Aid Economy and the "Three Whites" Industries

Also called: three whites industries, sambaek industries

After the Korean War, US aid fed the "three whites" industries that made flour, sugar and cotton cloth, but the economy struggled when aid declined.

With much of its industry destroyed in the Korean War, the South Korean economy relied on US aid, mostly consumer goods such as food, clothing and farm produce and their raw materials. Under a 1955 agreement based on US Public Law 480, large amounts of surplus wheat and raw cotton came in.

Milling (flour), sugar refining and cotton spinning (cotton cloth), which processed the aid raw materials, grew rapidly. Because all three products are white they are called the "three whites" (sambaek) industries. Firms allotted aid goods made large profits and grew into chaebol. Meanwhile the flood of cheap surplus produce cut wheat and cotton growing and lowered grain prices, hurting farmers.

In the late 1950s US aid declined and grants turned into loans; the consumer industries that depended on aid stagnated and growth slowed. The downturn was one reason for growing discontent with the Rhee government.