The Korean government is taking major initiatives to improve the nation ' s economic competitiveness by adopting a more realistic exchange rate , making available short - term export financing , simplifying customs procedures , and encouraging foreign investment . Korea ' s First Five - Year Economic Development Plan ( 1962 - 1966 ) focused on laying a foundation for industrialization . The plan successfully initiated , and then accelerated , a structural adjustment of the nation ' s industrial structure from subsistence agriculture to modern manufacturing and export trade . In the process of its economic growth , Korea has carried out comprehensive industrialization . The share of primary industries in the overall industrial structure decreased steadily from 26 . 6 percent in 1970 , to 14 . 7 percent in 1980 , and further to 4 . 9 percent in 1998 . On the other hand , the share of manufacturing industries increased from 21 . 5 percent in 1970 , to 30 . 7 percent in 1998 . The share of the service industries stood at 51 . 6 percent in 1998 , by far the leading growth sector in the economy . Korea ' s economic growth was initially led by labor - intensive light industries - especially textiles . The light industries were steadily replaced by the heavy and chemical industries that have come to account for over half of the nation ' s total manufacturing output . For instance , with the completion of the third Gwangyang blast furnace in December 1990 , Korea became a major steel producer in the world . Korea also produces a wide range of industrial machinery and equipment . The nation ' s shipbuilding and auto manufacturing industries have reached their peak , while its electronics industry is the leading growth sector and an increasingly important generator of foreign exchange . Korea is ranked the fifth - largest auto manufacturer in the world , with a production of nearly 3 million vehicles annually . To meet ever - increasing fuel demand , large petrochemical complexes , supported by several large refineries , have been developed along the coasts of the country . Other principal industrial products include cement , processed foods , plywood , chemical fertilizers , footwear , clothing , ceramics , glass , nonferrous metals , and farm implements . In line with the advancement of the nation ' s industrial structure over recent years , Korea has continued to increase its investment in the manufacturing sector . In particular , government and corporate investment in information and communications technology has been increasing . Construction - related investment has grown with government support through infrastructure expansion projects , such as railways , roadways , marine ports and airport facilities . This government - led investment is combined with private sector demand for construction of new housing , office buildings and factories . In 1999 , consumer prices in Korea posted 0 . 8 percent increase , while producers ' prices were down 2 . 1 percent . During the early 1990 s , consumer prices recorded eight to nine percent inflation levels . However , thanks to government efforts to contain inflation via the stabilization of industrial product prices , as well as improvement in the distribution structure of farm and fishery related products , inflation decreased considerably . Korea ' s overall agricultural production doubled over the last 15 years . Although agricultural growth has since slowed , the much - emphasized goal of self - sufficiency in rice , the staple food of Korea , was attained with an output of 5 . 5 million tons in 1997 . Agricultural development efforts have been concentrated mainly on maximizing yields from the country ' s limited arable land , which comprises only about 20 percent of total land area . New high - yield varieties of rice and other crops have been introduced . Also , a large - scale fertilizer and pesticide industry has been developed to keep farmers adequately supplied with these essential products . There has also been rapid growth in the production of fruits , vegetables and other high - value cash crops , as well as livestock products . The spread of vinyl greenhouses greatly contributed to the increased volume of the nation ' s vegetable harvest . Since the 1980 s , the annual income of the average farm household has been in balance with that of the average urban working family . The process of industrialization resulted in a steady decrease in Korea ' s farm population . The ratio of rural residents to the overall population plunged from 57 percent in 1962 to below 10 percent in the late 1990 s . This trend has also affected the employment structure of the nation ' s industry . To solve the problem of rapidly dwindling rural labor , major efforts have been undertaken to promote farm mechanization . Mechanization has progressed significantly in the planting and harvesting of rice . A nationwide reforestation program has been underway since the early 1970 s . The program consists of planting new trees and protecting existing forest areas in the hills of the country , which account for some 66 percent of Korea ' s land area . Also , new varieties of trees that are more productive and resistant to pests and disease are being developed . To conserve forestry resources until they become fully productive , tree cutting is strictly controlled . For over a decade , timber production has been limited to around 800 , 000 cubic meters . Most domestic timber demand has thus been satisfied by imports . As an added benefit , these efforts have greatly contributed to the control of flood and soil erosion . The expansion and modernization of Korea ' s fishing industry has been remarkable over the past two decades , making it an important source of foreign exchange earnings . The amount of fish harvested has increased rapidly as modern , motorized vessels began to operate in coastal waters as well as the open seas . Korean fishing bases have been established in Western Samoa , Las Palmas and other locations , while consumers now enjoy cuttlefish caught in waters off the Falkland Islands . Korea ' s deep - sea catch reached a peak in the mid - 1970 s and then declined sharply due to rising fuel costs and the declaration of a 200 - mile economic sea zones by many nations . Korea has negotiated fishing agreements with a number of coastal nations to secure fishing rights in their territorial waters and is continuing efforts to reinforce its deep - sea fishing industry .