Introduction

After the devastation of the Korean War and the partitioning of the country, South Korea was one of the poorest countries in the world. Economic recovery during the period 1953-61 was very slow and heavily dependent on US financial assistance. Recovery was based on an import substitution development policy, but by the early 1960s this was acknowledged to have failed and in 1962 emphasis shifted to the development of export-oriented industries. The country’s substantial investment in private and public education during the period after the war had provided a well-educated labour force and this formed the backbone of the new industries. The starting point for South Korea’s exported industrialisation was, however, inauspicious, with per capita GDP at only US$87 in current prices, much lower than those of most of its regional neighbours.