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South Korea, Poland, and Turkey: Three Emerging Market Success Stories Look to Sustain Their Growth

Foreign Affairs Live: The New Emerging Markets

Speakers: Steven A. Cook, Hasib J. Sabbagh Senior Fellow for Middle Eastern Studies, Council on Foreign Relations; Author, “Turkey’s Democratic Mirage,” ForeignAffairs.com
Marcus Noland, Executive Vice President and Director of Studies, Peterson Institute for International Economics; Author, “South Korea: The Backwater That Boomed,” Foreign Affairs
Mitchell Orenstein, Professor and Chair, Political Science Department, Northeastern University; Author, “Poland: From Tragedy to Triumph,” Foreign Affairs
Presider: Gideon Rose, Peter G. Peterson Chair and Editor, Foreign Affairs
January 29, 2014

Event Description

Emerging economies have boomed over the past decade, but many have recently seen their currencies come under pressure. With a potential currency crisis looming, CFR's Steven Cook, Marcus Noland of the Petersen Institute for International Economics, and Mitchell Orenstein of Northeastern University take an in-depth look at three emerging market success stories in a conversation with Foreign Affairs editor Gideon Rose. While Poland and South Korea's manufacturing prowess have laid the groundwork for their continued growth, Turkey's ongoing political turmoil and persistent current account deficit call into question its ability to continue its recent economic success.

Event Highlights

Mitchell Orenstein on the emergence of Poland's manufacturing sector:

"The value proposition was that you could make goods cheaper in Poland than you could in China, not every good, not very lightweight goods, but heavy industry, things that have substantial transport costs involved with them, such as automotive, such as white goods, where actually—have become actually cheaper to produce in Poland than to produce in China."

Steven Cook on the Turkish economy's dependence upon capital inflows from abroad:

"I think the reason why Turkey has cooled off is because, despite all the great promise and these factors that have led to—that led to the great, you know, boom of the 2000s, is that, one, the country's largely dependent on financing a current account deficit through foreign investment. And that's essentially hot money. Turkey has no energy resources to speak of and must import all of its gas, and the only way to finance that is through foreign investment. Current account deficit is a structural problem."

Marcus Noland on how demographic changes will affect the South Korean economy:

"Part of the Korean success story is they've had the wind at their back. They've had very good demographics for the last 50 years or so. Now it's going into reverse. 2010, the core productive population began shrinking. Next decade, dependency ratio goes up. And if you—you know, if you extrapolate out current trends, 2050, the population of the country—absent Korean unification—begins falling."

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