South Korea: quick growth Flashcards
What happened in 1910 in Korea?
Japan invaded. They would stay for 35 years, trying to kill Korean culture.
How did Seoul look like after the Korean war?
In 1950 North and South went to war. Seoul had 1,5M people at the time, of which only 200k remained after the war. Nationwide, 1/10 people had died.
Describe the marathon run that SK has done?
South Korea has maintained high growth of >7% for 45 years. It contracted only twice (1980: oil shock, 1998: Asian Financial Crisis). They have done so in three stages: developmental dictatorship (Park Chunge-hee, Tokyo-educated), democratization, liberalization.
What was key in SK growth ambitions?
Internal market was too small, they had to export. They followed Japan’s example, and started massproducing simple things (toys, shoes, textiles). Park used the money for infrastructure and schooling, and devalued the currency.
How did Park view the chaebols? How did he handle them?
He despised them, like most people, and forced a few CEOs to parade in the streets with signs saying ‘I am a corrupt swine’. Only after executives complied with the master plan did he moderate, and went to have monthly meetings. Those who complied were richly awarded (waiving tariffs, sweep aside bureaucracatic obstacles etc.). He kept an eye on performance very sharply.
What happened to Park?
He was shot in the face during dinner by his intelligence chief. Is still seen by some people as the best ever president.
What is muneo kyeongyeong?
Octopus business. Chaebols. LG, Samsung, Daewoo (destroyed), Kia.
Who was KDJ?
Kim Dae Jung, next president. Park tried to kill him five times. KDJ believed democracy and free markets are two sides of the same coin. He threw the doors open to FDI., and allowed the least competitive firms to die (Daewoo).
How did the Asean Financial Crisis benefit SK?
The chaebol used to make crap. Executives working for Hyundai demanded other cars, they did not trust the cars themselves. Samsung was named Samsuck globally. This changed after the crisis.
Today, how much % of GDP is accounted for with the top-30 chaebols?
82%. This is risky. Too big too fail companies generally become a moral hazard.
