Newly Industrialising Countries (NIC’s) In the 20th century many countries

in east and south east Asia industrialised – including South Korea, Taiwan, Singapore, Japan, Philippines and Thailand.

The governments of these NICs kept close control over industrial development, and encouraged industries to export manufactured products to the more developed and richer countries abroad.

Newly Industrialising Countries (NIC’s) The profits generated by exports were

re-invested in the domestic economy. Domestic businesses grew, wages rose, and workers spent their new wealth on home-produced goods and services - thus stimulating further growth.

This is called the multiplier effect. NICs (Newly industrialised countries)

tend to have a large proportion of people working in secondary industries. The % of the population working in primary industry starts to decline.

Newly Industrialising Countries (NIC’s) The success of NIC economies has

contributed to the decline, over the last 30 years, of manufacturing industries in MEDCs such as the UK.

Industries struggled to compete with the cheaper competition from NICs, where production costs and wages were less.

NIC Case study; South Korea

South Korea is known as a NEWLY INDUSTRIALISING COUNTRY (NIC) or a tiger economy.

How did South Korea develop so quickly ? This is because it has

developed really quickly eg over last 30 years, South Korea has transformed from an agricultural country to an industrial one.

The economy has sustained an average growth of 7% a year over the last 30 years.

ECONOMIC MIRACLE.

1950 1995

Primary(%)

66 20

Secondary (%)

6 30

Tertiary (%) 28 50

How did South Korea develop so quickly ?History Korea was the scene of a

bitter war during the 1950s which resulted in the creation of 2 countries : communist North Korea and capitalist South Korea.

How did South Korea develop so quickly ?South Korea has been helped

by 1. Aid from the US and

Japan (bilateral)2. Loans and grants from

development banks (multilateral aid).

3. Investment by multinationals.

How did South Korea develop so quickly ? The main reason why is the Korean Chaebol

– large family run companies with political connections, e,g, Hyundai.

The Government developed a Five Year Plan which began in 1965 and has been continued ever since.

The first Five Year Plan encouraged the growth of heavy manufacturing and chemical industries initially.

How did South Korea develop so quickly ? (2) The first industries

developed in South Korea were Import Substitution Industries (ISIs). Iron, steel and chemicals were produced to reduce spending on imports.

South Korea had skilled, cheap labour and an excellent location.

Reduce spending on imports

Set up Factories and

Make own Products.

How did South Korea develop so quickly ? S Korea now has Export

Orientated industries (EOIs) to try and make more export earnings.

The main success has been in the electronics industries eg Lucky Goldstar (LG).

Do you remember how many Korean companies moved

to Wales ?

How did South Korea develop so quickly ? This is an important case study to

know. It shows how a country has developed using different types of aid / investment.

Remember the keywords and facts !!