The Korean economy took three years to adjust to the second oil shock, but by 1983 inflation had been contained, the balance of payments gap had been significantly reduced, and the growth momentum restored. After briefly reviewing the experience of the early eighties, this report assesses Korea's development prospects from the perspective of changes occurring in the world trading environment. The report concentrates on: (i) the scope for domestic resource mobilization through financial and fiscal reforms, (ii) trends in Korea's exports and the likely evolution of international demand for Korean goods, and (iii) opportunities and problems faced by the seven manufacturing subsectors that currently and prospectively provide the bulk of the country's exports. The revised Fifth Plan projects a growth rate averaging 7.5 percent for 1984-86 and a balance of payments equilibrium by 1986. The analysis in this report suggests that, given international trade and financing opportunities combined with supportive macroeconomic and industrial policies, these ambitious objectives can be realized.