In Korea the term Hangangeui Kijeok, or in English the miracle of the Han River, is what the Korean citizens refer to when speaking about the fast development of the Korean economy from the 1960s to through the 1980s. The miracle of the Han River saw Korea going from one of the poorest countries in the world to an exporting giant and becoming one of the four Asian tigers alongside with Hong Kong, Taiwan and Singapore.
The exporting industries are the leading force to South Korean economical development. For example, South Korea has succeeded in such industries as Information technology, automotive, computer science and heavy industries such as shipbuilding and steel, which are all led by such homegrown large corporations as Samsung, LG, Hyundai, Daewoo and Posco.
Just as the other Asian Tigers, the Korean government played a major role by creating industrial and exporting policies that helped the development of its exporting sectors.
The government as well created enormous advantages for those companies that excelled at exporting. These small companies turned into the Chaebol mentioned above and have been driving the Korean economy. The government bequeathed these companies tax breaks and other subsidies to gain advantage nationally and internationally. In this paper, I will discuss how the export and industrial policies helped develop and support the large corporations. In my examples, I will demonstrate the creation of Samsung and Hyundai.
One of the major export policies that helped to develop the export sector was the currency undervaluation. With the effective exchange rate kept in the exporter's favour, this helps the exporters by having cheaper goods available to other countries such as the United States, Japan and Europe. The cheaper goods could enter the market in an undervalued position to gain acceptance much like what Japan did during their...