Korea Politics & Economy after 1945

Outline 1945 End of Japan Rule Brief Political History The 38 th Parallel & The Korean War Rhee: Government Led Development Park: The Five Year Plans Korea Today Chaebols

Korea up to – Russo-Japanese war ended, Korea protectorate of Japan 1910 – Japan-Korea Annexation treaty Colonial Mercantilism – Japan provided modern infrastructure, ports, factories, hospitals, schools, rail, mines, etc Land seizure, cultural repression & little opportunity for Koreans to obtain higher education 1945 – End of 35 year colonial Japanese Rule

The 38 th Parallel first suggested as a dividing line for Korea by Russia 1945 (Aug) - US State-War Navy Coordinating Committee establishes 38 th Parallel became the boundary between the newly independent countries of North and South Korea demarcation line established through the middle of the DMZ

The Korean War (1950 – 1953) Japan settled as fort to prevent soviet influence Japan is the regions stabilized government & economy US heavily invested in Japans economic development Special procurements amounted to 27% of Japans total export trade Cooperation of manufacturers, suppliers, distributors and banks is what led to the keiretsu and enterprise unions

Brief Political History Kim II Sung Syngman Rhee ( ) Park Chung Hee ( ) Chun Doo Hwan ( ) Roh Tae Woo ( ) 1945 Kim Young-sam ( ) 1994

Koreas Economic Development

Government Led Development Land Reform June 1949 – 1 million share croppers became land owners Dissolved landlord class Shift to entrepreneurial opportunities for past landlords Accelerated urbanization of Korea 11.6 % in % in % in 1960 Education opportunities extensively expanded after WWII Empowered Koreans with opportunity for upward mobility Primary education universal for both boys & girls by % Universities established by private foundations Under Rhee: Investment in Human Capital

Government Led Development Under Park: Miracle on the Han Government led initiatives in economic development. Main Goals: Establish self reliant industrial economy Nationalize bank to facilitate direct control all over business community Create hybrid approach between import substitution and export driven growth

Koreas Economic Development Five Year Plans Transition from import substitution industrialization to export driven growth First Five-Year Economic Development Plan ( ) Self Sufficient Structure The Second Five-Year Economic Development Plan ( ) Modernizing the industrial structure building import substitution industries The Third Five-Year Economic Development Plan ( ) Big Push( ) Development of export-oriented structure Under Park:

Koreas Economic Development The Fourth Five-Year Economic Development Plan ( ) Development of industries to compete effectively with worlds industrial export markets The Fifth Five-Year Economic and Social Development Plan ( ) Shifting industry focus to Technology-intensive industries The Sixth Five-Year Economic and Social Development Plan ( ) Phasing out of direct assistance from government, refocus to training workforce to meet the needs of all industries. The Seventh Five-Year Economic and Social Development Plan ( ) Development of high-technology fields Latter Five Year Plans

Koreas Economic Development Chaebols 'octopus with many tentacles' Massive conglomerates Comparative to Japans keiretsu and zaibatsu Spawned from leftover Japanese assets Majority controlled by families Government provided support to aid growth Key part of Koreas fast development

Koreas Economic Development Chaebols

Koreas Economic Development Chaebols down arrows Stagnates innovation Prevents foreign investment Hides losses within the unit Daewoo bankruptcy $80B in losses Corruption is prevalent Samsungtax evasion, Hyundaistealing funds, SKfraud Too reliant on the governments protection Asian Financial crisis

Conclusion History played a significant role during Japanese rule over Korea as it propelled Koreans into full economic development Using a model similar to Japans Meiji era, Koreas government and industry were able to institute policies that allowed for rapid growth Chaebols were crucial for Koreas development but are not necessarily beneficial in todays environment Takeaways

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