Economy of South Korea

Overview

Following the Korean War, South Korea remained a country with less developed markets for a little more than a decade. The growth of the industrial sector was the principal stimulus to South Korea's economic development. In 1986, manufacturing industries accounted for approximately 30 percent of gross domestic product (GDP) and 25 percent of the workforce. Due to strong domestic encouragement and some foreign aid, Seoul's industrialists introduced modern technologies into outmoded or newly built facilities, increased the production of commodities—especially those for sale in foreign markets—and plowed the proceeds back into further industrial expansion. As a result, industry altered South Korea's landscape, drawing millions of labourers to urban manufacturing centres.^{[citation needed][41]}

A downturn in the South Korean economy in 1989 spurred by a decrease in exports and foreign orders caused concern in the industrial sector. Ministry of Trade and Industry analysts stated that decreased export performance resulted from structural problems, including an overly strong won, increased wages and labour costs, frequent strikes, and higher interest rates. The result was an increase in inventories and cutbacks in production at a number of electronics, automobile, and textile manufacturers, as well as at the smaller firms that supplied the parts. Factory automation systems were introduced to reduce dependence on labour, to boost productivity with a smaller workforce, and to improve competitiveness.^{[citation needed]}

Colonial period

Japan colonized Korea, officially annexing it on 22 August 1910 as the Province of Choson.^[42]: 24 Japan encouraged an inflow of Japanese capital to Korea's less developed economy.^[42]: 24 A large majority of major firms in Korea became Japanese owned and operated as a result, with key positions reserved for Japanese.^[42]: 24 Koreans were permitted to work in menial roles under harsh labor conditions.^[42]: 24 Most of Korea's coal, iron, and crop production was shipped to Japan.^[42]: 24

Rapid growth from 1960s to 1980s

Following the coup that brought General Park Chung Hee to power in 1961, which at first caused political instability and an economic crisis, a protectionist economic policy began, pushing a bourgeoisie that developed in the shadow of the State to reactivate the internal market. To promote development, a policy of export-oriented industrialisation was applied, closing the entry into the country of all kinds of foreign products, except raw materials. Agrarian reforms were carried out and Park nationalised the financial system to swell the powerful state arm, whose intervention in the economy was through five-year plans.^[43]

The spearhead was the chaebols, diversified family conglomerates such as Hyundai, Samsung, and LG Corporation, which received state incentives such as tax breaks, legality for their exploitation system and cheap or free financing: the state bank facilitated the planning of concentrated loans by item according to each five-year plan, and by economic group selected to lead it.

South Korea received foreign aid from the United States due to their Cold War alliance, and foreign economic and military support has continued for years. Chaebols started to dominate the domestic economy and, eventually, began to become internationally competitive. Under these chaebols, workers began to see their wages and working conditions improve, which increased domestic consumption. By the 1980s, the country had risen from low income to middle income.^[44]

South Korea's real GDP expanded by an average of more than 8 percent per year,^[45] from US$2.7 billion in 1962^[46] to US$230 billion in 1989,^[47] breaking the trillion dollar mark in the early 2000s. Nominal GDP per capita grew from US$103.88 in 1962^[48] to US$5,438.24 in 1989,^[49] reaching the US$20,000 milestone in 2006. The manufacturing sector grew from 14.3 percent of the GNP in 1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent in 1962 to 35.8 percent in 1989.^[45] In the early 1960s, South Korea's rate of growth exceeded North Korea's rate of growth in most industrial areas.^[50]

The most significant factor in rapid industrialisation was the adoption of an outward-looking strategy in the early 1960s.^[51][45] This strategy was particularly well-suited to that time because of South Korea's low savings rate and small domestic market. The strategy promoted economic growth through labour-intensive manufactured exports, in which South Korea could develop a competitive advantage. Government initiatives played an important role in this process.^[45] Entrepreneurs such as Kim Hyung-mok were key figures in supporting industrial growth by investing in education and infrastructure aligned with the state’s economic goals. Through the model of export-led industrialisation, the South Korean government incentivised corporations to develop new technology and upgrade productive efficiency to compete in the global market.^[52] By adhering to state regulations and demands, firms were awarded subsidisation and investment support to develop their export markets in the evolving international arena.^[52] In addition, the inflow of foreign capital was encouraged to supplement the shortage of domestic savings. These efforts enabled South Korea to achieve growth in exports and subsequent increases in income.^[45]

