chapter  7
Path to industrialization (2)
Heavy and chemical industries push the needle
WithSeung-hun Chun
Pages 43

Entering the early 1970s, South Korea faced a serious security crisis caused by an East–West detente and a US policy to withdraw its troops from South Korea. President Park judged that to prevent war, it was urgent to build economic power that would overwhelm the North. That involved developing heavy and chemical industries (HCIs) to form a long-term export base and a basis for defense capacity. However, creating HCIs was a very risky and difficult task for South Korea. Industries including steelmaking, petrochemicals, automobile manufacturing, shipbuilding and information technology (IT) require enormous financial investment, well-trained manpower, and a large market for major plants to operate in. Korea had no advantages at all in these terms. It was reasonable for multilateral development banks and international experts to question the economic feasibility of those projects. However, President Park was determined in his belief that nothing else would guarantee sustainable development and national security for South Korea. The process of building HCI in Korea was a difficult one and had adverse effects. However, it provided the momentum for a quantum leap in the country’s economic development and produced global players like Samsung, LG, POSCO and Hyundai.