Globalization in South Korea-John Trevino/Stephanie Jemilo

Category: Globalization

Economic Overview: Over the past four decades, South Korea has experienced tremendous economic growth and integration into the world economy. Its annual GDP is comparable to that of Greece and Spain, and in 2004, it joined the "trillion dollar club" of world economies. South Korea's economic success has been a result of close government/business ties on directed credit, import restrictions, sponsorship of specific industries, and a strong labor effort. To spur economic growth, leaders in South Kore ahave imported raw materials and technology and stressed the importance of investment over consumption. They have reached relative economic stability through a combination of low unemployment, moderate inflation, and an export surplus.
GDP Growth Rate: 4.8% (2007 estimate)
Labor Force (composition): agriculture (8.8%), industry (18.3%), services (72.9%)
Inflation Rate: 2.5% (2007 estimate)

Globalization: In the 80s, South Korea experienced a period of economic growth. The collaboration between businesses and governments regulated what was produced, how money was borrowed/repayed, etc. The government shifted its focus from industry to consumer goods, and eased import restrictions. In the 19088, when Seoul hosted the Summer Olympics, the economy relied less on exports in order to meet the demands of a growing domestic market. By the end of the decade, however, economic growth slowed and inflation rates were on the rise. In the early 90s, Kim Young Sam, a member of the Democratic Liberal Party, is elected and immediately introduces economic reform. The East Asian financial crisis of the mid 90s hit South Korea hard. The value of the Korean Won falls 50% against the dollar and GDP growth fell to -5.8%. In order to fend off a large-scale recession, the IMF granted South Korea a "bailout" of 58 billion USD. In 2000, the leaders of North and South Korea reconnected the Seoul-Sinuiju railway line (closed for 55 years)to stimulate inter-Korean trade. After hosting the 2002 World Cup, South Korea gained a global image as a vibrant and flourishing country. While its economy is steadily growing, increase tensions with North Korea have some economists worried.