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ECONOMIC DEVELOPMENT AND WATERWater resources management as an engine foreconomic growth in the Republic of KoreaKyung-Jin Min, Director and Sunkyo Hong, Researcher, Research Center for Water Policy and Economy, K-waterThe Republic of Korea today enjoys a high standard of livingand produces cutting-edge technology, as well as creatingand exporting high quality consumer electronics. In termsof numbers, Korea is the world’s thirteenth-largest economy andits twenty-fifth most populous country. 1 However, just 50 yearsago, Korea was one of the poorest countries in the world, with agross domestic product (GDP) per capita of less than US$100 atthe beginning of the 1960s. 2 This economic transformation fromindigence to modern economic powerhouse has come to be knownas ‘the Miracle on the Han River’, which is the river that flowsthrough Seoul, Korea’s capital. This is an appropriate name, asit suggests that the river played a part in the transformation.Indeed, Korea’s rapid growth and development would not havebeen possible without the water resources and their development.There follows an account of how the management and developmentof water resources has served as an engine for growth in Koreathrough the various phases of its development history. An explorationof the institutional framework for water resources developmentwill be followed by examples of cooperation among interest groups.The headquarters of the Korea Water Resources Corporation (K-water)Image: K-waterThese various aspects of Korea’s water development areexplored with reference to the role of the Korea WaterResources Corporation, or K-water.Korea’s economic development history can be viewedin terms of decadal phases: post-war reconstruction inthe 1950s following the Korean War, the building of lightindustries in the 1960s, large investments in the heavy andchemical industries and the modernization of agriculturein the 1970s, economic liberalization in the 1980s, andglobalization and aid regulation in the 1990s. 3 The firstphase, the 1950s, was the period following the KoreanWar. The Korean economy during this time dependedheavily on foreign aid, most of it from the United States,and economic policy was one of import substitution.The flour, sugar and cotton-spinning industries receivedspecial attention, 4 but given the aid-dependent nature ofthe economy, the import substitution policy was at best amodest success, recording annual growth of 3.9 per cent. 5The next two decades saw the launch of great economicprogress under a new government and new economicpolicy. Policy during this period and until the mid-1980swas guided by five-year economic and social developmentplans drafted by the Economic Planning Board(EPB) established in 1961. Under the EPB’s guidance,GDP in the 1960s grew 8.5 per cent annually, manufacturing(mainly from light industries) grew 17 per centannually, and gross national product per capita tripledfrom US$82 in 1961 to US$253 in 1970. Unemploymentalso fell from 8.1 per cent in 1963 to 4.4 per cent in1970. A strongly export-oriented strategy and favourableforeign trade environment drove this growth, whichdespite rising inflation reduced absolute poverty andsecured the foundations for a self-sustaining economy. 6The nurturing of six heavy and chemical industries(HCI) – steel, shipbuilding, machinery, electronics,petrochemistry and nonferrous metals – and the ambitiousgoals to raise the per capita income to US$1,000and achieve US$10 billion in exports defined the 1970s. 7During this period, Korea saw the modernization of itsagriculture and the launch of the Saemaeul Undong, orNew Village Movement, a nationwide effort to developand improve standard of living. The economy continuedto enjoy rapid growth, averaging 9.1 per cent between1971 and 1980. HCI’s share of manufacturing’s contributionto GDP increased from 37.8 per cent to 57.5 per centbetween the beginning and end of the decade. 8[ 267 ]