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Competitiveness and Environmental Policies: The Cases of Chile and Korea

Competitiveness and sustainability share a common aim: to use resources more efficiently. In the long run, unsustainable production patterns may lead to the depletion or degradation of natural resources, and that means loss of future competitiveness.

The concept of sustainable development was endorsed by most of the world’s governments during the Rio Summit in 1992 as a priority principle for public agendas at the local, national and supranational levels. There are ethical, political and economic implications to this consensus, borne out by an expectation that the sustainability of a country’s development pattern should be reflected in its capacity to achieve goals in such interdependent fields as environmental balance, social justice and economic prosperity. (Rio Declaration, 1992)

A state of environmental balance is recognized as one of the foundations for achieving sustainable development, not only in individual countries, but also on a global scale. Hence both the Rio Declaration and Agenda 21 acknowledge its importance and urgency, both as a priority for governments and international organizations, and as an objective for economic and political agents, institutions and civil society.

In this context, the design and implementation of environmental policies at national level may be a decisive factor in promoting capacity-building processes, at the same time reconciling issues of environmental sustainability with goals for development and growth. As Jänicke outlines, the debate on capacity building around environmental protection is currently associated above all with developing countries which are "candidates "for receiving expertise and the transfer of good practice from the most successful donor countries, assuming that these might be regarded as models worth imitating" (Jänicke, 1997).

These considerations acquire special relevance in those developing countries which have registered major economic growth in the last few years. The present contributions focus on the recent cases of Chile and South Korea, often (though for different reasons) regarded as economic models of growth in their respective regions, and whose environmental legislation, capacities and institutions are relatively new.

In the case of Korea, a strong state led rapid industrialization and sustained high economic growth in order to break out of domestic poverty in a relatively short period of time. In some industrial sectors Korea has been able to develop its own technological capacity, and some companies even began to emerge as market leaders in first world markets. Because of this remarkable performance Korea has often been cited as a model of development by the World Bank, but too little attention was paid in the past to the environmental aspects of this rapidly growing economy. In fact, substantial environment protection measures were incorporated somewhat belatedly into Korea’s political apparatus around the early 1990s. Korea is a "late cleaner". Nevertheless, there are now some notably active civic organizations and many more environmental institutions, while the big companies are trying to be green.

The Chilean case is characterized by a rather small economy which, from the mid-seventies, pursued a model of growth with a considerable neoliberal bias and broad market deregulation as the country opened unilaterally to international trade and the role of the State was pruned back. This strategy was followed from the early eighties by strong export incentives, which have consistently encouraged a productive structure geared to the extractive industries and the primary elaboration (mainly commodity oriented) of natural resources, both renewable (forestry, fishing) and non-renewable (mining), in a context of sustained growth (over 7% annual average rate for the period 1984-1997) and rising investment rates (reaching 29% of GNP in 1997).

The two case studies display certain common features, such as a previous lack of any environmental regulatory framework during decades of strong economic expansion, the late arrival of the environment issue on the public agenda, the slow incorporation of channels for public participation and dialogue with non-government organizations, and the accrual of an environmental debt — resulting from the former absence of protection — which both societies have had to confront since the beginning of the present decade.

Nevertheless, they also provide plentiful illustrations of substantial differences with regard to factors such as the role and leadership of the State, capacity-building processes, priorities for environmental instrumentation, the relationship between the State and industry, and the strategies more recently adopted by companies under pressure to maintain or improve their position in international markets.

Having identified existing capacities, the strategies of various actors, and the main instruments of environmental policy along with their performance to date, these papers will in each case single out a number of elements for the actors (State, companies, institutions) to consider in seeking a framework of protection and an environmental balance which will allow them to reconcile aspects of competitiveness and sustainability within their development models and productive structures.

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