Project

in
Economic
Development

Submitted to: Mrs. Sherry Joyce Nuestro

Submitted by: Honey Mae C. Mariño
 경제 개발
프로젝트

제출: Mrs. Sherry Joyce Nuestro

제출자: Honey Mae C. Mariño

South Korea
History of South Korea

South Korea officially the Republic of Korea is a country in East Asia, constituting
the southern part of the Korean Peninsula and sharing a land border with North Korea.
The name Korea is derived from ‘Goguryeo’ which was one of the great powers in East
Asia during its time, ruling most of the Korean Peninsula, Manchuria, parts of
the Russian Far Eastand Inner Mongolia under Gwanggaeto the Great. Its
capital, Seoul, is a major global city and half of South Korea's over 51 million people
live in the Seoul Capital Area, the fourth largest metropolitan economy in the world.
Its citizens enjoy the world's fastest Internet connection speeds along with the world's
second best healthcare system,[ resulting in the third highest health adjusted life
expectancy in the world.] The world's 5th largest exporter and 8th largest importer,
South Korea is a global leader in many technology and innovation driven fields. Since
2014, South Korea has been named the world's most innovative country by
the Bloomberg Innovation Index for 6 consecutive years. Since the 21st century, South
Korea has been renowned for its globally influential pop culture such as K-pop and TV
dramas, a phenomenon referred to as the Korean Wave.
It occupies the southern portion of the Korean peninsula. The country is bordered by
the Democratic People’s Republic of Korea (North Korea) to the north, the East Sea
(Sea of Japan) to the east, the East China Sea to the south, and the Yellow Sea to the
west; to the southeast it is separated from the Japanese island of Tsushima by
the Korea Strait. South Korea makes up about 45 percent of the peninsula’s land area.
The capital is Seoul (Sŏul).
South Korea faces North Korea across a demilitarized zone (DMZ) 2.5 miles (4 km)
wide that was established by the terms of the 1953 armistice that ended fighting in the
Korean War (1950–53). The DMZ, which runs for about 150 miles (240 km), constitutes
the 1953 military cease-fire line and roughly follows latitude 38° N (the 38th parallel)
from the mouth of the Han River on the west coast of the Korean peninsula to a little
south of the North Korean town of Kosŏng on the east coast.

Ancient Korea

The history of Korea begins with the founding of Joseon (also known as "Gojoseon",
or Old Joseon, to differentiate it with the 14th century dynasty) in 2333 BCE
by Dangun, according to Korea's foundation mythology. Gojoseon expanded until it
controlled the northern Korean Peninsula and parts of Manchuria. Gija Joseon was
purportedly founded in the 12th century BC, but its existence and role have been
controversial in the modern era. In 108 BCE, the Han dynasty defeated Wiman
Joseon and installed four commanderies in the northern Korean peninsula. Three of
the commanderies fell or retreated westward within a few decades destabilized Ming
dynasty.
Modern history

Between 1962 and 1994, the South Korean economy grew at an average of 10%
annually, fueled by annual export growth of 20%, in a period called the Miracle on the
Han River.
Despite the initial plan of a unified Korea in the 1943 Cairo Declaration,
escalating Cold War antagonism between the Soviet Union and the United
States eventually led to the establishment of separate governments, each with its own
ideology, leading to the division of Korea into two political entities in 1948: North
Korea and South Korea. In the South, Syngman Rhee, an opponent of communism,
who had been backed and appointed by the United States as head of the provisional
government, won the first presidential elections of the newly declared Republic of
Korea in May.
In the North, however, a former anti-Japanese guerrilla and communist activist, Kim Il-
sung was appointed premier of the Democratic People's Republic of Korea in
September.
In October, the Soviet Union declared Kim Il-sung's government as sovereign over
both parts. The UN declared Rhee's government as "a lawful government having
effective control and jurisdiction over that part of Korea where the UN Temporary
Commission on Korea was able to observe and consult" and the Government "based
on elections which was observed by the Temporary Commission" in addition to a
statement that "this is the only such government in Korea." Both leaders began an
authoritarian repression of their political opponents inside their region, seeking for a
unification of Korea under their control. While South Korea's request for military
support was denied by the United States, North Korea's military was heavily reinforced
by the Soviet Union.

