lessons from korea's development experience for nepal

7/25/2019 Lessons from Korea's Development Experience for Nepal

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Lessons from Korea's Development Experience for Nepal

-Dr. Prakash Kumar Shrestha*

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Abstract

This paper analyzes the development experience of Korea1and Nepal from multidimensional

perspectives, for which the policies undertaken by Korea for economic development have

been reviewed and compared with the policies adopted by Nepal. This paper also compares

other potential determinants of development in both countries, such as history, geography,

culture and initial conditions. Finally, some lessons are drawn for Nepal which has

remained underdeveloped so far, although there is no unique path for development and

circumstances have changed. Some approaches taken by Korea, such as emphasis on

education, physical infrastructure, industrialization and land reform, are highly relevant for

Nepal. Moreover, there should be stable politics, commitment for development and a timelyimplementation of policies and programs in Nepal.

JEL : O2; O57

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1. Introduction

Economic development is a complicated and multi-dimensional process, involving various

sectors, such as economic, political, social, cultural, technological and geographical. It,therefore, involves the right mixture of all of the necessary ingredients and must overcomemany obstacles (Chung, 2007, p.3). Korea succeeded in overcoming obstacles fordevelopment and achieved an economic miracle within a short period of time. There was nota big difference between Korea and Nepal in terms of economic development in 1950.However, a gap in development between these two countries widened considerablythereafter. Korea has now become an advanced country - a member of OECD, while Nepal isstill one of the Least Developed Countries (LDC) in the world. Between 1961 and 1989,Korea succeeded in creating the "virtuous circle" of economic development, while Nepalremained trapped in the "vicious circle" of underdevelopment, which still continues. Such acontrasting development scenario is an interesting case study to understand the economicdevelopment process and to draw lessons for Nepal to design a successful development path.

What made Korea to succeed in transforming its economy has been the matter of discussionfor academicians and policy makers worldwide. Korea was one of the poorest countries in theworld with an agrarian and stagnant economy in 1948 (Sakong and Koh, 2010). By 1990,Korea had transformed itself into an industrialized and dynamic economy. On the other hand,despite being independent from the feudal autocratic Rana Regime at the same time whenKorea became an independent, Nepal is still in an underdeveloped stage with low per capita

*

Director, Research Department, Nepal Rastra Bank. Views expressed here are personal; do not belong to theaffiliated institution.1Korea refers to the Republic of Korea or South Korea.


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income and widespread poverty2. This shows that Nepal's development efforts have failed,although Nepal had some similarities in policy approaches with Korea in the past, such asimport substitution, financial repression, government intervention in economic activities,

planning approach, and autocratic political regime until the latter half of 1980s.

In this context, this paper analyzes the path undertaken by both Korea and Nepal foreconomic development since 1960. How Korea succeeded in transforming its economyespecially during 1961-89 and why Nepal failed to do until now is the matter of main concernfor this paper. The paper is structured as follow. Section two compares the level ofdevelopment in Korea and Nepal briefly, while section three presents possible non-economicdeterminants of economic development and starting situation in the 1950s and 1960s.Policies and programs adopted by Korea for economic development are assessed andcompared with Nepal in section four, and relevant lessons for Nepal have been drawn in thefifth section. Finally, section six concludes the discussion.

2. Economic Development in Korea and Nepal

Some important development indicators are analyzed here to portray the trend and level ofeconomic development in Korea and Nepal.

2.1 Per Capita Income

Per capita income is one of the highly used variables to gauge the level of economicdevelopment. In Korea per capita income (at constant 2005 US$) grew by 18 times from1609 dollarsin 1960 to 29618 dollars in 2011, while in the same period, per capita income in

Nepal increased marginally from 576 US dollars to 1189.4 US dollars3

(Figure 1). The percapita income of Korea, which was just 2.8 times higher than that of Nepal in 1960, increasedto almost 25 times higher than Nepal's per capita income in 2011. This shows the stagnationof the Nepalese economy relative to its population growth.

Korean economy grew by 7 8 percent compared to mere 2 -3 percent growth of Nepaleseeconomy during the 1960s and 1970s. Although Nepalese economy accelerated slightly in the1980s and 1990s, the pace of growth was far below the rate of growth observed in Korea. Inthis way, with a higher economic growth rate for three decades, Korea succeeded inachieving economic transformation.

2 With the beginning of remittance inflows in recent years, the poverty level has been gradually

declining inNepal. There are 23.8 percent of people under the absolute poverty line in 2013 (MoF,2013).3

Penn World Table, version 8.0


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Figure 1: Per Capita Real GDP (at constant 2005 US$)

Source:http://www.rug.nl/research/ggdc/data/penn-world-table

2.2 Human Development Index

The Human Development Index (HDI) consists of three dimensions of economic

development per capita income, health and education. Figure 2 shows the progress inhuman development both in Korea and Nepal. While the HDI in Korea has exceeded 0.9,

Nepal's HDI is still below 0.5. This shows a huge gap in human development between Koreaand Nepal. Such a gap implies that Nepal is not only behind in per capita income, but also inhealth and education. Nepal has not yet reached the level of human development whichKorea had achieved by 1980. Such a situation reflects the laggardness of Nepal in achievingeconomic development in the true sense.

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100001100012000130001400015000160001700018000190002000021000220002300024000

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1980

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Korea

Nepal
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Figure 2: Human Development Index in Korea and Nepal

3. Disentangling the Reasons behind Development Differences

3.1

Brief History

To understand the development difference between Korea and Nepal 4, it is imperative to lookat their history. While Nepal has always been an independent nation, Korea was annexed byJapan in 1910. Along with the independence from Japan in 1945, Korea wasdivided intoSoviet and the U.S. controlled regions. This led to the formation of North and South Korea.

In 1950, the Korean War between the two regions killed 1. 3 million people and caused heavyphysical destruction (Chung, 2007, p.12). On the other hand, for more than a century, Nepalwas ruled by the autocratic feudal family-based Rana dynasty. In 1846, the Rana familygained power and established the hereditary prime ministerial system, and reduced the Kingto a figurehead, which lasted until 19505 (Seddon, 1988). The Rana regime kept Nepalcompletely in a state of autarky without any economic development.

After the liberation from Japan, the first independent Korean government was formed in 1948(Koh, 2010)6. In Nepal, on the other hand, the armed struggle led by the Nepali congress

party with the support of King against the Rana regime succeeded in restoring the monarchyand launched the era of quasi-constitutional monarchy in 1951. The Rana regime ended with

the independence of India from the British rule because of lacking external support and thedesire for freedom on part of the Nepalese people (Panday, 2009).

