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Encyclopedia > Economy of South Korea
Economy of South Korea
World Trade Center in Seoul, South Korea
Currency 1 South Korean Won (W) = 100 Jeon(Chŏn) (theoretical)
Fiscal year Calendar year
Trade organizations APEC, WTO and OECD
Statistics [1]
GDP ranking 10th by volume (at nominal) (2006); 11th by volume (at PPP) (2006);
GDP (Nominal) $981.9 billion (2007 est.)
GDP (PPP) $1.206 trillion (2007 est.)
GDP growth 5.0% (2007 est.)
GDP per capita $25,000+ (2007)
GDP by sector agriculture (3.2%), industry (39.6%), services (57.2%) (2007 est.)
Inflation 2.5% (2007 est.)
Pop below poverty line 2% (2006 est.)
Labour force 23.99 million (2007 est.)
Labour force by occupation agriculture (7.5%), industry (17.3%), services (75.2%) (2007 est.)
Unemployment 3.2% (2007 est.)
Main industries electronics, automobile production, chemicals, shipbuilding, steel, textiles, clothing, footwear, food processing
Trading Partners [2]
Exports $371.8 billion (2007)[3]
Main Export Partners the People's Republic of China 22.0%, U.S. 12.5%, Japan 7.1%, Hong Kong 5.0% (2007)
Imports $356.8 billion (2007)[4]
Main Import Partners The People's Republic of China 17.7%, Japan 16.0%, U.S. 10.7%, Saudi Arabia 5.9%, UAE 4.2% (2006)
Public finances [5]
Public debt 33.4% of GDP (2007)
External debt $342.7 billion (2007)
Foreign credit $308.7 billion (2005)
Reserves of foreign exchange $264.3 billion (March 2008) [6]
Revenues $269.7 billion (2007)
Expenditures $256.6 billion (2007)
Economic aid ODA, $745 million (2005)
edit

The economy of South Korea is developed and one of the three largest in Asia and the 12th largest in the world, in terms of GDP (PPP) as of 2007. In the aftermath of the Korean War, South Korea grew from being one of the world's poorest countries to one of the richest. From the mid to late twentieth century, it has enjoyed one of the fastest rates of exponential economic growth in modern world history. The nation’s GDP per capita has grown from only $100 in 1963 to a record-breaking $10,000 in 1995 in less than 40 years to a fully developed $25,000 in 2007. This phenomenon has been referred to as the "Miracle on the Han River". This "Miracle" is continuing to this date and South Korea is still one of the fastest developing developed countries, with an average GDP growth of 5% per year - the most recent analysis report by Goldman Sachs in 2007 shows that South Korea will become the world's 3rd richest country by 2025 with a GDP per capita of $52,000[1] and 25 years later, is to surpass all countries in the world except the United States to become the world's 2nd richest country, with a GDP per capita of $81,000[2]. Image File history File linksMetadata No higher resolution available. ... ISO 4217 Code KRW User(s) Republic of Korea Inflation 2. ... APEC redirects here. ... For other uses of the initials WTO, see WTO (disambiguation). ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ... World map of GDP (Nominal and PPP). ... 2006 is a common year starting on Sunday of the Gregorian calendar. ... There are three lists of countries of the world sorted by their gross domestic product (GDP) (the value of all final goods and services produced within a nation in a given year). ... 2006 is a common year starting on Sunday of the Gregorian calendar. ... Map of countries showing percentage of population who have an income below the national poverty line The poverty line is the level of income below which one cannot afford to purchase all the resources one requires to live. ... CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ... This article is about the engineering discipline. ... Car redirects here. ... The chemical industry comprises the companies that produce industrial chemicals. ... Men from Francisco de Orellanas expedition building a small brigantine, the San Pedro, to be used in the search for food Shipbuilding is the construction of ships. ... For other uses, see Steel (disambiguation). ... For other uses, see Textile (disambiguation). ... A baby wearing many items of winter clothing: headband, cap, fur-lined coat, shawl and sweater. ... High-heeled shoe Footwear consists of garments worn on the feet. ... Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... 2007 is a common year starting on Monday of the Gregorian calendar. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... UAE redirects here; for other uses of that term, see UAE (disambiguation) The United Arab Emirates is an oil-rich country situated in the south-east of the Arabian Peninsula in Southwest Asia, comprising seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. ... 2006 is a common year starting on Sunday of the Gregorian calendar. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... 2005 is a common year starting on Saturday of the Gregorian calendar. ... 2008 (MMVIII) will be a leap year starting on Tuesday of the Gregorian calendar. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... 2007 is a common year starting on Monday of the Gregorian calendar. ... 2005 is a common year starting on Saturday of the Gregorian calendar. ... World map indicating Human Development Index (as of 2004). ... This is a list of the Asia-Pacific countries sorted by their Gross domestic product (GDP) at market or government official exchange rates. ... Belligerents United Nations: Republic of Korea Australia Belgium Canada Colombia Ethiopia France Greece Luxembourg Netherlands New Zealand Philippines South Africa Thailand Turkey United Kingdom United States Naval Support and Military Servicing/Repairs: Japan Medical staff: Denmark Italy Norway India Sweden DPR Korea PR China Soviet Union Commanders Syngman Rhee Chung... World GDP/capita changed very little for most of human history before the industrial revolution. ... Miracle on the Han River (한강의 기적) is a catchphrase often used in South Korea and by scholars to describe the period of rapid economic growth that took place in South Korea following the Korean War up until the Asian Financial Crisis. ... World map indicating Human Development Index (as of 2004). ... The Goldman Sachs Group, Inc. ...


The South Korean economy focused on heavy industry and automotive industry during the 1970s and 1980s. With government support, POSCO, a steel producing company, was established in less than 3 years, forming the first backbone of the South Korean economy for decades to come. Today, POSCO is the world's 3rd largest steel producer and South Korea has a strong reputation for being the world's largest shipbuilder with multinational enterprises such as Hyundai Heavy Industries and Samsung Heavy Industries consistently dominating the global shipbuilding market. The car manufacturing industry has grown equally rapidly and is rivalling the top established global car brands today, lead by Hyundai Kia Automotive Group, making South Korea the world's 5th largest car manufacturing nation. Heavy industry does not have a single fixed meaning compared to light industry. ... The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. ... The Pohang Iron and Steel Company, or POSCO (KSE: 005490) (NYSE: PKX) (TYO: 5412 ) (LSE: PIDD), based in Pohang, South Korea, is the third largest steel producer in the world. ... Hyundai Heavy Industries Co. ... Samsung Heavy Industries Ningbo Co. ... Hyundai Kia Automotive Group was formed through the merging of South Koreas largest car company, Hyundai Motor Company and the nations 2nd largest car company, Kia Motors in 1999 and is the worlds 6th largest car company. ...


The economy began to reach maturity in the 1990s as exponential growth slowed to a robust rate averaging 6.5 percent and chaebols like Samsung, Hyundai and LG started to globalise. During this period, early government investment in the electronics and semiconductor industries started to take place, in preparation for the foreseen digital age, which will later form a vital foundation in the 21st century for the South Korean IT industry. The rapid economic growth of the late 1980s was further boosted by the hosting of the 1988 Summer Olympics in Seoul, as well as the co-hosting of 2002 FIFA World Cup, which gave international recognition for the nation, as well as South Korean goods & services. In 1996, South Korea became a member of the OECD, a milestone in its development history. In mathematics, exponential growth (or geometric growth) occurs when the growth rate of a function is always proportional to the functions current size. ... Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ... Samsung Group is one of the largest South Korean business groupings. ... South Korean business tycoon Chung Ju-yung, founder and honorary chairman of Hyundai Group, 1998 Hyundai refers to a group of companies founded by Chung Ju-yung in South Korea, and related organizations. ... LG can refer to a number of things: LG Group, a South Korean electronics and petrochemicals conglomerate. ... This article is about the engineering discipline. ... A semiconductor is a solid material that has electrical conductivity in between that of a conductor and that of an insulator; it can vary over that wide range either permanently or dynamically. ... Johnson winning the 100 m final The 1988 Summer Olympics, officially known as the Games of the XXIV Olympiad, were the Summer Olympic Games celebrated in 1988 in Seoul, South Korea. ... Short name Statistics Location map Map of location of Seoul. ... 2002 World Cup redirects here. ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...


