How did South Korea transform from a poverty-stricken nation into a developed country?

The Park Chung-hee administration, inspired by the U.S. Interstate Highway System, prioritized transportation infrastructure as the core driver of economic development. Everyone said he was crazy: American experts flew in specifically to conduct a two-week assessment and concluded that with only a dozen cars per day on Korean roads, building expressways was unnecessary. In the 1960s, President Park spearheaded South Korea’s first expressway projects—the Gyeongin and Gyeongbu Expressways—despite severe shortages of both capital and technical expertise. South Korea secured loans through the restoration of diplomatic ties with Japan, and construction was undertaken by conglomerates such as Hyundai Group. The Gyeongin Expressway, opened in December 1968, connects Seoul and Incheon and spans approximately 24 kilometers. Though short in length, its completion marked the official dawn of Korea’s expressway era. It dramatically improved logistics efficiency between Seoul and the vital port of Incheon, laying crucial groundwork for subsequent large-scale highway network expansion. Shortly thereafter, South Korea launched the strategically pivotal Gyeongbu Expressway project. Stretching 428 kilometers between Seoul and Busan, it achieved full operational status in July 1970. The Gyeongbu Expressway slashed north–south travel time from over ten hours to roughly five hours, becoming the vital artery fueling Korea’s economic takeoff. In 1965, South Korea and Japan signed an agreement under which Japan provided $5 billion in economic aid. POSCO (Pohang Iron and Steel Company) was established in 1968 with the explicit goal of achieving steel self-sufficiency and strengthening national industrial capacity. POSCO’s annual production capacity stands at 12 million tons. It manufactures a wide range of products—including hot-rolled coils, cold-rolled sheets, electrical steel, and stainless steel—with annual capacities of 9.27 million tons for cold-rolled sheets, 1.59 million tons for stainless steel, and 0.65 million tons for silicon steel sheets. Its products serve diverse sectors such as construction, automobiles, home appliances, and industrial machinery, and are exported to over 60 countries worldwide. Since its founding, POSCO has maintained continuous profitability without ever recording a deficit. In 2005, its billet production reached 26.8 million tons—ranking first globally; in 2007, its total steel output hit 32.78 million tons, placing it fourth worldwide. It has been named the world’s most competitive steelmaker by Morgan Stanley and consistently ranked among the Fortune Global 500. In 2000, the South Korean government privatized POSCO, recovering $3 billion—far exceeding its original $174 million investment—and achieving an average annual return on investment of 16.7%. In 1971, Chung Ju-yung, founder of Hyundai Group, traveled to Europe to secure financing for shipbuilding. In Switzerland, he signed contracts for two 260,000-ton oil tankers—securing critical leverage for constructing the Ulsan Shipyard. Around 1971, Chung sought to build 500,000-ton vessels, requiring a 900-meter dry dock whose equipment alone would cost $80 million. Yet his fundraising efforts in Japan and the United States were rejected (Mitsubishi Heavy Industries claimed Korean technology could only support ships up to 50,000 tons). South Korean President Park Chung-hee declared unequivocally: “Developing the shipbuilding industry is a national strategic priority”—and ordered, “No matter what methods are required, we must push forward.” Later, when Chung flew to London seeking a loan from Barclays Bank to build the shipyard, the British bankers retorted: “You Koreans haven’t even built a decent ship yet—why should we lend you money?” “First, I’ll secure orders—I’ll consider the loan afterward.” Chung pulled out a 500-won banknote from his pocket—featuring an image of Admiral Yi Sun-sin’s 16th-century ironclad ‘turtle ship’. Pointing to it, he declared: “Koreans built ironclad warships in the 16th century—300 years before Britain. We merely fell behind due to Japanese colonization.” Astonishingly, the British believed him—and approved the loan.

The merger of NKK and Kawasaki Steel into the JFE Group unfolded in two phases: First, the two companies established a joint holding company via share transfers, remaining operationally independent under its umbrella; second, the newly formed holding company restructured the two subsidiaries along business lines, creating five new operating divisions. Subsequently, Japan’s Fair Trade Commission investigated markets where the combined entity’s post-merger share exceeded 25%—including non-oriented electrical steel, container steel plates, and pipeline steel—and determined that the merger did not violate the Antimonopoly Act, thereby approving it. The newly merged company was named the JFE Group. 'JFE' carries a dual meaning: first, Japan Fe Engineering (Japan Iron and Steel Engineering Corporation); second, Japan Future Enterprise. The JFE Group’s core businesses are steel production and engineering technologies. Leveraging NKK’s and Kawasaki Steel’s pre-existing sales networks, high-caliber technical expertise, and highly efficient production units, the JFE Group comprehensively enhanced its competitiveness and market responsiveness, continuously meeting new challenges while forging an innovative corporate culture. South Korea – POSCO POSCO POSCO’s establishment relied heavily on Japanese technology transfer. Predecessor companies of Japan’s Nippon Steel Corporation provided technical guidance, personnel training, and financial support to POSCO. Early construction and equipment procurement were profoundly influenced by Japanese expertise. Historically, POSCO and Nippon Steel maintained strong cooperative ties—even though they later became competitors in international markets, their deep-rooted historical connection remains significant. POSCO was founded in 1968 and is headquartered in South Korea. As a world-class steel manufacturer and the cornerstone of Korea’s heavy industrial development, it rose from scratch to become a global steel powerhouse within just three decades—repeatedly ranked the world’s most competitive steel producer. Beginning with the Pohang Steelworks, POSCO gradually expanded to include the Gwangyang Steelworks, completed its privatization in 2000, and is now transforming into a comprehensive materials enterprise encompassing new-energy materials. POSCO’s historical development stages: Founding and Foundation (1960s–1970s): Established in 1968, it built its first integrated steelworks in Pohang, North Gyeongsang Province—ending Korea’s absence of modern steelmaking capability. Rapid Expansion (1980s–1990s): With successive commissioning of facilities at the Gwangyang Steelworks, production capacity surged dramatically. By 1992, its ‘Quarter-Century Integrated Project’ had transformed it into a world-class steel plant. Privatization and Technological Innovation (2000s): Fully privatized in 2000. In 2004, it developed the revolutionary FINEX process—significantly lowering production costs and reducing environmental pollution. Globalization and Transformation (2010s–present): Expanded operations worldwide and completed its transition to a holding-company structure in 2022, entering the battery-materials sector with the ambition of becoming a leading future-materials enterprise. POSCO is not only a symbol of South Korea’s economic miracle but also today a global leader in steel-industry technological innovation. Hyundai Steel

Posco Gets Final Approval for $3 Billion Low-Carbon Iron Plant

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The Australian government approved Posco Holdings' $3 billion low-emissions iron ore processing plant at Port Hedland, targeting 2 million tons annual capacity by 2031 using natural gas and potential green hydrogen.

bloomberg

2026-10-18

Posco Gets Final Approval for $3 Billion Low-Carbon Iron Plant

Posco Gets Final Approval for $3 Billion Low-Carbon Iron Plant

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