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 General Information > Economy |
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 Historical Review |
Korea, once known to be one of the world's poorest agrarian societies, has undertaken economic development in earnest since 1962. In less than four decades, it achieved what has become known as the "economic miracle on the Hangang River" a reference to the river that runs through Seoul-an incredible process that dramatically transformed the Korean economy while marking a turning point in Korea's history.
An outward-oriented economic development strategy, which used exports as the engine of growth, contributed greatly to the radical economic transformation of Korea. Based on such a strategy, many successful development programs were implemented. As a result, from 1962 to 2003, Korea's Gross National Income (GNI) increased from US$2.3 billion to US$606.1 billion, with its per capita GNI soaring from US$87 to about US$12,646. These impressive figures clearly indicate the magnitude of success that these economic programs have brought about.
Korea developed rapidly from the 1960s, fueled by high savings and investment rates, and a strong emphasis on education. The nation became the 29th member country of the Organization for Economic Cooperation and Development (OECD) in 1996. |
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| Recent Phase |
Five years after the outbreak of the Foreign Exchange Crisis, the Korean economy has gradually escaped from the control of the IMF. Although the government announced on November 21, 1997 that it sought financial assistance from the IMF, US$ 19.5 billion dollars was paid back to the agency on August 23, 2002, three years earlier than the agreed upon schedule. This was possible by a spontaneous gold-collection campaign supported by the people as well as the timely commitment of public funds by the government.
Today, most economic indices have either gone back to normal levels or have exceeded their pre-1997 levels. Economic growth rate registered 5% in 1997 and -6.7% for 1998 with a yearly average of 5.2% from 1999 to 2002. Unemployment rose to over 1 million and fell to 600,000 from 1998 to 1999. Meanwhile the prices of goods increased at a rate of 6% prior to the Foreign Exchange Crisis, this has been stabilized to around 3%. The current account surplus in particular has been maintained for the last five years, and the government has curbed its chronic deficits.
While traditional industries led the economic growth, financial insolvencies were excessive, and indirect financing was dominant before the outbreak of the Foreign Exchange Crisis the scope of economic fluctuations expanded, the IT industry led the economic growth with the rise of new industries, and direct financing became revitalized between 1998 and 2002 after the Foreign Exchange Crisis. This was the most noticeable change in the economic arena. The Cyber Mobile generation formed the mainstream, and consumption of cultural industries such as games and movies surfaced. |
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