Table of Contents:

INTRODUCTION

PART I: South Korea: State Birth and State Infancy

1.1 Japanese Occupation and Korean industrial fragmentation

1.2 The Korean independence and political division during the Cold War

PART II: South Korea: State Growth and Maturation

2.1 Import Substitution and Export Promotion strategy – The Korean Experiment

2.2 The notorious Korean Heavy and Chemical Industry (HCI) development strategy

2.3 The focus on Research and Development (R&D)

2.4 `Chaebols`: The Korean private champions of industrialization

Part III: South Korea: State Maturity and Integration into the Neoliberal World

3.1 From Keynes to Park

3.2 Seoul`s thought on Neoliberalism

3.2.1 First attempt to Globalization

3.2.2 Second attempt to Globalization

CONCLUSION

Bibliography

Introduction

What if we start looking at the world not as a mosaic of different political-economic models but rather as timing capsules of economic uniformization? Are the countries` economic structures different because of a political choice or ideological belief, or are they rather on different stages on the scale of economic evolution?

In the end, what if we start looking towards the states not as solely political and economic actors but rather as humanized subjects? What if their economic stances are in fact just phases on their humanistic evolution? After all, states have been populated by human beings and governed by human beings in the interest of human beings towards who are responsible for good governance. Willingly or not, the human nature of states is uncontested.

The aim of the paper is to demonstrate the human nature of states in their economic development. I subscribe myself towards explaining that the different political economic models of states today are temporary phases of an economic evolution towards economic uniformization, rather than permanent economic projects based on ideology, interests, experimentation, or philosophy. The basis of the paper is to look at the evolution of states in a similar manner of human evolution. States, such as human beings have been born, raised, and matured. Young countries, such as human beings in their infancy need protection, attention, and special treatment until they mature enough so that they can survive without support. Just like a child who needs education and time to obtain the physical and intellectual capabilities before being exposed to the labour market, the young state needs a similar treatment before being exposed to the competitive forces of world markets.

This paper`s emphasis will be on the development of the Republic of South Korea as a prime example of `East Asian miracle` that passed through several stages of maturity empowered not by a given philosophy or rigid ideology, but by different circumstances that demanded flexible and pragmatic policy. Part 1 is dedicated to what would be called `State Birth and State Infancy`. In this chapter, my attention will be on the political foundation of South Korea (the birth). Part II, to be called `State Growth and Maturation` is dedicated to South Korean economic independence and the economic framework for protectionism (parental special treatment) towards rapid industrialization (the growth). I will analyse how South Korea (as most of nowadays fully industrialized developed states) has passed through this process of state-nurturing in its industrial maturity towards achieving a maximum potential to compete in international markets. Part III presented as `State Maturity and Integration into the Neoliberal world` is committed to analysing the `State Maturity` (the adulthood). Once mature (fully industrialized and developed) after decades of protection and special treatment, South Korea joins the international community (the globalized arena), not as an under-developed and under-industrialized infant that needs protection but as an industrialized and developed adult (liberal free market-based subject).

In this view, South Korea, like most of the states that have passed through similar developmental stages, tend to subscribe for a nationalistic stance in its infancy. After decades and centuries of political submission and economic exploitation, the concept of nation-state prevailed with political independence. But for a political independence to endure, newly established nation-states need economic independence in order not to be submissive to their former political patrons as economic-dependent subjects. Once nurtured and mature as fully industrialized and developed societies, the states start to progressively integrate within the global economy. Under this economic integration process, states place less weight to economic independence and more to the pull of resources towards an international economic system from which every state could benefit. It is not that the concept of `nation-state` is erased, but countries tend to become more like economic subjects within the powerful forces of a global governance, less as nation-states and more so as economic-states.

Part I

South Korea: State Birth and State Infancy

1.1 Japanese Occupation and Korean industrial fragmentation

Korea (both North and South) was under the influence of the Qing Dynasty for centuries until 1895 when the Shimonoseki Treaty which ended the First Sino-Japanese War set the terms for Korea`s termination of tribute to the Chinese Middle Kingdom.[1] The war also pushed Japan close to the status of hegemon in East Asia at the expense of imperial China for the first time in history.[2] But the short political independence of the Korean peninsula was short living. Following the Russo-Japanese War of 1905, Imperial Japan significantly increased its influence over Korea.[3] Five years later, the peninsula was annexed to the Japanese Empire and remained so until the end of World War II.[4] During the Japanese occupation, Korea underwent a process of social assimilation during which the Korean population was forced to behave like any subject of the empire, thus affecting the Korean political and cultural identity.[5] Second, the Korean economy was heavily dependent on Japanese policies, with Tokyo controlling almost every aspect of Korean economic development.[6] Moreover, long concerned by the negative implications of a strong and united Korea, Japan pursued a "divide and conquer" policy towards its smaller western neighbour. By keeping the peninsula developmentally (not geographically or politically) splitted in two, Tokyo sought the inability of the Korean people to magnify the emergence of a new political and influential actor in the region to play Japan and China against each other. Therefore, the northern part of the peninsula (nowadays North Korea) enjoyed a higher level of industrialization while the South (South Korea) was kept as a farming base for the Japanese.[7] [8] Additionally, the production of metal was much more frequent in the north (besides the greater abundance of natural resources), while the south predominated in textiles.[9] The Japanese-inflicted industrial division played an important role in Korean politics during the Cold War. In addition to maintaining a more industrial northern part and a more agrarian southern half, Japan has done its utmost to intimidate the formation of a Korean middle-class seen as a security threat to the occupying power.[10]

