This action might not be possible to undo. Are you sure you want to continue?
) structure of South Korea. The report provides a holistic view of the country from historical, current and future perspectives. Insightful analysis on critical current and future issues is presented through detailed SCPT (strengths, challenges, prospects and threats/risks) analysis for each of the PESTLE segments. In addition, the PESTLE segments are supplemented with relevant quantitative data to support trend analysis. Uses of Country Analysis Reports:
Understanding gained from country profiles can be used to plan business investment or market entry in a particular country. The insights provide ideas about key business opportunities. The profiles also provide an overview of the legal and regulatory framework to start or operate a business in the country. Typical uses of each PESTLE segment are: • Political section provides understanding about the political system and key figures relevant to business in the country and governance indicators. • Economic section deals with the economic story of a country that provides a balanced assessment of significant macro-economic issues. • Social section enables understanding of customer demographics through income distribution, rural-urban segmentation and centres of affluence, healthcare and educational scenario. • Technological section provides strategic information on technology and telecom, technological laws and policies, technological gaps, patents and opportunity sectors in the country. • Legal section provides information about the legal structure, corporate laws, laws to start a new business and the tax regime. • Environmental section provides information on the country's performance on environmental indicators and policies. Korea SWOT Analysis • • • • Strengths electronics and telecommunication semi conductor Shipbuilding
Weaknesses • • • Presidential Pardons for Executive Conflicts and Disputes Bank Cross Holdings Opportunities o o Threats • • • social difference North Korea Teenagers Addicted to Technology Instant Translation of Web Pages Government Backing of Nuclear Industry
COUNTRY OVERVIEW President: Kim Dae-jung Independence: August 15, 1945 Population (7/01E): 47.9 million Location/Size: Eastern Asia/(98,480 square kilometers 38,000 square miles), about the size of Indiana Major Cities: Seoul (capital), Pusan, Taegu, Inchon, Kwangju Language: Korean (English widely taught) Ethnic Groups: Korean, with a small Chinese minority Religions: Christianity, 49%; Buddhism, 47%; Confucianism, 3%; Other, 1% Defense (8/98): Army, 548,000; Navy, 60,000; Air Force, 52,000 (plus 35,910 U.S. troops)
ECONOMIC OVERVIEW Currency: Won (W) Exchange Rate (8/13/02): US$1 = 1,201 Won
Real GDP Growth Rate (2001E): 3.3% (2002E) 5.8% Inflation Rate (consumer prices)(2001E): 4.1% (2002E) 3.1% Unemployment Rate (5/02E): 3.7% Current Account Balance (2002E): $4.6 billion Merchandise Exports (2002E): $164.7 billion Merchandise Imports (2002E): $152.8 billion Merchandise Trade Balance (2002E): $11.9 billion Major Exports: Electronics, textiles, ships, automobiles, steel, computers, footwear Major Imports: Crude oil, food, machinery and transportation equipment, chemicals and chemical products, base metals and articles. Top Trading Partners: U.S., Japan, China, Germany
ENERGY OVERVIEW Oil Consumption (2001E): 2.1 million barrels per day (bbl/d); all imported Crude Oil Refining Capacity (1/1/02): 2.6 million bbl/d Natural Gas Consumption (2000E): 669 billion cubic feet (bcf)--all imported LNG Recoverable Coal Reserves (2000E): 86 million short tons (Mmst) Coal Production (2000E): 4.6 Mmst Coal Consumption (2000E): 71.7 Mmst Electric Generation Capacity (1/1/00E): 50.0 gigawatts Electricity Generation (2000E): 273.2 billion kilowatthours
ENVIRONMENTAL OVERVIEW Minister of Environment: Kim Myung-ja Total Energy Consumption (2000E): 7.9 quadrillion Btu* (2.0% of world total energy consumption)
Energy-Related Carbon Emissions (2000E): 115.3 million metric tons of carbon (1.8% of world carbon emissions) Per Capita Energy Consumption (2000E): 166.7 million Btu (vs. U.S. value of 351.1 million Btu) Per Capita Carbon Emissions (2000E): 2.4 metric tons of carbon (vs. U.S. value of 5.6 metric tons of carbon) Energy Intensity (2000E): 12,759 Btu/$1995 (vs U.S. value of 10,919 Btu/$1995)** Carbon Intensity (2000E): 0.19 metric tons of carbon/thousand $1995 (vs U.S. value of 0.17 metric tons/thousand $1995)** Sectoral Share of Energy Consumption (1998E): Industrial (55.7%), Transportation (20.2%), Commercial (15.1%), Residential (9.0%) Sectoral Share of Carbon Emissions (1998E): Industrial (49.8%), Transportation (24.0%), Commercial (17.1%), Residential (9.1%) Fuel Share of Energy Consumption (2000E): Oil (58.3%), Coal (20.4%), Natural Gas (9.5%) Fuel Share of Carbon Emissions (2000E): Oil (56.0%), Coal (34.6%), Natural Gas (9.4%) Renewable Energy Consumption (1998E): 177 trillion Btu* (9% decrease from 1997) Number of People per Motor Vehicle (1998): 4.4 (vs. U.S. value of 1.3) Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified December 14th, 1993). Signatory to the Kyoto Protocol (signed September 25th, 1998 - not yet ratified). Major Environmental Issues: Air pollution in large cities; water pollution from the discharge of sewage and industrial effluents; drift net fishing. Major International Environmental Agreements: A party to the AntarcticEnvironmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands and Whaling. Has signed, but not ratified, Desertification.
* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and
animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data. **GDP based on EIA International Energy Annual 2000
ENERGY INDUSTRY State Energy Companies: Korea National Oil Corporation(KNOC); Daehan Oil Pipeline Corporation (DOPCO); Korea Electric Power Company (KEPCO); Korea Gas Corporation (KOGAS) Major Oil Companies (Private): SK Corporation; LG-Caltex; S-Oil (formerly Ssangyong Oil); Hyundai Oil Major Refineries (1/1/02 Capacity): Ulsan (817,000 bbl/d); Onsan (520,000 bbl/d); Yocheon (633,600 bbl/d); Daesan (310,000 bbl/d); Inchon (270,000 bbl/d) Major Ports: Pusan, Inchon, Kunsan, Mokpo, Ulsan LNG Regasification Terminals: Pyongtaek, Inchon ___Economy
__Overview Prior to the economic crisis of 1997, Korea's impressive growth performance was part of what has been described as the East Asian miracle. The three decades of extraordinary growth that transformed Korea from one of the poorest agrarian economies to the 11th largest economy and exporting country in the world, culminated in its accession to the Organization for Economic Cooperation and Development (OECD) on December 12, 1996. Korea's rapid development was driven by very high rates of savings and investment and a strong emphasis on education, which boosted the number of young people enrolled in universities to among the highest levels in the world.
Korea's path to development, however, was full of challenges and obstacles. After its independence from Japan in 1945, Korea's economic development was a matter of national survival. With limited natural resources, insufficient domestic market, and virtually no tradition of economic development experience, Korea set out to insure its sovereignty through establishing a stable and independent economy.
However, the Korean War (1950-1953) merely prolonged the economic instability and stagnation. The number of civilian war casualties, including those missing, was approximately 1.5 million, and the nonmilitary war damage incurred to buildings, structures, equipment, facilities and movable assets was estimated to be about US$ 3.1 billion at 1953 price.
The physical war damage incurred to the civilian economy was equivalent to about 85% of South Korea's 1953 GNP. During the postwar reconstruction period (19531960), the rate of economic growth was quite low despite the massive inflow of foreign aid. Nonetheless, between 1953 and 1995, Korea's GNP grew at an average annual rate of 7.6%, thus resulting in about 21-fold increase in the level of GNP. ___The Judiciary
In Korea, judicial power is vested in the courts, which the constitution established as an independent branch of the government. The court system functions on three levels: the Supreme Court, appellate courts (High Courts), and district courts (including branch courts). Besides the three-tier court system, the judiciary also operates a family court, an administrative court and a patent court. The courts hand down decisions in litigations involving civil, criminal, administrative, election and other matters.
__The Supreme Court The Supreme Court, the highest judicial tribunal of the nation, consists of a Chief Justice and thirteen Justices. In the Court, located in Seoul, cases are heard by either the Grand Bench composed of the justices sitting "Full Bench," in which the entire membership of the court participates in the decision, or the Petty Benches, each of which is usually composed of four justices.
The Court deals with appeals against judgments or decisions rendered by the high courts and the appellate divisions of district courts. The Court also has exclusive jurisdiction over the validity of a presidential election or general elections. It is empowered to make a final review of the legality of administrative decrees, regulations or dispositions. The Supreme Court may establish rules regarding internal regulations, administration of the court, and trial procedures.
The grounds for appeal to the Court are prescribed. In civil cases, they are limited to constitutional and legal questions pertaining to the judgments of lower courts. In criminal lawsuits, an appeal may be brought in case of violations of the constitution or the laws, the abolition, alteration or excuse of a penalty; a grave error in fact-finding; or extreme impropriety in sentencing.
