Korea's overseas construction work and its impact on the Korean economy 1965-1984
The Korean overseas construction industry played a significant role in enabling Korea to make a spectacular leap from being one of the world's poorest countries in the early 1960s to become one of the newly industrialising countries by the early 1980s. The overseas construction industry's contribution to the Korean economy was particularly pronounced in the 1970s. Korea's balance of payments rapidly deteriorated in the early 1970s, as she had to pay much higher prices for raw materials to continue implementing her principal economic development strategy of processing and assembling imported raw materials and components for exports. In addition, Korea had to pay back the loans that had been taken out in the 1960s. To prevent increasing deficits in the balance of payments and to sustain Korea's rapid economic growth, the government needed a good source of foreign currency supply. To lessen her serious problem in the balance of payments, Korea needed a strategy to earn foreign currency while discouraging an excessive spending on imports. The solution was centred around exporting manpower. Fortunately, Korea had an industry that seemed as if it were designed to solve her faced economic problems: the Korean overseas construction industry, exporting manpower to overseas sites, could earn her immediately needed hard currency. Thus, the Middle East construction boom meant much to the Korean economic development. The contribution of the Korean overseas construction to her economy is as follows: improving the balance of payments, increasing national income, reducing unemployment, spurring corporate internationalisation, improving technical know-how, encouraging manpower development, increasing domestic investment, promoting related industries, and helping Government establish diplomacy with the Third World nonaligned nations. Of course, there were negative sides such as inflation and high increase of wages. However the loss was minor compared to the gain. The Korean overseas construction, in many ways, influenced not only the Korean economy but also the society: it gave her people incentives to look outwards and confidence in being a member of the international society.