To what extent did the Korean War contribute to South Korea’s economic miracle?

Candidates are required to consider how far the suggestion that the Korean conflict aided South Korea’s economic development has merit. Candidates may also discuss other factors that were responsible for their economic miracle.

Indicative content

The economic miracle

• By 1995, South Korea had become the world’s 11th largest economy. Between 1962 and 1994, the South Korean economy grew an average of 10 per cent annually and its annual export growth was 20 per cent.
• By the end of the 20th century, South Korea ranked as the most developed country in East Asia in terms of living standards and wage levels. South Korea’s high-tech industries also ensured it developed into a modern and innovative nation.

The Korean War

• Following the Second World War, the US gave monetary aid to South Korea under the Foreign Assistant Act to help contain the communist threat.
• Candidates may explain that initially the Korean War had a devastating impact on South Korea’s economy. The heavy casualties, destruction of infrastructure and the financial cost of the war made reconstruction a lengthy and expensive process.
• The outbreak of the Korean War increased US monetary aid to South Korea. Between 1945 and 1955, this amount was just over US$1 billion and in the years 1955 to 1962 this had further increased to US$2.3 billion. US aims were to restore South Korea’s economy and enable South Korea to support itself in the future.
• The US also supported economic development by sending in experts in industry and agriculture.
• Since the Korean War, the US has always been South Korea’s main trading partner.

Other factors

• South Korea’s modern and challenging education system helped create a motivated and highly skilled workforce.
• Korean cultural values ensured the workforce was disciplined and efficient.
• Effective state control of the economy, especially in the years immediately following the Korean War, ensured appropriate policies were adopted.
• Limited natural resources led to the government focusing on high-tech manufacturing industries, which proved a highly successful approach, as there was an increasing demand for these goods in the West.

The above material is an indication of what candidates may elect to write about in their responses. However, the list is not exhaustive and no set answer is required.

Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.

[20 marks]