The Initial Allocation Plans for Property Claims Fund against Japan to Small and Medium Industry and Their Subsequent Deviations (1965-1973)

This article examines the initial allocation plans and subsequent deviations of the Property Claims Funds against Japan(PCF) in the small and medium industry sector. While the economic effects of PCF have generally been viewed positively, it also entailed both achievements and limitations. If the establishment of the Pohang Iron and Steel Company represents the former, the small and medium industry sector represents the latter. Notably, the construction of the Pohang Iron and Steel Company was absent from the initial plans of 1965, reflecting the principle of broadly shared benefits among the population. In contrast, small and medium industry was designated, along with agriculture, fisheries, and infrastructure, as a major recipient, embodying the government’s intention to distribute the benefits widely.<br/> Despite the government’s pledge to allocate 90 million dollars out of 200 million in PCF to this sector, only about one quarter was actually disbursed. This article argues that the government’s weak commitment was decisive. Funds were repeatedly delayed and eventually reduced as the sector was deprioritized, and the process was further constrained by the requirement of consultation with, and approval from, the Japanese government.