Beginning in 1973, South Korea's government used its National Investment Fund and the Korea Development Bank to invest large amounts of money into what Park Chung Hee's government viewed as the six strategic industries: steel, non-ferrous metals, shipbuilding, industrial machinery, electronics, and petrochemicals.^[53]: 136 This developmental approach was frequently criticized at the time from outside Korea, including by the World Bank.^[53]: 136 The strategy was successful and ultimately also helped develop companies like Samsung and POSCO and reduced input costs for production in downstream industries as well.^[53]: 136

By emphasising the industrial sector, Seoul's export-oriented development strategy left the rural sector barely touched. The steel and shipbuilding industries in particular played key roles in developing South Korea's economy during this time.^[54] Except for mining, most industries were located in the urban areas of the northwest and southeast. Heavy industries were located in the south of the country. Factories in Seoul contributed over 25 percent of all manufacturing value-added in 1978; taken together with factories in the surrounding Gyeonggi Province, factories in the Seoul area produced 46 percent of all manufacturing that year. Factories in Seoul and Gyeonggi Province employed 48 percent of the nation's 2.1 million factory workers. Increased income disparity between the industrial and agricultural sectors became a problem by the 1970s despite government efforts to raise farm income and improve rural areas ^[45]

In the early 1980s, in order to control inflation, a conservative monetary policy and tight fiscal measures were adopted. Growth of the money supply was reduced from the 30 percent level of the 1970s to 15 percent. During this time, Seoul froze its budget for a short while. Government intervention in the economy was greatly reduced and policies on imports and foreign investment were liberalised to promote competition. To reduce the imbalance between rural and urban sectors, Seoul expanded investments in public projects, such as roads and communications facilities, while further promoting farm mechanisation.^[45]

The measures implemented early in the decade, coupled with significant improvements in the world economy, helped South Korea regain its lost momentum. South Korea achieved an average of 9.2 percent real growth between 1982 and 1987 and 12.5 percent between 1986 and 1988. The double-digit inflation of the 1970s was brought under control. Wholesale price inflation averaged 2.1 percent per year from 1980 through 1988; consumer prices increased by an average of 4.7 percent annually. Seoul achieved its first significant surplus in its balance of payments in 1986 and recorded a US$7.7 billion and a US$11.4 billion surplus in 1987 and 1988 respectively. This development permitted South Korea to begin reducing its level of foreign debt. The trade surplus for 1989, however, was only US$4.6 billion, and a small negative balance was projected for 1990.^[45]

1990s and the Asian Financial Crisis

For the first half of the 1990s, the South Korean economy continued a stable and strong growth in both private consumption and GDP. During the 1997 Asian financial crisis, after several other Asian currencies were attacked by speculators, the Korean won started to depreciate in October 1997.^[55] The problem was exacerbated due to non-performing loans at many of Korea's merchant banks. By December 1997, the IMF had approved a US$21 billion loan, which would be part of a US$58.4 billion bailout plan.^[55] By January 1998, the government had shut down a third of Korea's merchant banks.^[55] Throughout 1998, Korea's economy would continue to shrink quarterly at an average rate of −6.65%.^[55] and South Korean chaebol Daewoo was dismantled by the government in 1999 due to debt problems. General Motors managed to purchase the motors division. Indian conglomerate Tata Group purchased the trucks and heavy vehicles division of Daewoo.^[55]

Actions by the South Korean government and debt swaps by international lenders have contained the country's financial problems. Much of South Korea's recovery from the 1997 Asian financial crisis can be attributed to labour adjustments (i.e. a dynamic and productive labour market with flexible wage rates) and alternative funding sources.^[55] By the first quarter of 1999, GDP growth had risen to 5.4%, and strong growth thereafter combined with deflationary pressure on the currency led to a yearly growth of 10.5%. In December 1999, President Kim Dae-jung declared the currency crisis over.^[55]

2000s

South Korea's economy has moved away from a centrally planned, government-directed investment model toward a more market-oriented one. These economic reforms, pushed by President Kim Dae-jung, helped South Korea maintain one of Asia's few expanding economies,^[56] with growth rates of 10.8% in 1999 and 9.2% in 2000. Growth fell back to 3.3% in 2001 because of the slowing global economy, decreased exports, and perceptions that corporate and financial reforms had stalled.

