Contents1. Background2. Five Year Plans a. 1962–1966 b. 1967–1971 c. 1972–19763. Economic Development Process (My Report)4. KOREA Economy5. Sustainable Development for GEORGIA
BackgroundBoth North and South Korea had survived theKorean War (1950–53). From the end of WorldWar II, South Korea remained largely dependenton U.S. aid until an internal revolution occurredin 1961.In 1961, General Park Chung Hee graspedpolitical power and decided the country shouldbecome self-reliant by utilizing five year plans.
FIVE Years PlanThe plans were designed to increase wealth within South Korea and strengthen politicalstability. A change in policy from import substitution industrialization to export-orientedgrowth occurred throughout these five year plans. South Korea had three five year plansunder the auspices of the Economic Planning Board, a state bureaucracy pilot agency.
FIVE Years Plan1st Decade ; 1962–1966The first plan sought to benefit the textile industry and make South Korea self-sufficient.At the time, Koreas status was as a capital poor, inadequate saving, and predominantlyU.S.-financed state, in need of independence.
FIVE Years Plan2nd Decade ; 1967–1971The second five year plan sought to shift the South Korean state into heavy industry bymaking South Korea more competitive in the world market, which was incorporated into allfuture five year plans. U.S.-Chinas opening up in 1972 led to a greater competitivemarketplace for South Korean goods and services. Fears also prevailed that the U.S. wouldno longer provide military defense for South Korea. Lumber Industry Mid East Construction HYUNDAI Shipyard POHANG Steel HYUNDAI Motor KUKJE Shoes
FIVE Years Plan3rd Decade ; 1972–1976Park Chung Hee implemented the third five-year plan which was referred to as the HeavyChemical Industrialization Plan (HCI Plan) and, also, the "Big Push". To fund the HCIP, thegovernment borrowed heavily from foreign countries (not foreign direct investment, so that itcould direct its project), which led to South Koreas vulnerability in the East Asian financialcrisis of 1997. GEOJE Petro Chemical ULSAN Refinery Factory Synthetic Fabrics Industry Park Paint LG Fertilizer Logistics
Indicator – as of 2010 Import & Export Records Trade VolumeThe Republic of Korea is now the 11th largest economy in the world. However, 60 years ago, it was just apoor country in the East.In the early 1960s, the export items of Korea were mostly natural resources and marine products, but theKorean governments policy to encourage exports, which began in earnest in 1965, brought about adramatic change in the export items.In 1970s, wigs emerged as a main export item and in 1980s, automobiles, shipbuilding and semiconductorsbecame key export items. These items have been leading Koreas export industry until now and the worldhas acknowledged the quality of the products.With the change in the export items, the export volume of Korea has also shown a staggering growth overthe past 60 years. Koreas export amounted to 22 million dollars in 1948 and it showed a sharp increaseby 19201 times to 422.43 billion dollars in 2008.On the contrary, the import amounted to 208 million dollars in 1948 and it only rose by 2093 times to435.41 billion dollars in 2008.As the volume of the export and import expanded, the trade volume increased by 3730 times. The tradeamounted to 230 million dollars in 1948 and it skyrocketed to 857.84 billion dollars in 2008.
Indicator GDP Per Capita Income AVR Monthly Income by City WorkersThe GDP of Korea was 1.3 billion dollars in 1953. It constantly increased and last year, it amounted to1,239 billion dollars, which is an increase by 788 times compared to the year 1953.As the economic scale became larger, per capita income surpassed 20 thousand dollars. In 1953, PerCapita Income was 67 dollars. It rose to 1000 dollars in 1977 and 5000 dollars in 1989. In 1995, itsurpassed 10000 dollars and in 2007, it finally reached 20 thousand dollars in 2010The Average Monthly Income of City Workers also dramatically increased. It increased by 650 times from5990 won in 1963 to 3.895 million won in 2008.Over the past 60 years, the government and people of Korea have made concertedefforts for the economic development. The world has acknowledged the Miracle on theHan River and Korea has successfully transformed from the poorest country in theEast to the 11th largest economy in the world.
