Comparison Study of Economic Miracle in South Korea and Economic Paralyze in Nepal

Bal Kumar Dhimal Jagdish Bist Shradha Shrestha Nima Doma Serpa Arun Sapkota

Uniglobe College Pokara University, Kathmandu, Nepal

Nepal Vs Korea

South Korea S GDP (PPP) evolution from 1911 to 2011 in millions.

Contents
1. History of Korean and Nepalese

Flag of Ne pal

Economic Development 2. Performance and Scale of Korean and Nepalese Economy 3. Learning chapter from South Korea 4. Prospective sector of Nepalese economy 5. Blue Print of 50 year of Nepalese Economy

1. History of Korean &Nepalese Economic Development

Korean 1) Before 1961 Nepalese

1) Before 1950
2) 19501990s 3) After 1990

2) 19611980s
3) After 1990

1. Before 1961 in Korea

After Independence, during the period of president Rhee Syngman(194860) there were no well known economic growth. After the Devastation of the Korean War , South Korea was among of the poorest countries in the world. Economic Recovery was very slow in the period of 1953-1961. Import substitution policy was adopted i.e. depended on US assistance. In the military coup on 16 May 1961, General Park Chung lee took the power. Millions of people are homeless, jobless and they are suffering from hunger Korean Economy was unproductive, incompetent, corrupt and huge economic deficit.

Before 1950 in Nepal

There was Rana regime and there was poor economy growth. There is no any sophisticated economic indicator to measure different aspect of economic dimension. Major economy activates depend on agro-based product. Major Source of foreign currency was remittance by BritishGorkha solder. Economic liberalization strictly prohibited and closed economy. Financial Institution was not conceptualized. There was no proper database to record government revenue and Expenses.

1) Before 1961
1950s, Road in Suwon
1960, Road in Tribhuan Highway

1) Before 1961 in Korea

per capita GNI US$80 in 1960

a vicious circle of poverty Agrarian Country

Depend on Foreign Aid

2) 19611980s in Korea
Government-led Economic Development
Cheap labor cost

Miracle on the Han River

Saving and foreign capital inflow

Extensive export Promotion measures

2) 19611980s
Industrialization Policy
import-substitution industries cement, fertilizer

Light industry
textiles, plywood

Heavy chemical industry

shipbuilding, machinery, iron and steel, And automobiles

2) 19611980s
Government-led Economic Development Plan
The Five-year Economic Development Plans The First Plan (1962 ~ 66), . . . . . . . . , The Seventh Plan (1992 ~ 96)
(Before 1980) - Financial subsidies and tax benefits to exporters Building Laws - large devaluation of won, import-export linkage and systems. system Fighting with corruption. constructing heavy and chemical industry infrastructure - fiscal and financial support to heavy and chemical Modernization of Industrial industry increasing market competition Structures. (After 1980) - decreasing governments involvement in the economy Promotion of self-sustaining Economic Development. - increasing government efficiency
Industrial restructuring and Improvement of Technology.

Blueprint for 50 years of Nepal

Construction, road, water Light industry supply, hydropower. Heavy Industry

Import substitution

GDP

Current

10 years

20 years

30 years

40 years

Leader of building Developed Nation

Korean Leader Nepalese Leader

3) After 1990
Composition of Exports by Principal Commodity
(%)

1970 textiles (41) wiggery (12) plywood (11)

1980 textiles (29) Electric & Electronic machine (11) Iron & steel (9)

1990 Electric & Electronic machine (23) textiles (20) Iron & steel (8)

2000 Electric & Electronic machine (39) Petroleum Product & chemicals (13)

2008 Electric & Electronic machine (30) Petroleum Product & chemicals (19)

textiles (10)
machinery (6)

machinery (10)
automobiles (8)

3) After 1990
Agrarian country A Leading Industrialized Country

USA

Nepal
70 years
? years

Japan
Korea
70 years
40 years 170 years

UK

rapid growth

History on Economic Issues

Periods 1960s 1970s Growth Rate 8.5% 7.3% Main Issues Economic Development, Vietnam War Oil Shocks, Heavy & Chemical Industries, Construction in Middle East Countries Three Lows, Seoul Olympic Games, Labor Disputes Labor Disputes, per capita GNI $10 thousands, OECD(96), Currency Crisis(97) Restructuring, Globalization, IT, Aging

