Source: TW
S.Korea in 1960s began its reforms by nationalising banks, creating state owned steel plants. Any large scale manufacturing in Korea will create exportable surplus since its domestic market is small. Rest was their ability to compete in export market..
Much of (Korea’s development) was emulation of wartime Japan & Manchukuo (where Park served) & helped along by postwar Japan. To begin with, he went to World Bank & asked them for a loan to get into steel making which was denied as SK had no “comparative adv”. When his first efforts came to nothing – he was turned down for World Bank and U.S. Exim Bank loans – he used personal connections in Japan.
At the time Japanese gov’t compensated several countries for WW2 & their 35 yr rule of Korean peninsula, and proposed compensating any individual Koreans victimized directly. Park instead said he would take care of that, took the money & put it into infra development like dams etc. Japanese gov’t also encouraged J steel industry to do tech transfer to Koreans that.
He rounded up prominent Korean businessmen, arrested them, & threatened them into doing his bidding of industrial policy. The Korean millionaires didn’t have much choice except to follow Park’s orders and redirect their business activities away from rent seeking and financial arbitrage and towards the sectors he demanded; his command to industrialize grew out of the barrel of a gun.
Park’s “Yushin” was an allusion to “Meiji Yushin”. He once ordered his ambassador to send him every book on the on the Meiji rest & Japanese econ history. Park, in his memoir, wrote of the Meiji Reform in Japan as his influence.
“We are young, and from the viewpoint of Japan, what we are doing must seem naive, but in fact we are acting in the spirit of the men of high purpose [shishi] of the Meiji restoration… we are deeply studying Meiji history”
- Park Chung-hee to Kishi Nobusuke in 1961 on a visit
One of Kenkoku’s enduring ideological contributions was its inculcation of a state-led vision of industrialization and economic construction. Manchukuo itself practiced state economic planning from 1937 onward, intent on exporting the Japanese technocratic tradition across Asia.
Park’s Japanese identity influenced his modernization strategy in three critical ways. First is his admiration of the Meiji Restoration (1867/68- 1912) and his incorporation into his modernization program of that era’s nationalist ideological tenets, including fukoku kyohei (“rich nation, strong army”) and shokusan kogyo (“production promotion”).11
The rise of a modernizing elite, the dissolution of old power bases, and bringing military force and industrial production under the guidance of the state, all of which were the central traits of the Meiji Restoration, became the references for Park’s political and economic governance.
The slogans of Park’s modernization project echoed those of the Meiji Restoration. The South Korean state called for “production promotion, exports, and construction,” urged “construction on the one hand and national defense on the other,” and preached the virtue of “frugality, hard work, and saving.“12
When Park visited Japan in 1961, he told leaders Kishi Nobusuke, Ishii Mitsujirō, and Kosaka Zentaro of the impact of the Meiji Restoration on his thinking. “I am pushing for the modernization of my country as the modernizing elite of the Meiji Restoration did,” Park said, and noted that he was “studying the history of the Meiji Restoration in that context . . . I am a graduate of the Japanese Imperial Military Academy, and I still believe that Japanese education is the best way to cultivate a strong army.“13
In his memoirs he writes frequently of the importance to him of the Meiji Restoration in Japan, including its concept of “rich nation, strong military.” He borrowed the word “Yushin” for his constitution from the Meiji “Ishin” or “great renewal.”