Miracle on the Han River
Encyclopedia
Miracle on the Han River refers to South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

's highly accelerated export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

-fueled economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

, including rapid industrialization, technological achievement
Technology
Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...

, education boom
Education in South Korea
Education in South Korea is viewed as being crucial for success and competition is consequently very heated and fierce. A centralized administration oversees the process for the education of children from kindergarten to the third and final year of high school. Mathematics, science, Korean, social...

, exponential rise in living standards, rapid urbanization
Urbanization
Urbanization, urbanisation or urban drift is the physical growth of urban areas as a result of global change. The United Nations projected that half of the world's population would live in urban areas at the end of 2008....

, skyscraper boom
Skyscraper
A skyscraper is a tall, continuously habitable building of many stories, often designed for office and commercial use. There is no official definition or height above which a building may be classified as a skyscraper...

, modernization
Modernization
In the social sciences, modernization or modernisation refers to a model of an evolutionary transition from a 'pre-modern' or 'traditional' to a 'modern' society. The teleology of modernization is described in social evolutionism theories, existing as a template that has been generally followed by...

, successful hosting of the 1988 Summer Olympics
1988 Summer Olympics
The 1988 Summer Olympics, officially known as the Games of the XXIV Olympiad, were an all international multi-sport events celebrated from September 17 to October 2, 1988 in Seoul, South Korea. They were the second summer Olympic Games to be held in Asia and the first since the 1964 Summer Olympics...

 and 2002 FIFA World Cup
2002 FIFA World Cup
The 2002 FIFA World Cup was the 17th staging of the FIFA World Cup, held in South Korea and Japan from 31 May to 30 June. It was also the first World Cup held in Asia, and the last in which the golden goal rule was implemented. Brazil won the tournament for a record fifth time, beating Germany 2–0...

, fast democratization
Democratization
Democratization is the transition to a more democratic political regime. It may be the transition from an authoritarian regime to a full democracy, a transition from an authoritarian political system to a semi-democracy or transition from a semi-authoritarian political system to a democratic...

 and globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...

 that miraculously transformed the country from the ashes of the Korean war
Korean War
The Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...

 to a wealthy and highly developed country
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...

 today with a globally influential trillion dollar
Trillion dollar club
The Trillion dollar club is an unofficial classification of the world's major economies with a gross domestic product of more than USD 1 trillion per year....

 economy and well-known multinational
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...

 conglomerates such as Samsung
Samsung
The Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...

, LG
LG
LG may refer to:*LG Corp., a South Korean electronics and petrochemicals conglomerate*LG Electronics, an affiliate of the South Korean LG Group which produces electronic products* Lawrence Graham, a London headquartered firm of business lawyers...

 and Hyundai-Kia.

More specifically, this phrase refers to the economic growth of Seoul
Seoul
Seoul , officially the Seoul Special City, is the capital and largest metropolis of South Korea. A megacity with a population of over 10 million, it is the largest city proper in the OECD developed world...

, through which the Han River
Han River (Korea)
The Han River is a major river in South Korea and the fourth longest river on the Korean peninsula after the Amnok, Duman, and Nakdong rivers. It is formed by the confluence of the Namhan River , which originates in Mount Daedeok, and the Bukhan River , which originates on the slopes of Mount...

 flows. Also, the miracle generally refers to the period between 1953 and 1996. The phrase comes from the "Miracle on the Rhine
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...

", which is used to describe the economic rebirth of West Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....

 after World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

, resulting partially from the Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...

. The word "miracle" is used to describe the growth of postwar South Korea into the world's 13th largest economy and a role model for many developing countries, something considered to be impossible by many at the time. Seoul's infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

 was destroyed by the Korean War
Korean War
The Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...

 and millions lived in poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...

 at the time, with thousands of unemployed
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

 people struggling to fulfill basic needs. When General Park Chung-hee seized power in 1961, South Korea had per capita income of less than $100 per year. At this point, South Korea was mostly dependent on foreign aid, which mostly came from the United States of America in exchange for Korea's involvement in the Vietnam War
Vietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...