ECONOMIC DEVELOPMENT PROCESSFactors behind Korea`s Economic DevelopmentKorea`s industrial and economic growth has been outstanding since the 1960s.The GNP per capita grew from $82 in 1962 to $1,000 in 1977, and then to $10,000 in the world.Korea has achieved this outstanding performance despite unfavorable initial conditions for development,such as limited natural resources, a narrow domestic market, negligible domestic saving, and a lackof development experience.Most Korean industries were underdeveloped before 1945.Soon afterward, the country was devastated by the Korean War.More than half of the manufacturing capacity, including the railroad network and electricity generatingcapacity, was destroyed.The average annual income of the 22 million people in Korea was less than $100 in 1960 and housingconditions were very bad, with only 18% of households connected to running water.Further, Korea is relatively small in terms of land with one of the highest population densities in the world.Korea is mostly mountainous having less than a quarter of its land suitable for cultivation and has fewmineral reserves.Given such conditions and experience, it is not surprising that the Korean economy has been widely labeledan “Economic Miracle."
ECONOMIC DEVELOPMENT PROCESSHow was this rapid economic growth possible?No single factor can account for Korea`s economic success over the last 30 years.It is generally accepted that Korea`s successful growth and rapid ascent in the world economy isattributable to the government`s outward-looking development strategy, the high level of education,and favorable international economic conditions.The high level of education in Korea contributed tremendously to its economic development.Due in part to the traditional Confucian emphasis on education. Korea achieved a literacy rate of nearly80% by the early 1960s, the highest of any country at a similar level of development.This high level of education greatly facilitated the nation`s first economic takeoff.The abundant supply of highly educated and motivated human resources was extremely favorable to therapid growth of the export-oriented, labor-intensive manufacturing sector.With increasing income, the demand for higher education has continued to grow, and enrollment in thenation`s colleges and universities rose from less than 140,000 in 1966 to over two million in 1996.Without this continuing improvement in education it would not have been possible for Korea to upgrade itslabor force in line with the growing sophistication of its industries as well as sustaining continuous increasesin productivity.In short, an abundant supply of labor with a relatively high educational background and a strongmotivation to work not only provided favorable initial conditions for the Korean economy to take off in theearly 1960s, but has also continued to be the primary source of growth in the Korean economy thereafter.The favorable international economic environment is yet another factor related to Korea`s economic growth.Korea has benefited from a relatively open world trading system.Furthermore, world trade expanded rapidly, by 8% per year in real terms between 1962 and 1975.
ECONOMIC DEVELOPMENT PROCESSStages of Korea`s Industrial DevelopmentThe growth record of Korea has been spectacular. Over the four decades after the end of the Korean War,real gross domestic product grew at an average rate of more than 8% per year, with the growth being evenfaster if attention is focused on the 25 years after 1965.The engine behind this growth has been the manufacturing sector.The changes in structure and orientation of this sector over the period have been dramatic. The compositionof the manufacturing sector has shifted from food, beverages, tobacco, and textiles in the early 1960sto(and) chemicals, non-metallic mineral products, to basic metals in the 1970s, to machinery andtransport equipment in 1980s, and to automobile and electronics in the 1990s. Thus, there has been aremarkable diversification of industry from consumer to producer industries and from light to heavy andhigh technology industries.
ECONOMIC DEVELOPMENT PROCESS The six phases in the development of the manufacturing sector in Korea :1. In the 1950s the manufacturing sector developed on the basis of production for the domestic market (import-substituting industrialization). U.S. aid was crucial in financing the large trade deficit.2. As U.S. aid dried up in the 1960s, the emphasis switched to the export of manufactured goods. Government policy (including trade, exchange rate, finance, and infrastructure) was geared to promoting the growth of nationally-owned industrial companies with high export con-tent. During the 1960s and early 1970s, Korea based its growth on light industries: Wigs, footwear, textiles, and other labor-intensive products.3. The oil shock in 1973-74 forced Korea to respond quickly to a worsening trade balance. As a result, the government modified its out-ward-looking development strategy. Korea turned to heavy and chemical industries such as steel, shipbuilding, chemicals, construction, and industrial machinery.4. In the early 1980s, Korea faced severe economic problems. For the first time in two decades, a negative GNP growth rate was recorded in 1980. This sudden drop can be attributed to a number of causes, including political in Korea, global stagnation caused by increasing oil prices, high interest rates, increased barriers imposed by developed countries against imports of Korean good, and a poor domestic agricultural crop. However, the Korean economy recovered rapidly by the mid 1980s. As oil prices stabilized, international economic conditions moved in Korea`s favor. The government adopted strategies to liberalize the economy and to introduce greater competition in all sectors by relying more on market mechanisms.5. By the early 1990s, the heavy industries had come of age. The Steel & Poly industry was highly competitive in the world market, the car was increasingly developing its own technology. At the time, Korean automobile production capacity ranked fifth in the world.6. In the late 1990s, Korea was hit by a financial crisis forcing it to receive aid from the International Monetary Fund (IMF).
