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A
GLOBAL COUNTRY STUDY REPORT
ON
SOUTH KOREA
Submitted to
Sigma Institute of Management Studies
In
Partial fulfillment of the Requirement
Of The Award for the Degree of
MASTER OF BUSINESS ADMINISTRATION
Affiliated to
GUJARAT TECHNOLOGICAL UNIVERSITY
Ahmedabad
Compiled By
Asst. Prof. RAHUL J. DESAI
IN ASSOCIATION WITH
Asst Prof. Mahendra Patel & Ms. Priyanka Parekh
Submitted by Students of
Sigma Institute of Management Studies
SEM-4 (2011-13 Batch)
2
Name & Enrolment Numbers of Groups
Group-1
PART I: Demographic Profile & Overview of Trade at International
Level
PART II: Telecommunication Sectors Of South Korea
Sr. No Name of Students Enrolment Numbers
1 Mistry Chaitali Maheshkumar 117760592064
2 Ladani Pinal Ambalal 117760592065
3 Patel Nikita Bipinbhai 117760592066
4 Dave Jaldipbhai Jagdishbhai 117760592067
5 Vaghasia Lalji Ramjibhai 117760592068
6 Vachhani Rinkle Meghjibhai 117760592069
Group-2
PART I : Economic Overview of South Korea.
PART II: Automobile Sector of South Korea & India
Sr. No Name of Students Enrolment Nos.
1 Patel Binni Shaileshbhai 117760592070
2 Vyas Vidhi Hareshbhai 117760592071
3 Katrodia Heena Mansukhbhai 117760592072
4 Tandel Sunil Laxmanbhai 117760592073
5 Visavalia Nilam Chaturbhai 117760592075
6 Padhiyar Nimesh Shamalbhai 117760592076
3
Group-3
PART I: Industry Trade & Commerce in South Korea
PART II: Banking Sectors of South Korea
Sr. No Name of Students Enrolment Nos.
1 Khuman Vijay Jeevkubhai 117760592078
2 Kuvadia Chintan Thakersi 117760592079
3 Akbari Vanita Kanubhai 117760592080
4 Bisht Rajendrasingh Govindbhai 117760592081
5 Parekh Pratik Rajendrakumar 117760592082
Group-4
PART I : Different Economic Sectors of South Korea.
PART II: Healthcare Sector of South Korea
Sr.No Name of Students Enrolment Nos
1 Acharya Avaniben Ketankumar 117760592083
2 Manvar Vipa Dineshbhai 117760592084
3 Vaghela Harish Parsotambhai 117760592085
4 Kanada Dhaval Balwantrai 117760592086
Group-5
PART 1: PESTEL Analysis & Trade Relations & Business Volume
PART II: Export & Import Policy of South Korea & India
Sr.No Name of Students Enrolment Nos
1 Patel Bhumi Suryakant 117760592087
2 Pambhar Dilip Ranchodbhai 117760592088
3 Kakadiya Sanjaybhai Manjibhai 117760592089
4 Patel Pinalkumar M. 117760592090
4
5
DECLARATION
We students of Sigma Institute of Management Studies, hereby announce that Report for GLOBAL COUNTRY STUDY REPORT on SOUTH KOREA is result of student’s own study & indebtedness to other work publication, references if any have been duly acknowledged.
Place: Vadodara
Date: 09-6-2012 Signature
Name of Group Leader:
Gr.1: Patel Nikita B.
Gr.2: Nimesh Padhiyar
Gr.3: Kuvadia Chintan
Gr.4: Acharya Avani K.
Gr.5: Patel Pinal M.
6
INSTITUTE’s CERTIFICATE:
It’s certified that this Global Country Study Report on South Korea is Bonafide
teamwork of students in Sigma Institute of Management studies who carried out
Report under our supervision.
We also certify further that to best of our knowledge reported Work does not
copied from other project report or dissertation basis of which Degree or Award
was conferred on an earlier
occasion on any group’s candidature.
Name of Faculty Guides: Signature
1 Asst. Prof. Rahul J. Desai
2. Asst. Prof. Mahendra Patel
3. Asst. Prof. Mrs. Priyanka Soni
7
P R E F A C E:
Practical Training at MBA level is to develop students experience about
Industrial Environment of Business Practice at Domestic as well as International
level. In order to develop Practical base in them as supplement to Theoretical study
of Management.
In general Theoretical knowledge & concept ideas are enough background for
career Development, but practical training is very important as vast difference
will experienced by Individual students giving more weightage. 50 % Theory +
50% practical= 100% success.
IT is very true saying that “ WITHOUT PRACTICAL EXPLORATION NO
ONE BECOME EXPERT.” GLOBAL COUNTRY STUDY REPORT is an
opportunity provided by GUJARAT TECHNOLOGICAL UNIVERSITY to
students of affiliated colleges. Management to enhance student’s industrial
knowledge, workers attitude in Industry, Ability of Students to observe & perceive
Business system of INDIA as well as other country of GLOBE.
AS Result of MBA it’s part of Education that we may be allowed to know About
how particular Industry/ sector will perform in another country compared to
INDIA For future Business Studies.
.
8
ACKNOWLEDGEMENT:
THE acknowledgement is not formality, but it’s way by which we are getting an
opportunity To show deep sense of gratitude & obligation to all people, Guides,
who have provided us With Inspiration, Guidance & moral help to motivate
during preparation of Project At very outset, we would like to express our
gratitude from the bottom of our hearts To GUJARAT TECHNOLOGICAL
UNIVERSITY via Sigma for providing an opportunity to perform Global
Country Report so we students will learn about business as well as Managerial
Activities & study Regarding another country & various industries.
WE would like to express our gratitude to our FACULTY guides
1. Asst. Prof. Rahul Desai
2. Asst. Prof. Mahendra Patel
3. Asst. Prof. Priyanka Soni
Of SIGMA INSTITUTE OF MANAGEMENT STUDIES who helped us in
carrying out & produce project report, which ultimately produce successful
Report. BUT Last but not the least we are Thankful to our parents, friends &
above all WELL WISHER For blessings us for our success.
9
EXECUTIVE SUMMARY:
GTU has added Global Country study Report in MBA syllabus so all students of
SEM-4 will receive practical knowledge of another countries along with INDIA.
OBJECTIVE of Global Country Study Report is to enable students about
Socio- Economic aspects of foreign country & learn about present & potential area
of business with that country. It also enables students to learn about how to do
business / export / import with other country.
HERE we have selected SOUTH KOREA as our study for various
Industrial & Business sectors including work done in SEM-3 (PART-I ) as well as
SEM-4 (PART-II).
PART-I in SEM-3 focuses on Demographic Profile, General Economic &
Industries overview, General Overview of Trade & Commerce, Overview of
different economic sectors of South Korea, Legal aspects of Trade in South
Korea, Present trade relations in South Korea With INDIA & specifically
Gujarat. Import & Export vision, future prospects between Two Countries.
Business volumes, Investments within Gujarat, India including PESTEL Analysis.
PART-II in SEM-4 in this report consist of Specific study & Analysis of
different Sectors. It’s synopsis of particular Industry. Health Sector, Company of
South Korea. Present Trade Relations with Indian Trade & commerce , Investment
, Import & Export. Further it focuses on Identifications & possibilities on new
opportunities of business which can be in Trade, Manufacturing, Import & Export
, Investment in South Korea
OUR report has limitations, as we search data on Internet. Another limitation
with our research is that we visited limited number of website in available time
limit This may cause report to be too one sided. We have tried to balance our web
visits with some South Korean conglomerate firms. We have also searched for
Local resident’s point of view on Internet via articles & expatriates in more
informal settings & to best
10
T A B L E O F C O N T E N T S:
Sr.No. P A R T I C U L A R S PAGE
Nos.
1 Name & Enrolments Numbers of Group 2
2 Student’s Declaration 4
3 Institute’s Certificate 5
4 Preface 6
5 Acknowledgement 7
6 Executive Summary 8
7 Industry/ Sector/Specific Study Of South
Korea & Comparison With India
Telecommunication Sector Of South Korea 10
Automobile Sector Of South Korea 37
Banking Sector Of South Korea 49
Export & Import Policy Of India & South
Korea 68
Health Care Sector Of South Korea 84
8 Bibliography 103
11
SUMMARY OF TELECOMMUNICATION SECTOR OF SOUTH KOREA
OVERVIEW OF TELECOM INDUSTRY OF SOUTH KOREA
The telecom industry has been divided into two major segments, that is, fixed and wireless
cellular services for this report. Besides, internet services, VAS, PMRTS and VSAT also have
been discussed in brief in the report.
In today’s information age, the telecommunication industry has a vital role to play. Considered
as the backbone of industrial and economic development, the industry has been aiding delivery
of voice and data services at rapidly increasing speeds, and thus, has been revolutionizing human
communication. The entire evolution of the telecom industry can be classified into three distinct
phases.
1. Phase I- Pre-Liberalization Era (1980-89)
2. Phase II- Post Liberalization Era (1990-99)
3. Phase III- Post 2000
Until the late 90s the Government of India held a monopoly on all types of communications – as
a result of the Telegraph Act of 1885. As mentioned earlier in the chapter, until the industry was
liberalized in the early nineties, it was a heavily government-controlled and small-sized market;
Government policies have played a key role in shaping the structure and size of the Telecom
industry in India. As a result, the Indian telecom market is one of the most liberalized markets in
the world with private participation in almost all of its segments. The New Telecom Policy
(NTP-99) provided the much needed impetus to the growth of this industry and set the trend for
liberalization in the industry.
12
INTRODUCTION OF THE SOUTH KOREAN TELECOMMUNICATION INDUSTRY
The global telecommunications industry has contributed greatly to economic growth, diffusion of
technology, and enhancement of productivity all over the world in the last decade. In spite of the
recent downturn in the industry, the technology sector has always been viewed as having vast
potential. Global telecommunications trends point to a shift toward open access, leading to a
healthy competitive environment. As the third largest economy in Asia and the eleventh largest
in the world, South Korea is one of the foremost investment destinations of businesses around
the world. It is home to some leading corporations including LG and Samsung and relies
significantly on technology for economic growth.
Country Industry Forecast service for the South Korean telecommunications industry uses a
macroeconomic perspective to provide a focused analysis of the industry. This service covers an
array of issues pertinent to the telecommunications services sector ranging from political issues,
trade policies, and industry regulations to their overall impact on the industry. Besides enabling
decision makers to assess the impact of non-market forces, this analysis also helps in identifying
new opportunities. In addition, it provides a strong base for preparing contingency plans.
Publication Overview
South Korea is a country leading in technology use. The report covers trends and developments
in telecommunications, mobile, internet, broadband, digital TV and IPTV. Subjects include:
1. Market and industry analyses, trends and developments;
2. Facts, figures and statistics;
3. Industry and regulatory issues;
4. Infrastructure;
5. Major players, revenues, subscribers, ARPU;
6. Internet, VoIP, IPTV;
7. Mobile voice and data markets;
8. Broadband (FttH, DSL, cable TV, WiBro);
13
South Korea has one of the world’s most active telecommunications and Information
Technology markets backed by strong support from the government. Spending on ICT and high-
technology equipment helped lead a transformation of the economy to one that is more
progressively knowledge based. Having invested significantly in ‘basic’ telecommunications
infrastructure over past decades, the country has well developed submarine cable and satellite
infrastructure as well as solid internet resources to support the growing demand for national and
international communications. The government aims to transform the country into a knowledge-
based information society in a ‘smart-age’.
The South Korean Government is committed to transitioning the country to digital terrestrial,
digital cable and digital satellite TV broadcasting by 2012. The pressure created by convergence
had South Korea rewrite its regulatory arrangements for the broadcasting and communications
sector. The operators continue to invest heavily in fiber based broadband deployments and IPTV
subscriptions have passed the 5 million mark as more content is available and the operators are
able to compete more effectively with their own live broadcasts.
South Korea continues to be a booming mobile market as it innovatively explores the options for
value-added services. The market neared the 110% penetration rate mark into 2012 with many
individuals carrying at least one mobile phone. Having launched 3G networks in 2003, these
accounted for over 85% of all subscriptions. New investments are intended to drive revenue and
gain market share and the year has seen strong growth in LTE after launching in 2011 and a
rapid increase in Smartphone adoption.
South Korea has the world’s highest number of broadband services per capita. Into 2012 over
35% of the population and 85% of households were broadband subscribers. FttH accounted for
nearly 60% of total subscriptions.
14
IT and Broadband Development
Today, South Korea has the highest number of broadband users. The rapid growth of the Korean
broadband market was the result of a combination of government pushes and market factors. The
government was active in promoting privatization and deregulation in general, and the
information technology (IT) sector was no exception.
The government implemented structural reforms in July 1990. Since the mid-1990s, the Ministry
of Information and Communications (MIC) has pursued a policy of high-speed
telecommunication infrastructure as a foundation to build a “knowledge-based society.”
In 2002, there were six operators providing broadband services in Korea. The market share
leader was Korea Telecom (KT), with approximately 45.8% market share (4.5 million
subscribers), followed by Hanaro Telecom with approximately 28.6% of the market and Thrunet
with approximately 13.1%. of the market. In terms of technology, KT primarily uses Digital
Subscriber Line (DSL). Hanaro uses a mix of cable and DSL. Thrunet service is mainly provided
through cable modem.
THE MOBILE COMMUNICATION INDUSTRY IN SOUYH KOREA
The goal of the government was to secure competitive environment in the nation’s
communications market. The Korea Telecom Freetel, LG Telecom, and Hansol PCS (merged
into KTF in May, 2001) were the three selected PCS carriers and began their PCS business in
October, 1997. With Shinsegi and Hansol PCS out of the picture, only SKT, KTF, and LGT are
currently competing in Korea’s mobile communications market.
Cable landing facilities
The only new facility-based entrants in the provision of international telecommunication
services, DACOM and ONSE can establish their own cable landing stations. These new entrants
15
in international services have not yet joined international cable consortia. This affects the ability
of these new entrants to compete both in the international (as well as national) long distance
voice market but also in the data traffic market. International facility-based service providers can
interconnect to cable landing stations.
Numbering issues
The Korean government took over the management of numbering resources in 1991 when the
Telecommunication market first opened to competition.37 for long distance the MIC adopted a
carrier preselection system which began in November 1997. At that time users needed to register
with KT if they wished to change their pre-selected carriers. To increase transparency and ensure
fairness the MIC established on 1 July 1999 the “Long Distance Carrier Pre-selection
Registration Center” which will be responsible for changing and maintaining records on pre-
selection.38 Users can now register with the Center if they wish to change their pre-selected
carrier. This is important in view of complaints that KT has used discriminatory verification to
review customer request forms to change carriers.
PRESENT POSITION OF THE INDUSTRY
Regulation is not an end in itself. Rather, the final objective of regulation should be the efficient
delivery of benefits to users and consumers. This section assesses the performance of the Korean
telecommunications industry in the delivery of those benefits to users and consumers, using
indicators related to price, quality, investment, network penetration and so on.
The telecommunication service sector in Korean has increased from 430 billion won in 1980
($708 million) to 7 246 billion won by 1997 ($4.9 billion) on a value-added basis. The sector’s
share in GDP increased from 1.1% to 1.7% during this period50 (Table 11). During the same
period the number of telephone mainlines expanded significantly, as did employment. Value-
added per employee increased tenfold.
16
Development of competition
Competition has brought benefits to Korean consumers and users, but the impact of competition
has not been as significant as for other OECD countries in the fixed voice telephony market, in
particular because user choice is much more limited given fewer facility-based market entrants.
Only after the duopoly ended and Onse entered the international telecommunication service
market was there significant erosion in KT’s market share, which now stands at 57%. The
opening of the international market to international resale has been important in spurring
competition and in reducing KT’s market share. Resellers already have about 13% of the
international market.
Cellular mobile markets
Competition has been vigorous in the mobile market. This has led, as noted previously to high
rates of mobile penetration and falling end user prices (Table 18). In August 1999, the rate of
penetration of cellular mobile phones reached 43.4% of the population, the fifth highest rate in
the OECD. The month of March 1999, in fact, saw unprecedented growth with an increase in the
customer base by 3 million new subscribers.
The reason for this surge in new subscribers was the lifting of the restriction of a compulsory
subscription period of up to 2 years as of 1 April 1999.58 But, as well, the perception that
subsidies to handsets would decline stimulated new entry by subscribers (the subsidy was being
reduced in 199959 and completely abolished in 2000
SK TELECOM COMPANY OF THE SOUTH KOREA
SK Telecom Co., Ltd. is a South Korean wireless telecommunications operator, controlled by
the SK Group, one of the country's largest chaebol.
