LINKS: ....Korean Stars Image gallery.
Stars Video Archives.
Photo Puzzles of Korean Stars.
Video Guide to Korea.
Beautiful Korean Autum Season Photos.
Traditional House & Architecture.
After posting real growth in gross domestic product (GDP) of 4.6 percent for 2004, South Korea's economy is forecast to grow by 4.3 percent in 2005. While it has partially recovered from the brief recession of early 2003, growth in demand for the country's exports has remained slow. The 2003 recession was caused mainly by a consumer credit crisis, with a subsequent tightening of lending requirements and slowdown in household spending.
In response to the slow growth rate, the Bank of Korea has been pursuing an expansionary monetary policy. While inflation has risen modestly over the last year, the Bank cut interest rates twice in 2004 -- in August and in again in November. The rate cuts have curtailed the appreciation of the South Korean won against other currencies, which is intended to prevent an erosion of demand for South Korean exports.
In the wake of the Asian financial crisis of 1997-98, South Korea began an economic reform program designed to address some of the conditions which made its economy vulnerable. Most importantly, the South Korean government has begun to break the hold of the chaebols (large, multi-industry conglomerates) over the financial sector. The lack of an "arms length" business relationship between borrowers and lenders had led to many South Korean financial institutions having a very large ratio of non-performing loans. While there is no intention of forcing the chaebols to divest their financial subsidiaries, the government has increased regulation to prevent chaebols from abritrarily channeling money into other subsidiaries. Chaebols also have been pressed to spin off their non-core businesses and to rationalize their corporate structures.
The South Korean government has plans to privatize several large state-owned enterprises (SOEs), including the state electricity utility, Korean Electric Power Corporation (KEPCO), and the natural gas monopoly Korea Gas Company (KOGAS). The privatization program has moved at a slower pace than originally planned, due in part to strong opposition from labor unions to some of the privatizations and delays in passing implementing legislation. The South Korean government decided in June 2004 to limit the privatization of the electric power sector to generation facilities, retaining ownership over the transmission and distribution assets of KEPCO.