Startup and Expansion of High-speed Economic Growth in Postwar South Korea: "Miracle of the Han River"

The purpose of this paper is to recognize the high-speed growth of the Korean economy, which developed over a more than 30 year period beginning in the 1960s, from the East Asian context, and to analyze the internal and external factors which enabled such a rapid growth. The Korean government attempted to accelerate economic growth through strategic resource allocation in order to counter the North Korean threats during the Cold War. Especially, after the advent of the military regime, the Korean economy took advantage of the abundant labor force of the country, procured capital from overseas, and entered a rapid growth path. For long-term development plans that were regularly presented by the Economic Planning Board, firms led mainly by chaebol drew up business projects according to the prospects of the development plans and carried out capital investment. Even though firms sometimes ignored short-term profitability in order to commit to capital investment, generous support measures from the government were taken in the background, and an "escort fleet method" financial system to raise foreign as well as domestic funds was established to aid firms financially. With the participation of Korean President Park Chung-hee, monthly economic trends report meetings and export promotion conferences with enlarged memberships were held on various issues arising in the economic growth, and coordination between the public and private sectors was carried out. In addition, labor wages also began to rise and durable consumer goods were purchased in quantity. Nonetheless, there was a time lag between the reality of high-speed growth and the advent of a "mass consumer society," and the purchase of durable consumer goods by households was realized in a form that was late for high-speed growth. Together with the external demand-dependent economic growth strategy suitable for globalization, this was one of the factors that enabled high-speed economic growth for the long term.