After the bounce back from the 1997 Asian financial crisis, the economy continued strong growth in 2000 with a GDP growth of 9.08%.^[55] However, the South Korean economy was affected by the September 11 attacks. The slowing global economy, falling exports, and the perception that corporate and financial reforms had stalled caused growth to decrease to 3.8% in 2001^[57] Thanks to industrialisation GDP per hour worked (labour output) more than tripled from US$2.80 in 1963 to US$10.00 in 1989.^[57] More recently the economy stabilised and maintained a growth rate of between 4–5% from 2003 onwards.^[57]

Led by industry and construction, growth in 2002 was 5.8%,^[58] despite anemic global growth. The restructuring of chaebols, bank privatisation, and the creation of a more liberalised economy—with a mechanism for bankrupt firms to exit the market—remain an unfinished reform task. Growth slowed in 2003, but production expanded 5% in 2006, due to popular demand for key export products such as HDTVs and mobile phones.^{[citation needed]}

Like most industrialised economies, South Korea experienced setbacks during the Great Recession. Growth fell by 3.4% in the fourth quarter of 2008 from the previous quarter, the first negative quarterly growth in 10 years, with year on year quarterly growth continuing to be negative into 2009.^[59] Many sectors of the economy at the time reported declines, with manufacturing dropping 25.6% as of January 2009, and consumer goods sales dropping 3.1%.^[59] Exports in autos and semiconductors, two pillars of the economy, shrank 55.9% and 46.9% respectively, while exports overall fell by a record 33.8% in January, and 18.3% in February 2009 year on year.^[60] As in the 1997 Asian financial crisis, Korean currency also experienced massive fluctuations, declining by 34% against the US dollar.^[60] Annual growth in the economy slowed to 2.3% in 2008, and was expected to drop to as low as −4.5% by Goldman Sachs,^[61] but South Korea was able to limit the downturn to a standstill at 0.2% in 2009.^[62] Despite the Great Recession, the South Korean economy, helped by timely stimulus measures and strong domestic consumption of products that compensated for decreased exports,^[63] was able to avoid a recession unlike most industrialised economies, posting positive economic growth for two consecutive years of the crisis. In 2010, South Korea made an economic rebound with a growth rate of 6.1%, signaling a return of the economy to pre-crisis levels. South Korea's exports recorded $424 billion in the first eleven months of the year 2010, already higher than its export in the whole year of 2008.

The South Korean government signed the Korea-Australia Free Trade Agreement (KAFTA) on 5 December 2013, with the Australian government seeking to benefit its industries—including automotive, services, and resources and energy—and position itself alongside competitors, such as the U.S. and ASEAN.^[64] South Korea is Australia's third largest export market and fourth largest trading partner with a 2012 trade value of A$32 billion. The agreement contains an Investor State Dispute Settlement (ISDS) clause that permits legal action from South Korean corporations against the Australian government if their trade rights are infringed upon.^[65]

The government cut the work week from six days to five in phases, from 2004 to 2011, depending on the size of the firm.^[66] The number of public holidays was expanded to 16 by 2013.^[67]

South Korean economy decreased in the first quarter of 2019, which happened to be its worst drop since the Great Recession. GDP declined a seasonally adjusted 0.3 percent from the previous quarter.^[68]

South Korea's prices rose more than 6 percent in July compared with last year, the fastest jump in nearly a quarter century.

In July 2022, South Korea's Consumer price index rose 6.3 percent, the highest rate since November 1998.

