Economy of South Korea

According to cheeroutdoor, in the 55 years of its existence, the Republic of Kazakhstan has gone from being an underdeveloped country, having acquired in the 1970s. the status of a “new industrial economy”, to be recognized as an industrialized state, which was officially formalized by joining the OECD in 1996. The volume of GDP in 2001 amounted to 545 billion won (422 billion US dollars) (increased 1.3 times since 1995).

After World War II, Korea was thrown far back in its economic development. The Korean War completed the destruction of the industrial potential in the south of the peninsula. Settled in the beginning 1960s The authoritarian regime of General Park Chung Hee managed to accelerate industrialization and ensure high rates of economic growth, which made it possible to build a highly developed economy in a short historical period. An important role was played by the concentration of human, material, financial, scientific and technical resources in the strategic areas of development of export-oriented industries. With the assistance of the government, large conglomerates, or chaebols (Hyundai, Samsung, etc.), were formed, and support was provided for their promotion to world markets. In this, the government was helped by banks controlled by it,

At the same time, the state’s efforts were aimed at forming the foundations of a market economy: a legislative system was being developed, a network of financial institutions and stock exchanges was developing, a securities market was taking shape, and the mechanism of relations with the world market was being improved.

The sociocultural factor played an exceptionally important role in the development of modern South Korea. The Koreans’ commitment to Confucian ethics with its preaching of diligence, craving for education, discipline, respect for elders was fully used by the state and business for development purposes. The length of the working week in the 1960s and 70s in fact, it was not regulated, reaching 60 or even 70 hours a week. The duration of the vacation was only a few days. And in modern conditions, for more than a week, the vast majority of Koreans do not dare to leave their jobs. The activity of trade unions was allowed only at the level of enterprises and at the same time was strictly regulated.

With the assistance of the state, large national business managed to successfully reproduce on Korean soil the advanced methods of organizing entrepreneurial activity borrowed from developed countries. The rigidly organized economic system created by Park Chung Hee, although deformed and weakened in the 1980s, nevertheless existed, retaining its main features, until the middle of the 1980s. 1990s The search for new forms of development was hampered by the bloc of politicians, bureaucrats and representatives of big business that had formed in the previous period, which contributed to the reproduction of large-scale corruption. Such was the payment for the deep involvement of the state in economic processes.

Under these conditions, only a sharp change in the economic situation could break the established status quo. The monetary and financial crisis that spread in East Asia in 1997 not only destabilized the economic situation in South Korea, but also made it impossible for the economic mechanism that existed at that time to function.

The core of the economic reforms carried out in 1998-2002 by the administration of Kim Dae-chung was the curtailment of direct state intervention in the economy and, accordingly, the formation of a fundamentally different relationship between state institutions and business. A course was taken to ensure the independence of the banking and credit sector and create equal conditions for the access of commercial structures to credit resources, to support progressive sectoral transformations and strengthen competitive principles, incl. by expanding access to the domestic market for external investors. The administration of President Roh Moo-hyun has declared its desire to continue and develop the economic reforms begun. After the recession of 1997-98, the South Korean economy quickly reached its pre-crisis level and restored the stability of economic development. The country’s external debt for 2002 was 128,

The leading role in the South Korean economy is played by the manufacturing industry (32% of GDP) and the service sector (52%). Construction accounts for 8.2%, agriculture 4.5%, power industry 3%, mining 0.3%.

Production of extractive industries in the 1990s and in the early years of the 21st century. stagnating or even shrinking. Hard coal reserves are estimated at 1.5 billion tons, but its extraction, which amounted to 24.5 million tons in 1985, then constantly decreased to 5 million tons (2000). In turn, the production of iron ore, after its maximum of 665 thousand tons in 1985, also decreased to 180 thousand tons. The same trend characterizes the extraction of graphite and other mineral resources. The process of reducing the production of domestic raw materials is associated with growing competition for imports of cheaper and better quality fuel and raw materials, mainly from Australia, Canada, the USA, and Indonesia.

An important place in the country’s economy is played by metallurgy, the chemical industry, and shipbuilding. Between 1980 and 2000, the production of seagoing vessels in the Republic of Kazakhstan increased by a factor of 7 (total carrying capacity, 12 million tons), and steel production, by 1.7 times (41 million tons). Industries such as electronics, automotive, and biotechnology are developing dynamically. The production of automobiles in 1980-2000 increased 23 times (2.8 million units).

Traditionally, the so-called system is widespread in the Republic of Kazakhstan. lifelong employment, in which the employee has a high chance of linking his activity with the only place of work in his working biography. Under these conditions, unemployment in the Republic of Kazakhstan is usually a small amount – 2-4%. From con. 1990s the labor market is changing, acquiring the features inherent in a developed market economy (mobility, flexibility), while unemployment remains at a low level (2.9% in 2002).

