Case Study Of South Korea Nic

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SOUTH KOREA – A case study of an NIC Although South Korea is technically a Less Economically developed country it is now classed as a Newly Industrialized Country (NIC). This is due to the economic growth that it has seen since the start of World War 2. The term NIC is applied to those countries that have not quite reached the status of a developed country but have in an economic sense outpaced other developing countries. At the end of World War II, South Korea remained largely dependent on U.S. aid, however an internal revolution occurred in South Korea in 1961. The new rulers decided the country should become self-reliant by utilizing five-year plans. They were designed to increase wealth within South Korea, and make it more politically stable. A change in policy from import substitution (replace imported goods with locally produced goods. Usually finished manufactured goods), to export orientated (Selling goods abroad to increase industrialization). Why did South Korea develop as an NIC ? * The government backed investment in large companies and invested in research / develop projects and state owned work like the Pohang Iron and Steel Corporation : The Pohang Iron and Steel Company, or POSCO based in Pohang, South Korea, is the world's second largest steel maker by market value. * The government encouraged investment from abroad – for example from the USA – they also imported technology and ‘know-how’ to help development of industry * The government set high important taxes making foreign goods more expensive than those made in Korea – helping to stimulate a market for goods produced within the country * The government kept living costs low – helped keep wage levels low (but depressed rural incomes) * The pool of cheap labor therefore available –
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