Hello. Today we'll be talking about Korean economy. A lot of people call South Korean economy a miracle economy because South Korea has made a profound economic transformation in the past 70 years after liberation in 1945. Let us go through some empirical checks. South Korean economies initial conditions were extremely bad. South Korea suffered from colonial legacies, poor infrastructure, lack of capital and qualified manpower. And even South Korea didn't have any market access. As a result of a colonial domination for the past 40 years, in 1945. Another big issue regarding the Korean economy was its competition. The South Korean economy was very much agrarian economy. The agriculture sector accounted for more than 60% of Korean GDP at a time. An extremely poor and agrarian society was the reality of Korea, South Korea, in 1945. And also South Korea has a very poor resourcing endowment. South Korea didn't have any oil and gas. South Korea did not have any critical mineral resources. It has a rather small market size, yet population is huge. Therefore South Korea's carrying capacity was very much limited. As a result, per capita income in 1945, immediately after Korean liberation was about $35 per person. One of the poorest in the world. And more than that, 78% of Korean population was illiterate after national independence in 1945. And more interesting, was that tax revenue accounted for only 5% of national budget. Now you can see how Korean economy was poor in 1945. However, look at the profile of the economy transformation in South Korea. As you can see in the graph 1945 our per capita income was $35. And by year 2020, year 2015, our per capita income reached about $28,000. And you can see the path. Fifties, still low, sixties, still low, but seventy and eighties on, South Korea began to show a huge change in per capita income. And also growth rate is the same. 1950, just about 1% growth rate. And starting from 1965 the South Korean economy went to the sale of a medium-term economic planning effort. There was a systematic effort to develop the economy by introducing an export-led strategy and also enacting foreign capital inducement low and etc. Since then in South Korea begin to show rapid growth rate. Through the 1965 to 75 per captia what annual growth rate reached almost 10% per year on average. But in 1980 there was a sharp decrease because we had economy crisis in 1979 and 80, and therefore in 1980 our economy showed a -4.8% growth rate. Then, through the 1985 to 1995 about 8% growth rate per year on average. But again, 1998, we had a second major economy crisis, okay? South Korean economy record is -3.8%. Likewise, you can see ups and downs in the South Korean economy. But overall, South Korea's able to maintain economic growth rate about 10% per year from mid 1960s to late 1970s, and again in mid 80's to early 1990's South Korea showed very high growth rate per year. Another important indicator of economy transformation is a remarkable expansion of manufactured exports. You can clearly see from the graph, in 1960 virtually non-export of manufactured goods and from 1975 when South Korea studied having chemical industry mediation, export of manufactured goods were rapidly under rise. And 1995, it reached quite phenomenal in the amount. Almost it reached what? About $140 billion dollars in total end of 1990s. And another important indicator, South Korea was a forerunner of a newly industrial IT countries. More importantly, South Korea is one of the very few successful cases which graduated from the status of developing countries to become a member of OECD. OECD refers to organization for economic corporation and development, in 1994. OECD membership means that transformation of South Korea economics that is from developing to developed countries. OECD members are called in an advanced industrialized countries become the member of OECD. If the South Korean made the transition in 1994. Then how would the present status of the Korean economy as the previous graphs show that South Korea per capita income in year 2015 is about $30,000 US. Total gross domestic product went beyond almost $1 trillion and it was the 14th largest economy in the world. Total export in year 2015 were $548.8 billion. The sixth largest export economy in the world. Foreign reserve, Official reserve of South Korean economy is about $369 billion as of 2015 until March 2016 according to IMF figures, okay? But again since 2015 we had the foreign reserve of about $300 billion. And more than that, now South Korea had the world class semiconductor manufacturers, South Korea Hyundai, is one of the leading
automobile makers in the world, In fact the fifth in the world, ship building has become number one. Consumer electronics, and other important sectors now South Korea have been joining all the top class manufacturing status. And also, Korea has shown the highest population with tertiary education, meaning the student who are getting into college, okay? And between 25 to 34 years old in the population tertiary. 67.7% went to college. And, Also, another important thing to indicate is that South Korea used to be aid-receiving country but now it became a donor country. Now South Korea is a member of steering committee ODA. Assistant in a council level OECD. That is a really symbol of South Korea becoming donor state and in the countries. Another important indicator of so-called patent, how much patent South Korean firms and universities have. According to the World Intellectual Property Organization, as of 2014, South Korea was the fourth largest patent holding country in the world, only after China, the US, and Japan.
