South Korea’s main export commodities include automobiles, boats,
electric appliances and parts, fish, plastic products and synthetic resin,
while imports include petroleum products, professional and scientific
instruments, textiles and knitwear, timber, tobaccos, inorganic and organic
chemicals, cotton, crude oil, electric appliances and parts, fuel and iron
steel.
The Bank of Korea establishes the daily exchange rate of the WON, based on
the US Dollar and a few other currencies and the banks authorised to deal in
foreign exchange may do so without having to apply for exchange control
authority.
Import licences are granted only to registered traders.
Korean traders are required to import/export a minimum value of US$ 500,000
for at least 2 calendar years in order to maintain the status of a registered
trader and import licences are required for all goods.
Two free trade zones have been established at Masan and Iri, primarily to
assist and encourage foreign enterprises and joint ventures and foreign firms
operating in these zones will receive full exemption from all taxes.
Korea is a contracting party to the Harmonised Commodity Description and
Coding System.
South Korea is a democratic republic. Since its establishment in 1948, its constitution has undergone five significant changes. Each change resulting in a new republic. The current republic (the sixth one) resulted from the last constitutional revision in 1988. The powers in South Korea are shared between the President, legislature and the judiciary.
The head of state is the president, who is elected by direct popular vote for a single five year term. Currently the president is Roo Moo-Hyun. The president has considerable executive powers and appoints a prime minister with the approval of the national assembly. He also appoints and presides over the State Council of Chief Ministers as well as being the Commander-in-chief of the republic’s armed forces. Currently the Prime Minister is Han Myeong-Sook and the deputy-Prime Minister’s are Kim Jin-Pyo and Kim Woo-Shik
The South Korean legislature is the National Assembly, a unicameral body in which members serve a four-year term of office. The legislature has 299 seats, of which 243 are elected by regional vote. The remainder is distributed by proportional representation. The highest South Korean judiciary body is the Supreme Court, whose justices are appointed by the president with the consent of the National Assembly. The judiciary is largely independent of the presidency and the South Korean legislature. The judiciary also has a Constitutional court which oversees constitutional matters.
The main political parties in South Korea are the Uri Party, the Grand National Party (GNP), the Democratic Labour Party (DLP), and the Democratic Party (DP). The Uri Party was formed in late 2003 from a liberal faction of the DP (then the Millennium Democratic Party). It gained a slim majority in the National Assembly after the April 2004 legislative elections, but lost it in subsequent by-elections. The conservative GNP and centrist DP form the dominant political opposition. The progressive DLP is aligned with labour unions and farmers groups, and constitutes the left-wing opposition.
South Korea has the tenth largest economy in the world, and the third largest in Asia, behind only Japan and China. As one of the East Asian Tigers, it achieved rapid economic growth through exports of manufactured goods.
In the 1950s, South Korea was one of the poorest countries in Asia. At the end of World War II, the country inherited a colonial economic system designed solely for Japan's expansion policy. Much of the country's infrastructure was destroyed during the Korean War that followed in 1950-1953. After the war, South Korea became heavily dependent on U.S. aid.
Following the military coup led by general Park Chung-Hee in 1962, South Korea embarked on a series of ambitious five-year plans for economic development. Emphasis shifted to foreign trade with the normalisation of relations with Japan in 1965 and a subsequent boom in trade and investment. Rapid expansion, first into light and then heavy industries, in the 1960s and 1970s followed. During this period, the South Korean economy grew at an average annual rate of 8.6%.
This phenomenal growth is often called the "Miracle on the Han River", the Han River being the main river that runs through the nation's capital and largest city, Seoul. In the 1980s and 1990s, growth continued as South Korea transformed itself from an exporter of mostly textiles and shoes into a major global producer of automobiles, electronics, shipbuilding, and steel and later, high-technology fields such as digital monitors, mobile phones, and semiconductors.
The South Korean model of encouraging the growth of large, internationally competitive companies through easy financing and tax incentives led to the dominance of the family-controlled conglomerates. These companies, known as Chaebol, flourished under the support of the Park regime. Examples are Hyundai, Samsung, Daewoo, and LG all global corporations.
Since the Asian financial crisis of 1997, however, the corporate landscape has changed considerably as a result of massive bankruptcies and government reforms. The crisis exposed longstanding weaknesses in South Korea's economy, including high debt/equity ratios, massive foreign borrowing, and an undisciplined financial sector. This led to two rounds of financial and industrial restructuring, in 1997 and again following the collapse of Daewoo in 1999. Daewoo's collapse has been recorded as one of the world's largest bankruptcies in history. By 2003, just over one-half of the 30 largest chaebol from 1995 remained.
Between 2003 and 2005, economic growth has moderated to about 4% per year. A downturn in consumer spending, attributed to massive personal credit card debt, was offset by rapid export growth especially to China. In 2005, the government proposed labor reform legislation and a corporate pension scheme to help make the labor market more flexible, and new real estate policies to cool property speculation. Moderate inflation, low unemployment, an export surplus, and fairly equal distribution of income characterize this economy.
The major industries in South Korea are electronics, telecommunications, automobile production, chemicals, shipbuilding, and steel.
South Korea is a major exporter of the following products: semiconductors, wireless telecommunications, equipment, motor vehicles, computers, steel, ships and petrochemicals. Its main export partners are China; the United States of America; Japan; Hong Kong and Taiwan.