1.2 The Korean independence and political division during the Cold War

The defeat of Japan at the end of World War II restored the independence of the Korean peninsula this time for a long period to come.[11] But independence was soon followed by the split of Korea on the north-south axis.[12] [13] According to the Yalta Treaty, more precisely the part of the treaty dealing with the Soviet intervention against Japan towards the end of the war, the Korean peninsula would be divided into two entities, South Korea, and North Korea, the 38 ° parallel becoming the new political border.[14] The formation of the Democratic People's Republic of Korea north of the 38 ° parallel and the Republic of Korea in the south created an environment of insecurity, mistrust, and economic weakness on both sides.[15] [16] After a five-year civil war (1950-1955), the Korean peninsula still remained divided along ideological lines. The North embraced communism empowered by a regime backed by the Soviet Union and the People's Republic of China. The South opened up to a right-wing government led by Syngman Rhee and supported by the United States.[17] This political fragmentation has contributed to the application of repressive measures. For example, following the end of the Korean War, the Syngman Rhee regime waged a fierce decade-long fight against South Korean leftist forces seen as agents of the North aimed at dissolving the regime from the inside, while in North Korea, total isolationism was guaranteeing the regime's protection from any interference from the South and its American backers.[18] As Japanese colonialism guaranteed Korea's industrial fragmentation between an industrial north and an agrarian south, the Cold War power dynamics secured a political division for decades to come.

Part II

South Korea: State Growth and Maturation

South Korea today is perceived as a marvellous economic experiment and an "East Asian miracle". Seen from the World Bank, Seoul has achieved remarkable economic outcomes due to its efficient use of external loans, the massive attraction of foreign direct investment (FDI) and the pursuit of a developmental strategy based on export-oriented industrialization as opposed to import-oriented one.[19] For the core group of neoliberal economists, South Korea embraced success because instead of producing low-skilled and low-value commodities, it allocated all its resources towards the manufacture of high-value products with which to penetrate world markets rather than producing for domestic demand only.[20] Seen this way, South Korea looked more like a responsible adult matured in neoliberalism and praised as a champion of free-market liberalization. But, in fact, while looking towards Seoul now, few might have expected that ten years following the end of the Korean War, South Korea started to behave more like a socialist wonderkid, always anxious by its surroundings and the regional ideological threats coming from the People's Republic of China to the west and North Korea to the north.[21] Rather than being nurtured by neoliberalism, Seoul embraced a policy of state-led economic maturation through an industrial expansion and the protection of its own industrialists.[22] [23] And this developmental path could not be better described as such than during the Park era (1961-1979), the almost two decades in which the military dictatorship of Park Chung-hee started what, the Major General himself put forward, as the South Korean "Industrial Revolution".[24] [25]

2.1 Import Substitution and Export Promotion strategy – The Korean Experiment

Many neoliberal economists and free-market proponents put forward the idea that all the rich states today (including South Korea now) have become as such due to their fate in trade and market liberalization.[26] According to their lead, these states efficiently developed a strong and sustainable economic growth by disengaging from policies such as state subsidies to industries, protectionism, capital control, nationalization of all state assets and limited if not any foreign direct investment.[27] But South Korea under Park Chung-hee contradicted this narrative. Between 1961-1979, South Korea recorded an average annual growth rate of 7-9%.[28] [29] Before the 1961 military coup, South Korea was a typical Third-World agrarian country with 75% of its population living in the countryside.[30] By the 1980s, the urban population increased exponentially, the industrial sector held most of the population, while manufacturing became the main source of exports.[31] Instead of embracing the neoliberal cure for a less state and a more market-driven approach, Park Chung-hee knew it was far too early in opening up the Korean economy to international competition, given its Japan-inflicted underdeveloped and fragile industry.[32] [33] [34] Park's industrial revolution was a reflection of an alleged economic contradiction which states that a country cannot pursue a strategy of import substitution and export promotion at the same time.[35]

Since 1962, Seoul has accelerated the import-oriented industrialization that began in the 1950s under the Syngman Rhee regime.[36] With the aim of producing everything was imported for domestic consumption (mainly textiles and food), South Korea nurtured its prime selected industries, such as fertilizers, PVC, cement, and petroleum refineries.[37] It did so by creating the necessary infrastructure (mainly industrial sites where the selected sector could flourish) and implementing protectionism against foreign competition through limited import licenses offered by the Ministry of Commerce and Industry.[38] South Korea looked like the perfect county implementing an import-substitution strategy, but the rise of exports played a similar crucial role in its development.[39] [40] At the same time as running an import substitution strategy, the Park regime launched an export promotion policy. First, it started -contrary to what the World Bank stated about South Korean economic success mentioned above- with low-skilled and low-valued commodities with the Light Industry (LI) becoming the main source of Korean exports between 1962-early 1970s.[41] The government has allocated considerable financial resources to the development of new export industries, mainly in the production of textiles and shoes.[42] Enjoying a comparative advantage given its low-wages labour force, South Korea managed to improve its revenues, with the savings and Gross National Product (GNP) increasing on every year basis.[43] [44]

