The Formation of a National Capital Stock and the Pension Systems in South Korea and Malaysia

Abstract

AbstractThe advantage of building a pension system is not limited to the social security of older people, but can also serve other political, societal, or economic functions. This chapter examines such an interdependence of policy areas by illuminating the relationship between expansive social policy and the export strategy of developmental states, focusing on South Korea and Malaysia. In both countries, contribution-based pension systems—a social insurance scheme in South Korea, and a provident fund in Malaysia—have become a cornerstone of economic development. By accumulating large amounts of money within their pension systems, the governments of both countries have been able to use this money for economic investments within their generally export-oriented economies, thus demonstrating that social policy and international economic interdependence are mutually supportive.