Minimum Wage Strong Economic

A strong economic environment is essential for a country to sustain its GDP and the countries well-being. This is valuable for South Korea so other countries are interested in doing business with them. South Korea is striving to maintain economic freedom and a low unemployment rate. As of 2018, “South Korea’s economic freedom score is 73.8, making its economy the 27th freest country. Its overall score has decreased by 0.5 point, with a steep decline for the government integrity indicator outweighing an improvement in investment freedom.” (Heritage foundation) South Korea is ranked in the top 10 among 43 countries in the Asia–Pacific region. They are ranked so highly their score is higher than regional and world averages. Overall, the country is making its way to try and maintain freedom and market openness with a stable economy.

The new market they have adapted to has departed from a prior supply-side orientated with conservative administration with a strong demand driven economic policy agenda. The government emphasizes populist spending and income led growth. (CNBC, 2018) They have done this through taking measures mitigating debt for households, raising taxes on corporations and the wealthy community and increasing the minimum wage. According to, Statistics web, “the minimum hourly wage in South Korea amounted to 7,530 South Korean won. Note: 1,000 South Korean won equal 0.9 U.S. dollars.” (Statista) More consumer spending happened in the country because the minimum wage was increased, overall helping corporations and businesses. In the short-term businesses will take a hit because their margins are slimmer, but it will continue to move people to South Korea in the long run and benefit their economy.

Products and Service Export/Imports

To add on, South Korea has an export-oriented economy and its exports accounts for more than 50% of GDP. South Korea’s main exports include electronic products, machinery, motor vehicles, steel, ships and textiles. “South Korea is an open market economy with 80.4% trade freedom. After four decades of rapid economic growth and global integration, South Korea has become a high-tech, industrialized, trillion-dollar economy.” (heritage) This correlates to South Koreas largest export, electronic products. South Koreas major export partners are China who consumes 26% of total exports and the United States at 13%. Other countries following close behind include, Vietnam, Japan and Singapore. South Korea highest imports are petroleum and petroleum products which accounts for 16% of total imports.

According to OEC, “South Korea is the 5th largest export economy in the world. In 2016, South Korea exported $515B and imported $398B, resulting in a positive trade balance of $117B.” Alongside that, the services sector in South Korea includes wholesale and retail trade, transport, financial services, education, health care, and real estate. South Korea was a booming economy when they started exporting electronic products, which has helped their economy. Ever since 2012, they are becoming more stagnant due to a decline in the country’s growth potential.

Economic Risk

South Koreas economy has been stable until 2107, economic difficulties arose in relations with China and North Korea. China is one of their main trading partners. The countries were not getting along politically following nuclear tests. The biggest risk they endured was when North Korea started nuclear testing, causing chaos for the countries. “South Korea agreed to accept the deployment of the U.S. anti-missile system on its territory, to Beijing’s great dismay. (Society General, 2018) This caused one of South Koreas leading exports, Samsung to stop producing their new phones. They went bankrupt following vast incidents. Later during the year in 2017, China and South Korea made emends and renewed their currency swap deal. The last economic risk would potentially be impeaching the President, Park Geun-hye. He has been accused of abusing his position constitutionally and is accused of corruption.

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