Heavy-Chemical Industry Drive

The Heavy-Chemical Industry Drive (usually shortened to "HCI") was an economic development plan enacted in the 1970s under the regime of South Korean dictator Park Chung Hee.

Background

During the 1960s, the Republic of Korea had experienced rapid economic growth following the assumption of power by General Park. The dirigisme policies instated by Park—nationalization of the country's banking system, and directing cheap credit to the export sector—had produced rapid development in the textiles and apparel industries. By the time of the Yusin Constitution of 1972, South Korea had gone from one of the world's poorest nations to the middle rank of countries. However, the country lacked any sort of heavy industry, and was dependent upon the United States for many raw materials and capital goods during the early years.

The Korean DMZ Conflict (1966-1969) put a scare in the ROK's leadership. As the Vietnam War ground on, Park and his lieutenants faced the grim possibility that the United States might significantly reduce its military presence on the Korean Peninsula, in order to concentrate resources on the conflict in Indochina while maintaining military strength in Europe. On the other side of the DMZ, North Korea had amassed an enormous army, and an industrial establishment almost wholly devoted to the supply of its armed forces. Fearing for the ROK's military security, Park set out to build an industrial infrastructure that could support a modern military.

Structure of HCI

Park decided to channel the economic development capabilities of the state into the development of several key industries: steel, petrochemicals, automobiles, machine tools, shipbuilding, and electronics. This was over the objections of many contemporary observers, including many economists within and outside South Korea - those opposed claimed the country's economy and institutions were putatively not insufficiently advanced to handle the comprehensive industrial economy. In continuation of previous policies, South Korean banks extended virtually interest-free loans to firms engaged in sectors (q.v.). The country's import-export sector, which had previously been dominated by Japanese firms, was instead placed in the hands of export companies controlled by the chaebol individual or family-based conglomerates that had begun to dominate the economy in the 1960s.

Indeed, the chaebol were the key actors in this new economic initiative, which Park dubbed the "Heavy-Chemical Industry Drive". Being already the country's largest firms, they were decided best positioned to undertake the massive capital investment necessary to establish a heavy industrial sector (Park was uninterested in breaking up their power or putting their resources under a different form of control). Park's economic development ministers further strengthened the position of the chaebol by granting them large-scale credit under favourable conditions.

HCI and the Korean population

By the end of the 1970s, wildcat strikes and student demonstrations had become increasingly frequent. Park remained committed to his economic vision and contemptuous of calls for democratization and distributional equity. This, however, cost him his life: after ordering the violent suppression of a demonstration in October 1979, he was instead assassinated by the director of the KCIA.

Effects of HCI maintained public attention with incidents such as Onsan illness, an effect of the industrial push in the late 1970s which led to cases of environmental poisoning and gave rise to a grass roots environmental movement.

See also

• Chaebol
• History of South Korea
• Economy of South Korea

Bibliography

• Kim, Eun Mee (1997). Big Business, Strong State. Albany, New York: State University of New York Press. ISBN 0-7914-3210-6.
• Wan, Henry (2002). Development in a Globalized Context. Cornell University: monograph.
• Yumi Horikane, "The Political Economy of Heavy Industrialization: The Heavy and Chemical Industry (HCI) Push in South Korea in the 1970s," Modern Asian Studies, 39, 2 (2005) pp. 369–397.