W4 - The Korean Economy Flashcards
What was Korea’s GDP per capita like at the turn of the 20th century?
Korea was one of the poorest nations in the world, poorer than Afghanistan. Less than $50 a year in GDP per capita
When was the ‘Great Korean Empire’?
1897-1910
When did Japan annex Korea?
1910-1945
What happened between 1945-1948 in Korea
US military administration
When was the Korean War?
1950-1953
When was the Park Chung Hee era?
1961-1979
When was the accelerated growth era in Korea?
1980-1992
When did Korea become a full democracy?
1987
How much did Korea grow by nearly every year during the accelerated growth era?
10% every year
What did Korea do between 1993-1996?
Financial liberalisation and joining the OECD
What happened to Korean growth after the Asian financial crisis?
It continued to growth but at a rate not as strong as before
When was the Joseon dynasty?
AD1392-1897
What is the ideology during the Joseon dynasty?
Neo-Confucianism
What was the trading environment of Korea like during the Joseon dynasty?
Inward and oppressive society and closed economy except for state controlled trades with China
How did Japan extract resources from Korea?
Japan learnt from Great Britain and the Netherlands (Oriental Development Co) which did all the extraction.
What are the 4 levels of the Korean caste system?
Yangban (scholar gentry)
Chugin (middle class)
Sangmin (commoners)
Cheomin (slaves)
What types of institutions did the Japanese establish?
A system of property rights, banking and insurance, modern educational institutions, share-holding companies, judicial systems
How did Korea change after Japanese annexation?
The Japanese brought technology and institutions.
Life expectancy increased too.
Japanese capitalists set up companies in Korea.
Koreans became second class citizens of Japan (90% labourers).
When did Japan invade Manchuria and what was the impact on Korea?
1931, set up lots of industry in the North
During the later part of Japanese colonialisation of Korea, which part was richer and why?
North Korea was richer than South Korea during the later part of the colonial period because the industrial plants were in the North. There were more schools in North Korea.
How did Japanese rule effect social and political frameworks in Korea?
It failed to bring stability to them as it was largely extractive
What percentage of Koreans were in absolute poverty in 1945?
75% with high child mortality and low literacy rates
Who was the first leader of the Korean republic (1948)?
Syngman Rhee
How many people were killed or wounded in the Korean War?
2.5 million
What was the issue with the line of defence the Americans created?
It covered Japan but not Korea and started the Korean war
Why did South Korea refuse to sign the Korean Armistice?
South Korea refused to sign the treaty so the US did instead. They refused because he thought that the Americans would withdraw the military if he signed it.
Why could Syngman Rhee not puruse laissez-fraire economics?
Was initially in favour of Laissez-faire, but the US said he had to introduce land reform because of concern around Communist advances from the North
What did the Syngman Rhee government do?
- Land reform
- Set up national constitution
- Obtained a US defence treaty
- Relied on foreign aids and overvalued exchange rate (for import substitutions)
Why did Korea deliberately overvalue it’s exchange rate?
To make imports cheaper
Who did the Korean’s take as the inspiration for their constitution?
Germany
Why did communist ideas from the North begin getting support in the South?
Because of land disputes between landlords and tenant farmers
What act laid the basic groundwork for economic development to take place in the 60s and 70s?
The Land reform bill in 1949 that transferred units of land to farmers
Where was much of the army educated?
In Japanese military schools
What was the main economic policy taken on by Park Chung-Hee?
Since 1965 he adopted a pragmatic export led growth strategy with benchmarking of Japan’s industrialisation
Where did Park aim to break the vicious cycle of poverty?
Tried to break the link between low savings and low investment
Why did Park model it’s industrialisation efforts off of Japan?
Because of Park’s experience in the Japanese army in Manchuko
How did the ‘export led growth strategy work’?
By picking winners through competition and imposing export disciplines and then allocating resources through the government to the winners
What were export disciplines?
Export disciplines meant that you would not receive assistance from the government unless you achieved export targets every year
How did Park break the vicious cycle of poverty?
- Benchmarked Japan
- Export led growth strategy
- Savings and capital accumulation
- Developed Skilled Workers
- Chaebols
- 5 year incremental plans
What was the line that the US security assurances did not cover that left SK vulnerable to the Korean war?
The Line of Acheson
