Desarrollo de la Economía Coreana

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Development of Korean Economy

Wongun Song

2012. 10. 17


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Colonial Period(1910~1945)


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http://www.koreascope.org/sub/2/index10.htm


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Destroyed by Korean War(1950~1953)


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Industrialization after Korean War

Discard Import SubstitutionIndustrialization Policy

Adopt Export-led Industrialization Strategy Government support for exporting

companies in general

Only Companies that provedcompetitiveness in the world market weresubsidized by the government


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Changes in Industrial Structure

Starting from Labor-intensiveIndustry(1960s)

As Korean economy and exports grew,technology was developed.

Higher education

Basis for Capital-intensive industry(Heavyand Chemical Industry since 1970s)


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Leadership

I have longed for eliminating deeply -rooted poverty in Korea through my entire life.

-President Park Chung Hee-


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Blood and Sweat


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254320

6021,034

2,0763,321

5,418

11,432 10,841

7,355

16,413

20,045

Miracle of the HanRiver


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Stabilization and Liberalization (1980s)

Elimination of Price controls onnecessities(1982)

Reduction of government expenditure

Opening the market and liberalization


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Financial Market Liberalization(1990s)

Less Developed Financial Sector

East Asian Currency Crisis

IMF Bailout and Rescue Package


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Structural Reform

Corporate Sector Reform : 16 out of 30 biggestconglomerates disappeared

Financial Sector Reform : Restructuring of financial institutions including banks

Public Sector Reform : Privatization

Labor Market Reform : partially allowance of massive layoff


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1961

GDP : 2.3 bn$

Major Exporting ProductsIron ore, Tungsten,Raw-silk, Anthracite, Squid,Fresh fish, Graphite,Plywood, Rice, Swine

bristles

College Entrance Rate : 5%

2010GDP : 929.1 bn$

Major Exporting ProductsVessel, Semi-conductor, Display,Automobiles, Auto-parts,Synthetic Resins, Cellular Phones,Diesel, Parts of Wireless Device,Jet oil and Kerosene

College Entrance Rate : 82%


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1966

1 car per 100households

Total No. of Cars:50,000

Vs.363 timesincrease

2011. 3

1 car per 1 householdTotal No. of Cars:

18 million


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Korea in 2012 (Now)


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Korea in 2012 (Now)


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GDP Rankings in 2011 (billions of US$)

Rank Nation GDP Rank Nation GDP1 US 15,075.6 9 Russia 1,850.4

2 China 7,298.1 10 India 1,826.8

3 Japan 5,866.5 11 Canada 1,738.9

4 Germany 3,607.4 12 Austrailia 1,486.9

5 France 2,778.1 13 Spain 1,479.5

6 Brazil 2,492.9 14 Mexico 1,153.9

7 UK 2,431.3 15 Korea 1,116.2

8 Italy 2,198.7 World 69,899.2

Source: IMF


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Entrepreneurship

Lee Byungchul(founder of Samsung)

Food industry IT globalized

Chung Joo Young(founder of Hyundai)

Construction automobile globalized


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Competitiveness of Korean Companies(Fortune Global Top 500 Firms in 2011)

Korean Top 500 Firms Global Ranking

SAMSUNG Electronics 22

HYUNDAI Motor 55

SK 82

POSCO 161

LG Electronics 171HYUNDAI Heavy Ind. 220

GS 238

KEPCO 271

Hanwha 321

SAMSUNG Life Ins. 333LG Display 440

DOOSAN 489

SAMSUNG C&T 492

KOGAS 498

Rank Nation # of Firms

1 U.S.A 133

2 Japan 68

3 China 61

4 France 35

5 Germany 34

6 U.K 30

7 Swiss 15

8 Korea 14

9 Netherland 12

10 Canada 11

11 Italy 10

12 Spain 9

13 Australia 8

14 India 8

15 Taiwan 8


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Competitiveness of Korean Companies

Burj Khalifa(Dubai) Marina Bay Sands(Singapore)


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* Causes of Poverty in Korea- Insecure Property Rights- Corruptions, Official Robbers

Isabella Bird Bishop(1831-1904)

Korea and her Neighbours
http://upload.wikimedia.org/wikipedia/commons/3/36/Isabella_Bird.jpg


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Importance of Market Economy

PropertyRights Ownership

MarketEconomy Competition

Export-ledGrowth

WorldMarket

Engine of KoreanEconomic

Development


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Importance of Market Economy


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Changes and Innovation

Doosan

1896

Park Seung- jik(founder) : sales of

traditional cosmetics

Past

Business on Food andBeverage

(OB Beer, Korean wine)

2012

Turbine engine,Construction equipments

InfrastructureSupport Business


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Changes and Innovation

SK

Sunkyung Fabrics

established

Wooven Fabric

Products

M&A Energy &

Wireless

Communication

Companies

Energy,

Petrochemical,

Service, and

Telecom


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Global Strategy of Korean Companies

India Islam


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Becoming a global company fromCrisis Hyundai Motors

Share of Hyundai Motors in US mid-sized car market

7.9%(08) 9.6%(09) 13.0%(10.9)


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New Engine of Growth


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Ch ll i bl h


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Challenges to sustainable growth

(Reduction of Growth Potential) * GDP growth rate(%) : (81~90) 8.7 (91~95) 7.5 (96~00) 4.1 (01~07 ) 4.6

(Stagnation of Job Creation) Jobs increased(average) : (91~00) 31 (01~07) 33 (08) 14.4 (09) 1.6

(10) 32.2

(Low Fertility & Aging) * Fertility rate : (04) 1.15 (05) 1.08 (06) 1.12 (07) 1.25 (08) 1.19 (09) 1.16* turn into aging society very rapidly

(Global Economic Stagnation) Reduction of external demand negative effect on exports negative effect on

growth


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Policies for further Development

(Policies to encourage growth)

1. Improve business environments to increase investments and employments

2. Labor Market Reform, Regulatory Reform, Tax cuts

(Expand Domestic Demand & Trade Liberalization)

1. Regulatory and institutional reform for the service sector

2. East Asian Economic Integration , expand trade liberalization


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Desarrollo de la Economía Coreana

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