The Korean economic development: Experiences and Implications

A lecture from Professor Doowon Lee, who is teaching economics at Yonsei University was a valuable time for
me. Starting from the time period right after the independence, South Korea’s economy has made a significant
growth that everyone on earth acknowledge as “Miracle of the Han river”. However, at the time of
independence, there were unfavorable initial conditions in Korea based on the lecture. Those were undeveloped
environment, low income, and poor endowment of natural resources. With these unfavorable initial conditions,
it was really difficult to escape the vicious cycle of poverty, a low-income trap. One of the many efforts the
government has done to escape the vicious cycle of poverty was export-oriented industrialization. The Korean
government planned policies that promoted industries related to shipbuilding, electronics, and fiber. I believe
that the Korean government’s intervention was necessary since the exports helped the country to integrate into
the global market. Based on these trials and efforts put in economy, Korea in 1963~1991 showed a rapid growth
rate. However, during the 1992~2000 period it showed a slow down of growth and FX crisis but became a high
income country since 2001. Based on economic statistics shown on the lecture such as GDP, Neoclassical
Growth model, Korea’s economy points out its position as a develop country today. However, I want to
emphasize the fact that maintaining this economic stance requires addressing the existing obstacles and
challenges. Few challenges South Korea is facing in the society is income inequality and work-life balance.
First, the income inequality is a serious problem in our society to many workers. The rapid growth in economy
and industry brought huge wealth gap between the citizens, demanding policies like welfare to ensure the basic
human rights. However, government’s policies aren’t enough to solve the wealth gap between the rich and poor
in Korea. As a solution, I think the minimum wage should be raised in order to protect and strengthen the
worker’s rights. Also, there should be a steeper taxes on high-income workers to generate the revenue needed
for poor people. This is a controversial, but I believe that it is the only way to reduce the huge gap that exists
between the rich and the poor which is a problem that will get more serious as time passes and might even reach
a point where it is beyond our solution. Second, the work-life balance is a problem that began a long time ago.
There is a demanding work culture in Korea’s companies which makes it hard for people to have a healthy
work-life balance. To solve this issue, many companies are practicing flexible work for the workers such as
flexible start and end times, focusing on outcomes over the time spent. I think that these policies helped our
working atmosphere, but these should be applied to more companies as mandatory. Overall through this lecture,
I understood our economy better and deeper, and the lecture has given me a simplified overview of the past
economy growth and ongoing advancements. I would like to learn more about Korea’s economics and its
relations with the global world.