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Essay on the Economic Situation of South Korea

Updated August 11, 2022

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Essay on the Economic Situation of South Korea essay

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The history of Korea dates back to 668 A.D., when the three kingdoms on the East Asian peninsula, Silla-Tang, Baekje, and Goguryeo fought and eventually united into one. Fear of falling behind the rest of the world in technology and industrials led them to reluctantly open up their ports to the Japanese, who eventually ruled over Japan for 35 years starting in 1910 (Hahn, 2019). Despite Japan’s surrender in 1945 during World War II, the Korean peninsula remained occupied by United States forces and Soviet Russian forces. The Korean War (1950), which ended in an armistice, left the North and the South separated at the 38th parallel. While South Korea’s initial success came from the industrial development of steel, chemicals, metal, machine-building, ship-building, and electronics, their focus has now shifted to family-owned conglomerates and technological innovation (Seth, 2017).

Today, South Korea’s top exports include integrated circuits for consumer electronics, cars and car parts, refined petroleum, and passenger and cargo ships. Its’ journey from being a war-torn country to a major world superpower has made South Korea one of the most successful nations of the modern 21st century. In focusing on tremendous economic growth and technological advancements, which are reflected in South Korea’s real gross national income and human development index, South Korea has neglected to address other pressing issues like wealth and development inequality, as well as other health issues for their growing population of 51 million people (Population, Total).

In terms of economic growth, it’s no secret that South Korea has come a long way from where it stood before. In the 1960’s, South Korea’s GDP was a mere $158.24, which was even lower than Ghana’s GDP of $182.98 (World Bank Open Data). Since then, South Korea’s GDP has grown 20 times larger, and they now boast the 11th largest economy in the world. Another measure of wealth that highlights South Korea’s progress is the real gross national income per capita (GNI/PPP/pc). This is a measure of national wealth which takes into account the cost of living in different countries. With a real gross national income of $38,340 in 2017, South Korea ranks 30th out of 182 countries, which is quite impressive, considering that their real gross national income was $8,260 just 30 years ago (World Bank Open Data). For comparison, other developed countries like Canada, Japan, and the United Kingdom sit in 20th, 22nd, and 25th, so we can conclude that South Korea is not too far behind. Because real gross national income is strictly a measure a wealth without regards to distribution of wealth, education, and health, we must turn to other measures to understand the complete picture.

One other such measure is the Human Development Index (HDI), which takes into account the quality of life, or the standard of living. The human development index measures three different things – life expectancy, mean years of schooling compared to expected years of schooling, and logged gross national income per capita. South Korea proudly ranks 22nd out of 189 other countries with a human development index of 0.931. Beating the world average of 0.728 by 0.203, South Korea’s standard of living has only continued to grow since experiencing economic success. From 1990 to 2017, life expectancy increased by almost 11 years, mean and expected years of schooling increased by 3 years, and gross national income per capita increased 210% (Human Development Reports, 2018). The human development index does a great job measuring standard of living in certain countries, but it, too, has its’ fair share of criticisms for failing to assess the standard of living within populations of a country.

The multidimensional poverty index is the response to those very critiques, as it is a measure of poverty with a focus on populations within a country, which is exactly what the HDI fails to account for. This index is calculated using 10 indicators across three general categories of education, health, and living conditions and resources. MPI data is collected by going into each household and surveying entire families, and therefore, not every country needs to be measured. Because it is no longer a developing country, I was unable to find a MPI for South Korea. However, this does not eliminate the possibility of poverty within Korea, as I stumbled upon a report by the Korean Institute for Health and Social Affairs, highlighting multidimensional poverty of youth and young adults in South Korea as well as poverty amongst Korea’s elderly. I was surprised to find the things I did – in South Korea, seniors over the age of 65 are 3 to 4 more times likely to be poor, while 74% of poverty in South Korea can be attributed to poverty within youth. Like many other developed countries, South Korea still suffers from poverty within certain populations, despite not being on the multidimensional poverty index (Kim, Multidimensional Poverty of Youth in South Korea).