2.2 The notorious Korean Heavy and Chemical Industry (HCI) development strategy

The LI-sponsored exports soon started to show their limits. The export sector has grown considerably since 1962 but the export levels were supported by an even bigger imports.[45] [46] [47] Given that South Korea was only an industrial annex of the Japanese Empire, Tokyo managed to keep its industry week and fragile.[48] The LI enjoyed comparative advantage but in order to produce the low-skilled technologically weak commodities for exports, South Korea needed to import the capital goods (raw materials) and machinery in order to manufacture its products for exports.[49] [50] These imports mainly came from Japan and the more South Korea wanted to export, the even more it was forced to import.[51] This strategy brought substantial economic growth as Korean exports flowed in all directions, but at the same time, an even deeper balance of payment gap supported by high levels of borrowings and increased national debt.[52] [53] Therefore, the Park regime abandoned the LI-empowered export promotion in the early 1970s in favour of the Heavy and Chemical Industry (HCI).[54] [55] The notorious Korean HCI started in 1971 with the HCI Promotion Plan soon followed by the launch of the HCI Drive two years later supported by the newly founded HCI National Investment Fund established in 1974.[56] The Korean reasons behind the HCI drive were simple. On the one hand, South Korea enjoys a comparative advantage in the manufacturing of low-skilled technologically weak commodities given its low-wage labour force.[57] [58] [59] But in order to support this LI export promotion, South Korea is forced to import all inputs from abroad deepening its balance of payments crisis and skyrocketing the national debt levels to unsustainable levels.[60] [61]

Thus, the existence of HCI is to support the LI by substituting these capital goods and machinery imported from abroad and improving the trade balance.[62] [63] Secondly, even though the HCI does not enjoy a comparative advantage in the production of steel, machinery, chemicals, shipbuilding, and automobiles, the LI's comparative advantage started to present weaknesses with the increase in wage levels in South Korea which put pressure on the competitiveness of Korean exports.[64] [65] [66] Thus, the HCI was aimed at diversifying the promotion of exports by adding more high-value commodities within the Korean export portfolio.[67] [68] To achieve this, Seoul has embarked on a two-pronged strategy. First, once set up, the HCI (just like the LI a decade ago) needed protection against foreign competition.[69] [70] This was made possible by tariff barriers and import quotas imposed by the government. Second, during the protectionist years, the HCI needed to grow, as limited foreign access to the South Korean market was not enough for heavy industries to grow in the long run. A push by the government was therefore necessary. This push took the form of governmental subsidies, mainly fiscal and financial incentives granted to those industries considered to be a priority.[71] On the one hand, the fiscal incentives offered by the government consisted mainly by tax deductions and lower corporate taxes offered to those companies involved in the HCI.[72] During the 1970s, there was already a huge gap in the value of taxes paid by the companies involved in HCI as compared to those whose activities remained in the LI.[73]

Through the taxing system, the Park regime made sure that the HCI will flourish and stabilize enough to stand by foreign competition. On the other hand, the government offered financial incentives to the HCI through the nationalization of the entire Korean financial sector since 1962.[74] [75] All financial institutions, from the largest commercial banks to the smallest insurance companies came under the control of the Finance Ministry whose approval for the annual budgets and management of the banking leadership was always needed.[76] [77] By bringing the financial system under governmental decision-making, Park assured that all credit was under the control of the government and therefore easily distributed to the highest priority sectors.[78] During the 1970s, most loans were offered on preferential terms to companies whose activity was in the HCI.[79] Contrary to neoliberal-pushed interest rate liberalization, Seoul has set fixed (and low) rates for those involved in the HCI.[80] Moreover, indirectly, by setting prices rather than letting them be determined by market forces, the Seoul government was supplying food at subsidized (and generally low) prices to those actors involved in the sectors considered a priority for Korean economic development.[81] For example, by managing the prices for every industrial worker to afford a bowl of rice, the pressure over wages were kept minimal, thus indirectly subsidizing the big employers in the HCI.[82] Through low wages, the heavy industry managed not only to maintain its competitive advantage over foreign competition, but also to over-invest and expand production for export.[83] [84]

2.3 The focus on Research and Development (R&D)

The HCI was soon confronted with the same problem that the LI faced and basically one of the reasons why the government initiated it in the early 1970s. The HCI drive managed to diversify the Korean export portfolio and to switch production for exports from low-value commodities to high-value ones, but the dependence on imports has not ended there.[85] [86] Whether it was low-value products or high-value ones, South Korea still had to import capital goods and machinery (mostly from Japan) in order to manufacture the finished goods inside Korea.[87] For example, during the HCI drive, to produce electronics and vehicles, South Korea imported tubes, semiconductors, and other components (mainly from Japan) and machinery in order to assemble them locally for export.[88]

