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Japan's surrender to the Allied Powers in 1945, signaling the end of World War II, only further embroiled Korea in foreign rivalries.

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.

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.

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

Financially, South Korea is more integrated into the world economy now than it was in 1994. Foreigners are major players in the capital markets, accounting for nearly 40 percent of stock market transactions, and South Korean residents have greater opportunities to move their funds abroad. The use by South Korean financial firms of off-balance sheet transactions and financial derivatives, which did not exist in 1994, is expanding rapidly. While it is true that the South Korean stock market actually rose during the last crisis, the expanded role of foreign participants and the increased complexity of the financial transactions mean that the market today is far less susceptible to political intervention than it was a decade ago.

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.

Gross domestic product grew 0.7% from the previous quarter, down from the 1.6% expansion seen at the end of 2007. Falling exports were largely to blame for the quarterly slowdown along with weak consumer spending. President Lee Myung-bak took office in February promising to boost annual growth to 7% - it grew 5% in 2007. The investment bank Goldman Sachs said it was keeping its growth forecast for the full year at 4.8% despite the weak quarterly figures. It predicted the government's programme of tax-cuts and deregulation would boost growth while the weak currency would help exporters. Inflation figures were also released on Friday, with consumer prices rising 3.9% in the year to the end of March. That figure is above the government's target of between 2.5% and 3.5% for the fourth month running.