Like other developed nations, the service sector has grown to comprise about two-thirds of GDP[3]. At the same time, living standards and in particular the education level in South Korea rose exponentially to become equivalent or higher than that of other developed Western European and North American countries, with South Korea's HDI being rated at "High" with 0.912 by the Human Development Index in 2006, owning a 99% adult literacy rate. In the most recent Quality-of-Life survey conducted by the Economist Intelligence Unit, South Korea came 30th, only one rank below the United Kingdom. During this period, South Korean workers' income and wealth increased considerably, leading labour-intensive industries to move to neighbouring developing countries, such as China or Vietnam. However, South Korea still maintains the highest working hours in the world, a price the nation is paying for these continued achievements, with many workers living without weekends or holidays until they retire. The tertiary sector of industry (also known as the service sector or the service industry) is one of the three main industrial categories of a developed economy, the others being the secondary industry (manufacturing), and primary industry (extraction such as mining, agriculture and fishing). ... The Standard of living refers to the quality and quantity of goods and services available to people. ... This entity, also known as EIU is part of The Economist Group. ... The workweek, literally, refers to the period of time that an individual spends at paid occupational labor. ...


South Korea has been referred to as one of the Four Asian Tigers and a Newly-industrialized country during its exponential growth periods in the late 20th century but the country gained developed status since the 21st century and is now defined as a High Income Nation according to the World Bank. Today, the United Nation rates South Korea as a Prosperous Economy and the country became both part of the CIA and IMF list of advanced economies. As part of the world's top 20 largest economies, the country formed the G20 Industrial Nations and became the only developed country to be chosen as a Next Eleven country by Goldman Sachs in 2005. In addition, the economic boom in South Korea consistently required a large workforce, which allowed South Korea to maintain one of the lowest unemployment rates in the world, along with a well balanced income equality. Korean name Hangul: Skyline of Central, Hong Kongs financial centre, over Victoria Harbour (viewed from Tsim Sha Tsui, Kowloon, Hong Kong) Seoul, the capital of South Korea The skyline of Singapores Central Business District (CBD) at dawn. ... The category of newly-industrialized country (NIC) is a socioeconomic classification applied to several countries around the world by political scientists and economists. ... World map indicating Human Development Index (as of 2004). ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... This article is about the United Nations, for other uses of UN see UN (disambiguation) Official languages English, French, Spanish, Russian, Chinese, Arabic Secretary-General Kofi Annan (since 1997) Established October 24, 1945 Member states 191 Headquarters New York City, NY, USA Official site http://www. ... The CIA Seal The Central Intelligence Agency (CIA) is an American intelligence agency, responsible for obtaining and analyzing information about foreign governments, corporations, and individuals, and reporting such information to the various branches of the U.S. Government. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... This article is about the G-20 of industrial nations. ... A Map of the nations in the list. ... The Goldman Sachs Group, Inc. ... World map of the Gini coefficient This is a list of countries or dependencies by Income inequality metrics, sorted in ascending order according to their Gini coefficient. ...


Upon entering the 21st century, South Korea produced a 'National IT Project' to become the world's leading IT nation in just 5 years. With public funds, the government began to actively support South Korea's native IT industry, led by flagships Samsung Electronics and LG Electronics. International success was seen in the following years, with South Korea surpassing the United States and Japan in becoming the world's leader in the semiconductor (eg. RAM & Flash Memory) and digital display (eg. LCD & Plasma Panels) industries, as well as consumer electronics such as TVs or Mobile Phones. Telecommunication technology thrived in South Korea as it became the most wired & wirelessly connected country in the world[4], having the 2nd highest broadband users worldwide. Nationwide 100 Mbit/s High-Speed Internet Access, Interactive Full High Definition TV Broadcasting, DMB, WiBro and 4G technology rolled out since 2000, which are a few of the nation's ambitious plans to set benchmarks in the global information technology industry. Information and communication technology spending in 2005 Information technology (IT), as defined by the Information Technology Association of America (ITAA), is the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware. ... Money given from tax revenue or other govenmental sources to an individual, organization, or entity. ... Samsung Electronics (SEC, Hangul:삼성전자; KRXS: 005930, KRXS: 005935, LSE: SMSN, LSE: SMSD) is the worlds largest electronics and information technology company[1], headquartered in Suwon, South Korea. ... LG Electronics (KRXS: 066570, LSE:LGLD) is a South Korean multinational corporation and one of the worlds largest electronics companies. ... A semiconductor is a solid material that has electrical conductivity in between that of a conductor and that of an insulator; it can vary over that wide range either permanently or dynamically. ... A display device is a device for visual presentation of images (including text) acquired, stored, or transmitted in various forms. ... Consumer electronics is a term used to describe the category of electronic equipment intended for everyday use by people, the consumers. ... See TV (disambiguation) for other uses and Television (band) for the rock band European networks National In much of Europe television broadcasting has historically been state dominated, rather than commercially organised, although commercial stations have grown in number recently. ... Cell phone redirects here. ... Generally, high-definition refers to an increase in resolution or clarity such as in: High-definition television (HDTV), television formats that have a higher resolution than their contemporary counterparts High-definition video, which is used in HDTV broadcasting, as well as digital film and computer HD video file formats HDV... Possible meanings: Dave Matthews Band Diamond Mind Baseball Digital Multimedia Broadcasting DMB Consulting Services This page expands a three-character combination which might be any or all of an abbreviation, an acronym, an initialism, a word in English, or a word in another language. ... WiBro (Wireless Broadband, Korean: 와이브로) is a wireless broadband Internet technology being developed by the Korean telecoms industry. ... This article is about the mobile phone standard. ...


In addition to its highly advanced IT infrastructure, the government is now beginning to invest in the robotics industry. With the aim of becoming the "World's Number 1 Robotics Nation" by 2025, there are plans to put one robot in every household by 2020. [5][6] There are other ambitious plans to expand or create other sectors of the economy, including the financial, biotechnology, aerospace and entertainment industries. The Shadow robot hand system holding a lightbulb. ... The field of finance refers to the concepts of time, money and risk and how they are interelated. ... The structure of insulin Biotechnology is technology based on biology, especially when used in agriculture, food science, and medicine. ... Look up aerospace in Wiktionary, the free dictionary. ... A stilt-walker entertaining shoppers at a shopping centre in Swindon, England Entertainment is an activity designed to give pleasure or relaxation to an audience (although in the case of a computer game the audience may be only one person). ...

