1. SOUTH KOREAN ECONOMY

2. • A global superstar
•Market economy
•third largest in Asia, the 13th
largest in the world
•donor to international financial aid
•member of OECD
•Four Asian Tigers
•G-20

3. Confucian Heritage
• Strong emphases on education
• Hard work

4. South Korean Economy Distinctions
• state involvement in its economy
• Economic Planning Board (EPB)
• one of the most indicatively planned market
capitalist economies in the world
• influence, subsidies, grants, and taxes
•SK - incentives, regulation of foreign
exchange and highly centralized fiscal
policies

5. South Korean Economy Distinctions
• higher levels of
corporate
concentration in the
chaebol
(chae wealth, property + bŏl
faction, clan)
a family-controlled
industrial conglomerate
in South Korea
1960s

6. South Korea at its poorest
• Japanese occupation of Korea (1945)
• 38th parallel division of the Korean
peninsula (1948)
• Korean War (1953)
 complete loss in economy
 Decline of production sectors
 dependency on US aid

7. Syngman Rhee (1875-1965)
• First president of South Korea (1945-1960)
• anti-Communist
• later years: any political opponent =
communism.
• Regime
• authoritarian, corrupt and inefficient.
• 1960 - student demonstrations ousted
Syngman Rhee from presidency.
• Main achievement: land reform
Photo credits: Laguia2000.com

8. Park Chung Hee (1917 –1979)
• seized power through a military coup d'état
that overthrew the Korean Second Republic
in 1961.
• Authoritarian
• Political Activities Purification Law
• Indicative Planning
• Miracle on the Han River
• Five-Year Plan (FYP)
Photo credits:
Hulton Archive / Getty Images

9. Five Year Plan
• Aims to increase wealth within South Korea
and strengthen political stability.
• change in policy
• import substitution industrialization to
export-oriented growth
• Nathan Plan
• UN plan for the economic recovery of
South Korea
• Not implemented

10. Components of the Development
Plan
• an “unlimited” but educated labor
force
• foreign loans
• export in world markets
• the government

11. First Five Year Plan (1962-1966)
• Emphasized industrial growth rather
than food self-sufficiency
• GOAL: lay a foundation for future
economic growth by developing a
base industry in South Korea

13. Second Five Year Plan (1967 – 1971)
• sought to shift the South Korean state
into heavy industry
• emphasized textile exports as a
leading sector
• increasing the public sector for social
overhead capital investment

15. Third Five-Year Plan (1972-1976)
• Heavy Chemical Industrialization Plan
(HCI Plan); Big Push
• government borrowed heavily from
foreign countries
• Left South Korea with a large foreign
debt

17. Fourth Five-Year Plan (1977-1981)
• GOAL: efficiency in manufacturing and
investment in industries that can compete
internationally.
• Shifted towards electronics, machinery and
shipbuilding with lower foreign borrowing
• Increase in exports
• Worldwide economic recession (late 1970s)
• Economy suffered from inflation and low
GDP

19. Fifth Five-Year Plan (1982-1986)
• Had similar sectoral goals as Fourth
FYP
• Sought to shift emphasis away from
heavy and chemical industries to
technology-intensive industries
• Plan exceeded its targets

21. Sixth Five-Year Plan (1987-1991)
• part II of Fifth FYP
•Emphasis: Science and Technology
• Expanded welfare state programs
• Emphasized domestic research and
development
• Called for liberalization of financial
system

23. Seventh Five-Year Plan (1992-1996)
• high technology
• greater free marketization
•Kim Young Sam
GOALS:
• develop high technology fields
• maintain balance between growth and
stability
• achieve more economic concentration of
the chaebol groups

26. The chaebol and the South Koreans
• SK Policy of concentrating wealth in
the hands of a few wealthy
businessmen
+ elevation and development of the
South Korean economy
-unequal distribution of income
• Domination will still continue.