South Korea

separated

"The large conglomerates and Korean economy cannot be ________ from the politics and the culture and history;' says Rhyu Sang-young,

1. investment, 2.conflict management, 3.engagement with the outside world

Developing countries typically face three interrelated policy challenges:

small and medium enterprises (SMEs)

Economists have warned that the behemoth conglomerates often use their monopolistic clout to squeeze _________ out of the market, often copying their innovations rather than developing their own or buying out the SME

student protest

When a _______ in April 1960 finally put an end to the Rhee government, Korea was in a dismal state

Lotte Confectionery

_______ is the third-largest gum manufacturer in the world

SK Holdings

________, dates back to the early 1950s, when the Chey family acquired Sunkyong Textiles

chaebols

growth of a small number of very large firms called

chaebols

have made a significant contribution to industrialization during the period of rapid economic growth, and they have constituted an important part of the Korean economy

Emergency Decree

placed an immediate moratorium on the payment of all corporate debt to the curb lenders and called for an extensive rescheduling of bank loans at a reduced interest rate

Korea

was historically one of the poorest countries in the world endowed with a small landmass, scarce natural resources, and a large population

fragile financial system

A _________ and poorly developed corporate governance practices contributed to the kinds of visible problems in the banks that were discussed in the previous section

Mr Chung-hee Park

He seized power in a military coup and then retained it after holding an election, Korea possessed all the bad characteristics of a typically poor country; a small land mass with an extremely high population density, small domestic markets, no natural resources, and low levels of physical capital.

Korean won

During the period 1990 - 96, the _________ depreciated in nominal terms by more than 17.8 per cent;

President Moon Jae

Elected in May 2017, __________-in came into power with a mandate to sever the government chaebol nexus and crack down on corruption. He has vowed to end the practice of pardoning convicted executives, raised the minimum wage, and modestly boosted the corporate tax rate from 22 to 25 percent

heavy and chemical industry (HCI)

Exacerbating moral hazard, the government extended extremely generous financial support to large private firms during the ensuing _________ drive

thirteenth largest economy

From being one of the poorest countries in 1961, it had grown by 2001 to be the _________ in terms of gross domestic product (GDP) in the world

chaebol

HCI sector, the government relied on a select group of large family-based business groups and provided them with extremely generous financial support. Known as _________

Mr Roh

He compromised unnecessarily over the demands of the workers, which led to frequent labour strikes and an increase in wages that was higher than increases in productivity

General, President Park's

His ambition was to build the country to the point where at the very least it would be superior to North Korea in both economic and military power

bureaucrats

In 1979, the________ recognized that the complexity of the economy was in excess of the government's management capacities, and consequently introduced more market-oriented policies and deregulations

GS

In 2005, LG split, spinning off a separate entity called _______, a chaebol whose core businesses are in energy, retail, sports, and construction.

Economic Planning Board (EPB)

In order to centralize economic policymaking, the military government established the _______ in July 1961

export incentives

In order to increase economic independence through export promotion, the government also introduced a number of ________

state-led

In the early 1960s, the Republic of Korea (South Korea) addressed these developmental challenges by combining _______ financial resource allocation with export market orientation.

macroeconomic fundamental

In the period immediately preceding the Asian financial crises, the Korean economy appeared to possess strong ________

miraculous'

Korea belonged at the forefront of a group of countries labelled _______ by Lucas

1.the first was to join the Organization for Economic Cooperation 2.break through per capita GDP of $10,000.

Korea celebrated two monumental achievements in 1996: _______ and Development (O E CD) and the other was _________

Market Average Exchange Rate System (MARS)

Korea had a ______ , under which the value of Korean won to the US dollar changed within a daily trading margin whose bandwidth was 2.5 per cent

Mr Young-sam Kim

Korea next President after Mr. Roh is

capital accumulation.

Korea's economic development model entered on export-led industrialization and government- business risk partnership encouraged rapid _________

Mozambique and Senegal

Korea's per capita GDP in 1960 was lower than such sub-Saharan African countries as ________ - to say nothing of most countries in Asia and Latin America

zaibatsu.

Many of South Korea's chaebol date to the period of Japanese occupation before the end of World War II, modeling themselves after Japan's powerful industrial and financial conglomerates, known as ________

International Monetary Fund (IMF)

On 21 November 1997, the Finance Minister of Korea, in desperation, announced that the government was officially seeking an ___________ rescue package.

self-reliant

Park sought to build a South Korea that was _______ and not dependent on great powers for its security;

World Trade Organization and the Organization of Economic Cooperation and Development.