Contents

Historical overview

Following Japanese rule and the Korean War, the Syngman Rhee administration of the newly formed South Korean state used foreign aid from the United States during the 1950s to build an infrastructure that included a nationwide network of primary and secondary schools, modern roads, and a modern communications network. The result was that by 1961, South Korea had a well-educated young work force and a modern infrastructure that provided a solid foundation for economic growth. Flag of the Japanese Empire Anthem Kimi ga Yoa Korea under Japanese Occupation Capital Keijo Language(s) Korean, Japanese Religion Shintoisma Government Constitutional monarchy Emperor of Japan  - 1910–1912 Emperor Meiji  - 1912–1925 Emperor Taisho  - 1925–1945 Emperor Showa Governor-General of Korea  - 1910–1916 Masatake Terauchi  - 1916–1919 Yoshimichi... Belligerents United Nations: Republic of Korea Australia Belgium Canada Colombia Ethiopia France Greece Luxembourg Netherlands New Zealand Philippines South Africa Thailand Turkey United Kingdom United States Naval Support and Military Servicing/Repairs: Japan Medical staff: Denmark Italy Norway India Sweden DPR Korea PR China Soviet Union Commanders Syngman Rhee Chung... This is a Korean name; the family name is Rhee Syngman Rhee or Lee Seungman or Yee Sung-man (March 26, 1875 – July 19, 1965) was the first president of South Korea. ... It has been suggested that this article or section be merged into Development aid. ...


Rapid growth from 1960s to 1980s

South Korea's real gross national product expanded by an average of more than 8 percent per year, from US$3.3 billion in 1962 to US$204 billion in 1989. Per capita annual income grew from US$87 in 1962 to US$4,830 in 1989. 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. Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... In common usage, saving generally means putting money aside, for example, by putting money in the bank or investing in a pension plan. ...


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 poor natural resource endowment, low savings rate, and tiny 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. The inflow of foreign capital was greatly encouraged to supplement the shortage of domestic savings. These efforts enabled South Korea to achieve rapid growth in exports and subsequent increases in income.


By emphasizing the industrial sector, Seoul's export-oriented development strategy left the rural sector relatively underdeveloped. Increasing income disparity between the industrial and agricultural sectors became a serious problem by the 1970s and remained a problem, despite government efforts to raise farm income and improve rural living standards.


Stability

In the early 1980s, in order to control inflation, a conservative monetary policy and tight fiscal measures were adopted. Growth of the money supply was reduced from the 30 percent level of the 1970s to 15 percent. Seoul even froze its budget for a short while. Government intervention in the economy was greatly reduced and policies on imports and foreign investment were liberalized to promote competition. To reduce the imbalance between rural and urban sectors, Seoul expanded investments in public projects, such as roads and communications facilities, while further promoting farm mechanization. Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... Mechanization is the use of machines to replace manual labour or animals and can also refer to the use of powered machinery to help a human operator in some task. ...


These measures, coupled with significant improvements in the world economy, helped the South Korean economy regain its lost momentum in the late 1980s. South Korea achieved an average of 9.2 percent real growth between 1982 and 1987 and 12.5 percent between 1986 and 1988. The double digit inflation of the 1970s was brought under control. Wholesale price inflation averaged 2.1 percent per year from 1980 through 1988; consumer prices increased by an average of 4.7 percent annually. Seoul achieved its first significant surplus in its balance of payments in 1986 and recorded a US$7.7 billion and a US$11.4 billion surplus in 1987 and 1988 respectively. This development permitted South Korea to begin reducing its level of foreign debt. The trade surplus for 1989, however, was only US$4.6 billion dollars, and a small negative balance was projected for 1990. Wholesaling consists of the sale of goods/merchandise to retailers, to industrial, commercial, institutional, or other professional business users or to other wholesalers and related subordinated services. ... ). External debt is the part of a countrys debt owed to creditors outside the country. ...


Current status

In recent years South Korea's economy moved away from the centrally planned, government-directed investment model toward a more market-oriented one. South Korea bounced back from the financial crisis and carried out extensive financial reforms that restored stability to markets. These economic reforms, pushed by President Kim Dae-jung, helped Korea maintain one of Asia's few expanding economies, with growth rates of 10% in 1999 and 9% in 2000. The slowing global economy and falling exports account for the drop in growth rates in 2001 to 3.3%, but in 2002 Korea pulled out a very respectable 6.0% growth rate. Restructuring of Korean conglomerates (chaebols), bank privatization, and creating a more liberalized economy with a mechanism for bankrupt firms to exit the market remain Korea's most important unfinished reform tasks. Although the growth slowed down in 2004, a promising 5% growth was achieved in 2006, due to popular demand for key export products such as HDTVs and mobile phones. Increasing trade with the People's Republic of China is expected to boost Korea to a leading position among Asia's developed economies. It is also expected to lead the world in penetrating Japan's trade barriers. The field of finance refers to the concepts of time, money and risk and how they are interelated. ... Kim Dae-jung (born December 3, 1925) is a South Korean politician. ... Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ... High-definition television (HDTV) means broadcast of television signals with a higher resolution than traditional formats (NTSC, SECAM, PAL) allow. ... Cell phone redirects here. ...


South Korea relies largely upon exports to fuel the impressive 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. Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. ... For other uses of the initials WTO, see WTO (disambiguation). ...


Government role

See also: Five-year plans of South Korea

Contents Intro New Policies 1st 5 Year Plan 2nd 5 Year Plan 3rd 5 Year Plan 4th 5 Year Plan 5th 5 Year Plan Effects - Internal Changes Intro Korea was formed in 1945 after World War 2. ...

Under Park Chung Hee

In 1961 General Park Chung Hee overthrew the popularly elected regime of Prime Minister Chang Myon. A nationalist, Park wanted to transform South Korea from a backward agricultural nation into a modern industrial nation that would provide a decent way of life for its citizens while at the same time defending itself from outside aggression. Lacking the anti-Japanese nationalist credentials of Syngman Rhee, for example, Park sought both legitimacy for his regime and greater independence for South Korea in a vigorous program of economic development that would transform the country from an agricultural backwater into a modern industrial nation. Park Chung-hee (November 14, 1917 – October 26, 1979) was former ROK Army general and the president of the Republic of Korea from 1961 to 1979. ... Chang Myon was the prime minister of the Second Republic of South Korea. ... This is a Korean name; the family name is Rhee Syngman Rhee or Lee Seungman or Yee Sung-man (March 26, 1875 – July 19, 1965) was the first president of South Korea. ...


The Park administration decided that the central government must play the key role in economic development because no other South Korean institution had the capacity or resources to direct such drastic change in a short time. The resulting economic system incorporated elements of both state capitalism and free enterprise. The economy was dominated by a group of large private conglomerates, known as chaebol, and also was supported by a significant number of public corporations in such areas as iron and steel, utilities, communications, fertilizers, chemicals, and other heavy industries. The government guided private industry through a series of export and production targets utilizing the control of credit, informal means of pressure and persuasion, and traditional monetary and fiscal policies. There are multiple definitions of the term state capitalism. ... Free Enterprise is am economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control; and determined in a free market. ... Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ...


The government hoped to take advantage of existing technology to become competitive in areas where other advanced industrial nations had already achieved success. Seoul presumed that the well-educated and highly motivated work force would produce low-cost, high-quality goods that would find ready markets in the United States and the rest of the industrial world. Profits generated from the sale of exports would be used to further expand capital, provide new jobs, and eventually pay off loans.


In 1961 Park extended government control over business by nationalizing the banks and merging the agricultural cooperative movement with the agricultural bank. The government's direct control over all institutional credit further extended Park's command over the business community. The Economic Planning Board was created in 1961 and became the nerve center of Park's plan to promote economic development. It was headed by a deputy prime minister and staffed by bureaucrats known for their high intellectual capability and educational background in business and economics. Beginning in the 1960s, the board allocated resources, directed the flow of credit, and formulated all of South Korea's economic plans. In the late 1980s, the power to allocate resources and credit was restored to the functional ministries. In 1990, the Economic Planning Board was given primary charge of economic planning; it also coordinated and often directed the economic functions of other government ministries, including the Ministry of Finance. The board was complemented by the Korea Development Institute, an independent economic research organization funded by the government. Other government bodies directing the economy included the Office of the President, which included a senior secretary for economic affairs; the Ministry of Finance; the Ministry of Trade and Industry; the Ministry of Labor; and the Bank of Korea, which was controlled by the Ministry of Finance.


