ABSTRACT
A comparison of the South Korean economy of the early 1960s with that of the late 2010s makes for a sharp contrast. At the beginning of this period, South Korea suffered chronic deficits in its international balance of payments, but it has become one of the ten largest trading nations in the world with regular current account surpluses. Per capita national income increased from among the lowest in the world to almost $30,000. Reflecting this higher income, life expectancy rose above the OECD average. In the process, the once heavily aid-dependent country has grown to be an aid donor. This transformation happened under initial conditions that are equivalent to today’s developing countries. With the division of the Korean Peninsula after World War II, South Korea effectively became an isolated island with high population pressure, on a small area of land with almost no resources. Its only resource, the labor force, was unskilled and frustrated. One notable thing was that land reform was conducted until the early 1950s. International society viewed Korea as hopeless compared with its poor Asian peers.
