South Korea's economic growth over the past 30 years has been spectacular. Per capita GNP, only $100 in 1963, exceeded $9,800 in 2002. South Korea is now the world's ninth largest economy.
In the early 1960s, the Park government instituted sweeping economic reforms emphasizing exports and labor-intensive light industries. The government carried out a currency reform, strengthened financial institutions, and introduced flexible economic planning. In the 1970s South Korea began directing fiscal and financial policies toward promoting heavy and chemical industries, as well as consumer electronics and automobiles. Manufacturing continued to grow rapidly in the 1980s and early 1990s. During the late 1990s and the 21st century, Korean high-tech industries became very competitive in global market, especially in comparison with that of Japan and Taiwan, and dominated in various international semiconductor chip production.
In recent years South Korea's economy moved away from the centrally planned, government-directed investment model toward a more market-oriented one. South Korea bounced back from the 1997-98 crisis with IMF assistance, and carried out extensive financial reforms that restored stability to markets. These economic reforms pushed by President Kim Dae-jung, helped Korea maintain one of Asia's few expanding economies, with growth rates of 10% in 1999 and 9% in 2000. The slowing global economy and falling exports account for the drop in growth rates in 2001 to 3.3%, but in 2002 Korea pulled out a very respectable 6.0% growth rate. Restructuring of Korean conglomerates (chaebols), bank privatization, and creating a more liberalized economy with a mechanism for bankrupt firms to exit the market remain Korea's most important unfinished reform tasks. As of 2004 the economic situation looks less promising than in the years before. Increasing trade with China, however, is expected to boost Korea to a leading position among Asia's developed economies. It is also expected to lead the world in penetrating Japan's trade barriers.
South Korea relies largely upon export to fuel the impressive growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports. Although the import market has liberalized in recent years, the agricultural market has remained largely protectionist due to serious disparities in the price of domestic agricultural products such as rice with the international market. As of 2005, the price of rice in South Korea is about four times that of the average price of rice on the international market, and it is generally feared that opening the agricultural market would have disasterous effects upon South Korean agricultural sector. In late 2004, however, an agreement was reached through the WTO by which South Korean rice imports will gradually increase from 4% of consumption to 8% of consumption by 2014. In addition, up to 30% of imported rice will be made available directly to consumers by 2010, where previously imported rice was only used for processed foods. Following 2014, the South Korean rice market will be fully opened.
Since 1988, two-way trade between the two Koreas has increased from $18.8 million in 1989 to $647.1 million in 2002. In 2002, South Korea imported $271.57 million worth of goods from North Korea, mostly agro-fisheries and metal products, while shipping $371.55 million worth of goods, mostly humanitarian aid commodities including fertilizer and textiles as inputs for North Korean garment manufacturers... South Korea is now North Korea's third-largest trading partner, after China and Japan. Numerous ventures by the Hyundai Group have contributed to North Korea's economy, including the Kŭmgang-san (Diamond Mountain) tourist site. Last year alone, 84,347 visitors traveled by Hyundai-operated passenger ships, and most recently via land routes, as part of this tourism initiative, raising the total number of South Korean visitors to over half a million (see Kŭmgang-san Tourist Region). A mere 1,141 North Koreans travelled to South Korea, mainly for joint sporting events. Hyundai Asan is also lined up to be the South Korean party that will help develop an 800 acre (3.2 km²) industrial complex in Kaesŏng, located near the Demilitarized Zone (DMZ), subject to final agreements, including between Seoul and P'yŏngyang. The year 2002 witnessed significant progress on the Seoul-Shinŭiju railroad, on both reconstructing road and rail links across the DMZ (as of early 2004 this process was stalled).
GDP: purchasing power parity - $931 billion (2002 est.)
GDP - real growth rate: 5.8% (2002 est.)
GDP - per capita: purchasing power parity - $19,400 (2002 est.)
GDP - composition by sector:
services: 54% (2002 est.)
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 0.8% (1999 est.)
Labor force: 22 million (1998)
Labor force - by occupation: services and other 68%, mining and manufacturing 20%, agriculture, fishing, forestry 12% (1998)
Unemployment rate: 6.3% (1999 est.)
revenues: $68.9 billion
expenditures: $82.3 billion, including capital expenditures of $14.5 billion (1998)
Industries: electronics, automobile production, chemicals, shipbuilding, steel, textiles, clothing, footwear, food processing
Industrial production growth rate: 22% (1999 est.)
Electricity - production: 221,258 GWh (1998)
Electricity - production by source:
fossil fuel: 59.56%
other: 0.02% (1998)
Electricity - consumption: 205,770 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: rice, root crops, barley, vegetables, fruit; cattle, pigs, chickens, milk, eggs; fish
Exports: $144 billion (f.o.b., 1999)
Exports - commodities: electronic products, machinery and equipment, motor vehicles, steel, ships; textiles, clothing, footwear; fish
Exports - partners: US 17%, Japan 9%, China 9%, Hong Kong 7%, Taiwan 4% (1998)
Imports: $116 billion (c.i.f., 1999)
Imports - commodities: machinery, electronics and electronic equipment, oil, steel, transport equipment, textiles, organic chemicals, grains
Imports - partners: US 22%, Japan 18%, China 7%, Australia 5%, Saudi Arabia 5% (1999)
Debt - external: $142 billion (1999)
Economic aid - recipient: $NA
Currency: 1 South Korean won (W) = 100 chun (theoretical)
Exchange rates: South Korean won (W) per US$1 - 1,130.32 (January 2000), 1,188.82 (1999), 1,401.44 (1998), 951.29 (1997), 804.45 (1996), 771.27 (1995)
Fiscal year: calendar year