Causes and Effects of Japan and South Korea's Economic Dependence on the United States

Introduction

Post-World War II, Japan and South Korea embarked on different paths of economic growth and development, heavily relying on the United States for their success. This reliance manifested in various forms, from direct aid to a robust export market. Understanding the underlying causes and effects of this dependency is crucial to comprehending the economic and political dynamics at play.

Causes of Japan's Dependence on the United States

Following World War II, Japan was in a state of complete dependency on US aid, a situation that persisted well into the early 1950s. The economic aid from the Marshall Plan and the Korean War provided Japan with the necessary funds to rebuild its economy. By the late 1950s, Japan had leveraged its industrial heritage and global demand for its goods to become self-reliant.

Industrial Heritage and Market Demand

Japan's ability to develop independently by the late 1950s was primarily due to its long-standing industrial heritage. The country had a robust infrastructure and a workforce proficient in manufacturing. Additionally, the global demand for consumer goods produced in Japan fueled its growth, paving the way for a more sustainable economic model.

Causes of South Korea's Dependence on the United States

South Korea's journey towards economic independence was more complex and chaotic. From 1910 to 1945, the country was under Japanese colonization, which significantly hindered its development. After liberation, South Korea faced numerous challenges, including US military occupation and a lack of support for developmental initiatives.

US Occupation and Private Charitable Work

Under the US Army, South Korea received minimal developmental aid. Christian charities from the United States provided basic schooling, but the country remained burdened with the legacies of Japanese rule. From 1954 to 1970, South Korea served as a cheap labor force for Japanese industries, contributing to its industrial growth, albeit at a cost.

Political and Economic Strategies Under General Park

In 1962, General Park Jung Hee came to power through a military coup. Park's vision for South Korea's development was driven by strategic political and economic policies. His approach included:

Foreign and Local Investments

1. Military-led funding: Park utilized the services of 300,000 South Korean soldiers in the Vietnam War, earning $2 billion. He used this money to invest in infrastructure, tax-free industrial zones, and to attract foreign investments, such as LG, a joint venture between Siemens and Lucky Goldstar.

Education and Human Capital

2. Educational Programs: Park sent 5,000 South Korean students to Germany to study engineering, with these engineers later contributing to projects in Africa and the Middle East. South Korean nurses and miners were also deployed as contract workers, remitting their salaries back home.

Export Targets and Global Dominance

3. Export Goals: In 1970, Park set a goal for South Korea to capture 10% of the global hifi market by 1995. This objective was met, with companies like Samsung replacing German giants like Telefunken and Grundig. Similarly, Hyundai Heavy Industry replaced Bremer Vulkan in the container ship-building industry.

Development of Rural Areas and Democratic Reforms

Recognizing the importance of rural development, Park initiated the Saemaul Undong, a rural cooperative that not only improved living conditions but also served as a conservative stronghold against communism and socialism. By infusing public money into South Korean monopolies, or 'chaebols', Park aided their global expansion through unfair price-dumping.

Although South Korea managed to achieve significant economic growth, the path was fraught with corruption and political instability. The assassination of Park in 1979 led to democratic reforms, and since 1988, South Korea has undergone significant political and economic transformations. However, the country's relationship with the US remains a cornerstone of its economic strategy.

Conclusion

Japan and South Korea's dependency on the United States for economic development is a complex interplay of historical, political, and economic factors. While Japan managed to transition from aid-reliant to self-reliant, South Korea's path was more tumultuous, marked by strategies that included military and quasi-military campaigns to achieve economic goals. Understanding these causes and effects provides valuable insights into the economic and political landscape of both countries.