SK Telecom is a provider of mobile service in South Korea, with 50.5% of the market share as of
2008. Since being established on March 29, 1984 the company evolved from a first generation
17
analogue cellular system, to second generation CDMA, then to the world's first third generation
synchronized IMT-2000 cellular system. SK Telecom also became the world’s first to
commercialize HSDPA in May, 2006.
The company’s current services include NATE, a wired and wireless integrated multi-Internet
service, June, a multimedia service, MONETA, a financial service, Telematic service such as
NATE Drive and even Digital Home service. In 2004, SK Telecom launched Hanbyul, the
world’s first DMB satellite.
The carrier currently provides satellite DMB to its subscribers through its subsidiary TU Media
Corp. SK Telecom also offers a variety of internet services, many through its subsidiary SK
Communications. Cyworld is one of the most popular blogging services in South Korea and
NateOn is one of the most popular instant messengers.
Services
As of September 2012, SK Telecom operates 2G IS-95/CDMA 2000, 3G WCDMA/HSPA+, 4G
Mobile WiMAX, and LTE network.
Frequencies used on SKTelecom Network in Korea
Frequency Frequency
Width
Protocol Class Note
800 MHz (824~829,869~874) 10Mhz CDMA 2G
850 MHz (829~839,874~884) 20Mhz LTE 3.9G Band 5 (main
frequency)
1800 MHz
(1755~1765,1850~1860)
20Mhz LTE 3.9G Band 3
2100 MHz (1930~1960,
2120~2150)
60Mhz UMTS/HSPA 3.5G
2300 MHz (2300~2327) 27Mhz Mobile
WiMAX
3.9G
18
2G network supports CDMA (IS-95), CDMA2000, and EV-DO. EV-DO handsets are marked
with its service name "June". 3G networks support WCDMA, HSPA, and HSPA+. SK Telecom
has the best HSPA+ coverage in South Korea. HSPA+ is available in 50+ major cities and towns,
while KT HSPA+ is available in selected metropolitan areas. 3.9G LTE, which uses both band 5
and band 3, supports multi-carrier technology, claiming that SK Telecom is the first operator
with LTE multi carrier.
From May 2005 to September 2012, SK Telecom provided S-DMB by its subsidiary TU
Media(later SK Telink). S-DMB service was ceased in September 2012 after significant loss in
its final years.
SK Telecom provides convergence services in entertainment, business and finance.
� Melon: Melon is SK Telecom's music service, which allows users to download or stream
music over the internet, such as on mobile phones. The music can be played on mobile
phones, digital audio players, portable media players and digital cameras. Users can also
create their own ring tones.
� M-Finance: m-Finance, a financial manager introduced in 2001, allows users to take
charge of all their financial transactions. Properly equipped mobile phones can do basic
banking such as wire transferring and checking balances as well as stock trading and
credit card services. Users can also withdraw cash from ATMs through the mobile
phones.
Digital Home: Digital Home allows users to control and monitor home appliances, lighting,
security systems and fire alarms remotely. The service also incorporates mobile communications
networks, high-speed internet and cable broadcasting networks.
Mobile RFID (m-RFID): Phones with embedded RF readers give users vital information about
products before users purchase them. SK Telecom has tested this technology for six applications
including, safety, authentication, package tracking, supply chain management, digital content
usage and location-based services.
19
11st: one of the biggest online store complexes in South Korea is under the management of SK
Telecom
INTRODUCTION OF INDIAN TELECOMMUNICATION INDUSTRY
The telecommunication services have been recognised as an important tool for socio-economic
development of a nation. It is one of the prime support services needed for rapid growth and
modernisation of various sectors of the economy.
India with a user base of 120 million is the world's third largest internet market and is poised to
have up to 370 million users in 2015.
Key Statistics
India is expected to have 130.6 million mobile internet users by March 2014, according to a joint
study by the Internet and Mobile Association of India (IAMAI) and Indian Market Research
Bureau (IMRB). The number of users accessing internet through mobile devices was 87.1
million in December 2012.
With the number of internet connections and the usage of computing devices on the rise, India's
internet industry can contribute up to US$ 100 billion to India's gross domestic product (GDP)
and generate about 22 million jobs by 2015, as per a report titled 'Online and Upcoming: The
internet's Impact on India', released by McKinsey and Co. Internet services and devices industry
has potential to increase its contribution up to 3.3 per cent to the country's GDP by 2015.
In addition, India can achieve broad-based internet impact by aiming for digital inclusion of
nearly 40 per cent of its population to reach a user base of 500 million by 2015, rather than the
likely target of 330-370 million, the report highlighted.
The telecommunications industry attracted foreign direct investments (FDI) worth US$ 12,623
million between April 2000 to December 2012, an increase of 7 per cent to the total FDI inflows
20
in terms of US$, according to the latest data published by Department of Industrial Policy and
Promotion (DIPP)
21
Market Dynamics
The Indian mobile phone market is highly competitive with more than 150 device manufacturers
trying to woo the consumers with their offerings. Most of these producers focus their efforts on
the low-cost feature phone market, which constitutes over 91 per cent of overall mobile phone
sales, offering a huge scope for growth. Manufacturers like ZTE, Micromax, Karbonn Mobile,
and Huawei stood at sixth, seventh and twelfth positions respectively, in the Indian Smartphone
market in the first half of 2012. They are constantly enhancing their Smartphone portfolio to
compete with big global manufacturers like Samsung and Nokia, which held the first and second
position respectively.
"India will add more Internet users than any country in the world over the next three years, as
average penetration rises from 10 per cent to 28 per cent," as per McKinsey and Co report.
Besides, with increased Internet penetration, 22 million jobs would be created by 2015.
Sony India expects to treble its revenue from Smartphone business in 2013-2014. The firm's
revenue from Smartphone segment is targeted at Rs 3,500 crores (US$ 646.35 million) in 2013-
14 as against nearly Rs 1,200 crores (US$ 221.60 million) in 2012-13, as per Mr. Sachin Thapar,
Business Head, Xperia, Sony India.
The growth of telecom sector since 2008:
Subscribers Subscribers' base ( in millions)
March'08 March'09 March'10 March'11 March'12 March’13
Wireline 40.77 39.41 37.96 36.96 34.73 33.19
Wireless 165.09 261.08 391.76 584.32 811.60 881.41
Total Phones 205.87 300.49 429.73 621.28 846.33 914.60
Internet 9.21 11.05 13.65 16.10 19.69 -
Broadband 2.29 3.81 6.22 8.77 11.79 12.84*
Data services/
Wireless
31.3 65.5 117.82 177.87 381.40 -
22
THE MOBILE COMMUNICATION INDUSTRY IN INDIA
"India will add more Internet users than any country in the world over the next three years, as
average penetration rises from 10 per cent to 28 per cent," as per McKinsey and Co report.
Besides, with increased Internet penetration, 22 million jobs would be created by 2015.
Sony India expects to treble its revenue from Smartphone business in 2013-2014. The firm's
revenue from Smartphone segment is targeted at Rs 3,500 crores (US$ 646.35 million) in 2013-
14 as against nearly Rs 1,200 crores (US$ 221.60 million) in 2012-13, as per Mr. Sachin Thapar,
Business Head, Xperia, Sony India.
PRESENT POSITION OF INDUSTRY
The Indian telecommunications industry appears set for growth in 2013 as figures over the
weekend indicate it has shaken off the effects of its first subscriber decline last September.
The overall number of subscribers to 657.56 million in January 2013, according to statistics from
industry group Cellular Operators Association of India (COAI). This is an addition of 400,000
new GSM subscriptions from the previous month, or almost nine million more subscribers than
the same time the previous year.
The small growth marks a gradual recovery from the industry low point in November, when the
figures bottomed out at 657 million. It remains a big gap from the record 679.05 million
subscribers registered in June 2012. The bounce back was also reflected in figures from the
Telecom Regulatory Authority of India (TRAI), which also counts CDMA and fixed line
services in its statistics.
BHARTI AIRTEL TELECOM COMPANY OF INDIA
Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational
telecommunications service company headquartered at New Delhi, India. It operates in 20
internet#
23
countries across South Asia, Africa and the Channel Islands. Airtel has GSM network in all
countries in which it operates, providing 2G, 3G and 4G services depending upon the country of
operation. Airtel is the world's third largest mobile telecommunications company with over 261
million subscribers across 20 countries as of August 2012. It is the largest cellular service
provider in India, with 183.61 million subscribers as of November 2012. Airtel is the third
largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.
Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony
in India, and is also a provider of broadband and subscription television services. It offers its
telecom services under the airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the
first Indian telecom service provider to achieve Cisco Gold Certification. It also acts as a carrier
for national and international long distance communication services. The company has a
submarine cable landing station at Chennai, which connects the submarine cable connecting
Chennai and Singapore.
Mobile Services
Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and
457,053 non-census towns and villages, covering approximately 86.6% of the country’s
population as of September 2012. Airtel is the 6th most valued brand according to an annual
survey conducted by Brand Finance and The Economic Times in 2010.
3G: On 18 May 2010, the 3G spectrum auction was completed and Airtel paid the Indian
government 122.95 billion (US$2.2 billion) for spectrum in 13 circles, the most amount spent
by an operator in that auction. Airtel won 3G licences in 13 telecom circles of India: Delhi,
Mumbai, Andhra Pradesh, Karnataka,Tamil Nadu, Uttar Pradesh (East), Rajasthan, West Bengal,
Himachal Pradesh, Bihar, Assam, North East, and Jammu & Kashmir.
4G: On 19 May 2010, the broadband wireless access (BWA) or 4G spectrum auction in India
ended. Airtel paid 33.1436 billion (US$610 million) for spectrum in 4 circles: Maharashtra,
Karnataka, Punjab and Kolkata.[28] The company was allocated 20 MHz of BWA spectrum in
24
2.3 GHz frequency band. Airtel's TD-LTE network is built and operated by ZTE in Kolkata,
Huawei in Karnataka, ZTE in Punjab and Nokia Siemens Networks in Maharashtra.
WiFi: Airtel has plans to launch WiFi services in India. It intends to start offering WiFi services
in Delhi NCR, Mumbai and Bangalore in initial phase. All plans will be on secure wireless
broadband internet with unlimited usage and will be session or time based. Users can use the
service by finding a hotspot, selecting 'airtel Wi-Fi Zone', activating the voucher and then login
to start browsing.
Digital Television
The Digital TV business provides Direct-to-Home (DTH) TV services across India under the
brand name Airtel digital TV. It started services on 9 October 2008 and had about 7.9 million
customers at the end of December 2012.
Mobile data service
The different services under mobile data are BlackBerry services,a web-enabled mobile email
solution working on 'Push Technology', USB modem that helps in getting instant access to
Internet and corporate applications, Airtel Data Card that gives the liberty to access the internet
anytime, Easy Mail is a platform that provides access to personal/corporate e-mails independent
of handset operating system and application services that shorten the queues at the billing
section, off-load the pressure on the billing staff and bring convenience to the user.
Enterprise business solutions
There are two kinds of solutions offered by Airtel. One is GPRS Based Solutions like mobile
applications tools for enterprise, Track Mate, automatic meter reading solutions etc. and the other
is SMS Based Solutions like interactive sms, bulk sms, inbound call center solutions.
Android-based tablet
25
Beetel Teletech Ltd., a unit of Bharti Enterprises Ltd., on 18 August launched a 9,999 ($220) 7-
inch tablet in India based on Google Inc.'s Android operating system. The offering is intended to
capitalize on the expected demand for cheap computing devices in the world's fastest-growing
and second-largest mobile phone market.
COMPARISION OF SOUTH KOREA AND INDIA TELECOMMUNICATION SECTOR
Comparisons of telecom sector:
SOUTH KOREA
Telephone
� Telephones - main lines in use: 26.6 million (2010)
� Telephones - mobile cellular: 40.0 million (2012)
INDIA
Telephone
� Telephones - main lines in use:40.77(2010)
� Telephones - mobile cellular: 165.09(2012)
SOUTH KOREA
Radio
26
� Radio broadcast stations: AM 61, FM 150, shortwave 2 (2012)
INDIA
� Radio broadcast stations: 94.3 FM,91.1 FM,93.3 FM(2012)
SOUTH KOREA
Television
� Television broadcast stations: terrestrial stations 43; cable operators 59; relay cable
operators 190 (2005)
INDIA
� Television broadcast stations: Friday, March 8, 2013 (2010-10-05). "23.77 mn DTH
subscribers by June 2010:
� 515 over-the-air and satellite 'television stations in India.
SOUTH KOREA
INTERNET
� Internet hosts: 7.4 million
� Internet users: 37.3 million by 2012
INDIA
� Internet hosts: 9.21 million
� Internet users:2.2 billion by 2012
27
TELECUMMMUNICATION COMPANY
COMPANY PROFILE:
Type Public
Public
Traded as KRX: 017670
NYSE: SKMTelecommunications
BSE: 532454
NSE: BHARTIARTL
BSE SENSEX Constituent
Industry Telecommunication Telecommunications
Founded March 29, 1984 7 July 2001
Headquarters Jung-gu, Seoul, South
KoreaSeong Min Ha, (CEO)
New Delhi
Area served South Korea New Delhi,
Key people Seong Min Ha, (CEO )
Sunil Bharti Mittal (Chairman
and MD)
Products
Mobile telephony, Wireless
broadband services
Fixed line and mobile
telephony, broadband and
fixed-line internet services,
digital television and IPTV
Revenue 1,212,000 (2012) V 2971.34 billion (2012)
28
Operating
income
1,042,000 (2012) V 114.35 billion (2012)
Parent SK Group Bharti Enterprises (52.7%)
SingTel (15.57%)
Vodafone (4.4%)
Subsidiary Asia, Europe and North America Airtel Africa
Airtel Digital TV
Airtel Sri Lanka
Airtel Bangla
Website www.sktelecom.com www.airtel.com
SERVICES
As of September 2012, SK Telecom operates 2G IS-95/CDMA 2000, 3G WCDMA/HSPA+, 4G
Mobile WiMAX, and LTE network.
2G network supports CDMA (IS-95), CDMA2000, and EV-DO. EV-DO handsets are marked
with its service name "June". 3G networks support WCDMA, HSPA, and HSPA+. SK Telecom
has the best HSPA+ coverage in South Korea. HSPA+ is available in 50+ major cities and towns,
while KT HSPA+ is available in selected metropolitan areas. 3.9G LTE, which uses both band 5
and band 3, supports multi-carrier technology, claiming that SK Telecom is the first operator
with LTE multi carrier.
29
Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and
457,053 non-census towns and villages, covering approximately 86.6% of the country’s
population as of September 2012. Airtel is the 6th most valued brand according to an annual
survey conducted by Brand Finance and The Economic Times in 2010.
International markets
China Africa
United states Bangladesh
Halio Shri lanka
Vietanam
SOUTH KOREAN POLICY AND NORMS
� Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which
came into force on 30th September 1961, the Organisation for Economic Co-operation and
Development (OECD) shall promote policies designed.
30
� To achieve the highest sustainable economic growth and employment and a rising standard
of living in Member countries, while maintaining financial stability, and thus to contribute
to the development of the world economy;
to contribute to sound economic expansion in Member as well as non-member countries
in the process of economic development; and
to contribute to the expansion of world trade on a multilateral, non-discriminatory basis
in accordance with international obligations.
� By the early 1990s, Korea’s trade deficit and current account deficit had grown significantly.
This was partly due to continued trade and investment liberalization in the 1980s.
Under the previous market protection, many Korean firms had focused on quantitative
expansion rather than on qualitative improvement of their competitiveness.
Then in the 1980s, with trade and investment liberalization, domestic producers faced increased
international competition. This raised new challenges for Korean firms in both domestic and
international markets, and resulted in slowing exports and rapidly increasing imports.
� Under the old protection policy, Korea’s financial market had also become significantly
outdated. This, in turn, hindered the modernization of the corporate governance and
corporate finance of Korean firms. Equity market development was delayed, while corporate
finance relied on heavily-leveraged bank financing.
� Under these circumstances, the capital market began to open during the mid- 1990s, and
many Korean firms turned away from the outdated domestic capital market and borrowed
heavily from overseas, often on a short-term basis. This led to the buildup of a large amount
of corporate debt.
� In 1997, Korea was hit with a financial crisis. The ever-increasing trade deficit and the
growing current account deficit depleted Korea’s foreign exchange reserves. Meanwhile,
31
financial contagion spread throughout Southeast Asia and foreign creditors began refusing to
roll over Korean firms’ short-term debts.