High-tech industries in the 1990s and 2000s

In 1990, South Korean manufacturers planned a shift in future production plans toward high-technology industries. In June 1989, panels of government officials, scholars, and business leaders held planning sessions on the production of such goods as new materials, mechatronics—including industrial robotics—bioengineering, microelectronics, fine chemistry, and aerospace. This shift in emphasis, however, did not mean an immediate decline in heavy industries such as automobile and ship production, which had dominated the economy in the 1980s.^{[citation needed]}

South Korea relies upon exports to fuel the growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports. Although the import market has liberalised in recent years, the agricultural market has remained protectionist due to disparities in the price of domestic agricultural products such as rice with the international market. As of 2005, the price of rice in South Korea was four times that of the average price of rice on the international market, and it was believed that opening the agricultural market would affect South Korean agricultural sector negatively. In late 2004, however, an agreement was reached with the WTO in which South Korean rice imports will gradually increase from 4% to 8% of consumption by 2014. In addition, up to 30% of imported rice will be made available directly to consumers by 2010, where previously imported rice was only used for processed foods. Following 2014, the South Korean rice market will be fully opened.^{[citation needed]}

South Korea today is known as the Launchpad of a mature mobile market, where developers thrive in a market where few technology constraints exist. There is a growing trend of inventions of new types of media or apps, using the 4G and 5G internet infrastructure in South Korea. South Korea today has the infrastructure to meet a density of population and culture that has the capability to create strong local particularities.^[69]

COVID-19 pandemic and 2020s economic situation

South Korea faced a turning point in its economy in 2023. With the increasing challenges posed by China's growing manufacturing industry and the impact of COVID-19, South Korea's manufacturing sector is experiencing a consistent decline. According to SP Global, South Korea's export of manufactured goods to China, one of the biggest trading partners of South Korea, decreased by 4.4% in the fourth quarter of 2022 and by 31% in January 2023.^[70] On the other hand, their primary electronic manufacturing industry is facing a downturn. While information and communication technology maintained 34% of South Korea's total 2022 exports, at the end of the year, it decreased to 24%.^[70] The government had to incur a massive fiscal spending in 2020, leading to a rise in the fiscal deficit as projected in their budget.^[71] Moreover, their forecasted debt-to-GDP ratio jumped to 41.2% of GDP in 2020 from 37.1% of GDP in 2019. In 2021, the government unveiled a $29 billion extra budget to aid small businesses and boost employment.^[72] In 2024, the government forecast a debt-to-GDP ratio was 47.4% of GDP.^[73]

With downturns in many manufacturing industries, South Korea has been facing a recession. Many economists state the reason for industries' slowdown as deteriorating global conditions. The inflation rate in South Korea is regularly rising, and the problems in the domestic economy, such as household debt, population problems, and productivity problems, are the key fiscal and monetary factors that hold South Korea's economic growth.

Due to the sudden evolution of COVID-19, private consumption decreased, and a bottleneck in the supply sector occurred. With this situation, the Bank of Korea indicated that the consumer inflation rate rose about three percent after COVID-19 evolved. Assuming that South Korea's interest rate was low compared to other countries, raising house prices and household debt became one of the problems in South Korea's economy.^[74]

As part of its response to the COVID-19 pandemic, the government introduced sizeable fiscal and liquidity support, including expanded employment-retention subsidies, emergency cash transfers, and loan-payment deferrals and guarantees for firms; measures the OECD later noted helped preserve jobs and limit household income losses.^[75]

In April 2020, the government introduced two relief programmes: ₩40 trillion Key Industry Stabilization Fund, via the Korea Development Bank, to temporarily provide financing to sectors affected by the COVID-19 shock,^[76] and a temporary increase in the existing Employment Retention Subsidy (고용유지지원금) paid to employers who put workers on furlough instead of laying them off.^[77] To reach workers outside employment insurance, a temporary emergency employment stabilization allowance was introduced for "special-type" workers - which includes the self-employed and contractors - with pandemic-related income declines, with payments totalling ₩1.5 million over three months.^[78][79]

Policy announcements in 2022–2023 included continued financial forbearance for small businesses and SMEs through extensions of loan maturities and repayment deferrals, alongside targeted relief for high energy costs via expanded energy vouchers for low-income households.^[80][81] The government also convened strategy meetings aimed at strengthening competitiveness in semiconductors and rechargeable batteries,^[82] and in March 2023, the government expanded tax incentives and other support intended to strengthen competitiveness in high-tech manufacturing, including semiconductors and rechargeable batteries.^[83]

To stabilise the inflated economy, the government has passed the "Korean New Deal Program" to US$144 billion.^[84] This expansionary fiscal policy promoted private consumption and increased the number of jobs. This expansionary fiscal stimulus is designed to recover the economic and social impact of COVID-19 from the existing climate and environmental dangers. The New Deal policy is divided explicitly into healthcare and green industries.

