South Korea

Question 1

When did industrialization start?

Answer 1

1960s

Question 2

How did growth start?

Pre-condition to ‘take off’ Rostow Model

Answer 2

5 year plan

Policy shift from inward-looking growth to outward-looking of export promotion

Basically to promote exports of light manufactured goods, using their comparative advantage of cheap labour.

Question 3

HCI Part 1

Answer 3

Got more emphasis due to changes of external economic environment.

Demand for skilled workers grew domestic wages, accelerated urbanisation.

Question 4

HCI Part 2

Answer 4

1970s reached GNP growth of 11.2%

Over-investment in HCI and under-investment in light industries distorted Industrial structure.

Real wages also increasing faster than productivity.

Question 5

Rationalisation and Liberalisation in 1980s part 1

Answer 5

Gov forces firms with excess capacity to merge

Concentration of economic power increased as many firms were taken over by Korean conglomerates such as Chaebol

Question 6

Rationalisation and Liberalisation in 1980s part 2

Answer 6

Firms financial insolvent due to world recession following oil shock

Gov had to bail out firms for social stability

Gov restrictions relaxed to encourage FDI for competition and advanced foreign tech

Restructuring meant less in primary but more in secondary and tertiary

Question 7

Globalisation in 1990s

Age of mass consumption- Rostow

Answer 7

Market Liberalisation and democratism caused labour disputes and wage increases far above productivity

Reduced competitiveness and entrepreneurship

Sudden increase in disposable income led to excessive private spending.

Question 8

Economic Crisis 1997

Answer 8

Vulnerable from short-term debt and insufficient FX reserves.

Firms chose debt-financed growth to grow in size rather than profits

Unfavorable terms of trade shocks. Firms damaged foreign credibility, led to foreign capital flight.

Exchange rate of Won fell.`

Question 9

Financial sector reform

Answer 9

Called in IMF to make a stability program

Acquiring sufficient foreign reserves

Laying foundation for enhancing growth potential

Question 10

Corporate sector reform

Answer 10

aimed at efficiency

Objectives: reduce corporate debt, new governance structure

Tech giants agreed to realign their businesses

Question 11

Industrial Innovation

Answer 11

Worlds largest shipbuilding nation, 3rd largest for semi-conductors.

47% global market share for dynamic random access memory (DRAM).

Due to innovation, spectacular growth since 2000