Moreover, during the HCI drive, South Korea faced high levels of inflation due to investments that exceeded the available resources.[89] As government incentives attracted investors to HCI, the LI remained underdeveloped.[90] With an increase in aggregate governmental investment financed by money creation (and not by budgetary balances) and domestic demand with limited supply due to the bottleneck caused by an overinvested HCI over an underinvested LI, the prices skyrocketed bringing a blow to the export sector which would lose its competitiveness in international markets given the increase in input imports.[91] At the end of 1979, South Korea's exports began to decline in real terms while the national GDP entered on a dropping line and even reached a negative value in 1980.[92]

Because of the negative economic performance, the government launched the HCI Rationalization Measures between 1979-1981.[93] Since 1981, Seoul under the Chun Doo-hwan administration (1980-1988) has emphasized the importance of Research and Development (R&D) as a new economic development strategy.[94] Accepting HCI deficiencies, the Korean government took the right measures to put an end to imitating the techniques of advanced countries in favour of producing everything by its own.[95] The Korean production of semiconductors was given a crucial role induced by the presence of semiconductors in almost every electronic device and automobiles.[96] [97] The development of semiconductors as a strategic industry was recognized by the launch of the Semiconductor Industry Development Plan in 1985 when the government provided billions of `wons` in research grants to those companies involved in the production of semiconductors.[98] Since early 1990s, the development of Cutting-Edge Industries has been sponsored by governmental expenditures to Research and Development which have been growing considerably.[99]

2.4 `Chaebols`: The Korean private champions of industrialization

An important pattern of both HCI and R&D drives is the government's reliance on the private sector rather than public enterprises in economic development strategy.[100] It is true that the Seoul government pushed the public enterprises to produce those commodities considered as strategic, but it was the private sector that made its strongest mark during the industrial revolution.[101] Termed as "chaebol", those large family-owned business conglomerates in South Korea reaped the benefits of governmental fiscal and financial incentives starting with the HCI drive in 1973.[102] It was these privately held companies that played a critical role during the state-led industrial development. For the South Korean government, the identification of strategic industrial sectors was not enough without the choice of those actors who would contribute decisively to the realization of the government's will.[103] In a nutshell, the government ordered, and the chaebols delivered. Seoul's leadership was less concerned with the monopolization of the South Korean market by a handful of private companies, and more concerned with the formation of those Korean business champions that could compete with their Japanese and American competitors and penetrate global markets.[104] As mentioned by Eric Toussaint in "South Korea: The Miracle Unmasked", "the Korean bourgeoisie developed in the shadow of the state, which was its guardian and protector".[105]

Part III

South Korea: State Maturity and Integration into the Neoliberal World

3.1 From Keynes to Park

The development of the Light Industry (LI) (1950-1973) and Heavy and Chemical Industry (HCI) (1973-1980) was promoted as both an import substitution and export promotion strategy (the Korean experiment).[106] [107] The Research and Development (R&D) drive (started in 1981) was meant to take South Korea to the ultimate stage of producing almost everything (high skilled, technologically advanced commodities).[108] What all these drives had in common was a state-led (top-down) industrial planning in which every sector would be developed in order of priority.[109] [110] For this to happen, the government has restricted imports and foreign access to the Korean national market and subsidized the selected industrial sectors as champions of the national development momentum.[111] [112] This strict commercial policy was the engine for economic planning.[113] [114] [115] In "Keynes and Protection", Barry Eichengreen describes the advantages of a strict trade policy for industrial planning in developing nations.[116] According to Eichengreen, John Maynard Keynes himself who started as a free-trade promoter made a U-turn from a liberal commercial policy enthusiast towards recognizing the economic advantage of an import tariff once external constraints (such as the Golden Standard in the 1920s) restricted the British capacity to adopt reflationary measure to boost the output, increase investments and diminish unemployment through a currency devaluation.[117] The South Korean regime under Park Chung-hee used devaluation several times in the industrial planning given that Seoul was not restricted in doing so by a multilateral currency-fixing system.[118] Interestingly though, the same industries that Keynes in the early 1930s mentioned as acceptable exceptions from a free trade regime and important for a national industrial planning through import control -agriculture, iron, steel, and automobiles- would be the same industries that Seoul protected and chose for its export promotion strategy 30 years later.[119] [120]

3.2 Seoul`s thought on Neoliberalism

The import substitution and export promotion experiment brought self-sufficiency to South Korea and annual economic growth rate between 7-9%.[121] It abandoned the neoliberal basket of free trade, minimal state intervention and unsubsidized industrialization.[122] The trade-off that Seoul chose for its economic development was disloyalty to the liberal world -international institutions (World Bank), and state actors (the United States) - for an industrial planning conducted in stages that brough South Korea to the level of almost fully industrialized nation by the end of the 1990s.[123] But, ironically or not, it was this Korean experiment that brought Seoul to the neoliberal world, not outside of it.[124] The reason for that was that even though the economic contradiction stating that import substitution and export promotion could not run at the same time did not apply to Korea, import substitution was running at a lower speed than export promotion.[125] [126] South Korea was indeed producing a lot and the national output was growing between 1960s-1990s, but the South Korean production for exports was lower than its production for the substitution of capital goods and machinery to support its exports.[127] As mentioned by You-il Lee and Kyung Tae Lee in ``Economic Nationalism and Globalization in South Korea: A Critical Insight``, ``Korean firms during the 1980s depended on Japanese corporations for between 40 percent and 60 percent of their machinery, 60 percent of their parts, and 50 percent of their licensed technology``.[128] In a nutshell, Seoul still imported more than it produced solely for exports. And the fact that the Korean regime fully abandoned the principles of neoliberalism and restricted foreign direct investment (FDI) in favour of raising funds for industrialization through external borrowings and not FDI, put tremendous pressure on the national budget.[129] In the early 1990s, the Seoul government reoriented towards abandoning the decades-long restrictive policy on FDI after the national debt deepened into the abyss, putting pressure on the national currency (the won), raising prices, and therefore affecting the Korean competitiveness on exports through more expensive input imports.[130] According to Eric Toussaint in ``South Korea: The Miracle Unmasked``, ``In 1983, South Korea was fourth on the list of most heavily indebted countries in absolute figures (43 billion dollars), behind Brazil (98 billion), Mexico (93 billion), and Argentina (45 billion)``.[131]

