South Korea is offering lessons from its own economic ascent to Rwanda and other African countries -- and bringing business, cuisine, and rice paddies along with it.
GIHOGWE, Rwanda — Standing in the middle of a rice paddy in the Rwandan countryside, Lim Hong-hoon cuts a striking figure. A microbiologist from the South Korean city of Daegu, Lim, 48, took a hiatus from Korea's grueling corporate hierarchy last year, trading in his lab coat for a wide-brim hat and gumboots -- and a new life in central Africa. Now, as a volunteer with World Friends Korea, his country's Peace Corps-style international service program, Lim is tasked with advising a rice-growing cooperative covering 30 acres, established with financial and technical support from the Korea International Cooperation Agency (KOICA), South Korea's bilateral aid bureau.
The farm is part of a larger rural development project in Gihogwe known as Saemaul Undong (meaning "New Community Movement"), modeled after an initiative of the same name that was launched in the 1970s by South Korea's post-war strongman Park Chung-hee. The program, which began with small-scale self-help projects in villages and expanded to encompass larger irrigation, land consolidation, and rural electrification schemes, is credited with boosting South Korea's agricultural productivity and narrowing the gap between urban and rural living standards that had developed during South Korea's export-led industrialization. Since 2011, KOICA has integrated the Saemaul Undong model into its rural development work throughout the world, including in Rwanda, one of 21 African countries where there are active KOICA projects.
Although Lim had not worked in agriculture before coming to Rwanda, his days in the equatorial sun appear to be paying off. According to Léonce Ndagijimana, president of the 166-family cooperative that manages the rice farm, incomes in Gihogwe have increased significantly since residents, who previously farmed small plots of cassava, beans, and maize, mobilized to launch the rice project. (KOICA has helped provide the families with seeds, fertilizers, irrigation schemes, and technical expertise.) Jacqueline Kayitesi, 32, who used to spend her days toiling with a hoe, is also happy. "This is very, very easy," she says after plowing a section of the rice field with two bulls.
"She's using a traditional Korean style," Lim says. "In this part of Rwanda, people had never before plowed with animals."
South Korea remains a relative newcomer to Africa-related aid, trade, and investment. It was long a marginal player on the continent, and a foreign aid recipient itself from the end of World War II until the late 1990s. Yet over the last decade, driven by a thirst for natural resources, shrinking business opportunities at home, and a desire to disseminate lessons from its own development, Seoul has placed growing strategic priority on Africa. Although bilateral South Korean trade with the continent remains far behind that of Asian giants India and China, it grew more than fourfold, from $5.7 billion to $22.2 billion, between 2000 and 2011. This spike was driven predominantly by an expansion of Korean exports bound for Africa, including electronics, mobile phones, automobiles, and shipping equipment. During this period, however, South Korean official development assistance (ODA) to Africa, including both loans and grants, also rose from $43 million to $452 million, representing 24 percent of South Korean total ODA in 2011.
"Africa is potential," says Hwang Soon-taik, South Korea's ambassador to Rwanda. "Many people say Africa is the world's next locomotive for growth. But the Korean government is not interested only in the economic aspect. We're not so cold like China and some other countries. We also want to provide our hands-on development experience."
For many African policymakers, the South Korean tale of rags to riches is a model worth trying to emulate. In 1960, following its devastating war with the North, South Korea was one of the poorest countries in the world. By 2013, after a half-century of industrialization, its per capita GDP, calculated on a basis of purchasing-power parity (PPP), had risen to $33,140, on par with those of Italy and Spain. Today, South Korea is at the forefront of the high-tech global economy, with an economic footprint -- from container ships to smartphones to K-Pop -- that extends far beyond its Indiana-sized half-peninsula, home to some 50 million inhabitants.
Despite big injections of foreign aid, mostly from the United States and former colonial power Japan, South Korea's rapid growth -- often dubbed the "miracle on the Han," after the river that slices through its sprawling capital -- was largely engineered at home. Under the leadership of Park, who seized power in a 1961 coup, the country turned to export-oriented manufacturing, gradually shifting from labor-intensive light industries, such as garments, plywood, and wigs, to heavier goods, such as steel, machinery, and chemicals. Eventually, it moved on to the likes of memory chips, televisions, and mobile phones.
Driving this whole process were a handful of family-owned conglomerates, or chaebol, which benefited from several favorable government policies. They rose to become some of the world's biggest companies. Korea's largest chaebol, Samsung, which was founded in 1938 as a noodlery and grocery store, has grown to become an international leader in electronics, shipbuilding, and construction, with sales of $327 billion in 2013. Its most notable subsidiary, Samsung Electronics, is now the world's largest information technology company by revenue.
Rwanda, one of KOICA's eight "priority partner countries" in Africa, has little in the way of industry, yet its parallels with an earlier incarnation of South Korea are striking. Like Korea in the 1960s and ‘70s, Rwanda -- home to 11.5 million people on a territory about the size of Maryland -- is a compact, resource-poor nation with a recent history of fratricidal conflict. Like Park, Rwandan President Paul Kagame is a military man who has pursued a top-down, state-driven model of economic development, one frequently lauded for its effectiveness despite his government's poor human rights record. Rwanda, which is landlocked and home to some of the highest shipping costs in the world, is unlikely to experience a Korean-style, export-oriented manufacturing takeoff, yet it has taken an outward-looking approach to growth. Today, there is an emerging focus on information and communications technology, higher education, and mastery of the English language.