Political stability and commitment from the leadership seems to be vital for acceleratingeconomic development in Korea. Rhee Syngman, the first president of Korea, startedrebuilding the economy with a series of reconstruction plans and ruled for about 12 years(Appendix 1). After a brief period of the parliamentary system (1960-61), Park Chung-hee

4Nepal was founded in the 18th century and it has been an independent country in its current

geographical shape since 1768 (Raiz and Basu, 2007, p2).5

In 1846, Jung Bahadur, the founder of Rana Regime, seized executive power from the King forhimself and his brothers through massacre in the palace.6There was an American military government in charge of Korea between 1945 and 1948.

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1980 1990 2000 2005 2007 2010 2011 2012

Korea

Nepal
http://en.wikipedia.org/wiki/Division_of_Koreahttp://en.wikipedia.org/wiki/Division_of_Korea


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came into power in 1961 through a military coup, but later he was elected as President in1963 and ruled until 1979 by winning four elections. He adopted an export-led growthstrategy by building a powerful industrial base in Korea. After his assignation in 1979, ChunDoo- hwan came to the power through military coup in 1980. Finally, in 1987, democracywas restored in Korea and Roh Tae- woo won the election and became President in 1988.

Hence, Korea had overall political stability during its development process, although therewere various kinds of protests and political turning points.

The political situation in Nepal has been different than Korea. After the end of the Ranaregime, the power shifted to the King in 1951. Attempts to have a kind of parliamentarysystem with the King as a head of state during 1951-59 finally failed. Although the firstdemocratic election was held in 1959 and the Nepali Congress party won the election withthe two-thirds majority, the King dismissed the elected government within a year, which ledto the system of absolute monarchy. The King suspended the democratic constitution,

banned political parties and declared the parliamentary system as a failure, and finallypromulgated a new constitution in 1962, which established the party-less Panchayat system

(Panday, 2009).

The Panchayat system, which lasted for more than 30 years until 1990, did not have anyspace for dissent and opposition. This system was obviously autocratic and aristocratic innature almost similar to the military regime in Korea. However, there was a major differencethat the King did not need to be elected and did not have any accountability towards the

people. Because the power transferred through political dynastic, it was not necessary for theKing to have the adequate leadership skills to run and develop the country. Hence, despitethe political stability during the Panchayat regime, Nepal could not embark on itsdevelopment process, rather it progressed at a snails pacedue to the lack of commitment and

a weak implementation of policies and programs.

A form of parliamentary democracy, where the King as the head of stateand the primeminister as the head of the government, was introduced in 1991 after popular protests by then

banned political parties. However, a frequent change of government has become a normalphenomenon (Appendix 1). In fact, Nepal has witnessed an erosion of state capacity and thefailure of political parties to meet the people's expectation (Riaz and Basu, 2007). Amidst

political instability, Maoist rebels started a decade-long campaign against the monarchy in1996. Several analysis suggests that the widespread poverty and unemployment, sluggisheconomic performance, inequality, and social and gender discrimination were some of the

key underlying causes for this uprising. In February 2005, then King Gyanendra, bydismissing the coalition government and suspending democracy and civil liberties, assumed

absolute political power by imitating the path taken by his father, King Mahendra in 1960 .The power struggle among the King, mainstream political parties, and the Maoist for powerdamaged the Nepalese economy for a decade until a popular uprising against the King in2006. The King finally agreed to hand over the power to the people and the election forconstituent assembly was held, which later declared Nepal as a Republic in 2008. Thisabolished the 250-year old monarchical system. Currently, Nepal is a young republic similarto Korea in 1945. However, the political transition is still ongoing with unsettled politicalagendas among different political parties.
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3.2 Geography

Geography also matters for economic development. In terms of the land mass, Nepal isbigger than Korea. As a result, average population density is low in Nepal compared toKorea, but more than 75 percent of land is covered by mountains and hills in Nepal (Figure

3). Most of this land mass is unsuitable for living or agriculture, and the topography of thecountry makes construction of physical infrastructure extremely difficult and costly.Uncultivable snow covered mountain regions occupy 35.2 percent of total land surface and

barren hills constitute 41.7 percent of land; only 21 percent of land is cultivable (Riaz andBasu, 2007). It has 90 peaks over 7000 meters including Mount Everest (8848 meter)7,whereas the highest mountain peak in Korea is Hallasan with 1950 meter height andapproximately 30 percent of the area of Korea consists of lowlands8.

While Korea is mostly surrounded by sea, Nepal is a landlocked country situated betweenIndia and China. Nepal has to rely on India for access to any sea port for international trade,which is relatively costly9. Hence, Nepal may not able to compete in exporting merchandise

goods as Korea has been doing since 1960. However, Nepal is rich in fresh water resourceswith a technically feasible hydropower potential of 45610 MW(WECS, 2011). In addition,

Nepals geographical diversity presents great prospect for tourism and the production ofherbal products.

Figure 3: Map of Korea and Nepal

Source:http://www.worldatlas.com/webimage/countrys/asia/np.htm

7http://en.wikipedia.org/wiki/Geography_of_Nepal8

http://en.wikipedia.org/wiki/Geography_of_South_Korea9This dependence on India for trade and transit has virtually served to reinforce India's monopolyposition in Nepal. India threatened Nepal by holding up fuel supplies in 1971 and 1988 (Luitel, 2009).
http://www.worldatlas.com/webimage/countrys/asia/np.htmhttp://www.worldatlas.com/webimage/countrys/asia/np.htmhttp://www.worldatlas.com/webimage/countrys/asia/np.htmhttp://www.worldatlas.com/webimage/countrys/asia/np.htm


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3.3 Culture and Society

Nepal is a land of diversity where the society is characterized by feudal or semi-feudal andpatriarch and hierarchical order (Panday 2009). Nepal had the monarchical system until 2008and the people used to consider the King as a paternal figure with a divine right, which had

created some sense of dependency. More importantly, based on the religious dominance ofthe Hindu faith, the caste system has been very much rooted in the Nepalese society (Seddon,1988). According to the recent census 2011, there are nearly 125 caste /ethnic groups (CBS,2012) - some group of people are even considered "untouchable", which are the mostdeprived section of people in the society. However, these people have different occupationalskills and often work as blacksmiths, tailors and cobblers.

The Nepalese culture is highly shaped by the Hindu Religion10, which preaches that peopleshould be satisfied whatever they have. One dark side of the Nepalese culture is that womenare normally treated unequally and socially oppressed. For a long time, early age marriagewas rampant and continues to exist in some form even today. Girls were deprived of the

access to education since people did not think that sending girls was desirable and beneficialuntil recently. Such practices still exist in rural areas, although this kind of attitudes have

been changing and the participation of women in formal work has been increasing in recentyears, at least in urban areas. More importantly, the Nepalese society, even governmentactivities, has been marred by "Let's do tomorrow" culture almost no time pressure. Forexample, being late in meeting is considered as a sign of important. This may be a reasonthat nothing happens on given time in Nepal.

