Introduction
As an emerging developed country, South Korea is world-renowned for its achievements in machinery, electronics, cosmetics, and shipbuilding industries. However, South Korea was still an extremely backward country 60 years ago. South Korea was a mess after the Korean War. So how did South Korea develop in a mess? The author believes that the rise of South Korea is mainly determined by two aspects. One is that it depends on a relatively favorable international environment. In particular, the support from the United States during the Cold War and the opportunity for western countries to transfer labor-intensive industries abroad; in addition, in terms of politics, South Korea’s unique “authoritarian” political system provides institutional guarantees for the rapid economic rise of South Korea.
The relatively favorable international situation
The Cold War
Although the Cold War kept South Korea living under the dark cloud of war in North Korea, it also objectively provided South Korea with a relatively stable international environment where it can quickly obtain external technical assistance. With the escalation of the contradictions between the two superpowers of different ideologies, the United States and the Soviet Union, the Cold War that has lasted for more than 40 years kicked off, and the Korean War was a sign of its peak. South Korea, which is geographically closest to socialist China, the Soviet Union and North Korea, has become one of the best choices for the United States to choose the front line of the Asian Cold War. Therefore, since the establishment of the South Korean government, it has been a country that the United States has focused on military and economic assistance (Koo 1993).
However, before 1961, because of the chaos of the South Korean government and other reasons, US aid has not been transformed into a driving force for South Korea’s economic growth, thus failing to provide the economic foundation for South Korea to become a pioneer in political resistance to socialism (Jervis 1980). This phenomenon was caused by the attention of the United States. After the Kennedy administration came to power in 1961, it made major adjustments to the US foreign aid policy. The U.S. policy toward South Korea is adjusted to promote South Korea to become a country that can develop freely and resist aggression (Jervis 1980).
Therefore, the U.S. government has decided to reduce financial assistance to South Korea on the one hand, and on the other hand to increase assistance in trade and strengthen intervention in South Korea’s economic decision-making, urging South Korea to achieve economic independence at an early date. The economic development orientation of the Park Jeong-hee government in South Korea is linked to the strategy of the US government. With the help of the United States, the Park Jeong-hee government began to formulate and implement the first five-year plan in 1962, forming an industrialization led by a strong government and modelling to establish an independent economic foundation(Clifford 2011).
Taking advantage of the opportunity of capitalist countries headed by the United States to reduce trade fortresses within the camp under the international situation of the Cold War, and to implement the freedom of import and export of internal countries, South Korea put forward the slogan of “export first” when the Park Chung-hee administration first came to power.
Vigorously develop import substitution industries, and the United States has also implemented substantial import and export trade preferences for South Korea, making the United States have been South Korea’s largest export market for a long time. Even in 1972, exports to the United States accounted for 47.1% of total exports (Deyo 1987).
In addition, the United States has also made every effort to promote the establishment of diplomatic relations between Japan and South Korea. Out of considerations of the Cold War, the United States realized the importance of Japan and South Korea to restore diplomatic relations and jointly resist the socialist camp. Therefore, the U.S. government does everything possible to promote the normalization of diplomatic relations between Japan and South Korea by putting pressure on the governments of Japan and South Korea (Me-Jin& Hideo 1982). Since the beginning of the normalization of diplomatic relations between Japan and South Korea, this has brought urgently needed industrial technology to South Korea and this became the first step in the rise of South Korea.
The industrial transfer in capitalist developed countries
The second factor affecting the rise of South Korea is whether South Korea can seize the opportunity of industrial transfer from developed countries. South Korea’s transfer of international industries first occurred in the second international industrial transfer in the 1960s, and the main sources were the United States and Japan, where the rapid industrial upgrade was completed. Since the 1960s, the third scientific and technological revolution has reached its climax in the United States.
The rapid increase in productivity has allowed the country to accumulate a large amount of capital and develop capital-intensive industries such as steel and chemicals. At the same time, the development of high value-added technologies such as electronics and aerospace, capital-intensive import substitution industries, and the elimination of labor-intensive industries to developing countries have become an inevitable trend(Hoffenberg 1989).South Korea, which is at the forefront of resisting the socialist Soviet economic model, has become the first choice of the United States. Therefore, the United States does everything possible to transfer labor-intensive industries to South Korea. Japan, with its rapid economic development and accelerating industrial upgrading, has accumulated a large amount of capital and concentrated its efforts on the development of export-oriented capital-intensive industries such as steel, chemicals, automobiles, and machinery. The outward transfer of labor-intensive industries has also become a trend.