. President Park Chung-hee
Park Chung-hee
Park Chung-hee was a Republic of Korea Army general and the leader of South Korea from 1961 to 1979. He seized power in a military coup and ruled until his assassination in 1979. He has been credited with the industrialization of the Republic of Korea through export-led growth...

's Saemaeul
Saemaeul
Saemaeul, or "new village," can refer to:*The New Community Movement or Saemaeul Undong for rural development in South Korea in the 1970s* Saemaul-ho, a class of passenger train operated by Korail...

 movement focused on developing rural Korea. The strong leadership of the Park government and the effective use of cheap labor started a spark in the South Korean economy. In less than four decades, this "hopeless" city was completely transformed into a world leading global city
Global city
A global city is a city that is deemed to be an important node in the global economic system...

, a centre of business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

 and commerce
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

 in Asia and a highly developed world city and economic hub, having among the most advanced technological infrastructure in the world. It is considered by many Koreans as a symbol of national pride and "can-do" spirit. Besides the Saemaeul
Saemaeul
Saemaeul, or "new village," can refer to:*The New Community Movement or Saemaeul Undong for rural development in South Korea in the 1970s* Saemaul-ho, a class of passenger train operated by Korail...

 movement, the Korean government carried out another effective economic development plan called the Five-Year Plan
Five-year plans of South Korea
-Background:Both North and South Korea had survived the Korean War . From the end of World War II, South Korea remained largely dependent on U.S. aid until an internal revolution occurred in 1961...

. There were more than 5 plans created, and they were designed to revive the economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

. Each of the plans contributed tremendously in industrialization and enlarging the marketplaces of South Korea.

Park Chung-hee rule (1963-1979)

One of the most important people that contributed to the Miracle on the Han River was Park Chung-Hee
Park Chung-hee
Park Chung-hee was a Republic of Korea Army general and the leader of South Korea from 1961 to 1979. He seized power in a military coup and ruled until his assassination in 1979. He has been credited with the industrialization of the Republic of Korea through export-led growth...

. Under the rule of Park Chung-hee
Park Chung-hee
Park Chung-hee was a Republic of Korea Army general and the leader of South Korea from 1961 to 1979. He seized power in a military coup and ruled until his assassination in 1979. He has been credited with the industrialization of the Republic of Korea through export-led growth...

, South Korea began to make a dramatic recovery in its economy. Park Chung-hee announced the first 5-year Economic Development Plan to mobilize all of its resources in establishing a self-supporting industrial economy. Although he had many plans and contributions to Korea's economic revitalization, the most important thing that Park Chung-hee brought to Korea was self-confidence. This psychological boost gave Koreans hope and motivation in its path to economic success. "Treat employees like family" was Park's new motto, which also led to Korea's economic success. With this motto, Korean workers were 2.5 times more productive than American workers even though Korean workers were paid one-tenth of American wages.

During Park's rule, Korea suffered a very authoritarian leadership. Under the Park government, there was a huge censorship in the press and media. In his program of Yushin Kaehyuk (Revitalizing Reforms), he caused Korea Cinema to enter into a depression period. Many consider this as one of the lowest periods in the history of Korean cinema. Because of his strong feelings towards anti-communism, he would censor all of media and restrict freedom of press. Disregarding human rights and violations, Park would utilize the abundant supply of cheap labor and place his foremost priority on Korea's economic restoration. Although he was successful in bringing economic recovery to Korea, he trampled on human's rights and often imprisoned anybody who would question his rule. There was no freedom of speech under Park Chung-hee's rule. He would often arrest and torture anyone who would rebel against his policies. Park Chung-hee's rule came to an end on October 26, 1979 when he was killed by his closest friend, Kim Jaegyu
Kim Jaegyu
Kim Jaegyu was a South Korean Army Lieutenant General and the director of the Korean Central Intelligence Agency. He is most famous for assassinating South Korean President Park Chung-hee, who had been one of his closest friends for a long time, on October 26, 1979...

