All about south korea

Demographic Profile
In South Korea, a variety of different Asian people had migrated to the Korean Peninsula in past
centuries, however few have remained permanently. South Korea and North Korea are among
the world's most ethnically homogenous nations. The common language and especially race are
viewed as important elements by South Koreans in terms of identity, more than citizenship. A
country would not be determined as a country without the demographic profile. Thus, this article
is about the demographic features of the population of South Korea, including population
density, ethnicity, education level, health of the populace, economic status, religious affiliations
and other aspects of the population.

Population trends
As of January 1, 1989, the population of South Korea was estimated to be approximately 42.2
million. The country's population increased to 46 million by the end of the twentieth century.
The population of South Korea showed increase population since the republic's establishment in
1948, and thereafter slow down because of the effects of its economic growth. In the first official
census, taken in 1949, the total population of South Korea was calculated at 20,188,641 people.
The 1985 census total was 40,466,577. Population growth was slow, averaging about 1.1%
annually during the period from 1949 to 1955, when the population registered at 21.5 million.
When it comes to age structure of the population in South Korea, the proportion of the total
population under fifteen years of age has risen and fallen with the growth rate. In 1955
approximately 41.2% of the population was under fifteen years of age, a percentage that rose to
43.5% in 1966 before falling to 38.3% in 1975, 34.2% in 1980, and 29.9% in 1985. In the past,
the large proportion of children gives a great impact on the country's economy, particularly
because substantial resources were invested in education facilities .
Urbanization
South Korea experienced rapid growth of urban areas caused by the migration of large numbers
of people from the countryside. In the eighteenth and nineteenth centuries, Seoul, had a
population of about 190,000 people. Between 1945 and 1985, the urban population of South
Korea grew from 14.5% to 65.4% of the total population. The dislocation caused by the Korean
War accounted for the rapid increase in urban population during the early 1950s. Hundreds of
thousands of refugees, many of them from North Korea, streamed into the cities.
In 1985 the largest cities were Seoul (9,645,932), Busan (3,516,807), Daegu (2,030,672),
Incheon (1,387,491), Gwangju (906,129), and Daejeon (866,695). In 2016, 82.59 percent of
South Korea's total population lived in urban areas and cities. According to government
statistics, the population of Seoul, one of the world's largest cities, surpassed 10 million people in
late 1988. Seoul's average annual population growth rate during the late 1980s was more than
3%. Two-thirds of this growth was attributable to migration rather than to natural increase.
Rapid urban growth has brought familiar problems such as, the construction of large numbers of
high-rise apartment in Seoul and other large cities alleviated housing shortages to some extent.
Also, it gives hardship on the tens of thousands of people who could not afford the rents in the
new buildings. Another is the rapid growth of traffic, and the widespread use of coal for heating
during the severe winter months caused dangerous levels of air and water pollution, issues that
still a phenomena.

Vital statistics
This also includes the vital statistics of the country South Korea including the calculated live
birth and deaths per period. In 1950-1955 the live birth calculated with the total of 722,000 and
its calculated total death is about 331,000. Moreover, 391,000 total population increased within 5
years. However, the population arise with more than 720,000 population within 10 years after
and slowly decreasing in the year 1975 up to 2015.
Current natural population growth
Natural growth from January to November 2018 decreased and was calculated 31,758. A year
after, it is calculated 13,756. However, In the Life expectancy in South Korea arises about 2% in
the year 1908 to 1923 . But it is continually more arising up to the year 1950.
Total Fertility Rate from 1900 to 1924
The total fertility rate is the number of children born per woman. It is based on fairly good data
for the entire period. Decline in population growth continued, and between 2005 and 2010 total
fertility rate for South Korean women was 1.21, one of the world's lowest according to the United
Nations. Fertility rate well below the level of 2.1 births per female has been a national alarm, unable to
grow or support its elderly. The country's population increased to 46 million by the end of the twentieth
century, with growth rates ranging between 0.9% and 1.2%.
The population is expected to stabilize in the year 2023 at around 52.6 million people. As of early 2019,
the birth rate of South Korea reached an alarmingly low number. In February 2019, the Korean birth rate
fell to 0.98, well below the replacement level of 2.1 births. South Korea is now the fastest aging
developed country in the world. The Korean government and the worsening economic environment for
young people are blamed as the main cause.

