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Korea, Republic of (ROK)

KOREA, REPUBLIC OF (ROK)

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS KOREANS (ROK)
DEPENDENCIES
BIBLIOGRAPHY

Republic of Korea

Taehan Min-guk

CAPITAL: Seoul

FLAG: The flag, called the T'aegukki, shows, on a white field, a central circle divided into two parts, red on top and deep blue below, in the shape of Chinese yin and yang symbols. Broken and unbroken black bars in each of the four corners are variously arranged in sets of three, representing divination diagrams.

ANTHEM: Aegukka (The Song of Patriotism), officially adopted on 15 August 1948.

MONETARY UNIT: The won (w) is the national currency. There are notes of 500, 1,000, 5,000, and 10,000 won. w1 = $0.00099 (or $1 = w1,015) as of 2005.

WEIGHTS AND MEASURES: Both the metric system and ancient Korean units of measurement are used.

HOLIDAYS: New Year's Days, 13 January; Independence Movement Day, 1 March; Labor Day, 10 March; Arbor Day, 5 April; Children's Day, 5 May; Memorial Day, 6 June; Constitution Day, 17 July; Liberation Day, 15 August; Armed Forces Day, 1 October; National Foundation Day, 3 October; Han'gul (Korean Alphabet) Day, 9 October; Christmas, 25 December.

TIME: 9 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Occupying the southern 45% of the Korean Peninsula in East Asia, the Republic of Korea (ROK), also known as South Korea, has an area of 98,480 sq km (38,023 sq mi), extending 642 km (399 mi) nnessw and 436 km (271 mi) esewnw. Comparatively, the area occupied by South Korea is slightly larger than the state of Indiana. Bounded on the n by the Democratic People's Republic of Korea (DPRK), on the e by the Sea of Japan (known in Korea as the East Sea), on the s by the Korea Strait, and on the w by the Yellow Sea, the ROK has a total land boundary length of 238 km (148 mi) and a coastline of 2,413 km (1,508 mi). A demilitarized zone (DMZ), 4,000 m (13,100 ft) wide, covering 1,262 sq km (487 sq mi) and located north and south of the 38th parallel, separates the ROK from the DPRK, which comprises the northern part of the Korean Peninsula.

Over 3,000 islands, most of them off the southern and western coasts and belonging to the ROK, add another 8,600 km (5,350 mi) of coastline.

The ROK's capital city, Seoul, is located in the northwestern part of the country.

TOPOGRAPHY

Elevations in the southern part of the Korean Peninsula are generally lower than those in the north. Only about 30% of the Republic of Korea (ROK) consists of lowlands and plains. The principal lowlands, all bordering the Yellow Sea along the west coast, include the Han River Plain, near Seoul; the Pyongtaek and Honam plains, south of the capital; and the Yongsan Plain in the southwest. Mt. Halla (1,950 m/6,398 ft), on volcanic Cheju Island, is the nation's highest point, while Mt. Chiri, or Chii (1,915 m/6,283 ft), is the highest point on the mainland.

Principal rivers of the ROK include the Han (514 km/319 mi), with Seoul near its mouth; the Kum (401 km/249 mi) and Yongsan (116 km/72 mi), which water the fertile plains of the southwest; and the Somjin (212 km/132 mi), in the south. The longest river in the ROK is the Naktong (521 km/324 mi), which waters the southeast. Yellow Sea tides on the west coast rise to over 9 m (30 ft) in some places, while Japan Sea tides on the east coast rise only about 1 m (3 ft).

CLIMATE

The average January temperature ranges from -5°c (23°f) at Seoul to -2°c (28°f) at Pusan and 4°c (39°f) on Cheju Island. In the hottest part of the summer, however, the regional variation in temperature is not nearly so marked, with average temperatures ranging from 25°c to 27°c (7781°f) in most lowland areas. Average rainfall is 100 to 150 cm (40 to 50 in). Nearly all the rainfall occurs in the AprilSeptember period, especially during the rainy season, late June to early August. From one to three mild typhoons normally strike the south in the early fall, with a severe one occurring every two or three years. Days free of frost number about 240 in the southern regions.

FLORA AND FAUNA

The Korean Peninsula is rich in varieties of plant life typical of temperate regions. More than 3,000 species, some 500 of them unique to Korea, have been noted by botanists. Warm temperate vegetation, including camellias and other broad-leaved evergreens, predominate in the south and on Cheju Island. Zoologists have identified more than 130 freshwater fishes, 112 breeding birds, 49 mammals, and 14 reptiles and amphibians on the peninsula. Bear, wild boar, deer, and lynx still are found in the highlands, but the shrinking of the forested area has reduced the animal population in recent years. Migratory water fowl, cranes, herons, and other birds are visible on the plains. Noxious insects and household pests infest the warmer regions, and aquatic life is generally infected with parasites.

ENVIRONMENT

Efforts to control the detrimental effects of rapid industrialization, urbanization, and population growth focus on the Office of Environment, established in 1980 to control air, water, and land pollution and manage solid wastes. The Environmental Preservation Law, revised in 1979, covers air, water, and noise pollution, soil preservation, and disposal of solid wastes.

The nation has 65 cu km of renewable water resources with 63% used for agriculture and 11% used for industrial purposes. The purity of the nation's water is threatened by agricultural chemicals. Air pollution, associated mainly with the use of coal briquettes for home heating and the increase in automobile traffic, is also severe, with smog a common problem in Seoul. In the mid-1990s, South Korea had among the world's highest level of industrial carbon dioxide emissions, which totaled 289.8 million metric tons per year, a per capita level of 6.56 metric tons per year. In 1996, the total rose to 408 million metric tons. In 2000, the total of carbon dioxide emissions was at 427 million metric tons.

In 2003, about 6.9% of the total land area was protected by the state. There are three Ramsar wetland sites in the country. Although 28 species of birds and 8 species of mammalschipmunk, wild boar, squirrel, raccoon dog, badger, hare, river deer, and roe deerare still classified as game species, hunting was banned by the government from August 1972 through December 1981, except in such game preserves as that of Cheju Island. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species include 12 types of mammals, 34 species of birds, 1 species of amphibian, 7 species of fish, and 1 species of invertebrate. Endangered species in the Republic of Korea (ROK) include the Amur leopard, Oriental white stork, Japanese crested ibis, and Tristram's woodpecker. The Japanese sea lion has become extinct.

POPULATION

The population of South Korea in 2005 was estimated by the United Nations (UN) at 48,294,000, which placed it at number 25 in population among the 193 nations of the world. In 2005, approximately 9% of the population was over 65 years of age, with another 19% of the population under 15 years of age. There were 101 males for every 100 females in the country. According to the UN, the annual population rate of change for 200510 was expected to be 0.5%, a rate the government viewed as too low. The projected population for the year 2025 was 49,836,000. The population density was 486 per sq km (1,260 per sq mi).

The UN estimated that 80% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 0.65%. The capital city, Seoul, had a population of 9,714,000 in that year. Other large urban areas and their estimated populations were Pusan, 3,527,000; Inch'on, 2,642,000; Taegu, 2,510,000; Taejon, 1,464,000; Kwangju, 1,448,000; Suwŏn, 1,168,000; Ulsan, 1,060,000; and Pun'chon, 745,000.

MIGRATION

During the Japanese occupation (191045), some three million Koreans emigrated to Manchuria and other parts of China, 700,000 to Siberia, approximately three million to Japan, and about 7,000 to the United States (mostly to Hawaii). The great majority of those who went to Japan were from the populous southern provinces, and large numbers (1.52 million) of them returned home following the end of hostilities in 1945. In addition, from 1945 through 1949, at least 1.2 million Koreans crossed the 38th parallel into the Republic of Korea (ROK), refugees from Communism or from the Korean War. Under the Emigration Law of 1962, the ROK government encouraged emigration to South America (especially Brazil), Germany, the Middle East, and elsewhere. Most of the emigrants are workers who remit earnings back home. A total of 409,922 Koreans emigrated during the 196280 period; emigration peaked at 48,270 in 1976 but had declined to 27,163 by 1990. In addition, Koreans have emigrated permanently to the United States in large numbers since 1971; the population in the United States of Korean origin was 798,849 as of 1990 (72.7% foreign born). Migration within South Korea, mainly from the rural areas to the cities, remains substantial despite government efforts to improve village living conditions. Remittances in 2002 were $25.8 million.

In 1993, South Korea developed two programs allowing employers to hire migrant workers: the industrial trainee system and the work permit program. The training program was undercut by the fact that as unauthorized workers, trainees could earn a higher wage, even with expenses. According to Migration News, in 2004, industrial trainees numbering 50,357 ran away from their assigned employers. In November 2004, a total of 186,000 of the 422,000 foreigners in Korea were illegal. Employers realize fines of up to 20 million won ($19,080) and up to three years in prison for hiring illegal foreigners. Since August 2004, foreigners can enter Korea as workers under the Employment Permit System. This system benefits the employers as the workers are not quitting their jobs.

As of March 1997, 1,400 boat people who had been granted temporary refugee status were resettled to third countries. In 2004, South Korea hosted 44 refugees and 247 asylum seekers. In 2005, the net migration rate was estimated as zero per 1,000 population.

ETHNIC GROUPS

The Koreans are believed to be descended primarily from Tungusic peoples of the Mongoloid race, who originated in the cold northern regions of Central Asia. There is scant evidence of non-Mongoloid admixture. There are about 20,000 Chinese; however, the Republic of Korea (ROK) has no sizable ethnic minority.

LANGUAGES

The Korean language is usually held to be a member of the Altaic family; there are only slight differences among the various dialects. Korean is written in a largely phonetic alphabet called Han'gul, created in 1443. The Korean alphabet originally consisted of 14 consonants and 10 vowels; since then, 5 consonants and 11 vowels have been added. Han'gul letters are combined into syllables by clustering, in imitation of Chinese characters. Republic of Korea (ROK) governments have launched several "language beautification" drives designed to purge Korean of borrowings from Japanese and other languages, but more than half of the vocabulary consists of words derived from Chinese.

English is widely taught in junior high and high school.

RELIGIONS

Most South Koreans are quite eclectic in their religious beliefs, the majority subscribing to varying mixtures of Taoism, Confucianism, Buddhism, Christianity, Ch'ondogyo (Religion of the Heavenly Way, an indigenous sect originating in 1860), and local animism. Shamanism, especially its aspect of exorcism of evil spirits, survives in some rural areas of the Republic of Korea (ROK). Geomancy is also used in matters such as the selection of auspicious building and tomb sites.

About 49% of the population practice Christianity (including 8,760,336 Protestants and 2,950,730 Roman Catholics); 47% practice Buddhism; 3% Confucianism; and 1% folk religion (shamanism), Ch'ondogyo (Religion of the Heavenly Way), and other faiths. Over 21 million people claimed that they did not practice any religion. Of those who claimed a specific religious affiliation, about 41.7% reported that they are active weekly participants in religious services; 26.9% reported attendance of only once a year.

Protestant denominations include Methodist, Lutheran, Baptist, Presbyterian, and Anglican, and the Korean Gospel Church Assembly. Other religions with significant popular followings include Taejongyo, based on the worship of a trinity of ancient deities, and Soka Gakkai, a Buddhist sect of Japanese origin. There are also practicing Muslims, members of the Unification Church, Mormons, and Jehovah's Witnesses.

The constitution provides for freedom of religion, and this right is generally respected in practice. The Religious Affairs Bureau of the Ministry of Culture and Tourism sponsors such groups as the Korea Religious Council and the Council for Peaceful Religions in an effort to promote interfaith understanding.