. Many praise him for the contributions he made to Korea's economy and its recovery. Some even give him the title as the greatest South Korean president for all the industrial and economical growth South Korea experienced in his rule, but many criticize him for his harsh and cruel dictatorship. But one thing is certain; Korea would not have gone through an economic revolution if it weren't for this man. Despite all of his harsh and cruel policies, he is to be credited for Korea's economic success.

Foundations of the “Miracle”

At the root of the rapid expansion of the Korean national economy were several factors both societal and political. Experts agree that one of the fundamental building blocks of the Miracle on the Han was the stress placed on education. Aided by widely held Confucian ideals which celebrated literacy and scholarship, the state established a public compulsory education system. This allowed Korean labor to become highly skilled while labor expenses remained relatively low.

“The Iron Triangle”
Following the unprecedented economic growth experienced by Korea beginning in the 1960s, experts began to speculate that the Miracle on the Han could be explained by three key factors: state strength, strong bureaucracy and the Korean Chaebol businesses.

Authoritarian Rule
Following a military coup in the 1960s Park Chung Hee established a strong authoritarian rule. Korean political life was characterized by a one party regime. State strength can be most simply defined as a state’s ability to ignore political pressure and stamp down social unrest. In an authoritarian state in which the leading party must only appease a small constituency of the ruling or military elite, there is an opportunity for strong, directed and unified policy to be put in place. Park’s government was able to conflate national and private economic interests in a way that manipulated nationalistic sentiments in order to push through economic policies. One way this was incorporated was through policy loans. These policy loans were utilized to stimulate the struggling economy. The loans were granted by the government to individuals who would abide by their wishes as to where to invest this money. With this strategic plan, the government had hopeful plans of growing and nurturing Korea's economic strength. The result was a state-sponsored industrialization and commercial expansion.

Foreign Aid
Majority of the foreign aid that provided the capital for the miracle came from the United States. Aid in the form of money and goods from the military PX (Postal Exchange) were constantly flowing into South Korea since World War II. Official sources indicate that $12 billion of the American treasury went to South Korea in the years 1945-1965. By 1960, South Korea had $100 per capita income or an estimate of $2 billion of national income. A high point in the foreign aid came in 1957, where a whopping $383 million dollars were provided by the U.S. Money also sloshed in as military aid --- $400 million in the year 1957. Imports from the U.S were stunning as well. By the end of 1950, As much as five-sixths of all Korean imports came from the U.S. During the industrialization phase, Korea borrowed money from the world, most of which was from the United States. Towards the end of 1970s, Korea became one of the four biggest debtors in the world. Foreign aid and loans gave the needed capital to catalyze the heavy industrialization witnessed as the Miracle on the Han River.

Cost of Freedom

In the aftermath of the Korean War, South Korea became increasingly authoritarian as a result of militant anti-Communist policies enacted by President Syngman Lee. Despite these issues, the Lee administration is noted for at least two achievements which aided the economic growth. First, Lee's firm leadership in the aftermath of the war allowed South Korea to withstand the adversities that South Korea suffered during the War. Secondly, the Lee administration implemented an important land reform that provided for the redistribution of land which adverted a potentially explosive social issue. However, when Lee and the Liberal Party rigged the presidential election of 1960 in an attempt to consolidate their power, nationwide demonstrations led by angry students brought about the end of the Lee Regime, to be succeeded democratically by Chang Myon, the leader of the Democratic Party. However, with factional and other differences, economic and social problems continued to rise and in 1961, a military coup led by General Park Chung Hee overthrew the Democratic Party, giving rise to the military junta
Military junta
A junta or military junta is a government led by a committee of military leaders. The term derives from the Spanish language junta meaning committee, specifically a board of directors...

