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South Korea - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises

Introduction

Capital:: Seoul
Area:: 100 km2
Total Population:: 48.747
Annual growth rate:: 0.00%
Density:: 503.00/km2
Urban population:: 82%
Population of Seoul (23.900), Pusan (3.700), Daegu (2.625), Kwangju (1.510), Taejon (1.500)
Official language: Korean
Other languages spoken: None
Business language: English. But businessmen often read English better than they can speak it.
Ethnic Origins:: Korean 99%, others like Chinese, Japanese, Vietnamian, Thailanan, Philipinean, etc.: 1 %
Beliefs: Population with religion: 53.1%
Buddhism 43.0%, Christianity 34.5%, Catholic 20.6%, Others 1.9%.
Telephone codes:
To make a call from: 001, 002, 008, 00365, 00700
To make a call to: +82
Internet suffix:: .kr
Type of State::
Republic, Parliamentary democracy with a Presidential form of government.
Type of economy::
High-income economy, OECD member, Emerging Financial Market
A model of an economy turned towards exports.

Economic overview

Ranking fifteenth in the list of the world's largest economic powers, South Korea has shown a spectacular growth over the past thirty years. However, due to its strong incorporation into international trade and finance, South Korea was one of the most affected countries in Asia by the international financial crisis. Therefore, its GDP growth fell from 5.1% obtained in 2007 to 0.2% in 2009. South Korea was, nevertheless, one of the first economies to get out of the crisis, its recovery was strengthened by the dynamic growth in exports and an important budgetary and currency stimulus plan. Displaying a remarkable force, the country's growth attained 6.1% in 2010, according to the estimations, and it should remain at a high level.

Once the economy started to grow again, the government has started to withdraw progressively all the exceptional measures adopted during the crisis. In order to reinforce the activity, the country must succeed in controlling the increment of  public expenditures to be able to balance the budget, following the fiscal reform which intends to establish a system more favorable to the country’s growth.  The authorities must also supervise that this negative impact of restructuring the enterprises in the financial sector remains limited, continuing at the same time the structural reform that aims to maintain the growth during an average period.  The government’s fixed objective is to bring the budget deficit to 0.5% in 2013.  In the long term, the country has to deal with the structural problems which are: an underdeveloped financial market, the rising of household's debts and the ageing of the population.

The revenue per capita in South Korea increased from USD 100 in 1963 to almost USD 20,000 today. Nevertheless, the unemployment rate has noticeably increased during the crisis and the number of irregular workers is very high.

Main industries

The primary sector in South Korea is weak, counting only with a negligible contribution to the country's GNP. Rice is the main agricultural crop. However, barley, wheat, corn, soybeans, and sorghum are also extensively cultivated. Likewise, livestock farming is done on a large scale. South Korea's mineral resources are limited to gold and silver.
The country's main sectors of activity are textile, the steel industry, car manufacturing, shipbuilding and electronics. South Korea is the largest producer of semiconductors in the world. The manufacturing sector represents about 35% of the GNP, while the tertiary sector accounts for more than 60%.

Foreign trade overview

South Korea is the world's 15th trading nation, trade represents about 100% of the country's GDP. The trade balance of the country is on a high surplus and should remain so in the coming years. Despite the effects of the financial crisis, which have greatly reduced this surplus, the weakness of the won (Korean currency) encourages exports.
The main trade partners of the country are China, Japan, the European Union and the United States.

FDI

Under the effect of the world's recession, the flows of foreign direct investment (FDI) have reduced in 2009; later on, they started  to slowly increase again with the recovery, a trend that should be confirmed in 2011.

South Korea's appeal in terms of foreign direct investment (FDI) is the result of the country's fast economic development and the specialization of its industry in new information and communication technologies. However, the lack of general transparency in regulations is a major concern to foreign investors.

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