The Korean culture is, on the other hand, shaped by Confucianism which is "based on thebelief that people need to work for the good of the mass and for the good of the nation -Personal needs, ambitions, and concerns are much less important (Kim and Jaffe, 2010,

p.179). More importantly, Koreans pay close attention to completing tasks on time -anarmy- style culture, which means punctuality is a sign of respect (Kim and Jaffe, 2010,p.182). Women were given equal rights and opportunities; as a result they made up a largepart of the labor force in the 1960s when Korea launched its economic development (Koh,et.al, 2010, p.299). They continue to play an important role in the subsequent periods as well.

3.4 Initial Conditions

Foundations seem to be necessary for any economy to take off. In 1951, Nepal was a hermitkingdom, with complete dependence on subsistence agriculture11 with no sign of

development. It had become an independent nation coming out of a century of the Ranaregime. Only Kathmandu valley had electricity back then which also was very dim (Skerry et.al. 1991:20, quoted in Panday, 2009). The transportation network consisted of about 100 kmof railway track, about 50 km of ropeways, and no more than 400 Km fair-weather roads(Shah, 1981). The total electricity generating capacity of the country was 7.03 MW whichwas enough to serve only one percent of the population in 1961 (NPC, 1992). On the socialside, the literacy rate is believed to have been no more than two percent, with less than one

10 Hinduism is followed by 81.3 percent of the population. Other religion like Buddhism is followedby 9.0 percent of population, Islam by 4.4 percent, Christianity by 1.4 percent (Census 2011)11

Non-agricultural sector contributed probably less than 10 percent of community output. Modernindustry meant a few small and medium sized firms employing less than 1 percent of the labor force(Shah, 1981).


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percent of school age children going to schools and there were only 321 primary schools in1951 (Riaz and Basu, 2007). The Rana rulers were very hostile towards mass educationwhich they feared to generate popular discontent against them (Riaz and Basu, 2007, p.105).Likewise, average life expectancy at birth was no more than 35 years (Shah, 1981).

On the other hand, Korea had some strong foundation built during Japanese colonial timealthough the Korean War damaged most of them. In Korea, literacy rate was 22 percent in1945 (Koh, et.al. 2010, p.234) which was significantly higher than the literacy rate of two

percent in Nepal. The eradication of illiteracy made great strides resulting in dramatic fall inilliteracy rate from 78.2 percent in 1948 to 4.1 percent in 1958 (Koh, et. al., 2010, p.238).The elementary education expanded rapidly in the late 1950s and achieved the universaleducation in the early 1960s before embarking on industrialization in Korea (Koh, et. al,2010, p.242). Nepal is still struggling to make its citizen literate even today.

Chung (2007) stated that the fundamental transformation of the Korean economy beganduring the Japanese colonial time before 1945. During the colonial time, the real value added

in manufacturing grew by more than 10 percent per year on average and manufactured goodsaccounted for more than 40 percent of exports (Chung, 2007). Japanese colonialism, indeed,left a rich legacy of capital, including human capital (Chung, 2007, p.8). However, theKorean War destroyed 46.9 percent of the railroads, 1,656 roads (a total of 500 kilometers),and 1,453 bridges (49 kilometers), nearly 80 percent of power plant12 and great humancasualties (Chung, 2007, pp.9-12). It seems that such a terrible shock of war had created asense of national unity and feelings of revenge through economic recovery as soon as

possible a do or die situation. On the other hand, Nepal did not face such a shock and theNepalese people have remained complacent on whatever they had because of being isolatedfrom the world and being largely illiterate in the past.

4. Comparing Korea and Nepal's Development Efforts

This section presents major policies undertaken for economic development since 1961 inKorea and compares that with Nepal. It will give us the comparative analysis of similaritiesand difference of policies taken in both countries.

4.2 Major Economic Policies

Heavy Investment

Rapid economic growth and structural transformation in Korea was the result of heavyinvestment (Table 2). Investment reached its peak in 1991 at 40 percent of GDP (Kim andKoh, 2010, p.92). In Nepal investment has always remained very low (Table 2). The Koreangovernment made considerable efforts to alleviate shortages in economic infrastructurethrough investment. Korea generated enough electric power relative to demand andcompleted major expressways by the mid-1960s (Koh, 2010). However, due to the lack ofadequate investment, the Nepalese economy has been facing acute shortage of physical andsocial infrastructure even today. Only 67 percent of people have access to electricity (CBS,

12Power production plummeted to a miserable figure of 11,000 kilowatt-hours in the whole country,

which was one-tenth of the power consumption level in 1945 (Chung, 2007, p.9).


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2012) and the people have been facing power cut-off as high as 12 hours per day in dryseasons.

Table 2: Investment, Manufacturing and Exports of goods and services as % of GDP in

Korea and Nepal

Investment/ GDPManufacturing

Value/GDPExport /GDP

Korea Nepal Korea Nepal Korea Nepal

1960s 18.9 5.4 15.6 3.6 7.8 6.8

1970s 28.5 11.2 21.6 4.1 24.6 8.2

1980s 30.4 19.9 27.5 5.2 33.9 11.4

1990s 35.4 22.7 27.1 8.8 30.8 19.5

2000s 29.5 23.0 27.2 8.3 40.7 16.2

Source: World Bank's World Development Indicator 2014

Directed Industrialization

Another important set of policies adopted in Korea was the heavy focus on industrializationwhich helped it achieve a phenomenal economic growth. Industrialization was the centraltheme of the Five-Year Economic Plans, which modernized the industrial sector and enhanceits international competitiveness by rapidly expanding the key industries - cement, fertilizer,industrial machinery, oil refinery and others. (Koh, 2010, p.20). The second Plan (1967-1971)

placed emphasis on Heavy Chemical Industries (HCIs), including steel, machinery andpetrochemical industries. Different acts for each type of industries were enacted13. In fact,Korea successfully made transition from primary industries in the 1950s to labor-intensiveindustries in the 1960s, to capital intensive industries in the 1970s, and to knowledge-basedindustries in recent years (Kim and Koh, 2010). Hence, the share of manufacturing in grossvalue-added rose from 15.6 percent in the 1960s to 27.5 percent in the 1980s (Table 2).Government provided various supports for industrialization such as long-term credits and taxincentives to selected industries; established and expanded vocational schools and trainingcenters to supply skilled manpower; and created government-funded research institutions tocarry out R&D activities as a public good14(Koh, 2010, pp.21-22).

