The Japan Times WORLD EYE REPORTS REPUBLIC OF KOREA
©THE JAPAN TIMES	Saturday, October 26, 2002

New dynamism for a rejuvenated Asian tiger

Disaster struck Asia in 1997. A currency crisis caused the near-collapse of many of the region's most promising economies, and brought about emergency intervention by the International Monetary Fund. Bankruptcies swept many of the highest flyers completely off the table, and the economic landscape underwent drastic and painful reform. It was not uncommon to see tent cities and breadlines in many of Korea's largest cities, images which were a far cry from the booming Asian Tiger the world had known during the 1990s.

The Asian downturn shocked the world, but not nearly as much as it did the Koreans. Forced to reexamine their economic system, radical reform measures were undertaken. The vaunted "chaebols", huge corporate conglomerates, were broken up, allowed to fail or drastically restructured. Non-performing loans in the banking system were forced into the open, causing nearly half of the nation's banks to fold. New securities regulation was designed to end the era of crony capitalism and back room deals. Out of the ashes of crisis and reform, a new tiger economy is emerging. Smarter, more cautious and with a firm sense of purpose, Korea began to rebuild its industrial sector. Samsung, LG and others led the charge into the next millennium, investing heavily in 3G mobile telephony, LCDs, semiconductors, microprocessors and the other tools of the information society.

South Korean Trade Minister Hwang Doo Yun

Heavy industry continues to be one of the country's pillars. Lead by Hyundai, Korea is the fifth largest producer of automobiles in the world, and they remain one of the leading export industries. With an annual production volume exceeding 3 million units and quality steadily improving, Korean auto brands are increasingly visible on highways abroad, further fueling the country's economic engine.

This shift in production has brought forth a new Korea, one that would have been unthinkable just 10 years ago. Korea is becoming the hub of northeast Asia, and a full- fledged member of the international community. The drive to be a regional hub has produced the new Incheon Airport, built at a cost of nearly $6 billion. It is able to handle 170,000 flights and 27 million passengers annually, and is but one cog in a fully integrated transportation and logistics hub consisting of a fully integrated port, rail, and highway system that provides the arteries for both the domestic and export economy.

Seoul's urban sprawl has grown vertically as well, ready to resume its dynamic global role.

Sitting atop this new and dynamic country is the capital city, Seoul. Home to nearly 25 percent of the country's population and many of the leading companies in the country, Seoul has become a modern and international metropolis. The most telling sign of this internationalization of Korea - the land once known as the Hermit Kingdom - can be found in the historic events of this year. Japan and Korea, neighbors, and sometime rivals, jointly became the first Asian countries to host a World Cup of football - a triumph of sportsmanship and organization.

Once rivals, Korea and Japan are now working to bridge their differences and form alliances that will benefit both of them equally. In the eyes of Tetsuke Terada, the Japanese Ambassador to South Korea, the potential for growth through mutual cooperation is immeasurable. "The strategic objective of both governments is to conclude with a Free Trade Area," he comments. "We are encouraging Korean investment into Japan and vice-versa. This will assure the development of a sound investment and lending environment between Japan and Korea."

With an economic situation very similar to Japan's - essentially that of an island with little natural resources - Korea has always depended heavily on trade to provide fuel for economic growth. This necessity has led Korea in recent years to eschew its traditional protection of markets, and to take its first steps towards being an open and competitive market able to compete with the globe's largest players. The move away from primary resource processing into much more complex and value added production has made Korea a key trading partner for many of the world's leading economies. "There will be continued globalization, driven by the market," says Hwan Doo-Yun, Korea's Minister of Trade. "That is - globalization in the form of market integration that dismantles national barriers to the movement of goods, services, capital, technology and human resources."

Terusuke Terada, Japanese ambassador to the Republic of Korea

"As a country with a high ratio of exports and investment in its economy, there are limits to an economic growth driven by domestic demand. Accordingly, Korea needs to convert the current economic recovery, boosted by consumer spending, into solid economic growth led by a balanced increase in consumption, exports and investment," comments the country's Minister of Commerce Industry and Energy, Shin Kook-Hwan, on the need for an globally oriented economy..

Internationalization has been the most significant factor in Korea's growth over the past decades, and it will be responsible for forcing the reforms that have let Korea emerge from its financial crisis and resume its position as a leader in Asia and beyond. While the challenges facing the country are still severe and the threat of conflict with North Korea remains a looming cloud on the horizon, things are beginning to look brighter. For the first time in years, Korea is standing on its own - able to maintain a thriving and vibrant country as a true member of the global village.

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