The government made several key policy changes to provide selected firms a strong start. Two crucial policies during this period are the import-substitution industrialization (ISI) and export promotion (EP). ISI allowed government selected firms in government target industries to borrow foreign currency, and borrow domestic funds at rates beneficial to those firms. This was the beginning of importing advanced technologies only to improve, adapt, and reproduce them for export. EP gave firms access to low interest loans. The relations between the Korean firms and industries with the rest of the world broadened in EP. Efficiency grew, production went up and Korean saw exponential economic leaps in a few decades.

During the Vietnam War in the 1970s, U.S. troops withdrew from Vietnam. South Korea relied on the military presence of the U.S.A. As protection from North Korean. South Korean leadership decided to not rely on the U.S.A. For military presence and...
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