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Up until the 1960s, South Korea was one of the poorest countries in the world. Still reeling from the effects of Japanese colonial rule and the Korean War, the economy ran on subsidence agriculture. However, under rigorous control by the state and an export-oriented industrialization strategy, South Korea developed into a dynamic industrial nation in less than a generation.
The recovery after the "Asian crisis" 1997/1998 as well as the extremely minor scare in the wake of the global financial crisis of 2008/2009 is owed by South Korea to its consistent reform policy.
South Korea is a G20 country and ha since 1996 been a member of the OECD. With a gross domestic product of 1.41 trillion USD (2014), it is the 14th largest economy in the world. The resultant gross national income per capita stands at $ 28,180 USD. In the area of foreign reserves, South Korea occupies the seventh rank in the world with a total of 363 billion USD in reserve.
The inflation rate on consumer prices was 0.7 percent in August 2015 (2014: 1.3 percent). The prime rate since 11 June 2015 is 1.5 percent. The government's total debt was at the end of 2014 stood at 35.7 percent of the GDP, a comparatively healthy value. In 2014, Korea achieved an economic growth of 3.3 percent. A growth of about 3.1 percent for FY 2015/2016 is expected. The unemployment rate in July 2015 was recorded at 3.7 percent.
The foreign trade turnover (imports and exports) amounted to a total of 1.099 trillion USD in 2014, representing an increase of 2.2 percent over the previous year. China (excluding Hong Kong), the EU, the US and Japan are among South Korea’s main trading partners.
Exports increased in 2014 by 2.4 percent over the previous year. Main export goods of South Korea are chemical products, semiconductors, machinery, electronics, petroleum products, steel products, cars and ships. Imports also increased in the same period by 1.9 percent. Main imports are crude oil, machinery/precision equipment, chemical products, semiconductors and natural gas.
Why invest in South Korea?
- In addition to a general commitment to multilateral world trade talks, the Korean government has systematically included free trade agreements to its policy in recent years. FTAs with Singapore, EFTA, Chile, ASEAN, India, Peru, the EU, the USA, Australia, Vietnam, Canada and Turkey are in force. Negotiations are going on with Mexico, the Gulf Cooperation Council (GCC), Indonesia and Japan. In addition, a trilateral trade agreement between South Korea, Japan and China is in negotiations.
- South Korea is termed as one of the best international business destinations. This can also be concluded from the fact that more than 7,500 international corporations have operations in the country.
- South Korea has a diligent and highly efficient work force that is a product of a world class educational system.
- With a population of 50 million and a per capita income in excess of 27,000 USD, South Korea presents an attractive market for consumer goods and services.
- South Korea has highly developed infrastructure and quality of life. It ranks 15th in the world in terms of human development.