"Mr O, what industry should we develop to reach the US$10 billion export mark?" During a cup of coffee one day in 1972, Park Chung-hee, South Korea's president, directed this question at O Won-chol, his senior adviser.
Yet only a month earlier Mr Park had set the export goal at $5.5bn by 1980. Why was he suddenly asking about $10bn? Caught by surprise, Mr O nevertheless responded: "I think the time has come to develop the heavy and chemical industry, Mr President". The early 1960s marked the beginning of rapid expansion of South Korean exports.By the 1970s, the labour-intensive, light manufacturing industry had matured and exports of such products were achieving new highs.
In spite of this, Mr Park was aware that the country had to advance beyond light industries to sustain the development momentum. Furthermore, conditions such as the increasing threat of North Korea and the competition in light industries from other developing countries all seemed to point to one direction - the development of the heavy and chemical industry (HCI).
However, there was a major setback in pursuing HCI. South Korea had a small domestic market unable to accommodate this industry. Lack of capital, natural resources and technology were also barriers that had to be overcome.
The government's strategic choice, then, was to integrate the country into the world market, thereby attracting capital and technology, and exploring markets for the HCI. Until then, Korea's trade orientation was only halfway complete. The government continued protectionist policies, strictly controlling imports through the placement of heavy tariffs and quantitative restrictions. There were also interventions in the exchange rate. While protectionist measures were helpful in supporting the development of the HCI, excessive protectionism soon led to problems such as misallocation of resources and excess production capacity.
By 1979, a stable base for the HCI was created and the government shifted focus to boosting the nation's competitiveness through the creation of a market-driven and open economy.
By adopting gradual tariff reductions and introducing foreign direct investment (FDI), Seoul made efforts for liberalisation.
Yet the institutional basis for liberalisation was weak. For example, the government had little financial supervisory function. Private companies were not prepared for competition as they had been receiving state support and protection, resulting in debt accumulation and less focus on effectiveness.
Furthermore, the government still held tight control over FDI to maintain favourable export conditions. Nevertheless, Seoul continued to pursue an open economy.
Remedies were provided to problems arising from the institutional unpreparedness. Also, South Korea was fortunate that in the mid-1980s it experienced a period of "three lows" - a low value of its currency, low international interest rates and low oil prices. Such a favourable environment helped in the HCI drive despite difficulties resulting from rapid structural changes in industrial structure.
The HCI promotion efforts continued when the government announced a new five-year economic plan in 1993, reflecting new goals such as the internationalisation and liberalisation of the economy, active participation in the new international trade order such as the World Trade Organization, qualitative improvements in export products and the facilitation of technology transfer through FDI.
Amid the rapid changes, pressure built up and the country was in a fragile state when the Asian financial crisis struck in 1997.
The reckless management of the financial sector, problems of corruption arising from close ties between the government and businesses, and the belief that business groups, or chaebols, were "too big to fail", resulted in the failure to establish a fair and transparent economic system.
In the end, the crisis proved useful in accelerating the liberalisation of the economy. Many people now refer to the crisis as a blessing in disguise, through which major reforms necessary for growth were carried out in the public, corporate, labour and financial sectors.
The civic consciousness of South Koreans also played a great role.
The "gold collection campaign" was initiated to allow citizens to contribute their gold jewellery to the national reserve. Thousands of people stood in line, bringing with them gold rings, necklaces and watches. Within three months, gold amounting to more than 200 tonnes had been voluntarily collected, which was then used to help to pay off the national debt. Whereas citizens in other countries threw rocks at their governments in similar situations, South Koreans chose to work with theirs, which created a tight sense of social cohesion.
Having successfully overcome the crisis, the country is today highly intertwined with the global economy. South Korea's external dependency ratio - the value of exports and imports against gross national income - reached a high of 113.2 per cent last year. The nation's foreign reserves, as low as US$8.7bn during the Asian financial crisis, now amounts to more than $314bn.
A healthy and open market mechanism is firmly rooted, whereas the government's role is more market-oriented and restricted to providing macroeconomic stability, preparing better economic environments and promoting innovation and new engines of growth.
Going through the difficulties, South Korea has consistently carried out liberalisation, which now constitutes a solid base for a strong economy.Through such efforts, the nation's credit rating has consistently improved. Recently, in the midst of the global financial crisis, Standard & Poor's upgraded South Korea's sovereign credit rating to A+, the agency's fifth-highest grade.
Hyun Oh-seok is the president of the Korea Development Institute. This is the fourth of a six-part series on the South Korean economy
Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
Western Region Asia Cup Qualifier
Results
UAE beat Saudi Arabia by 12 runs
Kuwait beat Iran by eight wickets
Oman beat Maldives by 10 wickets
Bahrain beat Qatar by six wickets
Semi-finals
UAE v Qatar
Bahrain v Kuwait
Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company
Champion%20v%20Champion%20(PFL%20v%20Bellator)
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
World Cup League Two
Results
Oman beat Nepal by 18 runs
Oman beat United States by six wickets
Nepal beat United States by 35 runs
Oman beat Nepal by eight wickets
Fixtures
Tuesday, Oman v United States
Wednesday, Nepal v United States
'HIJRAH%3A%20IN%20THE%20FOOTSTEPS%20OF%20THE%20PROPHET'
%3Cp%3E%3Cstrong%3EEdited%20by%3A%3C%2Fstrong%3E%20Idries%20Trevathan%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20240%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Hirmer%20Publishers%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The biog
Name: Salvador Toriano Jr
Age: 59
From: Laguna, The Philippines
Favourite dish: Seabass or Fish and Chips
Hobbies: When he’s not in the restaurant, he still likes to cook, along with walking and meeting up with friends.
The Outsider
Stephen King, Penguin
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The specs: Volvo XC40
Price: base / as tested: Dh185,000
Engine: 2.0-litre, turbocharged in-line four-cylinder
Gearbox: Eight-speed automatic
Power: 250hp @ 5,500rpm
Torque: 350Nm @ 1,500rpm
Fuel economy, combined: 10.4L / 100km
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Killing of Qassem Suleimani
match info
Manchester United 3 (Martial 7', 44', 74')
Sheffield United 0
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