Ethnic groups

South Korea is one of the most ethnically homogeneous countries with a population of Korean
ethnicity who has about approximately 96% of the total population. However, because of the
economic powerhouse, opportunities for foreign immigrants increased and in 2007 the number of
foreign citizens resident in South Korea passed the million population for the first time in history,
and the number reached 2 million in 2016. 1,016,000 of them came from China, with more than
half of them being ethnic Koreans of Chinese citizenship. The next largest group was from
Vietnam with 149,000 residents. The third largest group was from the United States with 117,000
residents, excluding the American troops stay in the country. Thailand, Philippines, Uzbekistan
and other countries followed. Many of the foreign residents from China and the former Soviet
Union, including Russia and Uzbekistan, are ethnic Koreans (see Koreans in China, Koryo-
saram).
Foreign population
Below are the foreigner groups in South Korea that number more than 4,000. This are the
nationalities of foreigners in South Korea (as of July 2019). China has the highest total
population of 1,092,622 in South Korea. Next up is the Vietnam calculated about 219,076 total
population which is second to the highest and next is the United States calculated about 161,875
population. The Fourth country is the Uzbekistan (73,445), Russia (62,567), Philippines
(55,909), Japan (47,120), Cambodia (47,049) , Mongolia (46,620), Nepal(41,776), Indonesia
(41,574), Taiwan (32,588), Myanmar(28,497), Canada(27,136), Sri Lanka(25,010) , Bangladesh
(16,814), Pakistan (13,658), India (12,942), Hong Kong (11,440), Australia(9,677), UK (9,677),
New Zealand(4,128) which has the lowest population in South Korea. These countries has
different lives facing in the country of South Korea which they all looking forward.
Languages
The Korean language is the native language spoken by the vast majority of the population.
English is widely taught in both public and private schools as a foreign language. However,
being fluent in English is relatively low compared to other industrialized developed countries.
There is a Chinese minority who speak Mandarin and Cantonese. Some elderly may still speak
Japanese, which was official during the Japanese rule in Korea (1905–1945). In different areas of
South Korea, different dialects are spoken sounds quite rough and aggressive compared to
standard Korean.

Religion
Koreans have historically, lived under the religious influences of shamanism, Buddhism,
Daoism, or Confucianism. Korea is a country where the world's most major religions,
Christianity ,Buddhism ,and Confucianism peacefully coexist. According to 2015 statistics, 44%
of Korean population has a religion and 2008 statistics show that over 510 religious
organizations were in the South Korea population. This includes the Buddhism which has a total
of 22.8%, Protestantism which has 18.3%,Catholicism which has 10.9%, Nonreligious which has
46.5% and Other religion raging at 1.4%

Koreans living overseas

Because of the economy problems in South Korea , koreans from the northern provinces of
Korea went mainly to Manchuria, China, and Siberia. Many people from the southern provinces
went to Japan. By contrast, many of Japan's approximately 700,000 Koreans had below-average
standards of living. This situation occurred partly because of discrimination by the Japanese
majority and partly because a large number of resident Koreans, preferred to remain separate
from Japanese.
By the end of 1988, there were over two million South Koreans residing overseas. North
America was home to over 1.2 million. South Koreans also were residents of Australia
(100,000), Central and South America (45,000), the Middle East (12,000), Western Europe
(40,000), New Zealand (30,000), other Asian countries (27,000), and Africa (25,000). A limited
number of South Korean government-sponsored migrants settled in Chile, Argentina, and other
Latin American countries. Because of South Korea's rapid economic expansion, an increasing
number of its citizens go to abroad because of business and job matters. Some Korean citizen
going back to its country because they see their country being improved a little and they realized
that it is much hard for them to adjust in other countries.

Works cited
 This article incorporates public domain material from the Library of Congress
document: Savada, Andrea Matles; Shaw, William, eds. (1992). South Korea: A country
study (4th ed.). Federal Research Division. ISBN 9780788146190.
Information
Guide/Reference:https://en.wikipedia.org/wiki/Demographics_of_South_Korea

MARKETING STATUS
Marketing opportunities
These includes the Consumer Profile , Purchasing power, and Consumer Behavior in South
Korea.

