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Korea recently pulled through an economic storm that began in late 1997. This crisis, which roiled markets all across Asia, had threatened Korea's remarkable economic achievements

Korea, once known to be one of the world's poorest agrarian societies, has undertaken economic development in earnest since 1962. In less than four decades, it achieved what has become known as the "Miracle on the Hangang River" - an incredible process that dramatically transformed the Korean economy while marking a turning point in Korea's history.

With a history as one of the fastest growing economies in the world, Korea is working to become the focal point of a powerful Asian economic bloc during the 21st century

South Korea's finance ministry said on Monday it was maintaining its 2008 economic growth target of around 6 percent, due to deregulation and tax cuts, despite a slowing global economy. Economic growth in 2007 was 4.9 percent. Asia's fourth-largest economy is expected to be capable of 7-percent growth and have a stable current account and prices in five years, the Ministry of Strategy and Finance said in a report to the new president, Lee Myung-bak. "The new government will endeavor to achieve a growth target of some 6 percent, continuing efforts for economic recovery and managing risk factors," said the ministry.

In terms of economics, political science, and sociology, increases in education have been shown to bolster economic development and politically mobilize the public. The South Korean case, with its rapid economic growth since the 1960s and the shift to democratization in the 1980s, is a strong example supporting this claim.

oting has begun across South Korea in parliamentary elections that observers say are critical to the country's economic and political future. The elections come amid now-robust economic performance, as well as on the heels of the announcement of improved ties with North Korea. Rival candidates made last-ditch appeals for votes as the world focused on the first-ever summit between the two Koreas.

Another pressing issue for Kim's 2-year-old government is the reform of South Korea's inefficient economic systems, especially its family-owned conglomerates, or chaebol. About a dozen of the conglomerates collapsed under debts in 1997, forcing South Korea to accept a record $58 billion bailout package from the International Monetary Fund.

President Kim has publicly said reunions of those separated family members will top the agenda. Only 50 people from each Korea were allowed to cross the border in 1985 for the first temporary family reunions. No further reunions have since been arranged because of military and political tensions. The Korean border, the world's most heavily armed, is sealed with nearly 2 million troops deployed on both sides.

IN THE FIRST THREE decades after the Park Chung Hee government launched the First Five-Year Economic Development Plan in 1962, the South Korean economy grew enormously and the economic structure was radically transformed. South Korea's real gross national product (GNP) expanded by an average of more than 8 percent per year, from US$2.3 billion in 1962 to US$204 billion in 1989. Per capita annual income grew from US$87 in 1962 to US$4,830 in 1989. The manufacturing sector grew from 14.3 percent of the GNP in 1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent in 1962 to 35.8 percent in 1989.

Over the last three decades, the Republic of Korea has achieved what is widely acclaimed as "the economic miracle on the Hang-gang River." Since Korea embarked on economic development in earnest in 1962, its economy has grown at one of the fastest paces in the world. As a result, Korea, long one of the world's poorest agrarian societies, has emerged as an upper middle-income, fast-industrializing country.

Government type: republic

15 August 1945 (from Japan)

Economy - overview:

current research interests include real interest rates in Korea

1) the period of Malthusian stagnation up to 1910, when Japan annexed Korea; 2) the colonial period from 1910-45, when the country embarked upon modern economic growth; and 3) the post colonial decades, when living standards improved rapidly in South Korea, while North Korea returned to the world of disease and starvation.

North Korea rejected a proposal from South Korea's new conservative president to establish liaison offices in both countries

SEOUL, South Korea—North Korea rejected a proposal from South Korea's new conservative president to establish liaison offices in both countries calling it a public relations exercise aimed at covering up deteriorating ties on the divided peninsula.

The proposal was Lee's first overture to the communist nation.

Seoul recently agreed to reopen its market to most U.S. beef cuts, lifting a five-year ban placed after the outbreak of the first mad cow case in the United States. The decision reached on April 18 is expected to permit U.S. beef shipments to arrive here around in mid May.

"We are very pleased that Korea has taken the decision," Vershbow said, "And this agreement is based on international scientific standards, which I think is the only policy for trading nations that they want to observe, that they want to have healthy economic relations with other nations."The Lee Myung-bak administration, however, faced mounting domestic criticism for rushing to the beef agreement despite lingering concerns over mad cow disease and feared impact on the local cattle industry

Resuming U.S. beef imports has been considered a key condition for Seoul gaining U.S. ratification of the free trade agreement

Today, according to the 2007 Index, South Korea's economy is 68.6 percent free, making it the world's 36th freest economy. Unfortunately, however, a closer look reveals that South Korea's level of economic freedom is neither as comprehensive nor as concrete as it should be. For example, although its regulatory process has improved, bureaucracy and lack of transparency still hinders entrepreneurial activities. Interventionist government policies still linger. South Korea's labor freedom is also shackled by restrictive employment regulations that hamper employment and productivity growth. Militant labor unions make the situation worse, disrupting the rule of law and undermining productivity.