The South Korean economy is characterized by low inflation, the level of which in the 1990s. It fluctuated between 2-5%, with the exception of the crisis year 1998, when the rise in prices increased to 7.5%. In the post-crisis period, price dynamics declined again. In 2002, retail price inflation was 2.7%.

The leading role in the economy of the Republic of Kazakhstan is played by a small group of large companies – chaebols. They account for 57% of the country’s exports. By their nature, these are conglomerates whose structure evolved in the 1960s–1990s as financial, human, and technological resources accumulated. in favor of more and more advanced industries: from light industry and basic industry to automotive, electronics, computer science, biotechnology and aerospace engineering. The number of strategic industries sometimes grew to 8-10. After the crisis of 1997–98 and under pressure from the state, the chaebols reduced the number of strategic lines of business to 2–3. South Korean business leaders occupy prominent positions in the world market in such industries as metallurgy (POSCO), automotive and shipbuilding (Hyundai),

The dynamic development of the South Korean economy over the past four decades has been accompanied by profound structural changes that have led to a decrease in the role of the agricultural sector in the country’s economic complex. Although the volume of agricultural production increased almost 15 times in 1970-2000, the share of the agricultural sector in GDP decreased from 26.1 to 4.5%, while the share of the agricultural population in the total population of the country significantly decreased during this period from 44.7 to 9. 5%. In agriculture of the Republic of Kazakhstan, the average size of a farm is 1.3 hectares. Only 6.3% of farmers have a land plot of 3 hectares or more. The long-standing trend of the aging of the agricultural population has led to the fact that the proportion of farmers aged 60 and over has increased from 24% in 1990 to 41% in 2001. The development of social infrastructure (education, health care) and housing construction in the countryside is still lagging behind. The accumulated problems had a negative impact on the profitability of the agricultural business. The level of income of rural households in 2000 was only 80% of that of urban households, while in 1990 this figure was 97%.

At the same time, positive processes are taking place in agriculture: an increase in its concentration and specialization, and an increase in the efficiency of a number of industries. The number of farms with an arable land of 3 ha or more, specializing in rice production, increased from 18,000 to 35,000 in 1990–98. cost of rice by 30%. The concentration of production in pig production is growing: 7% of farms containing more than 1000 heads of pigs produced 52% of pork (1998).

In providing support to agriculture, the government proceeds not only from purely economic calculations. It considers the development of the agrarian economy as a guarantee of maintaining a favorable social environment that contributes to the transfer to new generations of national traditions that are threatened in the context of globalization. According to the OECD, the level of support for agriculture in South Korea is 5 times higher than the similar average indicators of the member countries of this organization. With the support of the state, the volume of agricultural production has doubled over the past 15 years. Rice production reached 5.5 million tons (2001), which covers the country’s needs for this important product and allows the ROK to provide food assistance to the DPRK. The production of citrus fruits is 644 thousand tons, apples 400 thousand tons, grapes 450 thousand tons.

The Republic of Kazakhstan has a developed system of transport and communications. The length of commercially operated railways is 3.12 thousand km. At the same time, the length of double tracks is 1 thousand km, 668 km, or 21% of all railways, have been electrified. Railways transported in 2001 43.86 million tons, or 10.281 billion tkm. There is a 412 km high-speed rail line connecting Seoul and the port city of Busan in the southeast of the country. The total length of paved roads is 91.5 thousand km (2002). The first high-speed highway, 24 km long, between Seoul and Incheon was built in 1968. In 1970, the Seoul-Busan highway (428 km) was put into operation, the construction of which became an important milestone in the development of transport infrastructure in the Republic of Kazakhstan. By 2002, the length of express roads was more than 2.6 thousand km. There are approx. 13 million cars, of which 8.9 million are cars, which is more than 35 times higher than in 1980. The material and technical base of air transport is constantly being strengthened in the Republic of Kazakhstan. In 2002, the first phase of the new Incheon International Airport near Seoul opened. At the same time, Gimpo Airport is gradually refocusing on serving domestic flights. Two South Korean airlines – Korean Airlines and Asiana Airlines, having an air fleet of 118 and 59 aircraft, respectively, provide transportation of passengers and air cargo in the Republic of Kazakhstan and more than 70 countries of the world. In the country in 2000, a total of 22.5 million passengers were transported, on international flights – 19.5 million passengers. The leading role in ensuring the delivery of commercial goods to the country and abroad belongs to maritime transport. The largest seaports of the country are Busan, Ulsan, Incheon, Mokpo. In total, 530 million tons of cargo was processed in the international seaports of the Republic of Kazakhstan in 2000.