In countries like South Korea and Rwanda, operating under size and raw-materials constraints, "the incentives to become global are strong," says Kent Calder, director of the Edwin O. Reischauer Center for East Asian Studies at the Johns Hopkins University School of Advanced International Studies. "You have to upgrade your workforce, address technical skills, stress communications. You have to get outside of your little narrow corner of the world."
Rwanda and South Korea's similarities have helped drive the nature of their aid and investment relationship. Korea's largest investment in Rwanda, a $140 million joint venture launched in 2013 between the telecom firm KT and the Rwandan government, seeks to bolster the African country's ambitions to become a regional information technology (IT) powerhouse through the establishment of a 4G LTE wireless broadband network; it will eventually cover 95 percent of the country. KOICA, whose 2014 grant aid to Rwanda totals approximately $12 million, also focuses on areas that helped accelerate the miracle on the Han and have been identified as critical to Rwanda's future growth. These include IT, technical and vocational education, and rural development.
Notably, despite South Korea's successful transition to democracy in the late 1980s, the country's aid to Rwanda eschews significant involvement in the promotion of democracy and human rights. This is in contrast to many of Rwanda's Western development partners, including Britain and the United States, which briefly suspended aid to Rwanda in 2012 over its alleged support of rebels in neighboring Democratic Republic of the Congo and which have grown increasingly intolerant of Kagame's suppression of political opponents.
According to Hwang, Rwanda -- like Park's Korea -- has experienced development largely because of a "strong government" that is comparatively free of corruption. "In world history, people get to think about freedom and democracy after solving their basic needs," he says. "This was the case in Europe and America, too."
To whatever degree that South Korea's expanding Africa footprint has been informed by its own successes, the process also exposes some of the Korean growth model's limitations. Aside from several oil and mining deals, much of Korea's activity in Africa, including a major push by Samsung into the mobile phone market, can be linked to increasingly saturated consumer markets, and therefore limited growth potential, at home. From a workforce perspective, too, Korea's hierarchical office culture and lengthy working hours have raised the attractiveness of overseas business and aid assignments. Jeong Jun-ho, chief strategy officer of Olleh Rwanda Networks, the KT-Rwandan joint venture, says he volunteered for his placement largely because it meant he'd have more time with his family. (He relocated with his wife and children.)
Then there are entrepreneurs like Shin Ji-yoon, who was driven to Africa in part by the influence of Korea's chaebol, which, despite playing an essential role in driving the country's growth, are increasingly blamed for inhibiting small and medium enterprises, discouraging entrepreneurship, and stifling innovation. "In the United States, everybody can be an entrepreneur and if they fail, oh OK, they can do another business," Shin, 26, says over coffee at Rz Manna, a Korean-style cafe and pastry shop that he and five university colleagues opened in Kigali, Rwanda's capital, last year. "In Korea, if I fail the first time, everybody will say, ‘You're a loser.' And if I succeed, and I invent a really good thing, a big company will just come and take it over."
Shin and his partners, who started their café with close to a million dollars in KOICA seed money, may not be paragons of high-risk frontier market capitalism. (The money, Shin says, is linked to Rz Manna's status as a "social enterprise," a designation he deems appropriate because the business treats its employees "like family," donates leftover bread to orphanages, and displays the work of local artists). Yet others have flocked to Rwanda without such institutional support.
A short walk from Rz Manna, in the upscale Kigali neighborhood of Nyarutarama, Lee Kyungbo owns Monmartsé, Rwanda's only authentic Korean restaurant. Dressed in sky-blue Marmot hiking gear and loafers, Lee is a serial expatriate entrepreneur who relocated to Kigali last year after previous stints in Tanzania, Nepal, and Madagascar. The 58-year-old, who first traveled to Africa as a translator for Korean missionaries, eventually found his way into minerals and gemstones, and is now waiting for a Rwandan government license to mine for the tin ore cassiterite. In the meantime, he's become something of a one-man conglomerate, establishing the restaurant, launching enterprises that import fish and cars, and planning a forthcoming rotisserie chicken business.
Although few Rwandans have taken to Lee's cooking (he also serves as Monmartsé's head chef), the restaurant has attracted steady business from foreigners, including a growing number of local Korean residents and business travelers. One July evening, a group of Korean businessmen -- part of a consortium working on a master plan for Rwanda's new international airport -- arrive to eat and, in the spirit of Korean hospitality, invite me to join them for dinner. Soon, the group is toasting to rounds of soju, as fatty strips of samgyeopsal, a popular cut of pork belly, sizzle on the tabletop grill. All of the men, it turns out, are on their first or second visit to Rwanda, and they are curious to learn more about the country. Notably, some also are surprised with what they've seen -- a reaction that may be similar to that of many Western business travelers visiting South Korea in the midst of its rapid takeoff.
"Rwanda is different than I'd imagined," says Jun Young-soo, an engineer on his first trip to the continent. "I thought Africa would just be suffering. But this place is really starting to develop."