Acountry report on South Korea
SouthKorea, also known as the Republic of Korea, is an independent countrythat constitutes the southern portion of the Korean Peninsula. Itsname was derived from the Kingdom of Goguryeo that also referred toas Koryo. South Koreans lead a lifestyle that distinguishes them fromother Asian countries, given that over 80 % of the population livesin the urban areas and close to half of the national population livesin the capital city of Seoul (Song 207). The fact that South Koreachose to adopt the democratic type of leadership as opposed to NorthKorea that decided to continue with communism in the 1940s makesSouth Korea a country of interest to study in order to examine itseconomic, political, and social progress over the years. This reportwill focus on the historical overview and contextual factors thatinfluence South Korea.
Politicaland historical events that shaped South Korea
Politicalas well as historical events play a critical role in shaping thenation by way of enlightening the policy makers or pressuring thenational leaders to take certain actions that change the type ofleadership, political, as well as economic policies. South Korea hasbeen shaped by many events, but the impact of six of these events ismore significant. The first and the most critical event is theadministration of South Korea by the U.S. Army. Although theleadership of the U.S. army took place between 1945 and 1948, theadoption of the constitution and the facilitation of the firstpresidential election in South Korea in 1948 initiated the differencebetween South Korea and North Korea (Chang 28). The North refused tobe guided by the constitution and a presidential government, whilethe South chose the path of democracy, instead of the communist wayof life, which has been a key pillar in its leadership to-date.
Thesecond event that shaped South Koreas is the parliamentary electionheld on July 1960, where the opposition (The Democratic Party) gotthe majority seats. This provided the country with an opportunity totest a parliamentary cabinet, instead of the presidential system ofgovernance after being led by an autocratic president Syngman Rhee(Chang 29). For the first time in history, the people of South Koreahad the freedom to take part in the national debates and formorganizations to fight for their rights. This was confirmed by theincrease in political activities that were repressed by Rhee regime.South Koreans gained the freedom to join trade unions and holddemonstrations to fight for the respect of the human rights. Forexample, it was reported that more than 2,000 demonstrations wereheld within a period of eight months between 1960 and 1961, whichculminated in the investigation of over 4,000 policemen and 2,200government employees for different types of crimes, includingcorruption (Nah 411). This was an indication that South Koreans hadgained the power to determine the fate of their country afterelecting a democratic government.
Thethird event, return of the presidential system of leadership, whichwas passed with a 78 % majority in the year 1962, opened a newchapter for economic growth and development in South Korea (YonhapNews Agency 271). For the first decade since its declaration as anindependent and an autonomous country, South Korea struggled with thedetermination of the most appropriate type of leadership and theadoption of the true concept of democracy. However, after testing thepresidential style of leadership in the First Republic and aparliamentary cabinet in the Second Republic, South Korea was nowmature enough to embark on economic development and combinedemocratic leadership with economic strategies that could enhance thewell-being of the people starting from the year 1962 (Yonhap NewsAgency 271). The government that took leadership in 1963 developed aneconomic development plan that was export-oriented, which created aplatform for the modernization and the establishment of aself-reliant economy. Therefore, the 1962 referendum that terminatedthe military rule and ushered in a democratic leadership paced SouthKorea on the path of economic development and industrialization, inorder to stop running its government on financial aid from the U.S.
The1992 election, February 1998 election, and December 2002 election areconsidered as a series of events that facilitated the maturity ofdemocracy in South Korea and created an environment that allowed thecountry to become a truly industrialized nation. The 1992 electionresulted in the election of a first civilian president, KimYoung-sam, after a period of 30 years of military leaders, whichindicated the transfer of government and power to the people of SouthKorea (Edward 615). The 1997 election was characterized by the firsttransfers of presidency from one political party to another in apeaceful way, which indicated that the people of South Korea hadembraced the true meaning of democracy where the majority always hastheir way, while the minority is given the opportunity to have theirsay and to be heard. The 2002 elections resulted in the election of apresident, Roh Moo-hyun, who believed in the people’s participationin public debate and decision making, which is the key pillar ofdemocracy (Edward 615). This allowed South Korea to adoptmarket-based reforms, where the civil societies became empowered andbusiness and politics were separated in order to allow the marketforces to influence business operations in Korea. The last threeseries of events are quite related, but they facilitated a balancedtransformation of the political, social, and economic systems thatdistinguished South Korea from other countries in Northeast Asia.
