2014 Trade and Investment Profile
One of the most dynamic countries in the world, South Korea has emerged from a chaotic history, and has rightfully ascended the ladder to become a world power. Bordering North Korea in the south and separated from China and Japan by the Sea of Japan, Yellow Sea and Korea Strait, South Korea is an active participant in what is one of Asia’s most historically volatile areas.
The country has shown remarkable resilience by shuttering its stricken past to become one of Asia’s most stable democracies. Its citizens enjoy one of the highest levels of political freedom and social rights – a stark contrast to the rigid and totalitarian regime of its neighbor North Korea. South Korea’s transition from poverty to riches is one of modern civilization’s most inspirational stories.
The economic ascent over the past four decades, thanks mainly to rapid industrialisation and the government’s pro-business policies, has inspired many less-developed countries around the world to adopt South Korea’s model of growth that enabled Korea to emerge as the third largest economy in Asia and to be counted among the “Asian Tigers” such as Hong Kong, Singapore, and Taiwan.
The small, open economy of just 50 million people managed to build some of the most coveted global brands, emerging as the twelfth largest economy in the world, with a per capita GDP of over $20,000. South Korea also enjoys the distinction of having clocked five consecutive decades of growth above 5%.
Following the lead of Japan, the first Asian economy to become fully industrialized, South Korea began making slow, but steady steps forward. Industry accounts for 40% of the economy’s GDP, while services contribute nearly 58% and agriculture a minuscule 3%. From having a GDP per capita income comparable to some of the impoverished Asian and African nations in the 1960s, South Korea leapfrogged to enter the trillion dollar club of global economies in 2004. The export-oriented economy’s dream run was interrupted briefly by the Asian financial crisis of 1997-98 and the global financial crisis of 2008-09.
However, Koreans have also proved themselves to be resilient in the face of adversity both during the Asian financial crisis and the global financial crisis. The economy’s open financial system made it particularly vulnerable to the churn in the global markets, yet the recovery was equally commendable as the country expanded by 6% in 2010.
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