. Through strong leadership provided by President Park and his government, South Korea made an economic recovery through the effective utilization of the abundant supply of cheap labor.
By end of 1996, South Korea established itself as the eleventh largest economy in the world. However, such enormous growth of economy came with the cost of freedom. President Park believed that South Korea was not ready to be a full democratic nation nor a free nation. As he stated: "Democracy cannot be realized without an economic revolution." President Park believed that poverty of the nation will make it vulnerable, and therefore the most urgent task was to eliminate poverty rather than establish a democratic nation. During Presidency of Park era, the Korean Central Intelligence Agency became much feared institution and the government frequently imprisoned anyone that opposed them. Yet, his fierce leadership to save the South Korean economy led to enormous success.

Junta During the Miracle

Junta
Military junta
A junta or military junta is a government led by a committee of military leaders. The term derives from the Spanish language junta meaning committee, specifically a board of directors...

-Military dictatorship. Whenever problems arose that dealt with economic development which is ideally a rich nation with a strong army, the Junta harassed the wealthy for funding. The Junta also gathered a group of people who earned a lot of money due to Syngman Lee, who are known as the "illicit profiteers." They also had to arrest a man who ate in Syngman Lee's container where animals ate while stating bizarre remarks. The Junta definitely helped shape where Korea lies today. Strangely, even though they were harsh, they helped the economy to exponentially increase, which eventually was able to receive recognition globally. The different stages Korea went through due to the different Junta leaders, Korea was able to experience and learn how to control their country.

Crisis and Reform
After the Korean War, Korea was in shambles economically. The nation was practically bankrupt and the government did all it could to sustain their banks. However, they mostly tried to cover up their jaw dropping deficit by lying. The Bank of Korea governor said that short-term nonperforming loans totaled 20 billion; whereas private analysts were placing the figure as high as 80 billion dollars; he said foreign reserves were at 31 billion, when in fact Korea had but 6 billion in reserves left, and all of it was committed in the near term. However, Korea received short term relief from the United States when Treasury Secretary Rubin and other senior officials agreed to a 57 billion dollar bailout package in exchange for drastic restructuring of Korea's market. Korea had to restructure the financial sector and make it more transparent, market oriented, and better supervised. Korean firms had to restructure in a way that would allow international firms to audit them. Around December 1997 President Kim Young Sam had announced that South Korea had advanced its economy by joining the Organization of Economic Cooperation and Development (this group consisted of top industrial nations). President Kim then created a new labor law which retained the Korean Federation of Trade Unions, a large, state-controlled trade union, as the only officially approved labor organization for five more years, leaving the independent Korean Confederation of Trade Unions out in the cold. This new law undercut workers' interests. Korea's financial sector officially became westernized and United States was able to oversee Korea's economy.

The President's of South Korea's success

The Korean War had left everyone scrambling about, yet Korea needed a president, and the first of them was President Syngman Lee; he led Korea into the first of the economic booms because he fulfilled two big achievements. First of which was the fact that Korea could endure such hardship during the war was because of the President’s leadership. The second achievement was that an important land reform was implemented, which provided for redistribution of land, thus removing a potentially explosive social issue. Another president with a tremendous help to South Korea was President Park Chung Hee. He took control in Korea and while all others were against it, he firmly signed a diplomatic normalization treaty with Japan. This treaty stated that Japan promised to provide economic aid totaling 800 million dollars. After this South Korea started to make a blooming recovery. Due to President Park Chung Hee South Korea had become the 11th largest economy in the world with a per capita income exceeding $10,000 per year and more than 70% of its population claiming to be middle class. One of the biggest concerns President Park Chung Hee had were the ongoing pressure from North Korea. However even though he had this concern he put that aside to make a 5-year plan to boost the South Korea economy.
President Park Chung Hee planned to
  • develop energy industries (such as coal production and electric power)
  • expand agricultural production and aimed at increasing farm income and correcting the structural imbalance of the national economy
  • develop basic industries and the economic infrastructure
  • utilize to the full extent of idle resource; increased employment; conservation and utilization of land
  • improve the balance of payments through export promotion
  • promote science and technology.