Consumer Profile
South Korea's the population is ageing very quickly. The median age is 42.3 years old while 25%
of the population is under 24 while almost 30% is over 55 years old. The population is growing
at a rate of 0.44%. The gender ratio is 1 man to 1 woman with 81% of the population living in
urban areas. The population is concentrated in the non-mountainous lowlands: the Gyeonggi
province around Seoul is the most populated while the Gangwon province is the least dense.
Purchasing Power
The GDP per capita PPP is 33,221,858 South Korean won in 2018. The average annual income
in South Korea is 33,600,000 won and the purchasing power is on the rise and consumption
follows the trend in 2018 increased by 0.76%. The annual adjusted disposable income per capita
is 24,348,659 won. The Gini index on income inequality is estimated at 0.316 and stable, but
gender inequality is among the highest among OECD countries. Women working in South Korea
earn only 63% of what men earn. In addition, the highest wages are in Seoul (37,810,000 won on
average) and people over 65 are the most affected by poverty.

Consumer Behaviour
South Korea is a consumer society. Purchases are made in department stores, shopping centres
but also in new types of stores (example: food retailers). Online shopping is very popular. The
use of the internet also makes every dealer’s job faster. Consumers are increasingly less attracted
to domestic products while purchases of foreign products are growing.
In general, Korean consumers are not loyal to brands. The reasons pushing consumers to turn to
other brands are the best prices and better usage. South Koreans tend to change their
consumption behavior.
E-commerce
These includes the Internet Access, e-commerce market, and e-commerce sales and market in
South Korea .
Internet access
Almost 99% of South Koreans go online at least once a week, spending an average 14.3 hours a
week on the internet. South Korea ranks sixth in the world in terms of smartphone usage, with a
penetration rate of 77.7%. South Korean official sources estimate the number of smartphone
subscribers at 47.4 million, although the figure includes users with more than one account. The
search engine market is dominated by local players .Google has a 10% market share which,
despite being negligible, has been growing quickly over the years.

E-commerce market
South Korea is the third biggest e-commerce market in Asia. Domestic online purchases reached
US$ 55.9 billion in 2016, up from US$ 47.6 billion recorded in the previous year. According to a
report by Research and Market e-commerce sales already made up nearly 20% of total retail
sales. Over half of internet users purchased products online the most popular categories of items
purchased online were travel, clothes and electronics. Mobile phones are used frequently than
computers .
Online purchases from foreign retail sites reached US$ 1.6 billion in 2016, with 65% purchased
from U.S. online retailers. Thus, Online purchases from foreign retailers have been rapidly
increasing because Koreans find less expensive prices on overseas websites even after adding
international shipping fees and import duties. 

E-commerce sales and customers

The most popular products from domestic online retailers are travel & reservation services
(17.4%), home appliances & electronics (11%), clothing (10.6%), home & car accessories
(10.2%), cosmetics (7.9%) and computers (6.2%). For the first time, online purchases surpassed
hypermarkets’ sales making e-commerce the biggest retail channel in Korea. The average
revenue per user is currently estimated at  US$ 1,150. The most active age groups are those
between 20-29 and 30-39, with roughly 80% of their members purchasing goods and services
online.
According to a survey by Korea Internet and Security Agency, PC and mobile shoppers preferred
payment method is credit card accounting for 72.4% of PC and 68.1% of mobile shoppers.  Next
are debit card and account transfer (both internet and mobile banking service).

Evolution of the Sector

Evolution of Marketing in South Korea is fast . According to Euromonitor, retail sales in the
packaged food market in Korea reached nearly US$21.4 billion in 2016.  Korea remains the 5th
largest packaged food market in the Asia Pacific region and is now the 17th largest market in the
world. By the year 2021, retail sales in the packaged food market in Korea is expected to
increase 8.1% to US$23.4 billion. Overall retail sector sales in Korea, including food products,
have shown sluggish growth in recent years under the global economic downturn.
Traditional retail distribution networks of small stores, stalls in markets and street vendors are
being replaced by large discount stores. As consumers take to the internet to purchase products
out of convenience, they are also showing a similar trend in store-based retailing by frequenting
convenience stores. One such measure is click and collect, whereby consumers can pick up the
items they ordered online via pick-up stations in the outlets.
.
Market share:
Market Share which has an Online sales that is about 18% of the market share. However,
Hypermarkets is 14% of the market share, Department stores is 10% of the market share, Mom
and Pop stores is 10% of the market and lastly there is 7% market share in the Convenience
stores. When it comes to Retail Sector Organizations in South Korea there is Korea Chainstores
Association (KOCA) and Korean Ministry of Trade, Industry and Energy

