A case study related to South Korea which depicts stages of development in case of this country. DEVELOPMENT ECONOMICS

1. SUBMITTED BY
HASSAN AHMAD NIZAM
UW-15-ECO-BS-011

2. DETAILS

3.  Stages of growth
 Structural Patterns
 Dependence Revolution
 Neo Classical Counterrevolution
STAGES OF DEVELOPMENT

4. BOTH ARE :-
 Midsize in population (48 million in S.K and
38 million in Argentina)
 Long Classified as Middle income countries
BUT NOW
South Korea has almost double the per capita income of
Argentina, and designated as high income country by
World bank
WHY SOUTH KOREA &
ARGENTINAARE WELL
MATCHED ?

5.  In recent years, Share of investment in national income
has been among the highest in the world
 1960 : Can’t even rate a mention in book of ROSTOW
STAGES OF GROWTH
 1965 : Investment Ratio 15% as part of GNI
 1990 : Rose to 37% of GNI
 2000 : Maintained at rate of 28%
“ Drive to Maturity “
STAGES OF GROWTH

6.  Rostow claimed : maturity could be attained after 60
years of TAKE OFF
 Unique Experience of South Korea
 Larger the productivity gap, quicker the income can
grow since takeoff
 Introduced new types of Imports Exports and offer some
confirmation of their value
Previous

7.  Rapidly increasing rate of Agricultural Productivity
 Shifts of Labor from Agriculture to Industry
 Steady growth of Capital Stock, Education and Skills
 Demographic transition from high to low fertility
( birth and death rates )
 1965-1990 : per capita income increase by 7% annually
 1990-2002 : Economy growth rate is 5.8% annual
although Asian financial crisis happened (97-98)
STRUCTURAL PATTERNS

8.  1940-1950 : South Korea carried out land reform so agriculture was
not neglected
 Rapid expansion was due to shift to industry has confirmed Lewis
model of development
 1970 : productivity growth also increases rapidly
 Becomes successful integrated rural development program

9.  1945 : Part of Japanese Colony
 Dependent on U.S for defense against North Korea
 1950 : got U.S aid as part of National budge
 Max Imports from U.S and Japan
 Today, South KOREA is an OECD member
 Candidate for developed country’s status
 Per capita income is comparative to Greece and Portugal [35,790
PPP dollars (2016)]
 South Korea is an exception because of the magnitude of Aid and
other countries' interest to see its full development (Role as bulwark
against Communism)
DEPENDENCE REVOLUTION

10.  Focus on Domestic industrial boom
 Ban multinational corporations
 Used Debt instead of Foreign investment
TWO MAJOR POLICIES
 Ambitious land reforms
 Pay strong emphasis on Primary education rather than
university education
Previous

11.  Government using development planning
 Used wide range of tax breaks and incentives
 Induce firms to follow government directives and
interventions
 Setting individual company export targets
 Urging industies to upgrade technological level
 Co ordinating foreign technology licensing agreements
 Using monopoly power to compete with multinational
companies
 Inducing firms to grow rapidly in advancement
NEO CLASSICAL
COUNTERREVOLUTION

12.  Previously mentioned policies addressed real technology
 Skill raising market failure problems of development
 Very few government failures were recorded
 S.Korea easily recovered from Asian Crisis due to these
policies
 It could be seen that South Korea, atleast, provides an
object lesson about overcoming government co-
ordination failures
Continuous….

13. ANY QUESTIONS ??
THANKYOU