Why South Korea Prospered
A look into factors that turned South Korea into the international power it is today.
From the country that blessed the world with Gangnam Style, it is hard to see South Korea as anything else but a mecca of fast-paced living, K-pop, and plastic surgery. Formerly dubbed as the “poorest, most impossible country in the world,” no one back then could have imagined its meteoric rise to international power.
A peninsula located in East Asia, this landmass is popular around the world for its two halves that highlight the extreme versions of western ideals. In the north, closer to China, is the Democratic People’s Republic of Korea, popularly known for its totalitarian dictatorship, legalized pizza, and the Mansu Water Park. On the southern side is its twin, the Republic of Korea, homeland of international pop superstar Psy, Samsung, and soju.
Separated by an unfortunate clash of ideals, the North (aided by China and the Soviet Union) invaded the South (aided by the United Nations and the USA) in 1950. Suffice to say, South Korea suffered greatly from this battle, and after the signing of an armistice in 1953 and the creation of the Korean Demilitarized Zone, it began to rebuild from the ashes and rubble left in the wake of the terrible war.
Now known as the Miracle on the Han River, this period marked the rapid economic growth of the country. The government invested heavily in smart policy reforms and education, which in turn made South Korea the world’s eleventh largest economy. The Cinderella transformation from a developing country to a developed county began with rapid reconstruction that led to its present day success. But what is the real reason behind it?
In the late 1990s, Asia was suffering from a financial crisis that threatened a global economic meltdown. Infecting even the relatively comfortable state of South Korea, businesses began to fail, banks collapsed, while its currency was on a nosedive to the bottom. Countless lost their jobs as foreign investors pulled out and the situation got so bad that it led the government to seek help from the International Monetary Fund (IMF). This was one of the largest economic bailouts at that time and required Korea to liberalize trade and capital accounts and reform its labor markets among other things. Wasting no time to repay the loan, the country began what is known today as one of the most stunning displays of patriotism and self-sacrifice the world has ever seen.
People of all background and ages (3.5 million approximately) queued in obscenely long lines to give up their cherished possessions; wedding jewelry, medals, coins, and gold items of strong personal significance were donated to aid the repayment of the loan. This isn’t the first time the hardy people of this fine land has had to turn out their pockets; in 1907, the Korean Empire had to pay back Japan, and to do this, the men stopped smoking while the women sold off their jewelry. Known as the Love Trade, this show of solidarity from its people to save their country boosted morale and was the stepping stone to what is known today as a highly developed country.
There may be many reasons as to why South Korea prospered, but one stands above all else, overcoming every crisis the country has faced, ensuring that the country will continue to thrive in the future—its people, the ever indomitable South Koreans.
Holmes, Frank. 2016. “How Gold Rode to the Rescue of South Korea.” Forbes, September 27, 2016. Accessed January 11, 2017. http://www.forbes.com/sites/greatspeculations/2016/09/27/how-gold-rode-to-the-rescue-of-south-korea/#74982a697d89.