South Korea’s economy is the 4th and 11th largest in Asia and the world respectively.
It is a mixed economy which is mostly led by
family-owned corporations called chaebols.
Nonetheless, the control of the chaebol is not
likely to last and it creates the risk of slowing
down the revolution of Korean economy into something
more beneficial for the future generations.
South Korea’s economy is the global front-runner of
Consumer electronics, Mobile Broadband and Smartphone.
South Korea is acknowledged for its remarkable
growth from one of the most deprived countries
in the world to a developed, high-earning
country in just a small number of generations.
The period of rapid economic development in South
Korea after the Korean War, which converted South
Korea from a developing country to a developed
country is termed as the Miracle on the Han River.
Following this rapid development, South Korea joined
the ranks of elite countries in the OECD and the G-20.
It has also been incorporated in the group of Next Eleven countries
that will lead the worldwide economy in the middle of the 21st century.
Regardless of the high-growth potential and structural solidity, South Korea’s
economy is facing lasting damage to its credit rating in the stock market
because of the hostility of North Korea in times of military predicaments,
which is having a harmful effect on the financial markets of South Korea.
On the other hand, prominent financial establishments, such as the IMF have admired
the strength of the South Korean economy against numerous economic crises.
Economic Freedom
South Korea’s economic freedom score is 73.8 which
makes it the 27th freest economy in the 2018 list.
Overall, its score has gone down by 0.5 point
due to a sharp decline in the score for the
government integrity indicator which outweighed the improvement in investment freedom.
South Korea has been placed at 7th position
among 43 nations in the Asia–Pacific region.
Rule of Law
South Korea completely acknowledges property rights and has a well-established set
of laws managing and administering the establishing of profitmaking enterprises.
The judiciary system is usually considered an independent establishment and
it safeguards private property rights and interests quite competently.
The officials who get elected execute the policies
and strategies without unnecessary intervention.
However, in spite of the government’s anticorruption
determinations, bribery, using influence,
and pressure and blackmail continue to exist
in politics, commerce, and day-to-day life.
GDP, Trade, and Taxes
The upper rate of personal income tax is 38 percent.
The upper rate of corporate tax is 24.2 percent.
Both incomes tax and corporate tax are subject to a 10 percent of the surtax.
The total tax burden is 25.3 percent of total domestic proceeds.
In the past three years, the government expenditures
have reached to 32.3 percent of total GDP.
Budget surpluses have shown an average of 0.4 percent of GDP.
Public debt is 38.6 percent of GDP.
The combined worth of exports and imports forms 78 percent of GDP.
The applied tariff rate on an average is 4.8 percent.
Merger and Acquisition (M & A)
Ever since 1991, there has been a stable upward movement in South
Korean M&A up until 2018 with only a small disruption around 2004.
From 1991 about 18,300 deals have been
announced, summing up to over 941 billion USD.
Target industries are spread very uniformly
with no industry taking more than 10% of share.
The leading three target industries are Electronics with 9.7%,
Semiconductors with 9.1%, and Metals and Mining with 7.7%.