1980s

8.7%

1990s

6.2%

2000s

4.7%

2. Performance and Scale of Korean & Nepalese Economy

1) Economic Performance 2) Scale of Korean

Economy

1) Economic Performance
a. Economic Size
1960 ~ 2013 Korea
1980 (A) GDP
(current prices) Billion Dollar

Nepal
2013 (B) 1197.8 change 1980 1.98 2013 19.341
Change

64.3

Inflation
(current prices)
Current A/c Balance

32.2
-8.2

2.7 4.6

10.9 -5.65

7.75 3.28

1) Economic Performance
b. Industrial Structure
1960 ~ 2008 Agriculture, forestry and fishing 37%->3% Mining and manufacturing 16%->28%
1960
Agriculture, forestry and fishing Mining and manufacturing Electricity, gas, Water , supply, Construction % % % 36.8 15.9 4.1

1970
29.2 19.6 6.5

1980
16.2 26.4 10.2

1990
8.9 28.1 13.4

2000
4.9 29.8 11.0

2008
2.5 28.3 8.8

Services

43.2

44.7

47.3

49.5

54.4

60.3

2) Scale of Korean Economy

1 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
USA Japan Germany China UK France Italy

a. GDP (at current prices, 2007)

US$ 13,841 Billion

US$ 970 Billion

2 3 4 5

US$ 5.8 Billion

7

12
India

14 157
Korea Nepal

2) Scale of Korean & Nepalese Economy

b. per capita GNI (1960, 2007)
Korea Argentina Philippines Nepal 80
620
5,150 100 1,786 137.52 692.63 75 820 77 1,795 0 5,000 10,000

20,045

India
Indonesia

2) Scale of Korean Economy

c. Export and Import (goods, 2007)
25,000 20,000 15,000 10,000 5,000 0 1 2 3
Export (0.1 billion $) Import (0.1 billion $)

2 1

US$ 372
3 4

US$ 357
billion

billion
5 5 6

12 12

13

15

G e rm a n y

China

US A

J apan

F ra n c e

K o re a

R ussia

2) Scale of Korean Economy

d. Rankings in the World by Industries
Ship building DRAM Auto mobiles Iron & Steel

1st (35.2%) Japan 29%

1st (48.5%)
5th (5.5%) USA 17.7% 5th (4.3%) China 31.7%

2) Scale of Korean Economy

d. Rankings in the world by Sectors
Domestic Films R&D
Investment

3rd (59%) USA 94%

9th USA 1st, Japan 2nd 6th USA 1st, Japan 2nd 5th China 1st, Japan 2nd

Patent Foreign Reserves

What should learn from Korea?

How to develop diplomatic talk and comm itment with Foreigner. How political leader can develop their lon g term vision and effort to achieve it. How to utilize national resources to achiev e long term vision. What should be economy and liberalizatio n policy develop.

The Truth about Koreas Economic Miracle

Key Notes:

At the heart of this dramatic emergence of the miracul ous economy of Korea, three crucial factors coincide;
FirstThe rapid expansion of world trade; Second- A strong interventionist state determined to pursue exportoriented economic growth; and Third- The availability of a high-quality ,and low-cost labour forces.

The Truth about Koreas Economic Miracle The key secrete, the Japanese colonisation and the civil war with North Korea created premises of an economic nationali sm, encouraged by soldiers. We can add miscontents of the population, caused by immobility, corruption and social injustice characteristic t o former regimes. Economic competition with North Korea will most certainl y continue to ensure important advantages to the South. Today, after 50 years of accelerated economic growth, Sout h Korea is able to prove to the world that the economic mir acle is reality.

Asias Latest Miracle

See picture of Seoul the world's most connected city.

Busan Citythe beautiful beach in the world.

Inch eon CityAn amazing bridge in Asia .

Suwon City-View

Deagu City-View

Kwangju City-View

Jeju City a famous island and heritage in the world.

Comparison of GDP current prices

Thank you for your participation

Have a nice time!