In Nepal, some industries were established as public enterprises such as sugar, cigarette,

textile, leather, and brick, and about a dozen industrial estates were established for promotingindustrialization during the Panchayat era. There was a protectionist industrial investmentregime which was regulated by means of a rigorous licensing system. The Industrial Policy of1957 was inward looking and focused on import substitution and self-reliance, and only thelarge business houses and people with connection to the royal family were awarded

13 For example, the Steel Industry Promotion Act (1969) the Machinery Industry Promotion Act(1967), the Shipbuilding Industry Promotion Act (1967), the Textile Industry Modernization Act(1967),the Electronics Industry Promotion Act (1969), the Petrochemical Industry Promotion Act

(1970), the Nonferrous Metal Producing Business Act (1971)all were introduced to provide

financial and tax incentives to these industries (Koh, 2010, p.20).14The public sector accounted for 50-70 percent of total R&D spending with the mission to import

advanced foreign technologies, modify them to suit local needs (Koh, 2010, pp.21-22).


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licenses15. There were bureaucratic hassles and the private sector was not well-developed tolead the industrialization process. More importantly, there was no R&D budget to identifyrelatively important and viable industries for Nepal. This situation still exists in Nepal.

The Nepal Industrial Development Corporation (NIDC) was established in 1959 to providefinancial assistance and technical help for establishing industries16. For industrialization,

priority was given to local material processing industries, import substitution industries,export-oriented industries and basic industries for fertilizer and agricultural tools (Gurung,1989, p.9). However, industrial development remained lackadaisical and haphazard despite

providing tax and interest rate facilities. A number of factors such as the lack of properimplementing mechanism, procedural constraints, administrative delays and the lack ofentrepreneurial skills contributed to the dismal performance of the industrial sector during thePanchayat era. Industrial performance continues to be weak.

Export Promotion

Industrialization and export promotion were interlinked in Korea. Exports began to growrapidly following the two rounds of devaluation in 1960 (Koh, 2010, p.17). Inspired by thesuccess, the government started more serious efforts towards promote exports in 1964-1965.Several administrative measures for export promotion were adopted by setting a target forexport each year, i.e. export targeting. Monthly Export Promotion Meetings, chaired byPresident, were held including business representatives to monitor export performance and toidentify problems and solutions. In addition, the Korea Traders association and the KoreaTrade Promotion Agency (KOTRA) were established which took charge of building overseasnetworks, helped the marketing activities of domestic firms, and collected market information(Koh, 2010, p.19).

Moreover, for export promotion, the government implemented exchange rate reform,provided export subsidies, as well as education and training to support export industries (Kimand Koh, 2010). In 1964, the Korean government adopted the Comprehensive ExportPromotion Program, which placed export promotion in a comprehensive and consistentframework (Sakong and Koh, 2010, p.132). Credit incentives and the export insurance systemwere also introduced. Further, responding to the need for medium- to long-term credit forexports and imports, the Export-Import Bank of Korea was established in 1976 (Sakong andKoh, 2010, p.132).

In contrast, the government of Nepal followed a closed and protectionist trade regime in

1956, which regulated industrial investment through a rigorous licensing system. Domesticindustries were protected from foreign competition with the help of high tariffs andquantitative restrictions. Imports of intermediate goods were also subject to import licensing.Restrictions in the use of foreign exchange were put in place (Sharma, 2001). Some effortswere made for export promotion such as Exporters Exchange Entitlement Scheme,

popularly known as the Bonus System in 1961 (Shrestha, 1978). Under this system, thoseearning convertible foreign currencies through the export of goods were issued a bonus

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del-english.pdf16The NIDC itself became defunct by the end of Panchayat with huge non-performing loans.
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certificate and only those having a bonus certificate were eligible for further imports(Adhikari, 2005, p.315). Because of the problem of over invoicing of exports, the bonussystem was replaced by the dual exchange rate system in 1978 (Adhikari, 2005).

Beginning in 1982, however, Nepal started to move towards an open and liberal trade regime.Export incentives were provided to a number of different industries and several sectors weregradually opened for foreign investment. Further, the import license auction system wasintroduced in July 1986, as a first move towards the direction of trade liberalization(Adhikari, 2005). A more liberal trade policy was finally introduced in 1992 with theobjective of promoting exports. Subsequently, the open general license (OGL) system wasimplemented in 1993, under which all goods except some related to health and security could

be imported through letter of credit. However, despite trade liberalization and export-orientedtrade policy, the export performance of Nepalese economy has been very dismal because ofthe lack of competitive goods to sell in the international markets. Instead, trade liberalizationhas further hurt the industrial sector because of the influx of cheap imported goods. Hence,

the exports-GDP ratio has remained very low in Nepal compared to Korea (Table 2).

Exchange Rate Policy

Both Korea and Nepal used the exchange rate policy for export promotion. However, in earlydays, Nepal struggled to increase the circulation of Nepalese currency (NC) by replacing theIndian currency (IC). On the other hand, from the very beginning, Korea used the exchangerate as a major policy instrument for export promotion. But Nepal focused on exchange ratestability with India on account of a number of factors like geographical proximity, majortrading partner, open border, informal cross-border trade and close socio-culture tie.

The Korean government maintained a complicated multiple exchange rate system and tightcontrol on the use of foreign exchanges to promote exports and control imports. Thegovernment devalued the won several times to increase its export competitiveness anddifferent level of rates were set depending on several factors, such as the type of investment,the degree of competition for particular types of imports, and the political influence of the

borrower (Chung, 2007). In June 1961, the government adopted a unified exchange ratesystem which was, however, abandoned two years later, in 1963, because of the balance of

payments deficit and reverted to the multiple exchange rate system (Chung, 2007). Finally,the Korean government introduced the managed floating exchange rate regime in 1990(Sakong and Koh, 2010).

Almost similar to Korea, Nepals foreign exchange system was also strictly controlled untilthe beginning of the 1990s and the dual exchange rate system was introduced with a view to

providing effective incentive to Nepalese exporters in 1978. Two types of exchange rates forthe US dollar were fixedbasic and special; the latter rate was higher than the former. The

basic rate was used for general transactions, while the second rate was set for all theconvertible foreign exchange earnings through exports (Adhikari, 2005). Although Nepalsexport to third countries (other than India) recorded some improvement, some adverse effectsemerged. For instance, import trade shifted towards India and instances of over invoicing ofexports and under invoicing of imports were recorded. All this led to the end of the dualexchange rate system in 1981 (Adhikari, 2005).


