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Transcript of South korea final

Slide 1

South Koreas Economy

Agenda

Miracle on the Han River

Reasons

Revenue Growth

Some Figures

US$30.3 billion

US$340.7 billion

8.7% per year

Real GDP

1960

1989

US$1226

US$8029

1960

1989

GDP per capita

Growth

Financial Stability

GDP

Labor Force

Labor Force Ranking

Other Details

High tech industries

Asian Financial Crisis

Asian Financial Crisis

Impact on South Korea

Industrial Policies of South Korea

1960-2000

R&D Expenditure in Billion won

2000s

Sector-wise analysis

Energy sector

Agriculture sector

Korea is heavily dependent on imported agricultural commodities due to limited domestic agricultural capacity.Total imports of agricultural, fishery and forest products in 08 totaled $22 billion, of which $6.3 billion (or 28.5%) was from the United States. Korea is the fifth largest market for U.S. agricultural products. Key U.S. exports to Korea include corn ($2.4 billion), wheat ($660 million), hides and skins ($300 million), pork ($209 million), beef ($165 million) and soybeans ($240 million).Agriculture's share of GDP has steadily declined to about 3 percent as the amount of agricultural land and the rural population has decreased in the past two decades. This trend is expected only to accelerate in the future. People are leaving the rural areas because of a lack of jobs, income, educational opportunities, medical support and modern housing. Those involved in agriculture account for only 6 percent of the labor force and 63 percent are over the age of 60.2

24

Tourism sector

South Korea's hosting the 1988 Seoul Olympics made 1988 a boom year for tourism. More than 2 million tourists spent US$3.3 billion, an increase in the number of tourists and the dollars spent, respectively, of 24.9 percent and 42.2 percent over 1987 Japanese visitors accounted for 48 percent of the total; tourists from the United States made up 14.9 percent.This trend continued in subsequent years, with 2.95 million foreign visitors arriving in 1990 and 3.8 million in 1995. After the FIFA World Cup in 2002, tourism to South Korea was much promoted throughout the world

25

Industrial sector

The growth of the industrial sector was the principal stimulus to economic development.MS Oasis of the Seas, the world's largest passenger ship, was built in Finland by South Korean shipbuilding group STX Europe. South Korea is the world's largest shipbuilderSouth Korea's KTX-II is the world's fourth high-speed train to surpass the 350km/h mark.

26

Macro Economic Indicators

GDP and Growth Rate

28

GDP and Growth Rate (contd..)

Inflation Rate

Inflation Rate (Contd..)

31

Unemployment Rate

Unemployment Rate (Contd.)

Fiscal Policy

Pre 1997 era

External Debt

Present policies

Monetary Policy

Key Points

Interest Rates

Critical Questions

Expenditure and Revenue

Expenditure

Revenue

Banking and Financing structure

Central Bank

Financing History : A timeline

History.. continued

Banking sector today

Other indicators : energy scenario

Currency - won

All @Won

"Won" is acognateof theChinese yuanandJapanese yen. All three names derive from theChinese character(), which means "round shape." The won was subdivided into 100jeon(Hangul:;Hanja:;RR:jeon;MR:chn), which means "money"; this word is also of Chinese origin and refers to the bronze and copper coins of old.

. After theJapanese invasionin 1910 and subsequent occupation, the won was replaced at par by the yen, made up of theJapanese currencyand banknotes of theKorean yen.In 1945 afterWorld War II, Korea becamedivided, resulting in two separate currencies, both called won, for the South and theNorth. Both theSouthern wonand theNorthern wonreplaced the yen at par. The first South Korean won was subdivided into 100jeon. Only banknotes were issued, initially circulating alongside banknotes of both the Japanese and Korean yen and Japanese coins.BanknotesIn 1946, theBank of Joseonintroduced 10 and 100 won notes. These were followed in 1949 by 5 and 1000 won notes. The designs were similar to those of theyennotes from theJapanese occupation period. However, there were two subtle and important differences. The new notes replaced thepaulownia, the badge of the government of Japan, with the five-petalledRose of Sharon, South Korea's national flower. The clause referring to exchangeability with theJapanese yenwas also removed.A new central bank, theBank of Korea, was established in 1950, and assumed the duties of Bank of Joseon. Notes were introduced (some dated 1949) in denominations of 5, 10 and 50 jeon, 100 and 1000 won. 500 won notes were introduced in 1952. In 1953, a series of banknotes was issued which, although it gave the denominations inEnglishin won, were, in fact, the first issues of thehwan.