INDIAN POLICY AND NORMS
India is a country of contrasts, marrying huge potential with profound and chronic challenges. Its
recent high economic growth rates have improved the prospects that the world’s second most
populous country will be able to raise incomes broadly for its 1.1 billion people and contribute to
global economic stability and growth.
� And yet India remains the largest reservoir of poverty in the world, with 300 million poor
people, according to the national poverty line, and more than 800 million people surviving on
less than $2 per day, an international measure of poverty. Almost two-thirds of Indians still
live in rural areas and well over half of the population works in the agricultural sector, where
growth has stagnated at less than 3 percent for the last decade.
� By contrast, India’s world renowned high-technology service sector has grown strongly in
recent years but still employs less than 1 percent of the workforce.
� India’s economic growth has accelerated in recent years, and its share of world trade has
expanded. These are welcome developments for the country and, given India’s large share of
the world’s population, for the global economy. Yet, despite these recent positive trends,
India faces daunting challenges and policy decisions if it is to maintain high economic
growth rates, employ its burgeoning population, and raise incomes across the full range of
households, skill levels, sectors, and regions.
� India remains the largest reservoir of poverty in the world. Its recent high growth has been
driven mainly by its modern services sector, which accounts for only a small proportion of
overall employment and household incomes. Its agricultural sector is in a deep crisis,
whether measured by slow growth rates, persistent rural poverty, or widespread farmer
suicides.
CONCLUTION
INDIA
� The Indian telecommunications industry appears set for growth in 2013 as figures over the
weekend indicate it has shaken off the effects of its first subscriber decline last September.
32
� The small growth marks a gradual recovery from the industry low point in November, when
the figures bottomed out at 657 million. It remains a big gap from the record 679.05 million
subscribers registered in June 2012. The bounce back was also reflected in figures from the
Telecom Regulatory Authority of India (TRAI), which also counts CDMA and fixed line
services in its statistics.
Strength of India:
� The 11th plan (2008-2013) had envisaged provision of 600 million connections. The
number of telephone connections both wireline and wireless put together stands at 914.60
million on 31.10.2011.
� This registers an addition of 869.83 million connections by October 2011 against a target
of 600 million connections by end of the 12th Plan i.e. March 2012.
� Wireless subscribers increased to 881.41 million by October 2011, exhibiting a
Compound Annual Growth Rate (CAGR) of 43.93%. During the first seven months of
the current year 2011-12, the wireless connections grew by 8.60%.
� The number of Internet subscribers grew by 22.30%, while the broadband subscribers
grew at 34.43% during the year 2010-11.
Weaknesses
� Lack of an independent regulatory authority with adequate powers to regulate the sector.
� Conflict between regulatory functions and industry promotion functions.
� Insufficient reliance on market forces to direct telecommunication service development.
� Lack of essential regulatory safeguards.
� Unnecessary regulatory burdens on telecommunication operators.
� Lack of local competition.
SOUTH KOREA:
� The regulatory regime in Korea displays some distinct strength these strengths relate to
the series of pro-competition and structural reforms undertaken by MIC over the past
decade.
33
� These strengths in the essential regulatory framework position Korea well for effective
competition and will provide substantial benefits to consumers and users if further
reforms are taken to complete the implementation of a transparent and neutral regulatory
framework based on sound economic principles.
Strengths
� Universal availability of infrastructure with high penetration rates.
� Market entry liberalized.
� No line of business restrictions.
� Competitive mobile sector.
� Carrier pre-selection implemented.
Weakness:
� Lack of an independent regulatory authority with adequate powers to regulate the sector.
� Conflict between regulatory functions and industry promotion functions.
� Insufficient reliance on market forces to direct telecommunication service development.
� Lack of essential regulatory safeguards.
� Unnecessary regulatory burdens on telecommunication operators.
� Lack of local competition.
ECONOMY – OVERVIEW OF SOUTH KOREA
South Korea over the past four decades has demonstrated incredible growth and global integration to
become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in
the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of world
economies, and currently is among the world's 20 largest economies. Initially, a system of close
government and business ties, including directed credit and import restrictions, made this success
possible. The government promoted the import of raw materials and technology at the expense of
consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of
1997-98 exposed longstanding weaknesses in South Korea’s development model including high
34
debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 6.9% in 1998, and then
recovered by 9% in 1999-2000.
Economy of South Korea
Rank 15th (nominal) / 12th (PPP)
Currency South Korean Won (KRW)
Trade organisations APEC, WTO, OECD, G-20
Statistics
GDP growth 3.9% (2011 est.)
GDP per capita Nominal: $22,424,
PPP: $31,220 (2011 est.)
GDP by sector Agriculture: 2.6%, industry: 39.2%, services:
58.2% (2010)
Inflation (CPI) 4.2% (2011 est.)
Population
below poverty line
15% (2006 est.)
Gini coefficient 31.0 (2010)
Labour force 25.1 million (2011 est.)
Labour force
by occupation
Agriculture: 6.4%, industry: 24.2%, services:
69.4% (2011 est.)
Unemployment 3.4% (2011 est.)
Main industries Electronics, telecommunications, automobile
production, chemicals, shipbuilding, steel
Ease of Doing Business
Rank
8th
35
External
Exports $558.8 billion (7th; 2011 est.)
Export goods semiconductors, wireless telecommunications
equipment, motor vehicles, computers, steel,
ships, petrochemicals
Main export partners China 24.4%, United States 10.1%, Japan 7.1%
(2011 est.)
Imports $525.2 billion (8th; 2011 est.)
Import goods machinery, electronics and electronic
equipment, oil, steel, transport equipment,
organic chemicals, plastics
Main import partners China 16.5%, Japan 13%, United States 8.5%,
Saudi Arabia 7.1%, Australia 5% (2011)
FDI stock abroad: $190.4 billion (31 December 2011)
Gross external debt $397.3 billion (31 December 2011 est.)
Public finances
Public debt 33.6% of GDP (2011 est.)
Revenues $267.9 billion (2011 est.)
Expenses $242 billion (2011 est.)
Economic aid ODA, $900 million (donor) (2009)
aid to North Korea excluded
Credit rating • Standard & Poor's:
AA- (Domestic)
A+ (Foreign)
AA (T&C Assessment)
Outlook: Stable
36
• Moody's:
Aa3
Outlook: Stable
• Fitch:
AA-
Outlook: Stable
Foreign reserves $306.4 billion (31 December 2011 est.)
ECONOMIC OVERVIEW OF INDIA
Economy of The Republic of India
Rank 10th (nominal) / 3rd (PPP)
Currency 1 Indian Rupee (INR) ( ) = 100 Paise
Trade organizations WTO, SAFTA, G-20 and others
Statistics
GDP growth 5.5% (Q1, 2012)[2]
GDP per capital
37
$1,514 (nominal: 139th; 2011)
[1]
$3,652 (PPP: 125th; 2011)
[1]
GDP by sector agriculture: 17.2%, industry: 26.4%,
services: 56.4% (2011 est.)
Inflation (CPI) WPI: 7.55% (August 2012)[3]
CPI: 9.73% (September 2012)[4]
Population
below poverty line
29.8% (2010)
(Note: 32.7% live on less than $1.25 a day
68.7% live on less than $2 a day)[5]
Gini coefficient 36.8 (List of countries)
Labour force 487.6 million (2011 est.)
Labour force
by occupation
agriculture: 52%, industry: 14%, services:
34% (2009 est.)
Unemployment 9.4% (2011 est.)[6]
Average gross salary $1,410 yearly (2011)[5]
Main industries textiles, chemicals, food processing, steel,
transportation equipment, cement, mining,
petroleum, machinery, software,
pharmaceuticals
Ease of Doing Business
Rank
132nd[7] (2012)
External
Exports $299.4 billion (2011 est.)
Export goods petroleum products, precious stones,
machinery, iron and steel, chemicals,
38
vehicles, apparel
Main export partners UAE 13%, US 11.4%, China 6.3%,
Singapore 5.3% (2011)
Imports $461.4 billion (2011 est.)
Import goods crude oil, precious stones, machinery,
fertilizer, iron and steel, chemicals
Main import partners China 12.1%, UAE 8.3%, Saudi Arabia
5.8%, US 5.1%, Switzerland 4.7% (2011)
FDI stock $47 billion (2011-12)[8]
Gross external debt $289.7 billion (31 December 2011 est.)
Public finances
Public debt 68.05% of GDP (2011 est.)[9]
Revenues $196.4 billion (2011 est.)
Expenses $308.8 billion (2011 est.)
Economic aid $2.107 billion (2008)[10]
Credit rating BBB- (Domestic)
BBB- (Foreign)
BBB+ (T&C Assessment)
Outlook: Stable
(Standard & Poor's)[11]
Foreign reserves $288.92 billion (August 2012)[12]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars
39
The economy of India is the tenth largest in the world by nominal GDP and the third largest by
purchasing power parity (PPP). The country is one of the G-20 major economies and a member of
BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP
(PPP) in 2011, according to the IMF.
INTRODUCTION OF AUTO MOBILE SECTOR IN
SOUTH KOREA
� Background of South Korea
An independent kingdom for much of its long history, Korea was occupied by Japan beginning in
1905 following the Russo-Japanese War. In 1910, Tokyo formally annexed the entire Peninsula.
Korea regained its independence following Japan's surrender to the United States in 1945. After World
War II, a democratic-based government (Republic of Korea, ROK) was set up in the southern half of
the Korean Peninsula while a Communist-style government was installed in the north (Democratic
People's Republic of Korea, DPRK).
Country facts:-
Area: 99,222 sq km (45% of the peninsula).
Population: 48.86m (2012 est. Source CIA Fact book)
Capital city: Seoul (population: 10m)
People: Korean with a small Chinese minority
Language(s): Korean
Religion(s): Wide range of religion from Shamanism, the oldest, to Buddhism,
Hinduism Catholicism, and Protestantism.
Currency: ROK Won (KRW)
40
Government: Presidential system backed by unicameral (one chamber) National Assembly of 299
members elected for four years.
Automobile industry in South Korea
The major automobile companies:
� GM Korea
� Hyundai Motor Company
� Kia Motors
� Renault Samsung Motors
� SsangYong Motor Company
� Automobile Production Worldwide, 2012:-
Summary of Korean automobile industry:- (In, 000)
Classifications Total Passenger
Cars
Buses Trucks SPVs
41
Chart:-
Domestic sales of south Korea:-
Classifications Total Passenger Cars
MPV
Buses Trucks SPVs
2013. 01~01
(year on year)
104,978
(8.3)
83,303
(1.6)
22,993
(16.6)
6,176
(60.7)
14,620
(34.8)
879
(202.1)
2012 1,410,857 1,175,891 309,494 64,546 157,311 13,109
2011 1,474,637 1,211,284 284,308 72,189 178,402 12,762
2010 1,465,426 1,217,764 275,433 70,261 165,291 12,110
2009 1,394,000 1,174,743 277,668 65,501 142,570 11,186
2008 1,154,483 958,854 217,513 62,409 123,895 9,325
2013. 01~01
(year on year)
284,221
(15.4)
268,874
(14.8)
6,073
(36.7)
9,000
(20.5)
274
(156.1)
2012 3,170,634 3,012,584 56,876 98,400 2,774
2011 3,151,708 2,980,659 71,795 96,808 2,446
2010 2,772,107 2,610,949 68,010 89,234 3,914
2009 2,148,862 2,007,230 47,371 91,763 2,498
2008 2,683,965 2,508,911 62,654 108,355 4,045
2007 2,847,138 2,718,548 38,965 88,307 1,318
2006 2,648,220 2,530,180 31,498 85,799 743
42
2007 1,219,335 986,416 282,890 70,192 151,010 11,717
2006 1,164,254 935,681 267,400 74,077 143,392 11,104
Chart:-
ECONOMIC AND SOCIAL SIGNIFICANCE OF AUTOMOBILE INDUSTRY IN KOREA:-
Korea is predominantly strong in manufacturing automobiles.The automobile industry is one of the most
important industries in Korea, and has huge impacts on the Korean economy. It has been a significant
part of their exports, like other industrialized countries such as Germany, Japan, United States, Sweden,
and Canada. Korea has been a major global force in terms of production volume as well as export
volume.
PEST Analysis of Automobile industry in Korea :-
Political:-
• South Korea’s government is divided in to three branches: executives, judicial, and
legislative.
• South Korea’s maintain diplomatic relations with more than 188 countries.
43
• The countries have also been a member of the united nation since 1991.
Economical:-
• It is Asia’s 4th largest economy, world’s 15
th (in terms of GDP) & 12
th (in terms of PPP)
economy.
• The economy is export-driven, with production focusing on electronics, automobiles, ships,
machinery, petrochemicals and robotics.
• South Korea has a technologically advanced transportation network consisting of high
speed railways, high ways, bus routes, ferry service, and air routes that criss-cross the
country.
Technological:-
• South Korea is the world’s fifth largest nuclear power producer and the second largest in
Asia .
• Fostering a Nuclear energy as a strategic export industry.
• Playing a leading role in the improvement of human welfare and the advancement of
science and technology by expanding the use of nuclear technology;
• SWOT Analysis of Korean Automobile Industry:-
STRENGTHS
� Price competitiveness in terms of highly
skilled workers, low cost parts and
materials
� Diversified export markets
� Aggressive marketing
WEAKNESSES
� Brand Awareness
� Labor Union Issues
� Immature parts and raw materials
industry
� The weak and the fluctuating Korean
Won
44
OPPORTUNITIES
� Successful launches on site
production
� Geographical proximity to Chinese
markets
� Potential market for ASEAN
THREATS
� Saturated domestic market
� High dependency on exports i.e., overseas market
� Rise of other Asian manufacturers
� Technology gap to advanced countries
Automobile industry in India
The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy. India is being
deemed as one of the world's fastest growing passenger car markets and second largest two wheeler
manufacturer. It is also home for the largest motor cycle manufacturer and the fifth largest commercial
vehicle manufacturer.
Products and Services
The primary activities of this industry are:
• Motor cars manufacturing
• Motor vehicle engine manufacturing
The major products and services in this industry are:
• Passenger motor vehicle manufacturing segment (Passenger Cars, Utility Vehicles & Multi
Purpose Vehicles)
• Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles)
• Two Wheelers
• Three Wheelers
Automobile companies in india:-
45
• Maruti Suzuki
• Tata Motors
• Mahindra & Mahindra Limited
• Ashok Leyland
• DC Design
• Force Motors
• Hindustan Motors
• Eicher
• TVS
• Bajaj
• Hero MotoCorp
• Segmentation of market share of automobile industry in India:-
Passenger Vehicle: 15.96%
Commercial Vehicle: 3.95%
Three wheelers: 3.60%
Two wheelers: 76.49%
PESTLE Analysis of Automobile Sectorin India:-
46
Political:-
� the Indian government formulated an auto policy that aimed at promoting integrated,
phased, enduring and self-sustained growth of theIndian automotive industry Allows
automatic approval for foreign equity investment up to 100% in theautomotive sector and
does not lay down any minimum investment criteria.
Economic:-
� The level of inflation Employment level per capita is right.
� Economic pressures on the industry are causing automobile companies toreorganize the
traditional sales process.
Social:-
� Since changed lifestyle of people, leads to increased purchase of automobiles, so automobile
sector have a large customer base to serve.
� The average family size is 4, which makes it favorable to buy a four wheeler.
� Growth in urbanization, 4th largest economy by ppp index.
Technological:-
� More and more emphasis is being laid on R & D activities carried out by companies in
India.
� Weighted tax deduction of up to 150% for in-house research and R & D activities.
� The Government of India is promoting National Automotive Testing and R&D
Infrastructure
Environmental:-
� Physical infrastructure such as roads and bridges affect the use of automobiles. If there is
good availability of roads or the roads are smooth then it will affect the use of automobiles.
� Physical conditions like environmental situation affect the use of automobiles. If the
environment is pleasant then it will lead to more use of vehicles.
LEGAL ENVIRONMENT OF SOUTH KOREA :-
47
The term ‘law’ may refers to the entire legal system of the society, in most countries, apart from
those laws that control investment and related matters, there are a number laws that regulate the
conduct of the business. These laws cover such matters standards of product, packaging,
promotion, ethics, ecological factors, etc…for the benefit of society.
INSTITUTIONS:
The influence of political environment and an business is enormous. The political system prevailing
in as country decides, promotes, fosters, encourages, shelters, directs and controls the business
activity of the country. A political system which is stable, honest, efficient and dynamic which
ensures political participation of the people and assure personal security to the citizens, is a
primary factor for economic development.