Supplier in South Korea

Type of Production
The manufacturing sector constitutes nearly 40% of Korean GDP, while the service sector raging
around 57.2%. Korea's main industrial activity sectors are textile, steel industry, automobile
manufacturing, shipbuilding and electronics (semiconductors, mobile phones, TVs, etc).
Information Guide/Reference: https://www.nordeatrade.com/en/explore-new-
market/south-korea/suppliers

SALES OF PRODUCTS
In Korea, sales taxes are included in the purchase price of each product - VAT/sales tax is about
(10%) and special taxes on high-priced goods such as jewelry and others. Retail sales in South
Korea grew last month as a year-end shopping festival buyed both online and offline sales. The
combined sales of 26 major online and offline retailers increased 7.5 percent in November from a
year earlier, according to the Ministry of Trade, Industry and Energy. These Sales of Product
includes the Franchising ,Direct Market, Selling to the Government , selling factors/techniques,
electric commerce, trade promotion, advertising, pricing, and sales service/customer support.

Franchising
Franchising in Korea first developed primarily in the food service market before expanding into
other areas. Although the restaurant franchise market is beginning to mature, this market is
relatively new with new concepts. Korean franchisees prefer to do business with, U.S.
franchisers that can offer established brand names to Korean consumers and value the transfer of
American management skills provided by U.S. headquarters. This market includes education,
beauty salons,cosmetics, cleaning services, real estate, fitness centers, and other operations.
Although U.S. franchises are sought after in Korea, several challenges remainOther common
franchising requirements, such as minimum facility size and the required number of store
openings within a certain period are often very challenging for Korean franchisers to meet.There
are no specific legal requirements for U.S. franchises to operate in the Korean market.
 
Direct Marketing
The Korea Online Shopping Association (KOLSA) estimates that Korean consumers spend
nearly USD 22 billion in purchases. This includes Door-to-Door Sales which according to the
Korea Direct Selling Association (KDSA), the Korean door-to-door sales market is approximately USD 7
billion. This items include home education materials, books, household consumer goods,
cosmetics, health foods, sporting goods, and service products, such as insurance and travel
counseling. It also includes Multi-level Marketing registered companies employed about 3.1
million active distributors. And also the Joint Ventures/Licensing Selecting the appropriate
partner is one of the most difficult and critical aspects of establishing a joint venture in Korea.
Large Korean conglomerates, known as Chaebols, still exercise considerable influence over the
Korean government and financial institutions. The Korean government has stepped up support
for small and medium sized businesses. With the decreasing influence of Chaebols and greater
concern of for anti-monopolistic behavior, joint venturing in Korea has become more diversified.
Regardless of the scale of Korean partner, there is a tendency within Korean business culture to
maintain local control, regardless of the percentage invested by foreign entities.
 
Selling to the Government
Korea joined the World Trade Organization’s Government Procurement Agreement (GPA) on
January 1, 1997. The GPA establishes non-discriminatory procedures for the procurement
process so that a maximum number of qualified suppliers can fairly compete. Korea Telecom’s
purchases of telecommunications commodity products and network equipment, procurement of
satellites, and purchase by the Korea Electric Power Corporation (KEPCO) of certain electrical
transmission and distribution equipment. Not all GPA-covered procurement is handled by the
PPS. Thus, tendering under open, formal procedures are required. 

Selling Factors/Techniques
Three practices are essential for success in the Korean market: (1) adapting products and
procedures to Korean tastes and conditions, (2) regular communication with Korean business
partners and customers, and (3) making a firm commitment to the Korean market over the long
run.
In selling to manufacturers, personal contact is important not only because of the value placed on
direct discussions and on building long-term relationships but in obtaining a first-hand
acquaintance with new processes and equipment. U.S. suppliers should consider the following
recommendations in their market plan for Korea: (1) As possible, make regular visits to Korea in
support of your local representative; (2) invite Korean representatives to U.S.
offices/headquarters periodically to ensure they are informed and up-to-date on company
strategies/products; (3) regularly discuss the best mix for Korea of company’s product line; (4)
when possible hold demonstrations, seminars and participate in trade shows/exhibitions in
Korea; (5) provide latest technical data and descriptive brochures; and (6) encourage strong
customer relations and follow-up.
 
