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Table of Contents
1.Korea at a Glance
2.Relations between the Republic of
Korea and the Republic of Bulgaria
3.Growth of Korea’s Economy
4.Causes of Korean Success
5.Challenges
1. Korea at a Glance
Area 99,720 sq km - 109th
Population 50,924,172 (2016) -28th /SEOUL 9.774 million
Population growth rate 0.53% (2016)- 156th
GDP(nominal/PPP) $1.4 trillion(2016) - 11th / $1.93 trillion(2016)- 14th
GDP- per capita (nominal/
PPP) $27,632 (2016) -28th /$37,900 (2016)- 45th
GDP - real growth rate 2.7%(2016 ) – 110th
Gross national saving 36.1% of GDP (2016) -10th
GDP Composition by sector Agriculture: 2.3%/ Industry: 37.6%/ Services: 60.2%(2016)
Source: CIA The World Fact book(Area, Population, Gross national saving, real growth rate, GDP PPP), IMF(GDP Nominal)
Joint Declaration on the Establishment of
Diplomatic Relations (March 23, 1990)
Minister of Foreign Affairs - Choi Ho-joong
(March 23, 1990)
2. Korea-Bulgaria Relations
- How everything began…
Prime Minister -Han Myeong-sook
( June, 2006)
Speaker of the National Assembly - Kim Hyong-o
(May, 2009)
Korea-Bulgaria Relations –High Level Visits ①
President - Georgi Parvanov
(October, 2010)
President - Rosen Plevneliev
(May, 2015)
Korea-Bulgaria Relations –High Level Visits ②
Three MOUs on Cooperation in the Field of Defense, Science and
Technology, and Sports
Arrangement on Cooperation in the Field of Education and Culture
Joint Declaration on the Comprehensive and Future-Oriented Partnership
between the Republic of Korea and the Republic of Bulgaria (May, 2015)
1st session of Intergovernmental Joint Commission on
Economic Cooperation (October, 2015)
Minister of Foreign Affairs - Yun Byung-se
(June,2016)
The 2nd session of the Joint Commission on Economic Cooperation will be
held this year in Seoul
Science and technology, IT and industrial cooperation are under discussion
Korea-Bulgaria Relations -Follow-up Actions
4th and 5th Nuclear Tests - January 2016, September 2016
Missile tests –24 times in 2016 and 7 times in 2017
The only country to conduct nuclear test in the 21st century,
threat to international community
Korea-Bulgaria Relations -Political Relations ①
: North Korean Provocations (2016-2017)
Korea-Bulgaria Relations -Political Relations ②
Both side reaffirmed shared commitment to the denuclearization of
North Korea (May,2015)
The Ministry of Foreign Affairs of the Republic of Bulgaria issued 5
statements in 2016 and 3 so far in 2017, condemning North Korean
nuclear tests and missile launches
In accordance with Resolution 2321, two North Korean Embassy
officials left Bulgaria in February 2017 and the Republic of Bulgaria
has asked North Korea to take measure to cease the commercial
use of their real estate property in Bulgaria
The Republic of Bulgaria supports
Peaceful Unification on the Korean
Peninsula and welcomes “North Asia
Peace and Cooperation Initiative” of
the Republic of Korea
Korea-Bulgaria Relations
-Educational & Cultural Relations ①
Education FieldSofia University, Center for Korean Studies, Korean Department
18th School “William Gladstone”, Korean language classes
Sofia Sejong Institute – Learning Korean Culture and Languages
Korean Government Scholarship Program
Bulgarian Government Scholarship
Cultural FieldKorea Corner in the Sofia City Library
Intergovernmental Youth Exchange Program
Korean Ambassador’s Cup Taekwondo Tournament
Annual Korean-Bulgarian Friendship Concert
Korean Cinema Week
Sofia University, Center for Korean Studies 18th School “William Gladstone”, Korean language classes
Korea Corner in the Sofia City LibrarySofia Sejong Institute
Korea-Bulgaria Relations
-Educational & Cultural Relations ②
KGSP Korean Government Scholarship Program Intergovernmental Youth Exchange Program
The 3rd Korean Ambassador’s Cup
Taekwondo Tournament (June, 2016)
The 4th Korean-Bulgarian Friendship Concert
(October, 2016)
Korea-Bulgaria Relations
-Educational & Cultural Relations ③
Bulgaria
Bulgaria exported $102million to Korea in 2016 - Feed(Corn, wheat), Clothes,Heavy Electricals, Top shell, Industrial Electronics
Bulgaria Imported $134 million from Korea in 2016-Petrochemicals, Transporting machine, Industrial Electronics,Nonferrous metal products, Electronic component
Korea is 2nd largest trading partner among East Asia after China and it has 3rd largest trade volume among non-EU OECD countries after Turkey and USA- $ 210 million (2015)/ $ 236 million (2016)
Source: Korea Customs Service, Bulgaria NSI
Korea-Bulgaria Relations
-Economic Relations ①
Korean companies in Bulgaria
Photovoltaic plant : KOSEP, SDN,
Samsung C&T, EU Sunday, PNH
Manufacturing : Hyundai Heavy Industry
Agriculture : Asia Invest
Cars: Hyundai(IND Commerce), KIA
Subsidiary : Samsung Electronics, LG Electronics, Alpha Display(Monitor), River(used car)
Bulgarian Companies with business in Korea
Agria Group Holding(corn, wheat), Aurubis(waste of precious metals), LB Bularicum(Bacteria), Sever Export(top shell), Deniva(rose oil), Vikitex(textile) etc.
