Asian Economic History Essays - Economy Of South Korea, Free Essays

Asian Economic History Essays - Economy Of South Korea, Free Essays Asian Economic History Brief Economic History and Government Policy Korea was one of the poorest countries in world after experiencing two wars. World War II and Korean war (1950 1953). The country even experienced a food shortage so that it had to heavily rely on the foreign aid. Yearly per capita consumption was a mere $88 as late as 1965. However, since 1965, Korea has been transformed from its underdeveloped agricultural economy to a leading Newly Industrializing Country. Between 1965 and 1981, its gross national product GNP multiplied twenty times from $3 billion to $63 billion and per capita GNP increased sixteen times from $88 to $1,554. There have been many explanations for Koreas successful story. Among those, the strong role of government would be probably the most important one. At the same time, this would be also responsible for current recession. After Koran war, the government in fact had no sense of direction and also due to the unstable political situation, the country didnt have specific economic policy until 1961 when military government came to power and established the major institution guiding its economic planning called Economic Planing Board (EPB). This government set economic development as the top national priority and recognized the financial system in support of economic development plan. To achieve this purpose, it focused its policies mainly on export expansion moving its emphasis from import substitution. The result was considered quite successful for economic growth. Between 1965 and 1973, exports grew at average annual rate of 45%, from $175 million to $3,271 million. The success of the expansion was due primary to three factors (Kwack, 72). The first was a favorable international economic environment, which saw total world imports expand from $175 billion in 1965 to $536 billion by 1973. This boom in impo rts of the world reflected the fact that the industrialized had not yet erected import barriers against exports from developing countries and were, on the contrary, quite active importers of cheaper goods from Newly Industrializing Countries such as Korea. A second significant factor was the Korean governments policy of promoting exports, which was set in motion in 1965. Initially, the government introduced a number of fiscal and financial incentives, which I will discuss more later. A third factor was Koreas abundant and highly productive labor force. This gave Korea a strong comparative advantage in producing labor intensive products and provided the impetus for the notable expansion for exports. In order to expand total exports over time periods, however, Korea turned to new export industries that were expected to have a comparative advantage with abundant labor, but skilled labor at this time, such as shipbuilding, electronics, and steel industries. This attempt was viewed as a manufacturing shifting of its emphasis from light industries to heavy industries which later started to produce intermediary goods as substitutes for imports (Kwack, 77). However, this governments promotion of heavy industries for large-scale economies led to under-investment in light manufacturing industries causing productive gap between small and large firms. Actually, the large firm that runs heavy industries has been given priorities, and small and medium firms relatively disregarded in governments allocation of loanable funds and other administrative preference. As a result, conglomerates later known as chaebol (family owned conglomerate) have been formed through this expansion of heavy industries. Governments Policy Before 1961 As seen above, the Korean government has been focused on import substitution for economic growth during 1953 65 period and followed by export expansion policy after 1965. However, to progress its policy efficiently, the government had to face to one of serious problem, poverty. After two major wars, the country even with a food shortage experienced lack of capital. There was no source for savings and investment to finance economic growth domestically, so it depended heavily on foreign capital which inflow in a form of mostly aid and loan in the early stage of economic growth. The proportion of foreign capital to total capital formation in 1965 was approximately 40 percent. In addition to inflow of foreign capital, the government faced allocation of capital with using its financial system. Before the military government in 1961, the loan decisions of commercial banks were heavily influenced by political interference (Haggard, 26). Well, in fact the loan decisions

How a Gamble Paid Off

How a Gamble Paid Off Several years ago, I spent ten days in Las Vegas on business. I allowed myself only twenty dollars to gamble with and am proud to say I broke even. After my home state approved the lottery, people lined up to buy the prized tickets. Not I. I can probably count on one hand the number of lottery tickets Ive bought. Im just not that much of a gambler. But the one time I did gamble, it paid off in a big way. A very big way. I had this completed manuscript titled Wink of an Eye gathering dust in my file drawer when I saw a notice in FundsForWriters for the St. Martins Press/Private Eye Writers of America Best 1st PI Novel competition. The manuscript met all the criteria for submission so I stuffed it in an envelope, scraped together the thirty dollar entry fee and mailed them off. To others, thirty dollars may not seem like a lot, but at that time I was unemployed and on the last weeks of collecting unemployment. It was a weeks worth of groceries. But I took a chance, crossed my fingers and said a prayer. Time went Then one day many weeks later, there in my inbox was an email from St. Martins Press. They were pleased to advise me Wink of an Eye had been chosen as a finalist for the competition. I remember being super excited that it could garner a publishing contract or some other kind of notice as a second place, third place, or honorable mention submission, because surely it wouldnt win. A week later, I received another email from St. Martins advising me my manuscript, Wink of and Eye, had won the competition. The prize was a ten thousand-dollar advance and publishing contract. Not a bad return on a thirty-dollar investment. Im still not much of a gambler, but I will take a second look at contests with big prizes now. If you consider entering your work in a contest, there are a few things to consider. First, is the entry fee fair in relation to the prizes? I saw a recent call for submissions where the entry fee was forty dollars with a hundred-dollar prize. You do the math. Secondly, winning a contest does not mean your winning entry will be published, unless the prize is publication. In that case, you still must read the contest rules and regulations, and contract if offered, thoroughly, to determine if the rights taken and means published fit your preferences. And lastly, entering your unpublished work in a contest should carry the same polish as if you were submitting to a publisher. Revise, edit, proofread. Repeat. The process should be the same whether its going to a contest, small press, or big house. Not all contests are equal, but there are some really good ones out there. And they can be an excellent way of getting your foot in the door and reaching an audience, if youre willing to take the gamble.