Park's first major goal, which was immediately successful, was to establish a self-reliant industrial economy independent of the massive waves of United States aid that had kept South Korea afloat during the Rhee years. Modernizing the economy and maintaining overall sustained growth were additional goals in the 1970s. Significant economic policies included strengthening key industries, increasing employment, and developing more effective management systems. Because South Korea was dependent on imports of raw materials, such as oil, a major government objective was to significantly increase the level of exports, which meant stressing greater international competitiveness and higher productivity. The early economic plans emphasized agriculture and infrastructure, the latter were closely tied to construction. Later, the emphasis shifted consecutively to light industry, electronics, and heavy and chemical industries. Using these strategies, an export-driven economy developed.


The government combined a policy of import substitution with the export-led approach. Policy planners selected a group of strategic industries to back, including electronics, shipbuilding, and automobiles. New industries were nurtured by making the importation of such goods difficult. When the new industry was on its feet, the government worked to create good conditions for its export. Incentives for exports included a reduction of corporate and private income taxes for exporters, tariff exemptions for raw materials imported for export production, business tax exemptions, and accelerated depreciation allowances.


The export-led program took off in the 1960s; during the 1970s, some estimates indicate, Seoul had the world's most productive economy. The annual industrial production growth rate was about 25 percent; there was a fivefold increase in the GNP from 1965 to 1978. In the mid-1970s, exports increased by an average of 45 percent a year.


Industrial policies

The major issue facing the Park regime in the early 1960s was the grinding poverty of the nation and the need for economic policies to overcome this poverty. A critical problem was raising funds to foster needed industrial development. Domestic savings were very low, and there was little available domestic capital. This obstacle was overcome by introducing foreign loans and inaugurating attractive domestic interest rates that enticed local capital into production. Of South Korea, Taiwan, Hong Kong, and Singapore, only South Korea financed its economic development with a dramatic build-up of foreign debt, debt that totaled US$46.8 billion in 1985, making it the fourth largest Third World debtor. Developing countries debt is external debt incurred by Third World countries, generally in quantities beyond that countrys ability to repay. ...


As noted by consultant David I. Steinberg, Seoul administered a series of economic development plans. The government mobilized domestic capital by encouraging savings, determined what kinds of plants could be constructed with these funds, and reviewed the potential of the products for export. In this sense, the will of the government to undertake economic development played a crucial role; the role of the government, however, was not limited to such measures as mobilizing capital and allocating investments.


Steinberg also pointed out that Park's government restructured industries, such as defense and construction, sometimes to stimulate competition and other times to reduce or eliminate it. The Economic Planning Board established export targets that, if met, yielded additional government-subsidized credit and further access to the growing domestic market. Failure to meet such targets led to Seoul's withdrawal of credit.


Revenues and Expenditures

The central government budget has generally expanded, both in real terms and as a proportion of real GNP, since the end of the Korean War, stabilizing at between 20 and 21 percent of GNP during most of the 1980s. Government spending in South Korea has been less than that for most countries in the world (excepting the other rapidly growing Asian economies of Japan, Taiwan, and Singapore). The share of government spending devoted to investment and other capital formation activities increased steadily through the periods of the first and second five-year plans (1962-1971), peaking at more than 41 percent of the budget in 1969. Since 1971 investment expenditures have remained at less than 30 percent of the budget, while the share of the budget occupied by direct government consumption and transfer payments has continued to increase, averaging more than 70 percent during the 1980s. Government spending or government expenditure consists of government purchases, which can be financed by seigniorage (the creation of money for government funding, at a heavy price of high inflation and other possibly devastating consequences), taxes, or government borrowing. ...


During the 1980s, the largest areas of government expenditure were economic services (including infrastructural projects and research and development), national defense, and education. Economic expenditures averaged several percentage points higher than defense expenditures, which remained stable at about 22 to 23 percent of the budget (about 6 percent of GNP) during the decade. In 1990, the government was studying plans to lower defense expenditures to 5 percent of GNP. Some observers noted a trend toward a slight increase in the portion of the budget devoted to social spending during the 1980s. In 1987 expenditures for social services--including health, housing, and welfare--were 16.4 percent of the budget, up from 13.9 percent in 1980, and slightly higher than 1987 government outlays for education (see table 3, Appendix).


The government revenue structure was virtually totally dependent on taxes (see table 4, Appendix). By the early 1980s, nearly two-thirds of tax money was collected in the form of indirect taxes. Revenues collected by the central government in 1987 rose to 19,270.3 billion won (for value of the won--see Glossary), up from 13.197.5 billion won in 1984.


Public enterprise

During the 1960s, public enterprises were concentrated in such areas as electrification, banking, communications, and manufacturing. In 1990 these enterprises were, in many cases, efficient revenue-producing concerns that produced essential goods and services at low costs, but which also produced profits that were used for new capital investments or to produce funds for public use elsewhere. In the 1980s, Seoul was slowly privatizing a number of these firms by selling stocks, but the government remained the principal stockholder in each company. In the 1980s, an important function of public enterprises was the introduction of new and expensive technology ventures. Electrification refers to changing a thing or system to operate using electricity. ...


In 1985 the public enterprise sector consisted of about 90 enterprises employing 305,000 workers, or 2.7 percent of total employment in the nonagricultural sector. There were four categories of public enterprises: government enterprises (staffed and run by government officials), government-invested enterprises (with at least 50 percent government ownership), subsidiaries of government-invested enterprises (usually having indirect government funding), and other government-backed enterprises. Government-invested public enterprises, such as the Korea Electric Power Corporation (KEPCO) and the Pohang Iron and Steel Company (POSCO), represented the core of the new enterprises established during Park's regime. In the late 1980s, roughly 30 percent of the revenues produced by public enterprises came from the manufacturing sector and the other 70 percent from such service sectors as the electrical, communications, and financial industries. The field of finance refers to the concepts of time, money and risk and how they are interelated. ...


Financing

Financing South Korea's economic development in the 1990s was expected to differ from previous decades in two main respects: greater reliance on domestic sources and more emphasis on equity relative to debt. Beginning in the 1960s, foreign credit was used to finance development, but the amount of foreign debt had decreased since the mid-1980s. According to the Sixth Five-Year Economic and Social Development Plan (1987-91), an average annual growth rate of 8 percent was expected, together with account surpluses of about US$5 billion a year through 1991.


To realize these growth targets, South Koreans needed the gross domestic savings rate to exceed the domestic investment rate; additionally, they needed the financing of future economic growth to come entirely from domestic sources. Such a situation would involve reducing foreign debt by US$2 billion a year; and South Korea would become a net creditor nation in the mid-1990s. Through the promotion and reform of the securities markets, especially the stock market, and increased foreign investment, the sixth plan encouraged the diversification of sources and types of corporate finance, especially equity finance.


Domestic savings were very low before the mid-1960s, equivalent to less than 2 percent of GNP in the 1960 to 1962 period. The savings rate jumped to 10 percent between 1970 and 1972 when banks began offering depositors rates of 20 percent or more on savings accounts. This situation allowed banks to compete effectively for deposits with unorganized money markets that had previously offered higher rates than the banks. The savings rate increased to 16.8 percent of GNP in 1975 and 28 percent in 1979, but temporarily plunged to 20.8 percent in 1980 because of the oil price rise. After 1980, as incomes rose, so did the savings rate. The surge of the savings rate to 36.3 percent in 1987 and 35.8 percent in 1989 reflected the sharp growth of GNP in the 1980s. The prospects for continued high rates of saving were associated with continued high GNP growth, which nevertheless declined to 6.5 percent in 1989.


