I bet that every one of us here has that one friend who is literally obsessed with K-Pop. Ask them anything about Korea or K-Pop or K-Drama, they are well-informed about all of it.
But did you know that some sixty years ago, the Republic of South Korea was a war-torn and between 1910 and 1945, Korea was one of the poorest countries in the world?
What exactly made Korea joined the ranks in G20 countries (the main economic council of the wealthy countries) directly after the Korean War (1950 – 1953) and what we can learn from this great transformation?
Miracle on The Han River
Miracle on The Han River is basically a term referring to the rapid economic growth and expansion in South Korea after the Korean War. This period was a witness where South Korea bloomed into a developed country from a poor, developing country.
The term was coined by the Prime Minister of the Second Republic of Korea (South Korea have gone the formations of government 3 times, yes I know that’s very confusing), in which, the premier encouraged the people of the republic to stay resilient in hope to achieve better economic upturn.
Miracle on The Han River is similar to the Taiwan Miracle and Meiji Restoration which all three has helped their respective country to grow and emerge as the economic powerhouse in the region.
Now, let’s see how the timeline of the Miracle on The Han River and how we can learn and apply to your business or even your personal financial planning.
The SCNR (Supreme Council of National Reconstruction) 1961 – 1963
During this period, the first 5-Year National Plan was introduced, it aimed to develop the nation’s economy by expanding the existing agriculture industry and establishing other modern sectors such as export, industrialisation, energy and providing public goods such as railways, roads and ports.
Although this plan didn’t push the economy to the current state it is right now, but this plan was the foundation of the ever-blooming economic prosperity of the country.
What can we learn?
Always set up a plan and business model.
Why plans and goals are important? Plans and your goals will set you on track and keep you on check.
If you and your business team are lost and floating around, take a look back on what your goal really is and are the things you are doing are contributing to the goals.
It is the same when we are planning our personal finance. Imagine where you will be in, for example, the next 5 years and work your plans out to achieve that.
Diversification of assets and investment
In both perspective of business and personal finance, we must be aware that every personal investment and business venture that we make, carries certain risks.
And one of the best way to reduce the risks is to have a diverse investment portfolio and businesses.
“Treat Employees Like Family” policy
In this period, one of the famous policy that the Second Republic of Korea introduced was the “Treat Employees Like Family” policy and this policy has been credited to the improvement of the people’s productivity.
So, if you are a business owner, remember to keep your employee happy and motivated.
When your team is happy, they will be motivated. And when they are motivated, they will be productive and your team will generate impressive results.
Market Restructuring (1981 – 1987) and IMF Crisis (1997 – 1999)
In the end of 1995, after just a short period from 1961, South Korea has established herself as the eleventh largest economy in the world.
However, there was a problem in their economic market, which was, most of the wealth was hoarded by the military junta. This had led to several legislative reforms to restructure the market.
And in 1997, South Korea’s economy was deeply affected by the Asian Financial Crisis and this caused a downturn in their economy.
How we can apply this:
1. Reform your organisation or plan.
Sometimes, when you put your effort into your business and investment but you are not seeing any results from it, that’s a sign where you need to step back, identify the problem and review your marketing strategy.
If the problem was within the steps, improve them. If the problem aroused from your team, advise, train and communicate with them.
2. Crisis management.
We cannot deny that everything we do will carry certain risks. This is especially true when we are in business or investing. It is very important that we have to come up with a crisis management strategy to minimise the effect in case things take turn for worse.
In short, there are many things that we can learn especially from successful stories, not just limited to individual success but also organisational and national success. So, keep reading and researching!