ECONOMIC DEVELOPMENT PROCESSHowever, it successfully overcame the crisis.In the twenty-first century Korea made remarkable progress in the knowledge industry, especially in theinformation technology (IT) and biotechnology (BT) sectors where its technologies lead many countriesin the world.The industries in which Korea moved ahead in global competitiveness were semi-conductor, shipbuilding,automobile, mobile communication, personal computers, steels, and chemical products.Korea became world number one in the sales of code division multiple access (CDMA) receivers, D-RAM, thin film transistor-liquid crystal display (TET-LCD), ships, and steels.Recently, Korean industry is threatened by increasing prices of raw materials, domestic labor marketinstability, and the advancement of Brazil, Russia, India, and China (BRIC).However, Korea is overcoming its situation by making progress in technology.As a member of the Organization for Economic Cooperation and Development (OECD), Korea is nowheading towards having developed country status.Korea`s growth prospects seem to be good.It has a well-educated labor force and a well-developed physical infrastructure.Korea has now reached a stage of development where a substantial impetus for growth is coming fromdomestic demand.Korea is emerging as one of the major centers for trade and industry in the world through rapid economicgrowth and successful industrialization.
Economy of South KoreaSouth Korea has a market economy which ranks 15th in the world by nominal GDP and 12th bypurchasing power parity (PPP), identifying it as one of the G-20 major economies.It is a high-income developed country, with a developed market, and is a member of OECD. South Korea isone of the Asian Tigers, and is the only developed country so far to have been included in the group of NextEleven countries. South Korea had one of the worlds fastest growing economies from the early1960s to the late 1990s, and South Korea is still one of the fastest growing developed countries in the2000s, along with Hong Kong, Singapore, and Taiwan, the other three members of Asian Tigers SouthKoreans refer to this growth as the Miracle on the Han River.Having almost no natural resources and always suffering from overpopulation in its small territory, whichdeterred continued population growth and the formation of a large internal consumer market, South Koreaadapted an export-oriented economic strategy to fuel its economy, and in 2010, South Korea was theseventh largest exporter and tenth largest importer in the world.Despite the South Korean economys high growth potential and apparent structural stability, South Koreasuffers perpetual damage to its credit rating in the stock market due to the belligerence of North Korea intimes of deep military crises, which has an adverse effect on the financial markets of the South Koreaneconomy. However, renowned financial organizations, such as the International Monetary Fund, alsocompliment the resilience of the South Korean economy against various economic crises, citing low statedebt, and high fiscal reserves that can quickly be mobilized to address any expected financial emergencies.South Korea was one of the few developed countries that was able to avoid a recession during the globalfinancial crisis. and its economic growth rate will reach 6.1% in 2010, a sharp recovery from economicgrowth rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis hit.
Economy of South KoreaSouth Korea was a historical recipient of official development assistance (ODA) from OECD. Throughoutthe 1980s until the mid 1990s, South Koreas economic prosperity as measured in GDP by PPP per capitawas still only a fraction of industrialized nations.In 1980, the South Korean GDP per capita was $2,300, about one-third of nearby developed Asianeconomies such as Singapore, Hong Kong, and Japan. Since then, South Korea has advanced into adeveloped economy to eventually attain a GDP per capita of $30,000 in 2010, almost thirteen times thefigure thirty years ago.The whole countrys GDP increased from $88 billion to $1,460 billion in the same time frame. In 2009, SouthKorea officially became the first major recipient of ODA to have ascended to the status of a major donor ofODA.Between 2008 and 2009, South Korea donated economic aid of $1.7 billion to countries other than NorthKorea. South Koreas separate annual economic aid to North Korea has historically been more than twiceits ODA.
