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South Korea’s Economic Development Strategy

South Korea has experienced poor economic conditions and rapid and unprecedented development that the world calls “The Miracle of Han River.” The Han River or Hangang is a major river in South Korea, with some of its tributaries and drainage basin in North Korea. It is the fourth longest river on the Korean peninsula after the Yalu (“Amnok”), Tumen (“Tuman”), and Nakdong rivers. The river begins as two smaller rivers in the eastern mountains of the Korean peninsula, which then converge near Seoul (https://en.wikipedia.org/wiki/Han_River_(Korea)). Han River is a river that also played a role in the history of the development of South Korea, and it became a trade route connecting South Korea with China. “The Miracle of Han River” means economic growth was achieved under a lack of capital and resources, and industrial facilities were almost destroyed by the three-year war from 1950 to 1953.
In the 1950s, South Korea was still classified as a poor country on par with Africa and Asia, where the economy is still dependent on the agricultural sector. South Korea was once on the verge of destruction due to Japanese occupation and the inter-Korean civil war that occurred at that time, which led to poor natural resources. In the 1960s, South Korea restricted foreign direct investment in favor of foreign borrowing; this was done to prevent the weakening of the domestic industrial sector caused by foreign investors. In the 1970s, South Korea reopened foreign investment but emphasized the technology sector because South Korea considered that their domestic industry could compete with other countries, and this required technology to develop more rapidly. Then, South Korea established KOTRA (Korean Trade Promotion Agency) in the 1980s. KOTRA was formed to provide investment assistance to South Korean companies located abroad with the aim of increasing the competitiveness of chaebol in global economic competition.
South Korea’s economic policy is market-oriented, as well as active intervention from the local government. In addition, the development of the South Korean economy cannot be separated from alliances between countries and entrepreneurs, focusing on technology transfer and protecting domestic industries. According to Jun (2013), this economic development model is a combination of a “capitalistic market” and a “capitalistic state.” The economic development that successfully brought South Korea to take off into an industrialized country belongs to the type of “authoritarian developmentalism” not only in Asia but also occurs in countries such as Taiwan, Singapore, Malaysia, the Philippines, and Indonesia over a long span of power (Suehiro, 2000, 115). Of course, this is very interesting to study further because South Korea in the 1960s was on par with the Philippines and Indonesia, but until now, South Korea has been able to excel further than these two countries.
The strategy used by South Korea to develop its economy is to establish cooperation that can benefit both parties. An example is the bilateral cooperation between South Korea and Indonesia. The cooperation between South Korea and Indonesia was strengthened on September 25, 2013, with the Working Level Task Force Meeting (WLTFM), which was held in Seoul, South Korea. The meeting produced several results, which included cooperation in the socio-cultural sector and the creative economy sector. The development of the creative industry was marked by the establishment of the Badan Ekonomi Kreatif (BEKRAF) and the South Korean Ministry of Culture, Sports and Tourism (Department of RI 2008). The cooperation involves capacity building and intensive dialogue, such as internships and other activities carried out by South Korea and Indonesia.
Furthermore, cooperation between South Korea and Indonesia in the socio-cultural sector, which is with a mutual visit program between the two countries, especially in the field of arts and culture. The cooperation that has been carried out by South Korea and Indonesia in the film industry and creative economy is the Indonesia-Korea Cinema Global Networking 2016. This cooperation aims to provide space for the South Korean and Indonesian film industries to promote co-production between countries (Afriantari 2017). In addition to the film cooperation that has been carried out, the two countries have also established a cooperative relationship in the fashion design sector.
In this case, we can also find out that South Korea also uses soft power strategies to develop its economy. Soft power carried out by South Korea is fairly successful, and South Korea has a good image in the world. About South Korea’s strategy for developing the country’s economy, actors who play an essential role besides the government are music industry companies. The Korean music industry plays a role in shaping the world community’s interest in South Korea. The image created by South Korea in bilateral cooperation with Indonesia makes the two countries closer, but it can affect South Korea’s performance and economy.

The Threat of South Korean Soft Power

South Korea’s Economic Development Strategy

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