Worse, the government's control of the financial sector (and credit) by nationalizing all central banks since the 1960s has created a series of losses for South Korean financial institutions.[132] During the HCI drive, the Korean government urged its commercial banks to lend exclusively at minimum interest rates to those entities engaged in the HCI.[133] These financial incentives (mentioned earlier in the paper) led to the predominance of non-performing loans (NPLs) after those ``HCI private champions`` suffered losses.[134] The low interest rate urged even more HCI industrialists to borrow money, increasing the NPL share of the Korean banks` lending portfolio.[135] The banking crisis was just around the corner.

3.2.1 First attempt to Globalization

The election of Kim Young-sam as president in 1993 proved to be a turning point both politically and economically.[136] Kim Young-sam would be the first non-military civilian president after three decades of military dictatorship.[137] Moreover, for the first time since independence, the protectionist euphoria in Seoul would be replaced by a neoliberal agenda.[138] Recognizing the shortcomings of decades of protectionism and over-subsidizing chaebols, Kim Young-sam initiated the neoliberal drive (`Segyehwa`) by easing FDI restriction laws between 1993-1998.[139] But South Korea's first neoliberal experiment would be a modest one. Although Kim Young-sam` neoliberal drive was thought to dismantle the politico-economic model focused on the government-chaebol relationship, he met with strong resistance from the same industrial champions not willing to give up their monopoly to foreign competitors.[140] As mentioned by You-il Lee and Kyung Tae Lee in ``Economic Nationalism and Globalization in South Korea: A Critical Insight``, ``the state's autonomy was preserved and actually assisted certain areas of the economy such as chaebols``.[141] Moreover, during Kim Young-sam`s `Segyehwa`, the balance between open FDI and empowering the chaebols tilted in favour of the latter.[142] Even though during Kim Young-sam`s tenure there were some improvements towards economic liberalization, such as the removal of trade barriers and other forms of import restrictions, on privatisation, and the liberalization of capital movements, Kim Young-sam still remained unable to disempower the state-chaebols relationship, and even assisted the chaebols through his move toward outward foreign direct investment and the relaxation of laws governing outward FDI.[143] [144] This was more reminiscent of the Park Chung-hee and Chun Doo-hwan eras of supporting the Korean industrialist and urging them to go and conquer the world markets, rather than a truly neoliberal turn to open up the Korean economy to foreign competitors.[145] [146]

3.2.2 Second attempt to Globalization

The real neoliberal turn was to be initiated by Kim Young-sam's successor, Kim Dae-jung (1998-2003) in response to the economic shock of the 1997 Asian financial crisis.[147] [148] The 1997 crisis was truly a cataclysm and the fact that was so pronounced in South Korea has brought to light many of the poor economic policies of past administrations.[149] First the huge share of non-performing loans (NPL) within the lending portfolio of Korean banks produced a banking crisis once the companies that borrowed could not pay back.[150] The Korean financial institutions collapsed and soon attracted the government in the vortex. Lacking funds, the chaebols soon faced restructuring measures with many industrial champions forced to sell affiliate companies to other foreign competitors from the United States.[151] The debt incurred by the chaebols was soon taken over by the government, increasing the public debt to unsustainable levels.[152] Seoul was getting closer to default and the negative perception of capital markets about Korea's ability to manage its finances and foreign debt made investors keep their money outside South Korea.[153] In a manner reminiscent of Argentina almost in the same period, capital running put pressure on the national currency and raised inflation and lowered incomes.[154] The increase in prices for all input imports affected the Korean capacity to export. Moreover, just like the Argentine exports suffering from the Brazilian devaluation of 1999, the decline in the value of the Japanese `yen` started in the middle of 1996 affected the competitiveness of Korean exports in 1997 given that Tokyo and Seoul exported almost the same range of products, mainly home electronics, electronic devices, automobiles, iron, and steel.[155] [156]