Korean War
On June 25, 1950, North Korea invaded South Korea, sparking the Korean War, the
Cold War's first major conflict, which continued until 1953. At the time, the Soviet
Union had boycotted the United Nations (UN), thus forfeiting their veto rights. This
allowed the UN to intervene in a civil war when it became apparent that the superior
North Korean forces would unify the entire country. The Soviet Union and China backed
North Korea, with the later participation of millions of Chinese troops. After an ebb and
flow that saw both sides almost pushed to the brink of extinction, and massive losses
among Korean civilians in both the north and the south, the war eventually reached a
stalemate. The 1953 armistice, never signed by South Korea, split the peninsula along
the demilitarized zone near the original demarcation line. No peace treaty was ever
signed, resulting in the two countries remaining technically at war. Approximately 3
million people died in the Korean War, with a higher proportional civilian death toll
than World War II or the Vietnam War, making it perhaps the deadliest conflict of the
Cold War-era. In addition, virtually all of Korea's major cities were destroyed by the war.
Post-Korean War (1960–1990)

In 1960, a student uprising (the "April 19

Revolution") led to the resignation of the
autocratic then-President Syngman Rhee. This
was followed by 13 months of political instability
as South Korea was led by a weak and ineffectual
government. This instability was broken by
the May 16, 1961, coup led by General Park
Chung-hee. As president, Park oversaw a period of rapid export-led economic
growth enforced by political repression.

Park was heavily criticized as a ruthless military dictator, who in 1972 extended his
rule by creating a new constitution, which gave the president sweeping (almost
dictatorial) powers and permitted him to run for an unlimited number of six-year terms.
The Korean economy developed significantly during Park's tenure.
The government developed the nationwide expressway system, the Seoul subway
system, and laid the foundation for economic development during his 17-year tenure,
which ended with his assassination in 1979.

The years after Park's assassination were marked again by political turmoil, as the
previously suppressed opposition leaders all campaigned to run for president in the
sudden political void. In 1979 there came the Coup d'état of December Twelfth led by
General Chun Doo-hwan. Following the Coup d'état, Chun Doo-hwan planned to rise
to power through several measures. On May 17, Chun Doo-hwan forced the Cabinet
to expand martial law to the whole nation, which had previously not applied to the
island of Jejudo. The expanded martial law closed universities, banned political
activities and further curtailed the press. Chun's assumption of the presidency in the
events of May 17, triggered nationwide protests demanding democracy, in particular
in the city of Gwangju, to which Chun sent Special Forces to violently suppress
the Gwangju Democratization Movement.

South Korea was formally invited to become a member of the United Nations in 1991.
The transition of Korea from autocracy to modern democracy was marked in 1997 by
the election of Kim Dae-jung, who was sworn in as the eighth president of South Korea,
on February 25, 1998. His election was significant given that he had in earlier years
been a political prisoner sentenced to death (later commuted to exile).

Contemporary South Korea

President Kim Dae-jung, the 2000 Nobel Peace

Prize recipient for advancing democracy and human
rights in South Korea and East Asia and for
reconciliation with North Korea, was sometimes called
the "Nelson Mandela of Asia.
In June 2000, as part of President Kim Dae-jung's "Sunshine Policy" of engagement,
a North–South summit took place in Pyongyang, the capital of North Korea. Later that
year, Kim received the Nobel Peace Prize "for his work for democracy and human
rights in South Korea and in East Asia in general, and for peace and reconciliation with
North Korea in particular". However, because of discontent among the population for
fruitless approaches to the North under the previous administrations and, amid North
Korean provocations, a conservative government was elected in 2007 led by
President Lee Myung-bak, former mayor of Seoul. Meanwhile, South Korea and Japan
jointly co-hosted the 2002 FIFA World Cup. However, South Korean and Japanese
relations later soured because of conflicting claims of sovereignty over the Liancourt
Rocks.

South Korea was the first chair of the G-20 during the 2010 Seoul summit.

