South Korea Background:
Korea was an independent kingdom under Chinese suzerainty
for most of the past millennium. Following its victory in
the Russo-Japanese War in 1905, Japan occupied Korea; five
years later it formally annexed the entire peninsula. After
World War II, a republic was set up in the southern half of
the Korean Peninsula while a Communist-style government was
installed in the north. During the Korean War (1950-1953),
US and other UN forces intervened to defend South Korea from
North Korean attacks supported by the Chinese. An armistice
was signed in 1953, splitting the peninsula along a demilitarized
zone at about the 38th parallel. Thereafter, South Korea achieved
rapid economic growth with per capita income rising to roughly
18 times the level of North Korea. In 1987, South Korean voters
elected ROH Tae-woo to the presidency, ending 26 years of
military dictatorships. South Korea today is a fully functioning
modern democracy. In June 2000, a historic first North-South
summit took place between the South's President KIM Tae-chung
and the North's leader KIM Jong Il.
South Korea Economy
Overview:
Since the early 1960s, South Korea has achieved an incredible
record of growth and integration into the high-tech modern
world economy. Four decades ago GDP per capita was comparable
with levels in the poorer countries of Africa and Asia. Today
its GDP per capita is 18 times North Korea's and equal to
the lesser economies of the European Union. This success through
the late 1980s was achieved by a system of close government/business
ties, including directed credit, import restrictions, sponsorship
of specific industries, and a strong labor effort. The government
promoted the import of raw materials and technology at the
expense of consumer goods and encouraged savings and investment
over consumption. The Asian financial crisis of 1997-99 exposed
longstanding weaknesses in South Korea's development model,
including high debt/equity ratios, massive foreign borrowing,
and an undisciplined financial sector. Growth plunged to a
negative 6.6% in 1998, then strongly recovered to 10.8% in
1999 and 9.2% in 2000. Growth fell back to 3.3% in 2001 because
of the slowing global economy, falling exports, and the perception
that much-needed corporate and financial reforms had stalled.
Led by consumer spending and exports, growth in 2002 was an
impressive 6.2%, despite anemic global growth, followed by
moderate 2.8% growth in 2003. In 2003 the National Assembly
approved legislation reducing the six-day work week to five
days.
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CIA
World Factbook