South Korea's Ministry of Economy and Finance asserted the New Growth Strategy 4.0 in August 2023. The New Growth Strategy suggests projects for South Korea's long-term industry growth.^[85] The South Korean government advocates these policies as a New Growth 4.0 project, which aims to generate tangible outcomes in the future by setting the focus of policy and investments towards emerging industries. To achieve these goals, the strategy outlines the following key guidelines:

1. Foster artificial intelligence and semiconductor industries and build up a collaborative ecosystem between businesses.
2. Dominate the global market of the Urban Air Mobility (UAM) industry.
3. Secure Clean Hydrogen Production Technology via Water Electrolysis.
4. Advance Autonomous Driving Technologies.
5. Promote the Battery Re-manufacturing and Reuse Markets.
6. Expand the Private Sector-led My Data Based Services.
7. Streamline the Ordering Process of Research Equipment or Facilities to Alleviate Administrative Burdens.

Besides this, South Korea is one of the countries with excellent healthcare systems, biomedical technology, and AI technology. While South Korea's value in the medical industry is projected at around US$6.7 billion, the medical technology market is projected to reach US$11.5 billion.^[86][87] The annual projected growth rate of the medical industry is over 6%, which indicates a bright future for the industry. Many economists suggest that by adopting AI technology, South Korea will be a bio-medical industry-leading country. An article about the future data-driven healthcare industry in South Korea suggests that AI technology helps the medical industry provide customised medical services for patients and can utilise the benefits and costs.^[88]

In April 2025, the incorporation of Korean government bonds into the "World Government Bond Index" was postponed from November this year to April next year. After being listed as a prospective candidate for incorporation in September 2022, it was successfully included in the regular market classification report in the second half of October 2024.^[89]

Economic inequality

Agriculture and fishing

This section is an excerpt from Agriculture in South Korea.[edit]

Agriculture in South Korea is a sector of the economy of South Korea. Korean agriculture is the basic industry of the Korean economy, consisting of farming, animal husbandry, forestry and fishing. At the time of its founding, Korea was a typical agricultural country, with more than 80% of the population engaged in agricultural production. After land reform under the Syngman Rhee administration, economic revitalization under the Park Chung-hee military government and the wave of world trade liberalization that began in the 1980s, Korean agriculture has undergone dramatic changes. Through the Green Revolution, Korea became self-sufficient in rice, the staple food, in 1978, and in 1996, Korea became the first Asian country after Japan to mechanize its agriculture with fine-grained cultivation. The development of Korean agriculture has also led to the development of agriculture-related industries such as fertilizer, agricultural machinery and seed.^[94][95]

The natural resources required for agriculture in South Korea are not abundant. Two thirds of the country are mountain and hill. Arable land only accounts for 22 percent of the country's land. It is one of the countries with the least arable land per capita in the world.^[96][97] Korea has a very low self-sufficiency rate for agricultural products, except for rice and potatoes, which are largely self-sufficient, while 85% of other foodstuffs need to be imported. In addition, Korea imports more than 60% of its beef, fish and shellfish, 20% of its fruit, poultry and milk from abroad, and only sugar and eggs are self-sufficient. Since the 1980s, with the restructuring of Korean agriculture, the area of food crops has tended to decrease, while the area of high value-added crops, vegetables and fruits has increased in proportion to the plantation industry. The most important crop in South Korea is rice, accounting for about 90 percent of the country's total grain production and over 40 percent of farm income. Other grain products heavily rely on imports from other countries. Farms range in size from small, family-owned farms to large corporations, but most are small-scale and rely heavily on government support and services in order to survive.^{[98][99][100][101]}