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With regards to the exchange rate with Indian currency, Nepal has been maintaining a peggedexchange rate system since 1960, with the commitment of free and unlimited convertibility ofthe Indian rupee (Adhikari, 2005). Nepal revalued its pegged exchange rate with the Indiancurrency in 1966 to establish confidence in the Nepalese currency17. However, after one and ahalf years, Nepal devalued its currency by 24.8 percent against Indian currency in 1967 to

maintain competitiveness in the world market. After that, Nepal made three devaluations withthe Indian currency until 1985, when a currency basket system was introduced. In practice,however, the basket system did not work since the government kept the exchange rate ofIndian currency unchanged on a daily basis, but did so discretionally three times over the

period until 1992. In 1991, the Nepali Rupee was revalued against Indian currency by 1.79percent and was devalued against the US dollar by 20.9 percent. After abolishing the basketsystem, the NRB reintroduced the pegged exchange rate with the Indian currency in 1992.

Financial Repression and Directed Credit

Throughout the industrialization process, Korea used the policy of directed lending,maintaining a high degree of financial repression. Nepal had also exercised financialrepression and followed directed lending until 1990. Even after adoption of financialliberalization policy, Nepal followed the priority sector lending until 2007/08 and has beencontinuing the policy of deprived sector lending. Until 1989, Nepal Rastra Bank used to setthe interest rates on deposits and lending for commercial banks, as in Korea. There were justtwo commercial banks and two development banks. The latter two being the Nepal IndustrialDevelopment Corporation (NIDC) and Agriculture Development Bank (ADB)both owned

by the government in Nepal. The private sector was not allowed to open banks and financialinstitutions until the mid-1980s.

More importantly, the Korean government established various specialized financialinstitutions such as the Korea Development Bank (1954), a solely government-owned bank to

provide long-term credits to key industries (Sakong and Koh, 2010). Other specializedfinancial institutions include the Industrial Bank of Korea (1961), the National AgriculturalCooperative Federation (1962), the National Federation of Fisheries Cooperatives (1962),Korea Exchange Bank (1967), Korea Development Financing Cooperation (1967), KoreaTrust Bank (1968), Housing and Commercial Bank (1969), and the Export-Import Bank ofKorea (1976) (Sakong and Koh, 2010). In contrast, both existing specialized institutions in

NepalNIDC and ADB - have been converted into conventional deposit taking institutions.As a result, Nepal lacks specialized financial institutions to provide sector- specific credit toagriculture, industries and infrastructure.

Restrictive Labor Market Policies

Korea followed a set of restrictive labor market policies during the industrialization phase.After the liberation, many labor unions were organized doing the political lines and foughtwith each other in Korea which compelled the military government to suspend the labor lawand dissolve the labor unions in 1961(Koh, 2010). Koh (2010) mentions that the Koreangovernment further prohibited multiple unions within a firm and banned labor unions from

17Because of the widespread use of Indian currency in Nepal, Nepal introduced the Circulation of the

Nepalese Currency Act, 1957 and the Control of the Foreign Exchange Transaction Act, 1960, theForeign Exchange Regulation Act 1960, all with the aim to increase the circulation of the Nepalesecurrency (Adhikari, 2005).


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political involvement, but provided them with statutory benefits and protection of workers,such as paid leave, severance payments, and limited work hours. Oppression of the labormovement continued in the 1970s and in the 1980s, following the declaration of the state ofemergency by promulgating the act on Special Measures on National Security and amendingthe Constitution (Koh, 2010, p.38).

In Nepal, during the Panchayat era, trade unions were completely banned. After therestoration of multiparty system in 1990, the government enacted the new Labor Act 1991and the Trade Union Act 1991, which were quite liberal and allowed forming the tradeunions. As a result, there are multiple trade unions in industrial establishments associatedwith different political parties. Such unions exist even in civil service and public enterprises.Trade union militancy has been increasing in Nepal in recent years, resulting in thedeteriorating industrial relations. It seems that Nepal now has similar trade unions' activitiesthat Korea observed in the 1950s and 1960s.

Economic Liberalization

Along with the introduction of neo-liberal policy worldwide in the 1970s and 1980s, bothKorea and Nepal started liberalizing their economy in the beginning of the 1980s 18. But thedifference is that at the time of liberalization, Korea was already an industrial economy with asound industrial base, and with the capacity to compete in the world market. In contrast,

Nepal liberalized the economy without making its economy strong enough to take part inglobal competition. As a result, the Nepalese economy, although some sectors exhibitedimprovement after liberalization, has been stagnant as a whole with deteriorating industrialsector and weakened export performance. Economic growth has not improved in the post-liberalization period, resulting in widespread unemployment. However, the poverty level has

been declining as a result of foreign employment and the inflow of remittances.

On liberalization, Korea, by announcing the Comprehensive Economic Stabilization Program1979, pursued contractionary policies and privatized banks (Sakong and Koh, 2010). Thegovernment reduced export subsidies and tariff rates, lowered HCI investments andliberalized the interest rate but maintained protection in agriculture (Sakong and Koh, 2010).In Nepal, economic liberalization includes financial and trade liberalization, deregulation ofthe interest rate (in 1989), removal of the licensing system for opening industries and theabolition of subsidies provided to agriculture. However, the nascent economic reforms weresoon blunted by the re-emergence of inter-party and intra-party feuds, and a decade longarmed conflict. More importantly, the abolition of agricultural subsidies hurt poor farmers in

Nepal.

4.2 Agricultural Land Reform

Korea successfully implemented land reform to pave the way for industrialization. At thetime of liberation in 1945, the rural society in Korea comprised of a small number of farmerswho owned their own land and a large number of tenant farmers who had the slave-likestatus.19 The Korean government enacted the Farmland Reform Act of 1949, on the

18Nepal implemented IMF's structural adjustment programme in 1987.

19

https://www.kdevelopedia.org/experience/view/73.do#.UxX26_mSw1I
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principle of compensated forfeiture and non-free distribution, whereby the governmentbought farmland from landlords at forced prices and sold it to the farmers below the marketrates (Koh, 2010, p.11). The Farmland Reform Act also banned the farmland ownership bynon-farmers, imposed land ceiling per farmer, and prohibited tenant farming (ibid). Theagricultural land reform in Korea accelerated productivity growth in agriculture and raised

farmers' income which they spent on educating their children. On the other side, landlordsused the money received from selling their farms to invest in industrial enterprises - animportant source of capital for the initial stage of manufacturing (Kim and Koh, 2010, p.102).Moreover, machinery and new farming methods were also introduced to improve agricultural

productivity, with the motive of achieving self-sufficiency in grain production. All thesechanges led to a huge improvement in agricultural productivity, which helped Korea achieveself-sufficiency in food production at least in the case of rice (Kim and Koh, 2010, p.106).

