Though they are hardly in the news or mainstream media or even gotten so much hype like the story of Singapore, South Korea is one of the most remarkable stories of a nation moving from a third world to a first world within five decades. By the 1960s, she was regarded as the poorest nation on Earth after a war with Japan who was by then occupying their land. They gained their independence in 1945 and was practically broke after that period. To start rebuilding, South Korea depended heavily on foreign aid and this, in fact, formed 90 percent of their national yearly budgets.
Dealing with the Basics
As against the trend of many developing nations mismanaging funds to corruption and other issues, South Korea used theirs to rebuild gradually and this they did by investing in small scale industries. These included textile, weave-making, etc. They expanded these industries to the point where they gained world prominence in them and the population of the country on the high side, they were able to reduce their unemployment rate. They also went further to invest heavily in educating their people and this helped to develop people who would propel them further into the world stage as a prosperous nation.
As a nation that was receiving aid from the America nation, they were advised to focus on the development of Small and Medium Scale companies but they had bigger plans for their country. They were also not timid to confront their benefactors on how they wanted to run their country. They started by drafting a proposal and plan that was going to see them develop a steel industry which was already 60 years old. South Korea sought funds from different places including the World Bank but none was forthcoming, but they decided to start the project. They made a commendable feat out of it while beating other nations that have been in it for decades. The success of South Korea in the Steel Industry can be pointed to these; low-interest rate, low dollar rate and low oil rates.
With good success in the steel industry, other allied industries like manufacturing opened up, they started adding value to Western nations and this drove a whole new level of exports for their economy.
A Unique Strategy for Infrastructural Growth
The development that was emerging with the building and expansion of industries created a gap between the urban population and those of the rural settlement. The government of South Korea offered to give the willing communities raw materials for developing infrastructure like cement admonishing them to utilise their labour force to build their communities. Those who utilised theirs properly were given more raw materials. It was tagged as the New Community Movement as today regarded as a credible strategy for any country to transform herself from a poor to a very rich and prosperous one.
The strategy has become even popular that Obama as President advised the UN to adopt it in helping African nations to come out of poverty just like South Koreans.
To further prove the resilience of South Koreans in matters that concern their country; during the crisis of 1997 in Asia, the country lost a lot economically and this made them get a loan from the IMF which was to be repaid after ten years. Interestingly, they paid up every penny of this loan in 2004, three years earlier.
South Korea is a success story in nation building in six decades and they have strategies to show for it. More nations in Africa like Nigeria need a lot to learn since we also receive aids from Western nations or organisations like the IMF.
Credit: MSG (www.managementstudyguide.com)