__Appellate Court An appellate court consists of a presiding judge and usually three associate judges. It hears appeals against verdicts of district or family courts in civil or criminal cases, administrative cases, or special cases designated by law. There are five appellate courts in the country - Seoul, Daegu, Busan, Gwangju and Daejeon. They hold their own trials and reach decisions for or against the verdicts of the lower courts. Only appellate courts can adjudicate administrative litigations filed by individuals or organizations against any government decisions, order, or disposition.
__District Court District courts, which have primary jurisdiction over most cases, are set up in Seoul and 12 major cities, most of which are provincial capitals. The Seoul District Court is divided into two separate courts; the Seoul Civil District Court and the Seoul Criminal District Court. A single judge usually conducts trials at these courts, but a three-judge panel is mandatory in such serious cases as civil cases involving amounts in excess of 50 million won (about US$ 40,000), and criminal cases involving sentences of death, penal servitude or imprisonment of more than a year.
As of May 2002, there are 43 branch courts and 103 municipal courts in the nation. The primary purpose of these courts is to manage and deal with the affairs of the district courts. Municipal courts, which were created to maximize judicial services to local people, have replaced circuit courts. Municipal court judges preside over small claims, misdemeanor offenses, and divorce by mutual agreement.
The Family Court is empowered to hear all cases involving matrimonial, juvenile, or other domestic matters. Court sessions are closed to the public to insure the privacy of the individuals concerned. At present, the Family Court is located only in Seoul. In other places, the district court handles such matters.
The Administrative Court, opened in Seoul on March 1, 1998, hears administrative cases only. District courts outside of Seoul perform the functions of the Administrative Court in their respective districts.
The Patent Court, which heard its first case in Daejeon in March 1998, reviews decisions made by the Patent Office as an intermediate appellate venue. The Supreme Court plays a role as the final hearing of patent disputes. The ordinary district courts, however, still have jurisdiction over infringement cases.
__Qualification and Appointment The President, with the consent of the National Assembly, appoints the Chief Justice of the Supreme Court. The President also appoints other justices of the Court upon the recommendation of the Chief Justice. The Chief Justice selects lower court judges, while the President appoints all justices on the Constitutional Court. The Judiciary and the National Assembly together select a list of candidates from which the President must choose.
All judges are appointed from among the successful candidates who have passed the Judicial Civil Service Examination and completed the two-year training program at the Judicial Research and Training Institute.
__Constitutional Court The Constitutional Court, established in September 1988, protects the Constitution by having the final say on the constitutionality of any law passed by the National Assembly. This is done through a majority decision of the Constitutional Court upon the request of a lower court, or upon request of a party who has filed a Constitutional complaint.
The Court also validates the legality of impeachment proceedings and judgments of any high-ranking public officials, including the President, Prime Minister or a judge.
The Constitutional Court also safeguards the Constitution by protecting the fundamental rights of citizens. Anyone whose fundamental rights, guaranteed by the Constitution, has been infringed upon may file a petition for relief or remedy to the
Constitutional Court. Anyone whose constitutional rights have allegedly been aggrieved by a legislative act may also resort to the Court by means of a Constitutional complaint ___Science and Technology
Korea's prowess in science and technology (S&T) has been growing steadily since the 1980s, as the country's rapid economic development has demanded more advanced and dynamic research and development (R&D) activities.
Investments in technology have increased 20-fold from $480 million in 1980 to $10 billion in 2000, while technology investment per gross domestic product (GDP) has soared from 0.84 percent to 2.68 percent during the same period. Even in the middle of the foreign currency crisis of 1997-98 and the ensuing economic hardship, Korea was able to raise R&D investment from 3.6 percent of the total government budget to 4.7 percent, which amounted to $3.85 billion in 2002. The number of specialists engaged in science and technology has surged from 18,500 in 1980 to 160,000 in 2000.
This quantitative growth led to increases in the number of research papers registered with the science citation index (SCI) and international patent applications. In addition, Korea ranked 5th in the world in the S&T achievement indicator developed by the UN Development Program, which takes into account patent registration, technology exports and overall education levels. It also ranked 10th in the Financial Times' knowledge-based indicator.
In recent years, however, a decreasing number of young students seem to choose careers in S&T-related areas and the morale among scientists and engineers is lower than before. In addition, the rapid expansion of science and technology investment has raised concerns over its efficiency.
To cope with this worrisome situation, the government created the National Science and Technology Council (NSTC) in April 1999 to strengthen the overall coordination of national S&T policies. The NSTC would also enhance the efficiency of R&D investment by concentrating on the development of technologies in the fields of information technology (IT), biotechnology, nanotechnology, environmental technology, cultural contents technology and space science. Its main role is to coordinate major policies
for promoting S&T, expand the S&T-related investment and set priorities for national R&D programs. The NSTC consists of 19 members including the cabinet members related to science and technology. The President chairs the council.
