External events in 1971 reinforced the downward trend Korea's economy was experiencing and the country entered the first year of the Third Year Plan in a cyclical trough which showed some of the symptoms of a business downturn. The Plan emphasizes stabilization of the economy, reduction in the dependence on external savings for investment, and a moderation in the growth rate of most national aggregates other than exports. More emphasis is placed on agricultural development while maintaining the share of manufacturing industry in the allocation of investment resources, but reducing the proportion allotted to infrastructure. Manufacturing is to provide virtually all the increase in exports, but deepening the industrial structure by greater emphasis on basic metals, engineering, and chemical industries is planned to create backward linkages and import substitution of capital goods. This strategy is based on sound consideration of the country's comparative advantages, further expansion of steelmaking capacity appears well justified. Domestic savings will remain a major constraint in the immediate future, and substantial gross medium- and long term borrowing will be required.