| San José State University
Department of Economics
& Tornado Alley
Park Chung Hee was born in 1917 in the village of Sonsangun near Taegu in southeastern Korea. He was the seventh child of a poor family; his father sometimes served as a magistrate under the Japanese occupation. Park won admission to high school through a competitive examination. After high school he taught school for a while before entering the Japanese army. He won admission to a two-year training program in Manchukuo, the Japanese puppet state in Manchuria, and graduated at the top of his class. Park was then selected for another two years of training at the Tokyo Military Academy. Park's experience with the Japanese government's program of economic development in Manchukuo strongly affected his thinking when he ruled South Korea. Park adopted the Japanese name Okamoto Minoru and was in many respect essentially Japanese.
Park's political ideology was mixed. After the end of World War II he participated in a communist cell organized within the South Korean army and was sentenced to death but gained a reprieve as a result of his cooperation with the authorities. Park served with distinction in the South Korean Army during the Korean War and became an expert at logistics. He received a year of special training at Fort Sill, Oklahoma.
In May of 1960, Park and a group of other officers of the South Korean army took control of the government. The U.S. government was uncertain of what had taken place in South Korea. There was strong suspicions that Park was a crypto-communist and the media sometimes referred to him as "Parkov," a Russianized version of his name. Although Park did not have affiliations with the communist movement, his thinking and ideological orientation was decidedly Stalinist. However his predeliction for central planning and autocratic control probably came from his experiences in the Japanese army. The Japanese army had no sympathy for notions of free markets and in Manchukuo undertook a Stalinist-style development program. Park's program for the economic development was modeled more on Meiji-era Japan than the Soviet Union.
One of the first things Park did after assuming power was to persecute South Korean business leaders for profiting from the corruption in the South Korean government. Twenty four of the leading businessmen were arrested. The founder of Samsung, Lee Byung Chull, escaped this treatment only because he was out of the country at the time. When Lee Byung Chull returned to Korea he met with Park and agreed to cooperate with Park's economic development program. Later Lee and other prominent business leaders offered to donate all or a substantial portion of their fortunes to the government. They ended up paying fines but not giving up their businesses. The Park regime morality campaign was probably less about corruption than asserting the traditional Confucian social system in which "merchants" had to recognize their status at the bottom of the social hierarchy. There was a campaign against foreign products such as cigarets and foreign cultural influences such as dancing.
Although the Park regime did not takeover all of the business holdings of those labelled "illicit profiteers," it did nationalize the banks. The motivation for this was to gain control of the flow of capital in the country so it could be directed into the sectors that the government wanted to develop.
Park set up three powerful agencies of oversee his development program:
There is an obvious similarity to the Japan's agencies for economic development. As in the case of Japan these agencies are important components of what might be called Korea, Inc. A fourth agency, the Korean Central Intelligence Agency (KCIA), was the instrument of political control which went along with the centralization of economic decision-making.
One of the first projects of the Park regime was the building of the Seoul-Pusan highway. This highway connected the two largest cities of South Korea but at the time of its construction it served more of a symbolic purpose than a transportation need based upon benefits versus costs.
To achieve the industrialization of South Korea that he thought was necessary for defense and prosperity Park Chung Hee generally relied upon private businesses, the chaebol. But in some cases, notably the Pohang Iron and Steel Company (POSCO), Park chose to use public enterprises. In the case of steel he opted for a public enterprise only after years of the failure of private enterprise to develop a successful steel industry. The story of the success of POSCO under the direction of the general Park Tae Joon is told elsewhere. The story of enterprises such as Hyundai's shipbuilding is also told elsewhere. The important thing is that the Park regime initiated a successful program of industrialization for South Korea based upon export-oriented industries which were guided and aided by the government.
The next development of the Park strategy for the economic development of South Korea was the Heavy and Chemical Industries (HCI) Plan. This was a shift in orientation. The HCI Plan formulated in the early 1970's, in addition to calling for the development of heavy industries and chemical industries, involved a more centralized, import-substitution orientation of the economy. The HCI plan followed the creation of a new constitution, the Yushin Constitution, that increased the power of the government and suppressed political opposition. Although the HCI plan achieved increased industrialization it was at the cost of distorting the economy and ultimately the plan was a failure.
The regime of Park Chung Hee ended with his assassination by the head of the Korean Central Intelligence Agency. The assassination was apparently provoked by Park's demand that protests and riots currently occurring be suppressed "even if it cost 30,000 lives." Park Chung Hee was meeting with the top level leadership of South Korea in the headquarters of the Korean Central Intelligence Agency (KCIA). He criticized the head of the KCIA, Kim Jae-kyu, for not completely suppressing the riots and protests in the Cholla region. Kim as head of the KCIA told Park that it would cost 3,000 lives to carry out that suppression. Park replied that he did not care if it cost 30,000 lives, he wanted it done. Another member of the Park regime supported Park's criticisms of Kim. Kim then went into a restroom where he retrieved a pistol hidden there. With the pistol concealed on his person, Kim returned to the meeting. He then said to Park, "Your Excellency, how can you govern the country with insects like this as part of your government?" He then pulled out the pistol and shot the other member of the group that has supported Park's criticisms of him. He then turned to Park and shot him in the head. Park did not die instantly but after a very short period.
The assassination was probably not pre-planned. The evidence for this is that Kim Jae-kyu did not have an escape arranged. When he fled the building he tried to escape by taking a taxi. He was captured and executed.
There had been an attempt to assassinate Park about five years earlier. At the time Park was was scheduled to give a public speech. His wife was with him on the platform. The assassin's shot missed Park and fatally wounded his wife. Park, ever disciplined, gave his scheduled speech despite the wounding of his wife. Park was probably more vigilant about his personal safety after that, but he would never had thought that Kim, his long time friend, would be a threat to him. With Park Chung Hee's assassination the technocrats in the government convinced Park's successors that the economic program would have to be revised and redirected.
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