South Korea embraced neoliberalism after decades of state-led economic planning following the involvement of the IMF and World Bank in rescuing the Korean economy.[157] [158] [159] The landing capacity of those multilateral (neoliberal) institutions was always linked to harsh conditions that Seoul needed to accept in order not to default.[160] [161] Priority was given to foreign banks that lent to the South Korean government.[162] The repayment capacity of the South Korean government consisted mainly of revenues from exports, but also austerity measures such as cuts in public spending and higher taxes.[163] The revenues from exports were particularly important since the low level of `won` and high inflation put tremendous pressure on exports by raising the costs of input imports. Aware of this concern, the new president, Kim Dae-jung, distanced himself from the economic policy of his predecessor regarding the promotion of the chaebol-empowering outward FDI, and embraced the opening of capital account and welcomed inward FDI to South Korea.[164] According to the new Seoul administration, the inward FDI will only strengthen the Korean industrial capacity for exports without relying on foreign borrowings.[165] In turn this will be a cure for the national currency, will bring the trade balance to a positive value, will raise the employment rate, and will increase the foreign exchange reserves.[166] Following the embrace of neoliberal wave in favour of inward FDI, since 1997 the levels of capital entering the Korean market increased and remained strong until the early 2010s, reaching record levels at the end of the decade.[167]

Conclusion: `Let Them Grow`

Many economic observers would make a common front against decades of state-led strictly economic planning given the preponderance of the 1997 Asian financial crisis in South Korea. Some of them such as Jai S. Mah in ``Industrial Policy and Economic Development: Korea's Experience``, pointed to the excessive financial incentives accorded through the governmental control over the banking system to the HCI.[168] According to his lead, the non-performing loans (NPLs) produced an unavoidable banking crisis that dragged the government inside.[169] A banking crisis was soon to be followed by a public debt crisis.[170] This narrative was also empowered by Eric Toussaint who in ``South Korea: The Miracle Unmasked`` criticized ``the high degree of intervention from the state``, including ``state control of the banking sector``.[171] If the banking sector had not been held hostage by the government and liberalized interest rates instead of being set and kept to a minimum in favour of companies operating in the HCI, the NPLs would not have had such a high preponderance in the lending portfolio of the Korean financial institutions.[172] According to them the banking crisis could have been avoided.

On the other hand, Tamio Hattori in ``Economic Development and Technology Accumulation: Experience of South Korea`` points to the lack of technology and skill accumulation as the basic cause for the crisis.[173] Following his lead, the entire industrial revolution between 1969-1990s was in deficit as it did not solve the negative trade balance. South Korea imported and exported a lot during those decades, but the imports of inputs far exceeded the exports of finished goods.[174] [175] The gap would be covered by external borrowings.[176] Additionally, Hattori mentions the devaluation of the Japanese yen in 1997 as the external factor that produced a shock to Korean exports given the similarity of Korean and Japanese exports on international markets.[177] The lack of technological and skill expertise in order to produce more advanced inputs produced a toxic dependence on imports (mainly from Japan).[178] According to this lead, a debt crisis predated the banking one. Moreover, Tamio Hattori also mentioned the huge public investments that accompanied the industrial revolution. As he stated in his paper, the savings rate could not keep up with the investment rate putting pressure on the national budget.[179]

But all these arguments (though rightfully economically motivated) are misplacing from one important point of view. South Korea did what was naturally intended to do. One decade following the Korean division, South Korea was economically weak and preponderantly agrarian.[180] Some have pointed out that it was a mistake to over rely on the heavy and chemical industry, but it would have been an even bigger mistake to rely solely on agriculture and a weak underdeveloped manufacturing. Moreover, Seoul was not only economically weak, but also politically and militarily.[181] The strong tenure of Park Chung-hee brought an economic vision for decades to come, and equally important (as opposed to Syngman Rhee period), it brought the entire political class aboard.[182] Through protected industrialization, Seoul diversified its economy and changed its dependence on others for others` dependence on South Korea. Any kind of weakness would have made a potential realpolitik with a more politically-unified, militarily-superior and resource-rich North Korea dangerous to the South.[183] What South Korea did was what other (now developed) nations did in their past, mainly to follow the natural path of state crafting.[184] For example, what Park Chung-hee initiated in South Korea could easily be described as `the Korean Hamiltonian moment`. `Hamiltonian` because of the first US Treasury Secretary, Alexander Hamilton, who promoted the concept of `infant industries` and energetically pushed for their protection from foreign competition in order to grow enough to compete by themselves.[185] Additionally, the same Hamilton pressed for public investment in infrastructure, something that Park now might have been accused of overreacting.[186] Another good example could be the Great Britain itself, probably the one nation that invented free trade.[187] Alexander Hamilton would have been the one who theorized the `infant industry` argument, but Robert Walpole, the first British prime minister between 1721-1742 blatantly put it in motion.[188] In the early 18th century, London protected and subsidized its wool industry to face the main competitor: the Low Countries.[189] Soon, the wool industry provided the main export revenues for Great Britain to import the food and raw materials necessary to launch its Industrial Revolution in the late 18th-early 19th century.[190] In a similar way, Park Chung-hee promoted heavy industry both to supplement the light industry and to diversify its exports to obtain the revenues necessary to further support its Korea-made Industrial Revolution.[191] Just as Great Britain turned to free trade in the late 19th century when it was industrially ready to do so, South Korea turned to neoliberalism in the late 1990s when its industry was already advanced.[192]

