A ship under construction at the Hyundai Heavy Industries shipyard in South Korea, one of the world's leading industrial countries. Seokyong Lee for The National
A ship under construction at the Hyundai Heavy Industries shipyard in South Korea, one of the world's leading industrial countries. Seokyong Lee for The National
A ship under construction at the Hyundai Heavy Industries shipyard in South Korea, one of the world's leading industrial countries. Seokyong Lee for The National
A ship under construction at the Hyundai Heavy Industries shipyard in South Korea, one of the world's leading industrial countries. Seokyong Lee for The National

Korea's creativity is fuel for Asian powerhouse


  • English
  • Arabic

Over the course of 60 years South Korea has developed to become an industrial giant. And it was the inspired visions of its leaders that made it all possible, writes Hyun Oh-seok

Chung Ju-yung, the founder of Hyundai Group, pulled out a 500 won (Dh1.6) note from his pocket and placed it on the table.

On the back of the currency was a picture of a geobukseon, an iron-clad battleship the Koreans built and used in the 1500s.

"Korea built this iron-clad battleship in the 16th Century, which is 300 years prior to [the first such vessel built in] the United Kingdom," he said.

"Although industrialisation in [South] Korea is in the initial stage, this is only due to its seclusion policy of the past. Based on the country's experience of building such advanced battleships, I assure you Korea holds the potential to build vessels."

In 1971 Mr Chung announced plans to establish a shipbuilding industry in Korea. Everybody thought his plan was "crazy", as Korea did not have the financial resources, lacked the technology and did not have a reputation for shipbuilding. Yet Mr Chung repeatedly visited foreign banks to secure the necessary investments. Despite his passion for the project, the only answer awaiting him was "no".

Thinking Barclays Bank in the UK was his last chance, he gave his speech about the geobukseon and succeeded in persuading the chairman of the bank. In doing so, he secured the investment desperately needed to launch the shipbuilding industry. He also persuaded a major shipping agent in Greece to place an initial order for two 2.6 million tonne ships. It is in this way the entrepreneurship of the private sector has made South Korea one of the world's leading industrial countries.

The tremendous growth of the Korean economy over the past 60 years has been accompanied by deep changes in its industrial structure. Initially, the economy was dominated by agriculture and other primary industries. As industrialisation gained full momentum in the 1960s. Labour-intensive manufacturing, which utilised Korea's comparative advantage in its abundant supply of a well-educated and diligent labour force, led economic growth.

However, as salary levels began to rise and competition from low-wage economies intensified, Korea faced increasing pressure to transform its economic structure. As a result, in the 1970s, capital-intensive, high-productivity manufacturing began to gain importance.

At the same time, the industrial structure was transformed towards heavy and chemical industries on the back of the serious threat to national security resulting from the reduced presence of American forces in Korea. Whenever the Korean economy moved to a new stage, the entrepreneurship of the private sector, along with government support through public-private dialogue, was a major factor.

Entering the 1980s, there was a change in leadership. Chun Doo-hwan took advantage of the fragile political situation following the assassination of then president Park Chung-hee and gained the office of the presidency. As a graduate of the Korea Military Academy, Mr Chun held strict control over all aspects of decision making. Yet there was one exception: his relationship with Kim Jae-ik, one of the leading technocrats of the economic planning board. Upon taking power, Mr Chun appointed Mr Kim as his senior economic adviser. Mr Chun expressed his full trust and support in Mr Kim's decisions regarding economic matters, openly referring to him as "Korea's economic president".

With full support from the president, Mr Kim pursued a policy of stabilisation, liberalisation and market opening, which solved problems of excess investment and inefficiency the Korean heavy and chemical industries were facing. In the period of "three lows" (low interest rate, low exchange rate and low petrol prices), his strategy made possible remarkable advances in Korea's industrial development. As a result, Korea achieved phenomenal growth rates during this time.

In a generation, the nation's economic structure was transformed from primary to labour-intensive, low-productivity sectors and eventually to capital-intensive, high-productivity sectors. In the early 1950s, nearly 50 per cent of Korea's GDP came from primary sectors such as agriculture and mining. The main exports were iron ore, raw yarn, coal, rice and fish.

Now, Korea is a leading economy in many sectors including ship-making, electronics and information and communication technology. Agriculture and mining constitute less than 3 per cent of Korea's GDP.

Instead, secondary and tertiary industries constitute more than 95 per cent of total GDP. For the past decade, heavy and chemical industry products have accounted for in excess of 80 per cent of total exports.

Korea's growth was initiated and sustained through the continuous creation of new comparative advantages, with the government focused on building a conducive atmosphere for economic growth through investment in human resources capable of creating comparative advantage, investment in infrastructure and support for the private sector to tap the world market for investment and to promote innovation through investment in research and development.

At every stage of its transformation there were leaders who laid out the vision, intrepid entrepreneurs, well-trained and devoted technocrats who implemented the vision and hard-working citizens who diligently supported the transformation. They all made Korea's economic development possible.

The Korean economy will continue to depend on the creativity and innovation of the private sector that has created its dynamism today.

Hyun Oh-seok is the president of the Korea Development Institute. This is the third of a six-part series on the Korean economy.

Infiniti QX80 specs

Engine: twin-turbocharged 3.5-liter V6

Power: 450hp

Torque: 700Nm

Price: From Dh450,000, Autograph model from Dh510,000

Available: Now

Company profile

Name: Infinite8

Based: Dubai

Launch year: 2017

Number of employees: 90

Sector: Online gaming industry

Funding: $1.2m from a UAE angel investor

How Islam's view of posthumous transplant surgery changed

Transplants from the deceased have been carried out in hospitals across the globe for decades, but in some countries in the Middle East, including the UAE, the practise was banned until relatively recently.

Opinion has been divided as to whether organ donations from a deceased person is permissible in Islam.

The body is viewed as sacred, during and after death, thus prohibiting cremation and tattoos.

One school of thought viewed the removal of organs after death as equally impermissible.

That view has largely changed, and among scholars and indeed many in society, to be seen as permissible to save another life.

UAE currency: the story behind the money in your pockets
Israel Palestine on Swedish TV 1958-1989

Director: Goran Hugo Olsson

Rating: 5/5

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
While you're here
The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

MATCH INFO

What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany

Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)

How much do leading UAE’s UK curriculum schools charge for Year 6?
  1. Nord Anglia International School (Dubai) – Dh85,032
  2. Kings School Al Barsha (Dubai) – Dh71,905
  3. Brighton College Abu Dhabi - Dh68,560
  4. Jumeirah English Speaking School (Dubai) – Dh59,728
  5. Gems Wellington International School – Dubai Branch – Dh58,488
  6. The British School Al Khubairat (Abu Dhabi) - Dh54,170
  7. Dubai English Speaking School – Dh51,269

*Annual tuition fees covering the 2024/2025 academic year

Five%20calorie-packed%20Ramadan%20drinks
%3Cp%3E%3Cstrong%3ERooh%20Afza%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20contains%20414%20calories%0D%3Cbr%3E%3Cstrong%3ETang%20orange%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20300%20calories%0D%3Cbr%3E%3Cstrong%3ECarob%20beverage%20mix%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20about%20300%20calories%0D%3Cbr%3E%3Cstrong%3EQamar%20Al%20Din%20apricot%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20saving%20contains%2061%20calories%0D%3Cbr%3E%3Cstrong%3EVimto%20fruit%20squash%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%2030%20calories%3C%2Fp%3E%0A