In 2010, there was an escalation in attacks by North Korea. In March 2010 the South
Korean warship ROKS Cheonan was sunk with the loss of 46 South Korean sailors,
allegedly by a North Korean submarine. In November 2010 Yeonpyeong Island was
attacked by a significant North Korean artillery barrage, with 4 people losing their lives.
The lack of a strong response to these attacks from both South Korea and the
international community (the official UN report declined to explicitly name North Korea
as the perpetrator for the Cheonan sinking) caused significant anger with the South
Korean public. South Korea saw another milestone in 2012 with the first ever female
president Park Geun-hye elected and assuming office. Daughter of another former
president, Park Chung-hee, she carried on a conservative brand of politics. President
Park Geun-hye's administration was formally accused of corruption, bribery, and
influence-peddling for the involvement of close friend Choi Soon-sil in state affairs.
There followed a series of massive public demonstrations from November 2016 and
she was removed from office. After the fallout of President Park's impeachment and
dismissal, new elections were held and Moon Jae-in of the Democratic party won the
presidency, assuming office on 10 May 2017.
Geography

South Korea occupies the southern portion of the Korean Peninsula, which extends
some 1,100 km (680 mi) from the Asian mainland. This mountainous peninsula is
flanked by the Yellow Sea to the west, and the Sea of Japan to the east. Its southern
tip lies on the Korea Strait and the East China Sea.

The country, including all its islands, lies between latitudes 33° and 39°N, and
longitudes 124° and 130°E. Its total area is 100,032 square kilometers
(38,622.57 sq mi).

South Korea can be divided into four general regions: an eastern region of high
mountain ranges and narrow coastal plains; a western region of broad coastal
plains, river basins, and rolling hills; a southwestern region of mountains and valleys;
and a southeastern region dominated by the broad basin of the Nakdong River.
South Korea's terrain is mostly mountainous, most of which is not arable. Lowlands,
located primarily in the west and southeast, make up only 30% of the total land area.
About three thousand islands, mostly small and uninhabited, lie off the western and
southern coasts of South Korea. South Korea has 20 national parks and popular
nature places like the Boseong Tea Fields, Suncheon Bay Ecological Park, and the
first national park of Jirisan
Climate
South Korea tends to have a humid continental climate and a humid subtropical
climate, and is affected by the East Asian monsoon, with precipitation heavier in
summer during a short rainy season called jangma (장마), which begins end of June
through the end of July. Winters can be extremely cold with the minimum temperature
dropping below −20 °C (−4 °F) in the inland region of the country: in Seoul, the average
January temperature range is −7 to 1 °C (19 to 34 °F), and the average August
temperature range is 22 to 30 °C (72 to 86 °F). Winter temperatures are higher along
the southern coast and considerably lower in the mountainous interior. Summer can
be uncomfortably hot and humid, with temperatures exceeding 30 °C (86 °F) in most
parts of the country. South Korea has four distinct seasons; spring, summer, autumn
and winter. Spring usually lasts from late March to early May, summer from mid-May
to early September, autumn from mid-September to early November, and winter from
mid-November to mid-March.
Rainfall is concentrated in the summer months of June through September. The
southern coast is subject to late summer typhoons that bring strong winds, heavy rains
and sometime floods. The average annual precipitation varies from 1,370 millimeters
(54 in) in Seoul to 1,470 millimeters (58 in) in Busan.

Environment

During the first 20 years of South Korea's growth surge, little effort was made to
preserve the environment. Unchecked industrialization and urban development have
resulted in deforestation and the ongoing destruction of wetlands such as the Songdo
Tidal Flat. However, there have been recent efforts to balance these problems,
including a government run $84 billion five-year green growth project that aims to
boost energy efficiency and green technology.
The green-based economic strategy is a comprehensive overhaul of South Korea's
economy, utilizing nearly two percent of the national GDP. The greening initiative
includes such efforts as a nationwide bike network, solar and wind energy, lowering oil
dependent vehicles, backing daylight savings and extensive usage of environmentally
friendly technologies such as LEDs in electronics and lighting. The country – already
the world's most wired – plans to build a nationwide next-generation network that will
be 10 times faster than broadband facilities, in order to reduce energy usage.
The renewable portfolio standard program with renewable energy certificates runs
from 2012 to 2022 Quota systems favor large, vertically integrated generators and
multinational electric utilities, if only because certificates are generally denominated in
units of one megawatt-hour. They are also more difficult to design and implement than
a Feed-in tariff. Around 350 residential micro combined heat and power units were
installed in 2012.

Seoul's tap water recently became safe to drink, with city officials branding it "Arisu" in
a bid to convince the public. Efforts have also been made with afforestation projects.
Another multibillion-dollar project was the restoration of Cheonggyecheon, a stream
running through downtown Seoul that had earlier been paved over by a motorway.
One major challenge is air quality, with acid rain, sulfur oxides, and annual yellow dust
storms being particular problems. It is acknowledged that many of these difficulties are
a result of South Korea's proximity to China, which is a major air polluter.

