« [Korea's] economy is practically as big as India’s even with a population less than one-twentieth the size. It exports more goods than the UK, a statistic admittedly more surprising to those who are aware that Britain still makes things. Samsung overhauled Hewlett-Packard last year to become the world’s biggest technology company by sales. This year, it should make more money than the top 15 Japanese electronics groups combined.
South Korea has had a good crisis. While most other countries fell into recession or staved off collapse by putting themselves in hock, it is already back to robust growth. After treading water in 2009, the economy is expected to expand this year by 4.7 per cent, with a budget deficit of just 2 per cent of output, positively parsimonious in these Keynesian times. Urbanised, sophisticated, wired-up and with a per capita income in purchasing-power terms of some $28,000 – only $5,000 behind arch-rival Japan.
The successes of corporate Korea are being matched by a new diplomatic swagger. Washington’s relations with Japan are rockier than normal because of disagreements over military bases. US-Sino ties are being tested by disputes over arms sales to Taiwan and cyber-security. That leaves South Korea as Washington’s new best friend in the region, a factor that has helped bolster its credentials as this year’s president of the Group of 20. »
« Helped in part by a cheap won, exports of cars, ships, electronics, and semiconductors are soaring, while China has yet to pose a credible threat to Korean products. Instead, the Chinese are now mostly seen as customers, not rivals. Korea's exports to China jumped almost fivefold from 2000 to 2009, to $86.7 billion. "There's a consensus that China represents more of an opportunity than a threat," says Im Sang Hyug, senior researcher at the Federation of Korean Industries. Thanks partly to the healthy China trade, many companies, including LG, Hyundai, and Kia Motors, posted record profits last year. "Korea is the first country to stage a full V-shaped recovery," says Jeroen Plag, Korea manager for Dutch bank ING Group.
These big home runs have changed the mood in Korea. "I hear from a lot of people saying, 'Korea is on the rise. We have a lot of hope,'" President Lee Myung Bak told the nation in a recent radio address.
The Middle East is already enjoying the benefits of Korean foresight. Seoul has been urging Korean construction companies to increase their presence in the Persian Gulf. In 2009, Korean companies priced so aggressively that they won half of all contracts handed out for oil and gas projects in Abu Dhabi, some $30 billion in all, says the International Contractors Association of Korea. A consortium led by state-controlled utility Korea Electric Power snagged Korea's first-ever overseas nuclear contract, beating France's Areva and a joint venture between General Electric and Hitachi for a project to build four plants in the United Arab Emirates. Soon, Korean companies will be "competing head to head with U.S. and European companies across the world," predicts Kim Kyeho, executive vice president for Samsung C&T in Dubai. Samsung was primary contractor for Dubai's 162-story Burj Khalifa tower, the world's tallest skyscraper.
Korea's central planners want the chaebol to entertain even bigger ambitions. Led by President Lee, the cabinet last year launched a plan to expand Korea's economic base by promoting robotics, health care, biotechnology, green transportation, renewable energy, and other next-generation ventures, some 17 in all. The goal is to double exports in these areas, to $434 billion, by 2013; create a million jobs; and reduce the economy's dependence on info tech, shipbuilding, and autos. To spur this change, the government plans to spend $22 billion by 2013 to finance R&D.
In robotics, for example, Seoul has already doled out $500 million in R&D and is underwriting pilot projects to test education, entertainment, and disaster-fighting robots. Korea, which saw its robot exports jump 10.5% in 2009, to $809 million, aims to become one of the top three industrial robot manufacturers. It currently is No. 5 behind Japan, the U.S., Germany, and Italy.
For green technology, Lee's cabinet will focus on developing innovations for solar and nuclear, expanding the use of LEDs and stepping up renewable energy mandates across the country. The government will actively promote the convergence of the broadcasting and telecom industries and offer low-cost loans to help develop content for this emerging hybrid business. »
This month's Monocle:
« Seoulites are hard at work making their capital a more attractive place to live and work. It's a project unfolding at an extraordinary speed. From the Han River clean-up and new landmarks, such as Dongdaemun Design Plaza, to rooftop parks and a new media city, Seoul is shedding its image as a gridlocked concrete jungle.
Seoul's ambitious mayor, Oh Se-hoon, is spearheading the design drive while the city's giant tech firms and upcoming G20 summit have also been instrumental in making South Korea's capital raise its game. The city's transport boom is also at the forefront of the transformation: the first locally made bullet train departed from Seoul Station early this year, Incheon International Airport is expanding and the country's national carrier is recording double-digit growth.
Seoul's sign-less back alleys may be tricky to navigate (something that is being rectified) but its inhabitants are putting the city on the map as an accessible and playful metropolis with their lively restaurants, bars, cafés and 24-hour shops.
It's from the cosy neighbourhoods of Bukchon, Apgujeong, Garosu-kil and Hongdae that Seoul is taking on the world by eporting its K-pop artists, product designers, technology innovators and chefs. It's a city that's preparing for a bright future. As the locals say, eoseo oseyo, come on in. »