Reasons for South Korea’s Rapid Growth
In early 1960, South Korea was considered as an underdeveloped country having its agrarian economy completely in bad shape. It was more devastating than Bolivia or even Mozambique. The ravaged economy was solely dependent upon foreign aids. The rapid transformation in the past 60 years made South Korea the 11th largest economy in the world with respect to gross domestic product.
The whole world saw an astonishing rise from one of the most underdeveloped and poor countries in the world to a highly developed and economically strong country within a very few decades. This stunning economic growth is called a miracle on the Han River which had brought South Korea to the ranks of elite countries in the OECD and G 20.
The military rulers that ruled the country for over two decades were although very atrocious and tyrannical but their liberal views, commitments to the growth in the country’s economy and reforms were laudable. The number of students who want to study in South Korea is increasing day by day.
The consequential results showed in the country’s economy which grew rapidly and the per capita income of the South Korean people came on an all-time high and increased more than almost a hundredfold. It became an industrial powerhouse with its highly skilled labor forces till the late 20th Century.
The factors that contributed to the rise of its economy in the international market and industrialization in South Korea are – (a) an overall improvement in the business atmosphere and (b) policies undertaken to incentivize investment opportunities.
Simultaneously, the modern education sector was given a new fillip by constant and successive government involvement in development. This huge growth in the number of educational institutions and commercial hubs as well as industrial projects in and around South Korean’s major cities attracted an increasing number of the rural populace to settle in the urban areas.
Seoul in particular suddenly became over populous and a hub of the complete education system to give rise to communications and growth in media, newspaper and magazine publishing houses. Several ambitious programs were undertaken to expand and modernize the transportation system.
All of a sudden Seoul became a major flashpoint and attractive location for all the students across the world to study in South Korea. The most social change that took place in South Korea was the emergence of the middle class.
Land Reform in the early 50s together with the spread of modern education completely eradicated the system of Yangban (landholding) and new generation elites came from the most commoners. The next significant change in the social fabric was a decreasing tendency in the extended family system.
Migration that took place from rural to urban ultimately broke the traditional big family systems and arrangements, as urban dwellers lean to live in flats and small houses as nuclear families and through family planning they have fewer children. The state initiated economic drive contributed to the creation of business conglomerates.
They played a significant role in the country’s economic development by building heavy industries such as car manufacturing units, shipbuilding, and export promotions and in the creation of jobs.
A strong business environment in the domestic market always attracts foreign investments. According to a survey, South Korea held the position of 4th in the overall ease of doing business category. Technology development and innovation to promote growth also played a significant and decisive role in the boosting of its economy.
Apart from South Korea’s promotion of exports, business environment, and innovation, there has been a constant challenge and competition from its neighbor China. This has definitely given a negative impact on its export promotions and expansion because China was all along with an age-old partner and was a large exporter of South Korean goods.
As China has emphasized the importance of a highly-skilled manufacturing sector followed by its research and development program, its import policy has been changed to a large extent. Rapid urbanization and the nuclear family system and also the increase in women’s participation in the economy have lengthened life expectancy.
Naturally, the population is about to decrease in the next few years. Considering South Korea’s relatively limited natural resources and geographical shape followed by its constant aging population, it has become a matter of concern for the government because this would lead to the country to the path of an economic slowdown.