Realizing the importance of land reform considering unequal distribution of land and theproblem of tenants, Nepal also carried out the land reform program, but this reform didntremain successful.

Although the Land Reform Act in 1957 and 1959 sought to improve the

condition of tenants, many provisions were not enforced due to the absence of effectiveimplementation mechanism, institutional hindrances and the lack of intention (Riaz and Basu,2007). Another land reform act was passed in 1964 by the Panchayat regime, which imposedownership ceilings and tenancy rights. Because of several loopholes, the redistributive aimof act also remained largely unfulfilled (Riaz and Basu, 2007). Hence, land reform in Nepalcould be termed cosmetic.

4.3 Development Planning

The development-state view claims that prevalent market failures in the early yearsnecessitated government intervention to correct them. The East Asian countries, includingKorea, purposefully distorted relative prices -getting the prices wrong" (Amsden,1989) and

boosted investment in particular sectors. More important than getting the prices right, adevelopmental state must get policy priorities right (UNDP, 2013, p.68). From the history ofeconomic development, it seems that government should play the role of developmental stateto navigate the development process in the country (Reinert, 2007). Koh (2010) argued thatthere was a heavy government intervention in Korea for export promotion, industrialization,and financial repression in line with the role of developmental state. However, at the sametime, he viewed that there was a relatively stable macroeconomic environment, well-established private property rights, and large public spending on education and infrastructure

investment to facilitate markets to work. Some degree of government intervention continuedeven after adopting the policy of economic liberalization in the 1980s and 1990s. Thisinvolved keeping a large number of state-owned enterprises (SOEs) under its control andregulating prices.

For economic development, both countries started their development planning by formulatingperiodic plans. The first Five-Year Economic Development Plan, which was adopted by thenew military government in 1961 in Korea, placed a high priority on import substitution andconsidered exports as a mere remedy for the foreign exchange shortage. However, a sharpturnaround in the policy took place in 1964 after the rapid export expansion (Sakong andKoh, 2010, p.136). In fact, the countrys first five-year plan (196266) proved to be a


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catalyst for the remarkable transformation of the economy, enabling Korea to achieve thestatus of a newly industrializing country (NIC) in 1970 (Harvie and Lee, 2003, p.1).

Nepal also started development planning process as early as in 1956, earlier than Korea. Thegovernment has continued producing plans since then. During the Panchayat regime,

infrastructure, agriculture and food production, integrated rural development, basic needs andpoverty alleviation were given high priority in planning (Panday, 2009). However, very littleof the official policy outlined in planning documents actually translated into effectiveimplementation at the grass roots level (Seddon, 1988, p.237). This trend continues eventoday in the post-Panchayat era. Effective translation of government policy into practicerequires the commitment and capacity of the bureaucracy, from top to bottom, which is inserious deficit in Nepal. Planning is still remained just a "rhetoric", despite some progress inareas like transportation, communication, health, drinking water, literacy and studentenrolment. These achievements remained disappointing on the whole not matched withnecessity and the requirement of the country.

4.4 Foreign Aid

Aid from the UN and the U.S. was crucial in the reconstruction of the Korean economy afterliberation from Japan. During 1945-1950, a total of 585 million dollars in aid was provided

by the U.S. and the UN (Sakong and Koh, 2010, p.126). The amount of aid as a proportion toGDP reached as high as 23 percent in 1957 (Sakong and Koh, 2010, p.126 ). In addition, thedevelopment grant from Japan also made a huge contribution to financing infrastructureinvestment projects and fostering industrial development in Korea. Foreign aid was used bythe Korean government to buy fertilizer to increase food production; develop energyindustries, such as electricity and coal, and build infrastructure and facilities needed for the

countrys post-war restoration (Kim and Koh, 2010, p.103). Korea also received U.S.economic aid for its military participation in the Vietnam war (1965-1973) and Koreancompanies benefited from supplying services, including the building of military facilities and

products, such as uniforms, to the U.S. armed forces serving in Vietnam (Kim and Koh,2010, p.105).

Foreign aid has also played an important role in the development efforts of Nepal. After1951, the hermit kingdom Nepal was exposed to the world and started receiving foreign aid(Gurung, 1989). Nepal received foreign aid for Village Development Project, for the firsttime in 1951, from the US (Khadka, 1991). The American aid was soon followed by India,

China and then the USSR came to the scene in 1956 and 1958, respectively. The UN startedassisting Nepal in 1952 (Gurung, 1989). Other several countries also started providing aid toNepal20. Moreover, among international agencies, the Colombo Plan21 had an earlyassociation with Nepal going back to 1950 and was later followed by the Ford Foundation,World Bank and Asian Development Bank. The quantity of foreign aid during the first twodecades (1951-1970) totaled more than 178 million dollars (Gurung, 1989, p67), which wasvery low compared to the amount received by Korea.

20 For example, U.K., Switzerland, Australia, New Zealand, Germany, Canada, Israel, France, and

Japan.21The Colombo plan made training facilities available to over 3700 Nepalese students between 1950and 1968.


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The 1970s, further, saw the beginning of a massive involvement of multilateral agencies inNepal (Riaz and Basu, 2007). By the 1990s, INGOs also became key players fordevelopment activities in Nepal. By the late 1980s, the share of foreign aid increased toalmost 13 percent of GDP (Gurung, 1989). In recent years, foreign aid supports a significant

portion of the development budget. Despite inflows of foreign aid from different sources, the

plight of the Nepalese economy has not improved as expected. In reality, fees to the foreignadvisors for technical assistance contributed to a large proportion of the aid componentresulting in a situation of "over-advised and undernourished" (Gurung, 1989, p.69). Duringthe Panchayat era, the monarchical regime also appropriated some part of foreign aid. Due tolow absorption and administrative incapacity, Nepal has been, suffering from a problem of"aid indigestion (Gurung, 1989) and "aid leakage".

4.5 Developing Human Capital

Korea's substantial investment in education after independence and the war had provided awell educated labor force needed for industrialization (Harvie and Lee, 2003). The Korean

government implemented a six year plan (1954-1959) for achieving compulsory primaryeducation. Educational opportunities expanded rapidly thereafter, with the enrollment rate inelementary school exceeding 90 percent by 1970 (Koh, et.al. 2010, p.229). Starting in 1968,the government successfully managed to produce more students majoring in science than inliberal arts by imposing student quotas on universities (Koh, et. al. 2010, p.239). Expenditureon education exceeded 10 per cent of GDP and the percentage of high school graduatesadvancing to college or university during the 1980s was the second highest in the world afterthe US (Harvie and Lee, 2008, p.15). The rapid expansion of education was possible due to

both the cultural factors and timely government policies. Korea also has had a long traditionof putting the highest priority on education (Koh, et.al. 2010, p.236).

