Korean Economic Development in Historic Perspective

Achieving “shared growth” and democracy 11

Korea has been able to achieve rapid growth with equity since early 1960s. Korea has been able to achieve rapid growth with equity since early 1960s.

• Free from poverty and foreign aid, and becoming self-sufficient economy

• Rapid transformation from light manufacturing to HCIs (Heavy and Chemical Industries)

• Economic development open the way to political democratization, all within one generation

• Free from poverty and foreign aid, and becoming self-sufficient economy

• Rapid transformation from light manufacturing to HCIs (Heavy and Chemical Industries)

• Economic development open the way to political democratization, all within one generation

Liberationfrom JapaneseColonial Rule

Six 5-Year-Economic- Development Plans

FinancialCrisis

200419801961 1970 1995

5,000

10,000

67 89

11,432

7,355

1953

Per Capita Income (US$)

1990

1945

14,193

OECDMember

100(1964)1,000(1977)

1998 2006

18,372

Source : Bank of Korea

66

16,291

Per Capita Income (US$)22

20,240

2007

63.0%7.9%

28.3%

1963

Agriculture / Fisheries

Manufacturing

Source : National Statistical Office

Changes in Employment Structure33

2007

75.0%

17.6%

7.4%

Agriculture / Fisheries

ManufacturingService

Service

Rapid Growth and Low Income Inequality44

Korea has been cited as one of successful countries with relatively low income inequality and rapid growth. Korea has been cited as one of successful countries with relatively low income inequality and rapid growth.

<Gini coefficient and GDP per capita growth rate: 1965-1990>

Mexico

Venezuela

Argentina

Peru

Philippines

ChileColombia

Brazil

Malaysia Singapore

ThailandIndonesia

Taiwan

Hong Kong

Korea

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0 1 2 3 4 5 6 7 8

Gini coefficient

Per capita GDP growth rate (%)

Reducing Poverty 55

<Absolute Poverty (%) : 1961-1993>

Absolute poverty declined steeply from 48% in 1961 to less than 10% entering 1980s. Absolute poverty declined steeply from 48% in 1961 to less than 10% entering 1980s.

48.340.9

23.4

9.8 9.5 7.60

10

20

30

40

50

60

70

80

1961 1965 1970 1980 1988 1993

NationalUrbanRural

22

<Annex 5> Why promote technical high school?1717

Absolute shortage of techniciansAbsolute shortage of technicians

• Composition of Engineer : technician : simple unskilled worker (graduate from elementary school) as of 1969

* Korea 1 : 2 : 15 * US 1 : 25 : 5

☞ Korean government, with a top priority, promoted technical high school education.

* Target: producing 50,000 technicians every year nationwide

• Composition of Engineer : technician : simple unskilled worker (graduate from elementary school) as of 1969

* Korea 1 : 2 : 15 * US 1 : 25 : 5

☞ Korean government, with a top priority, promoted technical high school education.

* Target: producing 50,000 technicians every year nationwide