Analysis of South Korean Foreign Trade Patterns
After World War II, South Korea was largely agricultural and poor, while the North had most of the industry and mineral wealth, developed largely by Japan in the colonial era (Facts about Korea, 1993). This disparity continued until the 1960s, when the South Korean economy began to industrialize and expand, at the same time the North's began to stagnate. Today, the situation is the reverse of what it was in the 1940s and 1950s; the South is relatively rich and industrialized, and the North poverty-stricken and isolated, no longer subsidized by the former USSR.
The story of South Korea's economic development is a textbook case of how an underdeveloped country transforms itself into an economic powerhouse (Facts about Korea, 1993). Known as one of the 'Tiger' nations of East Asia (along with Taiwan, Hong Kong, China, Singapore, Thailand, and Malaysia), the country has ironically modeled itself largely after Japan, its previous colonizer -- like Japan, Korea now has relatively autarkic, neomercantilistic, and protectionist policies. By avid promotion of manufactured exports (mainly to the U.S.) and simultaneously minimizing imports, except for raw materials that are scarce in the country, South Korea has aimed at Maintaining a positive balance of trade and accumulating a cache of foreign reserves (such as currency like dollars, yen, and D-marks, and also gold). Like Japan, government plays a key role in the economy as guide, facilitator, financier, enforcer of social and labor peace, and most importantly as educator of the work force. This education is likely one of the most crucial reasons for South Korea's economic transformation in the past three decades -- it has created a highly productive, relatively cheap force of workers that is highly competitive in the global economy that has emerged in recent times. The benefits accruing from this factor include the attraction of fo...