Government
The South Korean government's structure
is determined by the Constitution of the
Republic of Korea. Like many democratic
states, South Korea has a government
divided into three
branches: executive, judicial,
and legislative. The executive and
legislative branches operate primarily at
the national level, although various ministries in the executive branch also carry out
local functions. Local governments are semi-autonomous, and contain executive
and legislative bodies of their own. The judicial branch operates at both the national
and local levels. South Korea is a constitutional democracy.

The constitution has been revised several times since its first promulgation in 1948 at
independence. However, it has retained many broad characteristics and with the
exception of the short-lived Second Republic of South Korea, the country has always
had a presidential system with an independent chief executive.Under its current
constitution the state is sometimes referred to as the Sixth Republic of South Korea.
The first direct election was also held in 1948.

Although South Korea experienced a series of military dictatorships from the 1960s
until the 1980s, it has since developed into a successful liberal democracy. Today,
the CIA World Factbook describes South Korea's democracy as a "fully functioning
modern democracy". South Korea is ranked 45th on the Corruption Perceptions
Index (9th in the Asia-Pacific region), with a score of 57 out of 100.
Economy of
South Korea
Economy of South Korea

The economy of South Korea is the 4th largest in Asia and the 11th largest in the
world. It is a mixed economy dominated by family-owned conglomerates
called chaebols; however, the dominance of the chaebol is unlikely to last and
engenders risk of slowing down the transformation of Korean economy for the benefit
of future generations. South Korea is known for its spectacular rise from one of the
poorest countries in the world to a developed, high-income country in just a few
generations. This economic growth is called by some a miracle, and described as
the Miracle on the Han River, which has brought South Korea to the ranks of elite
countries in the OECD and the G-20. South Korea still remains one of the fastest
growing developed countries in the world following the Great Recession. It is included
in the group of Next Eleven countries that will dominate the global economy in the
middle of the 21st century.
South Korea's rigorous education system and the establishment of a highly motivated
and educated populace is largely responsible for spurring the country's high
technology boom and rapid economic development. Having almost no natural
resources and a high population density in its territory, which deterred continued
population growth and the formation of a large internal consumer market, South Korea
adapted an export-oriented economic strategy to fuel its economy, and in 2014, South
Korea was the seventh largest exporter and seventh largest importer in the
world. Bank of Korea and Korea Development Institute periodically release
major economic indicators and economic trends of the economy of South Korea.
Despite the South Korean economy's high growth potential and apparent structural
stability, South Korea suffers perpetual damage to its credit rating in the stock market
due to the belligerence of North Korea in times of deep military crises, which has an
adverse effect on the financial markets of the South Korean economy. However,
renowned financial organizations, such as the International Monetary Fund, also
compliment the resilience of the South Korean economy against various economic
crises, citing low state debt, and high fiscal reserves that can quickly be mobilized to
address any expected financial emergencies. Other financial organizations like the
World Bank describe Korea as one of the fastest-growing major economies of the next
generation along with BRIC and Indonesia South Korea was one of the few developed
countries that was able to avoid a recession during the global financial crisis, and its
economic growth rate reached 6.2% in 2010, a sharp recovery from economic growth
rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis hit. The South
Korean economy again recovered with the record-surplus of US$70.7 billion mark of
the current account in the end of 2013, up 47 percent growth from 2012, amid
uncertainties of the global economic turmoil, with major economic output being the
technology products exports.

Overview
Following the Korean War, South Korea remained one of the poorest countries in the world
for over a decade. In 1960 its gross domestic product per capita was $79.[29] The growth of
the industrial sector was the principal stimulus to economic development. In 1986,
manufacturing industries accounted for approximately 30 percent of the gross domestic
product (GDP) and 25 percent of the work force.
Benefiting from strong domestic encouragement and foreign aid, Seoul's industrialists
introduced modern technologies into outmoded or newly built facilities at a rapid pace,
increased the production of commodities—especially those for sale in foreign markets—
and plowed the proceeds back into further industrial expansion. As a result, industry altered
the country's landscape, drawing millions of laborers to urban manufacturing centers.

