Economic Growth Of South Korea In The 1970's

South Korea experienced exponential economic growth from the early 1960s through 1989. During the 1970’s is when they earned the title as an Asian Tiger. During this time South Korea saw GDP growth from $7.7 billion in 1962, to $230 billion in 1989. (South Korea the Facts) They experienced this economic growth due to foreign aid, an increase in economic policies and a heightened investment in education. There were a few fundamental causes for this economic explosion. But in order to fully understand why the policies and actions taken were successful, one must look to South Korea’s economic state prior to this growth. The 1950’s were a particularly bad time for South Korea. First of all they were invaded by North Korea in 1950. This …show more content…
The United States helped South Korea in three different ways. They gave funds to the government in Seoul, they sent over technology, and most importantly opened up their own market to South Korea. The funds given to South Korea by the United States equals out to be about $35 billion, over the course of many years. (Griffin) This money was given to South Korea at a very low interest rate to ensure that it was low risk for South Korea. The United States gave this money to South Korea in order to help stimulate their economy. After the war South Korea was in such debt that they needed a boost to their economy. The United States was smart; they knew that money without means is useless. So the United States shared some technological ideas with South Korea along with giving them guidance on how to grow their economy. This would ensure that the aid given by the United States money did not go to waste. The most crucial thing that the United States did for Korea however was open up their market for free trade.(Griffin) This is what ignited the fire in South Korea. By opening up their market the U.S. started South Korea on the track of an export based …show more content…
South Korea along with the United States recognized this and it was a major focus of the aid given by the United States. South Korea sent about 500 businessmen over to the United States in the 1960s in order to educate them in the ways of international business. This helped create an educated upper class. But Korea knew that an educated working class was also necessary. They began to invest a lot more in education and by 1987 over 88% of the population were going to college.(South Korean Economy Franks) The reason that education is important is for two reasons. The first is efficiency, which relates to the working class. The smarter the working force the more efficient it will be. The more efficient a company is the more money it will make, in turn bettering the economy. The second reason education is important is with the one percent. These people need to be well educated because they deal with foreign relations. They need to ensure that their company is not getting a bad deal, which would hurt the economy. Education is one of the many factors that led South Korea to having the well-developed economy that it does