Economy History of South KoreaThe growth of the industrial sector was the principal stimulus to economic development. In 1986,manufacturing industries accounted for approximately 30 percent of the gross domestic product (GDP) and25 percent of the work force. Benefiting from strong domestic encouragement and foreign aid, Seoulsindustrialists introduced modern technologies into outmoded or newly built facilities at a rapid pace,increased the production of commodities—especially those for sale in foreign markets—and plowed theproceeds back into further industrial expansion.As a result, industry altered the countrys landscape, drawing millions of laborers to urban manufacturingcenters. A downturn in the South Korean economy in 1989 spurred by a sharp decrease in exports andforeign orders caused deep concern in the industrial sector. Ministry of Trade and Industry analysts statedthat poor export performance resulted from structural problems embedded in the nations economy,including an overly strong won, increased wages and high labor costs, frequent strikes, and high interestrates.The result was an increase in inventories andsevere cutbacks in production at a number ofelectronics, automobile, and textile manufacturers,as well as at the smaller firms that supplied the parts.Factory automation systems were introduced toreduce dependence on labor, to boost productivitywith a much smaller work force, and to improvecompetitiveness. It was estimated that over two-thirdsof South Koreas manufacturers spent over half ofthe funds available for facility investments onautomation.
Rapid Growth from 1960s to 1980sSouth Koreas real gross domestic product expanded by an average of more than 8 percent per year, fromUS$2.7 billion in 1962 to US$230 billion in 1989, breaking the trillion dollar mark in 2007. Nominal GDP percapita grew from $103.88 in 1962 to $5,438.24 in 1989, reaching the $20,000 milestone in 2007. Themanufacturing sector grew from 14.3 percent of the GNP in 1962 to 30.3 percent in 1987. Commodity tradevolume rose from US$480 million in 1962 to a projected US$127.9 billion in 1990. The ratio of domesticsavings to GNP grew from 3.3 percent in 1962 to 35.8 percent in 1989.The most significant factor in rapid industrialization was the adoption of an outward-looking strategy in theearly 1960s. This strategy was particularly well suited to that time because of South Koreas poor naturalresource endowment, low savings rate, and tiny domestic market. The strategy promoted economic growththrough labor-intensive manufactured exports, in which South Korea could develop a competitive advantage.Government initiatives played an important role in this process. The inflow of foreign capital was greatlyencouraged to supplement the shortage of domestic savings. These efforts enabled South Korea to achieverapid growth in exports and subsequent increases in income.By emphasizing the industrial sector, Seouls export-oriented development strategy left the rural sectorrelatively underdeveloped. Except for mining, most industries were located in the urban areas of thenorthwest and southeast. Heavy industries generally were located in the south of the country. Factories inSeoul contributed over 25 percent of all manufacturing value-added in 1978; taken together with factories insurrounding Gyeonggi Province, factories in the Seoul area produced 46 percent of all manufacturing thatyear. Factories in Seoul and Gyeonggi Province employed 48 percent of the nations 2.1 million factoryworkers. Increasing income disparity between the industrial and agricultural sectors became a seriousproblem by the 1970s and remained a problem, despite government efforts to raise farm income andimprove rural living standards.
