The journey to industrialization began in the early 1960s with the introduction of First Five-Year Economic Development Plan. It was at this point that the government made a conscious policy shift from the inward-looking growth strategy of import substitution to the outward-looking growth strategy of export promotion. The essence of growth strategy was to promote exports of light manufactured goods in which Korea possessed comparative advantage given its cheap labor cost. The government utilized various macroeconomic mechanisms at its disposal in implementing this strategy, such as maintaining high interest rates to mobilize domestic savings, and enacting the Foreign Capital Promotion Act to encourage the inflow of foreign investment.

In order to promote exports, the government also devalued the currency by nearly 100% and replaced the previous multiple exchange rate system with a unified exchange rate. It also provided short-term export financing, allowed tariff rebates on materials imported for re-export use, and simplified customs procedures. This new strategy of economic development also affected the government's view toward imports.

Realizing that it was insufficient for Korea to insist on self-sufficiency in major grains, the government allowed large quantity of grain to be imported for the first time.

The government's export promotion strategy did not receive warm acceptance at first. Conservative economists argued that such strategy would endanger national independence through excessive reliance on foreign capital. Indeed, foreign capital made up 83% of total Korean investment in 1962, and it was not until late in the decade that Korea raised its exports enough to attain a credible foreign debt servicing capability.

Yet, the alternatives were even less acceptable. During the 1950s, Korea had depended on grant-in-aid and concessionary public loans, mainly from the United States, which financed imports and domestic projects.