In the 1960s, Korea's economy began to grow at a rapid pace, creating the "Han River Miracle". In 2005, the share of agriculture in Korea's GDP fell to 2.9 percent from 50 percent at the start of the country's history. With urbanization and industrialization, Korea's agricultural population has been lost and is aging, with the proportion of people employed in agriculture falling from 50% to 8.5% between 1970 and 2000, and to 7% in 2008.^{[94][97][99][102]}

This section is an excerpt from Fishing industry in South Korea.[edit]

Until the 1960s, agriculture and fishing were the dominant industries of the economy of South Korea. The fishing industry of South Korea depends on the existing bodies of water that are shared between South Korea, China and Japan. Its coastline lies adjacent to the Yellow Sea, the East China Sea and the Sea of Japan, and enables access to marine life such as fish and crustaceans.^[103]

Manufacturing

This section is an excerpt from Manufacturing in South Korea.[edit]

South Korea's major export industries include semiconductors, automobiles, and shipbuilding. Other major industries in South Korea are electronics, telecommunications, chemicals, and steel.^[104][105]

The country's manufacturing output is the sixth highest in the world.^[106] Well-known Korean manufacturing and tech companies include Hyundai Motors, Samsung Electronics, LG Electronics, Kia, SK Hynix, Celltrion, Posco, Krafton, Hancom, and NCSoft.

Automobile

Main article: Automotive industry in South Korea

See also: List of automobile manufacturers of South Korea and Plug-in electric vehicles in South Korea

The automobile industry was one of South Korea's major growth and export industries in the 1980s. By the late 1980s, the capacity of the South Korean motor industry had increased more than fivefold since 1984; it exceeded 1 million units in 1988. Total investment in cars and car-component manufacturing was over US$3 billion in 1989. Total production (including buses and trucks) for 1988 totaled 1.1 million units, a 10.6 percent increase over 1987, and grew to an estimated 1.3 million vehicles (predominantly passenger cars) in 1989. Almost 263,000 passenger cars were produced in 1985—a figure that grew to approximately 846,000 units in 1989. In 1988 automobile exports totaled 576,134 units, of which 480,119 units (83.3 percent) were sent to the United States. Throughout most of the late 1980s, much of the growth of South Korea's automobile industry was the result of a surge in exports; 1989 exports, however, declined 28.5 percent from 1988. This decline reflected sluggish car sales to the United States, especially at the less expensive end of the market, and labour strife at home.^[107] South Korea today has developed into one of the world's largest automobile producers. The Hyundai Motor Group is South Korea's largest automaker in terms of revenue, production units and worldwide presence.

Shipbuilding

South Korea became a leading producer of ships in the 1970s.^[114] With government support, Hyundai Heavy Industries became the largest South Korean shipbuilder. In the late 1970s, Samsung and Daewoo entered the shipbuilding business through acquisitions.^{[115]: 21–38} The "oil glut" and global recession led to an industry decline in the mid-1980s. Labor unrest, a lack of government support, and Japanese competition decreased orders in the late 1980s.^[114]

From 2003 to 2011, South Korea ranked first in the world for shipbuilding.^[116]

In January 2022, the European Commission blocked the acquisition of Daewoo Shipbuilding Marine Engineering by Hyundai Heavy Industries. The commission stated that the combined firm would have a majority share of the market for large LNG carrier construction.^[117] After a failed acquisition attempt in 2009, Hanhwa Group became the largest shareholder in DSME in May 2023, renaming it to Hanwha Ocean.^[118]

Mining

Iron ore was the country's top export in the early 1960s.^[124] The decreasing profitability of domestic mining led to the closure of various mines.^[125][126] South Korea's graphite production declined significantly after the 1960s.^[125] In 2010, the country had one active molybdenum mine as it reoponed NMC to increase mineral self-sufficiency.^[126] In 2014, almost all mining production in the country was for non-metallic minerals by small companies. These minerals included kaolin, limestone, and silica.^[127]

Construction

By 1981, the majority of construction work by South Korean companies took place overseas, particularly in the Middle East. By the end of the decade, focus shifted to a "rapidly growing domestic market."^[133]

