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The Past, Present, and Future of Korea’s Economy
Written by Jaehong Min | Published. 2017.07.14 15:00 | Count : 971
The Korean economy has gone through many shifts in the past century, and is one of the fastest changing economies in the world. It has gone through great development and modernization starting from 1953, right after the Korean War. Many positive things happened for the economy, such as Korea becoming a democracy, systematic highways being built, and export sums increasing. However, Korea’s economy had recently been going through some tough times- employment rates dropped, laborer’s rights are not being guaranteed, and economic polarization continued to be a problem. With Korea’s new 19th president Moon Jae-in being elected, one of his big tasks is to solve some of these problems, and to restore the economy to its once prosperous state. Let us recap some of the positive and negative things Korea’s economy has underwent in the past century and look at what changed, and what stayed the same. 

A positive change in the Korean economy in the past century is modernization. Korea had been a self-sufficient and agricultural economy. During the early 20th century, economic development in Korea was delayed due to Korea’s seclusion policy, and Japan’s annexation of Korea. Modernization began in 1948 after Korea’s independence from Japan, as Korea created a constitution, and an official government was established. In 1950, the Korean War broke out, completely desolating the land and leaving nothing but ruins. Because of the Korean War, Koreans had prioritized economic development and modernization. Syngman Rhee played a major role in building up more modern economic standards, with the Farmland Reform Act of 1950. This act allowed common people to own their own farmland, and this contributed in establishing capitalistic concepts. For example, concepts such as individuals being able to own private property, and that if you work hard, you can earn money for yourself, became more exoteric. These ideas became the foundation of the Korean economy. 

With capitalism extensively spreading, Park Chung-hee became Korea’s new president in 1961 with a military coup. Park strived to develop the country industrially, with basic industries such as shipbuilding, electric energy, and steel manufacturing. Also, various infrastructures were constructed under the supervision of Park’s government, such as roads, railways, and ports. The most famous example would be the Gyeongbu Expressway, which connects the capital Seoul and Busan. With modernization and industrialization happening in Korea, major companies such as Hyundai, LG, and Posco emerged. The country’s economy greatly developed, and the everyday life of an individual was also improved. While people living in urbanized areas benefitted from the economic development, some rural areas remained undeveloped. To solve this problem, the Saemaul Undong, also known as the New Village Movement, was commenced. This movement provided rural areas with sophisticated infrastructures and repaired everything that was old-fashioned. Villages were supplied with electricity, sanitation facilities were installed, and thatched roofs were replaced with tiled roofs.
This is the Han River in the early 1960s. There was no infrastructure, so people crossed the river on the small boats shown above. (This literary work from the [National Museum of Korea (http://www.museum.go.kr)] was used following Category 2 of the Korea Open Government License.)


This is the Han River of today. Infrastructure is built so everyone can walk on and enjoy the river. (Photo taken by me)


This was the Gyeongbu Expressway when it was being constructed. The photo was taken on October 15th, 1968. (This literary work from the [Seoul Museum of History (http://www.museum.seoul.kr)] was used following Category 2 of the Korea Open Government License.)


This was the Gyeongbu Expressway when construction was finished in late 1968, and was first opened. (This literary work from the [Seoul Museum of History (http:// www.museum.seoul.kr)] was used following Category 2 of the Korea Open Government License.)

Amidst all the changes from modernization, polarization has been a continuity in the Korean economy. First of all, polarization is the action of breaking up into opposing factions or groupings. Prior to Korea being annexed by Japan, Korea had always been a hierarchical society, with all people divided into classes. People in the higher classes had the most money, while people in lower classes were barely able to make ends meet. Due to the hierarchical society structure, economic polarization had been a major characteristic of the Korean economy. Even after Korea’s modernization and the emergence of capitalism, economic polarization continued, and became more severe. Major companies that helped Korea’s economy develop, such as Hyundai and LG, are family-owned conglomerates called Chaebols. Korea’s economic system is one where these large and wealthy companies can easily dominate the market.

For example, let us say that there is a factory that has earned a lot of money, and has grown into a big company. The company will build bigger factories, and sell more products with lower pricing. If the company continues to expand and earn money with this method, it becomes very difficult for smaller businesses to catch up. They will not have a chance, and will stay behind the larger Chaebols. Economic polarization also happened on an individual level. People that are already rich are able to invest their money. This allowed them to have more opportunities to make more money. With technological development, highly paid jobs require high-level education and professional skills, thus increasing wage gaps. As a result, problems such as the widening gap between the rich and the poor, and the expansion of poverty became prominent.
This is Kim Hong-do’s Rice Threshing, from the Joseon period. The landowner doesn’t do any of the work, and all work is done by the peasants. This shows how polarization has continued in Korea. (This literary work from the [Seoul Museum of History (http:// www.museum.go.kr)] was used following Category 1 of the Korea Open Government License.)

From 1910 to 1990, the number of economically active females in Korea has risen drastically. In the early 20th century, it was difficult for females to be economically active because of two reasons. First, Korea’s society revolved around agriculture for a very long time. Physical strength was crucial for effective farm work. It was natural for males to do all the farm work, and for the females to stay inside and do housework. Secondly, Korea had been based on Confucianism, which is an idea that teaches women to be virtuous supporters of males, and ever since then, female gender roles had been fixated in the early 20th century. But as Korea became gradually modernized, there were more opportunities for women to be economically active. Factories started to offer jobs that didn’t require high-level education. A lot of women were employed with low wages. This was the first big opportunity for women to become economically active. Korea sent many nurses to West Germany in January 1966, which was an opportunity for overseas employment for females. According to the Ministry of Gender Equality and Family, the ratio of female workers increased on an annual average of 4.5% from 1963 to 1974, and reached 37.2% in 1974. (“The History of Female Professions.” The Dong-A Ilbo, 7 Apr 1990, p. 10.) Gradually, the number of economically active females has been on the rise. As the number of females in the Korean economy rises, qualitative improvement has started. Compared to the past, females are advancing into jobs such as lawyers, prosecutors, and doctors, which requires high-level education. 

To summarize, the Korean economy has gone through many changes in the past century. There were positive changes, such as modernization, and females becoming more economically active. However, there were negative sides as well. Economic polarization continued in Korea’s economy. Politics, society, and culture are closely connected with economy, and constantly influence one another. Economy can progress effectively when these factors harmonize and positively interact with one another. The newly elected president Moon looks to encourage women’s economic activity, and regulate Chaebols so that economic polarization doesn’t become more severe. I hope that the changes that our new president Moon makes in Korea’s economy are for the better of everyone.


Jaehong Min
9th Grade
Korea International School

Jaehong Min  student_reporter@dherald.com

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