Overcoming the crisis in Korea's shipping industry, 1980–1988

Abstract

Korea's shipping industry, which began to grow rapidly during the 1970s, faced a crisis in the early 1980s. The leading cause of the crisis was the significant slump in the shipping market caused by the second oil shock and the overcapacity of tonnages through the acquisition of second-hand vessels at a high price during the shipping boom in the early 1980s. The crisis in the shipping industry could have spread directly to the entire banking sector and led to a catastrophe in the national economy. The military government implemented the Shipping Industry Rationalization policy from 1983 to 1988 to prevent such a collapse of the national economy. This article reviews the cause of the shipping industry crisis in Korea in the 1980s and the achievements and limitations of the Shipping Industry Rationalization policy as a way of overcoming the crisis.