JUDICIARY :
There are six types of courts in Korea, made up of the Supreme Court, the High Court, the District
Court, the Patent Court, the Family Court, and the Administrative Court. The Korean judicial
system is based on the three instance trial system, which is composed of the District Court, the High
Court, and the Supreme Court. Other courts exercise specialized functions with the Patent Court
positioned on the same level as the High Court, while the Family Court and the Administrative
Court are positioned on the same level as the District Court.
Municipal Courts
The Municipal Courts only exercise original jurisdiction over minor cases, such as small claims
cases where the amount in controversy does not exceed 20 million won or misdemeanor trials in
which the maximum possible sentence is 30 days in jail or a fine not exceeding 200,000 won. There
are currently 103 municipal courts in South Korea. In the System of Justice in South Korea,
District Courts
The 18 District Courts have original jurisdiction over most civil and criminal cases. Additionally,
the District Court appellate panel may exercise appellate jurisdiction over cases in which a single
District Court or Branch Court judge has rendered the decision. In most cases, a single judge hears
the case and renders a verdict, although in particularly important or serious cases, a trial panel of
three judges may hear the case and render a decision. An appellate panel is also composed of three
District Court judges.
BUSINESS ESTABLISHMENT
THE FOREIGN INVESTMENT PROMOTION ACT (“FIPA”):
48
The Foreign Investment Promotion Act (“FIPA”) is a piece of legislation designed to attract and
regulate foreign investment. Foreigners must file a report with the government or other relevant
institutions if they wish to invest in Korea through acquiring or merging with a Korean company,
etc. The FIPA restricts or prohibits foreign investment in certain businesses. If a foreign currency
exchange takes place at the foreign invested business, it is then subject to the Foreign Exchange
Transaction Act. In addition, the Financial Investment Services and capital market act, the
Foreigner Land Act, etc. may be applied based on individual circumstances.
Antitrust laws:
As is true with Korean companies, foreign companies conducting business in Korea are subject to
the Monopoly Regulation and Fair Trade Act (“Fair Trade Act”). The Fair Trade Act also
regulates concerted acts of unfairness, acts of preserving resale price, unfair trade acts, etc.
The Fair Trade Act requires companies of a certain scale to make a report on company
combination to the Fair Trade Commission in the following five circumstances:
(1) Acquisition of shares of another company;
(2) Officers concurrent hold of positions;
(3) Mergers and acquisition;
(4) Business or fixed operating asset transfer or lease, acceptance of appointment to management;
and
(5) Participation in incorporation of a company.
Growing Korean Companies in India and Indian Companies in South Korea:-
In india:-
� There are more than 200 Korean companies that have made considerable foreign direct
investments in India in a wide range of sectors.
� Trade relations between India and South Korea have strengthened over the years. Both
countries are now setting their sights on doubling their annual trade to US$40 billion by
2015.
49
� As one of the primary growth Asian economies, South Korea is among the ten major
investors in India, which is one of the most dynamic economies of the world with still
huge room for further growth.
� “There is considerable untapped potential given that South Korea is one of the fastest
growing Organisation for Economic Co-operation and Development countries, and India
is one of the fastest growing major economies,”
In Korea:-
� Tata Motors was the first Indian company to announce the acquisition of a South Korean
company. In 2004, it signed an investment agreement for the acquisition of cash-strapped
Daewoo Commercial Vehicle Company Ltd (DWCV) for about US$102 million. Today,
Tata Daewoo Commercial Vehicle Company (TDCV) is South Korea’s second-largest
manufacturer of medium and heavy-duty trucks
� Tata Consultancy Services (TCS), another company of Tata Group and a provider of IT
services and business solutions, commenced its Korean operations in 2003 to serve local
customers as well as global multinationals which have operations in South Korea.
� announced the acquisition of Alcan Taihan Aluminum for US$600 million in 2005.
Novelis is a subsidiary of India-based Hindalco Industries Ltd, which is the flagship
company of Aditya Birla Group. Novelis Korea is currently Asia’s number one
manufacturer of aluminium rolled products.
CONCLUSIONS:-
The Korean auto industry is one of the most flourishing industry in the world right now. It has
been doing wery well with the steep competition against the global leaders from Germany,
Japan, and USA. It has also reacted well to challenges from other new competitors from Asian
countries, mainly from China. In spite of severe competion and tough challenges in the global
markets, which gives serious threats to the Korean automobile companies, overall the Korea
automobile companies have done outstanding jobs so far, and are taking a right direction to the
future with ambitious but attainable goals based on well-calculated aggressive strategies.
50
Most of Korean automobile companies will firmly remain competitive in China as well as other
major markets in the world, while they still have room to be advanced further with its invaluable
supports from other industries Korea has strongly in the global markets, such as steel,
electronics, information technology and chemical industry. Overall Korea is now very dynamic
and competitive globally especially after the global financial crisis in 2008 because it has well-
diversified, strong and competitive industries in many areas. Korea is now well known
economically with its world-class industries, such as shipbuilding, electronics, petro-chemical,
information technology, and steel industry. For example, producing the next generation fuel-
efficient automobiles generally depends more on such high-tech industries, including
information technology and electronics, than the traditional heavy industries. Absolutely, Korea
has competitive edges over China and many other countries in those high-tech areas now. It will
not be changed in a short time period since it takes a while to upgrade the structure of national
economy based more on high-tech industries. Also, the China automobile industry needs more
time to improve quality of auto parts, enhance supply chain management as well as marketing
and so on. More importantly, China needs more technologies and experience of developing its
own models of vehicles with advanced design capacity. Especially the design capacity with own
models is the most difficult area to develop and advance in manufacturing automobiles. The
Korean automobile industry will do much better performances than the Chinese in this critical
area for a while. The Chinese automobile industry could develop its design capacity with its
financial supports from its government. But still it will take a while to introduce its own models
of reliable quality automobiles to the global markets.
51
BANKING SECTOR OF SOUTH KOREA
INTRODUCTION OF BANKING SECTOR
GENERAL INTRODUCTION ABOUT THE SECTOR
The Indian economy is emerging as one of the strongest economy of the world with the GDP
growth of more than 8% every year. This has given a great support for the development of
banking industry in the country. Due to globalization, competition among the banks has
drastically been increased. As India has a substantial upper and middle class income hence the
banks have immense opportunities to increase their market shares.
.
BANKING SECTOR
The banking sector is the most dominant sector of the financial system in India. Significant
progress has been made with respect to the banking sector in the post liberalization period. The
financial health of the commercial banks has improved manifolds with respect to capital
adequacy, profitability, and asset quality and risk management
Role of Banking in India's Developing Economy
One of the major considerations that led to the nationalization of the fourteen major commercial banks of
India in 1969 was the fact that banks, in general, had been negligent of the vital priority sectors of the
economy, viz., agriculture and small-scale industries. The commercial banks had remained largely
indifferent to the credit needs of the farmers for agricultural operations and land improvement
One of the most important problems of a developing economy is that of capital formation. There is a good
deal of difference between hoarding and saving and the people in the countryside have to be made to
realize the difference. This can be easily done by banks. They can undertake to educate the rural populace
and thus mobilize their savings. A number of leading economists have confirmed the fact that the amount
of capital available in India for investment is surprisingly and inexplicably large. Only we need exploiting
this idle capital. Who else can exploit it, if not banks? Both in rural and urban areas, huge amounts of
money are wasted on celebrations like marriages and births. If banks can offer handsome interest on
savings, people can be induced to direct their savings from wasteful activities to banks
52
Role of Banks in South Korea’s Economic Development
The Banking Sector has for centuries now formed one of the pillars of economic prosperity.
Indeed history provides us with some starting information regarding how banks provided finance
for imperialist ventures in newly acquired colonies. Over time banks have formed an important
part in providing an avenue for both savings and investments.
Land, Labour, capital and entrepreneurs are the basic economic resources available to business.
However, to make the use of these resources, a business requires finance to purchase of the land,
hire labor, pay for capital goods and pay for individuals with specialized skills. Detail role of
commercial banks in economic development is given below
• Trade Development
• Agriculture Development
• Industrial Development
• Capital Formation
Development of Foreign Trade
• Transfer of Money
Functions of RBI
Monetary Authority:
Formulates, implements and monitors the monetary policy.
Objective: maintaining price stability and ensuring adequate flow of credit to productive
sectors.
1. Regulator and supervisor of the financial system:
Prescribes broad parameters of banking operations within which the country's banking
and financial system functions. Objective: maintain public confidence in the system,
protect depositors' interest and provide cost-effective banking services to the public.
53
2. Manager of Exchange Control:
Manages the Foreign Exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote orderly development and
maintenance of foreign exchange market in India.
3. Issuer of currency:
Issues and exchanges or destroys currency and coins not fit for circulation.
Objective: to give the public adequate quantity of supplies of currency notes
and coins and in good quality.
ABOUT SOUTH KOREA BANKS
BANK OF KOREAN
HISTORY
The Bank of Korea was established on June 12, 1950 under the Bank of Korea Act.
Following liberation on August 15, 1945, the Korean economy was plunged into turmoil.
Tackling the severe inflation and financial disorder brought about by an acute shortage of
resources and the division of the country along the 38th parallel was the immediate priority.
In this situation, discussions raged across the country on establishing a central bank for the
Republic of Korea and Dr. A. I. Bloomfield, dispatched from the Federal Reserve Bank of New
York, drafted the Bank of Korea Act
PRIMARY PURPOSE
The primary purpose of the Bank is to pursue price stability.
Under the Bank of Korea Act (Article 1), the primary purpose of the Bank is pursuing price stability so as
to contribute to the sound development of the national economy.
54
ORGANIZATION
MONETARY POLICY COMMITTEE
At the apex of the Bank of Korea's organization is the Monetary Policy Committee
(GeumnyungTonghwaWiwonhoe). The Committee's prime function is the formulation of
monetary and credit policies. In addition, the Committee deliberates and resolves on major
matters concerning the operations of the Bank of Korea.
The Monetary Policy Committee is composed of seven members representing various groups in
the national economy:
1) the Governor, ex-officio;
2) the Senior Deputy Governor, ex-officio;
FUNCTIONS
ISSUING BANKNOTES AND COINS
The Bank of Korea has the exclusive right to issue banknotes and coins in the Republic of Korea.
Their dimensions, designs and denominations are determined by the Monetary Policy Committee
with Government approval. The banknotes and coins thus issued have the status of legal tender
within the country for all transactions, both public and private, without limitation.
Currently, there are four different denominations of banknotes in circulation: ￦1,000, ￦5,000, ￦10,000 and ￦50,000
and coins in four :￦10, ￦50, ￦100 and ￦500.
CONDUCTING MONETARY AND CREDIT POLICY
The most important mission of the Bank of Korea is formulating and implementing monetary
and credit policy. This is a process of controlling the supply or cost of money in order that the
economy may grow in a sound manner on the basis of price stability. To this end, the Bank
55
conducts monetary and credit policy with an emphasis on price stability while taking into
consideration such matters as economic growth and financial market stability.
BANKERS' BANK AND GOVERNMENT'S BANK
The Bank of Korea makes loans to and receives deposits from banks, thus serving as the banker
to the banking sector.
The Bank conducts credit operations with banks by rediscounting commercial bills or by
extending loans against eligible collateral with maturities of up to one year
COMPILATION OF STATISTICS AND ECONOMIC RESEARCH
The Bank compiles statistics which are essential to developing appropriate economic policies
across all sectors including government. These include money and banking statistics, national
income statistics, the producer price index, balance of payments statistics, flow of funds
statistics, input-output tables, etc
PAYMENT SYSTEM
The payment system is an operational network - governed by laws, rules and standards - that
links bank accounts and provides the functionality for monetary exchange using bank deposits
What makes it a "system" is that it employs cash-substitutes; traditional payment systems are
negotiable instruments such as drafts (e.g., checks) and documentary credits such as letter of
credits. With the advent of computers and electronic communications a large number of
alternative electronic payment systems have emerged. These include debit cards, credit cards,
electronic funds transfers, direct credits, direct debits, internet banking and e-commerce payment
systems. Some payment systems include credit mechanisms, but that is essentially a different
aspect of payment. Payment systems are used in lieu of tendering cash in domestic
56
ONLINE BANKING
Online banking (or Internet banking or E-banking) allows customers of a financial institution to
conduct financial transactions on a secure website operated by the institution, which can be a
retail or virtualbank, credit union or building society
OVERDRAFTS
Main article: Overdraft
In North America, overdraft protection is an optional feature of a chequing account. An account
holder may either apply for a permanent one, or the financial institution may, at its sole
discretion, provide a temporary overdraft on an ad-hoc basis.
TELEPHONE BANKING
Main article: Telephone banking
Telephone banking is the term applied to specific provision of banking services over the
telephone. In many cases such calls are to a call centre or automated service, although some
institutions continue to answer such calls in their branches. Often call centre opening times are
considerably longer than branches, and some firms provide these services on a 24 hour basis.
CURRENT ACCOUNTS
A current account is the form of transactional account found in the United Kingdom and other
countries with a UK banking heritage; a current account offers various flexible payment methods
to allow customers to distribute money directly to others. Most current accounts come with a
cheque book and offer the facility to arrange standing orders, direct debits and payment via a
debit card. Current accounts may also allow borrowing via an overdraft facility.
TYPES OF ACCOUNTS:
1. Current, ordinary deposit, on-call deposit, time deposit and installment deposit – when
57
opening an account ask about the different option available to you. If no one speaks English, as
often happens even in ‘foreign-designated’ areas, either bring a Korean friend/colleague/staff
person with you or contact BBB 1588-5644 for help from a Korean volunteer who speaks
English.
2. Regular bank accounts pay almost no interest. If you have funds you don’t have to drawn on
right away and on which you want to earn a more generous interest, ask your bank about term
deposits. The longer the term, the higher the interest. To earn more interest request a savings
account.
3. If you wish Internet access to your Korean bank account, you must request it. Make sure the
bank explains the process and time limits (if any exist as this varies from one bank to the other)
of registering on Internet and use requirements if you plan on using the Internet account to
withdraw or transfer money.
4. Telephone access is also possible.
OPENING A PERSONAL BANK ACCOUNT (PROCESS)
• You must visit the bank in person to open your account and bring your alien registration
card (you may asked for your passport). If you do not have an alien registration card yet,
bring your passport. (limits may be imposed if you do not have an ARC).
• You will be asked to fill out a form giving your ‘real’ name (the one on your passport),
your residential and/or business address and telephone number.
• There are no joint-accounts in Korea, so if you are married, you must each open your
own account.
• If you are opening an account for an association or club, you will have to open it in your
name.
• There is no charge for opening an account, but as of September 2007, you may have to
wait 3 months before you can use the ATM - counter transactions only until then.
(August 2009 NOTE: based a quick check of some of the banks in Seoul this may no
longer be the case. However, we're leaving the information here just in a case some banks
are still doing so - if they are, shop around for a bank that is more welcoming).
58
• There is no minimum deposit required, although it’s a good idea to put in W 10,000 or so
at the beginning (~$10.00).
• There is a small fee (W2-3,000) to get your ATM card from some banks. Most banks
only allow you to have one ATM card. Note: the number on your ATM card is not your
bank account number. Since you will often need to give/know your account number, you
may want to write it on the back of the ATM card – below your signature.
• Some banks allow only registered foreign residents, with 3 months residency, to open a
bank account. (see more details below*). However, as of early 2009, almost no banks
applied the 3-month delay policy.
• Maintenance/Admin Account fees: Korean banks do not charge a monthly fee on your
account. You pay only for those services you use, in other words, only for the
transactions you’ve made.
• ATM charges: some banks have accounts whereby you don't pay ATM charges ever.
But if you don't have such an account, you will generally pay nothing if you use your
bank's ATM during banking hours (any branch of your bank). Using another bank's ATM
or your bank's for a transfer to another bank, generally costs a little more.
• Teller service: using the tellers generally results in slightly higher service charges.
ABOUT INDIAN BANKS
History of Banking in India
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which started
as private shareholders banks, mostly Europeans shareholders.
59
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
Reserve Bank of India
The Reserve Bank of India (RBI) is India's central banking institution, which controls the
monetary policy of the Indian rupee. It was established on 1 April 1935 during the British Raj in
accordance with the provisions of the Reserve Bank of India Act, 1934.[2] The share capital was
divided into shares of V100 each fully paid, which was entirely owned by private shareholders in
the beginning.[3] Following India's independence in 1947, the RBI was nationalised in the year
1949.
The RBI plays an important part in the development strategy of the Government of India. It is a
member bank of the Asian Clearing Union. The general superintendence and direction of the
RBI is entrusted with the 21-member-strong Central Board of Directors—the Governor
(currently DuvvuriSubbarao), four Deputy Governors, two Finance Ministry representative, ten
government-nominated directors to represent important elements from India's economy, and four
directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi.
