Korea: Fifty years of economic development


Jonghyun Choe is the Korean Ambassador to the Sultanate

This year marks the fiftieth anniversary of the Republic of Korea's First Five Year Economic Plan. In 1961, Park Chung-hee became Korea's leader, and his government announced the First Five Year Economic Plan in 1962. Since then the Korean government has implemented seven Five Year Economic Plans.

These plans provided the road map and charted the course of action for Korea's subsequent development. Based upon these plans, Korea has been transformed into an industrialised country.

The nation has evolved from a backwater into one of the world's major economies. I think what South Korea has achieved in the last 50 years has been duly reflected in Korea's soft power. This year, a Korean singer, Psy has become a phenomenon in the world of pop music with Gangnam Style, and a Korean movie won the highest award in the 69th Venice International Film Festival.

Today I would like to analyse the success of Korea's efforts to develop the country and reflect on a number of milestones on that road. First, President Park motivated the people. Korea was a dirt poor country and the people were in despair.

After the Korean War (1950-53), the rest of the 1950s were more for a matter of survival than of development. President Park appealed to the nation, emphasising that they could live a better life and inspiring them to aspire for more.

 And to inspire the people he fostered in them a can-do attitude. Accordingly a hard work ethic was firmly established. Against this backdrop, in the early 1970's the government launched the Saemaul (New Village) Movement to overcome the gap between urban and rural areas.

The Movement emphasised self-help, diligence and cooperation, and was successful in transforming rural areas. Initially targeted toward underdeveloped rural areas, the Movement soon brought advances in various aspects of life throughout the nation. Now this formula has been exported to several developing countries.

Secondly, the government chose a right strategy, one which proved a very efficient choice. The Korean government switched to an export-oriented outward strategy from an import-substitution one in early 1964 since it was very difficult to secure loans from abroad. To earn hard currency, the Korean government decided to manufacture and sell abroad. Korea had no natural resources to speak of, so there was no other choice but to export manufactured products.

The global economic boom in the 1960s and 1970s helped and facilitated Korea's exports. Thirdly, the bureaucrats were very competent, dedicated and goal-oriented in the age of development administration.

The leadership, in keeping with the country's Constitution, believed in the market economy, but they also believed in state intervention and guidance. Accordingly, the Government played a leading role in the country's efforts towards economic development.

The fourth factor was the people themselves. No development is possible without a pool of educated human resources. Good plans need to be carried out by competent people.

In Korea, the education of their children has been the top priority of every family. This zeal for knowledge provided a competent workforce for various fields. Korea's long held emphasis on education stems greatly from Korea's Confucian heritage, among others.

I would now like to turn briefly to the Five Year Economic Plans to offer some insights into the development path. The First Plan (1962-66) aimed to build a self-reliant industrial structure.

 Recognising South Korea's limitations with respect to natural resources, the First Plan was geared towards developing a self-reliant industrial structure that didn't depend on foreign resources. Due to the devastation caused by the Korean War, South Korea faced a shortage of electricity.

Therefore, the emphasis was on the development of hydroelectric and thermal power capacity for the expansion of industrial production. The formation of the Korea Electric Power Corporation was initially related to the First Five Year Plan. The Second Plan (1967-71)'s goal was to modernise the industrial structure and to build import substitution industries. The subsequent Third Five Year Plan (1972-76) sought to build an export-oriented industrial structure by promoting a heavy industry and a chemical one.

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