Heavy-Chemical Industry Drive
Encyclopedia
The Heavy-Chemical Industry Drive (usually shortened to "HCI") was an economic development
plan enacted in the 1970s under the regime of South Korea
n dictator Park Chung Hee.
policies instated by Park—nationalization of the country's banking system, and directing cheap credit to the export sector—had produced rapid development in the textiles and apparel industries. By the time of the Yusin Constitution of 1972, South Korea had gone from one of the world's poorest nations to the middle rank of countries. However, the country lacked any sort of heavy industry, and was cripplingly dependent upon the United States
and Japan
for many raw materials and capital goods.
The Korean DMZ Conflict (1966-1969) put a scare in the ROK's leadership. As the Vietnam War
ground on, Park and his lieutenants faced the grim possibility that the United States might significantly reduce its military presence on the Korean Peninsula, in order to concentrate resources on the conflict in Indochina while maintaining military strength in Europe. On the other side of the DMZ
, North Korea
had amassed an enormous army, and an industrial establishment almost wholly devoted to the supply of its armed forces. Fearing for the ROK's military security, Park set out to build an industrial infrastructure that could support a modern military.
, petrochemicals, automobile
s, machine tool
s, shipbuilding
, and electronics
. Continuing previous policies, the country's banks extended virtually interest-free loans to firms engaged in these sectors (q.v.). The country's import-export sector, which had previously been dominated by Japanese firms, was instead placed in the hands of export firms controlled by the chaebol
conglomerates that had begun to dominate the economy in the 1960s.
Indeed, the chaebol were the key actors in this new economic initiative, which Park dubbed the "Heavy/Chemical Industry Drive." Since they were the country's largest firms, they were best positioned to undertake the massive capital investment necessary to establish a heavy industrial sector. Park's economic development ministers further strengthened the position of the chaebol by granting them particularly easy credit.
as president in 1980.
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
plan enacted in the 1970s under the regime of South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
n dictator Park Chung Hee.
Background
During the 1960s, the Republic of Korea had experienced rapid economic growth following the assumption of power by General Park. The dirigismeDirigisme
Dirigisme is an economy in which the government exerts strong directive influence. While the term has occasionally been applied to centrally planned economies, where the state effectively controls both production and allocation of resources , it originally had neither of these meanings when...
policies instated by Park—nationalization of the country's banking system, and directing cheap credit to the export sector—had produced rapid development in the textiles and apparel industries. By the time of the Yusin Constitution of 1972, South Korea had gone from one of the world's poorest nations to the middle rank of countries. However, the country lacked any sort of heavy industry, and was cripplingly dependent upon the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
for many raw materials and capital goods.
The Korean DMZ Conflict (1966-1969) put a scare in the ROK's leadership. As the Vietnam War
Vietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...
ground on, Park and his lieutenants faced the grim possibility that the United States might significantly reduce its military presence on the Korean Peninsula, in order to concentrate resources on the conflict in Indochina while maintaining military strength in Europe. On the other side of the DMZ
Demilitarized zone
In military terms, a demilitarized zone is an area, usually the frontier or boundary between two or more military powers , where military activity is not permitted, usually by peace treaty, armistice, or other bilateral or multilateral agreement...
, North Korea
North Korea
The Democratic People’s Republic of Korea , , is a country in East Asia, occupying the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea...
had amassed an enormous army, and an industrial establishment almost wholly devoted to the supply of its armed forces. Fearing for the ROK's military security, Park set out to build an industrial infrastructure that could support a modern military.
Structure of HCI
Over the objections of many economists within and outside South Korea, who thought that the country's economy and institutions were insufficiently advanced to handle the transition to a comprehensive industrial economy, Park decided to channel the economic development capabilities of the state into the development of several key industries: steelSteel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
, petrochemicals, automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
s, machine tool
Machine tool
A machine tool is a machine, typically powered other than by human muscle , used to make manufactured parts in various ways that include cutting or certain other kinds of deformation...
s, shipbuilding
Shipbuilding
Shipbuilding is the construction of ships and floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to before recorded history.Shipbuilding and ship repairs, both...
, and electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
. Continuing previous policies, the country's banks extended virtually interest-free loans to firms engaged in these sectors (q.v.). The country's import-export sector, which had previously been dominated by Japanese firms, was instead placed in the hands of export firms controlled by the chaebol
Chaebol
Chaebol refers to a South Korean form of business conglomerate. They are global multinationals owning numerous international enterprises. The term is often used in a context similar to that of the English word "conglomerate"...
conglomerates that had begun to dominate the economy in the 1960s.
Indeed, the chaebol were the key actors in this new economic initiative, which Park dubbed the "Heavy/Chemical Industry Drive." Since they were the country's largest firms, they were best positioned to undertake the massive capital investment necessary to establish a heavy industrial sector. Park's economic development ministers further strengthened the position of the chaebol by granting them particularly easy credit.
HCI and the Korean population
By the end of the 1970s, wildcat strikes and student demonstrations had become increasingly frequent. Park remained committed to his economic vision and contemptuous of calls for democratization and distributional equity. This, however, cost him his life: after ordering the violent suppression of a demonstration in October 1979, he was instead assassinated by his secret service, who ultimately installed Major General Chun Doo-hwanChun Doo-hwan
Chun Doo-hwan was a ROK Army general and the President of South Korea from 1980 to 1988. Chun was sentenced to death in 1996 for his heavy-handed response to the Gwangju Democratization Movement, but later pardoned by President Kim Young-sam with the advice of then President-elect Kim Dae-jung,...
as president in 1980.
See also
- ChaebolChaebolChaebol refers to a South Korean form of business conglomerate. They are global multinationals owning numerous international enterprises. The term is often used in a context similar to that of the English word "conglomerate"...
- History of South KoreaHistory of South KoreaThe history of South Korea formally begins with the establishment of South Korea on 15 August 1948, although Syngman Rhee had declared the establishment in Seoul on 13 August....
- Economy of South KoreaEconomy of South KoreaSouth Korea has a market economy which ranks 15th in the world by nominal GDP and 12th by purchasing power parity , identifying it as one of the G-20 major economies. It is a high-income developed country, with a developed market, and is a member of OECD...
- List of Korea-related topics