Dynastic Degeneration

The founders of the Chosôn dynasty (1392-1910) imposed a tribute system on a little-
commercialized peasant economy, collecting taxes in the form of a wide variety of
products and mobilizing labor to obtain the handicrafts and services it needed. From
the late sixteenth to the early seventeenth century, invading armies from Japan and
China shattered the command system and forced a transition to a market economy.
The damaged bureaucracy started to receive taxes in money commodities — rice and
cotton textiles — and eventually began to mint copper coins and lifted restrictions on
trade. The wars also dealt a serious blow to slavery and the pre-war system of forced
labor, allowing labor markets to emerge.
Markets were slow to develop: grain markets in agricultural regions of Korea appeared
less integrated than those in comparable parts of China and Japan. Population and
acreage, however, recovered quickly from the adverse impact of the wars. Population
growth came to a halt around 1800, and a century of demographic stagnation followed
due to a higher level of mortality. During the nineteenth century, living standards
appeared to deteriorate. Both wages and rents fell, tax receipts shrank, and budget
deficits expanded, forcing the government to resort to debasement. Peasant rebellions
occurred more frequently, and poor peasants left Korea for northern China.
Given that both acreage and population remained stable during the nineteenth century,
the worsening living standards imply that the aggregate output contracted, because
land and labor were being used in an ever more inefficient way. The decline in
efficiency appeared to have much to do with disintegrating system of water control,
which included flood control and irrigation.

South Korean Prosperity

With the end of the Second World War in 1945, two separate regimes emerged on the
Korean peninsula to replace the colonial government. The U.S. military government
took over the southern half, while communist Russia set up a Korean leadership in the
northern half. The de-colonization and political division meant sudden disruption of
trade both with Japan and within Korea, causing serious economic turmoil. Dealing
with the post-colonial chaos with economic aid, the U.S. military government privatized
properties previously owned by the Japanese government and civilians. The first South
Korean government, established in 1948, carried out a land reform, making land
distribution more egalitarian. Then the Korean War broke out in 1950, killing one and
half million people and destroying about a quarter of capital stock during its three year
duration.
After the war, South Korean policymakers set upon stimulating economic growth by
promoting indigenous industrial firms, following the example of many other post-World
War II developing countries. The government selected firms in targeted industries and
gave them privileges to buy foreign currencies and to borrow funds from banks at
preferential rates. It also erected tariff barriers and imposed a prohibition on
manufacturing imports, hoping that the protection would give domestic firms a chance
to improve productivity through learning-by-doing and importing advanced
technologies. Under the policy, known as import-substitution industrialization (ISI),
entrepreneurs seemed more interested in maximizing and perpetuating favors by
bribing bureaucrats and politicians, however. This behavior, dubbed as directly
unproductive profit-seeking activities (DUP), caused efficiency to falter and living
standards to stagnate, providing a background to the collapse of the First Republic in
April 1960.

Rapid growth from 1960s to 1980s

With the coup of General Park Chung-hee in 1961, a protectionist economic policy
began, pushing a bourgeoisie that developed in the shadow of the State to reactivate
the internal market. In order to promote development, a policy of industrialization by
import substitution was applied, closing the entry into the country of all kinds of foreign
products, except raw materials. Nor did they resort to foreign investment. An agrarian
reform was carried out with expropriation without compensation of Japanese large
estates. General Park nationalized the financial system to swell the powerful state arm,
whose intervention in the economy was through five-year plans.
The spearhead was the chaebols, those diversified family conglomerates such
as Hyundai, Samsung and LG Corporation, which received state incentives such as
tax breaks, legality for their hyper-exploitation system and cheap or free financing: the
state bank facilitated the planning of concentrated loans by item according to each
five-year plan, and by economic group selected to lead it.

Until 1961, South Korea received a 3100 million dollar donation from the United States,
a very high figure for the time, a privilege for being on the hottest frontier of the Cold
War. This policy of foreign economic and military support continued for decades. The
chaebols started to dominate the domestic economy and, eventually, began to become
internationally competitive.
Workers' saw their wages and working conditions steadily improve, which increased
domestic consumption. And the country steadily rose from low income to middle
income status by the 1980s.

