Japanese plan at colonial period on Korean peninsula has created a highly integrated but dual economy, with heavy industrialization mainly in the North and agricultural facilities in the South. As a result of Japanese division, the South left with nearly two-thirds of population and much of the arable land, while the North, with its abundant supply of hydroelectric power and minerals, kept most of the industrial and more than 90 percent of the electricity production. As a result of the World War II, Korea became liberated from Japan, and its lead to the sudden interruption of the trade with Japan and loose connection with power supplies at North. This period had a huge downward effect on South Korea and led them to an internal war. The Korean war (1950-1953) had both stabilization and destructive effect on the economy. The war cost to South Korea is too high in terms of current economy, but, the war also have effect on demolishing some of the oppressive elements of South Korea’s colonial legacy and to set the foundation for …show more content…
The government used to set high-trade barriers to encourage import while export growth was minor and only secondary consideration. After the military takeover in 1961, development strategy shifted from inward looking to aggressive export promotion. The government started to promote export in terms of tax breaks, and preferential credits. The government also used to do devaluation the exchange rate to promote export to be competitive in the world market. The result of this actions was a rapid expansion in exports and one of the world’s fastest-growing economies. In ten years export increased $33 million to $865 million and annual grow rate of about 40 percent in value terms. Mainly exporting product also have changed in these years from primary product to manufactured goods. As a result of rapid export expansion lead to country economically grow more than 9 percent per