Doing Business In Korea
Doing Business in South Korea
Korea has a history that dates back to 2333 BCE and at one point its territories extended as far as mainland China and Eastern Russia. The country was divided at the 38th parallel into North and South Korea when Japan was defeated in World War II and it remains separated today. Though both North and South Korea share the same history and culture, their current political and economic states are very much opposite. North Korea is a government-controlled communist society (primarily due to post-WWII Soviet influence), who’s Gross Domestic Product (GDP) ranks a dismal 85th worldwide. Meanwhile, democratic and capitalist South Korea has had one of the fastest economic developments in the world since the 1960s (Wikipedia1, 2007) making them the 3rd largest economy in Asia and the 12th largest economy in the world (CIA World Factbook, 2007). South Korea’s economic success can be partly attributed to a system of close government/business ties and a strong labor effort. The Asian financial crisis of 1997 exposed weaknesses in South Korea’s development model such as high debt-to-equity ratios, massive foreign borrowing, and an undisciplined financial sector, however, the economy has since rebounded and continues to grow. South Korea joined the trillion dollar club of world economies in 2004 (CIA World Factbook, 2007). Low inflation, low unemployment, an export surplus, and an equal income distribution help keep South Korea’s economy stable.
The Heritage Foundation conducts a yearly survey that assesses the economic freedom of countries around the world. Business, trade, fiscal, freedom from government, monetary, investment, financial, property rights, freedom from corruption, and labor freedom are the ten major factors used to determine a country’s standing. According to the 2007 survey, South Korea’s economy ranks 7th in the Asia-Pacific region and 36th worldwide (lower rankings represent more economic...
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