Ship BuildingDuring the 1970s and 1980s, South Korea became a leading producer of ships, including oil supertankers,and oil-drilling platforms. The countrys major shipbuilder was Hyundai, which built a 1-million-ton capacitydry-dock at Ulsan in the mid-1970s. Daewoo joined the shipbuilding industry in 1980 and finished a 1.2-million-ton facility at Okpo on Geoje Island, south of Busan, in mid-1981. The industry declined in the mid-1980s because of the oil glut and because of a worldwide recession. There was a sharp decrease in neworders in the late 1980s; new orders for 1988 totaled 3 million gross tons valued at US$1.9 billion,decreases from the previous year of 17.8 percent and 4.4 percent, respectively.These declines were caused by labor unrest, Seouls unwillingness to provide financial assistance, andTokyos new low-interest export financing in support of Japanese shipbuilders.However, the South Korean shipping industry was expected to expand in the early 1990s because olderships in world fleets needed replacing. South Korea eventually became the worlds dominant shipbuilderwith a 50.6% share of the global shipbuilding market as of 2008. Notable Korean shipbuilders are HyundaiHeavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and STXOffshore & Shipbuilding, the worlds four largest shipbuilding companies. South Korea also owns STXEurope, which is Europes largest shipbuilder.Shipbuilding is a flagship industry of South Korea that boomed since the 1960s
AutomobileThe automobile industry was one of South Koreas major growth and export industries in the 1980s. By thelate 1980s, the capacity of the South Korean motor industry had increased more than fivefold since 1984; itexceeded 1 million units in 1988. Total investment in car and car-component manufacturing was over US$3billion in 1989.Total production (including buses and trucks) for 1988 totaled 1.1 million units, a 10.6 percent increase over1987, and grew to an estimated 1.3 million vehicles (predominantly passenger cars) in 1989. Almost263,000 passenger cars were produced in 1985—a figure that grew to approximately 846,000 units in 1989.In 1988 automobile exports totaled 576,134 units, of which 480,119 units (83.3 percent) were sent to theUnited States.Throughout most of the late 1980s, much of the growth of South Koreas automobile industry was the resultof a surge in exports; 1989 exports, however, declined 28.5 percent from 1988.This decline reflected sluggish car sales to the United States, especially at the less expensive end of themarket, and labor strife at home. South Korea today has developed into one of worlds largest automobileproducers. Hyundai Kia Automotive Group is Koreas largest automaker
MiningMost of the mineral deposits in the Korean Peninsula are located in North Korea, with the South onlypossessing an abundance of tungsten and graphite. Coal, iron ore, and molybdenum are found in SouthKorea, but not in large quantities and mining operations are on a small scale. Much of South Koreasminerals and ore are imported from other countries.Most South Korean coal is low-grade anthracite that is only used for heating homes and boilers.
ConstructionConstruction has been an important South Korean export industry since the early 1960s and remains acritical source of foreign currency and invisible export earnings. By 1981 overseas construction projects,most of them in the Middle East, accounted for 60 percent of the work undertaken by South Koreanconstruction companies.Contracts that year were valued at US$13.7 billion. In 1988, however, overseas construction contractstotaled only US$2.6 billion (orders from the Middle East were US$1.2 billion), a 1 percent increase over theprevious year, while new orders for domestic construction projects totaled US$13.8 billion, an 8.8 percentincrease over 1987.The result was that South Korean construction companies concentrated on the rapidly growing domesticmarket in the late 1980s. By 1989 there were signs of a revival of the overseas construction market—theDong Ah Construction Company signed a US$5.3 billion contract with Libya for the second phase of LibyasGreat Man-Made River Project, which, when all five phases were completed, was projected to cost US$27billion. South Korean construction companies signed over US$7 billion of overseas contracts in 1989.Koreas largest construction companies include Samsung C&T Corporation, who had built noteworthyconstructs such as PETRONAS Towers, and Burj Khalifa
ConstructionGreat Manmade River Libya UAE Dubai Burj Khalifa on 23 December 2009
ArmamentSituated in the most heavily militarized region of the world, South Korea is an important manufacturer ofarmaments, both for domestic use and for export. During the 1960s, South Korea was largely dependent onthe United States to supply its armed forces, but after the elaboration of President Richard M. Nixons policyof Vietnamization in the early 1970s, South Korea began to manufacture many of its own weapons.Since the 1980s, South Korea, now in possession of more modern military technology than in previousgenerations, has actively began shifting its defense industrys areas of interest more from its previouslyhomeland defense-oriented militarization efforts, to the promotion of military equipment and technology asmainstream products of exportation to boost its international trade. Some of its key military export projectsinclude T-155 Firtina self-propelled artillery for Turkey; K11 air-burst rifle for United Arab Emirates;Bangabandhu class guided-missile frigate for Bangladesh; fleet tankers such as Sirius class for the naviesof Australia, New Zealand, and Venezuela; Makassar class amphibious assault ships for Indonesia; and KT-1 trainer for Turkey and Indonesia.South Korea has also outsourced its defense industry to produce various core components of othercountries advanced military hardware.Those hardware include modern aircraft such as F-15K fighters and AH-64 attack helicopters which will beused by Singapore and Japan, whose airframes will be built by Korea Aerospace Industries in a joint-production deal with Boeing.In other major outsourcing and joint-production deals, South Korea has jointly produced the S-300 airdefense system of Russia via Samsung Group, and will facilitate the sales of Mistral class amphibiousassault ships to Russia that will be produced by STX Corporation.South Koreas defense exports were $1.03 billion in 2008 and $1.17 billion in 2009, and South Korea aimsto increase the figure to $1.5 billion in 2010.