However, using this 5-year plan did not bring about an immediate self-reliant economy. There came a rapid period of growth out of this policy which is what they initially hoped for. The ambitious plan had simply looked for better policies in modernizing and preparing for long-term economic success. The government's efforts were designed to bring about policy reform.

The Kingdom of Chaebol and The Korean Economy

Chaebol
Chaebol
Chaebol refers to a South Korean form of business conglomerate. They are global multinationals owning numerous international enterprises. The term is often used in a context similar to that of the English word "conglomerate"...

 refers to corporate groups in South Korea, mainly ran by families, that exercised monopolistic or oligopolistic control in product lines and industries. Every Chaebol was started by a family group and can be compared with conglomerates of the United States and the Zaibatsu
Zaibatsu
is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...

 of Japan. Sometimes the Korean military itself is considered as chaebol. During the Industrialization period of South Korea, President Park Chung Hee supported the rise of Chaebol groups. The state facilitated the improvements of these groups for the benefit of Korean economical growth. Inside the operations of Chaebol groups, there are many branches that each of family members control and operate. The strong Korean family relationship is important to the chaebol because family members enter the market of business, not an individual. Every Korean chaebol business was started by a family group and 70 percent of chaebol business are still managed by family members. Also, in order for the power of status and standing of these groups to grow stronger, many Chaebols form alliances through marriage. For example, well known chaebol groups like Samsung and Hyundai have held hands together through marriage. Many political affiliations are created within the chaebols. One-third of chaebols occupy high-ranking offices in three branches of the government. Therefore, the existence of chaebols in Korean government can be described as significant. The Chaebol, tired of new generals coming in and seizing their property or telling them what industries to invest in, clearly moved in the same direction as the middle class, toward democratic elections and the rule of law. Their ideal was the Japanese model of stable one-party democracy. According to George Ogle, ten chaebol families managed 60 percent of the miracle on the Han. With the help of governmental help and associations, Chaebols are still great influence of the Korean economy today. There are some that say the chaebol groups will shrink over time. The Kim Young Sam government tried to help out the smaller businesses by providing more loan money but that did not deter the chaebols from continuing to expand. In 1992, Korea was rated 100 out of 100 on wage rates and 100 on tax burden or lack thereof (with Spain the next highest at 71, and the United States third at 55). In other words, the Korean state still provide a relative capitalist heaven for the big business groups. (cumings, 330-331).

The Mechanism for Economic Growth

When the junta of Park Chung Hee came into the power, it had the advantage of seeing trends in the previous presidential terms. Not long before the junta had this authority the idea that the economic practice of import substitution proved unable to help the economy was widely recognized. A lack of free trade enabled corrupt leaders of Syngman Lee’s administration to become rich. For this reason, it took action to stop corruption.

Having known about some sizeable firms with growing markets, the government junta shifted the focus from a self sufficient economy toward the exportation of goods for the influx of foreign capital. That way, there would be enough capital in circulation. Civilians cooperated by investing in the markets and the business employers did their part making sure employees were very loyal. What made the growth even better was that the labor cost saving was 25 times greater than that of the U.S. Fortunately, this continued to be the case even when the consequences of marginal utility seemed to be looming because of the overproduction of goods.

A motivating factor in the industrial sector that is difficult to ignore is the influence of a bunch of “policy loans” that were closely associated with negative interest rates. With the government backing the heavy industries, electronics and steel industries flourished. Employers didn’t let such a lucrative opportunity slip away. Another benefit of industries promoted by the government was the freedom for leaders in the industrial sector to ambitiously spend money without feeling constrained by a budget due to the government’s commitment to keep the business running. Even so, they were well educated on how to efficiently use resources to benefit the country while some of the smaller government-monitored industries became the business partners of the government which not only helped achieve the government’s goals but raised their incomes. Therefore, the government expected positive results when they pressured businesses workers to perform well. Sure enough, money came pouring into the economy as people became confident in investing in particularly successful heavy industries whose rewards they were enjoying.

