APB WORKSHOP ACTIVITY 2

Topics: South Korea, Chaebol, Economic development Pages: 3 (392 words) Published: January 23, 2015
Q1. What factors account for the distinctive features of Japanese keiretsus? Answer with reference to appropriate examples. Answer with reference to appropriate examples. Q2. To what extent have Korean Chaebols impacted on the economic growth and business development in South Korea? Support your answer by making reference to a case example.

Background information
During 1960s and 1990s, South Korea has experienced an incredible transformation to become a developed high-income economy. As it has achieved by focusing on developing large-scale industrial conglomerates refer to chaebols. These are large multinational family-controlled conglomerates, which have enjoyed strong government support. Literally speaking, the word of chaebols means “ business association”. During the president Park Chung Hee (1961-1979) greatly publicized the chaebol modle of state-corporate alliance. The chaebols have invested heavily in the export-oriented manufacturing sector. The chaebol model of state-corporate alliance is based on the Japanese Zaibatsu system, which stimulated economic development by large business conglomerates from 1968 until the end of the World War Two. In South Korea, some well-recognized conglomerates boasting global brand names are Samgsung, Hyundai and LG.

Benefits
Chaebols have made to the unprecedented rapid development of South Korea economy and huge influence in the global economy as well. Fast-paced economic growth, with GDP averaging 10% annual growth between 1962and 1994. The share of the exports in GDP accelerating from 8% in 1965 to a whopping 53% in 2008. Powering chaebols ro fuel explosive economic growth.

Eg. Hyundai contributed in earning foreign dollars that were essential for paying back debts and procuring funds for industrialization, as it went to Middle East and helped for construction work with its technologies.

The concomitant problems
Cronyism
Corrupt relations with government
It obstructs the supervision...
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