Another commonly used measure to assess the state of a country includes the GINI coefficient, measuring inequality within the distribution of income. While 0 represents total equality and 100 represents total inequality in income distribution, the entire range for countries spans only from 25.6 (Iceland) to 63 (South Africa). With a score of 31.6 (2012), South Korea ranks 131 out of 158, indicating a slightly better distribution than a majority of the rest of the world, but 31.6 is still far from 0, and there is still work to be done in equally distributing wealth between the poorest and the richest.

Moving onto additional measures of a nation, I chose another one that deals with inequality, the inequality human development index, which is basically the taking the human development index, and adjusting it for equality. South Korea’s HDI of 0.903, when adjusted, becomes an IHDI of 0.773. While it is normal for a country’s IHDI to be lowered than its HDI, South Korea’s adjusted IHDI falls by a significant 14%. The Gross National Happiness Index is another measure I wanted to bring up. Out of 153 countries, Korea ranks 57th (World Happiness Report). Despite experiencing periods of economic growth and drawing themselves out of poverty, South Koreans as a whole are not as satisfied with their lives as other advanced countries. This goes to show that there are other factors aside from economic prosperity that contribute to happiness within a country.

This last measure it not really a traditional measure, but I wanted to bring attention to several risk factors contributing to death and disability, especially since my final paper will be focused on health in South Korea. According to a study done in 2017, tobacco, dietary risks, and alcohol use rank 1st, 3rd, and 6th in the risk factors that drive that most death and disability in South Korea (Institute for Health Metrics and Evaluation, 2017). The daily smoking rate of South Korea is similar to other developed countries at around 20%, but the rate of male smokers in 36.2%, slightly above the average of 29% (Health Risks, Smoking). South Korea also suffers the reputation of the country with the world’s worst drinking problem, where South Koreans consume an average of 13.7 shots of liquor per week on average (Chao, 2016). While many South Koreans admit that drinking has become a problem, it has become very difficult for politicians to limit this culture of drinking due to pressure from liquor companies, so until then, the problem of alcohol consumption remains.

South Korea has taken great strides for the past 30 years. With a skilled labor force and innovations in technology and science, it has a lot to be proud of. However, now that it has achieved success economically, it should shift its’ focus towards individuals. This would mean improving income and development equality, educating the public about the risks of smoking and drinking, decreasing the social stigma regarding mental health, passing laws limiting the number of working hours – the list goes on and on. A country is only as strong as the people living inside of it, and right now would be a good time for South Korea to start recognizing the needs of the people.

Works Cited

  1. Chao, Steve. 2016. “The Country with the World’s Worst Drink Problem.” GCC News | Al Jazeera. (January 28, 2019).
  2. “GDP per Capita (Current US$).” GDP Per Capita | Data. (January 28, 2019).
  3. 2018. “South Korea.” (January 28, 2019).
  4. Hahn, Bae-ho et al. 2019. “South Korea.” Encyclopædia Britannica. (January 28, 2019).
  5. “Health Risks – Daily Smokers – OECD Data.” theOECD. (January 28, 2019).
  6. Kim, Moonhil, and Seonga Kim. Multidimensional Poverty of Youth in South Korea . rep. (January 27, 2019).
  7. “Korea (Republic of) – Human Development Reports.” 2018. (January 27, 2019).
  8. “Population, Total.” Population, Total | Data. (January 28, 2019).
  9. Seth, Michael J. 2017. “South Korea’s Economic Development, 1948–1996.” Oxford Research Encyclopedias. (January 27, 2019).
  10. “South Korea.” 2017. Institute for Health Metrics and Evaluation. (January 28, 2019).
  11. “South Korea.” 2018. U.S. Department of State. (January 28, 2019).
  12. World Happiness Report. 2018. “World Happiness Report 2018.” World Happiness Report. (January 28, 2019).
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