TRANSPORTATION

The Republic of Korea's (ROK) railway system in 2004 totaled 3,472 km (2,159 mi) of standard gauge track, most of which was government controlled. The Seoul subway system opened in 1991. Construction of Pusan's first subway line was completed in 1985.

The ROK road system carries 90% of the country's transportation. In 2003, the ROK had 97,252 km (60,491 mi) of roadway, of which 74,641 km (46,426 mi) were paved, including 2,778 km (1,728 mi) of expressways. There were 10,278,900 passenger automobiles, and 4,308,400 commercial vehicles in 2003. Bus transportation networks of varying quality serve most of the rural towns.

Maritime shipping expanded rapidly during the 1970s. By 2005, the ROK had a merchant fleet of 601 vessels of 1,000 gross registered tonnage (GRT) or more, accounting for a total of 6,992,656 GRT. Pusan is the country's chief port. Other major ports include Inch'on (the port for Seoul), Kunsan, and Mokp'o. As of 2004, South Korea had 1,608 km (1000 mi) of navigable waterways, most of which were accessible only by small craft.

There were an estimated 179 airports in 2004. As of 2005, a total of 70 had paved runways, and there were 537 heliports. Major airports include Cheju International at Cheju, Kimhae International at Pusan, and Kimpo International at Seoul. Civil aviation in the ROK in 2003 amounted to 8,312 million freight ton-km of service and about 33.334 million passengers were carried on scheduled domestic and international flights. Korean Air Lines (KAL), privately owned since 1969, grew rapidly during the 1970s and now ranks as a major world carrier. On the morning of 1 September 1983, a KAL jetliner en route from New York to Seoul via Anchorage, Alaska, strayed over airspace of the former USSR and was shot down by Soviet interceptors, reportedly because they thought it was a military aircraft engaged in espionage; all 269 persons on board were killed, and worldwide protest followed. In November 1983, 115 people were killed when a bomb was detonated aboard a KAL jet en route to Seoul.

HISTORY

[For Korean history before 1948, see Korea, Democratic People's Republic of.]

The Republic of Korea (ROK), headed by President Syngman Rhee (Rhee Syngman), was proclaimed on 15 August 1948 in the southern portion of the Korean Peninsula, which had been under US military administration since 8 September 1945. Like the Democratic People's Republic of Korea (DPRK), established in the north on 9 September 1948 with Soviet backing, the ROK claimed to be the legitimate government of all Korea. The ROK was recognized as the legitimate government by the United Nations (UN) General Assembly.

At dawn on 25 June 1950, following a year and a half of sporadic fighting, the well-equipped People's Army of the DPRK struck across the 38th parallel. Proclaiming that the war was for national liberation and unification of the peninsula, the DPRK forces advanced rapidly; Seoul fell within three days, and the destruction of the ROK seemed imminent. At US urging, the UN Security Council (with the Soviet delegate absent) branded the DPRK an aggressor and called for the withdrawal of the attacking forces. On 27 June, US president Harry S. Truman ordered US air and naval units into combat, and three days later, US ground forces were sent into battle. The United Kingdom took similar action, and a multinational UN Command was created to join with and lead the ROK in its struggle against the invasion. Meanwhile, DPRK troops had pushed into the southeast corner of the peninsula. At that juncture, however, UN lines held firm, and an amphibious landing at Inch'on (15 September 1950) in the ROK under General Douglas MacArthur brought about the complete disintegration of the DPRK army.

MacArthur, commanding the UN forces, made a fateful decision to drive northward. As the UN forces approached the Yalu River, however, China warned that it would not tolerate a unification of the peninsula under US/UN auspices. After several weeks of threats and feints, "volunteers" from the Chinese People's Liberation Army entered the fighting en masse, forcing MacArthur into a costly pell-mell retreat down the peninsula. Seoul was lost again (4 January 1951) and then regained before the battle line became stabilized very nearly along the 38th parallel. There it remained for two weary years, with bitter fighting but little change, while a cease-fire agreement was negotiated.

On 27 July 1953, an armistice agreement finally was signed at P'anmunjom in the DPRK. The Korean War was ended, but it had brought incalculable destruction and human suffering to all of Korea (some 1,300,000 military casualties, including 415,000 combat deaths, for the ROK alone), and it left the peninsula still more implacably divided. A military demarcation line, which neither side regarded as a permanent border, was established, surrounded by the DMZ. The international conference envisioned in the armistice agreement was not held until mid-1954. This conference and subsequent efforts failed to reach an agreement on unification of the North and South, and the armistice agreement, supervised by a token UN Command in Seoul and by the Military Armistice Commission and the Neutral Nations Supervisory Commission, both in P'anmunjom, remains in effect.

In 1954, the United States and ROK signed a mutual defense treaty, under which US troops remained in the country. Financial assistance throughout the 1950s was provided by the United States, averaging $270 million annually between 1953 and 1958, and by other nations under UN auspices. Syngman Rhee ran the government until 1960, when his authoritarian rule provoked the "April Revolution," the culmination of a series of increasingly violent student demonstrations that finally brought about his ouster. The Second Korean Republic, which followed Rhee, adopted a parliamentary system to replace the previous presidential system. The new government, however, was short-lived. Premier Chang Myon and his supporters were ousted after only 10 months by a military coup in May 1961 headed by Maj. Gen. Park Chunghee. The military junta dissolved the National Assembly, placed the nation under martial law, established the Korean Central Intelligence Agency (KCIA) as a means of detecting and suppressing potential enemies, and ruled by decree until late 1963 through the Supreme Council for National Reconstruction. General Park created a well-organized political partythe Democratic-Republican Party (DRP)designed to serve as a vehicle for the transition from military to civilian rule, and in October 1963, under a new constitution, he easily won election as president of the Third Republic.

During the summer of 1965, riots erupted all over the ROK in protest against the ROK-Japan Normalization Treaty, which established diplomatic relations and replaced Korean war-reparation claims with Japanese promises to extend economic aid. The riots were met with harsh countermeasures, including another period of martial law and widespread arrests of demonstrators. Further demonstrations erupted in 1966, when the ROK's decision to send 45,000 combat troops to Vietnam became known. Park was elected to a second term in May 1967, defeating his chief opponent, Yun Po-sun, and the DRP won a large majority in the National Assembly. In 1969, Park pushed through the National Assembly a constitutional amendment permitting him to run for a third term. He defeated Kim Dae Jung, leader of the opposition New Democratic Party (NDP), in the elections of April 1971, but Kim's NDP made significant gains in the National Assembly elections that May.

Student demonstrations against the government in the fall of 1971 prompted Park to declare a state of national emergency on 6 December. Three weeks later, in a predawn session held without the knowledge of the opposition, the National Assembly granted Park extraordinary governmental powers. These failed to quell mounting opposition and unrest, and in October 1972 martial law was declared. A new constitution, promulgated at the end of the month and ratified by national referendum in November 1972, vastly increased the powers of the presidency in economic as well as political affairs. Under this new document, which inaugurated the Fourth Republic, Park was elected for a six-year term that December, with a decisive legislative majority for his DRP. Soon the economy began to expand at a rapid rate. But Park's regime became increasingly repressive. Typical of its heavy-handed rule was the abduction by KCIA agents of Kim Dae Jung from a Japanese hotel room back to Seoul, an incident that provoked considerable friction between Japanese and Korean officials. On 15 August 1974, a Korean gunman carrying a Japanese passport and sympathetic to the DPRK attempted to assassinate the president but killed Park's wife instead. Park responded by drafting a series of emergency measures; the harshest of these, Emergency Measure No. 9, issued in May 1975, provided for the arrest of anyone criticizing the constitution and banned all political activities by students.

Park was reelected for another six-year term in July 1978, but the NDP, now led by Kim Young Sam, made major gains in the National Assembly. In October 1979, Kim was expelled from the legislature after calling for governmental reform. Riots protesting Kim's ouster were reported in several major cities. On 26 October 1979, in what may have been an attempted coup, Park was assassinated by KCIA director Kim Jae-gyu, who was later executed. Martial law was again imposed, and a period of relative calm followed as some of the more restrictive emergency decrees were lifted by Park's constitutional successor, the prime minister, Choi Kyu-hah, who promised a new constitution and presidential elections.

In December 1979, Maj. Gen. Chun Doo Hwan led a coup in which he and his military colleagues removed the army chief of staff and took effective control of the government. Demonstrations led by university students spread during the spring of 1980, and by mid-May, the government had once more declared martial law (in effect until January 1981), banned demonstrations, and arrested political leaders. In the city of Kwangju, more than 200 civilians were killed in what became known as the Kwangju massacre (these numbers may be conservative). Choi Kyu-hah was pressured to resign and Chun Doo Hwan, now retired from the military, was named president in September 1980. Chun Doo Hwan came to power under a new constitution inaugurating the Fifth Republic. A total of 567 political leaders, including Kim Dae Jung and Kim Young Sam, were banned from political activity. Kim Dae Jung, arrested several times after his 1973 kidnapping, was originally sentenced to death but allowed to go to the United States in 1982. All existing political parties were dissolved and all political activity banned until three months before the 1981 elections.

Twelve new parties (reduced to eight) were formed to enter the 1981 elections, in which Chun Doo Hwan was elected to a seven-year presidential term by a new electoral college and his Democratic Justice Party (DJP) secured a majority in the reconstituted National Assembly. Despite harsh controls, opposition to Chun continued. In 1982, 1,200 political prisoners were released, and in early 1983, the ban on political activity was lifted for 250 of the banned politicians. On 9 October 1983, Chun escaped an apparent assassination attempt in Yangon (Rangoon), Burma, when an explosion took the lives of 17 in his entourage, including four ROK cabinet ministers. Chun subsequently blamed the DPRK for the bombing. In 1984, under increasing pressure for political reforms prior to the 1985 parliamentary elections, the government lifted its ban on all but 15 of the 567 politicians banned in 1980. In 1985, the ban was lifted on 14 of the remaining 15. Kim Dae Jung was allowed to return from exile in the United States in 1984 but was rearrested. He remained banned from all political activity because of his conviction for sedition in 1980.

Opposition groups quickly formed the New Korea Democratic Party (NKDP) to challenge the DJP in the 1985 election; the new party became a strong minority voice in the National Assembly. The issue of constitutional reforms, particularly changes in the way in which presidents are elected and the way in which "bonus" seats in the legislature are distributed, became prominent, especially after Chun reaffirmed a commitment to step down in February 1988 and, in April 1986, dropped his long-standing opposition to any constitutional changes prior to that date. Demonstrations against Chun continued and became violent at Inch'on in May 1986 and at Konkuk University that fall. Opposition groups began collecting signatures on a petition demanding direct (instead of indirect) election of the president. In April 1987, as demonstrations became increasingly violent, Chun banned all further discussion of constitutional reform until after the 1988 Olympic Games in Seoul. The ban, which could have guaranteed the election of a hand-picked DJP successor, set off violent antigovernment demonstrations throughout the nation. In June 1987, the DJP nominated its chairman, Roh Tae Woo, a former general and a close friend of Chun, as its candidate for his successor. When Roh accepted opposition demands for political reforms, Chun announced in July that the upcoming election would be held by direct popular vote. On 8 July, 100,000 people demonstrated in Seoul in the largest protest since 1960 and, on the same day, the government restored political rights to 2,000 people, including the longtime opposition leader, Kim Dae Jung.

In the elections, held on 16 December 1987, Roh Tae Woo, as the DJP candidate, won a plurality of 37%, defeating the two major opposition candidates, Kim Young Sam and Kim Dae Jung, who had been unable to agree on a single opposition candidacy and split 55% of the total vote. Two minor candidates divided the remainder. A reported 89% of all eligible voters participated. The two leading opposition candidates charged massive fraud, and a series of demonstrations were held to protest the results. However, no evidence of extensive fraud was produced, and the demonstrations did not attract wide support. Roh Tae Woo was inaugurated as president in February 1988 when Chun Doo Hwan's term expired.

