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South Korea — Crouching Tiger?

Will the South Korean economy ever regain the momentum it had before the 1997 Asian financial crisis?

August 14, 2001

Will the South Korean economy ever regain the momentum it had before the 1997 Asian financial crisis?

Before the 1998 economic crisis hit South Korea, the country could point to an impressive economic growth record that made it one of the famed Asian “tigers.” As the country recovers from its financial meltdown, it still faces huge challenges. Our new Globalist Factsheet recalls the years of booming growth — and takes a look at the present situation.

Looking back, how impressive was South Korea’s economic rise?

In 1964, Zambia’s GDP per person was nearly twice as high as South Korea’s. By 1999, the Koreans were almost 27 times richer.


How does this compare with the United States?

Back in 1965, average per capita income in South Korea was only about 17% of the U.S. level. By 1995, it had increased to 72% of U.S. per capita income.

(Foreign Affairs)

What challenge would the re-unification of North and South Korea pose?

If the two Koreas were united, the cost of bringing the North’s labor productivity to just half the level of the South’s was estimated to cost as much as $1.2 trillion in 2000.

(Goldman Sachs)

How have South Korean companies coped in the aftermath of the crisis?

As of March 2000, two and a half after the Asian financial crisis, 76 South Korean firms were in workout programs, managing debt equal to 9% of the country’s GDP.

(World Bank)

Were there any big casualties?

When the Daewoo group collapsed in August 1999 under $80 billion worth of debt, it was the world’s biggest bankruptcy.


How did South Korea’s export industry recover?

In the wake of the 1997 Asian financial crisis, Korean exports in U.S. dollars fell almost 3% in 1998, but then grew nearly 9% in 1999 — and accelerated by 20% in 2000.


Who is running business in South Korea?

As of 2001, just under 50% of South Korea’s companies are still under family control.


What pension plan is there for those who helped build South Korea?

As of 2000, the average pension in Korea amounts to two-thirds of the minimum wage — or about $3 to $4 a day.


Does South Korea attract foreigners?

Nearly half of South Korea’s 4.7 million foreign visitors in 1999 were from Japan, many of them on shopping sprees.

(Washington Post)

Where does Seoul hold a world record?

As of 2000, the five-story Starbucks in Seoul, Korea, has a seating capacity of 200 — and is the largest Starbucks in the world.

(Washington Post)

How is the country’s outreach to the world?

As of 2000, more than one-third of South Korea’s 47 million people have access to the Internet. That is one of the highest ratios of web access in the world.

(Time Asia)