ArmamentT-155 Fırtına 155mm self-propelled howitzer S&T Daewoo K11Korea Dokdo-class amphibious assault ship Golden Eagle (Fighter) - ROK (Korea) Airplane
1990s and the Asian Financial CrisisFor the first half of the 1990s, the South Korean economy continued a stable and strong growth in bothprivate consumption and GDP. Things changed quickly in 1997 with the Asian Financial crisis.After several other Asian currencies were attacked by speculators, the Korean Won started to heavilydepreciate in October 1997.The problem was exacerbated by the problem of non-performing loans at many of Koreas merchant banks.By December 1997, the IMF had approved a USD $21 billion loan, that would be part of a USD $58.4 billionbailout plan.By January 1998, the government had shut down a third of Koreas merchant banks.Throughout 1998, Koreas economy would continue to shrink quarterly at an average rate of -6.65%.Korean chaebol Daewoo became a casualty of the crisis as it was dismantled by the government in 1999due to debt problems.American company General Motors managed to purchase the motors division. Indian conglomerate TataGroup, purchased the trucks and heavy vehicles division of Daewoo.Actions by the South Korean government and debt swaps by international lenders contained the countrysfinancial problems.Much of South Koreas recovery from the Asian Financial Crisis can be attributed to labor adjustments (i.e. adynamic and productive labor market with flexible wage rates) and alternative funding sources.By the first quarter of 1999, GDP growth had risen to 5.4%, and strong growth thereafter combined withdeflationary pressure on the currency lead to a yearly growth of 10.5%.In December 1999, president Kim Dae-Jung declared the currency crisis over
2000sAfter the bounce back from the crisis of the late nineties, the economy continued strong growth in 2000 witha GDP growth of 9.08%. Growth fell back to 3.8% in the early 2000s because of the slowing global economy,falling exports, and the perception that corporate and financial reforms had stalled.Thanks to industrialization GDP per hour worked (labor output) more than tripled from US$2.80 in 1963 toUS$10.00 in 1989. More recently the economy stabilized and maintain a growth rate between 4-5% from2003 onwards.Like most industrialized economies, Korea suffered significant setbacks during the late-2000s recession thatbegan in 2007. Growth fell by 3.4% in the fourth quarter of 2008 from the previous quarter, the first negativequarterly growth in 10 years, with year on year quarterly growth continuing to be negative into 2009.Most sectors of the economy reported declines, with manufacturing dropping 25.6% as of January 2009,and consumer goods sales dropping 3.1%. Exports in autos and semiconductors, two critical pillars of theeconomy, shrank 55.9% and 46.9% respectively, while exports overall fell by a record 33.8% in January,and 18.3% in February 2009 year on year. As in the 1997 crisis, Koreas currency also experiencedmassive fluctuations, declining by 34% against the dollar. Annual growth in the economy slowed to 2.3%in 2008, and was expected to drop to as low as -4.5% by Goldman Sachs, but South Korea was able tolimit the downturn to a near standstill at 0.2% in 2009.Despite the global financial crisis, the South Korean economy, helped by timely stimulus measures andstrong domestic consumption of products that compensated for a drop in export, was able to avoid arecession unlike most industrialized economies, posting positive economic growth for two consecutive yearsof the crisis. In 2010, South Korea made a strong economic rebound with a growth rate of 6.1%, signaling areturn of the economy to pre-crisis levels. South Koreas export has recorded $424 billion in the first elevenmonths of the year 2010, already higher than its export in the whole year of 2008.The South Korean economy of the 21st century, as a Next Eleven economy, is expected to grow from 3.9%to 4.2% annually between 2011 and 2030, similar to growth rates of developing countries such as Brazil orRussia.[