The government will continue to boost the country's industrial competitiveness by combining information technology, nanotechnology, and biotechnology with the nation's strategic areas such as semiconductor, shipbuilding, automobile, steel, chemistry, and textile industries. To promote basic science and foster high caliber, creative researchers and scientists, the government will increase its budgetary investment in basic sciences from 19 percent in 2002 to 25 percent by 2006, and foster some 400,000 experts in six national strategic areas: IT, biotechnology, nanotechnology, space science, environment and cultural technologies by 2005. It will also take various steps to tap the talents of women in the development of technology. Some of the measures include an employment quota system for women and recruiting more female students to science and technology fields.
To help boost the morale of scientists and engineers, the government plans to establish a National Research Fellowship System, so that dedicated researchers are recognized with presidential awards and have access to research funds and pension benefits. The government will also actively seek to internationalize Korean R&D activities to challenge the global R&D networks and trends. To this end, the government will gradually open its R&D projects to foreign institutions and researchers to build a quality research environment for both leading foreign researchers and local scientists. ___Logistics
The era of globalization and economic liberalization has drawn new attention to the importance of transportation and logistics. An increasing number of businesses have begun to look for access to logistics hubs that offer better business environment and comparative advantages. In order to meet this challenge in modern logistics, Korea has steadily pursued logistics modernization programs. Ultimately, Korea hopes to become a logistics hub in Northeast Asia.
The nation's aviation market has been expanding at an annual rate of 14 percent on domestic routes and 22 percent on international lines since the 1970s. From the late 1980s the government took a variety of actions to stimulate the industry. One was deregulation and the other was licensing a second carrier, Asiana Airlines. Moving into the 21st century, the government continues to expand its air transport improvement programs. As a result, Korea now has two flag carriers, Korean Air and Asiana that offer services to and from as many as 82 foreign cities across 30 countries, carrying up to 42 million passengers annually. The combined rank of Korean Air and Asiana is 6th in cargo handling and 11th in the passenger-carrying capability in the world. Korean Air Lines (KAL), the predecessor of Korean Air, started operation with two small passenger planes in the 1960s.
The new Incheon International Airport, 25 miles west of Seoul, is vying to become an air transport hub of Northeast Asia. The new high-tech airport, which opened for service in March 2001, boasts 27 million in passenger capacity and 1.7 million tons in freight per year. When the final phase of the airport construction is completed in 2020, its yearly capacity would jump to 100 million passengers and 7.5 million tons of cargo. The airport is strategically located at the geographic center of Northeast Asia, and 40 cities, with a population of over one million, are within a three-hour flight from this modern airport.
More than 800 international flights per week are currently flying between Seoul and major cities around the world. Gimpo Airport (the former Kimpo) is the nation's second largest airport, and serves domestic routes, with its passenger capacity standing at 25.5 million per year. It also provides backup service for Incheon International Airport.
__Ports Ports in Korea handle an estimated 99 percent of the nation's entire export and import freight. Thus the ports represent both the core distribution arm of the Korean economy and the center of logistics, waterfront industries, fisheries and international trade.
The Port of Busan (the former Pusan), located in southeastern Korea, is the nation's principal gateway linking the Pacific Ocean to the Asian continent. In 2001, it processed a total of 7.9 million TEU in freight, becoming the world's third largest port (in terms of container shipments). The port handles about 43 percent of the nation's exports and 95 percent of the total container loads. Currently, it is serving more than
50 foreign carriers from all over the world, proving that it has already become a hub port, both regionally and globally.
In order to increase port capacities, the government is currently in the process of expanding two major ports, the Ports of Busan and Kwangyang. In 2001, when the initial expansion works at these ports were completed, Korea's container handling capacity rose to 8 million TEUs. The capacity will increase to a total of 14 million TEUs by 2011. The construction of an additional container terminal is also under way near Gadeokto, west of Busan. When completed, the piers would serve a total of 24 modernized berths. The first ten berths are scheduled for completion in 2005.
In terms of total cargo transport (exports and imports), Korea handled 886 million tons in 2001, which represented almost a 100-fold increase from the 9 million tons in the 1960s. As of April 2002, 28 international trade ports are in operation in Korea.
__Improvement of Logistics Systems Under the 10-year Freight Transportation Improvement Plan, the government aims to establish a hub-and-spoke distribution network, linking all major transportation centers across the nation. To achieve the goal, the government will continue to construct freight distribution facilities. In all, 39 freight distribution facilities, including truck terminals, warehouses, wholesale markets, will be constructed by 2011, in addition to highway networks. These facilities would certainly facilitate a more systematic movement of goods at lower logistics cost.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.