Many free-market proponents would argue that South Korea turned neoliberal due to the 1997 Asian financial crisis and the IMF/World Bank bailout attached to Seoul's acceptance of economic liberalization. But in reality, South Korea would have liberalized despite the 1997 financial crisis, not because of it. And not because it was forced to, but because it was ready to do so. The Korean experiment with both import substitution and export promotion was only a stage (and a necessary one) in economic development and could not become a permanent economic-political model because it was not feasible in the long run. The continuous foreign borrowings to finance the input imports aimed at sustaining the exports put pressure on the national budget.[193] The Korean experiment was kept afloat by a skyrocketing national debt.[194] Since the early 1990s, the Kim Young-san administration has recognized the limitations of the Korean experiment and eased the FDI laws designed to supplement and even replace foreign-funded loans.[195] His successor, Kim Dae-jung took this policy to a higher level.[196]

Going even earlier, since the time of Chun Doo-hwan in the 1980s, the United States and the World Bank began to put pressure on Seoul to give up economic protectionism and open up to foreign competition after the Korean Hyundai chaebol won a significant share of the American market.[197] According to both the World Bank and Washington, Seoul was more than ready to give up its decades-long protectionism in favour of integration into the global market. But this was on the way even without external pressure. Since the 1980s, the Korean government has sought to initiate a process to give more autonomy to central banks and even privatize them.[198] The economic condition of South Korea in the mid-1980s prompted the government to begin liberalizing interest rates, long held at fixed and conveniently low levels for the HCI. According to Jai S. Mah in ``Industrial Policy and Economic Development: Korea's Experience``, ``trade balance surpluses that started in 1986 propelled the government to officially liberalize most interest rates in December 1988; and the liberalization ratio of interest rates reached 95.3 percent at the end of 1995`` (two years before the Asian financial crisis).[199]

[1] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), p. 150.

[2] Ibidem.

[3] Ibidem.

[4] Ibidem.

[5] Ibidem, p. 159.

[6] Ibidem, p. 160.

[7] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[8] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), p. 160.

[9] Ibidem.

[10] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[11] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 18.

[12] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 18.

[13] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), pp. 4211- 4212.

[14] Ibidem, p. 4211.

[15] Ibidem, pp. 4211-4212.

[16] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), p. 160.

[17] `Division of Korea`, Britannica, https://www.britannica.com/place/Korea/Division-of-Korea, Accessed on June 20^th, 2022.

[18] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4212.

[19] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[20] Ibidem.

[21] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), pp. 149-171.

[22] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 18-35.

[23] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 77-92.

[24] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 18-19.

[25] Kurtuluş Gemici, ` South Korea during the Park Chung Hee Era: Explaining Korea's Developmental Decades, Asian Journal of Social Science, 2013, Vol. 41, No. 2 (2013), pp. 175-192.

[26] H-J Chang, `` 'Thing 7' : Free-market policies rarely make poor countries rich' `` in Things they don't tell you about capitalism (Allen lane).

[27] Ibidem.

[28] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 77.

[29] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 18-19.

[30] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 18.

[31] Ibidem.

[32] Kurtuluş Gemici, ` South Korea during the Park Chung Hee Era: Explaining Korea's Developmental Decades, Asian Journal of Social Science, 2013, Vol. 41, No. 2 (2013), pp. 175-192.

[33] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[34] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), pp. 159-160.

[35] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 22.

[36] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4213.

[37] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 78.

[38] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 78.

[39] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 19-21.

[40] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 78.

[41] Ibidem.

[42] Ibidem.

[43] Chapter 20 ('International trade') from P. Krugman & R. Wells. Essentials of Economics (5th ed. Worth Publishers).

[44] Chapter 7 ('On Foreign Trade') from D. Ricardo, On the Principles of Political Economy and Taxation (1817).

[45] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 21.

[46] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[47] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), pp. M78-M80.

[48] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[49] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), pp. M79-M80.

[50] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[51] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), pp. M79-M80.

[52] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 21.

[53] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), pp. 4214-4215.

[54] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 78-79.

[55] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 21-23.

[56] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 78-79.

[57] Chapter 20 ('International trade') from P. Krugman & R. Wells. Essentials of Economics (5th ed. Worth Publishers).

[58] Chapter 7 ('On Foreign Trade') from D. Ricardo, On the Principles of Political Economy and Taxation (1817).

[59] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 21.

[60] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4214.

[61] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 23.

[62] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4214.

[63] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 23.

[64] Chapter 7 ('On Foreign Trade') from D. Ricardo, On the Principles of Political Economy and Taxation (1817).

[65] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 23.

[66] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4214.

[67] Ibidem.

[68] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 23.

[69] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4214.

[70] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 130.

[71] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 82-85.

[72] Ibidem, p. 82.

[73] Ibidem.

[74] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4213.

[75] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 83-84.

[76] Ibidem.

[77] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4213.

[78] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 83-84.

[79] Ibidem.

[80] Ibidem.

[81] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4213.

[82] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4213.

[83] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 22.

[84] B. Eichengreen (1984), `Keynes and protection`, The Journal of Economic History, 44(2), p. 365.

[85] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M80.

[86] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 80.

[87] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), pp. M79-M80.

[88] Ibidem.

[89] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 26.

[90] Ibidem.

[91] Ibidem.

[92] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 79.

