Korean Economic Dynamism

244 Pages·1992·11.773 MB·English

by  Dilip K. Das (auth.)

KOREAN ECONOMIC
DYNAMISM
Dilip K. Das
KOREAN ECONOMIC DYNAMISM
Also by Dilip K. Das and published by Palgrave Macmillan
INTERNATIONAL TRADE POLICY: A Developing-Country
Perspective
MIGRATION OF FINANCIAL RESOURCES TO
DEVELOPING COUNTRIES
KOREAN ECONOMIC
DYNAMISM
Dilip K. Das
Visiting Professor
Ecole Superieure des Sciences Economiques
et Commerciales, Paris
M
MACMILLAN
© Dilip K. Das 1992
Softcover reprint of the hardcover 1s t edition 1992 978-0-333-54821-9
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First published 1992
Published by
MACMILLAN ACADEMIC AND PROFESSIONAL LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
British Library Cataloguing in Publication Data
Das, Dilip K. 1945-
Korean economic dynamism.
1. South Korea. Economic growth, history
I. Title
339.5095195
ISBN 978-1-349-39005-2 ISBN 978-0-230-37385-3 (eBook)
DOI 10.1057/9780230373853
For
Vasanti,
who shared everything great and not-so-great
along our twenty-jive-year long journey
'In the transformation and growth of all things, every bud and every
feature has its proper form. Gradual maturing comes only through
the constant flow of transformation and change.' - Chaung Tzu
Contents
List 01 Tables IX
List 01 Figures X
Prelace Xl
List 01 Abbreviations xiv
1 THE SYNERGY OF KOREAN EFFORTS 1
The Economic Transition 1
Why Korea? 8
The J apanese Role Model 11
The Korean Weltanschauung 14
The Heritage 16
Summing Up 19
2 THE PHASES OF GROWTH AND THEIR
CHARACTERISTIC FEATURES 21
The Slack 21
The Turnaround 25
Of Savings and Investment 32
Of Prices and Inflation 36
The Agricultural Sector 40
The Manufacturing Sector 46
Aftermath of the Plaza Accord 54
The Sixth Plan (1987-91) and its Revision 55
3 OUTWA RD-ORIENTED INDUSTRIALISAT ION
STRATEGY 59
Scrutinising the Export Growth 59
The Incentive Structure 69
Outward-Orientation and the Macro-Variables 73
Policy Neutrality and Beyond 77
The Prerequisites for Outward-Orientation 80
Conclusion 81
VB
viii Contents
4 THE CONDUCT OF THE MACROECONOMIC
POLICY 83
Introduetion 83
The Monetary Seetor 83
The Fiseal Seetor 93
The Finaneial Seetor and Pattern of Intermediation 107
Honing the Human Resourees 127
The State of Teehnology 134
5 THE INVISIBLE HAND VERSUS THE VISIBLE
HAND 141
Statism and the Market Forees 141
The Visible Hand in Korea 145
Major Points of Intervention 152
The Unique Features 154
The Changing Role of Government 156
Conclusion 157
6 EXTERNAL FINANCES AND DEBT
MANAGEMENT 159
The Finaneial and Real-Resouree Aspeets 159
Early Dependenee on External Assistance 160
Changing Pattern of Capital Flows 162
The Three Surges 166
Management of External Liabilities 173
And Korea Emerges As A Creditor Nation 175
Structural Adjustments 177
Readjusting to Success 181
Summing Up 183
7 A PARADIGM FOR THE DEVELOPING
ECONOMIES 185
Is Korea Sui Generis? 185
Paths To Follow 187
Notes 197
Bibliography 213
Index 228
List of Tables
1.1 Major Macroeconomic Indicators, 1960-88 3
1.2 Comparative Levels of Real Per Capita Income 4
1.3 Structure and Growth Rate of Production 5
1.4 Import Dependency 13
2.1 Gross National and Foreign Savings and Investment,
1953-61 (at Current Prices) 24
2.2 Gross National and Foreign Savings and Investment,
1962-88 (at Current Prices) 33
2.3 Inflation Rates 37
2.4 Grain Production Indexes, 1968-87 43
2.5 Rates of Agricultural Protection 44
2.6 Production Indices in the Manufacturing Industries,
1954--87 47
2.7 Targets and Achievements 57
3.1 The Composition of Merchandise Exports 63
3.2 Products with High RCA Index Values 66
3.3 Destination of Exports 67
4.1 The Ratio of MI, M2 and Quasi Money to GNP,
1960-88 86
4.2 Interest Rates, 1963-88 88
4.3 Government Finance: Expenditure, Revenue, Surplus
or Deficit, 1955-87 94
4.4 Major Indicators of Fiscal Performance, 1962-88 98
4.5 Trends in Income Distribution 104
4.6 Proceeds from Corporate Securities Offerings,
1972-88 125
4.7 Employment Elasticity by Sector, 1963-80 133
6.1 Grants-In-Aid, 1953-60 161
6.2 External Debt Profile, 1961-89 165
6.3 Current Account Deficits and Debt Related Ratios,
1964--88 167
6.4 Real Effective Exchange Rate of the Won, 1980-9 179
lX