International Economics - South Korea Term Paper

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After the crisis, South Korea increased its efforts to regain their economic status and years of growth followed. The state officials have however been accused that their efforts went as far as getting them involved in illegal operations and this then led to increased levels of corruption within the state. In the last couple of years, the rate of economic growth has been at a steady 4% per annum.

The country is able to sustain itself in terms of consumed and produced energy, but when it comes to crude oil and natural gas, they have to import most of it. Therefore, South Korea is increasingly dependent upon the international movements that modify the price of oil.

South Korea hosts next to 50 million inhabitants who continue to support the country in further developing. The workers in Korea have generally high incomes and are able to provide for themselves and their families. 15% of the country's entire population lives below the poverty line and there still exists a rather large income gap, materialized in uneven distribution of wealth.

Criminality rates are rather reduced within the Asian country (or Asian Tiger, called so for its economic power - it is the fourth largest economy in Asia). However, the number of petty crimes remains rather high and the tourists are often frightened of the South Korean streets.

5. Recommendations for Regional Policies

Throughout the current paper, three major problems have been identified within South Korea:

Dependency upon international oil and gas

Poverty and income inequality

Petty crimes

These issues pose major threats as they influence the country's economic, social and political development and could materialize in lost partners for international operations, a weak business sector and a major reduction in the population's quality of life. The recommendations to resolve the three problems are succinctly presented below:

Dependency upon international oil and gas

The fact that South Korea imports most of its resources makes it highly susceptible to the international movements in the market of natural resources. For instance, the increasing price of the oil barrel has materialized in major economic impediments. Given that the natural resources are limited in the country and they are unable to extract and use internal resources, they have two possible alternatives to resolving the matter.

The first possible solution has a more political side and refers to the signing of strategic alliances with international exporters of oil and gas. The contracts could be signed for longer periods of time, generally more than one year and would establish the price a priori. The second alternative, but basically that should be implemented alongside and simultaneously with the political strategies, has a more technological nature and refers to the development of alternative resources that could replace or at least reduce the consumption of oil and natural gas.

Poverty and income inequality

The poverty rates have decreased during the past decades but the matter continues to remain a problem when more than 7 million people are living below the poverty line. In order to reduce this, the South Korean authorities should become more involved in the employment process.

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They should as such encourage national and international investors to open businesses within the country; the encouragement could reside in the offering of government subsidies. The newly opened companies would therefore create more jobs, reduce the unemployment rate and offer a stable source of income for more South Koreans.

Also, for reducing the rates of poverty within South Korea, the state authorities should closely collaborate with the Citizens' Coalition for Economic Justice (CCEJ), which is "part of a group working on the Global Call to Action against Poverty" (White Band, 2007)

Petty crimes

The problem of petty crimes has two particular aspects to it. First of all, it is a problem of its own as it has major negative impacts upon the touristy industry. In this order of ideas, after having been the victim of a theft, the foreign citizen is unlikely to return within the country. Foremost, not only that the individual will be lost as a tourist, he would also negatively influence the choices of other potential tourists, revealing as such the imperative need to resolve the matter. The resolution of the problem is then the second aspect and it revolves around the possibility to indirectly solve it through the solving of the previous two issues. To better explain, by engaging in technological operations to identify alternative replacements of natural gas and crude oil, the country would create more jobs. Then, through the encouragement of national and international investors, other jobs would be created. Therefore, the individuals committing petty thefts would have a stable job and a reliable source of income and would no longer feel the need to engage in criminal activities.

6. Conclusions

South Korea is one of the globe's largest and strongest economies and with the exception of the financial crisis in 1997, the country has been following half a century of economic growth. The population is generally wealthy, registers high incomes and lives at relatively high standards. However, poverty is still present and about 7 million out of the country's total of almost 50 million, live below the poverty line. South Korea's major problems derive from an increased dependency upon the international prices of crude oil and natural gas, resources which they mostly fail to produce internally and have to import. Then, despite the low criminality rates, the numbers are still high for petty crimes. The country's officials could begin to resolve the impending issues by developing a wide series of strategic approaches, such as the signing of international strategic partnerships, the search for alternative solutions and the encouragement of national and international investors.

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