South Korea goes to the polls on 13 April. Up for grabs are the 300 seats of the unicameral National Assembly. However, the election itself has been overshadowed by the declining popularity of President Park Geun-hye and intense infighting within the ruling Saenuri (New Frontier) Party between pro- and anti-Park camps.
The global energy situation is changing rapidly. The shale revolution has led to plunging oil prices that have remained around US$30 a barrel since OPEC’s failure to reach a consensus to cut oil production at its November 2014 meeting. This is an astonishing drop from the seemingly endless period of high oil prices of above US$100 a barrel. What do falling oil prices mean for the South Korean economy?
South Korea is undergoing rapid demographic ageing. Only 551,000 Koreans or 2.9 percent of the population were aged 65 or above when the Korean War broke out in 1950. However, according to the United Nations World Population Prospects (UNWPP), 6.4 million Koreans, or 12.7 percent of South Korea’s population, were aged 65 or above in 2014. By 2026 an astounding 10.7 million Koreans — 20.5 percent of the population — are expected to be aged 65 or above.
Ratings firms believe North Korea’s missile launch and nuclear testing will have a minor impact on South Korea’s economic output. Ratings agencies will not adjust South Korea’s credit rating in wake of the North Korean incident, believing that the economy will remain in stable condition.
However, the South Korean won is the worst performing currency in Asia so far in 2016, and investors are looking for future rate cuts from the nation’s central bank.
Last year was a challenging year for South Korea’s democracy. Since the inauguration of the Park Geun-hye government in 2013, there have been a number of incidents that raise serious questions about the soundness and maturity of South Korea’s democracy. These range from the interference of the National Intelligence Services in the 2012 presidential election to the government’s harsh crackdown on an anti-government rally in November 2015.
South Korea has been celebrated for the twin successes of its rapid economic development and democratisation. However, the political and economic progress that has taken place has increasingly come under challenge in recent years. The worsening gap between the rich and the poor, and certain undemocratic policies have been cause for growing concern among the public. Two of the most controversial issues of 2015 reflect these concerns: new labour reforms and the adoption of government-mandated history textbooks. Both of these issues brought about widespread protests.
Recent headlines on the South Korean economy announced that the country’s GDP grew faster during July–September 2015 than it had over the past five years. However, there is a more important story beyond the fluctuations in regularly reported macroeconomic data that needs telling.
South Korea is quickly rising as a world leader in the creation, development and export of renewable energy technologies — widely viewed by analysts as strategic growth industries of the future.
South Korea’s GDP grew at its fastest rate in over five years during Q3, due to a rise in consumer spending, according to AFP. However, manufacturing only grew 0.1 percent, and South Korean exports remain lackluster from a sluggish world economy and waning demand from China. South Korea’s central bank predicts 2.7-percent growth for 2015.
The South Korean economy rebounded from July to September, expanding 2.6 percent after struggling with a deadly outbreak and a sluggish economy, according to AP. The growth was steered by recoveries in consumer spending and construction, but the economy suffered a decline in exports due to a lack of demand from China. The Q3 growth rate marks the fastest performance in South Korea in over five years.
In South Korea 410,000 young people in their 20s are looking for work and unemployed. This is up from 330,000 in 2013 and is a 15-year high. But this deepening societal crisis should come as little surprise.