According to Donald S. Macdonald, through the early 1980s funds for investment came primarily from bilateral government loans (mainly from the United States and Japan), international lending organizations, and commercial banks. In the late 1980s, however, domestic savings accounted for two-thirds or more of total investment.


Throughout the 1980s, the finance|financial sector underwent significant expansion, diversification of products and services, and structural changes brought about by economic liberalization policies. As noted by Park Yung-chul, finance|financial liberalization eased interest ceilings. Deregulation increased competition in finance|financial markets, which in turn accelerated product diversification. In the early 1980s, securities companies were permitted to sell securities through a repurchase agreement. By 1985 banks also were allowed to engage in the repurchase agreements of government and public bonds. In 1981 finance and investment corporations started dealing in large-denomination commercial paper. The new form of commercial paper was issued in minimum denominations of 10 million won, compared to the previous minimum value for commercial paper of 1 million won. Repurchase agreements (RPs or Repos) are financial instruments used in the money markets and capital markets. ...


In order to extend their ability to raise cash, investment and finance companies introduced a new cash-management account with a 4 million won minimum deposit in 1983. Investment and finance corporations managed client funds by investing them in commercial paper corporate bonds and certificates of deposit. Money-deposit banks in the mid-1980s began offering similar accounts, known as household money-in-trust. Trust business formerly had been the exclusive domain of the Bank of Seoul and Trust Company; however, after 1983 all money-deposit banks were authorized to offer trust services. The finance|financial system underwent two major structural changes in the late 1970s and 1980s. First, money-deposit banks saw a sustained erosion of their once-dominant market position (from 80 percent in the 1970 to 1974 period to 55 percent by 1984). One reason for this decline was that in the 1970s nonbank finance|financial intermediaries, such as investment trust corporations, finance companies, and merchant banking corporations, were given preferential treatment. Further, because the costs of intermediation at these nonbank finance|financial institutions were lower than at banks (with their many branches nationwide and their multitudes of small savers and borrowers), their cost advantages and higher lending rates allowed them a larger market share.


The second structural change was the rapid increase of commercial paper and corporate debenture markets. Another development was the steady growth of investment trust corporations in the 1980s.


Because of the introduction of tax and financing incentives by the government that encouraged companies to list their shares on the stock market, the Korean Stock Exchange grew rapidly in the late 1980s. In 1987 more than 350 companies were listed on the exchange. There was an average daily trading volume of 10 million shares, with a turnover ratio of 80 percent. In 1989 the stock market was tarnished by accusations of insider trading among the five major South Korean securities firms. The Securities and Exchange Commission launched an investigation in late 1989. The popular index of the market soared to a high of 1,007.77 points on April 1, 1989, but plunged back to the 800s in late 1989 and early 1990.


Business financing was obtained primarily through bank loans or borrowing on the informal and high-interest "curb market" of private lenders. The curb market served individuals who needed cash urgently, less reputable businesspeople who engaged in speculation, and the multitudes of smaller companies that needed operating funds but could not procure bank financing. The loans they received, often in exchange for weak collateral, had very high interest rates. The curb market played a critical role in the 1960s and 1970s in pumping money into the economy and in assisting the growth of smaller corporations. The curb market continued to exist, along with the formal banking system, through the 1980s.


Industry

The growth of the industrial sector was the principal stimulus to economic development. In 1987 manufacturing industries accounted for approximately 30 percent of the gross domestic product 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.


A downturn in the South Korean economy in 1989 spurred by a sharp decrease in exports and foreign orders caused deep concern in the industrial sector. Ministry of Trade and Industry analysts stated that poor export performance resulted from structural problems embedded in the nation's economy, including an overly strong won, increased wages and high labor costs, frequent strikes, and high interest rates. The result was an increase in inventories and severe cutbacks in production at a number of electronics, automobile, and textile manufacturers, as well as at the smaller firms that supplied the parts. Factory automation systems were introduced to reduce dependence on labor, to boost productivity with a much smaller work force, and to improve competitiveness. It was estimated that over two-thirds of South Korea's manufacturers spent over half of the funds available for facility investments on automation. An industry analyst performs primary and secondary market research within a particular segment of the information technology or telecommunication industry to determine accurate market descriptions, market trends, forecasts and models. ... This article does not cite any references or sources. ...


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.


Except for mining, most industries were located in the urban areas of the northwest and southeast. Heavy industries generally 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 factories in surrounding Kyonggi Province, factories in the Seoul area produced 46 percent of all manufacturing that year. Factories in Seoul and Kyonggi Province employed 48 percent of the nation's 2.1 million factory workers.


Energy

With few native energy resources, South Korea has used nuclear combined with conventional thermal power plants to keep up with aggressive economic growth.
With few native energy resources, South Korea has used nuclear combined with conventional thermal power plants to keep up with aggressive economic growth.

The Korean Peninsula is only modestly endowed with natural resources, and North Korea has far more natural resources than South Korea. During the Japanese colonial period (1910-45), the North served as the center for mining and industry whereas the South, with somewhat greater rainfall, a warmer climate, and slightly greater arable terrain, served as the center for rice production. Image File history File links No higher resolution available. ... Image File history File links No higher resolution available. ...


South Korea's mineral production is not adequate to supply its manufacturing output. Energy needs are also met by importing bituminous and anthracite coal and crude petroleum. In 1987 approximately 23.4 million tons of anthracite coal, approximately 4,000 tons of tungsten, 565,000 tons of iron ore, and 47,000 tons of zinc ore were mined. Lesser amounts of copper, lead, molybdenum, gold, silver, kaolin, and fluorite also were mined (see fig. 9).


Energy producers were dominated by government enterprises, although privately operated coal mines and oil refineries also existed. In 1990 South Korea still had no proven oil reserves. Offshore oil possibilities in the Yellow Sea and on the continental shelf between Korea and Japan yielded nothing through the 1980s, but exploration continued. South Korea's coal supply was both insufficient and of low quality. The potential for hydroelectric power was very limited because of tremendous seasonal variations in the weather and the concentration of most of the rainfall in the summer months. Accordingly, Seoul placed an increasingly heavy emphasis on developing nuclear power generation. South Korea joined the International Atomic Energy Agency in 1957 and made immediate efforts to benefit from nuclear power, since fossil fuel resources available in the country are very limited. ...


Electric power in South Korea was provided by the Korea Electric Power Corporation (KEPCO). When KEPCO's predecessor, KECO, was founded in 1961, annual power production was 1,770 million kilowatt-hours (kwhr); production reached 73,992 million kwhr in 1987. The ratio of usage during 1987 was 17.9 percent for residential customers, 16.2 percent for public and service businesses, and 65.9 percent for the industrial sector. Energy used in electric power generation consisted primarily of nuclear, coal, oil, and liquefied natural gas (LNG). Of the 54,885 million kwhr of electricity generated in 1985, 22 percent came from nuclear plants then in operation, 74 percent from thermal plants (oil and coal), and 4 percent from hydroelectric sites. It was predicted in 1988 that the generation structure by the year 2000 would be 10.2 percent hydroelectric, 12.2 percent oil, 22.9 percent coal, 10.2 percent LNG, and 44.5 percent nuclear.