Reforms in the early 1990s introduced nominal improvements in economic governance and paved the way for South Korea to join the __________

firms

Replacing the import substitution bias of the 1950s with outward orientation, the government, for the most part, used the performance of ________ in competitive export markets as a selection criterion.

policy instruments

Rhee's use of ________ to finance elections and other party activities through a close alliance with select private firms played a dominant role in a succession of economic decisions during his presidency

banks

The ________ in Korea, the main borrowers, were in a position to exploit and arbitrage the gap between the domestic and foreign interest rates

Economic Planning Board (EPB)

The ________ was charged with the task of formulating and implementing five-year economic development plans based on an 'indicative planning' approach

self-fulfilling crisis.

The circularity of the pattern of events during Asian Financial crisis, can explain both the remarkable severity of the crisis and the apparent vulnerability of the Asian economies to ________

private sector

The deterioration in economic conditions resulting from the mismanagement of the Korean economy continued in the ________

HCI drive

The ensuing _________ aggravated moral hazard as the government was increasingly trapped in a vicious cycle of intervention

'moral hazard problems'

The fragile financial system and weak banking governance structures that had prevailed before the crisis, and the perceptions of implicit government guarantees, allowed banks to become involved in excessively risky projects; a type of behaviour which has been dubbed as ________

contracting out

The government decided to use its credibility to raise capital on the international market and allocate financial resources to private firms, in effect _________ the provision of goods and services to the private sector under a system of government monitoring as well as a guarantee on loans

cult of personality

, analysts say that in practice chaebol families continue to dominate from the sidelines and have fostered a ________ that prioritizes loyalty

chaebol

A group of massive, mostly family-run business conglomerates, called

the Korean model'

After Korea was liberated from Japanese colonial rule in 1945, the reassignment of property rights and the realignment of political forces provided the background for subsequent economic decisions, but what later came to be known as '__________ was not the initial choice

reform programme.

After the Asian Financial crisis, partly due to strong advice from the IMF, the Korean government launched a total ________

United States

After the outbreak of the Korean War in 1950, the __________ reassessed Korea's geostrategic importance and provided generous aid and assistance

'illicit wealth accumulators'

Although Park Chung Hee and his followers had initially condemned most of these businessmen as ________, they apparently concluded that combining state monitoring with private entrepreneurship would be the most effective means of carrying out the economic development plans

systemic risks

Although the Korean system was designed to contain idiosyncratic moral hazard by making government support contingent on market performance, it was not prepared to deal with the increased ________ as manifested in the higher leverage of private firms.

authoritarian regimes

As for conflict management, successive ________ used both the carrot of improving living standards and the stick of ruthless suppression - before Korea was democratized in the late 1980s

devalued

Building on the stabilization policies of 1963 - 64, the government _______ the Korean won from 130 to the dollar to 255 to the dollar in May 1964

close cooperation

Chaebol have relied on ________ with the government for their success: decades of support in the form of subsidies, loans, and tax incentives helped them become pillars of the South Korean economy.

foreign loans.

Seeking to tap into foreign capital while limiting the influence of foreign multinationals, the fiercely nationalistic Korean government decided to rely heavily on _______

Lotte Group

Shin Kyuk-ho founded _______ in Tokyo in 1948 and brought the chewing gum company to South Korea in 1967

four little Asian dragons (or tigers)'

Since the 1980s, it had become known as one of the '_______ together with Hong Kong, Singapore, and Taiwan, although there have been debates in some quarters about the reality of the rapid economic growth of some East Asian countries

family-owned

South Korea's chaebol are _______ businesses that typically have subsidiaries across diverse industries.

enemy properties'

The '___________ of the Japanese and their collaborators had to be either nationalized or sold off, and the rules governing trade and foreign exchange had to be modified to deal with the vacuum created by the severing of economic relations withJapan

1.First, primarily to accommodate US demands, the government instituted a set of macroeconomic reforms designed to 'get the prices right' and stabilize the economy 2.Second, the government adopted drastic measures to share the investment risks of the private sector, providing, in particular, explicit repayment guarantees to foreign financial institutions that extended loans to Korean private firms 3.hird, in order to enhance economic independence, Park himself spearheaded the effort to boost exports, offering various incentives based on market performance

The Park government implemented three interrelated sets of economic policies that came to define the Korean model of economic development

symbiotic relationship

The South Korean government and the chaebol have long had a ________

Samsung and Hyundai

The South Korean government has generously supported the chaebol since the early 1960s, nurturing internationally recognized brands such as ________

financial intermediary system

The ________ in Korea has been nationalized or heavily regulated by the government since the 1960s, and most foreign loans have been directed and allocated by the government

private sector

The ________ in Korea resorted to excessive and reckless borrowing

large private firms

The government nationalized banks and assumed a dominant role in financial resource allocation, providing selective guarantees on private-sector foreign borrowing. The government in effect formed a risk partnership with ________

'moral hazard' problems

The government's policy of rewarding chaebols through granting them preferential access to credit and implicit guarantees surrounding potential bailouts led to an underdeveloped banking system and raised ethical or __________

'economic bubbles'

The illusory or transient nature of the brief spurts of spectacular economic growth____________ - that characterized the economy before the crisis was created by just this type of reckless expansion of lending and borrowing. T

market-based one

The macroeconomic reforms ensured that Korea's state-led development model would be a ________

'the Korean model'.