Each of these local boards consists of five members who represent regional interests, as well as
the interests of co-operative and indigenous banks.
Functions of the RBI
The Reserve Bank of India Act of 1934 entrusts all the important functions of a central bank with
the Reserve Bank of India.
60
Bank of Issue: Under Section 22 of the Act, the Bank has the sole right to issue currency notes
of all denominations. The distribution of one-rupee notes and coins and small coins all over the
country is undertaken by the Reserve Bank as an agent of the government.
Banker to the Government: The second important function of the RBI is to act as the
government’s banker, agent, and adviser.
Bankers' Bank and Lender of the Last Resort: The RBI acts as the bankers' bank. Since
commercial banks can always expect the RBI to come to their help in times of banking crisis, the
RBI becomes not only the banker's bank but also the lender of the last resort.
Controller of Credit: The RBI is the controller of credit, i.e., it has the power to influence the
volume of credit created by banks in India. It can do so through changing the Bank rate or
through open market operations.
Custodian of Foreign Reserves: The RBI has the responsibility to maintain the official rate of
exchange. Besides maintaining the rate of exchange of the rupee, the RBI has to act as the
custodian of India's reserve of international currencies.
Supervisory Functions: In addition to its traditional central banking functions, the RBI has
certain non-monetary functions of the nature of supervision of banks and promotion of sound
banking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949, have
given the RBI wide powers of supervision and control over commercial and co-operative banks,
relating to licensing and establishments, branch expansion, liquidity of their assets, management
and methods of working, amalgamation, reconstruction, and liquidation.
Indian Banks’ Association (IBA) The Indian Banks’ Association (IBA) was formed on
September 26, 1946, with 22 members. Today, IBA has more than 156 members, such as public
sector banks, private sector banks, foreign banks having offices in India, urban co-operative
banks, developmental financial institutions, federations, merchant banks, mutual funds, housing
finance corporations, etc.
The IBA has the following functions:
61
• Promote sound and progressive banking principles and practices.
• Render assistance and to provide common services to members.
• Organize co-ordination and co-operation on procedural, legal, technical, administrative,
and professional matters.
• Collect, classify, and circulate statistical and other information.
• Pool expertise towards common purposes such as cost reduction, increased efficiency,
productivity, and improving systems, procedures, and banking practices.
• Project good public image of banking through publicity and public relations.
• Encourage sports and cultural activities among bank employees.
VARIOUS BANK SERVICES
Bank Account
Open bank account - the most common and first service of the banking sector. There are
different types of bank account in Indian banking sector. The bank accounts are as follows:
• Bank Savings Account - Bank Savings Account can be opened for eligible person /
persons and certain organisations / agencies (as advised by Reserve Bank of India (RBI)
from time to time)
Bank Current Account - Bank Current Account can be opened by individuals / partnership firms
/ Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts, etc
Loans
Banks in India with the way of development have become easy to apply in loan market. The
following loans are given by almost all the banks in the country:
• Personal Loan
• Car Loan or Auto Loan
• Loan against Shares
• Home Loan
• Education Loan or Student Loan’
62
In Personal Loan, one can get a sanctioned loan amount between Rs 25,000 to 10,00,000
depending upon the profile of person applying for the loan. SBI, ICICI, HDFC, HSBC are some
of the leading banks which deals in Personal Loan.
Money Transfer
Beside lending and depositing money, banks also carry money from one corner of the globe to
another. This act of banks is known as transfer of money. This activity is termed as remittance
business. Banks generally issue Demand Drafts, Banker's Cheques, Money Orders or other such
instruments for transferring the money. This is a type of Telegraphic Transfer or Tele Cash
Orders.
Credit Card
Credit cards in India is gaining ground. A number of banks in India are encouraging people to
use credit card. The concept of credit card was used in 1950 with the launch of charge cards in
USA by Diners Club and American Express. Credit card however became more popular with use
of magnetic strip in 1970.
Credit card in India became popular with the introduction of foreign banks in the country.
Internet Banking
Internet Banking Features & Benefits
V View your bank account / credit card balances and transactions at your convenience
V Transfer funds online to accounts with HSBC and other banks in India. See how to transfer
funds online.
V Create and manage Fixed Deposits
V Say goodbye to queues and missed dates. Pay your credit card and utility bills and insurance
premiums online
63
V Get cashier's orders and demand drafts free
E-Statements
Register for E-Statements on your bank accounts and credit card and view your statements
online. You can create an archive of your E-Statements and access them when you like. You can
also store these E-Statements for your records.
Phone banking
Eligibility : Customers having Savings Bank, Current Account with us
Salient Features : Customers can call for enquiries anytime, anywhere through telephone
Other Requirements/Details : Call telephone toll free 1800-425-3425.
* Customer can do the balance enquiry.
* Customer can have their account details.
* Customer can have the issued cheque status.
* Customer can have the deposited cheque status.
* Indian Bank is not liable for non-availability of services due to reasons beyond the controls of
the bank.
* Charges : Free
COMPARISION OF INDIAN BANKS & SOUTK KOREAS BANKS
point INDIA SOUTH KOREA
Saving
A/C
procedure
In India procedure of
opening saving a/c is easy &
simple
in Korea procedure of opening
saving a/c is hard compare to India
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Loan In India loan interest rate are high In Korea loan interest rate is low
Saving A/c
Interest rate
In India the interest rate of
saving a/c is low
In Korea the interest rate of saving
a/c is high
banking In India night banking
Sunday banking not
available
In Korea night banking & Sunday
banking available
Internet
banking
language
In India internet banking
provide only 3 to 5 language
to use
In Korea internet banking provide 10
language to use
Banking
hours
In India banking hours is
11:00 a.m to 5:00 p.m
In Korea banking hours is 9:00 a.m
to 5:00 p.m
Safety &
security
In Indian banking the safety
& security is not well
In Korean banking the safety &
security is good
65
INDIAN BANK SWOT ANALYSIS
Strength
Strength of the Indian banking industry lies in its asset quality, growth and profitability over its
global peers over the last few years. The banking index has grown at a compounded annual rate
of over 51 percent since April 2001 as compared to a 27 percent growth in the market index for
the same period. Geographical reach and market penetration have expanded at a very fast pace
over the past few years. .
Weakness
Weakness of the sector pertains to factors like limited market penetration in few geographies,
lack of fundamental institutional skill level and less household savings. Public sector banks hold
over 70 percent of total assets of the banking industry. However they are Severely lacking in
sales and marketing, service operations, risk management and as a result these banks have not
been able to match the aggressive growth by the private players.
Opportunities
Opportunities for the Indian banking industry lies in the untapped rural market Banking sector
has not penetrated to the rural sector .About 80% of the rural households in India have no access
to formal lending. About 46% of these used informal lending channels, 24% of which resorted to
unregulated money lenders.
Threats
Over the course of the years the number of market player has significantly increased. This
Intense competition could adversely affect the margins of the bank. So the there is threat of the
stability of the system and threat from existing players.
66
SWOT ANALYSIS OF KOREA BANK
Strength
1. Initiator: Introduced foreign currency in Korea for the first time, also introduced
travellers cheques in South Korea.
2. Partnering grand events: Official sponsor bank for 1986 Asian Games & 1988 Seoul
Olympic Games
3. Korea Exchange Bank is the largest and longest-running exchange bank in South
Korea
4. One of few specialized banks in South Korea that buys and sell foreign currency
coinage
5. Strong workforce of nearly 600 employees
Weakness
1. Dependent on volatile finance market for revenues.
2. Risk of running into bad loans can prove fatal for the organization.
Opportunity
1. Organic growth through wider offerings.
2. Inorganic growth through mergers and partnerships.
Threats
1. Prone to government and legal interventions.
2. Increased competition from global players.
3. Prone to contagion effects of global crisis.
67
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Policies & norms for Indian banks
Finance Ministry relaxes govt banks' staff promotion norms
With public sector banks staring at huge staff retirement over the next few years, the
government has decided to relax the norms for promotions for the current financial year. The
finance ministry has allowed the banks to deviate from the prescribed promotion norms, with
the approval of their board, so that more employees can become eligible for promotions.
However, banks will still need prior approval of the government for a change in guidelines on
five critical aspects such as minimum experience requirement for promotion to next scale,
marks in annual appraisal, rural/semi-urban experience, length of service in specialised cadre,
and zone of consideration
Notably, even in these, some degree of freedom would be given to banks. For instance, board of
banks can provide further relaxation of three months in minimum experience requirement. This
relaxation has been provided recognising that if a person was last promoted in June, he would
not be eligible for promotion at the beginning of the next financial year for not having
completed a year.
“On some operational issues regarding promotions, we have given them more freedom. But on
core issues, there will be uniformity in guidelines across the banks. On core elements of the
promotion policy, 80-85 per cent of the norms stipulated last year would continue,” said a
finance ministry official.
GOVT. ISSUE RULES & REGULATION FOR BANK(BANKING REGULATIONS
ACT 1949 )
69
The Banking Regulation Act was passed as the Banking Companies Act 1949 and came into
force wef 16.3.49. Subsequently it was changed to Banking Regulations Act 1949 wef 01.03.66.
Summary of some important sections is provided hereunder. The section no. is given at the end
of each item. For details, kindly refer the bare Act.
Banking means accepting for the purpose of lending or investment of deposits
of money from public repayable on demand or otherwise and withdraw able by cheque, drafts
order or otherwise (5 (i) (b)).
• Banking company means any company which transacts the business of banking (5(i)(c)
• Transact banking business in India (5 (i) (e).
• Demand liabilities are the liabilities which must be met on demand and time liabilities
means liabilities which are not demand liabilities (5(i)(f)
• Secured loan or advances means a loan or advance made on the security of asset the
market value of which is not at any time less than the amount of such loan or advances
and unsecured loan or advances means a loan or advance not secured (5(i)(h).
Policies & norms for South Korean banks
Basel Committee on Banking Supervision
• The Basel Committee on Banking Supervision (BCBS)[1] is a committee of banking
supervisory authorities that was established by the central bank governors of the Group
of Ten countries in 1974.[2] It provides a forum for regular cooperation on banking
supervisory matters. Its objective is to enhance understanding of key supervisory issues
and improve the quality of banking supervision worldwide. The Committee also frames
guidelines and standards in different areas - some of the better known among them are
the international standards on capital adequacy, the Core Principles for Effective Banking
Supervision and the Concordat on cross-border banking supervision.[3]
• Bank regulation of south Korea
70
• Bank regulations are a form of government regulation which subject banks to certain
requirements, restrictions and guidelines. This regulatory structure creates transparency
between banking institutions and the individuals and corporations with whom they
conduct business, among other things
FINDINGS / CONCLUSIONS
The development of banking firm is important for environmental aspects. It
is important to aim for a sustainable development including these issues, but also the ethical
aspects of customers; we must manage our customers in an acceptable way, which means that
customers health and welfare should be considered.
South koreas banking style and services is good and qualitative and in india also banking style
and services good but in some area or in some factor the south korea banking service good and in
some area indian banking service is good.
.
Ethnic Indian banking service like loan , over draft facility, internet banking, phone banking etc.
have good demand in the countries where the ethnicIndian population is settled. Universal
banking some service like housing loan term loan over draft facility are used in moderate
amounts, even though the growth rate of some of these services are costly.
The Indian government sometimes imposes restrictions on safeguard the genetic quality of
banking service in India and to avoid entering of any new system and service from foreign
countries. For a large portion of the banking in India (mostly small / large banks)
modern banking techniques may be unaffordable. There is a very strong need of lowcost and
hygienic banking equipment. Many co-operatives / private banks areeager to provide financial
assistance to groups of banks in this regard and encourage hygienic banking service.
There is great potential for banking technology that can sustain the quality to long life time and
in India. The rural market and many urban centres are penetrated by the organized banking sector
71
“EXPORT IMPORT POLICY OF SOUTH KOREA & INDIA”
INTRODUCTION OF COUNTRY
South Korea is a country in Eastern Asia occupying the southern half of the Korean Peninsula. It
borders the Sea of Japan, the Yellow Sea and North Korea. South Korea's terrain is mostly
mountainous. The government system is a republic. The chief of state is the President and the
head of government is the Prime Minister. South Korea has a mixed economic system in which
the economy includes a variety of private freedom, combined with centralized economic
planning and government regulation. South Korea is a member of Asian Pacific Economic
Cooperation (APEC).
It's little wonder that South Korea has had such a tumultuous past. Extending south from China,
and just north of Japan, the Korean Peninsula has long been strategically desirable to both
countries. As a result, Korea has had to fight off invaders from Mongolia, Manchuria, China, and
Japan over the course of its 5,000-year history. But the most traumatic moment in Korea's past
came after a 35-year Japanese occupation that ended with the close of World War II. The Soviet
Union was to oversee the northern half of the peninsula, while the U.S. oversaw the south,
ostensibly until fair elections could be held. But it was not to be. The Soviets and the U.S. were
unable to agree on how to reunify the country, and on June 25, 1950, Soviet-backed troops from
what had become known as North Korea crossed the 38th parallel and invaded South Korea. The
United Nations sent troops (predominantly American soldiers) to the South's defense, but Korea
had fallen victim to the Cold War.
Though an armistice was signed on July 27, 1953, it resulted in the formal division of the
peninsula into North and South, with a buffer, the Demilitarized Zone (DMZ), in between. Its
name is a tragically ironic one, as the DMZ is one of the world's most heavily guarded places.
But while North Korea remains essentially sealed off to outsiders, South Korea, which makes up
72
45% of the peninsula (making it the same size as Portugal), is one of the most fascinating tourist
destinations in the world.
Looking at a map, you might think it would be easy to traverse South Korea's 99,237 sq.
km (38,315 sq. miles). But nearly 70% of South Korea is made up of seemingly impenetrable
mountainous terrain. That terrain has helped many of South Korea's regions maintain their
unique charms and has gifted the country with some of the most stunning national parks in all of
Asia.
DEMOGRAPHIC PROFILE OF SOUTH KOREA
Korea's legendary foundation by the mythical king Tangun in BC 2333 embodies the
homogeneity and self-sufficiency valued by the Korean people. Korea experienced many
invasions by its larger neighbors in its 2,000 years of recorded history. The country repelled
numerous foreign invasions despite domestic strife, in part due to its protected status in the Sino-
centric regional political model during Korea's Joseon dynasty (1392-1910).
Population 48,860,500 (July 2011 est.)
Age Structure:
0-14 years: 15.7% (male 3,980,541/female 3,650,631)
15-64 years: 72.9% (male 18,151,023/female 17,400,809)
65 years and over: 11.4% (male 2,259,621/female 3,312,032)
(2011 est.)
Population Growth Rate: 0.204% (2011 est.)
Birth Rate: 8.42 births/1,000 population (2011 est.)
Death Rate: 6.38 deaths/1,000 population (July 2011 est.)
Net Migration Rate: 0 migrant(s)/1,000 population (2011 est.)
73
Sex ratio: at birth: 1.07 male(s)/female
under 15 years: 1.09 male(s)/female
15-64 years: 1.04 male(s)/female
65 years and over: 0.69 male(s)/female
total population: 1 male(s)/female (2011 est.
Urbanization:
urban population: 83% of total population (2010)
rate of urbanization: 0.6% annual rate of change (2010-15 est.)
Population Pyramid of
Mexico:
Total: 16.77 deaths/1,000 live births
Male: 18.58 deaths/1,000 live births
Female: 14.86 deaths/1,000 live births (2011 EST.)
Life Expectancy at Birth: Total population: 79.3 years
male: 76.12 years
female: 82.7 years (2011 est.)
Total Fertility Rate: 1.23 children born/woman (2011 est.)
Ethnic Groups: Homogeneous (except for about 20,000 Chinese)
Religious Affiliation: Christian 26.3% (Protestant 19.7%, Roman Catholic 6.6%),
Buddhist 23.2%, other or unknown 1.3%, none 49.3% (1995
census)
Literacy: definition: age 15 and over can read and write
total population: 97.9%
male: 99.2%
female: 96.6% (2002)
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INTERNATIONAL TRADE RELATIONS WITH OTHER COUNTRY
In recent years the SOUTH KORIA has played a greater role on the international stage. At one
stage it was the third largest contributor of troops to the coalition in Iraq. Korea currently has
about 1,300 military operating in 16 countries although the most significant deployments are to
UNIFIL in Lebanon, anti-piracy operations off Somalia, PKO and reconstruction in Haiti and
270 troops, mainly protecting SOUTH KORIA members of a Provincial Reconstruction Team
(PRT) in Afghanistan.
