The Five-Year Economic and Social Development Plans () were a series of economic development plans implemented by South Korea from the early 1960s to the late 20th century. Between 1962 and 1996, the government of South Korea formulated and implemented a total of seven five-year plans. The first four were called the Economic Development Plan, while the fifth to seventh were named the Economic and Social Development Plan to reflect the South Korean government's emphasis on both economic growth and social development.
The first four five-year economic plans had a strong "directive" nature. Starting from the fifth five-year plan, the South Korean government began to emphasize the "inductive" nature of the plan and tried to expand the participation of the private sector. The sixth five-year plan pointed out that the economic plan would play a role in the scope of a free market economy based on autonomy and competition. In addition to emphasizing "guidance", the seventh five-year plan also emphasized the "strategic" nature of the plan, which was a strategic issue for the economy jointly promoted by the government and the private sector. The Five-Year Economic Plan was a manifestation of the South Korean government's leading role in developing an export-oriented economy, and made important contributions to South Korea's economic take-off and the realization of the Miracle on the Han River.
The Economic Planning Agency was the government agency responsible for formulating and implementing five-year economic plans. When it was first established in 1961, the Economic Planning Agency was a ministerial-level national agency, which was later upgraded by half a level and headed by a deputy prime minister. The agency employed hundreds of experts in economics, law, public administration, education and other fields. It has subordinate agencies such as the Economic Planning Bureau, Budget Bureau, Price Policy Bureau, Economic Cooperation Bureau, and Survey and Statistics Bureau. It led central departments such as the Ministry of Finance, the Ministry of Trade and Industry, the Ministry for Food, Agriculture, Forestry and Fisheries, and the Ministry of Science and Technology. It played an important role in the overall development of the South Korean economy.
The President Syngman Rhee administration and the Prime Minister Chang Myon government formulated the Seven-Year Economic Development Plan (1960–1966) and the Five-Year Economic Development Plan (1961–1965) in 1960 and 1961, respectively. However, these two plans were not implemented due to the April Revolution and the May 16 Coup. The actual implementation of the five-year economic plan in South Korea was after Park Chung Hee came to power in 1963. In 1993, President Kim Young-sam announced the New Five-Year Economic Plan consistent with his term of office, replacing the Seven-Year Plan. President Kim Dae-jung discontinued the five-year economic plans.
History Both North and South Korea had survived the Korean War (1950–1953). From the end of World War II, South Korea remained largely dependent on United States. aid until a military coup occurred in 1961. American economic aid failed in its goal of creating an industrial base in South Korea largely due to corruption. While the South Koreans did not starve and were able to keep up with national defense, most of the aid was misappropriated for private use. This created a small class of wealthy Koreans at the expense of the majority of the country, generating resentment. Despite this widespread corruption however, President Syngman Rhee's administration had managed to use some U.S. aid to develop the country's education system, transportation infrastructure, and communications infrastructure.
The earliest economic development plan of the South Korean government was the first half of the 7-Year Economic Development Plan (1960–1966) formulated by President Rhee in May 1959, namely the 3-Year Economic Development Plan. The plan was formulated by the Industrial Development Committee of the Ministry of Reconstruction, the advisory body of the Ministry of Reconstruction at that time, and was passed by the National Assembly on April 15, 1960. This economic plan was proposed in response to the continuous reduction of U.S. aid to South Korea at that time. Its direct goal was to reduce the dependence on foreign food and optimize the industrial structure through investment in the secondary industry. The most prominent feature of the plan was the development strategy of balanced growth, including balance between industry and agriculture, coordination between heavy and light industries, and balance of international payments. The Rhee administration collapsed in the April Revolution shortly after the plan was passed, meaning the plan could not be implemented.
Prime Minister Chang Myon of the Democratic Party, which came to power after the April Revolution, formulated the Five-Year Economic Development Plan (1961–1965) in early 1961 based on the economic plan of the Rhee administration, and it was discussed and approved at a cabinet meeting. Due to the contradictions between the old and new factions within the Democratic Party at that time, mass demonstrations continued one after another, and social order was chaotic. On 16 May 1961, Park Chung Hee launched the May 16 Coup and overthrew the Chang Myon government, which had only existed for eight months. The Five-Year Economic Development Plan thus became another economic plan that failed to be implemented.