South Korea's real gross domestic product 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 2006. 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 1965 South Korea's rate of growth first exceeded North Korea's rate of growth
in most industrial areas, though South Korea's per capita GNP was still lower.
1990s and the Asian Financial Crisis

For the first half of the 1990s, the South Korean economy continued a stable and
strong growth in both private consumption and GDP. Things changed quickly in 1997
with the Asian Financial crisis. After several other Asian currencies were attacked by
speculators, the Korean won started to heavily depreciate in October 1997. The
problem was exacerbated by the problem of non-performing loans at many of Korea's
merchant banks. By December 1997, the IMF had approved a US$21 billion loan that
would be part of a US$58.4 billion bailout plan. By January 1998, the government had
shut down a third of Korea's merchant banks. Throughout 1998, Korea's economy
would continue to shrink quarterly at an average rate of -6.65%. Korean chaebol
Daewoo became a casualty of the crisis as it was dismantled by the government in
1999 due to debt problems. American company General Motors managed to purchase
the motors division. Indian conglomerate Tata Group, purchased the trucks and heavy
vehicles division of Daewoo.

2000s

Korea's economy moved away from the centrally planned, government-directed

investment model toward a more market-oriented one. These economic reforms,
pushed by President Kim Dae-jung, helped Korea maintain one of Asia's few
expanding economies, with growth rates of 10.8% in 1999 and 9.2% in 2000. Growth
fell back to 3.3% in 2001 because of the slowing global economy, falling exports, and
the perception that much-needed corporate and financial reforms have stalled.
After the bounce back from the crisis of the late nineties, the economy continued strong
growth in 2000 with a GDP growth of 9.08%.
However, the South Korean economy was affected by the September 11 Attacks. The
slowing global economy, falling exports, and the perception that corporate and
financial reforms had stalled caused growth to fall back to 3.8% in 2001[42] Thanks to
industrialization GDP per hour worked (labor output) more than tripled from US$2.80
in 1963 to US$10.00 in 1989.] More recently the economy stabilized and maintain a
growth rate between 4-5% from 2003 onwards.
Led by industry and construction, growth in 2002 was 5.8%, despite anemic global
growth. The restructuring of Korean conglomerates bank privatization, and the creation
of a more liberalized economy—with a mechanism for bankrupt firms to exit the
market—remain Korea's most important unfinished reform tasks. Growth slowed again
in 2003, but production expanded 5% in 2006, due to popular demand for key export
products such as HDTVs and mobile phones.
Like most industrialized economies, Korea suffered significant setbacks during
the late-2000s recession that began in 2007. Growth fell by 3.4% in the fourth quarter
of 2008 from the previous quarter, the first negative quarterly growth in 10 years, with
year on year quarterly growth continuing to be negative into 2009. Most sectors of the
economy reported declines, with manufacturing dropping 25.6% as of January 2009,
and consumer goods sales dropping 3.1%. Exports in autos and semiconductors, two
critical pillars of the economy, shrank 55.9% and 46.9% respectively, while exports
overall fell by a record 33.8% in January, and 18.3% in February 2009 year on year.
As in the 1997 crisis, Korea's currency also experienced massive fluctuations,
declining by 34% against the dollar. Annual growth in the economy slowed to 2.3% in
2008, and was expected to drop to as low as -4.5% by Goldman Sachs, but South
Korea was able to limit the downturn to a near standstill at 0.2% in 2009.

High-tech industries in
the 2000s
In 1990, South Korean manufacturers
planned a significant shift in future production
plans toward high-technology industries. In
June 1989, panels of government officials,
scholars, and business leaders held planning
sessions on the production of such goods as
new materials, mechatronics—including industrial robotics—bioengineering,
microelectronics, fine chemistry, and aerospace. This shift in emphasis, however, did
not mean an immediate decline in heavy industries such as automobile and ship
production, which had dominated the economy in the 1980s.

South Korea relies largely upon exports to fuel the growth of its economy, with finished
products such as electronics, textiles, ships, automobiles, and steel being some of its
most important exports. Although the import market has liberalized in recent years, the
agricultural market has remained largely protectionist due to serious disparities in the
price of domestic agricultural products such as rice with the international market. As of
2005, the price of rice in South Korea is about four times that of the average price of
rice on the international market, and it was generally feared that opening the
agricultural market would have disastrous effects upon the South Korean agricultural
sector. In late 2004, however, an agreement was reached with the WTO in which
South Korean rice imports will gradually increase from 4% to 8% of consumption by
2014.
In addition, up to 30% of imported rice will be made available directly to consumers by
2010, where previously imported rice was only used for processed foods. Following
2014, the South Korean rice market will be fully opened.

