SEOUL — All eyes have shifted to Seoul as Group of 20 leaders convene Thursday and Friday for the first time in the South Korean capital. The choice is long overdue, as South Korea is a remarkable success story: In one generation, the South Koreans, formerly pummeled by civil war, under constant threat from their Northern communist brethren, long mired in poverty, and ruled by military dictators for 40 years, have built the world's 13th largest economy and Asia's most vibrant democracy.
Historically squeezed between its two giant neighbors, China and Japan, South Korea had long been perceived as an underdog with a fuzzy cultural identity. In Asia, however, Japan's leaders are not waiting for the Seoul summit to take a closer look at South Korea. South Korea was formerly a Japanese colony (1910-1945), and the natives were treated like an inferior race. Today, South Korean's economy has been growing annually by 5 percent on average for 10 years, whereas Japan grew by 0.42 percent per year during the same period.
One could argue that South Korea is not yet a mature economy and is only catching up with a more advanced Japan. This was the case in the 1970s, but no more. Whereas China's growth is fueled by low-cost labor as millions of peasants enter the industrial economy, this is not the South Korean recipe for success, which has been driven by private entrepreneurship, innovation and quality products: Samsung and Hyundai, not cheap wages, are South Korea's growth engines.