South Korea’s impressive economy

Samsung makes lots of phones.

The news this week that Samsung was unveiling its newest smartphone, got me thinking about Korea. In spite of the instability involved in being in a technical state of war with their cousins to the north, South Korea is doing amazingly well in the world.

Korea was divided after WWII.

As you should know, Korea was divided after World War II into “North” and “South”. This split came about as a result of the defeat of Japan by the U.S. and the Soviet Union (the 20th century version of the Russian Empire). Japan had occupied and annexed the Korean peninsula in the early 1900’s, and had used it as a base for military expansion into the northern part of China.

North Korea a basket case

It is generally acknowledged that North Korea (population, about 23m) is a basket case. It is ruled by a weird family cult concerned more with developing nuclear weapons capability than the well-being of its citizens. North Korea, officially called the Democratic People’s Republic of Korea, has been spurned by the international community. The country is the object of severe economic sanctions promoted by the United States and endorsed by the United Nations security Council.

Hyundai is no Lada.

South Korea a modern Asian Tiger

South Korea (population about 50m) is another matter. According to Wikipedia, its per capita GDP in 1957 was lower than that of Ghana (in Africa), and lower than many Latin American countries of the day. But by 2008 it was 17 times higher than Ghana. By any measure that is pretty impressive. By 2012 its GDP was somewhere between 12th and 15th in the world – just ahead of Canada’s.

This in spite of suffering national bankruptcy in 1997. Unlike Canada, and like most other Asian countries, South Korea has few natural resources. It has developed a vibrant economy based on importing raw materials and exporting manufactured goods.

Important Korean brands

The best known Korean brands to North Americans are electronics and cars. Samsung is the largest manufacturer in the world of smartphones and liquid crystal displays, and is a major producer of digital televisions, computers and computer components. Daewoo and LG ar also Korean companies.

Korea produces roughly twice as many cars as we do in Canada. Just a few years ago Hyundai cars were the butt of jokes. Today Hyundai is the world’s largest automaker by profit, and sells significantly more vehicles than Ford, Nissan, Honda, Fiat, Renault, Chrysler, Mazda, BMW and Daimler-Benz. Only GM, VW, and Toyota are bigger.