Khushi Vaid, New Delhi
Economic growth in South Korea has accelerated at a never-before-seen rate. As the majority of the nation’s industrial facilities were destroyed during the three-year Korean War and the country was deprived of capital and natural resources, observers dubbed what the country has accomplished as the “Miracle on the Hangang.”
The nation pushed on with export-focused economic development goals at the start of the 1960s. The majority of the nation’s initial exports were either raw materials or light industrial products made in modest enterprises. The nation made investments in heavy chemical plants in the 1970s, laying the groundwork for the export of heavy industrial goods. The shipbuilding, iron/steel, and chemical industries are just a few of the current domestic industries with strong worldwide competitiveness. Around that period, the basis for such intense competition was laid.
The nation gained impetus to enter the group of semi-advanced nations after hosting the 1988 Seoul Olympic Games. Along with Taiwan, Singapore, and Hong Kong, the nation was referred to as one of the four Asian tigers by the world press. The nation joined the OECD in December 1996, becoming its 29th member to do so. The organisation is primarily made up of developed nations.
Picture Credits: Wikipedia
As a developing nation with limited money and resources, South Korea eventually developed a large-business centred export-oriented economic structure. Industry started to be dominated by conglomerates, and the economy of the nation grew very dependent on exports and imports, making it vulnerable to outside factors.
A currency crisis in November 1997 forced the nation to turn to the IMF for assistance. After several years of incredibly fast economic expansion, it was the first adversity the nation had to face. The nation adopted the severe measure of eliminating underperforming companies from the market before moving on with industrial restructuring. The nation regained its prior growth rate, price levels, and current account balance surplus in under two years. Around 3.5 million people participated in the drive to collect gold to aid the government in paying back the money it borrowed from the IMF during this time. 227 tonnes of gold were gathered in total.
Picture Credits: Yale Global
The Korean people’s voluntary engagement and their tenacious endeavour to pay off their national obligations were admired by people all around the world. The nation benefited from certain incidental impacts, such as the adoption of the worldwide economic and financial system, while making determined attempts to escape the foreign exchange problems. But there were also negative aspects to the reorganization process. The fiscal burden on the government grew, and the income gap widened.
South Korea’s economy continued to grow strongly after emerging from the economic crises. With the exception of the time of the global economic crises, nominal GDP doubled from US$504.6 billion in 2001 to US$1,049.3 billion in 2007, registering a strong growth rate of 4-5% annually. In fact, the nation experienced an incredible 6.3% economic growth rate from 2008 to 2010, despite the fact that the majority of the world was suffering from a severe financial crisis. The achievement of the nation was described as a “textbook recovery” by the major mass media outlets throughout the world.
Picture Credits: The Korea Herald
The constitution of South Korea stipulates that “the right of property shall be guaranteed for every citizen.” In short, the country has adopted the market economy system, respects individuals’ and businesses’ right to conduct free economic activities, and guarantees the profits and properties made and accumulated by them. However, the Constitution does not guarantee the limitless, unfettered pursuit of capitalistic free economy. According to the Constitution, an unfair situation must be corrected if it is discovered that the misuse of capital as a tool designed to advance the free market economy is harming people.
Picture Credits: Wikipedia
The GDP of South Korea is currently the 10th largest in the world and the 4th largest in Asia. It belongs to both the G-20 and the OECD. It is one of the Next Eleven nations because it has the potential to control the world economy by the middle of the twenty-first century.