitution in the years following the war. A common greeting among Koreans into the 1960s was “Have you eaten today?” The chronic shortage of electricity in the South crippled efforts to boost industrial and agricultural production. The scale of physical destruction was enormous: Perhaps 600,000 homes had been destroyed in the South alone, and Seoul, twice overrun by enemy forces, was a ruin.

To the chagrin of the Americans, North Korea, aided by the “fraternal socialism” of other communist states, appeared to be making faster headway than the south. It was never far from anybody’s mind that the effort in Asia was not just about the future of South Korea but about which side in the Cold War could claim to be the wave of the future in the developing world.

While the Americans were not uncritical of their own actions or unaware of the challenges facing South Korea, they didn’t hesitate to lay the blame for the shortcomings of their grand plans at the feet of the South Koreans. In Washington, some called South Korea a “basket case” or “rat hole.” State Department officials cited in an internal document commented that “the skills and knowledge of the ROK officials and population were not equal to this Herculean task.” The Amer­icans were also irritated by Rhee’s refusal to acquiesce in what they assumed was South Korea’s natural position in East Asia: handmaiden to Japan. The rampant corruption and cronyism of the Rhee government made it increasingly unpopular not just with the Americans but with the South Korean people.

Though elected by the National Assembly in his first term, Rhee forged an increasingly authoritarian regime. Throughout the first decades after 1945, the country’s domestic politics were faction ridden, tumultuous, and sometimes violent, but also marked by the persistence of pro-democratic forces. In the spring of 1960, when Rhee claimed victory in a rigged election, protesters took to the streets and forced him to step down. The Eisenhower administration supported Chang Myôn, the earnest democrat who took his place, but soon came to see that Chang’s government was rudderless and, perhaps worse, incapable of pushing modernization forward. The next year, when General Park Chung Hee seized power in a military coup, the Americans quickly warmed to him. Park showed himself to be a nationalist who was willing to follow a developmental path in line with American plans. Samuel Berger, the U.S. ambassador in Seoul, reported enthusiastically in late 1961 that Park was responsible for “a genuine revolution from the top breathlessly implementing the much-talked-about reforms of the past.” A pleased Washington was willing to overlook the junta’s authoritarian character.

Over the next few years, Park normalized relations with Japan and laid the foundations of an export-oriented economy, beginning with textiles and light industry. He was determined to forge an independent economy with its basis in heavy industry (steel, automobiles, shipbuilding, and chemicals), and he found willing partners in South Korea’s business class. Loans and kickbacks greased the economic and political gears, and a wave of foreign investment, particularly from Japan, sparked impressive economic growth. But the success would not have been possible without immense effort by the South Korean people themselves. Their talents and fierce work ethic were the glue that held everything together.

By the mid-1960s, South Korea appeared to be turning the corner economically. U.S. economic aid declined as the country’s industrial and export economy began to expand. But for all of the South Koreans’ efforts, it’s unclear how successful they would have been if fortune hadn’t intervened in the form of U.S. military involvement in yet another Asian nation, South Vietnam. Park committed two divisions of troops to the struggle at a time when the United States was desperate for allies to share the burden in Vietnam, and in return he received generous rewards from President Lyndon Johnson. There was aid, of course, but also military contracts. Just as it had boosted the economy of Japan with purchases during the Korean War, the United States now lifted the South Korean economy with a deluge of war-related orders. The war effort swallowed 94 percent of South Korean steel exports, as well as significant amounts of machinery, chemicals, and other goods. Hyundai, Hanjin, and many of the other chaebol (corporate conglomerates) that now dominate the South Korean economic landscape got their first solid footing with big Vietnam-era contracts from the U.S. government.

By the late 1960s, South Korea’s economic improvement had allowed it to “graduate” (the term at the time) from the “school” of Amer­ican foreign aid. William Bundy, assistant secretary of state for Far Eastern affairs from 1964 to 1969, would later recall that perceptions of South Korea shifted to the belief that, “given enough patience, and of course enough material support, but above all enough time for methods to sink in, ‘it could be done.” South Korea would continue to receive U.S. economic favors in the form of loans and guarantees, but it ceased to be dependent on massive grants and direct assistance. No longer a “basket case” of developmental failure, South Korea by the 1970s was billed as a triumph and a model to be emulated—and all the more important as such because of the failure of American-sponsored development in South Vietnam and Iran. The world marveled at the “East Asian economic miracle,” and those looking for lessons and inspiration were referred to South Korea and its fellow “dragons.”

But economic success did not automatically translate into political progress. Delighted by the economic “takeoff” of its Asian charge and mindful of the enemy looming north of the 38th parallel, Washington was never eager to press Park and his military successors for democratic reforms, even as the regime grew more and more authoritarian and violent during the 1970s. Park himself was murdered by his own intelligence chief in 1979, only to be succeeded by leaders who were even more bloody-minded. In 1980, the regime’s brutal suppression of a protest in Kwangju, which led to wider violence and hundreds of deaths, elicited only a muted response from Jimmy Carter’s White House. Still, the South Korean pro­democracy movement gathered momentum and managed, through large strikes and protests, to force the military gradually to retreat from politics in the early 1990s. In 1997, when Kim Dae Jung, a prodemocracy activist who had been sentenced to death by the military in the 1970s, was elected president, the success story was complete.

It had taken 52 years.

The Republic of Korea today displays all the trappings of a member in good standing of the exclusive club of highly industrialized, affluent democracies. Seoul, a shattered city of 900,000 in the aftermath of the Korean War, is now a world-class metropolis of more than 10 million. South Korean steel, automobiles, and electronics flood the world’s marketplaces. The role of the United States in this story was not always something to be proud of. None­theless, Americans should take some genuine satisfaction in having helped create a modern South Korea.

The book is by no means closed on U.S. involvement in South Korea. Nearly 60 years after the first American troops came ashore in South Korea, some 37,000 are still stationed there, facing a hostile North Korean regime that stubbornly endures. Virtually nobody foresaw the scale of commitment that would be necessary to create a model nation-state in South Korea. Americans assumed that their know-how would rapidly bring change. But the easy assumptions of a half-century ago yielded to a painful reality. American aid was part of a complex mixture of contingent factors—including the extraordinary perseverance and initiative of the South Korean people—that led to the elusive goals of prosperity and freedom only after immense and protracted effort.

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