In contrast, a majority of Nepalese people are yet to realize the importance of education.Before 1950, only a handful of people were getting schooling since the expansion of schoolscommenced in 1951 (Gurung, 1989, p.101). In 1954, National Education PlanningCommission was established and, in 1968, the National Educational Advisory Board wasconstituted. Finally, in 1971, the New Educational System was introduced as an integral partof the Fourth five year plan (1970-1975). In 1975, the government instituted a policy of freeand compulsory primary education. Despite all these efforts, by 2011, the overall literacy ratehave reached just 65.9 percent and female literacy stood at 57.4 percent (Census 2011).Thus, one thirds of the population and nearly half of women are still illiterate.

5. Lessons to Nepal for Economic Development

We are now in the twenty-first century and the world has been embracing globalization andliberalization supported by the rapid expansion of transportation and communication,especially the development of information technology. Similarly, the global politicalenvironment has changed. Now no more cold war, but still geo-politics and internationalactors can play the important role in economic development in any country. Environmentalconcerns, global warming and sustainable development are getting priority in recent decades.

As shown above, Nepal distinctly lies behind in the ladder of economic development despite

having potentialities and following some similar policies and programs as in Korea in thepast. The success of Korea showed that economic development is possible within the short


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period of time if right policies and programs are formulated and implemented effectively withactive involvement of the government and private sector. Hence, despite difference incircumstances, Nepal can learn the following relevant lessons from Korea's developmentexperience to embark on economic development.

(1) Korean experience shows that political stability is vital for economic development. Inaddition, there should be political commitment for development.(2) Given the geographical constraints, and the context of liberalization and globalization,

Nepal may not able to follow the same industrial process as in Korea, However, Nepalstill has a huge supply of uneducated labor force and there is over-dependency onagriculture. Thus, Nepal can still focus on establishing labor-intensive industries whichcan capture the benefit of international value chain because China and India are movingupward on it. In addition, as a landlocked country, access to sea port is costly. However,

Nepal can think of developing the software industry by utilizing informationaltechnology and educated manpower.

(3) Human capital is very vital for economic development and Nepal is yet to receive

demographic dividend. The situation of human capital is still very low as reflected bythe existing literacy rate and low level of technical skills. Obviously, country needsefficient and skilled manpower for economic prosperity. The main reason for Koreansuccess was due to well-educated people. Hence, Nepal needs to focus on developingnecessary human capital for development.

(4) Since the mid-1980s, with the adoption of economic liberalization policy, the role ofgovernment has been minimized and the role of private sector has been enhanced.However, Korean experience shows that the government should play an active role innavigating the development process. Without the development of physical infrastructureand social capital like education and health, the private sector cannot flourish becauseof market failures. Hence, the government should focus on infrastructure development

and providing quality education and health services.(5) Nepal has tremendous potential given by the nature on certain sectors, such as

hydropower, tourism, and herbs. These natural resources should be harnessedeffectively. Without the adequate supply of energy, modern development and economicactivities cannot take place. Korea achieved self-sufficiency in energy production in theearly 1960s. Foreign aid, foreign loans and remittances can effectively be used for thedevelopment of hydropower. Moreover, development of the tourism industry, in which

Nepal has the comparative advantage because of natural diversity and several mountainpeaks, can become the important source of foreign currency.

(6) Nepal has been maintaining the pegged exchange rate with Indian currency since 1993.The same level of peg has been maintained for more than 20 years. It shows that Nepalhas not been using the exchange rate actively to promote exports. During the highgrowth phase, Korea used to manage the exchange rate proactively for export

promotion. Nepal needs to use the exchange rate to support export promotion.(7) With the adoption of financial liberalization, the financial sector has been expanding

substantially by establishing many conventional deposit-taking institutions. However,Nepal lacks specialized financial institutions for providing financial resources tospecific sectors, such as industry, agriculture, infrastructure and exports. Suchspecialized institutions should be established so that these sectors can get necessaryfinancial resources.

(8) Following the multiparty democratic system, workers' unions have been mushrooming

and trade union militancy has been increasing. Industrial disputes are common in almostall industrial establishments, including government offices and public enterprises.


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Korean experience shows that excessive trade union activities should be regulated andcontrolled along with providing social security, healthy work environment andreasonable level of salary.

(9) Nepal attempted to carry out land reform in the past, but failed to be effective. Throughland reform, Korea not only increased agricultural productivity, but also generated

resources and support for industrial development. Distribution of land is still highlyunequal in Nepal and the absentee landlords are still prevalent. Hence, effective landreform should be carried out which will eliminate the dual ownership of land andincrease productivity.

(10)Nepal has been receiving foreign aid for a long time. However, it has not been utilizedeffectively. Donors should provide aid to fulfill infrastructure gap and the governmentshould use it efficiently and effectively.

(11)R & D is not getting priority so far. R & D is very important to identify areas ofcomparative advantage and technological transfer. Korea spent substantial amount on R& D at the beginning of industrialization, which continues even today. Nepal shouldadopt this approach.

(12)Nepal needs to change work culture by paying due attention to time, learning fromKorea. Hardly any development projects are completed on time in Nepal. In addition,women's participation in work should be increased by treating them equally, since theyconstitute more than half of the population.

6. Conclusions

The paper has assessed the process of economic development in Korea and Nepal frommultidimensional perspectives. The development gap has been widening between Korea and

Nepal since 1960. Several developmental indicators demonstrate the dismal state of theNepalese economy. While Korea succeeded in transforming its economy from anunderdeveloped agrarian economy to an advanced industrial economy within three decades,1961-1989, Nepal failed to do so despite making attempts to develop. Nepal is different fromKorea in its history, geography, culture and has different initial conditions. All of thesefactors are responsible for Nepal's underdevelopment.

Despite following some similar policies and approaches, such as import substitution,development planning, government intervention, land reform, financial repression andautocratic regime during the Panchayat era, Nepal failed to achieve the expected success

because of the lack of commitment and effective implementation of policies and programs.The Nepalese government could not play the successive role of development state as in Koreaon account of monarchical system with feudal character. As a result, Nepal is still a pre-capitalist economy, dominated by subsistence agriculture. Riaz and Basu (2007, p.91) rightysay that all stakeholders of development, such as politicians, planners, bureaucrats,entrepreneurs and donors, are ineffective to arrest the feedback loop of poverty in Nepal.

