UK and Korea post-Covid: Confronting ghosts of the past and why inclusive growth is a necessity and not a luxury

Allister McGregor is an Honorary Professor in the Institute for Policy Research (IPR) at the University of Bath.

At a recent conference hosted by the IPR and Yonsei University, UK and Korean social policy experts came together to discuss the challenges facing both countries in the wake of Covid-19.

The idea of confronting ghosts of the past was recognised. In social and economic policy terms, both Korea and the UK are being stalked by ghosts of their past. Their ghosts are very different but the ways in which they haunt the present are very similar.

In the case of the UK, the ghost is a declining industrial economy and a struggle to find a place in the world order. In Korea, it is a successful economic growth model that has been very costly in human and social terms.

The big beast lurking behind the ‘ghosts’ in both cases is inequality. The ghosts of the past have been driving worsening inequalities and are producing a series of wellbeing failures across the populations of the two countries. And by wellbeing failures I mean not just worsening material poverty but also failures across other dimensions of wellbeing such as health, education, social connectivity and perceived quality of life (for an explanation of wellbeing failures and illustration of their effects in the care sector, see Keating, McGregor and Yeandle 2021).

The impact of wellbeing failures is also evident in societal and political terms, where increasing divisions and polarisation are accompanied by the rise of populist politics and a loss of trust in government and in mainstream political actors (OECD (2022), Trust in Government).

In the UK the gaps between the North and the South have become ever greater and the sense of entire areas of the country and the people in them are being left behind is significant. Even in more prosperous cities and towns stark inequalities are often shocking.

In Korea, material improvements have been spectacular for some, but are not shared equally. They have often required significant personal sacrifice, and for years Korea has fared relatively badly in respect of OECD wellbeing indicators (such as work-life balance or stress). Marginal groups (the elderly, non-core workers, young people) have not benefited as fully and are being left behind.

Large numbers of people in both countries have been experiencing wellbeing failures but there is a popular perception that successive governments have failed to recognise and prioritise these for action.

Prior to Covid-19 the governments of both UK and Korea had begun to recognise that there was a need to address these issues and to tackle inequalities in particular. In both cases what is required involves significant structural changes and a major shift in the policy mindset.

In the UK, the need to tackle inequalities resulted in the ‘Levelling-Up’ agenda and this culminated in the White Paper ‘Levelling Up the United Kingdom’ in February 2022 . This sets out an ambitious government agenda, but it is also amorphous and is not clear about how precisely it will make a difference. Most crucially it fails to detail the level of financial investment that might be required to affect such deep-seated problems (such as investments in education, health and local governance).

In Korea, prior to Covid-19, the incoming government of Moon Jae-In set out a new strategy for sustainable growth. In a government briefing in 2017 it was stated that: “It is time to shift the country’s growth paradigm from large production and fast follower-led growth to sustainable growth." (Ministry of Strategy and Finance, Press Release on the New Administrations’ Economic Policies, 25 July, 2017).

In November 2018, a Presidential Commission on Policy Planning set out a plan for Inclusive and Innovative Growth. This included ideas for changing the way in which business was being done and for restructuring the economy to address inequalities in the labour market in particular. The plan also included proposals for major reforms of social policy to make Korean society more socially sustainable. At a Ministry of Economy and Finance conference in Seoul in May 2018 there was widespread recognition amongst government officials and academics attending that there were both economic and social grounds for shifting away from the hitherto ‘successful’ model of growth and development.

Covid-19 has had a significant impact on both policy initiatives. Although, the UK and Korea are seen by some as having coped reasonably well with the immediate impacts of the pandemic, its’ long-term consequences are profound.

In the UK the focus on Levelling-Up has been dissipated not only by coping with Covid-19, but also by the subsequent (Brexit exacerbated) economic recession, the war in Ukraine and by the energy price crisis. There is neither the policy headspace, nor adequate fiscal capacity to properly focus on and invest in the Levelling-Up agenda.

In Korea, a change of government in March 2022 heralds a likely return to the safe old model of tried and tested economic policies. The reforming zeal on the Moon regime ran out of steam in the face of a series of economic and political challenges.

Yet, in both countries Covid-19 has increased the level of wellbeing failures both presently and for years to come. In a book in 2019, Jonathan Joseph and I argued that human wellbeing, resilience and sustainability are inextricably interdependent.

As we look to the future, the current levels of human wellbeing failure in both the UK and Korea do not provide a sound basis for resilience with which to cope with future crises, nor do they provide a platform for sustainable development.

In this context the return to a fetish for orthodox economic growth is potentially disastrous. As we know from the past, these will generate further wellbeing failures for some and drive greater inequalities. Rather what is required is a strategy of inclusive development, which seeks to protect and improve the wellbeing of all citizens. This represents a course of action that will rebuild resilience and provide a basis for development and growth that is economically and politically sustainable (see Hay, Hunt and McGregor 2020). At this time, for both the UK and Korea, if the ghosts of the past are to be put to rest then inclusive growth is not a luxury, it is a necessity.

This blog is part of an ongoing series exploring social security, the labour market and public health in the UK and South Korea, as part of a partnership with Yonsei University, South Korea, supported by the UKRI Fund for International Collaboration.

All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.