In the elections for the National Assembly, held on 26 April 1988, President Roh Tae Woo's party, the DJP, won only 34% of the vote. This gave the DJP 125 seats in the assembly, while Kim Dae Jung's Peace and Democracy Party (PDP) gained 70 seats, Kim Young Sam's Reunification Democratic Party (RDP) won 59 seats, 35 seats went to the new Democratic Republican Party (NDRP), and 10 to independent candidates. Thus, for the first time in 36 years, the government did not have a controlling vote in the National Assembly, which quickly challenged President Roh's choice for head of the Supreme Court and by year's end forced the president to work with the assembly to pass the budget.

In the fall of 1988, the National Assembly audited the government and held public hearings on former President Chun's abuses of power. In November, Chun apologized to the nation in a televised address, gave his personal wealth to the nation, and retired into a Buddhist temple. Following the revision of the constitution in 1987, South Koreans enjoyed greater freedoms of expression and assembly and freedom of the press, and in 1988, several hundred political dissidents were released from prison.

Unrest among students, workers, and farmers continued, however, and beginning in April 1989, the government repressed opposition. In October 1989, the government acknowledged making 1,315 political arrests so far that year. The National Assembly became less of a check on President Roh after two opposition parties (RDP, NDRP), including that of Kim Young Sam, merged with Roh's DJP, forming a new majority party, the Democratic Liberal Party (DLP) in January 1990. Kim Dae Jung was then left as the leader of the main opposition party (PDP).

There were continuing demonstrations into 1990 and 1991, calling for the resignation of President Roh and the withdrawal of US troops. In May 1990, 50,000 demonstrators in Kwangju commemorated the 10th anniversary of the massacre, resulting in clashes with police which lasted several days. The United States agreed to withdraw its nuclear weapons from the ROK in November 1991. And, on the last day of the year, the ROK and the DPRK signed an agreement to ban nuclear weapons from the entire peninsula.

In the presidential election on 19 December 1992, Kim Young Sam, now leader of the majority DLP, won with 41.9% of the vote, while Kim Dae Jung (DP) took 33.8%. Inaugurated in February 1993, Kim Young Sam began a new era as the first president in 30 years who was a civilian, without a power base in the military. President Kim granted amnesty to 41,000 prisoners and instituted a series of purges of high-ranking military officials, including four generals who had roles in the 1979 coup. Among political and economic reforms was a broad anticorruption campaign, resulting in arrests, dismissals, or reprimands for several thousands of government officials and business people. In March 1994, a former official of the National Security Planning Agency made public President Roh Tae Woo's authorization of a covert program to develop nuclear weapons at the Daeduk Science Town through 1991.

South and North Korea continued to have a rocky relationship. On three successive days in April 1996, North Korean troops violated the 1954 armistice that had ended the Korean War by entering P'anmunjom. The soldiers, who were apparently conducting training exercises, withdrew after a few hours on all three occasions. In September of the same year, a small North Korean submarine was grounded off the eastern coast of South Korea and 26 crew members fled into the interior of South Korea. The ship appeared to be carrying a team of North Korean spies who intended to infiltrate South Korea to carry out what remain unknown missions against South Korean targets. Twenty-four of the crewmen were killed, one escaped, and one remains at large. In a surprise move, the North Korean government apologized in February of 1997 for the incursion.

Meanwhile, domestic events inside South Korea were equally tumultuous. In August of 1996, former President Chun Doo Hwan and his successor, Roh Tae Woo, were tried and found guilty of treason and mutiny for the 1980 coup that brought them to power, and the subsequent Kwangju massacre, in which troops killed more than 200 prodemocracy demonstrators (those numbers may be conservative). The court gave Chun a death sentence (extremely rare in Korea) and sentenced Roh to 22.5 years in prison. An appellate court later reduced Chun's sentence to life imprisonment and Roh's sentence to 17 years. When Kim Dae Jung was inaugurated as president in 1998, both leaders were released from prison under Kim's grant of amnesty.

On 11 April 1996, legislative elections took place amid allegations of corruption that reached the inner circle of President Kim Young Sam and his New Korea Party (NKP). During the preelection campaign, Kim promised to launch an anticorruption effort if his party gained power; in a major upset, the NKP captured 139 of the 299 seats, while the main opposition party (National Congress for New PoliticsNCNP) of Kim Dae Jung won only 79 seats. Kim Dae Jung lost his own seat in the legislature. Several important New Korea Party officials and even Kim Young Sam's son were implicated on charges of taking or giving millions of dollars in bribes to arrange loans to Hanbo Steel Industry Co., which eventually went bankrupt under $6 billion of debt. Some of those officials were indicted in February of 1997, but Mr. Kim's son, Kim Hyun Chul, was cleared. However, in May of the same year, Kim Hyun Chul was arrested on bribery and tax-evasion charges unrelated to the Hanbo scandal.

By 1997, many of the large chaebols (business conglomerates) were reporting serious problems with debt. A portion of the Kia Group, a major manufacturer of automobiles, was nationalized to prevent bankruptcy. Increased domestic economic instability coupled with economic crisis swept through Asia, leading to a severe decline in the value of the currency. The ensuing financial panic coincided with presidential elections on 18 December 1997, the month that negotiations with the International Monetary Fund (IMF) began. In the 1997 presidential elections, South Koreans elected former political exile Kim Dae Jung, who became the country's first opposition candidate to win a presidential election. In the election, Kim Dae Jung narrowly defeated the ruling party's candidate, Lee Hoe Chang, by 40.3% to 38.7%. Kim Dae Jung pledged to adhere to IMF conditionality and reform governmentbusiness relations in South Korea by increasing transparency. In 1998 and 1999, the government reduced the role of government intervention in the domestic economy despite numerous strikes by workers protesting layoffs.

By mid-2000, Kim Dae Jung had managed to steer Korea's economy out of the worst of the crisis. The economy started to grow in 1999 and topped 10% in 2000, although economic growth stabilized at 4.4% by 2004. South Korea faced a steady unemployment rate of 3.6% between 2000 and 2005. In April 2000, the legislative elections improved the position of Kim's party, renamed the New Millennium Party (NMP), to 115 seats. However, the Grand National Party (GNP), successor to the NKP, obtained 133 seats and the United Liberal Democrats, allied with the GNP, won 17. Thus, Kim's objective to continue economic reform was imperiled.

In June 2000, Kim Dae Jung traveled to P'yŏngyang, the capital of the Democratic People's Republic of Korea (North Korea) for a historic meeting with his counterpart, Kim Jong Il. The two agreed to pursue further cooperation in the future. This summit marked the high point of what became known as Kim Dae Jung's "sunshine policy" of rapprochement toward the North. He was awarded the Nobel Peace Prize in 2000 for his commitment to democracy and human rights in Asia.

Roh Moo Hyun was elected president in the December 2002 election, taking 49% of the vote; he was inaugurated in February 2003. While campaigning, Roh stated he would continue Kim Dae Jung's "sunshine policy" toward the North, but prior to his election, it was revealed that North Korea was secretly developing a program to enrich uranium for use in nuclear weapons. Relations between North Korea and the United States were tense in 2002 and 2003, as the United States maintained North Korea should not be allowed to develop nuclear weapons, and the North asserted it had the right to do so to provide for its defense and security. Roh took the position that North Korea's move to develop nuclear weapons and export missiles could only be countered by dialogue. This put him at odds with some in the Bush administration, who held that the United States would not be "blackmailed" into negotiating with the North. In June 2003, the United States announced it would redeploy some of its 37,000 troops in South Korea to positions south of the DMZ, in an effort to create more agile and mobile forces. South Korea is also an integral part of the six-state team that meets periodically to assess North Korean nuclear ambitions. Roh's attempts to engage North Korea came under increasing attack since North Korea admitted to having a uranium-enrichment program as well as nuclear reactors.

Relations between the two countries warmed slightly in 2005 due to an increase in joint sports matches. Growing cultural contacts helped improve P'yŏngyang's image in the South. The younger generation in South Korea does not hold as stringent anticommunist ideals as the older generation and there is growing public support to provide economic aid to North Korea.

A major fund-raising scandal that implicated both major parties in 2003 delayed Roh's ability to advance several bills through parliament as the majority of parliament was concerned with investigating the scandal. This was particularly embarrassing to Roh, who, during his campaign, had pledged to end corruption within the government.

Roh faced a major crisis in 2004 when opposition parties brought about a parliamentary vote to impeach him. However, South Koreans supported Roh and his party, the Uri Dang Party, and voted a majority into parliament in 2004. Roh was allowed to resume the presidency after a parliamentary vote to overturn the impeachment but Roh's aggressive political style and staunch alliance with the United States continued to divide the populace.

Of major importance to contemporary South Korea is the stance of Japan regarding their military activities during World War II. South Korea often criticizes the Japanese educational system for overlooking Japan's military aggression in Asia during World War II, and is in continual negotiations with Japan over this topic. Of immense intensity is South Korean animosity concerning South Korean women taken as sex slaves by the Japanese Imperial Army during World War II. Although the Japanese government admitted deception, coercion, and official involvement in the recruitment and kidnapping of South Korean women in 1995, there has been no official apology and there is much tension in South KoreanJapanese relations. Japanese prime minister Junichiro Koizumi further inflames this animosity by making a yearly visit to the Yasukuni Shrine, which is dedicated to the Japanese war dead; Japan regards all World War II compensation claims to be settled per treaties signed in 1964. South Korea also contests Japanese claims to Liancourt Rocks (Tok-do/Take-shima), occupied by South Korea since 1954.

GOVERNMENT

The Republic of Korea's (ROK) first constitution was adopted on 17 July 1948. Through repeated revisions, power remained concentrated in the hands of the president until the most recent revision, adopted by 93.1% of the vote in a popular referendum on 28 October 1987. Under the new constitution, which took effect in February 1988, the president is elected by direct popular vote, rather than indirectly as before, for a single term of five years. There are also a prime minister and two deputy prime ministers, who head the State Council (the cabinet). In an extremely tight presidential race, Roh Moo Hyun was elected president on 19 December 2002 with 49% of the vote over Lee Hoi Chang, with 47%, for a five-year term beginning on 25 February 2003. In the elections of 2004, the Uri Dang, or "Our Party," won a narrow victory in parliament with 38.3% of the vote.

The ROK legislature is the unicameral National Assembly (Kuk Hoe); its next election was scheduled to be held in 2008. It has 299 seats: 243 in single-seat constituencies, 56 by proportional representation. During the first four decades of the ROK, the National Assembly had little authority. The 1987 constitution strengthened the National Assembly, giving it power to audit government activities and removing the president's power to dissolve the Assembly. Suffrage is universal at age 20.

POLITICAL PARTIES

From 1948 to 1988, politics in the Republic of Korea were dominated by the executive arm of the government with military backing. Despite this, there were active opposition parties and, with the implementation of the revised 1987 constitution, political parties have had a greater governmental role. In the presidential election of December 1987, the governing Democratic Justice Party (DJP), with Roh Tae Woo as its candidate, won 37% of the vote; the Reunification Democratic Party (RDP), with Kim Young Sam, won 28%; the Peace and Democracy Party (PDP), with Kim Dae Jung, won 27%; and the New Democratic-Republic Party (NDRP), with Kim Jong Pil, won 10%. In a crucial election for the National Assembly in April 1988, the DJP gained only 34% of the popular vote, allowing the opposition parties to control the assembly. This was the first time since 1952 that the government party did not have a majority in, and hence control of, the National Assembly.

