Page:NATIONAL INTELLIGENCE SURVEY 41B; SOUTH KOREA; COUNTRY PROFILE CIA-RDP01-00707R000200080005-2.pdf/15





During the period of Japanese administration, the Korean economy was developed essentially as a complement to the Japanese economy. A substantial industrial complex developed in the northern part of the country based largely on local raw materials and power, but the southern part remained heavily agrarian in character and developed only a thin veneer of small-scale industry. The material benefits from such development, however, were largely monopolized by the Japanese. In manufacturing, for example, 90% of the capital and 80% of the skilled labor were Japanese; very few Koreans acquired any technical or managerial skills. With Japan's defeat in 1945, the Korean economy virtually collapsed, having already been drained to a very low level in the course of Japan's long and increasingly desperate war effort; production fell 75% and 60% of the industrial labor force was unemployed. The division of the peninsula at the 38th parallel in 1945 was another great blow because the South found itself left with the best agricultural land, a surplus of unskilled labor, but little else. At the birth of the Republic in 1948, the standard of living in the country was actually lower than it had been in prewar days.

Less than 2 years later came the holocaust: all-out fratricidal war launched across the 38th parallel by the North Korean Communists, supported with Soviet material and, shortly thereafter, by massive Chinese intervention. During the war, nearly 1 million civilians were killed or wounded, and more than 5 10