Post Miracle on the Han River
Han River (Korea)
The Han River is a major river in South Korea and the fourth longest river on the Korean peninsula after the Amnok, Duman, and Nakdong rivers. It is formed by the confluence of the Namhan River , which originates in Mount Daedeok, and the Bukhan River , which originates on the slopes of Mount...



In 1997, the miracle on the Han River
Han River (Korea)
The Han River is a major river in South Korea and the fourth longest river on the Korean peninsula after the Amnok, Duman, and Nakdong rivers. It is formed by the confluence of the Namhan River , which originates in Mount Daedeok, and the Bukhan River , which originates on the slopes of Mount...

 ended. Unfortunately, South Korea once again encountered an economic disaster called the 1997 Asian Financial Crisis. Korea's reserves were severely limited with a total of only $6 billion remaining. The majority of this money was allocated for spending in the upcoming term. Kim Yongsam, first nonmilitary person to become president in thirty years, failed to protect and raise the economy. Because of the positive turn around of the economical growth after the Korean war, South Korea was on full force in keeping their economy strong. While South Korea had the best intentions for their economy, it was also their downfall. From the overwhelming expansions of companies by the chaebol and the growth of loans from the banks, South Korea was losing its miracle. Most people mark the 1997 crisis as the end of the miracle. President Kim Taejung took office after President Kim Yongsam and had quite a lot of damage to repair. Taejung was openly opposed to the chaebol and the current systems of finance and government. Because of President Kim Taejung's reforms and views on reconstructing the economy, Korea was saved and it slowly recovered. With the efforts of the citizens, a new President, and 58 billion dollars put together by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

, the country paid its debts and surmounted the problem. During President Kim Taejung's time in office did Korea have the chance to be saved. South Korea amazed the world again because the time South Korea spent to overcome the financial crisis was relatively shorter compared to other countries who experienced similar situations.

With the economic disaster of 1997 Asian Financial Crisis stumbling upon South Korea, it took a great toll on the economy and seemed to bring crisis again. However, in 1999, the G20 was established. G20, The group of twenty finance ministers and central bank governors, is made up of 19 countries. This group was formed to bring together important industrial and emerging-market countries from all regions of the world. Ever since its establishment, the G20 holds annual meetings and discuss to endorse the financial stability of the world and to attain a sustainable economic growth and development. Together, its members account for two-thirds of the world’s population, 80 percent of world trade and 90 percent of the world GDP (Gross domestic product). The G-20 has progressed a range of issues since 1999, including agreement about policies for growth, reducing abuse of the financial system, dealing with financial crises and combating terrorist.

Thoughts on "The Miracle on the Han River"

The time between the years 1961-1996 was a period of economic boom for South Korea. Its economy developed so rapidly that it is popularly referred to as the “Miracle on the Han River.” This kind of economic growth spurt seemed so unlikely and impossible to achieve that it was considered a “miracle.” As a matter of fact, no Japanese or American even predicted something like this could happen before about 1960 (Cumings, 300). But Bruce Cumings brings up an interesting point that questions the assumptions that the term “Miracle on the Han River” is making. South Korea had made such an incredible leap from the destruction left by the Korean War to becoming the eleventh largest economy in the world. It did not happen by sheer supernatural or miraculous might however. “Koreans in the South have worked their fingers to the bone to create the industrial country that we now see” (Cumings, 341). It costs the people struggle, hardship, and unceasing effort; even miracles take faith.
This supposed "miracle" when closely speculated was inevitable judging from the fact that the "Korean military...had swelled from 100,000 in 1950 to well over 600,000 by 1953"(Cumings, 302); and as many people say with authority, power and wealth follow along. In other words, the economic boom was definitely predictable due to the preceding historical events.

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