The Korean economy recently has been compared to a glass half full of water, interpreted as either already half empty or still half full, depending on one's perspective.
According to the “Story about Two Koreas” (reported by Park Jong-hoon, Oh Bit-na-rae, and David Man) unveiled by Standard Chartered Korea (SC) Bank on July 23, the Korean economy is compared to a glass half full of water, as “improved in a macro sense, but challenged in a micro sense.”
The very first point of this report is the “quantum leap of big corporations and suffering of small companies.” Although the Korean economy grew rapidly thanks to the major performances of a few big corporations, called “chaebol,” employment is quite vulnerable in small and medium-sized companies.
The report says, “Big corporations in Korea have been moving their manufacturing bases to countries with lower labor costs. Accordingly, their infrastructure investment in Korea dropped to 5.6 percent during the first half of this year, from 13 percent throughout a year during the 1980s.”
The report also focuses on the fact that exports are the growth drivers of the Korean economy, but trade surpluses do not lead the overall economic revival.
This report evaluates the Korean economy by saying, “Domestic markets in Korea have been shrinking for the past few years. This has been even worsened by the Sewol ferry disaster, which caused a depression of consumer confidence and consumption.”
It is also pointed out that the enthusiasm for education in Korea leads to excessive spending on education, which ultimately leads to consumption depression.
The report stresses that although 82 percent of Korean high school students go to college, which shows a great enthusiasm for education, per capita average private education expenditures are US$3,000, more than 10 percent of per capita gross domestic product (GDP), which shows low productivity in education.
The report states, “A decrease of newborn children and increase of elderly people will cause a serious economic crisis. Working mom support policies such as flexible working hours, job guarantees after maternity leave, and childcare facilities in the office are still challenging.”