Originof the current political system
Thecurrent political system in South Korea can be traced back to 1948,when South Korea’s political system departed from the communiststyle of leadership to adopt the western concept of a democraticrepublic. This political system was brought about by the passage ofthe constitution and with the support of the U.S. The country wasunder the leadership of the U.S. military and there was a need toreturn its management to the people of South Korea, but the type ofpolitical system was a bone of contention, where the South Koreachose a constitutional democracy while the North Korea remained underthe communist political style (Chang 20). Although South Korea hasexperienced numerous cases of military coups and election ofpresidents who turned to believing in autocracy, no one has managedto take away the democratic republic political system to-date.
Beinga democratic republic, South Korea is led by a presidential system ofgovernment, where the authority to put the government in place is inthe hands of the people (through election), but the government hasthree arms. The executive is headed by the president and the primeminister, its main role is to lead the country by implanting laws anddeveloping policies (Community Center 1). Legislatures, whichcomprise of 299 members, play the role formulating laws. Thejudiciary administers justices in accordance to the constitution andother laws of South Korea. The three arms are considered to beindependent and apply the concept of checks and balance in order toensure that the country observes the rule of law.
Politicalstability and the business environment
Politicalstability is positively associated with the economic growth becauseit creates a suitable environment for international and domestictrade to take place. Studies have shown that South Korea and Thailandenjoy an average political stability, while China, Malaysia, andSingapore have the highest level of political stability among theAsian countries (Yonis 205). However, the average political system inSouth Korea has been sufficient to attract foreign trade since 1980sto date and help South Korea achieve its objective of establishing anindustrialized nation and is an export-oriented. Political stabilityhas attracted foreign direct investment, technology, and stock marketcapitalization, which has resulted in the ranking of South Korea atposition 14 in the list of the largest economies (Molen 1). Theaverage political stability has existed in South Korea since 1962,which can be can be confirmed by a continuous increase in foreigndirect investment from $ 1,228569 thousand in 1962 to $ 7,639,000thousands in 2015 (Trading Economics 1). Therefore, it is evidentthat an average political stability in South Korea has created asuitable environment for domestic as well as international investors.
Contextualfactors that influence South Korea
Demographicchanges have affected South Korea both negatively and positively.Significant demographic changes started occurring in the 1950s whenJapan and Manchuria immigrants were repatriated back to South Koreabetween 1950 and 1953 (Tai-Hwan 1). This was followed by a furtherimmigration of about 3 million from North Korea during the Civil Warand liberation. These series of events resulted in a 3 % increase inthe size of the natural population, which was the highest in thehistory of South Korea. However, trends started changing in the1960s, when the population growth rate started stabilizing. Thepopulation growth rate continued decreasing until 1980s when itreached a mere replacement rate. It is estimated that South Koreawill have the highest rate of population decrease by the year 2050.This projected decrease in population was based on studies showingthe number of children per South Korean woman has been reducingexponentially as shown in Figure 1.
Figure1: Decrease in the number of children per women
Thechanges in population growth rate affect South Korea in two majorways. First, Korea has been ranked as the oldest country given thatthe decrease in the population size has enabled the government toenhance the quality of care and ensure that nearly all citizens haveaccess to the basic needs (Tai-Hwan 1). This has resulted in asignificant in the overall quality of life and income per capita,which implies that South Korea is among the countries that havemanaged to fight poverty and guarantee it’s a good life to itspeople.
Secondly,population aging, which is characterized by the increase in lifeexpectancy coupled with a reduction in the birth rate, has resultedin a significant decrease in the size of the working population. Itis predicted that South Koreas will be suffering from the highestrate of decline in the number of working citizens by the year 2015 asshown in Figure 2.
Figure2: Changes in the population of the working citizens in differentcountries by 2050
Source: Guilford (1)
Thedecrease in the working population is worrying because it will affecteconomic growth in a negative way.
SouthKorea is a multiracial and multi-religious, which makes it difficultto avoid issues associated with profiling. With a population size of49,044,790 people, South Korea is occupied by 96.5 % Koreans, 1.8 %Chinese, and 1.7 % comprising of other races (CIA World Factbook 1).The data shows that the minority groups are too small to make anysignificant influence in the political and economic space by workingalone. Therefore, South Koreans have no perceived threat of beingaffected by non-natives, which facilitates a peaceful coexistenceamong the people of different races.