Inter-Korean relations
With the Korean War having been so bitterly fought, tension between DPRK and SOUTH
KORIA remained high even after 1953. There were numerous armed clashes but, with so many
families separated by Korea's division, the national dream of Korean reunification remained. In
1960, DPRK leader, Kim IL Sung, proposed pursuing reunification through confederation
between equals, similar to China's 'one country, two systems', and, with minor refinements, this
policy remains in place. In the early 1970s, the Koreas opened a Red Cross dialogue followed by
political talks that produced the Joint Communiqué of July 1972 in which the SOUTH KORIA
and DPRK agreed to work for peaceful reunification.
SOUTH KORIA's relations with the USA
Since the Korean War, the SOUTH KORIA's most important relationship has been with the
United States. As well as defending it militarily, the USA was the major provider of economic
assistance to the SOUTH KORIA and was the SOUTH KORIA's largest trading partner. SOUTH
KORIA forces fought alongside US forces during the Vietnam War.
TREDE RELATIONS BETWEEN INDIA SOUTH KOREA
INDIA:
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Trade policy reform has formed a major part of India’s economic reforms agenda and has
contributed significantly to the impressive performance of the economy’s external sector.
Export-import policies have seen progressive liberalisation and its tariff regime has been
continuously rationalised. Although India has been a strong supporter of the multilateral trading
system, it started taking a keen interest in the increasing regionalism around the world in recent
past. This is mainly due to the failure of different rounds of multilateral trade negotiations and
the slow progress of negotiation at the WTO.
Currently, India is among the top most countries having RTAs/FTAs either in place or under
negotiation. The total cumulative number of India’s proposed or existing RTAs/FTAs is 31 of
which 21 are with countries in Asia and the Pacific region.
Among the first preferential trading agreements in Asia was the Bangkok Agreement of 1975 of
which India and Korea, among other countries, were founding members.
Thereafter, India has joined various other regional trading arrangements 10 including the India-
Korea CEPA concluded in August 2009.
KOREA:
Korea has continuously (more so in recent years) liberalized its trade and investment policies and
business related regulations to enhance and sustain her economic development.
Since the Korean economy is highly dependent on the external sector and export has been
identified as a growth engine to double its per capita income by 2010, the main objective of
Korean trade policy has always been to promote structural reform and efficiency.
Expansion of high-technology industries, high value-added exports and making Korea a
northeast Asian business and financial hub are the main priorities. Though Korea actively
participates11 in the multilateral trading system, like India, she has increasingly focused on
regional and bilateral trading arrangements after the Asian financial crisis.
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In response to the growing trend of regionalism, Korea considers these agreements as a means to
liberalize its trade and investment regimes to rejuvenate the economy, secure export markets and
promote regional integration.
Korea's first such agreement was with Chile, which came into effect from April 2004. Other
important countries and blocs with whom Korea has agreements are Singapore, Peru, EFTA, the
US and ASEAN. Korea is also in the process of negotiating several other trade agreements with
other countries such as Canada, Mexico, EU, MERCOSUR, China, Gulf Co-operation Council
and Japan.
INDIA KOREA TRADE:
Korea is well-integrated with the global economy with a trade/GDP ratio of more than 85 per
cent in 2006. The Korean economy has followed an export-led growth strategy with exports
contributing 43 per cent of GDP in 2006. Comparatively, India is far less integrated, despite the
increasing openness of her economy since 1991, with a trade/GDP ratio of around 45 per cent in
2006.
Korea also has a higher share in total world merchandise trade as compared to India. She is also
a major importer of services. while India has emerged since 2001 as a significant exporter of
services.
In 2007, India ranked 26th and 18th and South Korea ranked 11th and 13th among merchandise
exporters and importers respectively in the world. Korean exports to the rest of the world in the
year 2007 stood at $371.5 billion, showing a 14 per cent growth over the previous year while her
imports increased to $356.8 billion, having grown by 15 per cent over the previous year. India’s
exports to world were $145.3 billion in the same year.
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EXIM POLICY OF SOUTH KOREA
External Economic Policies
Korea has pursued external economic policies commensurate withits economic status and its
international responsibilities. In the early 1980s, Korea instituted a set of policies which focus on
two goals: the promotion of Korea's trade relationships and the expansion of Korea's role in
promoting international economic cooperation. To satisfy the first goal, Korea has been
implementing policies to reduce import tariffs and to liberalize imports, investment and the
service sector. The policy measures were gradually faciliated by the nation's balance-of-
payments surpluses in the 1986-88 period. To satisfy the second goal, Korea has been exploring
several means of promoting international cooperation.
Reducing Import Restrictions and Tariffs
Carried out since 1980. The import liberalization ratio has increased from 68.6% in 1980 to its
current level of 97.3%. In October 1989, Korea was graduated from the GATT balance-of-
payments protection whereby the government has agreed to eliminate remaining import controls
or otherwise make them conform with GATT provisions by 1997.
On January 1, 1991, Korea liberalized the importation of 91 products (H.S. 10-digit
classificaton). This was only one of a series of import liberalization measures that have been
Korea plans to lower its tariff rates further from 1992 to 1994. According to the new tariff
reduction schedule, the average overall tariff rate will be lowered from 11.4% in 1991 to 7.9% in
1994. By that time, the average tariff rates will be on par with the rates of industrialized
countries.
Investment and Services
Korea has made steps to broaden the scope of opportunites for foreign investors. In 1984, the
country introduced a negative-list system for investment approval and has annually reduced the
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number of industries on the negative list. The list ha sbeen trimmed from 34% of all industries
down to 21% in 1990. The manufacturing sector is almost completely open to foreign investors,
and the service sector is becoming increasingly open as well. Those areas closely related to
goods transactions, such as financial services and maritime transportation, have already been
substantially
liberalized; technology-intensive sectors, such as telecommunications and construction
engineering, are in the process of being liberalized.
The basic policy principle governing the operation of foreign business is equal treatment of
foreign and domestic investment. And, under the revised Foreign Capital Inducement Act which
took effect from March 1, 1991, the direct foreign investment system has two major features: 1)
a notification system will be gradually implemented from 1991 to 1993, replacing the current
approval system; 2) tax privileges for foreign-invested enterprises will also be substantially
curtailed to ensure fair competition between domestic and foreign firms. By the end of 1992, the
current foreign investment approval system will be converted to a notification system for the
appropriate businesses.
Capital Foreign Exchange Transactions and Markets
The government has been actively pursuing the liberalization of foreign exchange transactions
and capital markets. In 1987, the controls were relaxed on paymnet to invisible trade and for
overseas investments by Korean residents, and in November 1988 Korea joined the IMF Article
VIII nations. In March 1990, the government introduced a new foreign exchange rate system
called a "market-average system." Under this system, the exchange rate is determined by
market forces within flexible boundaries that are based on the previous day's exchange rate. In
addition, Korea plans to gradually internationalize its currency.
India - Korea CEPA
A Comprehensive Economic Partnership Agreement (CEPA) between India and Republic of
Korea was signed on 7th August 2009. The CEPA came into force from 1st January, 2010. The
first meeting of the Joint Committee at Ministerial level to review the implementation of CEPA
was held on 20th January 2011 in New Delhi. The second meeting of JS/DG Level to review the
implementation of CEPA was held on 29th September 2011 in Seoul.
79
New Exim Policy 2012 - 2013
GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS
1.Exports and export and import free unless regulated
(a) Exports and Imports shall be 'Free', except when regulated. Such regulation would be as per
FOREIGN TRADE POLICY.
(b) ITC (HS) contains the item wise export and import policy regimes. The ITC (HS) is aligned
with international Harmonized System goods nomenclature maintained by World Customs
Organization.
(c) Schedule 1 of ITC (HS) gives the Import Policy Regime and Schedule 2 of ITC (HS) gives
the Export Policy Regime.
(d) Except where it is clearly specified in Schedule 1 of ITC (HS), Import Policy is for new
goods and not for Second Hand goods. For Second Hand goods, the Import Policy Regime is
given in Para on this FOREIGN TRADE POLICY.
2.1 Prohibition on
Despite the policy for 'Arms and related material' as is given in , the import / export of arms and
related material from /to Iraq shall be 'Prohibited'.
Import and Export of 'Arms and related material' from / to Iraq
Prohibition on Direct or Indirect Import and Export from/ to Democratic People's
Republic of Korea
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Direct or indirect export and import of following items, whether or not originating in Democratic
People's Republic of Korea (DPRK), to / from, DPRK is 'Prohibited': All items, materials
equipment, goods and technology including as set out in lists in documents.
2.1.3 Prohibition on Direct or Indirect Import and Export from / to Iran
(a) Direct or indirect export and import of all items, materials, equipment, goods and technology
which could contribute to Iran's enrichment-related, reprocessing or heavy water related
activities, or to development of nuclear weapon delivery system are prohibited.
2.1.4Prohibition on Import of Charcoal from Somalia
Direct or indirect import of charcoal is prohibited from Somalia, irrespective of whether or not
such charcoal has originated in Somalia. Importers of Charcoal shall submit a declaration to
Customs that the consignment has not originated in Somalia.
2.2 Compliance of Imports with Domestic Laws
In line with the National Treatment proviso of World Trade Organization. Domestic Laws/
Rules/ Orders/ Regulations/ technical specifications/ environmental/ safety and health norms
applicable to domestically produced goods shall apply, mutatis mutandis, to imports, unless
specifically exempted.
2.3 Interpretation of Policy
(a) The decision of DGFT shall be final and binding on all matters relating to interpretation of
Policy, or provision and classification of any item for import / export policy in the ITC (HS).
(b) A Policy Interpretation Committee may be constituted to aid and advice DGFT.
2.4 Procedure
DGFT may, specify procedure to be followed by an exporter or importer or by any licensing /
regional authority or by any other authority for purposes of implementing provisions of FT
(D&R) Act, the Rules and the Orders made there under and FOREIGN TRADE POLICY. Such
procedures, or amendments if any, shall be published by means of a Public Notice.
81
2.5 Exemption from Policy/ Procedure
DGFT may pass such orders or grant such relaxation or relief, as he may deem fit and proper, on
grounds of genuine hardship and adverse impact on trade. DGFT may, in public interest, exempt
any person or class or category of persons from any provision of FOREIGN TRADE POLICY or
any procedure and may, while granting such exemption, impose such conditions as he may deem
fit. Such request may be considered only after consulting committees as under:
Description Committee
(a) Fixation / modification of product norms under all schemes Norms Committee
(b) Nexus with Capital Goods (CG) and benefits under EPCG Schemes EPCG Committee.
(c) All other issues
Policy Relaxation Committee (PRC)
Import-Export Procedure of south-Korea.
1. Meaning of the import
2. Import declaration
3. Required documents
4. Import declaration
5. Import declaration customs
6. Processing of import declaration
7. Requests for supplementation
8. Delay in clearance
9. Declaration dismissal rejection
10. Cancellation of declaration
11. Inspection of imported goods
12. Issuance of the certificate of import declaration
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Top Products Imported by South Korea
Banned import south korea
� 1.Free import For over 19 year olds: • 200 cigarettes • 50 cigars • 250g of tobacco. • 1L of alcohol • 2oz of perfume • Other personal items (gifts, new items) worth up to US$ 400,-
� 2.Prohibited • Narcotics • Pornography • Subversive material • Treasonous material • Counterfeit goods or materials
� 3.Restricted Drugs(Narcotics and Psychotropic substance)
• Animals, plants and product
Export benned product by south Korea
� 1.Free export • No information available
� 2.Prohibited • Narcotics
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• Pornography • Subversive material • Treasonous material • Counterfeit goods or materials
� 3.Restricted • Goods designated as natural assets and those of cultural importance will require permit from • Specialty or rare goods from Korea. • Means of payment – up to the amount declared when entering the country.
NEW EXPORT IMPORT POLICY OF INDIA
NEW EXIM POLICY 2011-12
� 256 new products added under FPS (at 8 digit level), which shall be entitled for benefits @ 2% of FOB value of exports to all markets.
� Tea and CSNL Cardinol included for benefits under @ 5% of value of exports. � Zero duty EPCG scheme, introduced in August 2009 and valid for only two years upto
31.3.2011, has been extended by one more year till 31.3.2012. � Finished Leather export shall be entitled for Duty Credit Scrip @ 2% under FPS.
EXPORT PROCEDURE OF INDIA
� NO STOPPAGE OF EXPORT CONSIGNMENT � Procedures by person in charge of conveyance � LOADING WITH PERMISSION � Export Manifest � Procedures to be followed by Exporter
� 1. Excise formalities at the time of Export � 2. Duty drawback formalities � 3. Other documents required for export � 4. Check in customs
IMPORT PROCEDURE OF INDIA
� WHO IS 'PERSON IN CHARGE � Arrival at customs port/airport only � Import manifest report � Grant of entry inwards by custom officer � Carrier responsible for shortages during unloading � Filing of Bill of Entry � Documents to be submitted by Importer � Electronic submission under EDI system
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TOP EXPORT AND IMPORT
Figures in US$ billion
1 Petroleum Products 56
2 Gems & Jewellery 47
3 Pharma Products 24
4 Transport Equipments 21
5 Machinery & Instruments 14
TOP IMPORT PRODUCT BY SOUTH KOREA
Figures in US$ billion
1 Petroleum Crude 155
2 Gold & Silver 62
3 Electronic Goods 33
4 Pearls & Precious Stones 31
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5 Non-electrical Machinary 30
India signs bilateral trade agreement with South Korea:
Seoul, Aug 7:
“India and South Korea today signed the Comprehensive Economic Partnership
Agreement (CEPA) opening up trade and investment between the two countries.
• The CEPA comprises six agreements relating mainly to opening up of trade in goods,
services and customs. It would give a boost to the more than USD 10 billion bilateral
trade.
• India's exclusion and sensitive list contains mostly agricultural, textiles and auto sector
items.
• The CEPA negotiations had started in March 2006 and were concluded in September
2008. The Cabinet had approved the pact last month.
• In 2007-08, India exported USD 2.85 billion worth of goods to South Korea, posting a
rise of 13.5 per cent over the previous year.
• Commerce and Industry Minister Anand Sharma and several senior officials have left for
the South Korean capital.
• "We expect the CEPA to be a catalyst to further boost our business ties with India," said
Choi Gyung Rim, policy director of South Korean foreign ministry.
• The South Korean foreign ministry official said he expects the agreement to become
effective sometime around next January after Seoul gets final approval from the South
Korean National Assembly by the end of October.
• The CEPA is similar to a free trade agreement (FTA), with a comprehensive coverage of
trade in goods and services and investments, as well as intellectual property rights.
COMPARATIVE ANALYSIS SOUTH KOREA and INDIA
86
� 1.Import Policy is for new goods and not for Second Hand goods. For
Second Hand goods, the Import Policy Regime is given in Para on this
FOREIGN TRADE POLICY. In India it will be applicable both new and
second hand goods.
� 2.The main role for export import of goods to other county in south Korea is
and in India the main role is perform by the Custom act
� 3.Korea is well-integrated with the global economy with a trade/GDP ratio
of more than 85 per cent in 2006. The Korean economy has followed an
export-led growth strategy with exports contributing 43 per cent of GDP in
2012. Comparatively, India is far less integrated, with a trade/GDP ratio of
around 45 per cent in 2006
� 4. Korea also has a higher share in total world merchandise trade as
compared to India. It is also a major importer of services. while India has
emerged since 2001 as a significant exporter of In 2007, India ranked 26th
and 18th and South Korea ranked 11th and 13th among merchandise
exporters and importers respectively in the world
� 5. Korean exports to the rest of the world in the year 2007 stood at $371.5
billion, showing a 14 per cent growth over the previous year while her
imports increased to $356.8 billion, having grown by 15 per cent over the
previous year. India’s exports to world were $145.3 billion in the same year.
� 6. The increase in merchandise trade between the two countries has been
attributed to the changing demand structures and comparative advantages of
both the economies in different sectors.
� 7. There are total 10 agreement between India and south Korea. The most
beneficial and important agreement was CAPM agreement. Which would be
come in to 1st Jan 2010.It would be original implementation on 29th 2011.
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Healthcare in South Korea
Healthcare in South Korea is modern and efficient. There are both Western and Eastern
practitioners and medicines available and both are covered under the government’s National
Health Insurance (NHI) plan. Apart from the NHI there are a number of private health insurance
options; however, most of these are more expensive and not as widely recognized as the NHI
It is important for expats to note that they are not covered by either the National Health
Insurance plan or private health insurance until they have received their Alien Registration Card
from the immigration offices. This can take anywhere from three weeks to three months.
