Five-Year Plans of South Korea
The Five-Year Plans of South Korea (경제사회발전 5개년계획) is an economic development project of South Korea.
Both North and South Korea had survived the Korean War (1950–53). From the end of World War II, South Korea remained largely dependent on U.S. aid until an internal revolution occurred in 1961. In 1961, General Park Chung-hee seized political power and decided the country should become self-reliant by utilizing five-year plans.
The plans were designed to increase wealth within South Korea and strengthen political stability. A change in policy from import substitution industrialization to export-oriented growth occurred throughout these five-year plans. South Korea had three five-year plans under the auspices of the Economic Planning Board, a state bureaucracy pilot agency.
The first plan sought to expand electrical/coal energy industry, emphasizing importance on the infrastructure for establishing a solid foundation, agricultural productivity, export, neutralize balance of payments, and promote technological advancements.
Korean economy observed a 7.8% growth, exceeding expectations, while GNP per capita grew from 83 to 125 US dollars.
The second five-year plan sought to shift the South Korean state into heavy industry by making South Korea more competitive in the world market, which was incorporated into all future five-year plans. The industry was based on steel and petrochemical industry. The major highways were built for easier transportation.
U.S.-China's opening up in 1972 led to a greater competitive marketplace for South Korean goods and services. Fears also prevailed that the U.S. would no longer provide military defense for South Korea.
Park Chung Hee(박정희) implemented the third five-year plan which was referred to as the Heavy Chemical Industrialization Plan (HCI Plan) and, also, the "Big Push". To fund the HCIP, the government borrowed heavily from foreign countries (not foreign direct investment, so that it could direct its project).
By the time of the fourth plan, GNP per capita in 1977 was 1,000 US dollars. However, in 1978, because of price of goods, real estate speculation, lack of everyday necessities and various produce, etc., previously unaddressed problems began to arise. In 1979, the second oil shock pushed the Korean economy to harsher standards and in 1980, the Gwangju Democratization Movement, political turmoil, pessimistic foresight, and unmet goals all contributed towards a first minus in the Korean economy in years. Fortunately for the Korean economy in 1981, recovery was underway.
- List of Korea-related topics
- Economy of South Korea
- New Community Movement
- Five-year plans of other countries
- Park, P.H.,2000 "A Reflection on the East Asian Development Model: Comparison of the South Korean and Taiwanese Experiences," Thailand, Japan, and the East Asian Development Model, edited by Frank-Jurgen Richter, pages 141-168
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