Korea is the largest investor among Asia
$ 519 million: Photovoltaic plants, transformer manufacturing, agriculture
103MW, 1/10 of Bulgarian solar power generation
Korea-Bulgaria Relations
-Economic Relations ②
Trade Volume
Source: WTO, KITA
Trade VolumeTrade Volume
$857 billion
$280 billion
Trade volume between 1957 and 2012 (Unit: USD) $1.098 trillion ( 2.387 times compared to 1957)
(2014)
$0.46 billion(1957)
(1996)
(2008)
Leading exporters and importers in world merchandise trade, 2015 (USD billion)
1950s2000s
Cheong-Gye-Cheon Stream in Seoul
With no natural resources, capital and technology
However, Korea achieved
the Miracle of Han River.
1962 1992 1997 2007 2013 2014 2015
Economic Development
GDP per capita$87
(101st)$7,714 $11,505 $23,103 $25,998 $27,989 $27,221
Investment (/GDP) 13.8 36.0 34.6 30.5 29.1 29.2 27.97
Export (/GDP) 5.1 26.8 31.7 39.2 53.9 50.3 45.9
Import (/GDP) 16.8 27.0 32.2 38.1 48.9 45.0 38.94
Trade* (/GDP) 21.9 53.8 63.9 77.3 102.8 95.3 85
Social Development
Life Expectancy 55 72 74 79 82 82 -
Infant Mortality Rate(/1,000)(under the age of 5)
138 8.5 7.2 5.2 3.0 3.0 -
*Trade volume exceeded $1 trillion in 2011, 9th largest trading nation.
Source: KDI (1996-2007 data), WB(GDP, Export, Import, Trade 2013-2015), Economywatch(Investment 2013-2015),
OECD(Life Expectancy, Infant Mortality Rate 2013-2014)
Korea's Economic and Social Development Indicators
The leader in innovation Korea ranked first in the 2016 Bloomberg Innovation Index, with a top score
of 91.31 points
This is the third year in a row that Korea topped the innovation index,
having scored first place in 2014 and 2015.
Gross R&D investment as a percentage of GDP
Bloomberg Rankings Most Innovative in the world 2014: Countries
Source: OECD
15 Korean Companies
in FORTUNE Global 500 in 2016
(13)
(84)(172)
(173)
(208)
(180)
(237)
(294)
(277)
(431)(414)
(464)
(439)(429)
(310)
Market Share of Displays
1st
2nd
Source: Displaysearch 2013
22.1%
22.9%
Currently Korea is the leader in display
manufacturing, with Taiwan and China on its
heels and Japan a distant fourth.
Source: HS Displaysearch and Linde Internal(2016)
1st
3rd
14.2%
21.7%
Source: SNE Researcher2013
Market Share of Lithium Batteries
Source: SNE Researche 2015
Market share of Small-sized Battery from
5 Major Suppliers
Semiconductors
Memory semiconductor:66.5% Source: MOTIE, HIS technology (2013)
Leading Semiconductor companies from 2014 to 2016(in billion U.S. dollars)
Source: www.statista.com
Shipbuilding
Source: World Shipyard Monitor 2013
Korea45.4%
Other9.6%
China34%
Japan11%
Global Shipbuilding Share(CGT Contracting 2013)
Source: http://worldmaritimenews.com (March,2016)
Petrochemicals
USA China Saudi Arabia Korea Japan Germany
27.1
16.3 15.8
8.4 85.6
Ethylene Production Capacity (2012)
World’s
(Mn. Tons / Year)
REFINING
CAPACITY4th
Source: Korean Petrochemical Industry Association
Trend of Economic Policies
Extensive government involvement
1980s1970s1960s1950s
Industrialization through import substitution under protection
Export Promotion Heavy and
Chemical Industry
Drive
Trade LiberalizationInstitutional Reforms
Economic policies have been different from period to period.
