Universidad Latina de Panama

Branch of David
Degree in English

Oratory III

Student:
Katiria J. Castillo M.

I.D.:
4-755-1732

Economy, currency, industry and agriculture of South Korea

Professor:
Libeyca G. de Castrovertde

Date:
March 19, 2018
 Currency

The won (symbol: ₩; code: KRW) or the Korean Republic Won is the currency of South Korea.
A single won is divided into 100 jeon, the monetary subunit. The jeon is no longer used for
everyday transactions and appears only in foreign exchange rates. The won is issued by the Bank
of Korea, based in the capital city of Seoul. The official currency of North Korea, issued by the
Central Bank of the Democratic People's Republic of Korea which is based in its capital city,
Pyongyang, is divided into the same number of units, and is known as the North Korean won. The
old "won" was a cognate of the Chinese yuan and Japanese yen. It is derived from the hanja 圓
(원), meaning "currency" or "coin." The won was subdivided into 100 jeon (Hangul: 전; Hanja:
錢; RR: jeon; MR: chŏn), itself a cognate of the Chinese character 錢 (qián) which means "money"
and also used as a unit of money in ancient times. The current won (1962 to present) is written in
hangul only.
 Economy
South Korea over the past four
decades has demonstrated
incredible economic growth and
global integration to become a high-
tech industrialized economy. In the
1960s, GDP per capita was
comparable with levels in the poorer
countries of Africa and Asia. In
2004, South Korea joined the
trillion-dollar club of world
economies. A system of close
government and business ties,
including directed credit and import
restrictions, initially made this
success possible. The government
promoted the import of raw
materials and technology at the
expense of consumer goods and
encouraged savings and investment
over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in
South Korea's development model, including high debt/equity ratios and massive short-term
foreign borrowing. GDP plunged by 7% in 1998, and then recovered by 9% in 1999-2000. South
Korea adopted numerous economic reforms following the crisis, including greater openness to
foreign investment and imports. Growth moderated to about 4% annually between 2003 and 2007.
South Korea's export-focused economy was hit hard by the 2008 global economic downturn, but
quickly rebounded in subsequent years, reaching over 6% growth in 2010. The US-Korea Free
Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012.
Between 2012 and 2016, the economy experienced slow growth – 2%-3% per year - due to
sluggish domestic consumption, a drop in foreign demand for South Korean exports, increased
competition from regional rivals such as China and Japan, and declining investment. The
administration in 2016 faced the challenge of balancing heavy reliance on exports with domestic
restructuring efforts in the country’s shipbuilding and shipping industries. The South Korean
economy's short-term challenges include a potential loss of consumer confidence due to issues
with its mobile phone industry, as well as uncertainty stemming from a tumultuous domestic
political situation. In the long-term, South Korea must deal with a rapidly aging population,
inflexible labor market, dominance of large conglomerates (chaebols), and the heavy reliance on
exports, which comprise more than 40% of GDP. South Korea’s low overall unemployment rate
masks problems with high youth unemployment, low worker productivity, high labor
underutilization, and low female participation in the workforce. The government has tried to
implement structural reforms but continues to face significant headwind from vested interests.
Finally, the country could eventually face an unprecedented financial burden in the event the
unification of the Korean Peninsula was to occur.
 Industry

South Korea is a sovereign state in East Asia, constituting the southern part of the Korean Peninsula.
Highly urbanized at 92%, South Koreans lead a distinctive urban lifestyle; half of them live in high-rises
concentrated in the Seoul Capital Area with 25 million residents and the world's sixth-leading global city
with the fourth-largest economy and seventh-most sustainable city in the world.
South Korea is East Asia's most developed country in the Human Development Index. Driven by a highly
educated and skilled workforce, it has the world's eighth-highest median household income, the highest in
Asia, and its singles in particular earn more than all G7 nations. Globally, it ranks highly in personal
safety, job security, ease of doing business and healthcare quality, with the world's third-highest health
adjusted life expectancy and fourth-most efficient healthcare system. It is the world's largest spender on
R&D per GDP, leading the OECD in graduates in science and engineering and ranking third in the Youth
Wellbeing Index. Home of Samsung, LG and Hyundai-Kia, South Korea was named the world's most
innovative country in the Bloomberg Innovation Index, ranking first in business R&D intensity and
patents filed per GDP. In 2005, it became the world's first country to fully transition to high-speed
Internet and today it has the world's fastest Internet speed and highest smartphone ownership, ranking
first in ICT Development, e-Government and 4G LTE coverage.

For further information on the types of business entities in this country and their abbreviations, see
"Business entities in South Korea".
 Agriculture
At the start of the
economic boom in
1963, the majority of
South Koreans were
farmers. Sixty-three
percent of the
population lived in
rural areas. In the next
twenty-five years,
South Korea grew from
a predominantly rural,
agricultural nation into
an urban, newly
industrialized country
and the agricultural
workforce shrunk to
only 21 percent in
1989. Government
officials expected that
urbanization and industrialization would further reduce the number of agricultural workers to
well under 20 percent by 2000.

South Korea's agriculture had many inherent problems. South Korea is a mountainous country
with only 22 percent arable land and less rainfall than most other neighboring rice-growing
countries. A major land reform in the late 1940s and early 1950s spread ownership of land to the
rural peasantry. Individual holdings, however, were too small (averaging one hectare, which
made cultivation inefficient and discouraged mechanization) or too spread out to provide
families with much chance to produce a significant quantity of food. The enormous growth of
urban areas led to a rapid decrease of available farmland, while at the same time population
increases and bigger incomes meant that the demand for food greatly outstripped supply. The
result of these developments was that by the late 1980s roughly half of South Korea's needs,
mainly wheat and animal feed corn, was imported.

The government initiated various programs to improve rural conditions. South Korea, a high-cost
agricultural producer, prohibited unrestricted beef and rice imports and severely limited many
other agricultural imports. Foreign trading partners such as the United States pressured South
Korea to open up the agricultural market, but Seoul said that its farmers would be hurt badly by
the importation of inexpensive beef, rice, tobacco, and other products. In April 1989, Seoul
released a list of 243 agricultural products scheduled for import liberalization by 199l, but the list
did not include beef. In the late 1980s, many farmers, were already deeply in debt, told by the
government that they might have to compete in the world market and took to the streets to
protest against foreign demands and to demand further protection from the government.