South Korea - an NIC

When the end of the Korean War ended in 1953, South Korea had a peasant economy with just a few small businesses.

It recieved economic aid from the USA 

During the period when the 'economic miracle' was taking place, a military regime goverened the nation

The government told the people they had to put up with short-term discomforts of low wages and long working working hours if the country was going to secure long-term benefits.

The economic miracle begain in the early 1960s, and by 1996 South Korea had a prominent position as a world supplier. It had become:

• The world's leading supplier of computer memory chips
• The second largest shipbuilder in the world
• The third largest exporter or textiles
• The fifth largest car maker
• The sixth largest steel producer

South Korean was due to several factors: 

• American aid and technical assistance
• a hard-working labour force (an average of 72 hours per week)
• Low wages - $2.9 per hour (Japan $13 per hour)
• skilled and well-motivated businessmen - developed links with USA and Western Europe
• An export-oriented strategy - 1963 = $40 million, 1990 = $65 billion

The government actively encouraged the electronics industry - 1969 passed the Electronics Industry Promotion Law - since then companies like Lucky GoldStar and Samsung have experienced incredible growth.

CHAEBOL = family owned business conglomerates (heart of the economic miracle)

Chaebols are very different when compared to European or US businesses: 

• Workers are expected to work hard, with just five days of annual leave
• The chaebol adopt local rivers or areas of land which they manage, and the workers take responsibility for cleaning and collecting rubbish
• The chaebol have their own dentists, libraries and, in Samsung's case, even their own hotels
• Workers have access to advice centres where they can secure interest-free loans for housing or tuition
• The wives and families of workers can attend a college in Seoul where they can study a wide range of courses (photography, politics, interior design, foreign languages)

Lucky GoldStar has a major involvement in the north-east of England

In 1994 LG opened a factory in Washington new town, costing £26million

Also operation a 108-hectare plant at Teesside, employing 3,000 people

In the summer of 1996 the biggest investment programme in the EU was announced by Lucky GoldStar - £1.7billion in a 100 hectare site in Newport, South Wales.

LG chose this location because...

• Generous government support
• Technical assitance and financial support from the Welsh Development Agency
• Newport's situation at the western end of the M4 Corridor
• Good communications by rail and road - 300,000 people of working age living within 20 minutes drive
• Closeto many thriving Japanese multinationals - employing 23% of all British workers in electronics
• Excellent educational infrastucture

Economic Systems

• Raises standards of living
• Benefits the governments and TNCs rather than people
• Increases competition for land, raising land prices
• Brings about changes to the labour force. There is:
  • A shift to manufacturing 
  • A decline in agricultural employment
  • A growth of rural unemployment
  • An increase in service industries - transport, retailing and administration

Social systems

RURAL AREAS

• Social imbalance between affluent and industrial minority/commercial workers and the rest of the population 
• Population changes - migration to urban areas
• Decline of traditional values and lifestyle
• Increased dependence on remittances from urban workers
• Poor welfare systems

URBAN AREAS

• In-migration leads to rapid development of shanty towns, increaed birth rates and population growth
• Concentration of unemployed and poor in shanty towns
• High rates of crime, illiteracy and disease in poor areas of housing
• Low levels of services
• Unsanitary working conditions (sweatshops)

Environmental systems

• Resource exploitation can damage the natural environment and could lead tot he destruction of whole habitats
• Rivers polluted by industrial waste
• Air pollution - Taiwan, Taipei
• Unsafe working practises may create environmental disasters - Bhopal in India 1985 where toxic gas from the Union Carbide factory lead to widespread blindness in the area
• Urban blind - derelict buildings, contaminated land
• Limited environmental legislation

Korea has enjoyed an annualeconomic growth rate of 8.6% and has emerged as the world's 12th largest trading nation.

World's leading shipbuilders and manufacturers of electronics, semiconductors and automobiles.

Korea's GNI increased from $2.3billion to $786.8billion, with its per capita GNI soared from $87 to about $16,291

The government forced firms suffering from excess capacity, namely those involved in power-generation equipment industry and automobile industry, to merge. 

Due to the world recesion following the second oil shock, many debt ridden firms became financially insolvent. 

The government's concern over unemployment and financial instability led it to bail out these firms for the sake of social stabillity

Korea is the world's largest shipbuilding nation; the third largest for semiconductors, and the fouth largest for digital electronics

Korea produces over three million vehicles annually.

Since 2000, innovation has topped the national agenda - the Korean government is now focusing on the 'quality of growth' - growth that fosters creation, growth that fuels innovation in industries, and growth that brings balanced development among provinces as well as metropolitan areas and among companies large and small.

Agricultural development efforts have been concentrated on maximising yields from the country's limited arable land, which comprises only about 19% of total land area.

A large-scale fertiliser and pesticide industry has been developedto keep farmers adequately supplied with these essential products

There has been a rapid growth in the produciton of fruit, vegetables and other high quality crops, as well as livestock products

Industrialisation resulted in the steady decrease of Korea's farm population - the ratio of rural residents to overall population plunged from 57% in 1962 to below 9% in the late 2000.