South Korea's largest construction companies include Samsung C&T Corporation, which built some of the tallest buildings in the world such as Taipei 101,^[134] Petronas Towers, and the Burj Khalifa.^[135]

Defense

During the 1960s, South Korea was dependent on the United States to supply its armed forces, but after the elaboration of President Richard M. Nixon's policy of Vietnamisation in the early 1970s, South Korea began to manufacture its own weapons.^[136]

Since the 1980s, South Korea has begun exporting military equipment and technology to boost its international trade. Some of its key military export projects include the T-155 Firtina self-propelled artillery for Turkey; the K11 air-burst rifle for the United Arab Emirates; the Bangabandhu class guided-missile frigate for Bangladesh; fleet tankers such as Sirius class for the navies of Australia, New Zealand, and Venezuela; Makassar class amphibious assault ships for Indonesia; and the KT-1 trainer aircraft for Turkey, Indonesia, and Peru.

South Korea also exports various core components of other countries' advanced military hardware. Those hardware include modern aircraft such as F-15K fighters and AH-64 attack helicopters which will be used by Singapore, whose airframes will be built by Korea Aerospace Industries in a joint-production deal with Boeing.^[137] In other major outsourcing and joint-production deals, South Korea will facilitate the sales of Mistral class amphibious assault ships to Russia that will be produced by STX Corporation.^[138] The deal was cancelled in 2014 due to Russia's actions in Ukraine and the ships were sold to Egypt instead.^[139] South Korea's defence exports were $1.03 billion in 2008 and $1.17 billion in 2009.^[140]

Education

Energy

This section is an excerpt from Energy in South Korea.[edit]

South Korea is a major energy importer, importing nearly all of its oil needs and ranking as the second-largest importer of liquefied natural gas in the world. Electricity generation in the country mainly comes from conventional thermal power, which accounts for more than two thirds of production, and from nuclear power.^[149]

Energy producers were dominated by government enterprises, although privately operated coal mines and oil refineries also existed. The National Assembly enacted a broad electricity sector restructuring program in 2000, but the restructuring process was halted amid political controversy in 2004 and remains a topic of intense political debate.^[150]

South Korea has no proven oil reserves.^[149] Exploration until the 1980s in the Yellow Sea and on the continental shelf between Korea and Japan did not find any offshore oil. The Donghae-1 gas field produced natural gas between 2004 and 2021, and natural gas exploration off the east coast was started in 2024.^[151]

Coal supply in the country is insufficient and of low quality. The potential for hydroelectric power is limited because of high seasonal variations in the weather and the concentration of most of the rainfall in the summer. As of 2017, South Korean President Moon Jae-in has vowed to end the country’s reliance on coal and also said the nation would move away from nuclear energy. He has taken a major step in that direction in June, saying his country would not try to extend the life of its nuclear plants, would close existing coal-fired plants, and would not build any new coal plants.^[152]

In recent years, South Korea has set a new direction for its energy sector, with significant decarbonization goals, aiming to raise the share of electricity from renewable sources from 6% in 2019 to 35% by 2030.^[153][154]

Finance and banking

Healthcare

This section is an excerpt from Healthcare in South Korea.[edit]

Healthcare in South Korea is universal, although a significant portion of healthcare is privately funded. South Korea's healthcare system is based on the National Health Insurance Service, a public health insurance program run by the Ministry of Health and Welfare to which South Koreans of sufficient income must pay contributions in order to insure themselves and their dependants, and the Medical Aid Program, a social welfare program run by the central government and local governments to insure those unable to pay National Health Insurance contributions. In 2015, South Korea ranked first in the OECD for healthcare access.^[155]

Satisfaction of healthcare has been consistently among the highest in the world; South Korea was rated as the second most efficient healthcare system by Bloomberg.^[156][157] Health insurance in South Korea is single-payer system.^[158] The introduction of health insurance resulted in a significant surge in the utilization of healthcare services.