52

First South Korean won

Only bank notes were issued alongside banknotes of both the Japanese and Korean yen and Japanese coins.

53

Pegs for the first South Korean won

Date introduced

Value of U.S. dollar in won

October, 1945

15

July 15, 1947

50

October 1, 1948

450

June 14, 1949

900

May 1, 1950

1800

November 1, 1950

2500

April 1, 1951

6000

The South Korean won was initially pegged to theU.S. dollarat a rate of 15 won = 1 dollar. A series of devaluations followed, the later ones in part due to theKorean war.

54

Hwan

ISO 4217is theinternational standarddescribing three-letter codes (also known as thecurrency code) to define the names ofcurrenciesestablished by theInternational Organization for Standardization(ISO).

On February 27, 1980, efforts were initiated to lead to afloating exchange rate. The won was finally allowed to float on December 24, 1997 when an agreement was signed with theInternational Monetary Fund.[2]Shortly after, the won was devalued to almost half of its value, as part of theEast Asian financial crisis.In 1982, with inflation and the increasing popularity ofvending machines, 500 won coins were introduced on June 12, 1982

In 1962, 10 and 50 jeon, 1, 5, 10, 50, 100 and 500 won notes were introduced by theBank of Korea. The first issue of 1, 5, 10, 50, 100 and 500 won notes were printed in theU.K.

With the economic development from the 60s the value of the 500 won notes became lower, resulting in a greater use of cashier's checks with higher fixed denominations as means of payment, as well as an increased use of counterfeited ones.[3]In 1970, the 100 won notes were replaced by coins, with the same happening to the 50 won notes in 1972.Higher denomination notes of 5000 won and 10,000 won were introduced in 1972 and 1973 respectively.

55

Second South Korean won

ISO 4217is theinternational standarddescribing three-letter codes (also known as thecurrency code) to define the names ofcurrenciesestablished by theInternational Organization for Standardization(ISO).

On February 27, 1980, efforts were initiated to lead to afloating exchange rate. The won was finally allowed to float on December 24, 1997 when an agreement was signed with theInternational Monetary Fund.[2]Shortly after, the won was devalued to almost half of its value, as part of theEast Asian financial crisis.In 1982, with inflation and the increasing popularity ofvending machines, 500 won coins were introduced on June 12, 1982

In 1962, 10 and 50 jeon, 1, 5, 10, 50, 100 and 500 won notes were introduced by theBank of Korea. The first issue of 1, 5, 10, 50, 100 and 500 won notes were printed in theU.K.

With the economic development from the 60s the value of the 500 won notes became lower, resulting in a greater use of cashier's checks with higher fixed denominations as means of payment, as well as an increased use of counterfeited ones.[3]In 1970, the 100 won notes were replaced by coins, with the same happening to the 50 won notes in 1972.Higher denomination notes of 5000 won and 10,000 won were introduced in 1972 and 1973 respectively.

56

FX Rates

Wednesday, February 03, 2010

1 KRW

in KRW

American Dollar

0.00087184

1147

Australian Dollar

0.000982502

1017.81

British Pound

0.000546271

1830.59

Chinese Yuan

0.00595169

168.019

Euro

0.000623455

1603.96

Hong Kong Dollar

0.00676948

147.722

Indian Rupee

0.0400826

24.9485

Japanese Yen

0.0790105

12.6566

Swiss Franc

0.000918849

1088.32

Malaysian Ringgit

0.00296384

337.4

S. Korean Won to US Dollar Currency Exchange Rate

Past Trend Present ValueS. Korean Won per One U.S. Dollar

South Korea:FOREX and GOLD reserves

South Korea's reserves of major currencies last hit a record high in November but fell in December as the yen and euro weakened, reducing their value in dollar terms.The reserves are largely invested in securities and deposits, according to the central bank.

A small component is a notional currency called Special Drawing Rights which are overseen by the International Monetary Fund. Gold accounts for the smallest portion.

South Korea's reserves had peaked at $264.25 billion in March 2008 but declined to $200.51 billion in November. In October of that