Social Scientist. v 24, no. 282-83 (Nov-Dec 1996) p. 18.

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Government and Economic Development in South Korea. 1961-79^

Korea was a colony of Japan from 1910to 1945. Following Japan's defeat and surrender in the Second World War, Korea was divided into two parts. The southern portion. South Korea, was put directly under the control of the American Military Government till 1948. A South Korean government was established in 1948 under Syngman Rhee, who remained in power till a Student Revolt forced him to resign and retire in 1960. A military coup in 1961 led by a Major General of the South Korean army. Park Chung Hee, overthrew the government which succeeded Rhee. Park became the President and ruled South Korea as a dictator till his assassination in 1979.

The economic condition of South Korea in the 1950s was dismal. In fact when Park took over, the economy was passing through a severe crisis with decreasing growth and rising unemployment (Schwartz, 1989, p. 240). Park initiated and implemented an economic strategy, which transformed the economy and achieved remarkable economic progress. In the 1950s, South Korea like India was a typical low income Third World country. Today she is way ahead. With a GNP per capita of US$ 8260 in 1994, she is closer to such high income countries as Portugal (US$ 9320) and Spain (US$ 13440) than she is to low income countries such as India (US$ 320) and Ethiopia (US$ 100) (World Bank, 1996, pp. 188-89). As in developed countries, the rapid growth has been accompanied by significant structural changes. Like the other Third World countries. South Korea was basically an agrarian economy around 1960 with about 68.3 per cent of the work force depending for their livelihood on agriculture, forestry and fishery and only 1.5 per cent on manufacturing. As a result of rapid economic growth, manufacturing became more important than agriculture by the late 1980s, with the former accounting for 27.7 per cent of the employment and the latter 20.7 per cent (Yoo, 1990, p. 7).

We concentrate in this paper on the South Korean economy during the 1960s and the 1970s when Park was in power. Park gave top priority to

* Economics Group, Indian Institute of Management, Calcutta.

** Enlarged version of a part of the paper presented at the seminar on *The State and Development in Asia', Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, November 11-13, 1995.

Social Scientist, Vol. 24, Nos. 11-12, November-December 1996

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