Within the framework of the nationwide program of the national network of telecommunications and informatics in the country “Cyber K. 21”, a single developed information system accessible to any type of user was created, uniting 34 thousand state institutions, 10 thousand schools, 1000 centers of computer education of the population. There are more than 15 million personal computers in the country, 44 ordinary and 50 cell phones per 100 inhabitants. Covering 22.3 million Internet users, the South Korean Internet market in terms of its capacity is the fourth in the world after the USA, Japan and Germany.

Domestic trade and services in the Republic of Kazakhstan are developing dynamically. And this applies to different market segments. The volume of retail trade through the network of discounters in 2001 amounted to 12 trillion won (10 trillion in 2000). TV sales amounted to 2 trillion won, online sales in the beginning. 21st century doubled annually, and department store turnover was 16.1 trillion won.

From the 2nd floor. 1980s The tourism industry is intensively developing in the Republic of Kazakhstan. This is facilitated by the regular holding of international exhibitions, business forums, cultural festivals, major sports competitions in the Republic of Kazakhstan (1988 Summer Olympics, 2002 World Football Championship, 2002 Asian Games and world championships in various disciplines). As a result, the number of foreign tourists visiting the Republic of Kazakhstan annually increased from 170,000 in 1970 to 5.5 million in 2002. The growth in the welfare of the population has led to a significant increase in the number of South Koreans traveling abroad for vacations. In 2001, 6 million people spent their holidays in other countries: approx. 4 million visited Asia (mainly in China and Japan), more than 800 thousand – in the USA, approx. 400 thousand – in Europe, 260 thousand – in Australia and Oceania.

The Korean Bank, founded in 1950, plays the leading role in the monetary system of the Republic of Kazakhstan and functions as a central bank. The Korean Bank conducts emission transactions, implements monetary policy, lends to the banking system. For several decades, until the financial crisis of 1997–98, the banking and credit system was under strict state control. Control over the banking system made it possible to direct financial flows to those areas of the economy that the government defined as priorities. However, the regulatory role of officials, sometimes guided by selfish interests, led to the inefficiency of banking and credit operations and the deterioration of the financial position of credit institutions. Since 1998, the banking and credit system has been undergoing a process of reform, supervised by the Financial Supervision Commission: the commission develops a plan for the implementation of reforms, establishes general principles for the operation of the banking system, forms a new system of supervision over banking and credit institutions and non-banking financial institutions. Using privatization in its policy, the admission of non-residents and a number of other measures, the government is carrying out the rehabilitation of banking and credit institutions. By 2002, there were 20 banks and 1,528 non-banking institutions in the Republic of Kazakhstan, including 3 commercial banks, 44 insurance companies, 121 mutual savings companies, 1,268 credit unions, 129 investment trust companies, and a number of others.

The budgetary and financial system of the Republic of Kazakhstan integrates the finances of the central government, provincial and local authorities. The 2001 budget was 100.2 trillion won ($85.9 billion). The volume of taxes collected in 2001 amounted to 95 trillion won (82 billion dollars). Of these, income tax accounted for 19.5%, corporate tax 17.7%, value added tax 27%, customs payments 6.2%. At the same time, the government, as part of the ongoing reform of the tax system, in 2001 reduced income tax rates by 10% (from 10-40% to 9-36%), the corporate tax rate was lowered by 1 point to 15-27%.

In terms of foreign trade turnover (314.57 billion dollars in 2002), the country ranks 12th in the world. At the same time, exports amounted to 162.47 billion dollars (the 8th indicator in the world), imports – 152.1 billion dollars, with a positive balance of 10.37 billion dollars (2002). Leading South Korean exports: consumer and industrial electronics and electrical engineering (34.5%), light industry products (15.6%), cars (8%), industrial equipment (7.7%), chemical products (7.3%) %), sea vessels (6.6%), ferrous metallurgy products (6.3). Having become one of the world’s leading shipbuilding powers, the Republic of Kazakhstan has become the world’s largest manufacturer of sea vessels for the transportation of liquefied gas. South Korean companies are among the leading exporters of electronics and telecommunications equipment, steel and automobiles. The top 10 export commodities in South Korea account for 26, 6% of exports. 100 export goods provided 60.7% of South Korea’s exports in 2000. Almost half (48.5%) of South Korean imports are fuel and raw materials. A significant share is accounted for by imports of high-tech goods: electronics and electrical engineering (24%), machinery and equipment (12%). The expansion of domestic consumer demand has led to the fact that consumer durables account for 5% of imports.

Economy of South Korea