The Economic Planning Board (EPB) was strengthened in 1961 to coordinate budgets, mobilize foreign loans, and draft national development plans. This gave the state a central “control tower” for setting targets and steering investment. The EPB became a key tool for aligning credit, industry policy, and export goals.
On May 16, 1961, a military coup ended South Korea’s short-lived parliamentary government. The new rulers created the Supreme Council for National Reconstruction, with Park Chung-hee emerging as the central figure. This political break set the stage for a state-led development strategy focused on rapid industrial growth and exports.
In June 1961, the Korean Central Intelligence Agency (KCIA) was established under the new military government. It became a powerful institution that gathered intelligence but also played a major role in domestic politics. Its creation strengthened the government’s ability to control opposition while pursuing ambitious economic plans.
The First Five-Year Economic Development Plan (1962–1966) began South Korea’s shift from a largely agricultural economy toward manufacturing. The plan emphasized building basic industrial capacity and infrastructure while linking growth to export performance. It provided a policy framework for the export-led model that became central under Park.
In 1962, the government created KOTRA to promote foreign trade and help Korean firms enter overseas markets. KOTRA supported exporters with market information and connections, reinforcing the state’s hands-on export strategy. Over time it became a central institution in Korea’s export promotion system.
In February 1965, President Park began chairing high-level monthly export promotion meetings at the Blue House. Firms reported problems directly, and officials were expected to remove barriers quickly, making exports a top political priority. This routine helped coordinate ministries and businesses around measurable export targets.
On June 22, 1965, South Korea and Japan signed a treaty normalizing diplomatic relations. The accompanying agreements included Japanese grants and loans, which helped provide capital for industrial projects. This inflow supported development plans but also sparked political controversy inside South Korea.
On April 14, 1967, South Korea became a member of the General Agreement on Tariffs and Trade (GATT). Membership linked Korea more tightly to global trade rules and markets during its export takeoff. It also signaled a stronger commitment to outward-oriented growth.
On April 1, 1968, the government established Pohang Iron and Steel Company (POSCO). Steel was seen as a “core input” needed for shipbuilding, machinery, and later heavy chemical industries. Creating POSCO marked a shift toward building heavy industry capacity, not just light-manufacturing exports.
On April 1, 1970, construction began on the first phase of the Pohang integrated steelworks. Building domestic steel capacity reduced reliance on imported steel and enabled downstream export industries. The project became one of the most important heavy-industry investments of the Park era.
On April 22, 1970, Park launched the Saemaul Undong (New Village Movement) to improve rural infrastructure and living conditions. It aimed to narrow the gap between rapidly industrializing cities and the countryside. The program linked community projects with government-provided materials and performance-based support.
On October 27, 1972, the Yushin Constitution was promulgated after the October 1972 political crackdown. It expanded presidential powers and weakened checks on executive authority, reshaping governance during a key period of industrial upgrading. The new system helped Park sustain tight political control while pushing major economic initiatives.
On July 3, 1973, the Pohang plant was dedicated with an initial capacity around 1.03 million metric tons annually. This milestone strengthened Korea’s ability to supply steel for shipbuilding, machinery, and construction—industries central to export-led growth. It also demonstrated the state’s capacity to execute large industrial projects.
In 1976, South Korea established the Export–Import Bank of Korea to provide specialized financing for exports, imports, and overseas investment. This strengthened the financial infrastructure behind export-led industrialization, especially for large projects requiring long-term credit. The bank became a key policy instrument for trade expansion.
On October 26, 1979, President Park Chung-hee was assassinated by KCIA director Kim Jae-gyu. Park’s death abruptly ended the leadership that had tightly linked political control with export targets and industrial policy. The assassination opened a new period of political instability, even as the export-led model continued to shape South Korea’s economy.
South Korea's Export-Led Industrialization under Park Chung-hee (1961-1979)