Free Essay About Why Korea Was Poor

The economy of Korea is as interesting as any country’s economy. Although the country’s economy has rapidly expanded, this does not reflect its past. Until 1970, Korea was among the poorest countries in the world. Several reasons contributed to this (Cheng et al. 2005).
The major reason for Korea’s poor economy before 1970 was the 1950-1953 Korean War. In essence, this war had a devastating impact on how the country fared economically. Millions of Korean citizens were injured, while thousands were killed (Lim, 2005). After such an occurrence, even those who survived were scared to the extent they could not be courageous enough to invest. The war also had a direct impact on the economy in that most properties were destroyed beyond irrecoverable measures. Thousands of Korean families relocated and separated, while others fled for their lives. This did not encourage economic development and investment.
Apart from the Korean War, ill-fortuned decisions on policy regarding military expenditures and the industry of mining also played a major role in the declining of the Korean economy. Because of this, Korea was forced to acquire foreign debts that would later be difficult to pay. Expanding the foreign trade or even securing credit became difficult because of the country’s self-reliance policy. Her antagonism with the United States of America ensured these problems continued, making it difficult for the country to develop (Cho, 1997). The move to borrow capital from foreign countries so as to heavily invest in military industries proved to be another challenge that affected the economy of the country. After heavily investing in the mineral extraction infrastructure, the prices of oil internationally fell drastically. With this, the country was in a difficult position in her attempts to pay the debts.

References

Cheng, J. M., Blankson, C., Wu, P. C., & Chen, S. S. (2005). A Stage Model of International Brand Development: The perspectives of manufacturers from two newly industrialized economies—South Korea and Taiwan. Industrial Marketing Management. doi:10.1016/j.indmarman.2004.09.009
Cho, M. (1997). Large - small firm networks: a foundation of the new globalizing economy in South Korea. Environment and Planning A. doi:10.1068/a291091
Lim, W., & Hahm, J. (0). TURNING A CRISIS INTO AN OPPORTUNITY: THE POLITICAL ECONOMY OF KOREA'S FINANCIAL SECTOR REFORM.
Park, H. W., Hong, H. D., & Leydesdorff, L. (2005). A comparison of the knowledge-based innovation systems in the economies of South Korea and the Netherlands using Triple Helix indicators. Scientometrics. doi:10.1007/s11192-005-0257-4