Electronic Commerce
The total amount of E-Commerce transactions in Korea reached approximately USD 518 billion
and is estimated to have increased by 20 percent in 2008. This figure is projected to grow at an
average annual rate of 10 percent over the next five years. In Korea, the B2B, B2G and B2C
transactions in 2007 accounted for 89.9, 7.1 and 2.0 percent of the E-commerce sector
respectively. There are approximately 4,500 B2C cyber shopping malls in Korea. With over 35
million internet users from a total population of 48 million , the transaction become more faster.
Increase of variety of equipment, networking, software, and services, to develop and support E-
commerce-related web-sites and transactions. The electronics and metal manufacturing industries
that account for nearly 70 percent of total B2B transactions are willing to spend in order to
achieve efficient and secure use of EC tools.
However, U.S.- based E-Commerce companies need to monitor the Personal Information
Protection Act and Ministerial data privacy/SPAM regulations that were enacted in 2007.
Although the new regulations are likely to reflect concerns voiced by the public and the industry
to the government, it may still be restrictive for E-Commerce firms managing user data globally
to some extent.
Trade Promotion and Advertising
There are Government agencies who also assists potential foreign buyers or sellers including
non-USG organizations, the Korea International Trade Association (KITA) which is the largest
international trade association in country , World Trade Centers Association (WTCA),
Convention and Exhibition Center( COEX) which is Seoul’s largest trade show venue in Korea
that provides multi-lingual simultaneous translation, full range of audio-visual equipment,
lighting and sound systems, as well as comprehensive information services. The Seoul Trade
Exhibition Center (SETEC) also located in Seoul, is run by the Korea Trade/Investment
Promotion Agency (KOTRA). The second largest city in Korea, Busan, located in southeastern
part of Korea currently holds regular national exhibitions. The Busan Exhibition & Convention
Center (BEXCO) has a floor space of 26,446 square meters. There is also an outdoor exhibition
site with 13,223 square meters of available space.
Advertising
Korea’s advertising market is open to 100 percent foreign participation. Foreign advertising
agencies control more than 50 percent of the Korean advertising market. All the major
international agencies are present in Korea. Companies must register with this corporation if they
intend to advertise. As of 2008, approximately 273 foreign and Korean agencies were registered
with this corporation.
Though censorship in advertisement is still practiced in Korea, it is not as strict as it has been in
the past. Several local TV stations have been established in recent years. This development, as
well as the advent of cable television in 1995, has expanded advertising's potential reach to
Korean audiences. Advertising market opportunities are predicted to show strong growth as
more Koreans gain access to electronic media. Cable television in Korea currently has an
audience of over 15 million households.
Additionally, the government took steps to promote broadcast satellite television in digital
format in 2001, with expectations of nationwide coverage by 2010. Korea Digital Broadcasting
(KDB), a subsidiary of state-run Korea Telecom, holds the contract for digital broadcasting.

Pricing
U.S. goods have a reputation among Korean buyers of having quality, durability, and
performance; however, since Korean manufacturers are price-conscious, they often perceive U.S.
products to being expensive. In an export-oriented economy, many Korean manufacturers
believe that it is essential to buy the lowest priced raw materials and equipment, even at the
expense of quality. Goods from China, Japan and elsewhere are often considered to be more
attractive primarily because of price. Korean OEM manufacturers often seek to lower input costs
to offset high Korean labor costs. Korea has consumer-protection legislation that requires
consumer items be labeled with both the manufacturer’s sales price to the retailer and the
marked-up retailer’s price to the consumer. The mark-up from manufacturer to consumer ranges
from 50 percent to 150 percent. Korea has a 10 percent sales tax that is included in the price of
taxable items.
 
Sales Service/Customer Support
Sales and after-sales service is generally secondary to product and price considerations. Private
traders and agents often hire in-house engineers to install equipment. Japan's proximity to Korea
as well as similarities in business culture between the two countries allow Japan to send teams of
specialists to Korea at marginal cost and effort providing skilled installation, maintenance and
repair.
Information Guide /Reference: https://www.globaltrade.net/f/business/text/South-
Korea/Selling-Selling-in-South-Korea.html

ECONOMIC STATUS
The economy of South Korea is the 4th largest in Asia and the 12th largest in the world. It is a
highly developed mixed economy dominated by family-owned conglomerates called chaebols;
however, the dominance of the chaebol is unlikely to last slowing down the transformation of
the South Korean economy for the benefit of future generations also, South Korea is known for
its spectacular rise from one of the poorest countries in the world to a developed, high-income
country in just a few generations. This economic growth is called by some a miracle, and
described as the Miracle on the Han River, which has brought South Korea to the ranks of elite
countries in the OECD and the G-20. South Korea still remains one of the fastest growing
developed countries in the world following the Great Recession. It is included in the group of
Next Eleven countries that will dominate the global economy in the middle of the 21st century.