The actual implementation of South Korea's five-year economic plan was after Park Chung Hee came to power. In early January 1962, President Park Chung Hee's government officially released the first five-year plan (1962–1966). Subsequently, the South Korean government formulated and implemented a total of seven five-year economic plans between 1962 and 1996. In 1993, after Kim Young-sam was elected President of South Korea, he announced the New Five-Year Economic Plan which was consistent with his term of office, replacing the Seventh Five-Year Plan and ending the historical mission of the original five-year economic plan. The later President Kim Dae-jung's government stopped formulating five-year economic plans.
Economic Planning Institute On 17 June 1948, South Korea enacted the Government Organization Law when it drafted the Constitution, which decided to establish the Planning Office directly under the Prime Minister, responsible for formulating comprehensive plans for finance, economy, banking, industry and other matters to be submitted to the State Council and for budget preparation. On 7 February 1955, South Korea revised the Government Organization Law, deciding to abolish the Planning Office and establish the Ministry of Reconstruction on August 27 of the same year. According to the newly revised Government Organization Law, "the Minister of Reconstruction is in charge of the comprehensive economic plan for reconstruction industry and the management and adjustment of its implementation."
On 26 June 1961, the Park Chung Hee government amended the Government Organization Law, abolished the Ministry of Reconstruction, and established the Ministry of Construction. "The Minister of Construction is in charge of management and adjustment matters related to the formulation and implementation of comprehensive plans required for the effective operation of the national economy." However, a month later, on 22 July, the Park Chung Hee government amended the Government Organization Law again and decided to establish the Economic Planning Institute. According to the new Government Organization Law, the Economic Planning Institute is responsible for "handling management and adjustment matters in the formulation and implementation of comprehensive plans for national economic reconstruction and development."
The Economic Planning Institute was initially formed by some relevant functional departments of the Ministry of Construction, and had 4 bureaus and 19 sections. In order to manage the affairs of national land construction, the National Land Construction Agency became the external agency of the Planning Institute. In October of the same year, the Allocation Agency also became the external agency of the Planning Institute in order to manage the purchase, supply and management of domestic and foreign investment. Initially, the Planning Agency had one director and one deputy director. However, from 14 December 1963, the Planning Institute began to establish one director and one deputy director. The director was concurrently held by the Deputy Prime Minister (at that time, the South Korean government only had one deputy prime minister).
During the administrations of Park Chung Hee and Chun Doo-hwan, the Economic Planning Agency (EPA) held great power. The Deputy Prime Minister and the EPA was often referred to as the "Economic Vice President". In the 1960s and 1970s, the EPA oversaw other economic departments by formulating economic development plans and adjusting economic policies. The EPA operated the "Ministerial Economic Council" from 1961, and later took charge of the "Monthly Economic Trends Report Meeting". It also operated many associations and adjustment agencies as chairman or speaker of the council. The Korean Government Organization Law of 1973 stipulated that the EPA was ordered by the Prime Minister to oversee the relevant departments in economic planning and operation The EPA employed hundreds of experts in economics, law, public administration, education and other fields, and played an important role in the overall development of the Korean economy.
Five-year plans
The First Five-Year Plan (1962–1966) According to South Korean economic data from 1954 to 1961, by 1957 South Korean economy had recovered from the ruins of war, and there was even a surplus in the production of some consumer goods. However, before the Park Chung Hee regime came to power, South Korean economy was still in a vicious cycle of low investment, low production and low income, and faced many serious problems such as declining economic growth rate year by year, excessive population growth, high unemployment rate, backward industrial structure, large proportion of primary industry and small proportion of secondary and tertiary industry. Whether or not the economy could be revitalized became the key to maintaining the Park Chung Hee government. "In order to resolutely correct the vicious cycle of social economy caused by the incompetence and corruption of the old regime and realize the reconstruction and self-reliant growth of the national economy," the Park Chung Hee regime officially released the First Five-Year Plan (1962–1966) in early January 1962.