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South Korea after WWII

South Korea after WWII. Rain Chao David Foss Nancy Miao. There was once a country…. Autocracy Closed borders Massive slums Paradise of fake. Agenda. Historical review before 1953 Early postwar period – 1 st and 2 nd Five -y ear Plan s

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South Korea after WWII

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  1. South Korea after WWII Rain Chao David Foss Nancy Miao

  2. There was once a country… • Autocracy • Closed borders • Massive slums • Paradise of fake

  3. Agenda • Historical review before 1953 • Early postwar period – 1st and 2ndFive-year Plans • Economicdevelopmentin70’s, 80’sand90’s • 1997 AsianFinancialcrisis • Modern Day • Summary • Q&A

  4. Korea Pre-WWII • Colony of Japan 1910-1945 : agriculture & light industry in the south and heavy industry in the north http://blog.renren.com/share/259710201/7020409751

  5. WWII  Korean War • Division of Korea 1945 : 38 parallel North • Soviet-dominated Communist government in Pyongyang • Led by Kim Il Sung in North (Great Leader) South • U.S.-dominated anti-communist government in Seoul • Led by Syngman Rhee

  6. Korean War • North invaded South 1950 • UN army dominated by U.S. force sent troops to South • Soviet stayed out of it • UN army crossed 38 parallel, China sent troops to North • Truce, rather than a permanent peace treaty 1953 – never ends • Impact on Korea • Enormous destruction in both halves, greatly set back economic growth • Killed 215,000 (north) and 415,000 (south) • Heightened North-South bitterness, tension, and mutual paranoia

  7. 1950s: Period of saving potential energy • Post-war situation of South Korea • Agricultural country, lack of industrial system and infrastructure construction • American military aid • Military autocracy government • Built infrastructure construction • Highway and railway • Power station and telegraph pole • Anti-illiteracy campaign

  8. 1960s: transforming potential energy into kinetic energy • 1961, General Park staged a coup and seized power • Began to form authoritarian government • 1962-1966: 1stFive Year Plan • Goal: to build a self-reliant industrial structure • 1967-1971: 2ndFive Year Plan • Goal: to modernize the industrial structure and to develop export-oriented industrial development strategy • Build up state companies

  9. 1960s: transforming potential energy into kinetic energy • U.S.’s development assistance policy • Capital and technology assistance • Japan’s economic assistance • Normalization of relations • Since 1966, massive financial and technical assistance • Supported U.S.’s military action in Vietnam • Gained economic and political benefit

  10. Part 2 – Rain

  11. Heavyindustryin70’s • Policiestopromote heavy industry:chemicals, electronics,automobiles,andshipbuilding • The3rdand4thFive-year Plans:export-oriented industrial structure • Over25%ofallmanufacturingvalue-addedin1978

  12. Goldentenyears(1982-1991) • The5thFive-yearPlans:technology-intensive industries • The6thFive-yearPlans:increasedinvestmentintheR&Dandmanpowertraining • Technologymanufacturerandhigh-techmiracle

  13. chaebol • Large, familycontrolledfirmsofSouthKorea • Modeledofthezaibatsusystem • Twoimportantfactors:foreignloansandspecialfavor • Tradedeficitin1985toatradesurplusin1986 • 13chaebolwererankedintheFortuneGlobal500 • Advancedinglobalmarket

  14. Stableperiodin90’s • The 7th Five-year Plans:promote high-technology fields • 1996-Join Organization for Economic Co-Operation and Development(OECD) • 1997-Asian Financial Crisis • 11chaebolcollapsed • DaewooGroup:$80billionunpaiddebt

  15. Financialcrisis • Over borrowing by chaebol • Debtratio of the thirty major chaebolwas 500% • Lowsavingrate • RescueplanfromIMFof $58.4 billion standby arrangement Source: GlobalFinancemagazine Householdsavingrateshttp://www.gfmag.com

  16. Part 3 - David

  17. Consequences of“IMF crisis” • Currency crisis – weakening of KRW

  18. Consequences of IMF crisis • IMF bailout money ~ $60billion • Conditions • Less regulation: free float currency and loosen stock price fluctuation • Open markets to foreigners, allow Korean companies to be foreign owned http://www.economywatch.com/economic-statistics/Korea/Current_Account_Balance_Percentage_GDP

  19. Economy Today- FTA • Often used tool to boost exports • Eliminate most tariffs between trading partners • 5 FTAs in effect • 3 FTAs in conclusion stages • 19 FTAs in negotiation or consideration Korea-US FTAKorea-EU FTAKorea-EFTA (European Free Trade Area; Iceland, Norway, Lichtenstein, Switzerland) Korea-Peru FTAKorea-Chile FTAKorea-Singapore FTAKorea-India CEPA FTAKorea-ASEAN FTA http://www.economywatch.com/world_economy/south-korea/export-import.html

  20. Economy Today - Export economy • Economic focus on exports • 7th in the world • $559 billion (2011) worth of exports • $525 billion (2011) worth of imports

  21. Heavy Industry - Shipbuilding • Shipbuilding • Hyundai Heavy Industries, Samsung HI, Daewoo Shipbuilding & Marine Engineering, STX http://www.sajn.or.jp/e/statistics/Shipbuilding_Statistics_Sep2011e.pdf

  22. High tech • Component supplier & Contract manufacturing to Name brands • Components • LCD screens • Chip fabrication • Connectivity • Regarded as best broadband system in the world

  23. Culture exports Hallyu – Love of Korean pop culture

  24. Summary • Growth out of destruction and hardship • Domination of chaebol and government cooperation • Economic transformation • Agriculture  Light industry  Heavy Industry  Growing Hi-tech • Export Map 1962  2009

  25. Q&A

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