Economy of South Korea
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.
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.
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.
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 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.
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]
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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.
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]
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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).
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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:
- 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)
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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 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[7] or 4th[8] largest in Asia on a currency basis.
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See also
- Four Asian Tigers
- Economy of North Korea
- List of Banks in South Korea
- List of Korea-related topics
- List of North Korean companies
- List of South Korean companies
- Heavy-Chemical Industry Drive
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References/Notes
This article contains material from the Library of Congress Country Studies, which are United States government publications in the public domain.
- ^ 2007 figure is from the CIA World Factbook. Last accessed on May 28, 2008.
- ^ Country Studies: South Korea. The Economist (2003-04-10). Retrieved on 2006-04-06.
- ^ In Korea, a Boot Camp Cure for Web Obsession - New York Times
- ^ In a Wired South Korea, Robots Will Feel Right at Home. The New York Times (2006-04-02). Retrieved on 2007-06-24.
- ^ A Robot in Every Home by 2020, South Korea Says. National Geographic News (2006-09-06). Retrieved on 2007-06-24.
- ^ Korea Tourist Organization (2006-12-04). 연도별 입출국 통계(1975~1998). Retrieved on 2007-06-02.
- ^ International Monetary Fund, World Economic Outlook Database, April 2007. Data for the year 2006.
- ^ World Bank - July 1, 2006 . Data for the year 2005.
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External links
- kosis.nso.go.kr - Korea Statistical Information System
- Korea and the Knowledge Economy – ( World Bank Institute)
- BOK.or.kr – Bank of Korea, the central bank of South Korea
- KSE.or.kr– Korea Stock Exchange
- Samsung Economic Research Institute
- OECD's Korea country Web site and OECD Economic Survey of Korea
- Development at Home and Abroad: My Lessons from Korea - University of Iowa Center for International Finance and Development
- Investing in South Korean Stocks - An October, 2006 article with global investor perspecitve discussing general South Korean Market activity and projections.
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