Time has changed; Nepal cannot go back to the 1950s and 1960s. Plus there are severaldifferences between the two countries. Hence, Nepal may not be able to follow similar paththat Korea followed in the past. However, Nepal needs to adopt many common approachesthat Korea followed to bring the economy into the take-off stage, which includes

development of education, infrastructure and focus on R&D. Nepal should formulate rightpolicies by analyzing the internal and external environments. More importantly, Nepal


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should implement policies and programs effectively. Nepal can strategically utilize moneyreceived from foreign aid and remittance for the development of domestic economy, givingdue attention to its own potentialities. For this, the government cannot just let the market todo all things, but it should play an active role and at the same time, the private sector shouldalso be promoted.

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Amsden, Alice. 1989.Asia's Next Giant: South Korea and Late Industrialization. New York:Oxford University Press.

CBS. 2012. National Population and Housing Census 2011. Kathmandu: Central Bureau of

Statistics.

CBS. 2013.National Agriculture Survey. Kathmandu: Central Bureau of Statistics.

Chung, Young-Iob. 2007. South Korea in the Fast Lane: Economic Development andCapital Formation. New York: Oxford University Press.

Gurung, Harka.1989.Nepal: Dimensions of Development. 2nded. Kathmandu: Awarta Press.

Harvie, Charles and Hyun-Hoon Lee. 2003.Korea's Economic Miracle: Fading or Reviving?New York: Palgrave Macmillan.

Joh, Jung Jay, Young-Pyo Kim and Youngsun Koh. 2010. "Territorial Development Policy",in SaKong, Il and Koh, Youngsun, 2010 (ed). The Korean Economy Six Decades of Growthand Development. Seoul: Korea Development Institute

Khadka, Narayan.1991. Foreign Aid, Poverty and Stagnation in Nepal. New Delhi: VikasPublishing House Pvt. Ltd.

Kim, Dahoon and Youngsun Koh. 2010. "Korea's Industrial Development" in SaKong, Il andKoh, Youngsun, 2010 (ed). The Korean Economy Six Decades of Growth and Development.Seoul: Korea Development Institute.

Kim, Myung Oak and Sam Jaffe. 2010. The New Korea: An Inside Look at South Korea'sEconomic Rise. American Management Association.

Koh, Youngsun . 2010. "The Growth of Korean Economy and the Role of the Government"in SaKong, Il and Koh, Youngsun, 2010 (ed). The Korean Economy Six Decades of Growthand Development. Seoul: Korea Development Institute.

Koh, Youngsun, Seung Kwon Kim, Chang Whan Kim, Young Lee, Joo Seop Kim, SangYoung Lee and Young-Ock Kim. 2010. "Social Policy", in SaKong, Il and Koh, Youngsun,2010 (ed). The Korean Economy Six Decades of Growth and Development. Seoul: Korea

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Luitel, Samira. 2009. "Dependency and Underdevelopment: The Nepalese Context".Occasional Papers in Sociology and Anthropology. Vol. 11. (pp.202-220).

MoF. 2013.Economic Survey 2012/13, Ministry of Finance. Kathmandu: the Government ofNepal.

NPC. 1992. The Eight Plan (1992-1997). Kathmandu: National Planning Commission.

Ocampo, Antonio, Codrina Rada and Lance Taylor. 2009. Growth and Policy in DevelopingCountries: A Structuralist Approach. New York: Columbia University Press.

Panday, Devendra R. 2009.Nepal's Failed Development: Reflections on the Mission and theMaladies. Kathmandu: Nepal South Asia Centre.

Reinert, Erik. S. 2007. How Rich Countries Got Rich and Why Poor Countries Stay Poor.New York: Public Affairs.

Riaz, Ali and Subho Basu. 2007.Paradise Lose? State Failure in Nepal. New York: Rowman& Littlefield Publishers, Inc.

SaKong, Il and Youngsun Koh. 2010 (ed). The Korean Economy Six Decades of Growth andDevelopment. Seoul: Korea Development Institute

Seddon, David. 1988. Nepal: A State of Poverty. New Delhi: Vikas Publishing House Pvt.Ltd.

Shah, Sukhdev. 1981. "Developing an Economy Nepal's Experience" Asian Survey, VolXXI, No.10.

Sharma, Kishor. 2001. Liberalization, growth and structural change: evidence from

Nepalese Manufacturing.Applied Economics, V33(10).

Shrestha, Omkar, L. 1978. Exporters' exchange entitlement scheme as Trade DiversificationMeasure: A case study of land-locked Nepal. The Developing Economies. Vol. 16(1). pp.83-96.

Skerry, Christa A., Kerry Moran and Kay M. Calavan. 1991. Four Decades of Development:The History of U.S. Assistance to Nepal, 1951-1991. Kathmandu: USAID.

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Appendix 1: Tenure of Rulers since 1950

Korea Nepal

President Tenure (yrs) King / Prime

Minister

Tenure (yrs)

Ree Syngman 1948-1960 King Tribhuvan 1951-1955Yun Bo-seon 1960- 1961# King Mahendra 1955 -1972

Park Chung-hee 1961-1979 King Birendra 1972 -1990

Chun Doo- hwan 1980-1988 Constitutional Monarchy with MultipartySystem (1990-2008)

Roh Tae- woo 1988-1993 K. P. Bhattarai 13 months

Kim Young- sam 1993-1998 G.P. Koirala 43 months

Kim Dae- jung 1998-2003 M.M. Adhikari 9 months

Roh Moo- hyun 2003-2008 S.B. Deuba 18 months

Lee Myung- bak 2008-2013 L.B.Chand 3months

Park Geun-hye 2013- S.B. Thapa 3 monthG.P. Koirala* 14 months

K. P. Bhattarai 10 months

G.P. Koirala 28 months

S.B. Deuba 14 months

L.B. Chand 7 months

S.B.Thapa 11 months

S.B. Deuba 8 months

King Gyanendra 14 months

G.P. Koirala (2006-2008) 2 yrs

After Being Republic in 2008

P.K. Dahal 9 monthsM.K. Nepal 20 months

J.N. Khanal 6 month

B.R. Bhattarai 19 months

K.R. Regmi 11 months

S. Koirala 2014-

# parliamentary system, *3 times with different coalition in this time.

Source: http://en.wikipedia.org/wiki/History_of_South_Korea and

http://www.bbc.com/news/world-south-asia-12499391
http://en.wikipedia.org/wiki/History_of_South_Koreahttp://en.wikipedia.org/wiki/History_of_South_Koreahttp://www.bbc.com/news/world-south-asia-12499391http://www.bbc.com/news/world-south-asia-12499391http://www.bbc.com/news/world-south-asia-12499391http://en.wikipedia.org/wiki/History_of_South_Korea

lessons from korea's development experience for nepal

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