Nuclear Power

South Korea placed a heavy emphasis on nuclear power generation. The country's first nuclear power plant, the Kori Number One located near Pusan, opened in 1977. Eight plants were operational in 1987 when atomic power generation was an estimated 71,158 million kilowatts, or 53.1 percent of total electric power. South Korea joined the International Atomic Energy Agency in 1957 and made immediate efforts to benefit from nuclear power, since fossil fuel resources available in the country are very limited. ... This article is about applications of nuclear fission reactors as power sources. ... The Kori Nuclear Power Plant is a South Korea nuclear power plant located in Kori, Kyongnam. ...


Agriculture

A major land reform in the late 1940s and early 1950s spread ownership of land to the rural peasantry. Individual holdings, however, were too small (averaging one hectare, which made cultivation inefficient and discouraged mechanization) or too spread out to provide families with much chance to produce a significant quantity of food. Additionally, South Korea is a mountainous country with only 22 percent arable land and less rainfall than most other neighboring rice-growing countries. A hectare (symbol ha) is a unit of area, equal to 10 000 square metres, commonly used for measuring land area. ... To meet Wikipedias quality standards, this article or section may require cleanup. ...


At the start of the economic boom in 1963, the majority of South Koreans were farmers. Sixty-three percent of the population lived in rural areas. In the next twenty-five years, South Korea grew from a predominantly rural, agricultural nation into an urban, newly industrialized country and the agricultural workforce shrunk to only 21 percent in 1989. Government officials expected that urbanization and industrialization would further reduce the number of agricultural workers to well under 20 percent by 2000. Countries considered NICs as of 2007 The category of newly industrialized country (NIC) is a socioeconomic classification applied to several countries around the world by political scientists and economists. ...


The enormous growth of urban areas led to a rapid decrease of available farmland, while at the same time population increases and bigger incomes meant that the demand for food greatly outstripped supply. The result of these developments was that by the late 1980s roughly half of South Korea's needs, mainly wheat and animal feed corn, was imported. Species T. aestivum T. boeoticum T. dicoccoides T. dicoccon T. durum T. monococcum T. spelta T. sphaerococcum T. timopheevii References:   ITIS 42236 2002-09-22 Wheat Wheat For the indie rock group, see Wheat (band). ... In agriculture, fodder or animal feed is any foodstuff that is used specifically to feed livestock, such as cattle, sheep, chickens and pigs. ... This article is about the maize plant. ...


Compared with the industrial and service sectors, agriculture remained the most sluggish sector of the economy. In 1988 the contribution of agriculture to overall GDP was only about 10.8 percent, down from approximately 12.3 percent the previous year. Most economists agreed that the country's rural areas had gained more than they had contributed in the course of industrialization. Still, the growth of agricultural output, which averaged 3.4 percent per year between 1945 and 1974, 6.8 percent annually during the 1974-79 period, and 5.6 percent between 1980 and 1986, was credible. The gains were even more impressive because they added to a traditionally high level of productivity. On the other hand, the overall growth of the agriculture, forestry, and fishing sector was only 0.6 percent in 1987 as compared with the manufacturing sector, which grew 16 percent during 1986 and 1987. GDP is an acronym which can stand for more than one thing: (in economics) an abbreviation for Gross Domestic Product. ... A decidous beech forest in Slovenia. ... For the computer security term, see Phishing. ...


Service industries

Service industries included insurance, restaurants, hotels, laundries, public bath houses, health-related services, and entertainment establishments. There were thousands of small shops marketing specialized items, large traditional marketplaces, and streamlined buildings housing corporate and professional offices. Game rooms featuring Ping-Pong tables, or billiards, and tearooms serving a variety of beverages were located on almost every downtown city corner. Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... A typical restaurant in uptown Manhattan A restaurant is an establishment that serves prepared food and beverages to be consumed on the premises. ... A hotel is an establishment that provides lodging, usually on a short-term basis. ... Italian street, with laundry hung to dry Laundry can be: items of clothing and other textiles that require washing the act of washing clothing and textiles the room of a house in which this is done // Man and woman washing linen in a brook, from William Henry Pynes Microcosm...


In the mid-1980s, the largest employer of South Korea's service sector was retail trade. A growing number of workers were employed by the department stores (most of which were owned by chaebol) that were opening rapidly in the downtown areas of major urban centers. The vast majority of retailers were small merchants in cities, towns, and villages, each with a modest storefront, or stand, limited stock, and poor access to capital, but the great majority of South Koreans made their purchases from these small retailers. In 1986 there were approximately 26,054 wholesale and 542,548 retail establishments and 233,834 hotels and restaurants that employed about 1.7 million people (these figures probably do not include family members working in small stores).[citation needed] Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ...


The distribution system was far from perfect, and managers recognized the need for better organization and management. Most of the nation's wholesalers were located in Seoul and accounted for most of the turnover of goods. Most of the sales outlets were located in the heart of urban centers. Cargo truck terminals and warehouse facilities were spread irregularly through city neighborhoods.


An improved transportation and communications infrastructure, increasing incomes, enhanced consumer sophistication, and government tax incentives encouraged the development of a modern distribution network of chain stores, supermarkets, and department stores.


Tourism

South Korea's hosting the 1988 Seoul Olympics made 1988 a boom year for tourism. More than 2 million tourists spent US$3.3 billion, an increase in the number of tourists and the dollars spent, respectively, of 24.9 percent and 42.2 percent over 1987. Japanese visitors accounted for 48 percent of the total; tourists from the United States made up 14.9 percent. This trend continued in subsequent years, with 2.95 million foreign visitors arriving in 1990 and 3.8 million in 1995.[7] The Gyeongbokgung palace, a major tourist attraction in Seoul. ... The 1988 Summer Olympics, officially known as the Games of the XXIV Olympiad, were held in 1988 in Seoul, South Korea. ...


Labour force

Labour movement in the 1980s

Despite significant increases in wages in the 1980s, labour unions in the late 1980s continued their wave of strikes demanding better working conditions and wages. The ferocity and sheer size of the labour movement caught management and the government by surprise. During his first year or so in office, President Roh Tae Woo was confronted with considerable labour unrest; there were more than 300 strikes in the first three months of 1989. Emboldened by the political reforms of 1987 and by reports that the rate of South Korea's economic growth was greater than the improvements in their own incomes and life-styles, many workers agitated for a greater share of the nation's prosperity and sought more freedom and responsibility at the workplace and an end to the traditional paternalism of management. Lost production was estimated to have climbed to US$6 billion in 1989 from US$4.4 billion in 1988. A union (labor union in American English; trade union, sometimes trades union, in British English; either labour union or trade union in Canadian English) is a legal entity consisting of employees or workers having a common interest, such as all the assembly workers for one employer, or all the workers... Roh Tae-woo (born December 4, 1942 in Daegu, South Korea), a Korean general and politician. ...


Workers were caught in a revolution of rising expectations, as a wave of rising urban land values and housing costs outpaced average real wage increases of more than 70 percent during the 1980s. Moreover, wages for manual workers, who were responsible for much of the production and export that fueled the economy, were much lower than the national average. In the late 1980s, working families still found themselves struggling to meet minimum standards of living. Employees also were expected to work long and often erratic hours in exchange for steady employment and were frustrated over a lack of benefits and individual say.


Worker complaints were focused on three areas: low wages, long working hours, and a high number of industrial accidents. In 1986 the average wage of a South Korean worker was US$381 a month (339,474 won), including overtime and all allowances. The basic wage was US$287, or 255,408 won, but, according to the government, the basic wage necessary to sustain a "decent" way of life was US$588 (524,113 won). Thus, the average worker only earned two-thirds of what the government thought necessary to sustain a family of four. In 1987 semiskilled workers typically received US$1.50 to US$2.00 per hour and worked fifty-five to sixty hours a week; unskilled workers worked twelve-hour days seven days a week, earning US$125 a month.


