Economy of South Korea
South Korea has a market economy that ranks 11th in the world by nominal GDP and 13th by purchasing power parity (PPP). It is a developed country, with a developed market and a high-income economy. South Korea is a member of the Organization for Economic Co-operation and Development (OECD) and the G-20 major economies. South Korea had one of the world’s fastest growing economies from the early 1960s to the late 1990s, and remains one of the fastest growing developed countries in the 2000s.
South Korea’s rigorous education system and the establishment of a highly motivated and educated populace is largely responsible for spurring the country’s high technology boom and rapid economic development. Having almost no natural resources and always suffering from overpopulation in its small territory, which deterred continued population growth and the formation of a large internal consumer market, South Korea adapted an export-oriented economic strategy to fuel its economy, and in 2014, South Korea was the seventh largest exporter and seventh largest importer in the world. Bank of Korea and Korea Development Institute periodically release major economic indicators and economic trends of the economy of South Korea.
The growth of ICT industry in South Korea has been far concentrated on the hardware sector, which focuses on expanding wired and wireless telecommunication network penetration rather than the software sector, which creates innovative applications and value-added services. The economy of South Korea is the global leader of Consumer electronics, Mobile Broad-band and Smartphone. The economy of South Korea ranks No.1 in the world in 2015 Bloomberg Innovation Index.
Renowned financial organizations, such as the International Monetary Fund, compliment the resilience of the South Korean economy against various economic crises, citing low state debt, and high fiscal reserves that can quickly be mobilized to address any expected financial emergencies. Other financial organizations like the World Bank describe Korea as one of the fastest-growing major economies of the next generation along with BRIC and Indonesia. South Korea was one of the few developed countries that was able to avoid a recession during the global financial crisis, and its economic growth rate reached 6.1% in 2010, a sharp recovery from economic growth rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis hit. The South Korean economy again recovered with the record-surplus of US$70.7 billion mark of the current account in the end of 2013, up 47 percent growth from 2012, amid uncertainties of the global economic turmoil, with major economic output being the technology products exports.
South Korea was a historical recipient of official development assistance (ODA) from OECD. Throughout the 1980s until the mid-1990s, South Korea’s economic prosperity as measured in GDP by PPP per capita was still only a fraction of industrialized nations. In 1980, the South Korean GDP per capita was $2,300, about one-third of nearby developed Asian economies such as Singapore, Hong Kong, and Japan. Since then, South Korea has advanced into a developed economy to eventually attain a GDP per capita of $30,000 in 2010, almost thirteen times the figure thirty years ago. The whole country’s GDP increased from $88 billion to $1,460 billion in the same time frame.
On June 23, 2012, South Korea is landmarked to become the 7th member of the 20-50 club (with the population surpassing 50 million and maintaining per capita income of US$20,000), chronologically, after Japan, United States of America, France, Italy, Germany and United Kingdom. A free trade agreement between the United States of America and the Republic of Korea was concluded on April 1, 2007. The European Union–South Korea Free Trade Agreement was signed on 15 October 2009. The South Korean economy is heavily dependent on the energy imports and the related refinery technologiesin association with the Ministry of Knowledge Economy and in accordance with the South Korea-Australia Free Trade Agreement. The Canada–South Korea Free Trade Agreement was concluded in 2014. China–South Korea Free Trade Agreement went official on November 10, 2014. South Korea has the largest indoor Amusement park in the world, Lotte World, adding to the notable export-oriented music industry guided by the Ministry of Culture, Sports and Tourism of the Republic of Korea.