Publication Date
December 2013
Abstract
There are striking contrasts between a productive and an extractive economy. South Korea and Peru are used as examples. Korea is not a resource-rich country but has developed remarkably fast. Pem, on the other hand, is a resource-rich country but has shown uneven rates of growth and has had a lackluster development performance because it has relied on extractive industries that have brought boom and bust. Korea is a high performing economy that achieved high rates of growth implementing policies that emphasized productivity and promoted industrialization and free trade. Korea's success is explained in terms of its policies promoting the growth of private manufacturing industries, technological planning, strong support for education, investment initiatives, and socio-cultural factors. Peru, on the other hand, still suffers from structural weaknesses. This article calls for Peru to put in place a viable development model, invest in human capital, industrial development, and promote nontraditional exports.
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