This study explores the historical process through which Korea’s exports, industrialization and economic growth have come to occur and intertwine with one another. It aims to provide a detailed and evaluative description of Korea’s experience with increasing exports and industrialization. Exporting involves the selling of a good or a service produced in one country to a customer in another country. Exports are a major source of foreign currencies, enabling the country to pool the financial resources it needs for its development while also increasing the overall level of output and employment in the country. This, in turn, accelerates the country’s economic growth rate and ultimately improves the gross national income (GNI) per capita, which stands for the average living standard in the country.
Korea is utterly devoid of natural resources it can put to industrial use. The main products of exports from Korea are therefore not raw materials but manufactured goods assembled and/or processed in Korea. The sudden growth of exports has thus spurred rapid industrialization here, and thereby accelerated the growth of the overall economy. In the early 1960s, Korea made a successful transition from its import-substitution strategy to the current export-oriented industrialization strategy. The sustained economic growth that followed finds few precedents elsewhere in the international community, and it has served to boost the profile and stature of Korea on the world stage.
After switching to the export-oriented strategy in the 1960s, Korea allowed the partial liberalization of imports. The soaring demand for imports, however, began to exceed the growing volume of exports, leading Korea into an almost perpetual state of trade deficit. As Korea began to allow the liberalization of imports on an incremental basis in 1978, it created a relatively successful market open to both exports and imports. In order for Korea to continue its economic growth through increasing exports in this day and age of liberalization and globalization, the Korean industries need to retain and improve their international competitiveness. Korean policymakers therefore need to introduce new industry incentives that encourage both increasing investment and technological innovation. In the meantime, clunky government regulations that interfere with the freedom of business should be rolled back without hesitation.
한국의 수출과 공업화(Korea’s exports and industrialization)
|Series Title; No||경제교육자료 / 9502|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade
Industry and Technology < General
|Holding||KDI; KDI School|