AlthoughSouth Korea is dominated by Koreans (about 96.5 %), the demand forimmigrant employees has created a new challenge of racial profiling.The increase in the number of immigrants is attributed to thepopulation aging, which limit the capacity of the country to meet itsdemand for labor force. The Chinese, Africans, and other minorityracial face a lot of discrimination in nearly all aspects of life.Recent studies have shown that individuals from the minority groupsundergo discriminatory maltreatment and exploitation through verbalabuse (Jiji 1). Although cases of physical abuse are rare, verbalabuse is a clear indication that race is among the factors thatprofile or divide the population of South Korea. However, the oldergeneration is affected more than the youths. This has been confirmedby the exponential increase in the number of multiracial marriagesfrom 44,000 in the year 2007 to 200,000 in the year 2013 (Jiji 1).This trend indicates that the significance of race as a key factorfor profiling the South Korean society might reduce with time. Inspite of the few cases of race-based discrimination reported SouthKorea, the issue of racial profiling in the enforcement of law isclose to nil.
SouthKorea is a democratic republic that is guided by the principle of therule of law. This implies that the role of the government isformulate and implement laws, rules, and policies that can enhancethe well-being of the South Koreans, and not oppressing them like thecase of North Korea. A strong believe in the idea of the rule of lawand fact that the government gives guarantee to civil rights to allpeople residing or living South Korea has attracted a large number offoreigners who wish to travel to and work in South Korea. Forexample, it has been reported that more than 100,000 Britishnationals visit South Korea every year and 4,800 of them chose towork in the country (U.K. Government 1). The tendency of people totravel and chose to work in a given country in large numbers ispositively associated with the existence of the fair government thatprotect civil rights, such as the freedom of speech, education,health, and assembly among other rights. However, trends indicatethat corruption in the government is increasing steadily, with SouthKorea being ranked position 43 in the list of the corrupt nations(Ja-young 1). Corruption denies people their rights, which impliesthat the increase in corruption will reduce the efficiency of thegovernment and jeopardize the rule of law in the future.
Althoughthere are many empirical studies showing the relationship betweenlevel of education and economic development, many countries havefailed to develop education systems that can help them achieve thedesired economic growth rate. South Korea is an exemption, given thatit has been shown to have the highest level of literacy in the worldKorean (Overseas Information Service 1). The economic progress thatKorea has achieved is positively associated with the highly educatedworkforce. The education system of South Korea started in 1880s, whenthe country was opened to the western culture. After being declaredas a republic in the year 1948, South Korea instituted the 6-6-4education system, while the 6 years of elementary education was mademandatory and free in 1953 (OIS 1).
Althoughthe education system has been changed to the 6-3-3-4 system, theinclusion of aspects of quality and specialization has enhanced thecompetence of the South Korea’s workforce compared to othercountries in the world. For example, the separation of high schooleducation system into vocational and general has ensured thatstudents are equipped with general skills (such as liberal arts) andtechnical skills (OIS 1). Unlike most of the education systemsobserved in the world, South Korean high school students are giventhe right to select courses of their own aspirations, which ensurethat courses are not imposed to students. Learners in all levels ofeducation are tested through the administration of highly competitiveexams that require students to prepare carefully, thus enhancingtheir ability to retain the content learned in school in the processof preparing for exams.
Theemphasis that the government of South Korea puts on education (bothvocational and general education) has enabled the country to developone of the most competitive workforces in the world. This has in turnallowed South Korea to increase its prowess in terms of science andtechnology. Scholars who are adequately prepared are able to utilizeover $ 10 billion of funds set aside by the government to financeresearch and development projects (OIS 1). To this end, the highquality of education has influenced South Korea in a positive way byhelping it develop a competent workforce, which has allowed thecountry to compete globally.
SouthKorea developed among the best health care systems in the world. Thequality of the health care system is confirmed by the effectivenessof the health care deliver and a health insurance system thataccommodates the majority of citizens. The South Korean healthinsurance program is divided onto three programs that take ofdifferent interests and preferences of the people. For example, theNational Health Insurance Corporation covers about 57.7 % of allinsured South Koreans and Medical Aid program covers about 38.6 % ofthe insured citizens (Song 208). The Long-term Care Insurance Programwas specifically designed to take care of the health care needs ofthe elderly citizens, and it currently covers a total of 3.8 % of theelderly South Koreans (Song 209). In total, the health insuranceprogram in South Korea have covered about 47,409,600 (96.3 %) of thetotal population, which means that 3.7 % of the population does nothave a health insurance cover compared to the United States withabout 15.4 % of the population being uninsured (Song 208).
