Domestic savings were very low, and there was little available domestic capital. This obstacle was overcome by introducing foreign loans and inaugurating attractive domestic interest rates that enticed local capital into production. Of South Korea, Taiwan, Hong Kong, and Singapore, only South Korea financed its economic development with a dramatic build-up of foreign debt, debt that totaled US$46.8 billion in 1985, making it the fourth largest Third World debtor" (Wikimedia Foundations, Inc).
It was this strategy that worked well for Korea. Specifically, "The government mobilized domestic capital by encouraging savings, determined what kinds of plants could be constructed with these funds, and reviewed the potential of the products for export. In this sense, the will of the government to undertake economic development played a crucial role; the role of the government, however, was not limited to such measures as mobilizing capital and allocating investments" (Wikimedia Foundations, Inc).
It was vast savings and investment that brought Korea to instant stardom. However, it was trade liberalization that made it surpass a perilous regional economic crisis: The Asian Economic Crisis in 1997.
"Korea's economy has achieved an impressive recovery from the Asian crisis, with its GDP per capita having been restored to pre-crisis levels, according to a report on the trade policies and