In a surprise move in January 1990, the DJP merged with two of the opposition parties, the RDP and the NDRP, to form a new majority party, the Democratic Liberal Party (DLP). In July of that year, two opposition parties, the PDP and the Democratic Party (DP) merged, retaining the latter's name. In September 1991, the DP agreed to merge with another opposition party, the New Democratic Party (NDP), then led by the veteran oppositionist, Kim Dae Jung, forming a new DP.

The National Assembly election on 24 March 1992 saw 38.5% of the vote go to the DLP; 29.2% to the DP; 17.3% to the Unification National Party, which later changed its name to the United People's Party (UPP); and 15% to other parties. The actual distribution of seats in the National Assembly shifts as members frequently switch among parties. In the presidential election on 18 December 1992, 41.5% of the vote went to Kim Young Sam of the DLP; 33.8% to Kim Dae Jung of the DP; 16.3% to Chung Ju Yung of the UPP; and 8% to candidates of various smaller parties.

Following the 1992 elections, Korea's largest political parties began a period of reorganization. The DLP transformed into the New Korea Party (NKP), while Kim Dae Jung formed a new opposition party, the National Congress for New Politics (NCNP). In the National Assembly election on 11 April 1996, the NKP won 139 seats; the NCNP, 79 seats; the ULD, 50 seats; and the DP, 15 seats. The remaining 16 seats were won by independents. The surprise of the election was the success of the ULD, a conservative party led by former premier Kim Jong Pil.

In the presidential election of 18 December 1997, Kim Dae Jung won 40.3% and Yi Hoe Chang of the Grand National Party (GNP) won 38.7%. In January 2000, Kim reorganized his cabinet; his party, the National Congress for New Politics, assumed a new name, the Millennium Democratic Party (MDP).

The 13 April 2000 election involved Kim Dae Jung's MDP, which captured 115 seats; the former governing party, Grand National Party (formerly the New Korea Party), obtained 133 seats; and a minor party, the United Democratic Liberal Party captured 17 seats. Two seats were held by the Democratic People's Party, one seat was held by the New Korea Party of Hope, and five seats went to independents. The 15 April 2004 election showed a surprise outcome of the Uri Dang party, a liberal party, overtaking the Grand National Party with 152 seats; the Grand National Party retained 121 seats and the MDP came in fourth place with only 9 seats.

LOCAL GOVERNMENT

The Republic of Korea (ROK) is divided into is divided into one special city (teukbyeolsi ), six metropolitan cities (gwangyeoksi ), and nine provinces (do ). These are further subdivided into a variety of smaller entities, including cities (si ), counties (gun ), wards (gu ), towns (eup ), districts (myeon ), neighborhoods (dong ), and villages (ri ). Between 1961 and March 1990, there were no local elections.

In late April 2005, the governing Uri Dang Party and leading opposition parties agreed to a sweeping change in the country's local administration. This reform, tentatively slated to take place in 2010, would replace the three-tier system with a two-tier system. The existing provinces and metropolitan cities would be eliminated. The current gu, si, and gun units would be reorganized into about 60 "metropolitan cities" with a population of roughly one million each. Beyond this, the details of the reform were not decided at that time.

JUDICIAL SYSTEM

The highest judicial court is the Supreme Court, under which are five intermediate appellate courts. Lower tribunals include district courts, of which there are 15, and a family and administrative court. There are 103 municipal courts in South Korea. Since 1988, constitutional challenges go to the Constitutional Court.

The president, with the consent of the National Assembly, appoints the chief justice, the other 13 justices of the Supreme Court, and the Constitutional Court. The chief justice, in consultation with the other justices of the court, appoints lower court justices.

The constitution provides for a presumption of innocence, protection from self-incrimination, the right to a speedy trial, protection from double jeopardy, and other procedural due process safeguards.

The constitution provides for an independent judiciary. There are no jury trials. The legal system combines some elements of European civil law systems, Anglo-American law, and classical Chinese philosophies. Laws concerning detention are often vaguein particular, the National Security Law, which authorizes the detention of South Koreans who may be engaged in espionage or otherwise supportive of North Korea. Because South Korean citizenship is based on parentage instead of birthplace, there are many nonethnic Koreans who face extreme difficulties in procuring employment and are banned from civil service work. Rape, domestic violence, and sexual harassment are also punished leniently and many grassroots organizations have been formed to promote the legitimacy of these issues. As of 2005, there was a growing movement against the mandatory military conscription for South Korean males.

ARMED FORCES

The Republic of Korea (ROK) in 2005 had 687,700 personnel on active duty in its armed forces. Of that total, 560,000 were in the Army, 63,000 in the Navy and Marines, and 64,700 in the Air Force. An additional 4.5 million were in the reserves. Paramilitary forces included 3.5 million in the Civilian Defense Corps and an estimated 4,500 personnel in the Maritime Police. The Army's equipment roster included 2,330 main battle tanks, 40 armored infantry fighting vehicles, 2,480 armored personnel carriers, over 10,774 artillery pieces, and 60 attack helicopters. Major naval units included 20 tactical submarines, 6 destroyers, nine frigates, 28 corvettes, 80 patrol/coastal vessels, and 15 mine warfare ships. The Air Force had 540 combat-capable aircraft, including 210 fighters and 283 fighter ground attack aircraft. The ROK in 2005 provided support for peacekeeping and UN missions in seven countries or regions. The United States maintained a military presence of over 40,000 personnel in the ROK. The defense budget in 2005 totaled $20.7 billion.

INTERNATIONAL COOPERATION

The Republic of Korea (ROK) became a member of the United Nations on 17 September 1991 and participates in ESCAP and several nonregional specialized agencies, such as the FAO, UNSECO, IFC, IMF, the World Bank, ILO, UNIDO, and the WHO. The ROK participates in the African Development Bank, Asian Development Bank, APEC, the ASEAN Regional Forum, the Colombo Plan, the European Bank for Reconstruction and Development, the Latin American Integration Association (LAIA), and OECD. The country is a dialogue partner in ASEAN, a partner in the OSCE, and an observer in the OAS.

The UN Commission on the Unification and Rehabilitation of Korea was dissolved in 1973, but the UN Command originating from the Korean War continues to supervise implementation of the 1953 armistice agreement. The ROK pursues a vigorous international diplomacy, and in recent years has modified both its militant anticommunist stance and its close alliance with the United States. By 1986, the ROK was recognized by 122 nations, 67 of which also had diplomatic relations with the Democratic People's Republic of Korea (DPRK). The demilitarized zone that separates North and South Korea has been in place since 1953, though both governments claim a desire for reunification. The nation is a guest in the Nonaligned Movement.

The ROK is part of the Australia Group, the Zangger Committee, the Nuclear Energy Agency, the Nuclear Suppliers Group (London Group), and the Organization for the Prohibition of Chemical Weapons. In environmental cooperation, the nation is part of the Antarctic Treaty, the Basel Convention, Conventions on Biological Diversity and Whaling, Ramsar, CITES, the London Convention, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Under a centralized planning system initiated in 1962, the Republic of Korea (ROK) was one of the fastest-growing developing countries in the postwar period, shifting from an agrarian to an industrial economy to a high-tech "new economy" in the course of only a few decades. In 1996, the ROK was officially admitted to the 30-member Organization for Economic Cooperation and Development (OECD) of advanced industrialized countries. In 2005, industry contributed 41.4% of gross domestic product (GDP) compared to 16.2% in 1965, while agriculture, forestry, and fishing accounted for 3.8%, down from 46.5%. Much of this industrialization was fueled by the government's stimulation of heavy industry, notably steel, construction, shipbuilding, and automobile manufacture, as well as its support of technological advances in communications and information technology (CIT). To finance industrial expansion, the ROK borrowed heavily up until the mid-1980s. By the end of 1986, its foreign debt equaled about 52% of gross national product (GNP), making the country one of the world's four most deeply indebted developing economies. Steady current account surpluses allowed the ROK to reduce this figure, but in 1998, in the wake of the Asian financial crisis, the external debt/GDP ratio again ballooned, reaching an average 46.9% in 1998. Financial and corporate structural reforms helped bring this ratio down to 26.1% at the end of 2004.

The average annual rate of GDP growth declined from an average of 9.5% between 196580 and 9.7% between 198090 to 6.57% 19912000 as export growth slowed, labor costs rose, and the won steadily appreciated against the US dollar. However, Korea's economy started to grow once again at the phenomenal rate that it saw in the 1970s and 1980s in the later 1990s. The economy grew by 9.1% in 1995 and 9.1% in 1996. However, after June 1997, when Hong Kong reverted to Chinese rule, South Korea became engulfed in the Asian financial crisis. GDP growth averaged only 5% in 1997, and then turned negative (-6.6%) in 1998, in the country's first economic contraction since the Korean war. Export value fell 25% in 1998 despite a 19.6% increase in volume, due to depreciating currencies. Before the end of 1997, a $58 billion international support program had been arranged, anchored in a three-year standby arrangement with the International Monetary Fund (IMF) running from 4 December 1997 to 3 December 2000, and a one-year arrangement under the IMF's Supplemental Reserve Facility (SRF) with an additional $14 billion line of credit. South Korea's economy made a strong recovery in 1999 and 2000, with GDP growth rates of 10.9% and 9.3%, respectively, while inflation, which had reached 4% in 1998, was held to 1.9% in 1999 and 2.8% in 2000. The recovery was sharply interrupted, however, by the collapse of the dot.com boom in early 2001, the decline in international investment in the aftermath of the 11 September 2001 terrorist attacks on the United States, and the slowdown in the global economy.

One problem South Korea faces is that it has not yet developed a strong and diverse local economy, despite its skilled workforce and large middle class. It has relied upon increasing exports, which benefit a few huge conglomerates (chaebol ), in ways that stifle domestic demand. Real GDP growth dropped to 3.23% in 2001, stood at 6.27% in 2002, and fell again to 2.7% in 2003. In 2005, the real GDP growth rate was estimated at 3.7%, and was forecast to pick up in 2006 to 4.8%, reflecting a strengthening of domestic demand, before easing back to 4.1% in 2007. However, further rises in global oil prices in 200607 could slow the economic recovery.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 South Korea's gross domestic product (GDP) was estimated at $983.3 billion. The per capita GDP was estimated at $20,300. The annual growth rate of GDP was estimated at 3.7%. The average inflation rate in 2005 was 2.8%. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange. It was estimated that agriculture accounted for 3.8% of GDP, industry 41.4%, and services 54.8%.

According to the United Nations, in 2000, remittances from citizens working abroad totaled $63 million or about $1 per capita. Worker remittances in 2001 totaled $49.20 million. Foreign aid receipts amounted to about $2 per capita.

The World Bank reports that in 2001, per capita household consumption (in constant 1995 US dollars) was $6,907. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the same period. private consumption grew at an annual rate of 4%. Approximately 18% of household consumption was spent on food, 7% on fuel, 5% on health care, and 14% on education. The richest 10% of the population accounted for approximately 24.3% of household consumption and the poorest 10% approximately 2.9%. It was estimated that in 2001, about 4% of the population had incomes below the poverty line.

LABOR

The South Korean labor force in 2005 was estimated at 23.65 million. In 2004, it was estimated that 8% were engaged in agriculture, 19% in industry, and 73% in the services sector. The unemployment rate in 2005 was estimated at 3.7%.

Before 1987, the labor movement was heavily controlled by the government, but since 1991, democratic reform has brought some changes. With the exception of public-sector employees, workers enjoy the right to join unions, even with as few as two members. All unions must register with the Labor Ministry, although unions not formally recognized by the ministry have generally not been interfered with by the government. In 2005, about 11% of the workforce belonged to a union. Unions often exercise the right to strike, and collective bargaining is prevalent.

