David Stojkovski

Korea’s economical development

After WW2 and the Korean War, Korea’s economy was mainly depended on foreign aid. The
casualties form the wars were fixed and new buildings were constructed to satisfy the needs of
the people at the time. Eventually the foreign aid that they received came to a stop and Korea
had to think of new ways to improve their economical situation. Even from the start education
was especially emphasized and a lot of the then, little funds that the government had were
spend on improving the educational system in order to produce competent workforce that
would later on be ready to take on the special roles needed to lift up Korea once again. The first
five-year economic plan was put into action in 1962 but problems arose around the problem of
acquisition of funds. In the end Korea received some of its funding from West Germany but
they were far from sufficient. On the other hand the light industry sector such as textiles, wigs
and needlework proved to be a valuable asset at the time, with it the export rates increased but
this was again far from what the government at the time hoped to accomplish. Therefor a they
started to orient themselves to other industries such as steal, coal, chemicals, machinery and
shipbuilding. Among these the most controversial project was the construction of the Pohang
integrated steel mill in 1970 which a lot of foreign advisors thought it was way to risky and that
a lot of technology was needed to take on such a project. Nevertheless the mill was constructed
Three years later however the mill the built and it successfully produced steel. Korea was about
half a century behind all the developed countries in steel production but in a short amount of
time it became the worlds forth largest steel producer. This success in the primary industry set
the foundations for future development of other steel related industries such as shipbuilding,
automobiles , fine machinery, construction and electronics. Another key factor in Korea’s
economical development was Korea’s New Community Movement, with which the emphasis
was on the improvement of the rural areas in Korea who were especially underdeveloped in
this period. Free cement was granted to the villages around Korea but the thing that really
made this movement a success was the endless devotion of the people living in those areas to
improve their lives and the lives of their community. All of this proved helpful in improving
Korea’s economy but soon after the two ominous oil crises emerged. Korea didn’t passively
wait out the oil crises and it didn’t allow them to stop their economical development so instead
of decreasing their investments, like other countries did at the time, Korea increased its
investment especially in its steel, oil, chemicals, machinery and shipbuilding industries. In the
1980’s Korea used the world’s economical situation known as the three lows, the US dollar, oil
prices and interest rates to improve its economy or in other words the economy in Korea
flourished in this period. After this another crises stared known as the Asian crises which
started in Thailand and this crises helped the government at the time to understand that some
things needed to be improved in the management sector, some of the policies in the industries
and that the main principle in society should be the one of competition and performance. With
the fast reaction of Korea’s officials and the mission to improve Korea’s economy, things turned
out great and in 2001 Korea had the world’s fifth highest foreign exchange reserves. Koreas
David Stojkovski

economy development had its ups and downs but through the will of the people to improve
and work hard Korea managed to produce one of the biggest global corporations and create a
stable economy for itself.