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South Korea Economic Performance
The new regime inherited an economy suffering from all the
side effects of Park's export-oriented development program and
policy of expanding heavy and chemical industries
(see Economic Development
, this ch.;
Industrial Policies
, ch. 3). The
international economic environment of the early 1980s was
extremely unfavorable, a situation that further restricted South
Korea's exports. It was necessary, therefore, for the Chun regime
to concentrate on stabilization and it devoted its first two
years to controlling inflation while attempting to bring about
economic recovery. Investment was redirected from the capitalintensive heavy and chemical industries towards labor-intensive
light industries that produced consumer goods. Import
restrictions were lifted.
The economy began to improve in 1983 because of stringent
anti-inflationary measures and the upturn in the world economy.
While South Korea had suffered a negative growth rate in 1980, it
attained an 8.1 percent growth rate in 1983. Exports began
increasing in mid-1983 and the economy began to gain strength. A
good harvest in 1983 also helped. South Korea attained its 1983
export target of US$23.5 billion, a 7.6 percent increase from
1982.
In December 1983, Seoul unveiled its revised Fifth Five-Year
Economic and Social Development Plan. The plan called for steady
growth for the next three years, low inflation, and sharply
reduced foreign borrowing. Exports were to rise by 15 percent a
year, inflation was projected to be held at 1.8 percent, and per
capita GNP was to rise to US$2,325 by 1986. The annual growth
rate was planned to average 7.5 percent though the actual
performance was higher. The real GNP growth rate was 7 percent in
1985, but for the next three years 12.9 percent, 12.8 percent,
and 12.2 percent, respectively.
Data as of June 1990
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