South Korea: a Different Country than the Others .

▲Seoul in night time

South Korea is a country in Eastern Asia occupying the southern half of the Korean Peninsula. It borders the East Sea, the yellow sea and the North Korea. South Korea terrain is mostly mountainous. It has a republic government  system; the chief is the president and the head of the government is the prime minister.

South Korea has a mixed economic system which includes a variety of private freedom, combined with centralized economic planning and government regulation. Also this country is a member of the Asia-Pacific Economic Cooperation (APEC) and the Asia-Pacific Trade Agreement (APTA).

Economic improvement

South Korea has experienced one of the largest economic transformations of the past 60 years. It started as an agriculture-based economy in the word in terms of gross domestic product in 2016.

Many studies attribute South Korea's structural transformation to policy reforms aimed at opening the country to foreign markets. Indeed, the export-oriented policies of South Korea are one of the most important factors of its success: South Korea is now one of the top 10 exporters in the word, and its exports percentage has increased from 25.9 percent in 1995 to 56.3 percent in 2012.

South Korea has been one of the fastest growing economies in the word in the 50's. It processes a significant domestic market with a population of 50 million and is close to the bigger Asian markets of China and Japan.  This country developed democracy that offers a less risky business environment for those looking to enter the Asian market. On the other hand, South Korea is more dynamic and has a more entrepreneurial, agile and aggressive corporate culture.

Factors and Challenges in South Korea Success

Many studies attribute South Korea's structural transformation to policy reforms aimed at opening the country to foreign markets. They say that the business environment fosters growth in the domestic market and attracts foreign investors.

South Korea dominates in the ease to start a business and enforcing contracts. All of them play a significant role in encouraging investment, production, communication and eventually economic growth.

Also, this country has devoted extra attention to technology development and innovation to promote growth. Innovation and technology are the key factors that have underpinned South Korean export competitiveness and fueled the country's remarkable economic over the past decades. In fact South Korea is now spending the largest share of its GDP on research and development, even larger than the U.S and Japan; two of the global leaders in innovation based on intensity.

Even though South Korea has been successful at promoting exports, its business environment and innovation, challenges still remain including many of China. Chinese competition is one challenge. Policymakers in China have also been emphasizing the importance of high-skill manufacturing and exports. This could have a negative impact on South Korea as China has a traditionally been a larger importer of South Korean goods.

Furthermore, given South Korea's relatively limited geographical size, natural resources and population size, an aging population aggravates the threat that South Korea's economy might fall behind its fellow developed countries.

To maintain sustainable economic growth, South Korea needs to continue its support in innovation and a favorable business environment.

Idriss

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