Apartfrom the broad coverage of the citizens, the delivery of the healthcare is more efficient compared to other developed nations. Thisconfirmed by the fact that the insured citizens are given theautonomy to select the health care facility as well as the healthcare providers who should serve them, unlike in the other countries(such as the U.S) where the freedom to select the health careprovider or facility depends on the type of the insurance program(Song 206). This means that the insured South Koreans do not requireany referral slip to visit any health care provider. The highpercentage of the insured citizens, coupled with effectiveness in thedelivery of the health care services indicate that the populationhealth in South Korea is among the best in the world. However, thereis a slightly disproportionate distribution of the health careproviders between the rural and the urban areas. It has been reportedthat more than 90 % of the registered physicians serve 80 % of thepeople living in the urban areas, while the remaining 10 % serve the20 % of the citizens living in the rural areas (Song 207). Theproportion of the physicians serving the rural population is quiteless compared to the proportion that serves the urban population. However, the overall health population of South Korea is commendable.The healthy population has made significant contribution towards theeconomic growth.
SouthKorea is considered to be among the nations that have developed theireconomies by adopting the right economic policies. It GPD per capitawas equal to the GDP of the underdeveloped nations in Asia and Africain the 1960s, and close to half other national budget was financedusing foreign aids, especially from the U.S. (McGrath 1). The factthat South Korea lacks natural resources (such as oil) that arebelieved to drive the national economy in most of the best performingeconomies in Asia and Africa makes the country unique. South Koreachanged the fate of its economy by investing in industrialization andfocusing more on export trade, where export accounts for close tohalf of its GDP (McGrath 1).
Althoughoverreliance on the export market may influence the economy in anegative way in case other nations enact unfavorable laws orexperience political unrest, South Korea has diversified its targetexport destinations to include Asia, America, and Europe. Inaddition, the people of South Korea are used to a double digit growthin the GDP and recent reports indicating a growth rate of about 3.3 %and a balance of trade of 6.3 % could be a shock to South Koreans whowant to see their economy growing faster and creating more jobs forthe youths (McGrath 1). In overall, the economy of South Korea ishealthy, in spite of the low inflation rate (1.3 %) and unemploymentrate of 3.5 % (McGrath 1).
SouthKorea is among the few countries in the world that have managed toovercome its tough terrain to construct world class infrastructurethat have made the country a destination for the international trade.The process of modernizing infrastructure in South Korea began in1960, where the government has been allocating billions of dollarsevery financial year with a projected investment of over $ 300billion between 2000 and 2020 on roads, airports, mega resorts, andrailway (World Bank 1). The heavy investment in the infrastructurehas allowed South Korea to develop an extensive road network of about64,808 paved roads and hundreds of thousands of kilometers of unpavedroads. This allows more than 7.58 million private cars, 749,000buses, and 2.1 million trucks to transport people and goods smoothly(World Bank 1).
Althoughthe road is the main means of transport in South Korea, the countryhas managed to establish other world class infrastructure. Forexample, the country is served by more than 103 airports where 67 ofthem have paved runways (World Bank 1). These airports serve morethan 100 million passages and facilitate transportation of more than7.5 million tons of cargo each year (KOIS 1). In addition, theadvanced seaport infrastructure facilitates the transportation ofheavy cargo weighing more than 5 million tons each year (World Bank1). Apart from the transport infrastructure, South Korea hasdeveloped its energy infrastructure to supply all citizens withreliable and affordable energy and advances its telecommunicationsystem and the internet connectivity from 4 G to 5 G in most of thecities (World Bank 1). Heavy investments in the infrastructurefacilitates the movement of the goods and people and makecommunication efficient, all of which are key contributing factors tosuccessful trade and sustainable economic growth.
TheCapacity of South Korea to overcome poverty, globalize its economy,and adopt a successful export-oriented market policy is attributed tothe good relations that the country has with other nations of theworld. For example, South Korea managed to take off early in terms ofeconomic development compared to countries in the Northeast Asiabecause of its close ties with America, which financed its operationswith more than half of the domestic budget during the early years ofseparation with North Korea (KOIS 1). In addition, good internationalrelations can be confirmed by the fact that South Korea has managedto establish diplomatic relations with more than 189 countries anddeveloped permanent embassies in more than 112 nations (KOCIS 1).