The normalization of diplomatic relations between South Korea and Japan in 1991 provided an opportunity for the two parties to transfer their industries(Hoffenberg 1989).Therefore, with its abundant and cheap labor, South Korea seized the international opportunities of developing capital-intensive industries and transferring labor-intensive industries to developing countries in developed countries led by the United States and Japan during this period, and became a labor-intensive industry country. South Korea has developed a large number of labor-intensive industries, mainly textiles, clothing and other light textiles, and exported finished products to countries such as the United States and Japan, which has enabled South Korea’s economy to grow rapidly in a short period of time. In particular, the export value of light industrial products has increased significantly. According to statistics, in 1970, the export value of South Korean light industrial products accounted for 69.6% of its total exports (Koo 1984)).
Therefore, under the aegis of the major capitalist countries, South Korea made full use of the opportunity of industrial transfer from capitalist countries to introduce industries eliminated by developed countries. The first time it focused on light industry and the second time it focused on heavy and chemical industries. And pay special attention to the introduction and absorption of advanced technology, which has successfully promoted economic development.
The authoritarian system
Compared with other developed countries, South Korea’s economic rise is not a “bottom-up” democratic approach; on the contrary, it has formed a “top-down” state-led economic development way, even though the state power is in the hands of the military government headed by Park Jung-hee (Cotton 2006). Because its economic development is based on the authority of national violence, this system is called an “authoritarian system”.
Its main feature is that under the premise of protecting the private property rights system, state power and market power are highly integrated. The government uses the power of the country to formulate economic plans, determine development goals, and use various resources to effectively promote rapid economic growth(Juan 1975). The “visible hand” of the government is active and powerful, and is always present. First of all, industrial policy is the main lever used by the Park Jung-hee regime to intervene in economic life.
At different stages of economic growth, the government has determined priority development target industries in accordance with the national development strategy, and provided full support in terms of funds, technology, resources, and information. Early-emerging endogenous modernization countries did not have the concept of industrial policy for a long time, because they have enough time for the market to allocate resources without the government’s labor. However, for South Korea, which has developed exogenous modernization, “the significance of industrial policy lies in the fact that, without waiting for the market to complete spontaneous adjustments, this kind of resource allocation is carried out through government policies, and the adjustment of the industrial structure can be realized in a relatively short period of time. And industrial reorganization to catch up with or exceed the international advanced level, so as to achieve economic or non-economic national goals.
Secondly, economic planning is the central means of the Park Jung-hee regime to guide economic development. From the “5.16 Military Revolution” to the assassination of Park Jung-hee, South Korea has implemented four five-year plans. Except for the fourth five-year plan due to the oil crisis and domestic political turmoil during the period, the growth rate failed to reach the expected target. The actual growth rate of each of the five-year plans exceeded the planned target (Amos 1988).
The significance of the economic plan is extraordinary. It determines the country’s development direction and economic development stage goals for a long period of time, and creates the necessary conditions for a backward and poor country to achieve economic take-off. The process of plan formulation has essentially become a process of mobilization. By formulating plans to absorb various social forces into the existing political framework, the administrative quality and capabilities of the bureaucracy have been improved in formulating and implementing plans.
Thirdly, the development strategy is an important measure taken by the Park Jung-hee regime to revitalize the economy. This kind of development strategy is usually called “export-oriented.” It has four elements: one is to encourage foreign direct investment, the other is to implement exchange rate reform, the third is to adopt various measures to promote exports, and the fourth is to allow import liberalization. The export industry drives the growth of the entire manufacturing industry, and the growth of the manufacturing industry promotes the growth of the entire national economy. In this process, the structure of the national economy has undergone profound changes, and South Korea’s economic take-off occurred during this period.
In short, in economic operations, the government’s active and extensive intervention is a significant feature of South Korea’s economic development. However, this kind of intervention is not a “command economy”. Although it has commands and is not a “compulsory economy”, although it has regulations, it is not based on the character of repelling the market, but it is precisely to make up for the lack of market as its responsibility. Organize and cultivate on the market.
Therefore, the success of South Korea is the success of its political leadership and the success of the government in guiding the economy, because the government guides the economy in accordance with the laws of the market. While using the power of the government to promote the most reasonable distribution of limited resources, it actively cultivates the market and develops the market system, so that economic activities are full of vitality, and the government’s comparative advantage in economic development and the comparative advantage of the market burst out at the same time. This led to the rapid growth of the Korean economy.
Conclusion
In general, the rise of South Korea is inseparable from the economic and military assistance that the United States has provided to South Korea due to the Cold War’s need to fight the Soviet Union. Meanwhile, South Korea benefits from the transfer of labor-intensive industries due to the industrial upgrading needs of developed countries. Finally, because the military government headed by Park Jong-hee backed by the state’s violent organs, it swept out the factors that hindered economic development, allowing the country to concentrate its efforts on economic development. These three factors have created Korea as a member of developed countries today.
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