The resulting government- business risk partnership, for which the export market performance of private firms was primarily used as a selection criterion, defined the core of what later came to be known as _______

(wealth) (clan or clique)

The word chaebol is a combination of the Korean words chae _______ and bol ________

1990s

The year ___________ witnessed the liberalization of financial markets in Korea.

General Park Chung-hee

These enterprises (chaebol) flourished under the leadership of _______, who led a military coup in 1961 and then served as president from 1963 to 1979

existing firms

Throughout the history of rapid economic growth in Korea, the expansion of industrial capacity has been achieved through the expansion of _______ rather than through the creation of new firms

Lee family

Today the conglomerate of samsung is run by secondand third-generation members of the ________, the second-wealthiest family in Asia, according to Forbes.

ownership or management positions

Traditionally, the chaebol corporate structure places members of the founding family in __________, allowing them to maintain control over affiliates.

General Park Chung Hee

Upon seizing power through a bloodless coup, _________ and his followers declared that they were determined to 'focus all energy into developing capability to confront communism, in order to realize the people's long-standing wish for national unification

1 They actively pursued export-oriented policies. 2 Usually, government intervention in the economy was not excessive. 3 The importance of education was emphasized. 4 And, these economies were able to maintain stable macroeconomic policies.

common features of four Asian dragons

bail out

When a major economic downturn raised the specter of massive bankruptcies in the early 1970s, however, the government resorted to an emergency decree to _________ heavily indebted firms and their incumbent owner- managers at the expense of creditors.

Presidential Emergency Decree for Economic Stability and Growth

When a serious economic slowdown following the investment explosion of the late 1960s threatened to topple the debt-plagued corporate sector in 1972, the Park government decided to bail out heavily indebted firms and issued the __________on 3 August 1972.

sell

When agents in currency markets perceive that the present actual value of a currency is substantially higher than its fundamental value, they usually decide to _______ the currency

Samsung Electronics

_______, the largest Samsung affiliate, employs more than 300,000 people globally

SK Hynix

_______, the world's second-largest maker of memory chips.

The Emergency Decree of 1972,

________ established the precedent that the government would take extraordinary measures to relieve financial distress when necessary - without holding the management of firms and banks accountable for their previous investment and lending decisions

SK Telecom

________, the largest wireless carrier in South Korea and its semiconductor company

LG Corporation

________, which derives its name from the merger of Lucky with GoldStar, got itsstart in 1947 in the chemical and plastics industries.

Unstable and deteriorating economic fundamentals

_________ explain the plunge of one nation's currency

Samsung Group

_________ is South Korea's most profitable chaebol

Hyundai Group

________was a small construction business when it opened in 1947 but grew immensely to have dozens of subsidiaries across the automotive, shipbuilding, financial, and electronics industrie

third Economic Development Plan

concentrated on developing 'heavy and chemical industries' (1973- 79) and selected six strategic heavy and chemical industries - steel, petrochemicals, non-ferrous metals, shipbuilding, electronics, and machinery - to receive support such as tax incentives, subsidized public services and preferential financing.

Korean War (1950-53)

ended the entire peninsular of Korea

Five-Year Economic Development Plans

initiated by the Park government thus emphasized the role of exports to overcome the limitations imposed by small domestic markets

first Five-Year Plan

it was in 1962, initiated and designed by the military government, Korea accelerated its development and changed the trend curve of economic growth dramatically

Military Revolution'

the '_________ of May 1961 provided the political background for the adoption of the Korean model of economic development

President Tae-woo Roh

the backbone of the Koreas economy began to fall apart when ________ was in office

higher debt to equity ratio

the corporate sector in Korea had a relatively ________ than many Asian countries, well in excess of 300 per cent, until it faced economic collapse and a fully blown economic crisis

Mr Doo-hwan Chun,

the economy experienced a period of political turmoil following Mr Park's assassination (in 1979), and the ascension to power of ________ bureaucrats liberalized the country even further and used a variety of incentives to encourage production and exports.

Syngman Rhee

the first president of the Republic of Korea , took a rather myopic and politically motivated approach