Recent trends

South Korea was known for having the world's longest working hours. In 1986 the Korean worker averaged about 54.7 hours a week. This situation was the natural consequence of the low wage system that necessitated extended hours and extra work to earn minimum living expenses.


There were, however, dramatic increases in wages in 1988 and 1989. Labour stoppages in the manufacturing sector, coupled with a scarcity of labour, led to 20-percent salary increases for workers in the manufacturing sector in 1988 and 25-percent salary increases in that sector in 1989. These raises later spread, increasing wages across the entire economy 18.7 percent in 1989. By 1989 some South Korean economists were worrying about the effect that skyrocketing wages would have on the cost of domestic-made goods and the consequent impact on export prices. The situation was especially worrisome because the wages paid to workers in South Korea's major competitors were growing far more slowly.


Average annual household income is 39,013,596 won (USD 42,108) as of 1Q 2007 retrieved from Korea National Statistical office.


Science and technology

The most important sources of productive growth for South Korean manufacturers had traditionally been directly or indirectly related to the ability of South Korean companies to acquire new technology from abroad and to adapt it to domestic conditions, rather than paying the cost of research and development. However, as Seoul's industry and exports continued to evolve toward higher levels of technology, domestic research and development efforts needed to be increased. Fortunately for South Korea, its high level of well-educated workers, who constitute a formidable brain trust for future research and development, are its major asset.


Historical development

The Seoul government began investing in technology research institutes soon after the republic was established. The Korean Atomic Energy Commission founded in 1959 was responsible for research and development, production, dissemination, and management of technology for peaceful applications of atomic energy. In the mid-1960s, the government established the Ministry of Science and Technology to oversee all government research and development activities and the Korea Institute of Science and Technology to function as an industrial research laboratory. Ministry of Science and Technology may refer to: Ministry of Science and Technology (South Korea), government department of South Korea Ministry of Science and Technology of the Peoples Republic of China, government department of China. ... The Korea Advanced Institute of Science & Technology is an institute of higher learning in Daedeok Science Town, Daejeon, Korea. ...


In the 1970s, in order to better coordinate research and development, two scientific communities were established--one in Seoul, the other near Taejon. The Seoul complex included the Korea Institute of Science and Technology, the Korea Development Institute (affiliated with the Economic Planning Board), the Korea Advanced Institute of Science, and the Korea Atomic Energy Research Institute. Plans for the Daeduk Science Town near Taejon were far more ambitious. Modeled after the Tsukuba Science City in Japan, by the late 1980s the Daeduk Science Town accommodated laboratories specializing in shipbuilding, nuclear fuel processing, metrology, chemistry, and energy research. The government founded the Korea Advanced Institute of Science and Technology to develop and offer graduate science programs, and it also encouraged universities to develop their own undergraduate programs in science. Daejeon Metropolitan City is a metropolitan city in the centre of South Korea, and the capital of South Chungcheong Province. ... The Korea Development Institute is an autonomous economic policy think tank that was set up by the Korean government. ... The Korea Advanced Institute of Science & Technology is an institute of higher learning in Daedeok Science Town, Daejeon, Korea. ... Tsukuba (Japanese: つくば市 Tsukuba-shi) is a planned city located in Ibaraki Prefecture, Japan. ... // KAIST (/kaist/) is the elite leading research university located in Daedeok Science Town, Daejeon, South Korea. ...


High technology

The tremendous growth of Samsung since the mid-1980s was strong evidence of the high productivity in such modern industries as electronics. The group's total sales nearly doubled (8.4 billion won to 14.6 billion won) between 1984 and 1986, while the number of employees only increased from 122,000 to 147,000. The reason for this high degree of productivity was South Korea's move away from labor-intensive industries to those that were highly automated. Samsung Group is one of the largest South Korean business groupings. ...


South Korean planners realized that the country needed to advance quickly in such areas as high technology if the economy were to grow while matching foreign competition. POSCO's decisions to build the Pohang Institute of Science and Technology and the Research Institute of Industrial Science and Technology were examples of this trend. POSCO also used a great deal of money to lure back more than 100 top South Korean scientists and researchers who had emigrated abroad. The Pohang Iron and Steel Company, or POSCO (KSE: 005490) (NYSE: PKX) (TYO: 5412 ) (LSE: PIDD), based in Pohang, South Korea, is the third largest steel producer in the world. ... POSTECH or Pohang University of Science and Technology is a private university in Pohang, South Korea dedicated to research and education in science and technology. ...


POSCO's efforts represented a great change from the past. As of the late 1980s, many of South Korea's younger scientists, technocrats, and economic planners had received their graduate education in the United States. Throughout the 1970s and 1980s, the government sponsored the scientific and technical education of many graduate students at prestigious institutions, such as Harvard University and the Massachusetts Institute of Technology. The success of the Pohang Institute of Science and Technology meant that many of South Korea's future scientific and technical leaders would be educated at home. Harvard redirects here. ... “MIT” redirects here. ...


In 1987 the Korea Development Institute issued a report, Korea Year 2000, that profiled South Korean economic development in 2000. The Korea Development Institute noted that the industrial structure would be highly developed and would resemble that of advanced countries inasmuch as high value-added industries, high-technology industries, and soft industries grew relatively rapidly. Further, changes in industrial structure were expected rapidly to reduce the demand for unskilled workers while simultaneously increasing the demand for professional and technical manpower, resulting in further change of the employment structure. The Korea Development Institute is an autonomous economic policy think tank that was set up by the Korean government. ...


The Korea Development Institute also noted that the Ministry of Science and Technology had prepared a long-range plan of science and technology for the twenty-first century that took into account limited available resources. Accordingly, Seoul selected its comparative advantage areas, including informatics-- particularly information storage and retrieval and electronic data processing, fine chemicals, and precision machinery in the short term; biotechnology and new materials in the mid-term; public benefit areas, such as the environment, health, and welfare, as another group; and oceanography and aeronautics for the medium and long term. Informatics includes the science of information, the practice of information processing, and the engineering of information systems. ... In drug manufacture, fine chemicals are pure, single chemical substances that are produced by chemical reactions. ... The structure of insulin Biotechnology is technology based on biology, especially when used in agriculture, food science, and medicine. ... Thermohaline circulation Oceanographic frontal systems on the southern hemisphere Oceanography (from the greek words Ωκεανός meaning Ocean and γράφω meaning to write), also called oceanology or marine science, is the branch of Earth Sciences that studies the Earths oceans and seas. ... Six F-16 Fighting Falcons with the U.S. Air Force Thunderbirds aerial demonstration team fly in delta formation in front of the Empire State Building. ...


In 1990 Seoul announced an ambitious plan to promote science and technology so that high-technology activities would dominate the economy by the year 2000. The Ministry of Science and Technology intended to coordinate technology-related projects between government and industry in a variety of fields including semiconductors, computers, chemistry, and new materials.