Developinginternational relations and making the best use of those relationsfor mutual benefit are different things. South Korea has takenadvantage of these international relations to implement itsexport-oriented industrialization strategy by finding markets forlocally manufactured products in the 189 countries (KOCIS 1). Thishas not only earned the country foreign exchange, but also createdemployment for the citizens following the exponential growth of themanufacturing sector. However, the sour relationship between SouthKorea and North Korea has been a constant threat to the peace ofSouth Korean for more than half a century. The feeling of insecurityhas intensified following the North Korean’s move to test nuclearand hydrogen bombs. In overall, South Korea has an extensive networkof international allies that have provided the country with anopportunity to take part in the world trade.
AlthoughSouth Korea has managed to establish good relations with more than ahundred countries, it has a segment of countries and regions thatserves as the main trade partners from where it imports and exportsmost of its products. It is estimated that more than 62.9 % of allexports from South Korea goes to other Asian countries, includingChina, Hong Kong Singapore, and Japan (International Trade Center 1).North America takes about 15.1 % of all Korean exports, while Europetakes about 11.3 % of these exports. By establishing good tradepartners and targeting countries whose citizens have a higher buyingcapacity, South Korea has managed to reach a target of about US$573.1 billion worth of exports, which represents about 3.1 % of theworld export business (International Trade Center 1).
AlthoughSouth Korea has been able to increase its exports exponentially andcontinuous since 1960s, critics have it that exports to Europe havebeen increasing at a declining rate. This has created a scenario inwhich South Korea exports less than it imports from Europe, which hasbeen a reverse trend since late 2012 (European Commission 3). Thiscould be an indication that South Korea is losing one of the mostreliable trade partners, and this might affect the balance of tradein the future.
Themonetary system of South Korea consists of the currency, the bankingsector, the capital market, and non-bank companies. The currency forSouth Korean is referred to as Won and recent studies indicate thatit will continue getting stronger. A stability assessment indicatesthat Korean banks have adequate liquid assets that will allow themonetary system to handle significant outflows in case of extremefinancial chocks (IMF 19). The currency is traded in differentsub-sectors of the financial market, including banks (making up 54 %of the market share), non-banking depository organizations (13 %),insurance firms (18 %), security organizations (6 %), and collectiveinvestment firms (IMF 10). The banking sector, which is comprised of13 commercial banks, 39 branches of foreign banks, and 5 specializedbanks, is the key determinant of the strengths of the monetarysystem.
Althoughthe South Korean authorities understand that the banking sector isstrong enough, studies show that the government has been fosteringthe growth and development of financial holding companies, capitalmarket, and insurance companies (IMF 12). This is a programinitiated by the government to diversify the monetary system, whichwill shield South Korea’s economy from financial crisis. Therefore,the current strengths of the monetary system coupled with thegovernment’s initiatives to diversify it imply that the SouthKorean economy will be able to withstand global financial crisis.
AlthoughSouth Korea has recorded a significant increase in the quality oflife, trends indicate that the gap between the poor and the rich willcontinue widening. This increases the risk of the society beingprofiled in terms of the amount wealth that each individual or thehousehold has. Statistics show that the Gini coefficient, which is anindex used by the government to measure income disparity, rose from0.31 in 2004 to 0.326 in 2005 and it is projected to increase to0.335 by the year 2020 (Koo 1). Other statistics indicate that thetop richest 1 % and 10 % take the largest proportion of the profitsmade by the large companies operating in South Korea as shown inFigure 3.
Figure3: Disparity in earnings in South Korea
Source:Hankyoreh Company (1)
FromFigure 3, the top 1 % richest South Koreans takes 72 %, while the top10 % take 93.5 % of all dividends issued by companies each, leavingless than 6.5 % to over 90 % of the national population. Similarly,the top 1 % takes 44.8 % of the interest income and the top 10 takes90.5 %, leaving less than 9.5 % to the 90 % of the nationalpopulation. However, the top 1 % takes only 6.41 % of the work incomewhile the top 10 % takes 27.8 %, leaving over 72.2 % to the 90 % ofthe national population. These figures indicate that the least 90 %of the national population work for the top 10 % of the population,which is a serious case of income inequality that might cause socialunrest and a conflict between the rich and the poor in the future.
