Identified Economic Issues that South Korea Needs to Tackle
South Korea is known as the country that has a strong economy proven at how they are able to recover from the Korean War without relying on external assistance. This follows by how the country’s economic system is able to recover in a short amount of time during the 2008 global financial crisis. However, it is not all sunshine and rainbows for the country’s economic system as there are still issues lying underneath that needs to be tackled.
The country’s household debt is currently at a level that is record-high. During the late of 2016, the Korean household debt exceeded by $1.1 trillion dollars (1,257 trillion won) translating to an incredible increase of 11.1% compared to the year before. Not only as this reduces savings, consumption, and Korean consumer investment, it also slows down the country’s economic growth and threatens bankruptcy to many borrowers, which could potentially cause the country’s entire economy to destabilize.
Other than that, Korea’s population is expected to have more than half of citizens over the age of 52. A country whose people have a healthy and longer life expectancy also has to tackle the problem for low-birth rates, which reduces the growth rate of 3% down to 1% by 2020. Solutions have been presented in order to improve the current economic state by including the elderly in terms of a better retirement system and pension as well as actively encouraging them to be more proactive towards the economy.
But, as South Korea is busy searching for ways to tackle these issues, the country also has a determined group of leaders that is dedicated to improving global finance issues. People such as Dr. Sakong Il, the Chairman and CEO of the Institute for Global Economics (IGE) which is the country’s economic think tank helps to continuously place effort to create a more stable and thriving country.