[93] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 79.

[94] Ibidem, pp. 79-80.

[95] Ibidem. p. 80.

[96] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 25.

[97] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 81.

[98] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 81.

[99] Ibidem, pp. 80-81.

[100] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 22-24.

[101] Ibidem.

[102] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 82-84.

[103] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 22-24.

[104] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 22-24.

[105] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4212.

[106] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 22.

[107] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 78.

[108] Ibidem, pp. 79-81.

[109] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 22-23.

[110] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 131-132.

[111] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 82-85.

[112] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), pp. 4213-4214.

[113] B. Eichengreen (1984), `Keynes and protection`, The Journal of Economic History, 44(2), pp. 370-371.

[114] D. Rodrik (2011), `Chapter 9 – The Political Trilemma of the World Economy` from The Globalization Paradox (Oxford University Press), pp. 198-199.

[115] J.M. Keynes (1933), National Self-Sufficiency, Studies: An Irish Quarterly Review, 22(86), p. 181.

[116] B. Eichengreen (1984), `Keynes and protection`, The Journal of Economic History, 44(2), pp. 370-371.

[117] Ibidem, pp. 364-367.

[118] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 19.

[119] B. Eichengreen (1984), `Keynes and protection`, The Journal of Economic History, 44(2), p. 371.

[120] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 79.

[121] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 79.

[122] H-J Chang, `` 'Thing 7' : Free-market policies rarely make poor countries rich' `` in Things they don't tell you about capitalism (Allen lane).

[123] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), pp. 4214-4216.

[124] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[125] Ibidem.

[126] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M79-M81.

[127] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[128] Ibidem, p. 131.

[129] Ibidem, p. 130.

[130] Ibidem, p. 131.

[131] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4215.

[132] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 86-87.

[133] Ibidem.

[134] Ibidem.

[135] Ibidem.

[136] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4217.

[137] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4217.

[138] Ibidem.

[139] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 131.

[140] Ibidem, p. 132.

[141] Ibidem.

[142] Ibidem.

[143] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4218.

[144] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 132.

[145] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 24.

[146] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4216.

[147] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4218.

[148] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 133-134.

[149] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78.

[150] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 86-87.

[151] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78.

[152] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4218.

[153] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78.

[154] D. Rodrik (2011), `Chapter 9 – The Political Trilemma of the World Economy` from The Globalization Paradox (Oxford University Press), pp. 184-187.

[155] Ibidem, p. 186.

[156] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), pp. M78-M79.

[157] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78.

[158] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4218.

[159] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 133.

[160] Ibidem.

[161] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4218.

[162] Ibidem.

[163] Ibidem.

[164] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 133.

[165] Ibidem.

[166] Ibidem.

[167] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 134.

[168] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), pp. 83-87.

[169] Ibidem.

[170] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78.

[171] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4211.

[172] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 87.

[173] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78-M84.

[174] Ibidem.

[175] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[176] Ibidem.

[177] Tamio Hattori, ` Economic Development and Technology Accumulation: Experience of South Korea`, Economic and Political Weekly , May 29 - Jun. 4, 1999, Vol. 34, No. 22 (May 29-Jun. 4, 1999), p. M78-M79.

[178] Ibidem, pp. M78-M84.

[179] Ibidem, p. M78.

[180] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), p. 18.

[181] Christina Lai, `Economic Nationalism in South Korea and Taiwan`, Journal of Asian Security and International Affairs, August 2018, Vol. 5, No. 2, (August 2018), p. 160.

[182] Ibidem, pp. 160-161.

[183] `Chapter 7: Realism` from C. Reus-Smit & D. Snidal (ed.), The Oxford Handbook of International Relations (Oxford University Press: 2008), pp. 132-144.

[184] H-J Chang, `` 'Thing 7' : Free-market policies rarely make poor countries rich' `` in Things they don't tell you about capitalism (Allen lane).

[185] Ibidem.

[186] Ibidem.

[187] Ibidem.

[188] Ibidem.

[189] Ibidem.

[190] Ibidem.

[191] Sudip Chaudhuri, `Government and Economic Development in South Korea, 1961-79`, Social Scientist, Nov. – Dec. 1996, Vol. 24, No. 11/12 (Nov. - Dec., 1996), pp. 18-34.

[192] H-J Chang, `` 'Thing 7' : Free-market policies rarely make poor countries rich' `` in Things they don't tell you about capitalism (Allen lane).

[193] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), pp. 130-131.

[194] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4215.

[195] You-il Lee and Kyung Tae Lee, `Economic Nationalism and Globalization in South Korea: A Critical Insight`, Asian Perspective, Vol. 39, No. 1 (Jan.-Mar. 2015), p. 131.

[196] Ibidem, p. 133.

[197] Eric Toussaint, `South Korea: The Miracle Unmasked`, Economic and Political Weekly, Sep. 30 - Oct. 6, 2006, Vol. 41, No. 39 (Sep. 30-Oct. 6, 2006), p. 4216.

[198] Jai S. Mah, ` Industrial Policy and Economic Development: Korea's Experience`, Journal of Economic Issues, Mar., 2007, Vol. 41, No. 1 (Mar., 2007), p. 84.

[199] Ibidem.

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