Healthcare providers are overburdened by the government relying on their workforce.^{[159][160][161]} Healthcare providers are prosecuted for criminal malpractice at a much higher rate than expected for a country like Korea, probably due to low legal protections.^[162] Patients too often cannot get treatment.^[162]

Housing

This section is an excerpt from Housing in South Korea.[edit]

Housing in South Korea includes detached houses, apartment (unit of apartment, row houses, and private houses), studio apartments, and dormitories in non-residential buildings such as shopping malls and factories. While the occupancy rate of apartment houses is steadily rising, the occupancy rate of detached houses is steadily falling.^[163]

Retailing

Mass media and entertainment

This section is an excerpt from Korean Wave.[edit]

The Korean Wave, or hallyu (Korean: 한류; IPA: [ˈha(ː)ʎʎu] ^ⓘ), refers to the important rise in global interest in South Korean popular culture that has spread rapidly since the 1990s. It is led by the spread of K-pop, K-dramas, K-beauty, K-food, and films, with key successes including K-pop groups 2NE1,^[164] BTS and Blackpink, the Oscar-winning film Parasite (2019) and the Netflix television series Squid Game (2021–2025).^[165][166] The Korean Wave has been recognized as a form of soft power and a significant economic asset for South Korea, generating revenue through cultural exports and tourism.^[167]

Following the 1997 Asian financial crisis and the end of military censorship over the South Korean entertainment industry, the country emerged as a major exporter of popular culture.^{[168][page needed]} The growth of satellite media in the late 1990s helped spread K-dramas and Korean cinema across East Asia and parts of Southeast Asia. Chinese journalists coined the term "Korean Wave" (Chinese: 韩流; pinyin: hánliú) in 1999 to describe the growing popularity of South Korean cultural products. During the 2000s, hallyu expanded into Southeast Asia, South Asia, the Middle East, and Eastern Europe. By 2008, South Korea's cultural exports surpassed its cultural imports for the first time.^[169] The rise of social media and global internet platforms helped the Korean entertainment industry reach overseas audiences and gain support from the South Korean government.

Telecommunications

Tourism

In 2012, 11.1 million foreign tourists visited South Korea, making it one of the most visited countries in the world,^[170] up from 8.5 million in 2010.^[171] Many tourists from all around Asia visit South Korea which has been due to the rise of the Korean Wave (Hallyu).

Seoul is the principal tourist destination for visitors; popular tourist destinations outside of Seoul include the major coastal city of Busan, the Seorak-san national park, the historic city of Gyeongju, and subtropical Jeju Island.

Transportation

Water supply and sanitation

Trade statistics

More information Country/Region, Export (M$) ...

2018 Top 10 export partners[182] Country/Region Export (M$) Percentage China 162,125 26.8% United States 72,720 12.0% Vietnam 48,622 8.0% Hong Kong 45,996 7.6% Japan 30,529 5.1% Russia 20,872 3.4% Taiwan 20,784 3.2% India 15,606 2.6% Philippines 12,037 2.0% Singapore 11,782 2.0% Mexico 11,458 1.9% Others 173,201 28.6% Total 604,860 100.0%

2018 Top 10 import partners[182] Country/Region Import (M$) Percentage China 106,489 19.9% United States 58,868 11.0% Japan 54,604 10.2% Saudi Arabia 26,336 4.9% Germany 20,854 3.9% Australia 20,719 3.9% Vietnam 19,643 3.7% Russia 17,504 3.4% Taiwan 16,738 3.1% Qatar 16,294 3.0% Singapore 12,762 2.0% Others 177,153 33.1% Total 535,202 100.0%

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More information Country/Region, Balance (M$) ...

2018 Top 10 positive balance (surplus) countries for South Korea[182] Country/Region Balance (M$) China 55,636 Hong Kong 43,999 Vietnam 28,979 United States 13,852 India 9,722 Philippines 8,468 Mexico 6,368 Turkey 4,791 Taiwan 4,045 Singapore 3,808 Others −110,011 Total 69,657

2018 Top 10 negative balance (deficit) countries for South Korea[182] Country Balance (M$) Japan −24,075 Saudi Arabia −22,384 Qatar −15,768 Kuwait −11,541 Germany −11,481 Australia −11,108 Russia −10,183 Iraq −7,658 United Arab Emirates −4,699 Chile −2,667 Others 191,221 Total 69,657

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