Children under the age of 15 are generally prohibited from working, and those under 18 must obtain written approval from their parents. In July of 2004, the five-day, 40-hour workweek was adopted, applicable to certain types of companies with 1,000 or more employees. In other areas, employees can work up to 44 hours per week, during certain weeks, so long as the average over two weeks is 40 hours per week. Overtime pay is mandatory for extended hours. In 2005, the minimum wage was $2.92 per hour. Health and safety standards are regulated by the government, although they are not stringently enforced due to lack of inspectors.

AGRICULTURE

Some 18.7% of the Republic of Korea's (ROK) land area is arable, with about 70% of it sown in grain, rice being the chief crop. In 1965, agriculture (including forestry and fishing) contributed nearly 50% to gross national product (GNP), but by 2005 only accounted for 3.8%. Double-cropping is common in the southern provinces. Rice production in 200405 was 5,000,000 tons. Barley production in 2004 stood at 260,000 tons; potatoes, 550,000 tons; and soybeans, 139,000 tons. Despite increased yields due to mechanization, the use of hybrid seeds, and increased employment of fertilizers, the ROK runs a net deficit in food grains every year. In 2004, imports of cereals, mostly from the United States, amounted to $2.2 billion, consisting almost entirely of wheat and corn. Virtual self-sufficiency has been attained in rice production, but at a cost of nearly $2 billion per year in direct producer subsidies. In 2004, the ROK's agricultural trade deficit was $8.4 billion, fifth highest in the world.

Hemp, hops, and tobacco are the leading industrial crops. The ROK was the world's second-leading producer (after China) of chestnuts in 2004. The orchards in the Taegu area are renowned for their apples, the prime fruit crop; output in 2004 was 60,000 tons. Pears, peaches, persimmons, and melons also are grown in abundance. About two-thirds of vegetable production is made up of the mu (a large white radish) and Chinese cabbage, the main ingredients of the year-round staple kimchi, or Korean pickle.

Until the Korean War, tenant farming was widespread in the ROK. The Land Reform Act of June 1949, interrupted by the war, was implemented in 1953; it limited arable land ownership to three hectares (7.4 acres) per household, with all lands in excess of this limit to be purchased by the government for distribution among farmers who had little or no land. By the late 1980s, farms averaged 0.51 hectare (1.22.5 acres). The New Village (Saemaul) Movement, initiated in 1972, plays a major role in raising productivity and modernizing villages and farming practices.

The ROK has one of the most protected agricultural economies of the world, with high production costs supported by government purchases, and high tariffs protecting domestic producers from import competition. In 2004, a free trade agreement with Chile became effective, whereby trade duties were lifted on many of Chile's agricultural goods. The agreement was strongly opposed by the ROK's agricultural sector. The government has agreed to a farm support program worth $100 billion during 200411, whereby farmers will receive compensation for the anticipated losses caused by Chilean imports.

ANIMAL HUSBANDRY

The raising of livestock, traditionally a supplementary occupation among Republic of Korea (ROK) farmers, expanded rapidly during the 1970s and 1980s. In 2005, 2.3 million head of cattle were raised; pigs totaled 9 million and chickens, 110 million. Production in 2005 included (in thousands of tons): beef, 229; pork, 1,050; chicken, 402; eggs, 598; milk, 2,237; and butter, 5.3. The silkworm industry has declined radically since the mid-1970s. Although the dairy industry has been protected by import restrictions, an incremental lifting of such trade constraints is under way, which will eventually include livestock imports.

FISHING

Korean waters are some of the best fishing grounds in the world. The Sea of Japan off the east coast provides deep-sea fishing, with an average water depth of 1,700 m (5,600 ft). Warm and cold water alternate each season; the area is known for its Alaskan pollack, cod, squid, king crab, hairing crab, turban shell, and abalone. Off the west coast, the Yellow Sea has an average depth of 44 m (144 ft); major species include corker, hairtail, mackerel, surf clam, large clam abalone, lobster, Japanese paste shrimp, and blue crab. Off the south coast, the warm Pacific Ocean currents move toward the northeast, bringing diverse species such as anchovy, mackerel, oyster, mussels, shellfish, octopus, beka squid, laver, and sea mustard.

Industrialization and urbanization have led to a dramatic reduction in the number of families directly involved in fishing; from 1980 to 2000, the number of fishing families declined from 157,000 to 82,000. The fishing fleet consisted of 91,608 vessels in 2004, with a capacity of 724,979 gross tons. The size of the fleet has decreased by 4% in vessels and 22% in capacity since 2001. The depletion of fish resources in adjacent waters and the enforcement of the Exclusive Economic Zone has caused the ROK's domestic fishery production to decline since 2001.

According to the government, the total catch in 2004 was 2.52 million tons. Mackerel and anchovies account for about half the coastal fish landings; oysters are the principal aquacultural species; Alaskan pollack and tuna provide 80% of the deep-sea fish catch. Korean fishing bases have been established in Western Samoa and Las Palmas, and cuttlefish caught in waters off the Falkland Islands are now available. Since the declaration of 200 mi economic sea zones by many nations in the 1970s, the ROK has negotiated fishing agreements with several coastal nations to secure fishing rights in their waters. Seaweed is another important aquacultural product, with 560,642 tons harvested in 2004. Production of processed fishery products in 2004 totaled 1,528,795 tons, with frozen seafood accounting for 69%; canned seafood, 10%; ground fish meat, 6%; and other products, 25%.

The ROK exports seafood to about 65 countries throughout the world. Fishery exports typically include tuna, shellfish, frozen/canned products, and seaweed. Japan is the largest destination for exports, annually accounting for about 75% of ROK seafood exports by value. In 2004, fisheries exports were valued at $1,278,638,000. In 2004, China, Russia, and Japan were the origin for 60% of the ROK's fishery imports; Japan, China, and the European Union were the destination for 80% of the ROK's fishery exports. The rate of fish consumption in the ROK was 45.5 kg (100 lb) per person in 2002. Although domestic consumption is still largely tied to local production, the ROK imported $2,261,356,000 of fish products in 2004.

FORESTRY

Forests cover 6.2 million hectares (15.4 million acres), or about 63% of the Republic of Korea's (ROK) total area, but wood supplies are grossly inadequate to meet the needs of the fast-growing plywood and paper industries. The total commercial forest area covers 4,930,000 hectares (12,182,000 acres). Most of the original forests were destroyed during the Korean War and have been transformed into pine forests under a massive government reforestation program. Conifers now account for 45% of the forest; broad-leaved species (such as oak), 28%; and mixed forests, 27%. About 21% of all forested land is nationally owned and is the focus of extensive reforestation efforts. The government supported local efforts to invest in forest development projects abroad. According to the Food and Agriculture Organization, estimated production of roundwood in 2004 was 4,136,000 cu m (146 million cu ft); sawnwood, 4,380,000 cu m (154 million cu ft); and wood-based panels, 3,720,000 cu m (131.8 million cu ft). Softwoods (mostly red pine and larch) accounted for about 80% of production; hardwoods (mainly oak), 20%. Because of low quality, domestic roundwood is mainly used for chopsticks, crates, match wood, and wood chips. Whereas plywood and wood pulp were once traditional export items, the role of forestry products in generating export earnings is now shrinking. The ROK now imports about 95% of its forest products. Imports of forest products amounted to nearly $3.7 billion in 2004 (primarily from Indonesia, Malaysia, and the United States). Imports have been boosted by a growing demand for single and multifamily wood frame houses.

MINING

The Republic of Korea (ROK) does not have significant natural resources, and its limited supplies of iron ore, coal, copper, lead, and zinc have to be supplemented by imports. In 2004, 496,000 metric tons of iron ore and concentrate (gross weight) were produced, up from 289,000 metric tons in 2003. Output of mined zinc in 2004 was 14 metric tons. There was no recorded mined zinc output in 2003. Lead mine output was 40 metric tons in 2004. As with zinc, there was no recorded mined lead output in 2003. No mined copper was produced in 2004. The ROK also produced the metals bismuth, cadmium, gold, nickel, and silver. Among industrial minerals, the ROK produced barite, hydraulic cement, diatomaceous earth, feldspar, graphite, kaolin, limestone, mica, nitrogen, quartzite, salt, sand (including glass sand), soda ash (manufactured), sulfur, and talc and pyrophyllite. No barite was produced in 19972000 or in 2004, and no fluorspar was produced in 19982000 or 2004. The production of chemicals and steel ranked third and fifth, respectively, among the country's leading industries in 2002. Steel ranked fourth among export commodities.

After four years of prospecting, Ivanhoe Mines Ltd. of Canada announced the discovery of two epithermal gold-silver veins near Haenam, Cholla Province, with potentially high-grade gold-silver mineralization. The government continued to support state-owned or privately owned enterprises that invested in such mineral-rich countries as Australia, Brazil, Canada, and Chile. The Korea Development Bank sold off the government's equity in Pohang Iron and Steel Co. Ltd. (POSCO), which had diversified interests and holdings, including a high-grade iron ore deposit in the Pibara region of Western Australia with proven reserves of 200 million tons. Two-way trade with North Korea continued to grow.

ENERGY AND POWER

South Korea has no known reserves of oil or natural gas, and must rely on imports to meet all its oil and natural gas needs. The country does have recoverable coal deposits, which are the country's primary source of domestic fossil fuel output, but the deposits are small and South Korea must import the bulk of the coal it consumes.

South Korea produced 3,657,000 short tons of coal in 2002, all of it anthracite. However, with recoverable coal reserves estimated at only 86 million short tons as of 2000, demand for coal far exceeded output in 2002 at 79,710,000 short tons. Thus, imports made up the difference. In 2002, South Korea's coal imports came to 75,529,000 short tons. Most of the domestic coal is low-quality anthracite and is used mainly for home cooking and heating; imports of higher-grade coal are required for industry.

In 2004, petroleum product imports averaged an estimated 2.263 million barrels per day, while consumption that same year averaged an estimated 2.07 million barrels per day. Because domestic demand was less than the volume imported, South Korea was able to export an estimated average of 630,100 barrels per day in 2004.

Demand for natural gas in 2003 was estimated at 20.92 billion cu m, with imports that same year estimated at 21.11 billion cu m.

South Korea's electric power generating capacity came to 54.463 million kW in 2002. Of that total, conventional thermal fueled capacity accounted for 38.581 million kW, followed by nuclear power at 13.716 million kW, hydroelectric at 1.614 kW, and geothermal/other at 0.552 million kW. Electric power output in 2002 totaled 287.994 billion kWh, with conventional thermal fuel and nuclear plants producing 170.873 billion kWh and 113.148 billion kWh, respectively. Hydroelectric power output that same year came to 3.201 billion kWh, with 0.772 billion kWh produced by geothermal/other sources. Electric power consumption for 2002 came to 267.834 billion kWh. In 2003, electric power output rose to 322.5 billion kWh, while consumption rose to 293.6 billion kWh. Electricity demand is projected to rise 3.4% per year on average through 2015.