High-tech industries in the 1990s and 2000sIn 1990, South Korean manufacturers planned a significant shift in future production plans toward high-technology industries. In June 1989, panels of government officials, scholars, and business leaders heldplanning sessions on the production of such goods as new materials, mechatronics—including industrialrobotics—bioengineering, microelectronics, fine chemistry, and aerospace. This shift in emphasis, however,did not mean an immediate decline in heavy industries such as automobile and ship production, which haddominated the economy in the 1980s.South Korea relies largely upon exports to fuel the growth of its economy, with finished products such aselectronics, textiles, ships, automobiles, and steel being some of its most important exports.Although the import market has liberalized in recent years, the agricultural market has remained largelyprotectionist due to serious disparities in the price of domestic agricultural products such as rice with theinternational market.As of 2005, the price of rice in South Korea is about four times that of the average price of rice on theinternational market, and it was generally feared that opening the agricultural market would have disastrouseffects upon the South Korean agricultural sector. In late 2004, however, an agreement was reached withthe WTO in which South Korean rice imports will gradually increase from 4% to 8% of consumption by 2014.In addition, up to 30% of imported rice will be made available directly to consumers by 2010, wherepreviously imported rice was only used for processed foods. Following 2014, the South Korean rice marketwill be fully opened.
RecentIn the early 1980s, in order to control inflation, a conservative monetary policy and tight fiscal measures wereadopted. Growth of the money supply was reduced from the 30 percent level of the 1970s to 15 percent. Seouleven froze its budget for a short while. Government intervention in the economy was greatly reduced andpolicies on imports and foreign investment were liberalized to promote competition. To reduce the imbalancebetween rural and urban sectors, Seoul expanded investments in public projects, such as roads andcommunications facilities, while further promoting farm mechanization.These measures, coupled with significant improvements in the world economy, helped the South Koreaneconomy regain its lost momentum in the late 1980s. South Korea achieved an average of 9.2 percent realgrowth between 1982 and 1987 and 12.5 percent between 1986 and 1988. The double digit inflation of the1970s was brought under control. Wholesale price inflation averaged 2.1 percent per year from 1980 through1988; consumer prices increased by an average of 4.7 percent annually. Seoul achieved its first significantsurplus in its balance of payments in 1986 and recorded a US$7.7 billion and a US$11.4 billion surplus in 1987and 1988 respectively. This development permitted South Korea to begin reducing its level of foreign debt. Thetrade surplus for 1989, however, was only US$4.6 billion dollars, and a small negative balance was projectedfor 1990.In recent years, Koreas economy moved away from the centrally planned, government-directed investmentmodel toward a more market-oriented one. South Korea bounced back from the 1997-98 Asian financial crisiswith assistance from the International Monetary Fund (IMF), but its recovery was based largely on extensivefinancial reforms that restored stability to markets. These economic reforms, pushed by President Kim Dae-Jung, helped Korea maintain one of Asias few expanding economies, with growth rates of 10.8% in 1999 and9.2% in 2000. Growth fell back to 3.3% in 2001 because of the slowing global economy, falling exports, and theperception that much-needed corporate and financial reforms have stalled. Led by industry and construction,growth in 2002 was 5.8%, despite anemic global growth. Restructuring of Korean conglomerates, bankprivatization, and creating a more liberalized economy with a mechanism for bankrupt firms to exit the marketremain Koreas most important unfinished reform tasks. Growth slowed again in 2004, but production expanded5% in 2006, due to popular demand for key export products such as HDTVs and mobile phones.
TourismIn 2007, South Korea had 6.4 million visitors making it the 36th most visited country in the world.Recently, the number of tourists from China, Taiwan, Hong Kong, and Southeast Asia has grown dramaticallydue to the increased popularity of the Korean wave ("hallyu").Seoul is the principal tourist destination for visitors; popular tourist destinations outside of Seoul includeSeorak-san national park, the historic city of Gyeongju and semi-tropical Jeju Island.
