South Korea's Industrial Policy Is Returning to Park Chung-hee-Era Developmentalism

South Korea's current industrial strategy looks increasingly like a return to the developmentalism of the late 1970s, according to energy policy committee member Lee Heon-seok. The factories and heavy industries of Park Chung-hee's era have been replaced by semiconductors and artificial intelligence data centers, but the policy pattern, he argues, is strikingly similar.

The column revisits 1976 and 1977, when South Korea's heavy and chemical industries expanded rapidly. Pohang Integrated Steel Mill increased crude steel capacity from 1.03 million tons to 2.6 million tons in 1976, while plans sought to raise it to 7 million tons by 1979. Factories filled the Changwon machinery complex, and Namhae Chemical completed what was then the world's largest single fertilizer plant. South Korea also recorded its first $10 billion in exports in 1977, began its fourth five-year economic development plan, and started test operations at Kori Unit 1, the country's first nuclear power plant.

Electricity production rose from 9.2 terawatt-hours in 1970 to 19.8 TWh in 1975 and 26.6 TWh in 1977. To manage demand, the government created the Ministry of Energy and Resources in 1978 by separating energy and electricity departments from the Ministry of Commerce and Industry. It also moved to simplify permits for power plants and transmission facilities and speed land acquisition.

Lee says today's three government-led megaprojects, the passage of a special law on the national backbone power grid, and plans for a special law on mega-special zones follow the same supply-first approach. The Climate, Energy and Environment Ministry has estimated that the projects will need about 27 GW by 2040, more than the 26 GW capacity of all nuclear plants currently operating in South Korea.

Meeting that demand quickly, the column says, could require greater reliance on liquefied natural gas, delayed coal retirements, life extensions for aging nuclear plants, and possibly new nuclear construction. Lee argues that the ministry should instead ask whether all the demand is necessary and how much the country can support within its climate targets and ecological limits. Otherwise, he warns, it could become a 21st-century Ministry of Energy and Resources with only the word climate on its sign.