Additionally, South Korea today is known as a Launchpad of a mature mobile market,

where developers can reap benefits of a market where very few technology constraints
exist. There is a growing trend of inventions of new types of media or apps, utilizing
the 4G and 5G internet infrastructure in South Korea. South Korea has today the
infrastructures to meet a density of population and culture that has the capability to
create strong local particularity.
 Economic
Indicators of
South Korea
Trade

The country generally has maintained a positive balance in annual trade. The major
imports are machinery, mineral fuels, manufactured goods, and such crude materials
as textile fibers and metal ores and scrap. Principal exports include machinery,
electronics, textiles, transportation equipment (notably, automobiles), and clothing and
footwear. South Korea’s principal trading partners are the United States, Japan, and
Middle Eastern, East Asian, and Southeast Asian countries.


 2018 Top 10 export partners

Others
Mexico
Singapore
Philippines
India
Taiwan
Japan
Hong Kong
Vietnam
United States
China
0 50,000 100,000 150,000 200,000

2018 Top 10 import partners

Others
Singapore
Taiwan
Turkey
Mexico
Philippines
India
United States
Vietnam
Hong Kong
China

0 20,000 40,000 60,000 80,000 100,000 120,000

2018 Top 10 positive balance

(surplus) countries for south korea
Others
Singapore
Taiwan
Turkey
Mexico
Philippines
India
United States
Vietnam
Hong Kong
China

0 20,000 40,000 60,000 80,000 100,000 120,000

 Demographic trends

South Korea’s population more than doubled over the second half of the 20th century.
From 1960, however, birth rates decreased rapidly, and the population growth rate was
almost negligible by the beginning of the 21st century. During the same period,
mortality rates also slowed, reflecting an overall increase in living standards.

South Korea: Age breakdown

The rapid increase in the urban population and the resultant depopulation of vast rural
areas are South Korea’s main demographic issues.
More than four-fifths of the population is classified as urban; roughly half the population
lives in the country’s seven largest cities. Thus, although the country’s rate of
population growth is low, its overall population density is high—some two and a half
times that of North Korea—with huge concentrations of people in the major cities.

Sex Ratio (males vs. females)

Males Male % Females Female % Total Population Sex Ratio

(2020) (males to
females)

25,665,854 50.06% 25,603,329 49.94% 51,269,185 1.00

Settlement patterns
Agglomerated villages are common in river valleys and coastal lowlands in rural areas,
ranging from a few houses to several hundred. Villages are frequently located along
the foothills facing toward the south, backed by hills that give protection from the
severe northwestern winter winds. Small clustered fishing villages are found along the
coastline the pace of urbanization in South Korea since 1960 has caused considerable
depopulation of rural areas, and the traditional rural lifestyle has been slowly fading
away.

Unemployment Rate
The unemployment rate in South Korea increased to 3.4 percent in September 2019
rising from almost 6 year low of 3.1 percent in the previous month, but well below 4.0
percent in September 2018 and market expectations of 3.9 percent. The number of
unemployed increased by 87 thousand to 0.954 million, while the number of employed
declined by 37 thousand to 27.159 million. The labor force participation rate edged up
to 63.1 percent from 63.0 percent. Unemployment Rate in South Korea averaged 3.65
percent from 1999 until 2019, reaching an all-time high of 7.10 percent in June of 1999
and a record low of 3 percent in September of 2002.

In South Korea, the seasonally adjusted unemployment rate measures the number of
people actively looking for a job as a percentage of the labour force. This page provides
- South Korea Unemployment Rate - actual values, historical data, forecast, chart,
statistics, economic calendar and news. South Korea Unemployment Rate - actual
data, historical chart and calendar of releases - was last updated on October of 2019.
Employment Rate

Employment Rate in South Korea increased to 61.50 percent in September from 61.40
percent in August of 2019. Employment Rate in South Korea averaged 59.79 percent
from 1999 until 2019, reaching an all-time high of 61.60 percent in July of 2017 and a
record low of 56.10 percent in February of 2001.
South Korea, the employment rate measures the number of people who have a job
as a percentage of the population. This page provides - South Korea Employment
Rate- actual values, historical data, forecast, chart, statistics, economic calendar and
news. South Korea Employment Rate - actual data, historical chart and calendar of
releases - was last updated on October of 2019.

