The Transition to Export-Led Growth in Korea, 1954-1966 (original) (raw)
Related papers
The Rise and Fall of Korea’s Economic Development
Springer eBooks, 2017
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.
SSRN Electronic Journal, 2021
In 1960, South Korea's exports were about 1 percent of GDP, and the country's ability to import depended almost entirely on US aid. After changing its foreign exchange and trade policies in the mid-1960s, Korea saw a surge in exports to more than 10 percent of GDP by the end of the decade. What factors account for the shift in policy that enabled this dramatic export growth to occur? The United States helped initiate the process by withholding financial assistance, pressuring Korea to devalue its currency and reform its foreign exchange regime. Initially, the Korean government resisted taking these steps, but in 1964 it became firmly committed to an export promotion strategy to boost foreign exchange earnings and end its dependence on American aid.
colonialism and the korea problem
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Export-led industrialisation and growth: Korea's economic miracle, 1962-1989
Australian Economic History Review, 2003
The period 1962-89 witnessed a remarkable transformation of the South Korean economy, from being poverty ridden to the attainment of the status of newly industrialised nation. This transformation was achieved through the adoption of an outward oriented industry led strategy, based, particularly during the period of the 1970s, upon the development of large-scale industrial conglomerates and the attainment of economies of scale and technology to achieve international competitiveness. By the early 1980s this strategy had resulted in major structural imbalances, a weakened financial section, heavy concentration in domestic markets, and a repressed development of small and medium enterprises. By the end of the 1980s, despite attempts at economic reform during this decade, the structural and financial problems remained which were to prove the country's undoing during the financial and economic crisis of 1997-98. This issue of whether Korea's performance during this period can be described as an economic miracle is also reviewed. The empirical evidence on this issue is mixed and no conclusive evidence can be drawn. However, despite this, the achievements of the Korean economy during the period under discussion should not be underestimated.
A New Paradigm for Korea’s Economic Development
Palgrave Macmillan UK eBooks, 2001
The South Korean economy is one of the economic wonders of the late twentieth century. War-torn and poverty-stricken in the 1950s, with a per capita income below that of Haiti, Thailand or India, the country then emerged as an economic giant by the 1980s. Rapid industrialization, phenomenal growth rates and rapid social transformation characterized a process that has made Korean products and firms, such as Hyundai and Samsung, familiar throughout the world. The study of Korea's transformation is fascinating in itself, but there are also many general aspects of the process which make Korea of particular significance in understanding Asian economic development. How was South Korea able to achieve its rapid, equitable growth? What parts were played by the state, the banks, the giant corporations, imported technology, foreign investment and trade, and by the unique balance between competition and control? Korea felt the full force of the Asian economic crisis in 1997, and was one of three countries forced to call for IMF assistance. Korea's response to the crisis (reverberations from which will remain for a long time) is of considerable significance not only for Korea but for the future handling of global financial disturbances. The present series of books aims to explore Korea's development and its unique economic governance structure. The appearance of such a series is timely, for not only does it give the opportunity to review Korea's growth in perspective after several decades of unparalleled advance, but it also provides an opportunity to bring to a western readership the increasing contributions of Korean scholars to the understanding of their country's transformation.
Korea's Fading Economic Miracle 1990-97
Faculty of Commerce-Economics Working …, 2005
By the late 1980s Korea's interventionist and export oriented development model had contributed to a number of serious structural weaknesses in the economy. Ongoing government involvement in the banking and corporate sectors, weak prudential supervision of financial institutions, and restricted financial market and corporate competition created moral hazard, as banks and corporates believed they would not be held accountable for their actions due to their close relationship with government. This resulted in financial sector risk mismanagement and highly leveraged growth of the chaebols. After 1988, when the new democratically elected civilian administration removed long-standing restrictions on union activity, rapid wage growth, in excess of productivity gains, eroded profitability. These structural weaknesses, and policy errors and mismanagement, made Korea increasingly vulnerable to external shocks during the 1990s. In mid-1995, a rapid depreciation of the Japanese yen and a world semiconductor glut and price fall provided the trigger for a rapid slowdown in exports and industrial output, and an unprecedented wave of chaebol bankruptcies that undermined the solvency of financial institutions. Korea's long period of sustained economic growth, low inflation, strong investment and balanced budgets had lulled policy makers into complacency. They failed to act decisively to tackle the growing structural weaknesses. Korea's high exposure to short term foreign debt and loss of foreign exchange reserves through a vain and unsustainable attempt to defend the won further undermined foreign investor and creditor confidence. This paper discusses in some detail these developments and their contribution to the financial and economic crisis experienced by the country during 1997-98. It also identifies key lessons for countries contemplating similar rapid development, and key warning signs that need to be heeded to avoid similar happenings to that which occurred in Korea.
