1. How did Korea achieve its miracle?
Korea’s miracle was achieved through the acceptance of an outward oriented industry led strategy. It was based particularly during the period of the 1970s, upon the development of large-scale industrial conglomerates and the accomplishment of economies of scale and technology to achieve international competitiveness. By the early 1980s this strategy had resulted in major structural imbalances, a weakened financial section, heavy concentration in domestic markets, and a repressed development of small and medium enterprises. By the end of the 1980s, despite attempts at economic reform during this decade, the structural and financial problems remained which were to prove the country’s undoing during the financial and economic crisis of 1997-98. The evidence on this issue is mixed and no definite evidence can be drawn. However, despite this, the achievements of the Korean economy during the period should not be taken lightly.
2. What role did Chaebols play in Korea’s development strategy?
The chaebol played a vital role in South Korea’s past economic success. But these conglomerates are also partly responsible for leading South Korea into its current deep recession. Their blind focus on capacity expansion is partly to blame. Over the past ten years, the chaebol have taken on massive amounts of short-term debt. This was manageable so long as the economy was…