If more foreign products came in, the home producers would be forced to improve their production quality and quantity, to survive in the market. Second, reformers believed that it was the key to higher investment in technology from abroad to boost their production. For a developing country to compete in the same field with the industrialized nations and survive, it had to offer the best products and services in the market. This was a strategy for most marginalized corporations to allow them access to foreign technology in the wake of trade liberalization. However, the outcome had variations between nations. Despite trade liberalization in different parts of the developing world, the trend in the 1990s indicates that “the results of trade reform have varied and sometimes fallen short of expectations” (Worldbank, n.d., p. 133).
Considering the crisis in the Korean economy in 1980, the government had to effectively seek a solution to it, before things got out of hand. There was a lot of pressure for the industries, especially the heavy and chemical industries (HCI), which had no option but rationalize or merge to survive. The Korean government implemented import liberalization in two faces, which were centred on reduction of tariff rates. The mid 1990s had seen imports in Korea rise by approximately 18 per cent, compared to the tariff rates for the manufactures that declined by almost 6 per cent (Yang, 1999). The Korean move to imports liberalization, which was an existing trend among developing nations was the trigger for the pressure in the domestic markets, especially in the manufacturing sector. As the import restrictions reduced, more imports as compared to exports weakened the economy. The domestic prices reduced, which resulted to reduced profit margins not only for the economy as a whole, but including business people. Trade liberalization led to one problem after the other,