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South Korea Economy and Society
These circumstances had thrown South Korea's economy into
complete chaos. Even if the occupation forces had arrived with a
carefully laid economic plan, the situation would have been
difficult because the Japanese had developed Korea's economy as
an integral part of their empire, linking Korea to Japan and
Manchuria.
The division of Korea into two zones at an arbitrary line
further aggravated the situation. There were many inherent
problems in building a self-sufficient economy in the southern
half of the peninsula. Most of the heavy industrial facilities
were located in northern Korea--the Soviet zone--including the
chemical plants that produced necessary agricultural fertilizers.
Light industries in southern Korea had been dependent on
electricity from the hydraulic generators located on the Yalu
River on the Korean-Manchurian border; electric generating
facilities in the south supplied only 9 percent of the total
need. Railroads and industries in the south also had been
dependent upon bituminous coal imported from Manchuria, Japan,
and the north (although the south had been exporting some excess
anthracite to the north).
The problems were compounded by the fact that most of Korea's
mines and industries had been owned and operated by Japan. As the
United States military government let the 700,000 Japanese depart
from South Korea in the months following the start of the
American occupation, almost all of the mines and factories--now
enemy properties vested in the military government--were without
managers, technicians, and capital resources. This situation led
to severe problems of unemployment and material shortages.
The months after the arrival of occupation forces also
witnessed a vast inflow of population. South Korea's population,
estimated at just over 16 million in 1945, grew by 21 percent
during the next year. By 1950 more than 1 million workers had
returned from Japan, 120,000 from China and Manchuria, and 1.8
million from the north. The annual rate of increase of births
over deaths continued at about 3.1 percent. Since rural areas
were inhospitable to newcomers, most of the refugees settled in
urban areas; Seoul received upwards of one-third of the total.
The situation was further aggravated by scarcities of food and
other commodities and by runaway inflation, caused in part by the
fact that the departing Japanese had flooded Korea with newly
printed yen.
The social unrest created by these developments can be easily
surmised. By 1947 only about half the labor force of 10 million
was gainfully employed. Labor strikes and work stoppages were
recurrent phenomena, and demonstrations against the United States
military government's policies drew large crowds. Temporary
stoppages of electricity--supplied from the northern areas--in
the early part of 1946 and late 1947 plunged the southern region
into darkness on each occasion, deepening the despair of the
populace. The disillusioned and disconcerted people paid keen
attention to political leaders of various persuasions who offered
new ways of solving the Korean problem.
Data as of June 1990
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