South Korea Gross National Product

Gross Domestic Product of South Korea grew 1% in the second quarter of 2019
compared to the previous quarter. This rate is 14 -tenths of one percent higher
than the figure of -0.4% published in the first quarter of 2019.
The year-on-year change in GDP was 2.1%, 5 -tenths of one percent more than
the 1.6% recorded in the first quarter of 2019 .
The GDP figure in the second quarter of 2019 was $324,969 million, South
Korea is number 11 in the ranking of quarterly GDP of th e 50 countries that we
publish.
South Korea has a quarterly GDP per capita, of $7,072, less than the same
period last year, when it was $7,137

South Korea Gross Domestic Product

The Gross Domestic Product (GDP) in South Korea was worth 1619.42 billion US
dollars in 2018. The GDP value of South Korea represents 2.61 percent of the world
economy. GDP in South Korea averaged 443.27 USD Billion from 1960 until 2018,
reaching an all-time high of 1619.42 USD Billion in 2018 and a record low of 2.42 USD
Billion in 1961.

How Did South Korea’s Economy Develop So

Quickly?
South Korea has experienced one of the largest economic transformations of the past
60 years. It started as an agriculture-based economy in the 1960s, and it became the
11th largest economy in the world in terms of gross domestic product (GDP) in
2016. How did the industrialization miracle take place?

Factors in South Korea’s Economic Success

Many studies attribute South Korea’s structural transformation to policy reforms aimed
at opening the country to foreign markets. Indeed, the export-oriented policies of South
Korea are one of the most important factors of its success: South Korea is now one of
the top 10 exporters in the world, and its exports as a percentage of GDP increased
from 25.9 percent in 1995 to 56.3 percent in 2012.
Two additional factors have contributed to the increase in international trade and
industrialization in South Korea:

 An improvement in the business environment

 Policies incentivizing investment in innovation

Environment and Innovation

First, a strong business environment fosters growth in the domestic market and attracts
foreign investors. According to the World Bank, South Korea is ranked No. 4 in terms
of the overall Ease of Doing Business (DB) index in 2018, while the U.S. is ranked No.
6. Among the list of criteria, South Korea dominates in the ease to start a business and
enforcing contracts. All of them play a significant role in encouraging investment,
production, communication and, eventually, economic growth.

Second, South Korea has devoted extra attention to technology development and
innovation to promote growth. Innovation and technology are the key factors that have
underpinned South Korean export competitiveness and fueled the country's
remarkable economic rise over the past decades.

In fact, South Korea is now spending the largest share of its GDP on research and
development (R&D), even larger than the U.S. and Japan, two of the global leaders in
innovation based on R&D intensity. Between 1996 and 2015, South Korea’s R&D
intensity grew 88.5 percent (from 2.24 percent in 1996 to 4.23 percent in 2015), while
the U.S.’s only grew 14.4 percent.
Challenges for South Korea
Even though South Korea has been successful at promoting exports, its business
environment and innovation, challenges still remain, including many from China.

Chinese competition is one challenge. Policymakers in China have also been

emphasizing the importance of high-skill manufacturing and exports. This could have
a negative impact on South Korea as China has traditionally been a large importer of
South Korean goods. China is also catching up fast in innovation. Its R&D intensity
has been approaching the levels of the U.S. and Japan.

Furthermore, given South Korea’s relatively limited geographical size, natural

resources and population size, an aging population aggravates the threat that South
Korea’s economy might fall behind its fellow developed countries.

To maintain sustainable economic growth, South Korea needs to continue its support
in innovation and a favorable business environment.
Reference

https://tradingeconomics.com/south-korea/gdp

https://www.britannica.com/place/South-Korea/Settlement-patterns

https://tradingeconomics.com/south-korea/gross-national-product

https://en.wikipedia.org/wiki/Economy_of_South_Korea

https://en.wikipedia.org/wiki/South_Korea

https://www.stlouisfed.org/on-the-economy/2018/march/how-south-korea-economy-
develop-quickly

https://oxfordre.com/asianhistory/asianhistory/view/10.1093/acrefore/9780190277727.00
1.0001/acrefore-9780190277727-e-271

https://link.springer.com/chapter/10.1007/978-94-017-9953-9_2