INDUSTRY

Until the 1960s, manufacturing was chiefly confined to production for domestic consumption, and a substantial proportion of the output was produced by handicraft methods in homes and small factories. While textiles, apparel, and footwear were the first modern industries to be developed, heavy industry grew rapidly over the next four decades, promoted by a series of development plans. In the 1980s, the manufacture of metals, machinery, and electronic and other equipment overtook textile production as the country's leading industries in terms of value, employment, and export earnings. In turn, in the 1990s, high-tech electronics became the leading sector as South Korea became the world's leading semiconductor manufacturer as well as the leading shipbuilder. Prosperity brought higher labor costs, and in the past decade, South Koreans have begun outsourcing productionparticularly textiles and footwear but also more recently "commoditized" consumer electronics. During the past decade, increasing domestic production costs have encouraged the relocation of production plants in some industriesparticularly textiles and footwear but more recently also consumer electronicsto overseas locations in Southeast Asia, Eastern Europe, China, Mexico, and Turkey. The Republic of Korea (ROK) now ranks as a major Asian producer of electronics, automobiles, chemicals, ships, steel, textiles, clothing, shoes, and processed food. In 2002, industrial production grew 7.3% (although excluding the 21.4% growth in semiconductors, it grew only 5.8%). Other high-value-added sectors showed above-average growth: Automobile production rose 8.1%; machinery equipment, 7.9%; and wearing apparel and fur articles, 7.4%. The lower-value-added sectors of textiles and basic metals showed the strains of global overcapacity and low-cost competition. Textiles declined 6.6% and basic metals increased a weak 4.6%. Long-term plans for the textiles and clothing sectors include a shift from the current mix of 5% clothing to 30% clothing by 2010 as part of the goal of doubling export value from the 2002 level of $15.7 billion. In 2005, the industrial production growth rate stood at 3.9%.

Manufacturing in the ROK has been dominated by a few dozen vertically integrated industrial conglomerates, known as chaebol, which have privileged access to financing and set the standards for contracting and procurement throughout the country. In 1995, the 30 largest chaebol accounted for 16.2% of GNP (up from 13.5% in 1992). In 1999, the debts of the four biggest chaebol stood at approximately $140 billion. However, many of the country's chaebol have racked up huge debts in order to finance industrial expansion, some more than five times their annual intake. Asset sell-offs by the four biggest chaebol, including Hyundai, Samsung, LG, and SK, amounted to $15 billion in 1999. By 2005, the government had instituted a program of corporate restructuring designed to make the business activities of Korean companies, including the chaebol, more transparent and more accountable to shareholders, but this was still a work in progress. Due to reform measures and market realities, the sell-off of some chaebol constituent companies has weakened chaebol dominance in the economy at large. By 2005, approximately 12 of South Korea's top 30 chaebol prior to 1998 had ceased to exist as coherent entities.

Joint-venture production with major US and Japanese car companies, growing domestic demand, and successful penetration of overseas markets by Korean-owned corporations have fueled steady growth in automobile output. The production of passenger cars more than doubled from 1990 to 1995. Total vehicle production in 1995 was 2,526,400, or 5% of world output. Vehicle production in 1998 was about two million, or one-eighth of all Organisation for Economic Co-operation and Development countries. South Korea's automotive industry is dominated by Hyundai, which accounted for 48% of all passenger cars, trucks, and buses domestically produced in 1995. Kia accounted for 25% of production that year; Daewoo, 18%; and others, 9%. In 2004, South Korea manufactured 3.4 million automotive vehicles, making it the sixth-largest automobile manufacturer in the world, after the United States, Japan, Germany, China, and France. The total size of the automotive market in 2004 was $32 billion, a 7.6% increase over 2003.

In 1998, the ROK was the second-largest world producer of new ships; in 2002, it was the world leader. In 2002, Korean shipbuilders got orders for 230 ships (2.6 million CGT), delivered 210 ships (6.8 million CGT), and had a backlog of 496 ships (17.1 million CGT).

Production of electronics has shifted from assembly of imported parts to the manufacture of competitive high-technology products, such as office automation systems, for both the international and domestic markets. Daewoo Electronics (the second-largest chaebol, with substantial debts), LG, and Samsung Electronics dominate the production of consumer electronics; the televisions, videocassette recorders, stereos, refrigerators, washing machines, and microwave ovens produced by these companies are sold across the world. Daewoo Electronics also operates 36 overseas factories and planned to capture 10% of the world's market in consumer electronics by 2000. Samsung Electronics was the world's largest producer of computer memory chips by 1996. By 2005, South Korea's electronics industry accounted for 4% of world output. Components, and in particular semiconductors, accounted for 41% of the total. South Korea is also a major producer of radio communications, including cell phones; the sector accounting for 25% of domestic output. In 2005, South Korea was the world's leader in the production of thin film transistor liquid crystal displays (LCDs). Korean companies had a 46% share of the global LCD market in 2004, followed by Taiwan.

By 2002, the ROK had become the world's fifth-largest steel producer, up from 10th in 1989, accounting for 4.8% of the world total. P'ohang Iron and Steel Co. (POSCO) produces about half of the nation's total steel output and is the world's second-largest steel mill, producing 27.4 million tons in 2002. There are about 200 steel companies in South Korea. From January to November 2005, South Korea's steel output was 43.6 million metric tons, up 0.4% from 2004.

SCIENCE AND TECHNOLOGY

The Republic of Korea (ROK) has often been compared to its powerful neighbor, Japan, but is said to be about 10 years behind that nation in scientific and technological innovation. However, in areas such as semiconductor memory chips, cars, and steel, Korean industries provide innovation equal to that in the United States and Japan.

In 2002, high-technology exports were valued at $46.438 billion and accounted for 32% of all manufactured exports. Research and development (R&D) spending in 2002 totaled $23,452.761 million, or 2.91% of GDP, with business accounting for the largest portion at 72.2%, followed by the government at 25.4%, higher education at 2%, and foreign sources at 0.4%. In that same year, there were 2,979 researchers per million people actively engaged in R&D.

Two organizations provide most of the main support for Korean science and technology. The Korean Institute of Science and Technology (KIST) was started in 1965 with the help of the United States. The Korean Advanced Institute of Science and Technology (KAIST), the leading university in scientific research, attracts researchers from all over the world and is considered one of the top universities in the world for electrical and molecular engineering and computer science. In 198797, science and engineering students accounted for 32% of college and university enrollments. In 2002, of all bachelor's degrees awarded, 37.3% were in the sciences (natural, mathematics and computers, and engineering).

DOMESTIC TRADE

The small family store, traditional in Korea, is giving way to chain stores and supermarkets. Large, modern department stores now operate in Seoul, Pusan and other major urban centers, although some trade in rural areas is still carried on by itinerant peddlers, mobile sidewalk stands, and periodic market fairs. Black markets offering all manner of foreign goods are much in use; haggling over prices is common. Seoul is the nation's wholesaling center. Franchising has a firm ground in the restaurant and retail markets. Direct marketing, in particular door-to-door sales, is still fairly popular as well.

Most private offices are open from 9 am to 6 pm weekdays. Some businesses are open from 9 am to 1 pm on Saturdays, but Korean companies are moving toward the five-day workweek. Korean government offices keep similar hours. Banking hours are 9 am to 5 pm, Monday through Friday. Department stores are open from 10:30 am to 8 pm seven days a week, although typically one day a month (usually a Monday) department stores are closed (closings vary according to each store).

FOREIGN TRADE

Electric and electronic products, automobiles, various types of machinery, and chemicals are the Republic of Korea's (ROK) most important commodity exports. The ROK's other major exports include woven fabrics and ships. In percentage terms, in 2004 the primary exports were electric and electronic products (34.6% of all exports); passenger cars (9.7%); machinery and equipment (8.9%); and chemicals (8.1%).

Oil and related products, machinery, semiconductors, electronic machinery, and raw materials are major imports, as most raw inputs for the country's industrial sector are imported. A lack of small companies and technological research compels the ROK to import components and production machines for the cars, videocassette recorders, computer chips, and ships that it manufactures. In percentage terms, in 2004 South Korea's primary imports were electric and electronic machinery (22.3% of all imports); crude petroleum (13.3%); machinery and equipment (12.6%); and semiconductors (10.5%).

The United States, China, and Japan continued to be the ROK's chief trading partners by far, although potential new markets in Eastern Europe and the rest of Asia are being explored. Saudi Arabia and Indonesia have been major providers of oil and liquefied natural gas. Australia is a leading supplier of iron ore, coal, and grains. In percentage terms, the leading markets for South Korea's goods in 2004 were China (19.6% of all exports); the United States (16.9%); Japan (8.5%); and Hong Kong (7.1%). The leading suppliers in 2004 were Japan (20.6% of all imports); China (13.2%); the United States (12.8%); and Saudi Arabia (5.3%).

BALANCE OF PAYMENTS

Robust export performance turned the Republic of Korea's (ROK) overall balance-of-payments deficit into a $1.7 billion surplus in 1986, which grew to $12.1 billion in 1988. The balance-of-payments surplus later declined; in 1990, the balance of payments had a deficit of $274 million because of declining exports, rising imports, and a current account deficit. The deficit grew to over 4% of GDP in 1996, before subsiding in 1997 due to a shrinking currency base.

At the end of 1998, South Korea had $20.2 billion in net outstanding loans, but by the end of 1999, it had become a net creditor. By the end of April 2001, $33.3 billion in outstanding loans were owed the country.

Merchandise export revenue in 2004 rose by 30.6% year-on-year to $257.8 billion, and the value of merchandise imports increased by 25.2% to $219.6 billion. The resulting merchandise trade surplus for 2004 was $38.2 billion, an increase of $16.2 billion compared with 2003. In 2005, the current account surplus was estimated at $14.32 billion. The current account surplus was forecast to decline to an average of 1.3% of GDP in 200607 from an estimated 2.4% of GDP in 2005.

BANKING AND SECURITIES

In 2000, finance, insurance, real estate, and business services accounted for over half of GDP. The Bank of Korea serves as the central bank, the bank of issue, and the depository for government funds. It was established on 12 June 1950. The banking system is regulated by the Financial Supervisory Service. Other banking services are provided by the state-run Korea Development Bank, the Export-Import Bank of Korea, and nine state-run specialized banks. Commercial banking operations in 1999 were handled by 11 nationwide commercial banks, 10 provincial banks, and 42 foreign

Country Exports Imports Balance
World 193,817.3 178,825.9 14,991.4
China 35,109.7 21,909.1 13,200.6
United States 34,368.7 24,934.8 9,433.9
Japan 17,276.1 36,313.0 -19,036.9
China, Hong Kong SAR 14,653.7 2,735.4 11,918.3
Other Asia nes 7,044.6 5,879.6 1,165.0
Germany 5,603.3 6,821.6 -1,218.3
Singapore 4,636.0 4,089.7 546.3
United Kingdom 4,094.2 2,703.2 1,391.0
Malaysia 3,851.8 4,249.1 -397.3
Indonesia 3,377.6 5,212.3 -1,834.7
() data not available or not significant.
Current Account 12,321.0
     Balance on goods 22,161.0
         Imports -175,476.0
         Exports 197,637.0
     Balance on services -7,611.0
     Balance on income 596.0
     Current transfers -2,824.0
Capital Account -1,402.0
Financial Account 14,530.0
     Direct investment abroad -3,429.0
     Direct investment in Korea, Republic of 3,222.0
     Portfolio investment assets -4,333.0
     Portfolio investment liabilities 22,653.0
     Financial derivatives -360.0
     Other investment assets -3,496.0
     Other investment liabilities 274.0
Net Errors and Omissions 342.0
Reserves and Related Items -25,791.0
() data not available or not significant.

banks. Total assets of Korea's commercial banks at the end of 1998 were $300 billion.

