In this paper I will take a look at two economically leading countries in Asia Pacific - Japan and South Korea and evaluate more in detail their conglomerates that have been said to be the greatest contributors to their success - keiretsu and chaebol. In their development state as well as historical and macroeconomic factors have had a very high influence. The interaction of the three has led to a miraculous development and prosperity and enabled the conglomerates to become the driving forces of the economies. For example, 50% of Japanese capital is held by the 18 keiretsu and the top four chaebol accounts for in-between 40% and 45% of the South Koreas GNP.
             The recent Asia crises have changed the world's perception of the miracle of Asia Pacific countries, however the conglomerates still play and will do a very important role in the economies. Nevertheless, the recent past has provided a more critical insight in the region and proved that to hold onto their reputation in the future the Asian tigers will need to redevelop their key characteristics to build back the trust. Japan and South Korea, being the leading countries have a cascade effect on all the other countries in the region, so the change is sought in the reconstruction of keiretsu and chaebol.
             The success story began in Japan at the end of last century when Meiji restoration took place - the power was given to the emperor again. Japan realised that they are behind the rest of the world technologically so finally in foreign affairs they abandoned isolation and worked instead for the introduction of Western "civilisation and enlightenment". Within 50 years, Japan moved from feudalism to modern nation - the Japanese investigated the western industrial success and copied it. As a result, in the pre - II world war years the family holding zaibatsu took the advantage of the I world war devastated European industries and started to concentrate on the heavy i...