The R&D Budget set for 2008 is USD 11.15 billion according to the Ministry of Science and Technology. [7]


North-South trade

Since 1988, two-way trade between the two Korean countries has increased from $18.8 million in 1989 to $647.1 million in 2002. In 2002, South Korea imported $271.57 million worth of goods from North Korea, mostly agro-fisheries and metal products, while shipping $371.55 million worth of goods, mostly humanitarian aid commodities including fertilizer and textiles as inputs for North Korean garment manufacturers. South Korea is now North Korea's third-largest trading partner, after China and Japan. Numerous ventures by the Hyundai Group have contributed to North Korea's economy, including the Kŭmgang-san (Diamond Mountain) tourist site. Last year alone, 84,347 visitors travelled by Hyundai-operated passenger ships, and most recently via land routes, as part of this tourism initiative, raising the total number of South Korean visitors to over half a million (see Kŭmgang-san Tourist Region). A mere 1,141 North Koreans travelled to South Korea, mainly for joint sporting events. Hyundai Asan is also lined up to be the South Korean party that will help develop an 800 acre (3.2 km²) industrial complex in Kaesŏng, located near the Demilitarized Zone (DMZ), subject to final agreements, including between Seoul and P'yŏngyang. The year 2002 witnessed significant progress on the Seoul-Shinŭiju railroad, on both reconstructing road and rail links across the DMZ (as of early 2004 this process was stalled). However, the constructiveness of these efforts is still on question, as North Korea still declines to abandon its radical neo-Stalinist style of government and is hardly showing any reliable economic growth. Humanitarian aid arriving by plane at Rinas Airport in Albania in the summer of 1999. ... The Hyundai Group, founded by Chung Ju-yung in 1947 as a construction company, was once South Koreas biggest conglomerate (chaebol). ... Kŭmgang-san (Diamond Mountain) is the second-tallest mountain in North Korea, with a height of 1638 metres. ... Kŭmgang-san Tourist Region (Kŭmgang-san Kwangwang Chigu) is a special administrative region of North Korea. ... Hyundai Asan is an arm of the Hyundai Group and a major investor in North Korea. ... Kaesŏng Industrial Region (Kaesŏng Kongŏp Chigu) is a special administrative region of North Korea. ... For Panmunjom or Joint Security Area, see Joint Security Area. ... Short name Statistics Location map Map of location of Seoul. ... Not to be confused with PyeongChang. ... SinÅ­iju (SinÅ­iju-si) is a city in North Korea, on the border with China and is the capital of North Pyŏngan Province. ... Neo-Stalinism is a term used to describe historical revisionism in favor of Stalinism and/or Joseph Stalin. ...


The annual output of a South Korean-built industrial complex in North Korea’s border city of Gaeseong reached 185 million U.S. dollars in 2007. [8] Inter-Korean trade volume in 2007 totaled 1.79 billion dollars. [9]


Macro-economic trend

This is a chart of trend of gross domestic product of South Korea at market prices estimated by the International Monetary Fund with figures in millions of South Korean Won.

Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100)
1980 38,774,900 605.85 Won 33
1985 84,061,000 869.51 Won 46
1990 186,690,900 707.59 Won 60
1995 398,837,700 771.27 Won 82
2000 578,664,500 1,130.95 Won 100
2005 812,196,561 1,024.11 Won 117

For purchasing power parity comparisons, the US Dollar is exchanged at 841.39 Won only. This implies that for 2006, with exchange rates of 945 per dollar, and nominal GDP over 850 trillion won, the GDP will reach over $900 Billion (US dollars).


Other economic indicators

Industrial production growth rate: 8.0% (2006 est.)


Electricity:

  • production: 366.2 billion kWh (2005)
  • consumption: 352.5 billion kWh (2005)
  • exports: 0 kWh (2005)
  • imports: 0 kWh (2005)

Electricity - production by source: The kilowatt-hour (symbol: kW·h) is a unit for measuring energy. ...

  • fossil fuel: 62.4%
  • hydro: 0.8%
  • other: 0.2% (2001)
  • nuclear: 36.6%

Oil:

  • production: 7,378 barrel/day (2004 est.)
  • consumption: 2.149 million barrel/day (2004 est.)
  • exports: 0.6441 million barrel/day (2004)
  • imports: 2.83 million barrel/day (2004)

Natural gas:

  • production: 498.7 million cu m (2005 est.)
  • consumption: 29.17 billion cu m (2005 est.)
  • exports: 0 cu m (2005 est.)
  • imports: 28.29 billion cu m (2005 est.)

Agriculture - products: rice, root crops, barley, vegetables, fruit; cattle, pigs, chickens, milk, eggs; fish


Exports - commodities: electronics (5000 of Export - 2004 statistics) - semiconductors, LCD panel, mobile phone, computers related, television, and others], motor vehicle, steel, ships, petrochemicals


Imports - commodities: machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, plastics


Exchange rates:
South Korean Won (W) per US$1 - 936.1 (2007)[10], 955.3 (2006)[11], 1,024.1 (2005), 1,145.3 (2004), 1,191.61 (2003), 1,251.09 (2002), 1,290.99 (2001), 1,130.32 (January 2000), 1,188.82 (1999), 1,401.44 (1998), 951.29 (1997), 804.45 (1996), 771.27 (1995) In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other. ...


History

Growth plunged by 6.6% in 1998, then strongly recovered to 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 finance|financial reforms have stalled. Led by industry and construction, growth in 2002 was 5.8%, despite anemic global growth. South Korea's economy is the 3rd[8] or 4th[9] largest in Asia on a currency basis.


See also

Korean name Hangul: Skyline of Central, Hong Kongs financial centre, over Victoria Harbour (viewed from Tsim Sha Tsui, Kowloon, Hong Kong) Seoul, the capital of South Korea The skyline of Singapores Central Business District (CBD) at dawn. ... This article or section does not cite any references or sources. ... // Central Bank Bank of Korea Major Banks Hana Financial Group Hana Bank Kookmin Bank Korea Development Bank Korea Exchange Bank Shinhan Financial Group Shinhan Bank + CHB Bank Woori Financial Group Woori Bank Local Banks Daegu Bank Jeonbuk Bank Pusan Bank Woori Financial Group Gwangju Bank Jeonnam Bank Shinhan Financial Group... This is a list of Wikipedia articles on Korea-related people, places, things, and concepts. ... // The ordinal numbers are the numbers used by the North Korean government and can be seen on Naenara, the DPRK Website: Foreign Investment. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... The Heavy-Chemical Industry Drive (usually shortened to HCI) was an economic development plan enacted in the 1970s under the regime of South Korean dictator Park Chung Hee. ...

References/Notes

This article contains material from the Library of Congress Country Studies, which are United States government publications in the public domain. The Country Studies are works published by the Federal Research Division of the Library of Congress ( USA), freely available for use by researchers. ... The U.S. Constitution, adopted in 1789 by a constitutional convention, sets down the basic framework of American government in its seven articles. ... The public domain comprises the body of all creative works and other knowledge—writing, artwork, music, science, inventions, and others—in which no person or organization has any proprietary interest. ...

  1. ^ Korea expected to be ninth largest economy by 2025. Goldman Sachs (2003-01-26). Retrieved on 2007-12-02.
  2. ^ Korea to become 2nd richest nation by 2050. Goldman Sachs (2003-01-26). Retrieved on 2007-12-02.
  3. ^ Country Studies: South Korea. The Economist (2003-04-10). Retrieved on 2006-04-06.
  4. ^ In Korea, a Boot Camp Cure for Web Obsession - New York Times
  5. ^ In a Wired South Korea, Robots Will Feel Right at Home. The New York Times (2006-04-02). Retrieved on 2007-06-24.
  6. ^ A Robot in Every Home by 2020, South Korea Says. National Geographic News (2006-09-06). Retrieved on 2007-06-24.
  7. ^ Korea Tourist Organization (2006-12-04). 연도별 입출국 통계(1975~1998). Retrieved on 2007-06-02.
  8. ^ International Monetary Fund, World Economic Outlook Database, April 2007. Data for the year 2006.
  9. ^ World Bank - July 1, 2006 . Data for the year 2005.

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