Donald Elliot S.

Gutierrez September 11, 2019

BSAC- I AEC 14

Case Analysis
Case Study 3: Schools of Thought in Context:
South Korea and Argentina

I. Introduction

Recently the two countries, South Korea and Argentina has been
compared and studied for having close statistics regarding their very own
economy. These two uses the four approach of development-stages of growth,
structural patterns of development, dependence, and neoclassical. These four
different approaches to further improve nation using their important insights
about development processes and policies. Both of these nations are midsize
population, 50 million and 41 million respectively. Also they classified as middle-
income countries but South Korea was reclassified as a high-income country in
2008 by the World Bank; having $31’000 PPT which is nearly the double of
Argentina’s per capita income $17’000.

II. Background of the Study

South Korea has experience positive growth in the past few years using
the Rostow’s stages of economic growth. It made the highest shares of
investments among other countries especially in Asia. The GNI in 1965 was 15%
but quickly rose to 37% by 1990. The GNI closely remain to 40% in the period
200-2007. While Argentina experience significant negative growth which affects
their economy. Despite being able to grow in the following years, the long-term
debts of the nation is yet to be paid or follow-up. This makes their GDP a
staggering 17%, half of South Korea’s GDP.

Both of the nation increase the productivity of their country with the rapid
increase of agricultural productivity. But the effects are not the same. In 1985 to
1990, South Korea’s per capita income increased 7% annually while the living
conditions of Argentina became stagnant. The cause is that the South Korea
prioritize the expansion of labor force of their agricultural sector by carrying out
lad reform which improves the growth of the nation. Argentina rely much on
improving without any insights of future outcomes of their decisions which put
them in their state right now.

Historically, South Korea was dependent from the Japanese Colony after
World War II. They also gain allies which help their dependence against North
Korea. The America then provide aid budget which help South Korea falling
economy which is now a highly develop country with the countless opportunities
to grow from the past. The economy of Argentina in the past solely relies on
export of goods. Then the nation requires adjust structural programs in hopes to
 improve their market in which they are unable to solve. This slow progression
leads them to a fallen victim to developed countries. South Korean Government
being a high interventionist gives them the edge over the years and put them
what they are right now, not just only that they also able to utilize the usage of
development planning, wide range of tax breaks and incentives, and intervention
and others. They tend to have rapid progress in terms of comparative advantage.
While Argentina supports the privileged interest consistently and focus on the
effects rather that long-term outcomes. The result was a huge failure which
demolish the nation’s market.

III. Alternatives

Alternatives for the failing economy of Argentina is to adapt their peso to

the peso to a dollar because this would benefit them with much more improved
exchange rate. Having outside trade and balancing of import and export of goods
would help the flow within the nation’s economy.

IV. Proposed Solution

The logical solution for this problem would be lessen the government
expenses or expenditure and utilize it properly. Again they’re focusing improving
which they after the short-term effects rather the long-term effects. Moreover,
attracting outside investors is the most profitable way but not an easy task.
Despite the economic records of Argentina is always dwindling, but it is important
to have foreign investors to improving the market.

V. Recommendation

Finding solution on their high tax should be prioritize which affects the
productivity and livelihood of the citizens. This would improve the nation’s growth
and in the long-term economy. Avoid inefficient public expenditure which put the
potential and money of the country a waste. The removal of protectionism which
because the country doesn’t have a stable economy which should rely on
imports, but that can’t be attain as the government impose protectionism