In 1986, as part of the government's economic stabilization program initiated in 1980, all of the five commercial banks previously under government control were denationalized. In 1993, the Korean government began a five-year financial-sector reform program, including the deregulation of interest rates and liberalization of foreign exchange. During the financial crisis of late 1997 and 1998, nonperforming loan levels skyrocketed. The credit hunger of South Korean corporations can be explained in part by the failure of the stock exchange to generate the equity capital they needed. On 25 June 1998, the Korean government ordered the takeover of five failing banks, and seven other banks were put on a warning list. Of the seven, five merged, and two continued operations. Banks directly affected by these measures included Shinhan Bank, the Housing and Commercial Bank, Kookmin Bank, KorAm Bank, Hana Bank, and Hanvit Bank, among others. In 1998, efforts continued to stabilize the banking sector by increasing the capital adequacy ratio to 8%, and the government encouraged lending to small and medium-sized companies as opposed to the large conglomerate chaebol. By 2003 the government had nationalized eight failing private banks, spending $120 billion on bailouts. The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $41.4 billion. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $362.2 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 4.7%.

The Korean Stock Exchange (KSE), a share-issuing private corporation, functioned as the country's only stock exchange through 1998, when the Korea Securities Dealers Automated Quotations (KOSDAQ) began holding stock transactions for small and medium-sized firms. Direct access to the stock market by foreigners has been allowed since 1992, with Seoul implementing unrestricted foreign access in 1998 and international links established in 2000. As of 2004, a combined total of 1,573 companies were listed on the KSE and KOSDAQ, which had a combined market capitalization of $428.649 billion that year. In that same year, the Korean Composite Stock Price Indexes (KOSPI) rose 10.5% from the previous year to 895.9.

INSURANCE

The insurance industry in the Republic of Korea is overseen by the Financial Supervisory Service. In 2003, there were us$59.758 billion direct insurance premiums written, with us$41.998 billion of the total life insurance and us$17.760 billion nonlife insurance. In 2002, leading life insurance companies included Samsung Life, Korea Life, Kyobo Life, and Allianz. Leading nonlife insurance companies in 2003 included Samsung, Hyundai, Dongbu, LG, and Oriental. Workers' compensation, medical insurance, third-party automobile liability, nuclear and aviation liability, and unemployment insurance are all compulsory.

PUBLIC FINANCE

The US Central Intelligence Agency (CIA) estimated that in 2005, South Korea's central government took in revenues of approximately $184.0 billion and had expenditures of $187.4 billion. Revenues

Revenue and Grants 141,864 100.0%
     Tax revenue 95,793 67.5%
     Social contributions 21,102 14.9%
     Grants
     Other revenue 24,969 17.6%
Expenditures 125,406 100.0%
     General public services 31,635 25.2%
     Defense 15,702 12.5%
     Public order and safety 6,331 5.0%
     Economic affairs 26,983 21.5%
     Environmental protection
     Housing and community amenities 2,740 2.2%
     Health 555 0.4%
     Recreational, culture, and religion 1,272 1.0%
     Education 22,218 17.7%
     Social protection 17,969 14.3%
() data not available or not significant.

minus expenditures totaled approximately -$3.4 billion. Public debt in 2005 amounted to 20.5% of GDP. Total external debt was $188.4 billion.

The International Monetary Fund (IMF) reported that in 2001, the most recent year for which it had data, central government revenues were w141,864 billion and expenditures were w125,406 billion. The value of revenues was us$110 million and expenditures us$97 million, based on a market exchange rate for 2001 of us$1 = w1,290.99 as reported by the IMF. Government outlays by function were as follows: general public services, 25.2%; defense, 12.5%; public order and safety, 5.0%; economic affairs, 21.5%; housing and community amenities, 2.2%; health, 0.4%; recreation, culture, and religion, 1.0%; education, 17.7%; and social protection, 14.3%.

TAXATION

The principal sources of tax revenue are customs duties, corporate taxes, a defense tax surcharge imposed on corporations, a value added tax (VAT) of 10%, personal income taxes, and excise taxes ranging from 520%. As of 2005, the rates for corporate taxation ranged from 13% on taxable income up to w100 million to 25% on income over w100 million. In addition, there is a resident tax surcharge of 10% and a special agriculture and fishery tax imposed on corporations having taxable income over w500 million. There is a 15% withholding tax on interest. Dividends are not subject to a withholding tax. Dividends paid to a domestic corporation by another domestic corporation are deductible from taxable income. However, foreign companies without a domestic business operation are subject to a 25% withholding rate on their dividends. Royalty payments are treated the same as dividends. Capital gains are treated as income and taxed at the corporate rate. Tax relief for up to five years, with a 50% exemption in the ensuing two years, is offered to new industries and corporations that are foreign exchange earners. Those in electronics receive seven years of exemption, and three years at 50%.

The personal income tax is graduated, with a top rate of 38.5%. Capital gains accrued to individuals are treated as income and are taxed at the same rate, although special rates can apply to certain gains on listed shares. Nonresidents declaring capital gains from securities are taxed at 11% of the sale price or 27.5% of the difference between the sale price and the original cost, whichever is the least. The VAT applies to most transactions; however, exports, international transport, services performed outside the country, fertilizers and agricultural equipment and machinery are zero rated. The leasing of real estate, unprocessed foodstuffs, financial and insurance services, and agricultural and livestock products are exempt.

CUSTOMS AND DUTIES

As of 2000, South Korea had an average tariff of 7.9%. However, tariffs remain high on a number of agricultural and fishery products, at 30100%. South Korea plans to further reduce tariffs in the future. Other import taxes include a value-added tax of 10% and excise taxes ranging from 15100%. The special excise tax on consumer electronic goods and automobiles was cut by 30% in 1998. There were 57 items subject to quotas and 29 items subject to excise tariffs in 1999. The Information Technology Agreement (ITA) dropped most IT tariffs by 2000, with the remainder phased out by 2004.

FOREIGN INVESTMENT

The Foreign Investment Promotion Act (FIPA) and related regulations have governed foreign investment in the Republic of Korea since May 1998, when a five-year liberalization plan was announced covering a total of 11 sectors, including real estate, financial services, and petroleum. The policy emphasis shifted from "control and regulate" to "promote and support." Tax benefits and incentives were provided for foreign investors in high-tech and services sectors. In December 2000, the ceiling on foreign ownership was raised from 33% to 49% when Korea Telecomnow simply KTwas offered for privatization. KT was fully privatized in May 2002, albeit with SK Telecom as its largest shareholder. The Japanese share of foreign investments fell from about 50% in 1987 to 5.7% in 1998, as Japanese investors have been increasingly attracted to new centers of economic growth in Southeast Asia.

As of 2002, European Union (EU) countries had the largest cumulative investment in South Korea ($22.8 billion), followed by the United States with $21.8 billion. To facilitate further technology transfer, the government offers particular incentives to foreign companies in more than 500 categories of high-technology industries. Four free export zones geared toward highly technical business activities have been established at Masan (near Pusan), Iri (near Kunsan), Daebul, and Iksan, to provide additional incentives for investment in favored industries. Six industrial parks exist, which are for the exclusive use of Korean firms with heavy foreign investment.

In 1998, net foreign direct investment (FDI) was $0.7 billion, the balance of inflows was $5.4 billion and outflows $4.7 billion. Net portfolio equity investment was a positive $3.9 billion. In 1999 and 2000, FDI inflow was $9.3 billion in both years, and net FDI was $5.1 billion and $4.3 billion, respectively. Net portfolio investment was $11.8 billion in 1999 and $12.6 billion in 2000. After the 11 September 2001 terrorist attacks on the United States, FDI inflow dropped 62% to $3.5 billion, producing a net inflow of only $1.1 billion. For 2002, net FDI inflow turned negative (-$0.7 billion) and net portfolio investment was a low $1.5 billion.

FDI inflow to South Korea accelerated to $12.8 billion in 2004, twice the amount in 2003. The United States had the largest single-country share of FDI in the country, at $32.3 billion, or about 31.1% of Korea's total stock of FDI since the 1960s. The EU (25 countries) had invested $30.7 billion (29.5% of the total) by 2004, followed by Japan with $15.5 billion (14.9%). Total cumulative stock of inward FDI as of 2004 amounted to $103.9 billion. Overall, FDI increased 97.4% year-on-year in 2004, to $12.8 billion, the fastest pace of inward FDI seen since 1999, just following the 199798 financial crisis. Total FDI outflow amounted to $4.3 billion in 2004, approximately $1.6 billion going to China and $1 billion to the United States. Total cumulative stock of FDI outflow by 2004 amounted to $38.7 billion.

ECONOMIC DEVELOPMENT

The Republic of Korea (ROK) has a market economy in which both private enterprise and foreign investors play an important role. From 1962 to 1997, overall economic development was guided by the Economic Planning Board and a series of five-year plans. The Korean economy was devastated by the Korean War, even requiring foreign food aid. As late as 1965, per capita income was only $88 a year. Since 1965, South Korea has been transformed from an underdeveloped agricultural economy to a leading newly industrialized country (NIC) to a leader in the new information technology (IT) economy. Nominal GDP was $3 billion in 1965; in 2003, it was projected at $514 billion, 171 times higher. In 2004, South Korea joined the trillion-dollar club of world economies.

The seventh five-year economic and social development plan for 199296 aimed at establishing the ROK as an advanced industrialized economy by the year 2000. More specific goals included improving social and economic equity, continued liberalization, improving industrial and export competitiveness, as well as strengthening the role of the private sector while reducing government intervention in economic management, especially in the financial sector. The plan targeted an annual GDP growth rate of 7% and a decline of consumer price inflation to 3%. The plan was overtaken by the Asian financial crisis. South Korea was assisted in weathering the crisis of confidence with a $58 billion international support program mobilized through the IMF, the World Bank, and the Asia Development Bank (ADB). In May 1998, the government introduced a five-year liberalization program covering 11 economic sectors, including the previously closed petroleum, insurance and financial services sectors. The ROK's recovery from the Asian financial crisis was remarkably strong, aided by a show of international confidence and its government's embrace of trade and investment liberalization reforms. However, the collapse of the dot.com boom and the global economic slowdown that began in 2001, combined with the aftermath of the 11 September 2001 terrorist attacks on the United States, dealt serious blows to the economy's forward momentum. Progress in reducing the share of nonperforming loans (NPLs) in the financial sector and reducing dependency on foreign borrowing were brought to a halt. At the end of March 2001, total external liabilities were at a record $137 billion. However, the ROK continued to maintain its net creditor position, as it has since September 1999. Foreign assets totaled an estimated $188 billion. Reserves of foreign exchange and gold amounted to $220.1 billion in 2005. As of June 2005, external debt stood at $188.4 billion.

The ROK government in 2003 announced that the four pillars of its development strategy were (1) consistently promoting technological innovation; (2) continued development of a fair and transparent market system; (3) social and cultural norms based on trust; and (4) peace and prosperity in East Asia. President Roh Moo Hyun, elected in 2003, campaigned on a proreform image and platform, but the chaebol (large conglomerates) have used their clout as exporters and investors to resist further reform. Major foreign acquisitions in the financial sector by 2006 prompted a backlash against further market opening, although this remains desirable, especially in the service sector. In order for the economy to grow at a faster rate in the long-term, South Korea, despite its skilled workforce and large middle class, must develop a strong and diverse local economy instead of relying disproportionately on exports for growth, which benefit the chaebol and stifles domestic demand.

SOCIAL DEVELOPMENT

The devastation of the Korean War left 348,000 war widows, most of them with dependent children, and 100,000 war orphans. Some 595,260 homes were destroyed, 5,000 villages wiped out, and many large cities badly damaged. Military relief payments consist mainly of financial support to veterans and their families.

A social insurance system provides old-age, disability, and survivors' benefits to all residents ages 1859. There is a separate system for public employees, school teachers, self-employed individuals, and military personnel. Workers and employers contribute 4.5% of earnings and payroll. Retirement is set at age 65 but is gradually increasing. Unemployment insurance covers all employees younger than 65 years of age.

