Five-year plans of South Korea

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At the end of the Pacific War, Korea was divided. The United States Army Military Government in Korea gave way to a capitalist, anti-communist republic in South Korea that stood in contrast against the North Korean communist state. Both survived the Korean War (1950–53). Since the end of World War II, South Korea remained largely dependent on U.S. aid, however an internal revolution occurred in South Korea in 1961. The new rulers decided the country should become self-reliant by utilizing five year plans. They were designed to increase wealth within South Korea, and make it more politically stable. A change in policy from import substitution industrialization to export-oriented growth occurred through these five year plans.

South Korea had three five year plans under the auspices of the Economic Planning Board, a state bureaucracy pilot agency. The first was in 1962–1966 to benefit the textile industry and make South Korea self-sufficient. Korea's status as a capital poor, low saving, and predominantly U.S.-financed state was in need of independence. The second and third five year plans sought to shift the state into heavy industry between 1967–1971 and 1972–1976, making South Korea more competitive. U.S.-China's opening up in 1972 led to greater competition for Korean markets, and fearing that the U.S. would not provide defense for South Korea. Park Chung Hee implemented the third five-year plan was referred to as the Heavy Chemical Industrialization Plan (HCI Plan) and the "Big Push". To fund the HCIP, the government borrowed heavily from foreign countries (not foreign direct investment, so that it could direct its project), which led to South Korea's vulnerability in the East Asian financial crisis of 1997.

[edit] References

Park, P.H.,2000 "A Reflection on the East Asian Development Model: Comparison of the South Korean and Taiwanese Experiences," Thailand, Japan, and the East Asian Development Model, edited by Frank-Jurgen Richter, pages 141-168