Reverberations of the Korean war on the South Korean Economy
2018
South Korea’s success story is one to marvel at. They were the first non G -7 country to host a summit of the G-20 countries of the world – the committee that drives the economy of the world today. The shocking element is the ability of South Korea to tran sform their position from that of “rags” to “riches” as seen in their current position of being the twelfth largest trading nation in the world. Between the years of 1962 and 1979, Korea’s real GNP grew at an astounding rate of 9.3%. One of the major reasons for their growth was the fact that exports were given prime importance. The significance was such that, the people of the nation coined exports as their “engine of growth”. In 1962, South Korea had annual exports of 55million.However,thenationmanagedtogrowittoanextentwheretheannualexportvaluewasastaggering55 million. However, the nation managed to grow it to an extent where the annual export value was a staggering 55million.However,thenationmanagedtogrowittoanextentwheretheannualexportvaluewasastaggering27 billion in the year 1982. The years of 1966, 1968 and 1969 were extremely profitable for the country. The GNP rose at levels of 12.4, 12.6 and 15.0. ...
THE RISE AND FALL OF KOREA'S ECONOMIC DEVELOPMENT Lessons for Developing and Developed Economies
book, 2017
Preface The Korean economy has for a long time been a most interesting and controversial area for economic research. Beginning from the 1950s when South Korea was an underdeveloped, agrarian economy that depended heavily on foreign aid, the nation rose at remarkable speed to become a major international economic power, the fourth largest economy in Asia and the 13th largest in the world. Korea’s modernization was brought about by Park Chung-hee, who is widely regarded as almost single-handedly having initiated the transformation of the Korean economy through his economic management and policies which I characterize as development policy by “economic discrimination”: that is, a meritocratic system based on economic performance that by treating differences differently helps those who help themselves. This economic discrimination paradigm instilled in all Koreans, individuals, villages, and corporations, the “self-help” spirit that allowed them to grow and develop. Specifically, a conducive climate was created that encouraged small- and medium-sized firms to grow into large conglomerates to lead national economic growth through exports and industrialization. As I write this preface, the impeachment of Park Geun-Hye (daughter of Park Chung-hee) the 18th term President of South Korea who took office in 2013 has taken the country by storm. In between the regimes of father and daughter, Korea’s political landscape has changed drastically by which “economic egalitarianism” has substituted “economic discrimination” and has positioned itself at the center of social and political discussions. From “Park to Park”—father to daughter—and all the many episodes in between, this book takes a closer look at Korea through the new General Theory of Economic Development lens tracing its trials and tribulations for over the 60 or so years. The study of the Korean economic development has so far failed to come under satisfactory scrutiny by mainstream economists largely because Korea during the miracle years adopted heterodox policies that are not fully supported by the mainstream economic schools, as well as world economic organizations like the World Bank and IMF, while the recent experience in the post-miracle years with the introduction of the market economy and political democracy with the hope to transform Korea into a developed economy has thus far turned out to be far less satisfactory than expected. A central theme of this book is the interpretation of the Korean economy with my General Theory of Economic Development (published by Edward Elgar in 2017) that serves as the analytical framework to better understand the Korean economy. The theory I have proposed goes beyond the market-centric view as well as the contemporary neo-classical models that see Korea’s unprecedented rise more of an anomaly than something which can be explained in their model. My theory also goes beyond the pro-government school that looks at Korea’s economic miracle as a result of infant-industry protection. Neither interpretations, as I argue in the book, are satisfactory. Incidentally, almost 15 years back in 2001, I wrote a book titled “A New Paradigm for Korea’s Economic Development” which is also published by Palgrave that looked at Korea’s future economic reform from the broad market-centric perspective as well as blending in ideas with the New Institutional Economics. That book also looked closely at macroeconomic policy issues as Korea had then been hit by the 1997/98 Asian financial crisis. In contrast, this book I believe goes deeper by applying my General Theory of Economic Development to better understand the Korean economy, as well as looking more thoroughly at institutional factors that have affected Korea’s past and current economic evolution, and thereby deriving some important lessons to be learned by developing and developed countries. The Korean economic story is of course not all rosy, and I carefully dissect and provide reasons for the long-term economic stagnation of the recent decades that have seen a rise in inequality, a slowdown in economic growth, and an overall increasing dissatisfaction of the Korean people with life in general. Ironically, all these economic and social woes have coincided with increased extent of the market economy and political democracy. This book attempts to provide an explanation for this apparent paradox. And by tracing the rise and fall of Korea’s economic development, an important purpose of this book is to provide lessons for developing as well as developed countries. What would be the useful lessons that could be learned by developing countries in Africa, Southeast Asia, and Latin America? What are the things to be avoided? What can non-developing developed countries (including Korea) learn about the current economic stagnation? The book hopes to provide answers to these perennial and important questions. Seoul, Korea (Republic of) Sung-Hee Jwa