Economic Take-Off with Outward-looking Development Strategy
Mechanism of Outward-looking Development Strategy
Government
Export
PromotionManufacturingProcessing
PrivateEnterprises
Technology
Development
Economic Growth
S
Financial Tax
Support
Well-educated
Labor force
Imports
Foreign Technology
Imports Capital Good
Imports Raw Material
Foreign Capital Inducement(Economic Aids External Debt)
S
The Role of Each Sector for Export Promotion
Economic Take-Off with Outward-looking Development Strategy
Export Growth of 40%
Per annum in 1964-80
Strong export promotion
supports high growth
35
Stages for Econ. Development
Economic Development Policy Education Policy
Phase 1(1945-1960)
Agricultural Society, Rehabilitation, Seek for export-oriented growth policy
Establishment of elementary education system and universal primary education
Phase 2
1960sDevelopment of labor-intense industry(Esp. light industry-oriented) Expansion of secondary education,
reinforcement and expansion of professional advancement education
1970sBirth of conglomerates, Promote policies of heavy chemical industry
Phase 3(1980s-1990s)
Development of technology, knowledge, information-intense industry
Expansion of higher education
Phase 4(2000-present)
Enter into the Global Era, Transform into the information and knowledge-oriented economy
Popularize higher education, informatization of education, lifelong education, efforts in developing human resources at national level
Trend of Education Policy
36
Budget in Education Public Expenditure on Education as a percentage of GDP
Year 1970 1980 1982 1990 2001 2010 2016
% of GDP 3.27 3.34 6.08 3.02 3.90 4.54(36th ) 4.90(30th )
Source: http://data.uis.unesco.org/
Source: TheGlobalEconomy.com, UNESCO
* Educational tax was introduced in 1982
http://one-europe.net/eurographics/infographic-countries-that-invest-the-
most-in-education (April, 2015)
Leadership
“The House That Park Built: A survey of South Korea”
The Economist, June 3, 1995 p.15
Prof. Tanev
“How strategists think”
Willingness of the People
Korean nurses and miners went to work in West Germany in exchange for a
public loan from West Germany (1960’s- 1970’s)
Koreans sold or donated their gold to help
country pay debt (1997-1998)
19975.Challenges
Asian Financial Crisis
The countries most affected
by the 1997 Asian financial
crisis
Causes of 1997-98 Financial Crisis
Increased Corporate
Failure
Heavy CorporateDebt Leverage
Labor MarketRigidity
IMFRescue Package
• Massive Capital Outflow• Denied Rollover of
Short-term external Debt
DeterioratedFinancial
Soundness
South East AsianCrisis
IncreasingCompetitionfrom China
Declining MarginalProductivity of
Capital
Further Expansionof Chaebols’Investment
Decreasing Profitability
Lax Financial Supervision
Cleaning up Non-performing Loans
AcceleratingLiberalization
Improving Corporate Governance
Expanding Social Safety Net
- Early Graduation from the IMF Rescue Package
- Foreign Reserves of more thanUSD 200bn in 2004
Improved External Positions
- GDP Growth: -6.7% (1998) 10.7% (1999)
- Unemployment: 6.8% (1998) 3.5% (2004)
Rapid Economic Recovery
- Debt-equity Ratio: 396% (1997) 110% (2004)
- No. of Banks: 33 (1997) 19 (2004)
Stronger Corporate and Financial Sector
Overview
- Swift Crisis Resolution and Economic Recovery
Aging Shock
0
10
20
30
40
50 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 30 35 40 45 50
(%)
India
OECD
Japan
Korea
ChinaUSA
Source: KDI
Korea is the fastest aging society
The ratio of population aged over 65 increased from 7% in 2000 to 14% in 2015 due to low birth rate and better medicine
Population Share of 65+
Decline in Potential Growth Rate
Growth potential of Korea based on growth accounting (%)
Source: KDI.
0
2
4
6
8
10
12
1970~80 1980~90 1990~00 2000~10 2010~20 2020~30
노동 자본 총요소생산성Labor Capital Total Factor
Productivity
• Low labor input due to the low birthrate and aging population &
Low productivity of the capital⇨ Decline of potential growth.
• To boost the potential growth, total factor productivity should be improved
through creativity and innovation.
Growth Patterns of the Korean Economy
High tech + Innovation
Manufacturing with capital
After economic crisisLabor intensive
productionHeavy &chemical industriesInitial stage of
development
Stages of Economic Growth - Korea
Labor-oriented
Capital-oriented
Innovation-oriented
Years for Transition
UK
Japan
Korea
China
200 years
100 years
30~40 years
30 years?
’60s- ’70s
’70s- ’90s
’00s -
• Previously, the forces of growth were capital and labor.
• Now innovation based on knowledge, creativity and exploration is
more important than economic resources.
The Korean economy entered the stage of growth by innovation.
“Creative Economy” Strategies Since 2013
Focus on creativity and convergence of business
Invest in Science & Technology, Education &Culture