South Korea's export-led industrialization

In 1960 South Korea was among the poorest countries in the world, with income per person in the same range as Ghana's, a ruined economy and a heavy dependence on US aid. By the 1990s it was a major exporter of ships, steel, cars and electronics, and in 1996 it joined the OECD, the club of rich economies. The change began after General Park Chung-hee seized power in May 1961 and launched the first Five-Year Economic Development Plan in 1962.¹²

The Korean War had left the country devastated and divided, with a huge army to support. Park's government copied parts of Japan's model: it directed bank credit to chosen exporters, rewarded firms that hit export targets and punished those that failed, and nurtured big family-run conglomerates called chaebol, such as Samsung, Hyundai and LG. A 1965 treaty normalizing relations with Japan brought in loans and grants. The state built the Seoul to Busan expressway in the late 1960s and the POSCO steel mill, and in 1973 pushed into heavy and chemical industries. Education spending and cheap, disciplined labor supported the effort.¹²

The costs were real: long hours, repressed unions and a government that jailed critics. Park was assassinated in 1979, and democracy arrived only in 1987. Economists still argue about the mix of state direction and market competition, but the sequence of protecting infant industries, pushing exports and acquiring technology became a template for development economists. Later waves, in semiconductors, displays, shipbuilding, and eventually K-pop and streaming, built on this base.¹