chapter  5
Path to industrialization (1)
Paving the way to industrialization
WithSeung-hun Chun
Pages 22

Exporting labor is by no means a sustainable approach to spurring economic growth. The international society recommended agricultural development to alleviate imminent poverty and food insecurity in Korea. However, the Korean government did not think agriculture seemed a viable option for long-term growth. It resolutely pursued industrial development, facing seemingly insurmountable odds. Two tasks lay ahead on the path to industrial development: one was establishing infrastructure to support trade and economic activity, and the other was fostering industry and enterprises. Regarding the former, Korea constructed the 428-kilometer Kyungbu Highway at a time when nobody outside government even dreamed of it. The road connects the two largest cities in Korea and cost the equivalent of 23.6 percent of the annual national budget. Regarding the latter, the government employed a new industrial policy: it arranged for entrepreneurs to set up joint ventures with foreign investors, and with the establishment of large corporations, it devised incentives and protection schemes to foster small and medium enterprises that produced parts and intermediate goods for large corporations. Thus, industry began to take root in this poor country.