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.
And the Fourth Plan (1977-81) promoted the development of industries that could effectively compete internationally in industrial export markets. It was during these five years that South Korean exports began to grow enormously. The Fifth Plan (1982-86) tried to move concentration to technology-intensive industries, while the Sixth Plan (1987-91) emphasised R&D and the nurturing of human resources. The Sixth Five Year plan is basically part II of the previous plan. The Seventh Plan (1992-96) was developed to promote high-technology fields, such as microelectronics, new materials, fine chemicals and bioengineering. The plans have been interconnected, with each building upon the achievements of the previous plan to move further forward.
Now, I would like to highlight major watershed developments. One of the decisive decisions was to develop a heavy industry and a chemical sector, which was announced in January in 1973. Korea started by boosting a labour-intensive light industry. However, the model had its own limits — they were easy to start, thanks to the country's large and cheap workforce, but were not enough to propel Korea's emergence as one the world's leading economies. To break through these limitations, the government turned to a heavy industry such as steel, chemicals, automobiles and ships. In 1976, cars were exported for the first time in Korea's history. And Korea's shipbuilding industry was able to compete at the global level within a short period of time.
Building upon what the country had achieved, Korea hosted the Asian Games in 1986 and the Summer Olympics in 1988. The hosting of the Olympic Games had a significant impact on the country, firmly placing it on the global stage and further inspiring a sense of national pride. Korea further harnessed its can-do spirit for a new leap forward. In 1996, Korea joined the OECD, and in 2009 took the further huge leap of emerging as a donor country. The following year Korea was the host of the G20 Summit.
Korea's path has not been without its ups and downs. The first crisis came when there was a hike in oil prices in the wake of the war in the Middle East in 1973. It tided over the first oil crisis through a construction boom in the region. Another change caused by the oil shock of 1973 was a shift to nuclear power plants. In 1978, the first nuclear power plant was completed, and Korea became the 21st country in the world to use nuclear energy for electricity generation. Korea was also severely hit by the Asian financial crisis of 1997. Korea had to look to an IMF package. IMF Managing Director Christine Lagarde told students at the Asian Institute of Management in Manila on November 16 that "in response to the financial crisis in the late 1990's, Asia embraced change, not without a laborious, difficult process, not without huge sacrifices, not without misery and suffering." That was exactly what happened in Korea. So many people lost their jobs. The Korean currency was devalued. And since Korea had a solid manufacturing base, the depreciation of its currency helped the country earn hard currency more through increased exports. During the financial crisis, the Korean people impressed the world by contributing jewellery to help the government to pay the debt. With these combined efforts, Korea paid off the IMF loans ahead of schedule.
When the First Five Year Economic Development Plan was launched, Korea's per capita income stood at 87 US dollars. Today, Korea is one of the 15 largest economies in the world. Korea's Internet access is the highest in the world. And Korea is the world's fifth largest car manufacturing country. Jonghyun Choe is the Korean Ambassador to the Sultanate