Sustainable Development for GEORGIA - Blind Section of Economic Growth -Many developing nations pursuing rapid industrialization and economic prosperity look to Korea as a Model.As this Article discusses, however, Koreas economic advancement came with a price. While Korea realizedtremendous economic expansion in a relatively short period of time, the pressure placed on theenvironment as a result of this expansion revealed the importance of balancing industrialization withenvironmental protection.Koreas first national environmental law, the Pollution prevention Act [PPA] was enacted in 1963. That yearwas the first year of Koreas initial five-year economic plan initiated by then President Park Chung Hee, asymbolic hero of the Korea economic miracle.As with most developing countries Korea put first priority on economic development over environmentalprotection. In the middle of Ulsan City, a mecca of Korean industrialization, a monument tower displays thefollowing inscription : "Dark smoke arising from factories are symbols of our nations growth and prosperity."Korea has accomplished tremendous economic growth as evidenced by its average annual gross nationalproduct(GNP) growth rate of over eight percent - more then double that of most other countries.However, this success came at a cost and gave rise to a number of social ills. Korean people thoughteverything had to be done "faster and faster." In other words, "the Korea government and people ignoredthe deteriorating environment until [he 1980s despite worldwide concern for pollution be cause they weretoo busy concentrating on developing the economy and meeting basic needs." Korea concentrated onheavy industries(such as automobiles, steel, and shipbuilding) and petrochemicals, resulting in seriousdeterioration of the environment. Rapid urbanization made the situation much worse.
Sustainable Development for GEORGIA - Blind Section of Economic Growth -More than twenty-five percent of Koreas population lives within the city limits of Seoul. Indeed, Korea wasplagued by industrialization and urbanization along with limited land availability and population increases.Because of the severe environmental degradation that resulted from Koreas "poisoned prosperity," thepeople of Korea have reassessed the feasibility of the "faster and faster" idea. The Korean people havesuffered from a number of severe environmental harms, such as the dumping of phenol into the NakdongRiver.Therefore, in the wake of the countrys industrial growth in the late 1980s and 1990s, environmentalprotection became an "increasingly public issue.As environmental degradation emerged as a serious social problem, a wide scope of people beganparticipating in the efforts for environmental preservation.Activities by a number of environmental nongovernmental organizations (NGOs) have been thepredominant factor behind the publics increased awareness.People who had devoted themselves to the democracy movement in the 1970s and 1980s becameenvironmental preservation activities.This trend will continue because the Korean people are now more attuned to environmental issues than atany time in the past.The Korean government also realized that strong responses were urgently needed.
Sustainable Development for GEORGIA - Blind Section of Economic Growth -One of those responses was the strengthening of existing environmental laws.The PPA had been crippled by the absence of an environmental agency to oversee the enforcement of ltslaws and regulations ; hence, new statutes were enacted, numerous regulations promulgated, and newenvironmental agencies were created and elevated to the ministerial level to improve environmentalprotection. in 1977, the National assembly replaced the ineffective PPA with the environmental preservationact. Shortly thereafter in 1979, the environmental administration(EA) was established to "orchestrateenvironmental duties that were then spread out "among a host of ministries and agencies." in 1980s theconstitution of Korea was amended to provide all Korean people with the right to live in a healthy and cleanenvironment. while the now law provided for various administrative and criminal sanctions, it was not strictlyenforced. the governments priority was to rebuild the Korea economy, which had been shattered by politicalturmoil during the early 1980s.Furthermore, EA was structurally organized to deal primarily with pollution problems: "EA for the most partleft non-pollution control issues, such as those concerned with parks and wild life, to other divisions of thegovernment."in the early 1990s the Korea government launched a concerted effort to address the countrys mountingenvironmental concerns. the first step was to substantially rework the existing legislation and to promulgatenew laws to address pollution and other environmental issues. While Koreas legal system is heavilyinfluenced by the civil law traditions of Germany, the new environmental law system is modeled after that ofthe united states. for example, the most important Korean environmental law, the basic environmental policyact(BEPA) is patterned after the national environmental policy act(NEPA) of the united states. further, just asthe united states has a number of medium-specific statutes below NEPA, Korea also has similar statutesbelow BEPA.