As of 2018, the total population of South Korea is 51,635,256 . The population below poverty line was
about 14.4% (2016 estimated). The currency of South Korea is won (KRW, ₩) and their Fiscal Year
is 1 January to 31 December. They also have trade organizations which includes the APEC,
WTO, OECD and G-20. They developed high income economy. In statistics, their GDP(Gross
  3.8% (December, 2019)
 9.9% youth unemployment
Unemployment
(December, 2019)
Domestic Product) is
estimated  Electronics $1.630 trillion by
the year  telecommunications 2019(nominal) and
$2.320  automobile production trillion (PPP, 2019
Main
est.). The  chemicals GDP growth has
industries
decreased  shipbuilding by the year 2017 to
2018 and  steel increased by the
year 2019 and 2020. Thus,
their GDP Ease-of-doing- 5th (very easy, 2020) per capita also
increases by business rank nominal and PPP.
They are External ranked 27th
(nominal) and 29th (PPP) per
capita Exports $577.4 billion (2017 est.) rankings. Their
sectors in semiconductors, petrochemicals, GDP includes
Agriculture automobile/auto parts, ships, wireless which is
Export goods approximately
communication equipment, flat displays,
estimated steel, electronics, plastics, computers 2.2%, industry that
is 39.3% and services which
58.3%. As   China 25.1% of the 2020 their
estimated   United States 12.2% inflation rate is
about 0.9%. Main export   Vietnam 8.2% The Human
partners   Hong Kong 6.9% Development Index
in South   Japan 4.7% Korea is about
0.906 and  (2017)[5] 0.777 very high as
of 2018 and ranked 22nd . The
total labor $457.5 billion (2017 est.) force population is
Imports
about 28,445,506 (2019)
and rate of crude oil/petroleum products, 60.7% in
employment semiconductors, natural gas, coal, steel, (2018). Labor force
by Import goods computers, wireless communication occupation as of
2018 equipment, automobiles, fine chemicals, includes agriculture
(4.8%), textiles industry( 24.6%),
(services:   China 20.5% 70.6%),
  Japan 11.5%
Main import   United States 10.5%
partners   Germany 4.2%
  Saudi Arabia 4.1%
 (2017)[5]

 $230.6 billion (31 December 2017

est.)[5]
FDI stock  Abroad: $344.7 billion (31
Economic December 2017 est.)[5] History of South
Korea
Current $78.46 billion (2017 est.)[5]
account
Gross external
$384.6 billion (31 December 2017 est.)[5]
debt
Public finances
Public debt 39.5% of GDP (2017 est.)
South Korea's education system is the country's rapid economic development. Having almost no
natural resources and a high population density in its territory, which will prevent the continued
population growth and the formation of a large internal consumer market. Despite the South
Korean economy's high growth potential and structural stability, South Korea suffers endless
damage to its credit rating in the stock market due to the deep military crises, which gives an
effect on the financial markets of the South Korean economy. However, renowned financial
organizations, such as the International Monetary Fund, also compliment the resilience of the
South Korean economy against various economic crises, citing low state debt, and high fiscal
reserves that can quickly be mobilized to address any expected financial emergencies. Other
financial organizations like the World Bank describe Korea as one of the fastest-growing major
economies of the next generation along with BRIC and Indonesia.

South Korea was one of the few developed countries that was able to avoid to exit during the
global financial crisis, and its economic growth rate reached 6.2% in 2010, a sharp recovery from
economic growth rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis hit.
The South Korean economy again recovered with the record-surplus of US$70.7 billion mark of
the current account in the end of 2013, up 47 percent growth from 2012 products exports.
However, In order to promote development, a policy of industrialization by import substitution
was applied, closing the entry into the country of all kinds of foreign products, except raw
materials. Nor did they resort to foreign investment. An agrarian reform was carried out with
expropriation without compensation of Japanese large estates.