Doctors, dentists, dermatologists and other specialists are all affordable and readily available, as
are general healthcare products and pharmaceutical drugs. Most hospitals and doctors have some
English-speaking staff members, but it is sometimes advisable to ask a Korean-speaking friend
or colleague to accompany you, particularly in smaller towns and cities.
The upside is that your expenses for a routine visit to your doctor or dentist will be quite low for
both your consultation and your medication - usually no more than a few US dollars. On the
other hand, it can happen that doctors are so anxious to see as many patients as possible that
consultations are not as thorough as you might like, and may over prescribe medication in an
attempt to get more kickbacks from pharmaceutical companies.
To enrol in the NHI, simply bring your Alien Registration Card with you to a nearby hospital to
apply for an NHI card. Once you have been enrolled in the NHI Program you will be able to
extend your coverage to your immediate family members.
In contrast to the many decades it took the United States to pass comprehensive health care
reform, the Republic of Korea (hereafter referred to as South Korea) implemented universal
health insurance coverage in just twelve years (Anderson, 1989). In 1976, President Park Chung-
Hee passed a series of laws to provide coverage to a succession of groups, starting with
beneficiaries of firms with more than 500 employees, with smaller firms soon following
(Anderson, 1989). The next year, a program similar to the United States’ Medicaid was created
to provide coverage to the poor and unemployed (Anderson, 1989). Laws to ensure the coverage
of public workers and the self-employed followed in 1979 and 1981. In 1988, coverage was
extended to the remaining urban and rural populations (Anderson, 1989) Dr. S. Kwon identifies
Park’s motivation for shepherding health coverage legislation as an outcomes, costing less down
88
the road. One popular provision designed for this purpose supports providers in forming
accountable care organizations (ACOs) to care for Medicare beneficiaries. Similar to health
maintenance organizations (HMOs) in their network structure, ACOs are physician-run instead
of being operated by insurance companies, and thus patients are free to go out of network (Gold,
2011). Medicare historically has used a fee-for-service payment system, which is said to
incentivize providers to order more procedures than is medically necessary, thus driving up costs
(Gold, 2011). ACOs do not dismantle the fee-for-service system, but they do alter the incentives
by offering bonuses when providers keep costs down through quality benchmarking focused on
prevention and coordinated chronic care management (Gold, 2011). ACOs are also designed to
promote better care coordination through the provider network structure. Two provisions that
promote aging in place are Community First Choice Option and Money Follows the Person, both
of which facilitate home-based care. The Community First Choice Option is somewhat limited in
that it specifically excludes assistive technologies and devices, and home modification(MacGuire
Woods, 2010). As the PPACA is implemented, it will be possible to adjust its provisions so as to
heighten the efficiency of state health exchanges, consider additional cost containment
mechanisms and their effects, and to assess opportunities for using information technology to
support older adults through the aging in place approach.
Emergency services in South Korea You can phone the Emergency Medical Information Centre (1339) for emergency or routine medical advice, or to help translate for you when you are at a clinic or doctor’s office. They can also connect you directly with emergency services if appropriate. Staff members are bilingual and there will almost always be someone on staff who speaks English.
Ambulance: 119
Emergency Medical Information Centre: 1339
Public healthcare in South Korea
South Korea's National Health Insurance Program is a compulsory social insurance system which covers the whole population. By law, any company which employs more than five foreign workers must enrol their foreign workers in a health insurance programme; the company is expected to pay 50 percent of the health insurance premiums each month, and employees the other half. It is important to note that this does not apply if expats are employed as independent contractors. The amount you pay towards the NHI is determined in the same way taxes are – on a sliding scale according to how high your salary is. Doctors and specialists will claim most of the costs of your visit from the NHI. There is a small premium expats or locals will need to pay for a consultation. Prescription medication and traditional medicine (including acupuncture) is also covered and therefore also incurs only minimal costs.
89
The upside is that your expenses for a routine visit to your doctor or dentist will be quite low for both your consultation and your medication - usually no more than a few US dollars. On the other hand, it can happen that doctors are so anxious to see as many patients as possible that consultations are not as thorough as you might like, and may over prescribe medication in an attempt to get more kickbacks from pharmaceutical companies.
To enroll in the NHI, simply bring your Alien Registration Card with you to a nearby hospital to apply for an NHI card. Once you have been enrolled in the NHI Program you will be able to extend your coverage to your immediate family members.
Private healthcare in South Korea
The National Health Insurance covers most day-to-day and emergency medical procedures, prescription medication, and specialist visits. However, some procedures and medications, particularly those associated with chronic illnesses such as cancer, are not covered and can become costly. For this reason private insurance companies do exist, and many middle-class Koreans and expats join these chronic illness plans to guard against costs the NHI doesn’t cover.
Hospitals in South Korea Medical facilities are of a high standard in South Korea, especially in Seoul. Hospitals will almost always have an English-speaking doctor on staff, although support and technical staff will be unlikely to speak English. Hospitals are often well equipped and modern looking, although may not always have the best sanitation practices. Expats can also attend one of several “international clinics” affiliated with nearby hospitals. These are staffed by doctors who have studied abroad and who therefore speak English well. They often incur higher fees. Note that before being treated in a hospital, you will need to pay a deposit against the costs that might be incurred during your stay. Some hospitals accept only certain credit cards so it may be wise to take at least KRW 100,000,000 with you in cash.
Pharmacies and medicines in South Korea Pharmacies are plentiful and both Western and Eastern medicines are available in abundance. Pharmacies are usually located near hospitals, as hospitals in Korea are not permitted to dispense prescription medication.
90
Expats who have enrolled in South Korea’s NHI programme will be able to get prescription medication at a heavily subsidised rate – likely no more than a few dollars.
Health hazards in South Korea As in many cities in industrialised Asia, South Koreans are increasingly facing health problems due to pollution in cities. In spring, the “Yellow Dust” – a combination of industrial pollutants and dust from mainland China – might necessitate wearing a mask while outdoors, particularly if you already have respiratory problems like asthma.There is a small risk of malaria in some rural areas; travellers are advised to take medication and wear appropriate clothing in affected areas. Malaria prophylaxes are widely available, including at the medical centre at Incheon Airport.
Expat to South Korea
Pros and Cons of Moving to South Korea ► Buy the South Korea Guide Life in South Korea provides plenty of unique opportunities, but sometimes with a cost. Regardless, if you’re flexible and easy-going, then you won’t have any issues adjusting to life in this fast-paced yet traditional country.
Accommodation
Pro: Often a no-brainer For expats moving to South Korea with a job-contract already in hand, often an apartment is already provided and paid for. Expats need only worry about utilities: typically, gas, water, Internet and telephone fees.
Con: Cramped and boring If you’ll be living Seoul, expect apartments to be tiny; one-bedroom or studio apartments are the most common. The farther away from the city you move, the more spacious your potential arrangements become. In addition, apartments are almost exclusively built in bulk, which calls for little to no architectural variation. Interiors frequently include white walls, plain kitchens and no-frills furnishings.
Con: Expensive If you’re interested in buying or have to hunt for rentals on your own, you’ll be in for a small shock. Rentals, especially in Seoul, will cost a lot for a space much smaller than you may be used to. In addition, deposits are typically much steeper than in other countries, which makes securing a place difficult if you’ve no savings to use up front.
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Safety Pro: Abundance of traditional fare
Even in the tiniest of towns, there will always be one or more traditional Korean restaurants willing to satisfy an expat’s appetite for authentic dishes. In the big cities, you’ll be hard-pressed to pick which one, as many streets are packed with restaurants with similar menus. The fierce competition also means lower prices; a quality Korean meal is always affordable.
Con: Lack of comfort foods Unless you’re living in a very urban area, it’s difficult to find food that isn’t Korean or Asian-inspired. More exotic, foreign cuisine options are hard to come by outside the city, and oftentimes of disappointing
quality.
Culture Shock
Pro: Tight-knit expat communities In Seoul especially, there are many foreigner meet-ups and parties at which you can meet and socialise with other expats in your area. In smaller cities, the groups may meet up regularly and are generally very welcoming to newcomers.
Con: Shy locals South Koreans are often unable to speak any English or too shy to attempt it for fear of making a mistake. While there are exceptions, it’s not uncommon for a local to shy away from answering a question completely, for lack of English skills.
Work Culture
Pro: Friendly and amicable Koreans value their interpersonal relationships with coworkers and will make it a priority to get to know each other’s personal lives. The standard corporate atmosphere is very friendly and social. After work, employees will often go out dining and drinking.
Con: Unpredictable scheduling Koreans will often make last-minute adjustments and expats will need a certain degree of flexibility to survive. Expect unplanned meetings, projects and cancellations as well as obligatory social gatherings after work, announced shortly before quitting time.
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Cost of Living
Pro: Cheap basic amenities Groceries, utilities, public transport and even alcohol are all more than reasonable when compared to most Western countries. Most expats find that living in South Korea is an efficient way to quickly save up money.
Con: Expensive non-essentials If you have a weakness for technology and fashion, then Seoul will not only satisfy those cravings, but it will empty your wallet in the process. Don’t expect the newest trends to come without a price, like any city, but especially so in South Korea, where looking your best and having the newest and fastest gadgets is considered essential by many locals.
Education and Schools
Pro: Excellent education Public Korean primary and secondary schools are generally quite good and focus on sciences and math, as well as English and Korean. Many schools also employ a native English speaker, even in rural areas. Private education is extremely popular and rigorous as well, including afterschool tutoring academies, called wagons. If your child is able to keep up with the high standards, they’ll certainly get a solid education.
Con: Stressful atmosphere South Korea has a notably high suicide rate, partially as a result of the very stressful atmosphere surrounding education. Students account for many of these suicides and are constantly pressured to perform better and study longer, in order to get into a good university: the perceived cornerstone of a successful life.
Healthcare
Pro: Cheap public healthcare If you’re employed, you’re covered by the public health care system, which costs little and offers a lot. In urban areas, many of the doctors will also speak English, although bringing a friend to translate is still advisable.
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Con: Travel/wait time If you don’t live in an urban area, you may need to make a long trip to see a doctor at one of the official University hospitals. Because these hospitals are also centrally located, wait time can be inconvenient but not outrageous.
METHOD
The Health of Nations programme of research was created by the Economist Intelligence Unit
for GE. The Economist Intelligence Unit's editorial team built the Index, undertook the research
and analysis, conducted the interviews, and wrote the key findings, case studies and profiles. The
findings and views expressed here do not necessarily reflect the views of GE.
The index
The Health of Nations Index was built by the Economist Intelligence Unit in order to assess
countries on their ability to meet the health demands of their populations. Its coverage extends to
50 countries, and the assessments are based on each nation's performance in 21 core indicators.
Summarising the complex nature of healthcare systems is extremely difficult in a single index.
For one thing, the health challenges facing some countries are very different from those faced by
others. These may derive from differing levels of economic development, climatic conditions,
culture or other factors. For this reason, the Index is divided into three separate components:
Healthcare Inputs, Outcomes and Risk.
The Healthcare Inputs Index is comprised of seven indicators which measure the population's
access to hospitals, doctors and other health personnel as well as key types of preventive
medicine. The Healthcare Outcomes Index gauges the health status of populations by
considering eight indicators covering mortality rates, the prevalence of diseases and nutritional
health. The Healthcare Risk Index is based on the recognition that future demands on
healthcare systems are influenced also by exogenous factors; this component thus considers such
factors as smoking, access to clean water and air, and obesity levels.
The Key Findings draw out specific trends from the data series and grapple with some of the big
issues facing healthcare systems worldwide. They synthesize the data from the Health of Nations
index with other research and explore the ramifications of the results.
The indicators
94
All the indicators used in the Index are quantitative in nature. They were selected by the
Economist Intelligence Unit based on their fit with several criteria. To merit inclusion, each
indicator had to be:
• directly relevant to healthcare inputs, outcomes or risk
• internationally comparable across all countries
• accessible
• recent
• methodologically robust
Therefore, reputable and recent standardised data sets are used from international sources such as
the World Health Organisation, the World Bank, the United Nations and the OECD.
Healthcare Inputs Index • Nurses (per 10,000)
• Pharmaceutical personnel (per 10,000)
• Physicians (per 10,000)
• Hospital beds (per 1,000)
• Measles vaccine (% of children)
• DPT vaccine (% of children)
Healthcare Outcomes Index • Adult mortality rate (per 100,000, age 15-60)
• Infant mortality rate (per 100,000, age 0-1)
• Cancer mortality rate (per 100,000, all ages)
• Cardiovascular disease mortality rate (per 100,000, all ages)
• Incidence of tuberculosis (per 100,000, all ages)
• Life expectancy at age 60 (years)
• Prevalence of HIV among adults (%, age 15-49)
Healthcare Risk Index • Newborns with low birth weight (%)
• Smoking Prevalence, Females (% of Adults)
• Smoking Prevalence, Males (% of Adults)
• Access to improved water (% rural population)
• Access to improved water (% urban population)
• Alcohol consumption (litres per person per annum)
• Air pollution (urban PM10 exposure, mg/m3)
• Population below poverty line (%, <US$1 per day)
Scoring, weighting and testing
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Based on scores generated in each indicator, the 50 countries have been grouped into quintile
bands in each of the Inputs, Outcomes and Risk indexes according to how they perform relative
to the other countries. The band labels are:
• Well above average
• Above average
• Average
• Below average
• Well below average
To assign countries to each band, composite scores were compiled in the three indexes using the
"min-max method" to normalise the data sets. Each country received a score for each indicator
out of 100, based on where the country sits on the range of values of that indicator for all
countries. One of the advantages of the min-max method is that it can fix a specific range of data
at the outset so that, all else remaining constant, changes in one country's indicator in one year
will not change the scores for all other countries.
Equal weights have been assigned to each indicator within each index, with the exception of the
four individual Healthcare Risk indicators on smoking prevalence and access to improved water,
which are each half weighted to ensure an equal balance with other indicators.
In order to test the results, manipulation and scenario analysis have been conducted. This
involved, for example, excluding indicators from each index; assuming some data were
"missing"; trying alternative normalisation techniques; and assigning different indicator
weightings to analyse the changes from the "baseline" scores. Other sense checks include scatter
plots of the final index scores versus other independent variables, such as life expectancy.
Country profiles
Unless otherwise indicated, the country profiles are excerpted from Economist Intelligence Unit
healthcare reports which appear on its Healthcare Briefings & Forecasts website. The profiles
offer country-specific outlooks on healthcare spending and policy and issues surrounding
disease, using the most recent available data.
The Structure of the South Korean Health System
(A)ADMINISTRATIVE STRUCTURE :-
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The structure of administration and its relationship to both the country’s goals for efficiency and
its political philosophies were at the heart of the debate, as they have been in the united states
through the legislative process in passing the ppaca. The health insurance review agency, which
reviews fees and evaluates care; and the medical care institutions that provide health care and are
the move to a single-payer system was partially driven by inequities in financing, whereby the
self-employed in poor regions were paying a higher proportion of contributions than those in
wealthy regions, even though the benefits themselves were identical (kwon, 2009).
This was due to differences in the administrative societies, which were often too small to pool
risk efficiently. Consequently, administrative costs varied substantially (kwon, 2009). With the
introduction of the single-payer system, administrative costs were equalized across different
segments of the population and dropped substantially overall. Before the move to a single-payer
system, administrative costs ranged from 4.8% for government workers to 9.5% for the self-
employed. By 2006, the rate was 4% for all workers (kwon, 2009). A mixed system of tax-based
financing and health insurance was established (kwon, 2009), avoiding problems in assessing the
income of the self-employed.
(B)Health Care Financing and Cost Containment :-
The influence of the Japanese health care system can be seen in South Korea’s payment
model in which the employer and employee each pay half of the premium (Lee, 2003), resulting
in much higher payments from the employee than generally paid by U.S. employees. Along with
a co-payment structure also adopted from Japan, this mechanism provided enough revenue to
provide financial stability for South Korean medical societies until the Asian Financial Crisis in
1997, when national health insurance began to run an operating deficit (Lee, 2003)
Insurance system, or the flat monthly fees paid per-member within managed care organizations
in the United States. When added to the liberal provider choice given to beneficiaries, the
resulting competition by private health care providers led to a high volume of services,
exponentially raising costs under fee-for-service. This is often referred to as moral hazard in the
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United States. Reforms have limited consumer choice, but have not balanced out costs incurred
by the high proportion of specialists that extensively utilize new medical technology (Lee, 2003).
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requirements are open-ended, as opposed to the ‘global budget’ used in Canada’s National
Health Insurance system, or the flat monthly fees paid per-member within managed care
organizations in the United States. When added to the liberal provider choice given to
beneficiaries, the resulting competition by private health care providers led to a high volume of
services, exponentially raising costs under fee-for-service. This is often referred to as moral
hazard in the United States. Reforms have limited consumer choice, but have not balanced out
costs incurred by the high proportion of specialists that extensively utilize new medical
technology (Lee, 2003).
