The Republic of Korea

By Daniel Gomez and Frank Reilly

History

Three periods: • 1. Malthusian stagnation prior to Japan’s annexation of Korea

in 1910• 2. Colonial period from 1910-1945 • 3. Post colonial period with massive growth and increase in

living standards

https://eh.net/encyclopedia/the-economic-history-of-korea/

The Korean War & Politics • Korea was split following WWII

between the U.S and the Soviet Union

• On June 25th, 1950, 75,000 troops from the Democratic People’s Republic of Korea (Soviet supported North) cross the 38th parallel and attacked the Republic of Korea in the South

• Armistice reached on July 27th, 1953

• About 5 million casualtieshttp://www.history.com/topics/korean-war

Geopolitical Map of Korea (GDP & Population)Source URL: https://bambooinnovator.files.wordpress.com/2013/10/20131026_srm980.png

South Korea pre-crisis• After the war, South Koreans adopted an outward-looking

strategy, seeking to do much of their business with the United States and the West

• Between the 1960’s-1980’s the GDP of the country expanded by roughly 8% per year

• Promoted rapid industrialization and high number of exports• In the 1980’s, the country implemented tight inflation controls

policies on their currency to prevent it from hyper inflating. They still implement these policies today

During Crisis• One of the main countries hit during the crisis of 1997, needed

an IMF bail out of US$60bn• GDP plummeted by 7% • Was caused mainly due to control on inflation and to lots of

borrowing leading to high debt and inequality in the country • Recovered nicely in 1999, causing GDP to increase by 9%

Today • The economy was damaged during the crisis of 2008 but

South Korea was able to recover in 2010 and has grown since• Mainly an export trade economy• Has a number of bilateral trade agreements with the United

States and exports most of their goods to China

Currency• 1USD = 117.30KRW• The rate of inflation on the KWR is about 1.3%, has been

constant for years• They keep it this way to prevent severe hyperinflatio

Development• Is called by the economist “A tiger in winter”• Has only a GDP growth rate of 3.3%, and is continuously

declining• Industrial output is starting to slow down, the nation is

receiving less revenue from exports• Their debt accounts for about 80% of their GDP and are

believed to have surpassed the United States in regard to how much debt is owed

GDP Per Capita

Source: http://i.imgur.com/oCs7Vkb.png