The Japanese army had no sympathy for notions of free markets and in Manchukuo undertook a Stalinist style development program. Park's program for the economic development was modeled more on Meiji-era Japan than the Soviet Union. On the political front, Park gradually yielded to pressure from the John Fitzgerald Kennedy Administration. One of the first things Park did after assuming power was to persecute South Korean business and arbitrarily arrest many political leaders. Kim Dae Jung escaped arrest only because he was out of the country, and the security apparatus entered its most draconian period. Putting down dissent and becoming infamous for his use of torture, Park maintained a policy of dictatorship, dissolved the National Assembly, suspended the constitution, suppressed the press and opposition parties, and controlled the judicial system and the universities. On June 19, 1961, Park established, organized and expanded the dreaded Korean Central Intelligence Agency (KCIA) under Kim Jong Pill who later was prime minister twice (from 1971-1975 under the Park administration and from 1998-2000 under the Kim Dae Jung administration).
When Park normalized relations with Japan in 1965 with a treaty signed on June 22, 1965, more than 80,000 college students marched against Park's pro-Japanese policies in Seoul and Pusan. The student leaders were brutally beaten and eliminated by the Korean CIA.
In 1972, Park declared martial law and set up the yushin system of government. Until 1979, Park ruled by presidential decree and criticism of him or his government was expressly illegal.