POLI 243 Chapter Notes - Chapter 19: Park Chung-Hee, Corporatism, Kotra
13 May 2013
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Low tariffs and expansion of trade beginning b/c of gatt members gave countries opportunity to exploit trade. Less developed countries began to use trade as part of their economic strategy. Exports played a key role in the rise of gdp for south korea. South korea"s initial trade and industrialization strategy: import-substitution industrialization (isi) Initially it blocked import of industrial goods so that domestic demand would stimulate domestic production aka import-substitution industrialization or isi. By blocking foreign competition, isi ensures domestic manufacturers have a profit but means consumers are hurt by lack of competition; What happens w/o isi: if you"re producing steel and there"s cheaper steel moving in from other countries, your steel manufacturers will dry up. Price shifts cause distortions in ability of other sectors to utilize inputs; for ex: if steel is an input to another"s product, but price of steel isn"t competitive, then neither will your product be competitive.