(C)Medical Aid Program For people unable to pay for their own health care coverage, the South Korean
government offers the Medical Aid Program. The program was written into law via the Medical
Aid Act in 1977 and was fully established two years later (Song, 2009). Like Medicaid in the
United States, Medical Aid is jointly funded by the central and local governments (Kwon, 2007)
and recipients undergo means-testing based on income to qualify for benefits (Kwon, 2009).
Public demand for additional social welfare increased after the Asian Financial Crisis (Lowe-
Lee, 2010) and part of President Kim Dae-Jung’s 1998 campaign platform was an expansion of
health care coverage (Shin, 2006).
However, in 2009, Medical Aid covered only 3.7% of the entire South Korean
population (Song, 2009); as a comparison, 15.7% of the U.S. population was covered by
Medicaid in 2009 (U.S. Census Bureau, 2010). Park (2008) argued that the low percentage of
coverage in South Korea is evidence of an underdeveloped social insurance system. Shin (2006)
cited estimates of the poor in need of further coverage, additional benefits, and reduction of co-
payments to be closer to 10% of the population.
In the United States, the PPACA will expand Medicaid to people living at or below
133% of the poverty level (Kaiser Family Foundation, 2011), leading to the 45% reduction in
uninsured Americans by 2019 according to projections from the United States’ Congressional
Budget Office (Holahan & Headen, 2010). Funding Medicaid for Americans at or below 133%
of the federal poverty line will also equalize beneficiary levels that currently vary widely among
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states. President Kim took office soon after the onset of the Asian Financial Crisis. In response,
his administration quickly changed the focus of their policy from expanding Medical Aid to
containing costs. for better care coordination through ACOs via Medicare (Gold, 2011). Close
monitoring of this mechanism may outline a health-status–focused policy viewpoint, which can
help avoid a similar public resistance to a perceived socialization of the U.S. health care system.
(D)Long-term Care and Expanding Benefits to Older
Adults In South Korea, nearly 4 of every 10 Koreans is age 65 or older (“Medical
Reform,” 2010). Yet the urgent issue is the rate of growth of this population, which is higher
than anywhere else in the world (OECD Factbook, 2011). In 2010, South Korea’s senior
population had a growth rate of 3.63%; the next highest growth rate among this population was
1.78% in Israel. The OECD average was 0.56% and the U.S. rate was 0.78% (OECD Factbook,
2011). In addition to the aging of the population, changes in family structure have created
pressures on older adults and their familial networks. Historically the Confucian virtue of filial
piety, respect for one’s parents and ancestors, has promoted informal caregiving for elders in the
extended family (Chee & Levkoff, 2001).
Daughters-in-law have long been expected to serve as caretakers (Chee & Levkoff,
2001), yet as women have entered the workforce, family structures have been put under great
stress because of the need to care for older family members. The government responded to this
burden by introducing the Long-term Care Insurance Program in 2008 (Kwon, 2009). It began as
a pilot that provided services to older adults with severe limitations in the performance of daily
activities (Song, 2009). Services offered include in-home nursing care and discounts of up to
20% on long-term care facilities (Lowe-Lee, 2010). The NHIC manages the system along with
the Ministry for Health, Welfare and Family Affairs (Kim, 2011).
After the introduction of the program, the Korean Longitudinal Study of Ageing
found that 60% of adults ages 50–64 are still family caregivers (OECD 50, 2011). However, the
portion of older adults living with their children fell sharply from over 80% in 1981 to 29% by
2008 as more women began working (OECD 50, 2011). If the program is able to grow at an
adequate rate, its development will stand as a significant advancement in health care coverage.
The program has been followed by others, some pioneered in Seoul by the SMG.The older adult
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population is projected to increase substantially in the city of Seoul, from 5.4% to 20% in 2027
(Park, 2011). One of the goals of Seoul’s Warm Life Welfare initiative is to create “an elderly-
friendly city in the era of one million senior citizens” (Hi Soul web site, 2011), and the city
operates 4,356 senior welfare facilities (Seoul Metropolitan Government, 2011).
The initiative includes designing built environments that address the needs of
senior citizens, assuring assistance to underprivileged and homebound seniors, and developing
institutional support (Hi Soul web site, 2011). Two programs that exemplify Seoul’s aims are the
9988 Senior Program and the Elderly Care Service. The “99” in the 9988 Senior Program is
meant to indicate that all older adults in Seoul can live to the age of 99 by staying healthy. The
program consists of services for seniors with
(E) Health Outcomes and Quality of Care
Data show that the overall quality of medical care and the health status of its citizens
have both improved in South Korea since the implementation of universal health insurance. This
is demonstrated by the decline in infant mortality, which went from 61.0 per 1,000 live births in
the 1960s (Song, 2009) to 3.5 per 1,000 in 2008 (OECD Factbook, 2011), and the increase in life
expectancy from 51.1 years in the 1960s to 75.7 years in 2006 for men and from 53.7 in the
1960s to 82.4 in 2006 for women (Song, 2009). Health outcomes are worse in the United States,
which had an infant mortality of 6.5 per 1,000 births in 2008, and an average life expectancy of
75.1 for men and 80.2 for women in 2006 (OECD Factbook statistics, 2011). However, health
care coverage is not the only change in South Korea over the past thirty years. Yang (2008)
points out that additional factors including “lifestyle, diet, income distribution, and
environmental elements,” contribute to health outcomes.
Source: OECD Factbook statistics, 2011
Jung (2011) reported that the delivery system of medical services is not fully
established in South Korea, and “every doctor can run his private office regardless of specialty.”
This can lead to highly variable quality of care. Eight years earlier, Lee (2003) noted that South
Korean medical professionals have practiced without public accountability, resulting in overuse
of antibiotics, excessive testing, and a high rate of caesarean section deliveries. In 2008, Yang
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pointed out that quality-of-life measurement tools such as the EQ-5D (Euro quality of life) and
the health utility index were available only from North American and European contexts, which
may not correspond with Asian values. Recently, Jung (2011) has reported on a new validity and
reliability measure, the Korean Primary Care Assessment Tool that assesses patient satisfaction
with primary and non-primary care services.
The demand for this tool arose from professional discussion focused on primary
care as a more efficient use of medical resources, improved cost containment, and increased
equity (Jung, 2011). The resulting study found low satisfaction on health care coordination
among both primary and non-primary groups, and suggested that self-owned clinic-based
physicians may dismiss referrals because of competition for patients with other medical
facilitates, short visits, and a loose medical service delivery system in which physicians’
treatment boundaries are not as strictly defined as by licensure in the United States (Jung, 2011).
The low scores given by patients may be correlated with a high demand for medical care, but
also demonstrate an area for future attention . Both primary care and quality improvement
measurement are central to the PPACA. Provisions supporting the development of primary care
include funding for primary care residencies .
(F)Expanding Health Care Delivery Through e-
Government One of the strategies employed by SMG to ensure access to quality care is to
deploy advanced technological tools and services. In 2010, SMG was rated as the top global city
in e-government worldwide (Hicks, 2010). The E-Governance Institute at Rutgers University-
Newark and the Global e-Policy e-Government Institute at Sungkyunkwan University, South
Korea, evaluate the digital governance of large municipalities annually, and rated Seoul’s online
e-government efforts as the best in the world in 2003, 2005, 2007, and 2009 (Holzer, Min-Bong,
& Manoharan, 2009). E-government projects touted by SMG include the Imagination Bank,
through which city employees can make suggestions; Seoul Oasis, through which citizens offer
ideas for increasing public good; and interactive online meetings between citizens and city
government (Kang, 2011).
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The u-Healthcare system is designed to increase capacity for managing chronic
diseases, such as hypertension and diabetes. The Guro Public Health Center provides check-ups
through the system, consisting of patient input of health indicator measures for diabetes, blood
pressure, obesity, and respiratory diseases via mobile devices (Ramalingam, 2010). The center
then monitors data for diagnosis and treatment as appropriate (Ramalingam, 2010). This
promotes a focus on disease prevention and early intervention, which can greatly improve one’s
quality of life.
The larger u-Healthcare system is still under development, with a primary focus being the build-
out of its Electronic Medical Records (EMR) system. Launching a comprehensive EMR system
is also a goal of the PPACA. An EMR system can reduce administrative costs, duplicative
services, and the number of medical errors, thus increasing quality of care (HealthReform.gov).
In South Korea, the technology industry maintains that privacy laws are preventing more
advanced use of the system, such as the sharing of medical information among doctors via cloud
computing and electronic prescription ordering (Je-yup, 2011). Experts are now considering
managerial issues, behavior perspectives, and the user’s point of view for further policy .The
South Korean health system mixes single-payer administration with private provider delivery
while managing universal coverage. As a leading global city, Seoul has a key role in developing
and expanding health care structure and delivery in South Korea. The United States could follow
the results of Seoul e-health care pilot programs to develop new policies for health care,
particularly care for seniors.
In many ways, the South Korean health care system has met the goals it set for
itself, with universal health insurance coverage, improved health outcomes, and overall costs that
are a lower percentage of GDP compared with other OECD countries. South Korea was able to
fairly quickly transition to a single-payer system without substantially altering the private
provider market. Such a transition would not be so easy in the United States, as the PPACA
leaves the United States’ private health insurance systems in place. However, the fact that both
countries built (or are building) health care reform around the free market—with insurance
companies in the United States and medical providers in South Korea—demonstrates the two
nations have similar values. These values offer useful comparisons and lessons in health care
system strengths and weaknesses.
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Medical Tourism in South Korea
Medical Visa
Medical tourists to South Korea have to be invited to receive medical services by registered health providers or medical tourism agencies. An international patient can stay in the country for up to 180 days, depending on the nature of the medical procedure to be done. The patient has to submit the following documents to his local South Korean embassy or consulate:
• Passport
• Visa Application
• 3x4 Photos
• Proof of medical treatment requirement from the health provider
• Financial documents as proof of the patient’s ability to pay for his expenses
• A copy of the registration certificate of the healthcare provider or the medical tourism agency
People from some countries like the US do not have to have a visa. A for up to 90 days of stay in the country. US citizens are only required to get a visa if they have to be there for more than that period. For more information about requirements to enter Korea, international patients to South Korea should inquire at their local South Korean embassy or consulate to be certain.
Unlike its neighbor to the north, South Korea is perceived around the world as a gentle and fun-loving country. Many tourists from around the world travel to this country to experience its beautiful tourist spots, delicious cuisine, and very rich culture. Recently, South Korea medical tourism has also grown to be one of the most popular in Asia, because of their excellent-quality healthcare services and state-of-the-art facilities.
Advanced treatments for various spinal problems, other orthopedic problems, dental issues, organ transplantation, cancer treatments, cyberknife surgery in Korea, etc. have made this East Asian Country a hit among medical tourists from many western countries.
Here are some facts about South Korea:
• It is officially known as The Republic of South Korea. • Neighbouring countries include Japan (East), North Korea (North) and The People’s
Republic of China (West). • Climate in South Korea can range from very warm to cold, depending on time of the
year. Summers can go up to above 30° centigrade, while in winter seasons the temperature can go below 0°:.
• The population is estimated at around 50 million people. • South Korea has the 4th largest economy in Asia, with large businesses in electronics,
robotics, petrochemicals, ships, and machinery. • The South Korean government is democratic, with executive, judicial, and legislative
branches.
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• Seoul is the capital of the country, and is the seat of most key players in the South Korean medical tourism industry.
• Other big cities in South Korea (based on population) are Busan, Incheon, and Daegu • South Korea has good international relations with other Asian countries as well as many
countries around the world. It became a member of the United Nations (UN) in 1991, and is also a member of the World Trade Organization (WTO). It is also a founding member of both the Asia Pacific Economic Cooperation (APEC) and the East Asia Summit (EAS).
• English is taught as a second language in the country’s primary and secondary schools.
Healthcare in Korea
South Korea’s healthcare systems are among the best in Asia. The country’s general health office is called the Ministry of Health and Welfare. This office works with the government and other health agencies in the country in making and enforcing policies regarding public health and safety. Public and private employees are covered by healthcare insurance, as mandated by the government, and many hospitals continually update their systems and facilities – a big draw for medical tourists who go to South Korea.
The office of Ministry of Health and Welfare of South Korea is responsible for finding ways to enhance their quality of life, fostering health among children and adults, giving long-term care insurance for the elderly, and enforcing preventive healthcare and treatment programs.
Green South Korea
Environmental health is also one of this country’s continuing focuses, addressing issues like climate change, water pollution, and deforestation. In 2008, South Korean President Lee Myung Myung-bak announced the country’s vision for development “Low Carbon, Green Growth” – a drive that aims to use “green” technologies and industries that enhance efficiency in the use of its natural resources, while continually minimizing the hazards they pose to the environment.
South Korea has invested a lot of money in this aggressive drive, ensuring that the country does its part to conserve natural resources. They have taken huge steps to significantly cut down on greenhouse gas emissions, invested in renewable energy sources, and started to encourage the building of energy-efficient homes.
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South Korean Currency
South Korea’s official currency is the South Korean Won. Depending on the fluctuating exchange rates, a US dollar can be approximately worth 1,100 SK Won.
South Korea’s Medical Facilities and Equipment
In 2004, the South Korean government started to implement the Hospital Evaluation Program as described by the Korean Medical Service Act. This includes the assessment of hospitals with more than 300 beds every 3 years. This is done by collecting information through questionnaires, telephone surveys that focus on patient satisfaction and hospital management, and onsite inspection.
• All medical institutions and facilitators in the country who are interested to attract medical tourists to South Korea have to register and comply with specific requirements (Article 27.2 of the country’s Medical Service Act).
• In order to register, a medical specialist per department is required to monitor and ensure the quality of healthcare they provide.
• State-of-the-art equipment and cutting edge devices are used in the country’s hospitals, which is no surprise for a popularly technology-savvy country.
• As per the Korea Healthcare Industry Report of 2009, Korea is #3 in the world for the number of CT scan machines per million of population, following only Japan and the US.
• This is the same ranking for MRI machines, where South Korea is third to Japan and the US, and ahead of huge European countries like Germany, UK, and France. You may also check South Korea’s health profile as of 2008, as given by the World Health Organization.
• Most hospitals involved in South Korean medical tourism maintain an international patients department that employs English speaking staff especially hired to take care of medical tourists’ needs.
Qualifications of Medical Doctors in South Korea
Patients going to South Korea for medical tourism are treated by doctors who have international accreditation. To facilitate lifelong education and training, all Korean Medical Association (KMA) members employed at medical facilities are required to complete at least 12 credits of training yearly, ranging from workshops, online training, lectures, publications, symposiums, and conferences.
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Tips for South Korea Medical Tourists
• The most important rule is to research the qualifications of all parties a patient is interested to work with, including the hospital, doctor, and medical tourism agency.
• Be aware of the weather and climate by looking up forecasted conditions for your scheduled trip so you can pack clothing as needed.
• Inquire from the nearest South Korean embassy or consulate about the latest updates regarding requirements to enter South Korea.
• Take advantage of the other benefits of going to South Korea as a medical tourist: look up the festivals, restaurants, cultural sites, mountains, and beaches you would like to explore – then schedule your trip accordingly. Just make sure to consult the doctor about what activities you want to do, so he can advise you on the things you may or may not be allowed to do before and after your medical visits to the hospital.
• Coordinate with the hospital or medical tourism agency for the itinerary you want, as they will be able to help you out with arranging side trips to tourist spots before, in between, or after hospital visits when possible.
• Medical tourism agencies are able to provide packages with hotels and transportation services during your stay, and most are available for discounted rates.
• The success of medical tourism in South Korea is mainly due to the low costs of excellent-quality medical procedures and services. However, ensure that you are getting the best rates by getting feedback from more than one hospital and doctor if available. For this, working with a reputable medical tourism agency is best, as they will be able to give you options that will work best with your needs.
Medical Tourism Corporation facilitates low cost treatments for various health problems, in South Korea. Fill out the free estimate request form for a free quote & more information.
Comparison of South Korea and India
India has a universal health care system and southkorea has private health care system.Healthcare is one of India’s largest sectors in terms of revenue and employment. A growing healthcare sectorHealthcare is one of India’s largest sectors in terms of revenue and employment.And the sector is expanding rapidly.During 1990s,Indian healthcare grew at a compound annual rate of 16%Today the total value of the sectors is more than $34billion.This translate to roughly 6%GDP.by 2012,india,shealthcare sectors is projected to grow to nearly $40billion and by 202 it will be around US $ 280 billion.