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

South Korea's real gross domestic product expanded by an average of more than 8 percent per
year, from US$2.7 billion in 1962 to US$230 billion in 1989, breaking the trillion dollar mark in
2006. Nominal GDP per capita grew from $103.88 in 1962 to $5,438.24 in 1989, reaching the
$20,000 milestone in 2006. The manufacturing sector grew from 14.3 percent of the GNP in
1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a
projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent
in 1962 to 35.8 percent in 1989.

In 1965 South Korea's rate of growth first exceeded North Korea's rate of growth in most
industrial areas, though South Korea's per capita GNP was still lower. 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. 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, and a small negative balance was projected for
1990. For the first half of the 1990s, the South Korean economy continued a stable and strong
growth in both private consumption and GDP. Things changed quickly in 1997 with the Asian
Financial crisis. The problem was exacerbated by the problem of non-performing loans at many
of Korea's merchant banks.

Throughout 1998, Korea's economy would continue to shrink quarterly at an average rate of
-6.65%. South Korean chaebol Daewoo became a casualty of the crisis as it was dismantled by
the government in 1999 due to debt problems. American company General Motors managed to
purchase the motors division. Indian conglomerate Tata Group, purchased the trucks and heavy
vehicles division of Daewoo. Actions by the South Korean government and debt swaps by
international lenders contained the country's financial problems.

Much of South Korea's recovery from the Asian Financial Crisis can be attributed to labor
adjustments. By the first quarter of 1999, GDP growth had risen to 5.4%, and strong growth
thereafter combined with deflationary pressure on the currency led to a yearly growth of 10.5%.
In December 1999, president Kim Dae-jung declared the currency crisis over. After the bounce
back from the crisis of the late nineties, the economy continued strong growth in 2000 with a
GDP growth of 9.08%. However, the South Korean economy was affected by the September 11
Attacks. The slowing global economy, falling exports, and the perception that corporate and
financial reforms had stalled caused growth to fall back to 3.8% in 2001 thanks to
industrialization GDP per hour worked (labor output) more than tripled from US$2.80 in 1963 to
US$10.00 in 1989.

More recently the economy stabilized and maintain a growth rate between 4-5% from 2003
onwards. Led by industry and construction, growth in 2002 was 5.8%,despite anemic global
growth. The restructuring of Korean conglomerates (chaebols), bank privatization, and the
creation of a more liberalized economy—with a mechanism for bankrupt firms to exit the market
—remain Korea's most important unfinished reform tasks. Growth slowed again in 2003, but
production expanded 5% in 2006, due to popular demand for key export products such as
HDTVs and mobile phones. Like most industrialized economies, Korea suffered significant
setbacks during the late-2000s recession that began in 2007. Growth fell by 3.4% in the fourth
quarter of 2008 from the previous quarter, the first negative quarterly growth in 10 years, with
year on year quarterly growth continuing to be negative into 2009.

Most sectors of the economy reported declines, with manufacturing dropping 25.6% as of
January 2009, and consumer goods sales dropping 3.1%. As in the 1997 crisis, Korea's currency
also experienced massive fluctuations, declining by 34% against the dollar. Annual growth in the
economy slowed to 2.3% in 2008, and was expected to drop to as low as -4.5% by Goldman
Sachs, but South Korea was able to limit the downturn to a near standstill at 0.2% in 2009.
Despite the global financial crisis, the South Korean economy, helped by timely stimulus
measures and strong domestic consumption of products that compensated for a drop in exports,
was able to avoid a recession unlike most industrialized economies, posting positive economic
growth for two consecutive years of the crisis. In 2010, South Korea made a strong economic
rebound with a growth rate of 6.1%, signaling a return of the economy to pre-crisis levels. South
Korea's export has recorded $424 billion in the first eleven months of the year 2010, already
higher than its export in the whole year of 2008.

The South Korean economy of the 21st century, as a Next Eleven economy, is expected to grow
from 3.9% to 4.2% annually between 2011 and 2030, similar to growth rates of developing
countries such as Brazil or Russia. The government cut the work week from six days to five in
phases, from 2004 to 2011, depending on the size of the firm. The number of public holidays
was expanded to 16 by 2013. South Korean economy fell in 2019’s first quarter, which was the
worst performance since the global financial crisis. GDP declined a seasonally adjusted 0.3
percent from the previous quarter.

Information Guide/Reference: https://en.m.wikipedia.org/wiki/Economy_of_South_Korea