States due to the Cold War, and foreign economic and military support continued for some years. Chaebols started to dominate the domestic economy and, eventually, began to become internationally competitive. Under chaebols, workers began to see their wages and working conditions improve, which increased domestic consumption. By the 1980s, the country rose from low income to middle income. South Korea's real GDP expanded by an average of more than 8 percent per year, from US$2.7 billion in 1962 to US$230 billion in 1989, breaking the trillion dollar mark in the early 2000s. Nominal GDP per capita grew from $103.88 in 1962 to $5,438.24 in 1989, reaching the $20,000 milestone in 2006. The manufacturing sector grew from 14.3 percent of the GNP in 1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent in 1962 to 35.8 percent in 1989. In the early 1960s, South Korea's rate of growth exceeded North Korea's rate of growth in most industrial areas. The most significant factor in rapid industrialization was the adoption of an outward-looking strategy in the early 1960s. This strategy was particularly well-suited to that time because of South Korea's low savings rate and small domestic market. The strategy promoted economic growth through labor-intensive manufactured exports, in which South Korea could develop a competitive advantage. Government initiatives played an important role in this process. Through the model of export-led industrialization, the South Korean government incentivized corporations to develop new technology and upgrade productive efficiency to compete the global market. By adhering to state regulations and demands, firms were awarded subsidization and investment support to develop their export markets in the evolving international arena. In addition, the inflow of foreign capital was encouraged to supplement the shortage of domestic savings. These efforts enabled South Korea to achieve growth in exports and subsequent increases in income. By emphasizing the industrial sector, Seoul's export-oriented development strategy left the rural sector barely touched. The steel and shipbuilding industries in particular played key roles in developing South Korea's economy during this time. Except for mining, most industries were located in the urban areas of the northwest and southeast. Heavy industries were located in the south of the country. Factories in Seoul contributed over 25 percent of all manufacturing value-added in 1978; taken together with