SouthKoreans consider themselves to be a part of a single large communityof people whose main agenda is to build their country and make itbetter for their posterity. However, there larger community of SouthKoreans can be categorized into small communities of people living inthe nine provinces (such as South Jeolla, Gangwon, and SouthGyeongsang among others) and different cities (including Seoul,Daejeon, Busan, and Gwangju) (Hankyoreh Company, 1). Although peopleliving in these different regions are not organized into a recognizedcommunity that is guided by a specific set of rules and regulations,they permanent residents tend to identify themselves with theirrespective regional communities. In addition, South Koreans establishorganizations that they call diasporas community (such as the KoreanCommunity living in Canada), which brings them together whenever theyvisit or work in the foreign country. This sense of nationhood and asense of belonging to a single large community have helped SouthKoreans live in peace avoid social unrest, and civil wars.
SouthKorea lacks a majority religious group, but it has a plurality ofcitizens who have no any religious affiliation. South Korea has a45.5 % non-religious, 26.34 % Christians, 26.26 % Buddhists, 1 %Confucianism, and 1 % others (CIA World Factbook 1). However, trendsindicate that the proportion of Christians has been increasing overthe years. For example, Christians comprised of 1 % of the nationalpopulation in the year 1900, but this proportion has increased toabout 26 % of the national population in the year 2015 as shown inFigure 4 (Connor 1).
Figure4: Changes in the population of the Christians in South Korea
Figure4 indicates that Christianity could become a dominant religion inSouth Korea in the future.
PewResearch identified that South Korea has the least level of religiousrestriction by the government and social hostility among differentreligious groups compared to U.S. and Asian Pacific (Connor 1). SouthKorea has enjoyed religious tolerance for many years, but thistolerance was put to the test in 2008 when political leaders startedseeking support from religious groups and 2011 when President,Myung-bak, knelt while praying in a Christian meeting (Hopfner 1).The tendency of politicians to show their religious background inpublic increases the risk of religious conflicts in South Korea.
Domesticand international influencers
SouthKorea has a list of both foreign and domestic influencers who shapethe direction of its policies and economic growth. At theinternational level, the U.S. and North Korea are the greatestinfluencers, but their influences take different dimension. SouthKorea and the U.S. have a special tie that has existed for more thanhalf a century and it continued even after the occupation of SouthKorea by the U.S. army in the 1940s (Manyin 8). The U.S. influenceSouth Korea in a positive way. Although many people may consider theSouth Korea-U.S. relationship as a mere trade partnership betweencountries, the difference between South Korea and other countries inNortheast Asia in terms of economic policies, the level of democracy,and respect for civil rights is clear evidence that the U.S. hasinfluenced South Korea in a significant way. North Korea, on theother hand, has a negative influence for South Korea. North Korea hasbeen hostile towards South Korea since 1948, and this hostilityinfluences the security policies made by South Korea since there is aconstant need to protect its citizens from the threat of beingattacked by a hostile neighbor.
Domesticinfluencers in South Korea include the social class of the richbusiness people and Confucianism. The business class imparts theirinfluence by financing political campaigns and lobbying, which is acommon phenomenon in nearly all democratic republics where leadersare brought to power through elections. The business class influencesthe process of policy making by lobbying to the ruling class, butthis occurrence is not as pronounced like in other countries, such asthe U.S. South Korea is considered the most Confucian nation in theworld (Stefan 1). The respect for age, family values, and personalbetterment values observed among South Koreas are a clear indicationof the influence of Confucianism on the South Korean Society.
SouthKorea is ranked among the countries that have made a significantprogress in terms of economic and political progress by adopting theright policies. South Korea managed to distinguish itself from othercountries in Northeast Asia by choosing the democratic type ofgovernance and departing from the communist way of leadership. Theadoption of the democratic style of leadership has allowed SouthKorea to globalize its economy and implement its export-orientedindustrialization strategy that was formulated in the 1960s. AlthoughSouth Korea does nor the key natural resources (such as oil andminerals) that are known for supporting economic growth in otherAsian and Middle East countries, the government has managed to adoptalternative strategies that have helped the country fight poverty andestablish a trend for sustainable economic growth. Although NorthKorea has been a constant security threat to South Korea since 1948,the U.S. support for South Korea has allowed the country to enjoy anaverage political stability, which is favorable for international anddomestic trade. Moreover, the influence of Confucianism has createdan environment for a peaceful coexistence of South Koreans, in spiteof their differences in terms of race and religion. In overall, SouthKorea has among the most stable economic, social, and politicalsystems in the Northeast Asia, which makes it a preferred destinationfor many international and domestic investors.
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