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Seoul is a leading financial center in Asia and one of the five mostexpensive cities in the world.

South Korea is a major economic power and one of the wealthiest countries in Asia. The South Korean economy is highly developed and one of the four largest in Asia and 13th largest in the world. Often called the "Miracle on the Han River", South Korea's tremendous economic growth was fueled by the export of high-tech goods. South Korea has the highest industrial production growth rate in the developed world and the nation's scientific competitiveness is ranked among the top five in the world. Today, South Korea is leading several key industries in the world, particularly in the fields of science and technology. The Asian Tiger's strongest industries are automobiles, biotechnology, construction, computers, electronics, petrochemcials, robotics, semiconductors, shipbuilding, and steel. 

Economic History

South Korea's exponential economic growth and success is often called the Miracle on the Han River.

In the 1950s South Korea became one of the poorest countries in Asia; its infrastructure and resources were severely exploited during the Japanese occupation and completely destroyed by the Korean War. However, following the military coup led by General Park Chung-hee in 1962, South Korea became for four straight decades one of the fastest-growing economies in world history, completely transforming it from a farming and fishing based economy into one of the world's most high-tech industrial powers.

Park Chung-hee embarked on a series of ambitious five-year plans for economic development that were similar to the macro-economic schemes of the Soviet Union. Emphasis shifted to foreign trade with the normalization of relations with Japan in 1965, which resulted in a boom in trade and investment. South Korea received 800 million dollars in grants and soft loans from Japan as compensation for its colonial rule in the treaty. South Korea government spent most of the money establishing social infrastructures and corporation,founding POSCO,building Gyeongbu Expressway and the Soyang River Dam. Rapid expansion in light industries, which were later followed by subsequent development in heavy industries, made South Korea in 1973 the 34th wealthiest country in the world. Park's government plans for economic development greatly boosted the Korean economy. This growth is often called the "Miracle on the Han River", the Han River being the main river that runs through the nation's capital and largest city, Seoul. In the 1980s and 1990s, growth continued as South Korea transformed itself from an exporter of textiles and shoes into a major global producer of automobiles, electronics, shipbuilding, steel and, later, high-tech products such as digital monitors, mobile phones, and semiconductors.

Hyundai Genesis Luxury sedan

The South Korean model of encouraging the growth of large, internationally competitive financial services companies, business groups, and banks through easy financing and tax incentives led the South Korean economy to be dominated by family-controlled conglomerates. These companies, known as chaebol, flourished under the support of the Park regime. Some such asHyundai, Samsung, LG and the SK Company became global corporations.

Since the 1997 Asian Financial Crisis the corporate landscape has changed considerably as a result of massive bankruptcies and government reforms. The crisis exposed longstanding weaknesses in South Korea's economy, including high debt-to-equity ratios, massive foreign borrowing, and an undisciplined financial sector. This led to two rounds of financial and industrial restructuring; one in 1997 and another following the collapse of Daewoo in 1999. Daewoo's collapse has been recorded as one of the largest bankruptcies in world history. By 2003, just over one-half of the 30 largest chaebol from 1995 remained.

South Korea is the world's largestshipbuilder and one of the top tenexporters in the world.

Between 2003 and 2005, economic growth had slowed to about 4% per year. A downturn in consumer spending, attributed to massive personal credit card debt, was offset by rapid export growth, primarily to China. In 2005, the government proposed labor reform legislation and a corporate pension scheme to help make the labor market more flexible, and new real estate policies to cool property speculation. In 2006, South Korean economy has recovered its growth rate to 5.1%. Traditionally less of an open economy compared to Japan, South Korea is now pursuing free trade policies with various other nations, notably the U.S.-Korea Free Trade Agreement and European Union-South Korea free trade agreement.

Modern economy

Like other developed nations, the service sector has grown to comprise about two-thirds of GDP. At the same time, living standards and in particular the education level in South Korea rose exponentially to become equivalent or higher than that of other developed Western European and North American countries, with South Korea's HDI being rated at "High" with 0.921 by the Human Development Index in 2007, owning a 99.8% adult literacy rate. In the most recent Quality-of-Life survey conducted by the Economist Intelligence Unit, South Korea came 30th, only one rank below the United Kingdom. During this period, South Korean workers' income and wealth increased considerably, leading labour-intensive industries to move to neighbouring developing countries, such as China or Vietnam.

Samsung and LG are two leadingtechnology conglomerates in the world.

South Korea has surpassed the United States and Japan in becoming the world's leader in thesemiconductor (eg. RAM & flash memory) and digital display (eg. LCD & plasma panels) industries, as well as consumer electronics such as TVs or mobile phones. Telecommunication technology thrived in South Korea as it became the most wired & wirelessly connected country in the world, having the second highest broadband users worldwide. Nationwide 100 Mbit/s High-Speed Internet Access, Interactive Full High Definition TV Broadcasting, DMB, WiBro and 4Gtechnology rolled out since 2000, which are a few of the nation's plans to set benchmarks in the global information technology industry.

Today, there are many strong South Korean industries. South Korea's largest automaker, Hyundai Motor Company and its subsidiary Kia Motors are the fifth largest car groups in the world. The South Korean shipbuilding industry is one of the most highly-developed in the world, headed by chaebols such as the Hyundai Heavy Industries, Samsung Heavy Industry and POSCO. It became the largest after overtaking Japan in 2004. In 2006, approximately one in every three new vessels was constructed in Korea. South Korea also exports radioactive isotope production equipment for medical and industrial use to countries such as Russia, Japan, Turkey and others.

In addition to its highly advanced IT infrastructure, the government is now beginning to invest in the robotics industry. With the aim of becoming the "World's Number 1 Robotics Nation" by 2025, there are plans to put one robot in every household by 2020. There are other plans to expand or create other sectors of the economy, including the financial, biotechnology, aerospace and entertainmentindustries.

Energy and Infrastructure

Main articles: Transportation in South Korea and Nuclear power in South Korea

Korail subway lines in central Seoul.

Transportation in South Korea is excellent and provided by extensive networks of railways, highways, bus routes, ferry services, and air routes that criss-cross the country. Korea Highway Corporation operates the toll highways and service amenities en route. South Korea has about 3,000 kilometers of national highways.

Incheon International Airport is rated as the best airport in the world and awarded the full 5-star rating from Skytrax.

Korail provides frequent train service to all major South Korean cities. Two rail lines, Gyeongui and Donghae Bukbu Line, to North Korea are now being reconnected. The Korean high-speed rail system, KTX, provides high-speed service along Gyeongbu and Honam Line. Major cities have subway systems, including the popularSeoul Subway, Busan, Incheon, Daegu, Daejeon andGwangju. Metropolitan Cities have express bus terminals.

South Korea's largest international airport is the Incheon International Airport, which has been named as the best airport in the world by the ACI for 3 consecutive years. It serves as the main hub for the country's largest air carriers Korean Air and Asiana Airlines and more recently, the Korean subsidiary of Tiger Airways. South Korea has eight international airports and seven domestic airports in total, with about 71 international passenger and cargo airlines operating frequent flight services between South Korea and all over the world. The largest ports are in Busan and Incheon.

Nuclear power in South Korea supplies 45% of electricity production. Nuclear power research in South Korea is very active with investigation into a variety of advanced reactors, including a small modular reactor, a liquid-metal fast/transmutation reactor and a high-temperature hydrogen generation design. Fuel production and waste handling technologies have also been developed locally. It is also a member of the ITER project.

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