Conservative Confucian tradition encourages married women to remain at home. Women continue to suffer legal and societal discrimination. Despite equal opportunity laws, very few women achieve high levels of professional success. The wage of the average female worker is roughly half that earned by a male counterpart. Violence against women, domestic abuse, and child abuse are prevalent. Prostitution is illegal but widespread. Divorce remains socially unacceptable in most sectors of Korean society, and this leads many women to remain in abusive marriages.

Korean citizenship is determined exclusively by genealogy, and as a result, many Chinese born and raised in Korea are deprived of citizenship rights. Human rights are generally respected by the government. Some abuses have been reported involving detainees, but these are declining.

HEALTH

The substantial improvement in health care is directly related to improvement of diet, a rise in living standards, and the development of health and medical programs. Since the late 1970s, medical security, in the form of medical insurance and medical aid, has been expanded to cover a substantial portion of the population. The national medical insurance system was expanded in 1989, covering 94% of the population. About 5.4% of the GDP went to health expenditures. In the mid-1990s, there were 236 general hospitals, 351 hospitals, 6 dental hospitals, 12,629 clinics, 6,708 dental clinics, 269 maternity clinics, 53 herb doctor hospitals, and 4,062 herb doctor clinics. As of 2003, there were an estimated seven physicians per 100,000 people. Approximately 92% of the population had access to safe drinking water and 63% had adequate sanitation.

The fertility rate was 1.4 children per woman surviving her childbearing years. Approximately 4% of all births were of low birth weight. About 79% of married women (ages 1549) used contraception. Immunization rates for children up to one year of age were tuberculosis, 72%; diphtheria, pertussis, and tetanus, 74%; polio, 79%; and measles, 93%. The 2005 infant mortality rate was 6.28 per 1,000 live births and the general mortality rate was 6 per 1,000 inhabitants.

The HIV/AIDS prevalence was 0.10 per 100 adults in 2003. As of 2004, there were approximately 8,300 people living with HIV/AIDS in the country. There were an estimated 200 deaths from AIDS in 2003.

Leading causes of death were related to cardiovascular disease and deaths caused by traffic motor vehicle accidents. Life expectancy was 76.85 years in 2005.

HOUSING

After liberation in 1945, southern Korea faced a housing shortage greatly compounded by high population growth rates. A housing shortage continues to plague the nation, especially in Seoul, Pusan, and other large cities, where shantytowns house many rural arrivals. The 1985 census counted 9,588,723 households but only 6,274,462 housing units, a deficit of 3,314,261. According to 2002 estimates, there were 11,892,000 housing units nationwide and 12,099,000 households. The same year, about 543,000 new housing units were built. Most new housing is in apartment buildings.

EDUCATION

The Education Law of 1949 provided for a centralized system under the control of the Ministry of Education and made six-year elementary schools free and compulsory for children between 6 and 12 years of age. Children attend middle school for three years, and subsequently attend either general academic high school or vocational high school for the remaining three years. In 2001, about 80% of five-year-olds were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 100% of age-eligible students. The same year, secondary school enrollment was about 87% of age-eligible students. It is estimated that about 97% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 31:1 in 2003.

The leading government university is Seoul National University. The principal private institutions, all of them in Seoul, are Korea, Sung Kyun Kwan, Yonsei, Hanyang, Chungang, and Ewha universities; the last named is one of the largest women's universities in the world. The country had a total of 121 colleges and universities in 1996, along with 335 graduate schools. In 2003, about 85% of the tertiary-age population were enrolled in some type of higher education program. It has been estimated that nearly all men attend some type of higher education program, while only about 64% of women enroll in a program. The adult literacy rate for 2002 was estimated at about 97.9%.

As of 2003, public expenditures on education were estimated at 4.2% of GDP, or 15.5% of total government expenditures.

LIBRARIES AND MUSEUMS

In 2002, the Central National Library, founded in 1923, had approximately 3.8 million volumes. Most other sizable libraries in the Republic of Korea (ROK) are found at universities. The largest academic collection is at the Seoul National University Library (2.2 million volumes).

The National Museum, with centers in Seoul, Kyongju, Kwangju, Puyo, Chinju, Chunju, Chongju, and Kongju, contains art objects reflecting more than 5,000 years of cultural history, including statuary pieces, ceramics, and painting. A major private museum is the Ho-Am Art Museum in Seoul. The National Museum of Modern Art in Seoul presents many special exhibits as well a permanent collection. The National Science Museum of Korea, completed in 1990 in Daejon, is one of the country's most recent cultural sites. The ROK also possesses collections of early printing, dynastic histories, and art in its palaces and Buddhist temples and in university, college, and public libraries.

MEDIA

In 2003, there were an estimated 538 mainline telephones for every 1,000 people. The same year, there were approximately 701 mobile phones in use for every 1,000 people.

The Korea Broadcasting System operates two television and six radio networks. There are privately owned networks, including a few operated by religious organizations. As of 2004, there were 58 AM and 150 FM radio stations. Television broadcasting began in 1956. In 2004, there were 64 television stations, including the American Forces Network Korea, a station designed for US military but watched by many citizens. In 2003, there were an estimated 1,034 radios and 458 television sets for every 1,000 people. About 282.2 of every 1,000 people were cable subscribers. Also in 2003, there were 558 personal computers for every 1,000 people and 610 of every 1,000 people had access to the Internet. There were 894 secure Internet servers in the country in 2004.

Most of the leading newspapers are published in Seoul. The leading Korean-language newspapers, with their estimated daily circulations (in 2002), include Dong-A Ilbo, 2,150,000; Joong-ang Ilbo, 2,020,000; Hankook Ilbo, 2,000,000; Choson Ilbo, 1,960,000; Kyung-hyang Shinmun, 1,478,540; and Seoul Shinmun, 700,000.

Though most radio and television stations and newspapers are state supported, the government is said to have abandoned direct control over the news media, though some journalists report aggressive government lobbying to soften criticism.

ORGANIZATIONS

Clan and county associations are a conspicuous aspect of Korean social life. A traditional type of organization with a primarily economic function is the key, a mutual loan association formed to provide funds for a specific and typically short-term purpose, such as to defray the expenses of a wedding or funeral. The National Agricultural Cooperative Federation comprises millions of farmers who work in cooperatives. The Korea Chamber of Commerce and Industry is based in Seoul. Other groups include the Agricultural and Fishery Marketing Corporation and the Federation of All Korean Trade Unions. The Consumers' Union of Korea is active.

There are a number of cultural and arts organizations, including the Academy of Korean Studies, the Korea Foundation, and the National Academy of the Arts. Organizations for advancement and research in science include the Korean Medical Association and National Academy of Sciences of the Republic of Korea.

National youth organizations include the Boy Scouts and Girls Scouts of Korea, Free Asian Youth Alliance, Korea Young Buddhists Federation, Korean 4-H, Junior Chamber, Korean Student Christian Federation, Korean World University Service, YMCA/YWCA, Seoul Association for Youth Service, and the Young Christian Workers of Korea. There are several sports associations throughout the country. Among the most notable are the base offices of the International Judo Federation and the World Tae Kwon Do Federation.

National organizations for women include the Korean Association of University Women, Korean Institute for Women and Politics, and the Korean Women's Institute.

The Korea Welfare Foundation works with children and youth, the handicapped, and the elderly. International organizations with active chapters within the country include Amnesty International, Habitat for Humanity, Caritas, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

Major tourist attractions include Seoul, the former royal capital of the Yi (or Li) Dynasty, and Kyongju, with its treasures from the ancient kingdom of Silla. Along the eastern coastline, from Hwajinpo to Busan, are popular resorts with skiing in the winter and swimming and water sports in the summer. Football (soccer) and baseball are the most popular modern sports. Traditional sports for men are wrestling, archery, kite fighting, and tae kwon do (a martial art). Popular games include paduk, the Korean name for Japan's board game go; changgi, or Korean chess, with pieces different from the European form; and yut, or Korean dice, played with four wooden sticks. Seoul hosted the 1988 Summer Olympic Games.

There were 4,753,604 foreign visitors in 2003. The number of hotel rooms totaled 56,196 in 2003, with a 51% occupancy rate. Tourist receipts reached $6.9 billion that year. Visitors to the Republic of Korea must carry a valid passport and an onward/return ticket. Visas are not required for citizens of nations that have visa exemption agreements with the Republic of Korea. Visitors from the United States, Australia, Canada, and 60 other nations also not need visas.

In 2005, the US Department of State estimated the daily cost of staying in Seoul at $308, and in Chinae, $81.

FAMOUS KOREANS (ROK)

The dominant political figures of the contemporary period in the Republic of Korea (ROK) have been Syngman Rhee (18751965), president from 1948 to 1960, and Park Chung-hee (191779), president from 1963 until his assassination in 1979. Chun Doo Hwan (Chon Du-hwan, b.1931) became president in 1981. Other well-known modern figures include Kim Chong-p'il (b.1926), prime minister, 197175; Bishop Daniel Chi (Chi Hak-sun, b.1921); and Kim Dae Jung (Kim Tae-jung, b.1925) and Kim Young Sam (Kim Yong-sam, b.1927), prominent opposition leaders during the 1970s and 1980s who both went on to become president. Kim Dae Jung won the 2000 Nobel Peace Prize for his policy of engagement with North Korea. Roh Moo Hyun (b.1946) became president in 2003. The Rev. Sun Myung Moon (Mun Son-myong, b.1920), a controversial evangelist and founder of the Tong-il (Unification) Church, and Kyung Wha Chung (Chung Kyung-wha, b.1943), a violinist, are both well known internationally.

DEPENDENCIES

The Republic of Korea has no territories or colonies.

BIBLIOGRAPHY

Altbach, Philip G. and Toru Umakoshi (eds.). Asian Universities: Historical Perspectives and Contemporary Challenges. Baltimore, Md.: Johns Hopkins University Press, 2004.

Armstrong, Charles K. (ed.). Korean Society: Civil Society, Democracy, and the State. New York: Routledge, 2002.

Aspalter, Christian. Conservative Welfare State Systems in East Asia. Westport, Conn.: Praeger, 2001.

Bergsten, C. Fred and Inbom Choi. The Korean Diaspora in the World Economy. Washington, DC: Institute for International Economics, 2003.

Buzo, Adrian. The Making of Modern Korea. New York: Routledge, 2002.

Connor, Mary E. The Koreas: A Global Studies Handbook. Santa Barbara, Calif.: ABC CLIO, 2002.

Dudley, William (ed.). North and South Korea: Opposing Viewpoints. Farmington Hills, Mich.: Greenhaven Press, 2003.

Edwards, Paul M. The Korean War: A Historical Dictionary. Lanham, Md.: Scarecrow Press, 2003.

Foley, James A. (ed.). Korea's Divided Families: Fifty Years of Separation. New York: RoutledgeCurzon, 2003.

Hoare, Jim and Susan Pares. A Political and Economic Dictionary of East Asia. Philadelphia: Routledge/Taylor and Francis, 2005.

Hwang, Eui-Gak. The Korean Economies: A Comparison of North and South. New York: Oxford University Press, 1993.

Lone, Stewart. Korea Since 1850. New York: St. Martin's Press, 1993.

Nahm, Andrew C. and James E. Hoare. Historical Dictionary of the Republic of Korea. 2nd ed. Lanham, Md.: Scarecrow Press, 2004.

Seth, Michael J. Education Fever: Society, Politics, and the Pursuit of Schooling in South Korea. Honolulu: University of Hawaii Press, 2002.

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Korea, Republic of

Korea, Republic of

SOUTH KOREANS … 91

The Koreans are believed to be descended from Mongoloid people from the cold northern regions of Central Asia. However, there are two Koreas, North and South. This chapter profiles the people living in the south, the Republic of Korea. The Republic of Korea has no significant ethnic minorities.

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