The Role of Government in Economic Development

The Role of Government in Economic Development

November 2006

Oh-Seok Hyun, Ph.D. President

Trade Research Institute Korea International Trade Association

Contents

Introduction Overview of the Role of Government Korean Experiences Mechanism of Government Interventions Globalization and the Role of Government Conclusion

Korea's Economic Development & Economic Crisis Management

. Introduction

1 - 1. Korea's Economy

World `s 12th largest Economy

GDP 12th

Trade 12th

Growth Rate 3th

Foreign Reserves 5th

z GDP(2005) : $ 788 Billion - Malaysia + Indonesia + Thailand + Philippines = $ 687 Billion - Russia = $ 764 Billion

z Per Capita GNI(2005) : $ 16,291

z Trade Value(2005) : $ 545 Billion - Exports : $ 284 Billion (12th) - Imports : $ 261 Billion (13th)

z Average Growth Rate(1970~2005) : 7.0% (3th)

z Foreign Reserves (Jun 2006) : $ 224 Billion (5th)

Korea's Economic Development & Economic Crisis Management

. Introduction

1 - 2. Government's Role

? Guardian of Political Stability

Mobilization and

? Provider of Development Funds

Allocation of Resources ? Major Investor in Industries of the Country

Stabilization of the National Economy

Promotion of Technological Development

? Investment Decision of Private Enterprises ? Motivator behind the Scene ? Preservation of the Law and Order

? A Strong Agent of Social Change

? Protector of Social Security

Korea's Economic Development & Economic Crisis Management

. Overview of the Role of Government

2 - 1. The Neoclassical View

z A Stable Macroeconomic Environment z A Reliable Legal Framework

z Orientation of International Trade z The Absence of Price Controls & other

Distortional Policies

Getting the basics

right !

z Investment in People, Education, Health z Stress on Human Capital

Korea's Economic

Miracle

Korea's Economic Development & Economic Crisis Management

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