SOUTH KOREA SWOT ANALYSIS – TRADE

Before Covid-19
Strength Weakness

-A very high degree of economic freedom -Bankruptcy can be carried out very easily.
exists in South Korea. The economic -The labour market remains competitive, but
freedom score for South Korea is 71.2, regulatory rigidities are enduring and strong
making its economy the highest 31st free trade unions add to the cost of doing
economy in 2014. business.
-South Korea is moderately corruption-free.
This makes South Korea a very clean place
to conduct business where all is equal to
people who, compared to countries with
higher corruption rates, make it a very good
place to conduct business.
Opportunities Threats

-South Korea's travel and tourism industry -Overrepresentation in the economy of

has an optimistic outlook. This is a huge chaebols
opportunity because more visitors will come -Competition coming from China (steel,
to South Korea and ultimately raise South shipbuilding, electronics)
Korea's revenue.
-The trend in South Korea has emerged
around the world where Korea's music
industry has exploded into countries such as
the US, Indonesia, China, Malaysia, etc.

SOUTH KOREA SWOT ANALYSIS - INVESTMENT

Before Covid-19
Strength Weakness

-Competitive and resilient banking industry -Feature of indirect financing centered

-IT infrastructure Top-end & Regional money brokerage
advantage -Excessive rivalry at the domestic level
Opportunities Threats

-Accumulation of wealth produced by -Powerful position of China as the financial

ageing society hub of Northeast Asia
-Capitalizing on the potential of Northeast -FX business uncertainties & risks due to
Asia for rapid growth the global financial crisis
SOUTH KOREA SWOT ANALYSIS – TRADE
After Covid-19
Strength
-to avoid in paralyzing the economy South
Korea did not close their border and without
a full dockdown.
-Power of critical components of the export
economy. The impact of COVID-19 on
global demand and supply chains (on which
South Korea is heavily dependent) has had a
direct impact on South Korean exports -
down 24.3% in April and 10.9% in June
(Y.O.Y). However, the relative strength of
key parts of its export economy has helped
offset the downturn and signs of a recovery
for some sectors have begun to emerge.
Opportunities
-Loans and Guarantees by the Korean
government
-Tax benefits by the Korean government
SOUTH KOREA SWOT ANALYSIS – INVESTMENT
After Covid-19
Strength
-Currency strategy is accommodative. In
March 2020, the Bank of Korea reduced its
policy rate by 50 basis points and in May by
a further 25 basis points, to
0.50% and a variety of steps have been
adopted to improve liquidity in response to
the crisis.
-There's a very expansionary monetary
strategy. The fiscal room created by strong
public finances, with general government
gross debt at around 40 percent of GDP, is
adequately used by the government to
dampen the effect of the crisis.
Opportunities
-It would increase job quality by changing
the focus of aggressive labour market policy
from direct job growth, which accounted for
Weakness
-unemployment rate has risen up and result
in lack of work force
-The consequences of the pandemic have
decreased unevenly across various
categories of employers and employees.
South Korea's relative poverty rate is
currently the third highest in the OECD,
followed by the worst old-age relative
poverty rate in the OECD.
Threats
-Pandemic Covid-19
-The relative poverty rate in South Korea is
currently the third highest in the OECD, led
by the OECD's worst old-age relative
poverty rate.
Weakness
-Economic growth has dropped markedly.
The Korean authorities responded rapidly to
avoid the spread of the virus and to help the
economy.
-Recovery will be delayed by the global
recession. Although domestic activity will
gradually normalize, the global recession
will hold back exports and investment, even
though no revival of the pandemic is
expected (single-hit scenario)
Threats
-Pandemic Covid-19
-Jobs shrinks. In particular, for non-regular
employees, the recession is pushing down
 about half of pre-crisis spending, to training jobs. In order to ensure a job-rich and high
and job counselling, along with increased productivity recovery, the government
adult education. would need to invest more in successful
-Productivity across economic sectors varies labour market policies.
widely. Productivity is excellent in IT
manufacturing and high in other
manufacturing, but services, including IT
services, are lagging behind.

References
Trade:
1. https://www.bartleby.com/essay/Swot-Analysis-of-South-Korea-Market-
PKTE8S5HKGEY
2. https://www.mfat.govt.nz/en/media-and-resources/publications/south-korea-impacts-
of-covid-19-on-the-south-korean-economy-13-july-2020/
3. https://thediplomat.com/2020/08/how-covid-19-wreaked-havoc-on-south-koreas-
labor-market/
4. https://globaledge.msu.edu/countries/south-korea/risk

Investment:
1. file:///C:/Users/User/Downloads/korea-2020-OECD-economic-survey-overview.pdf
2. https://www.facebook.com/investseoul/posts/171577673021812/
Strengths

South Korea was able to avoid a major epidemic by implementing without shutting its door
and by avoiding without a complete lockdown. This way South Korea can try to reduce in
jeopardising its economy, In the third quarter, the South Korean economy rebounded from a
COVID-induced recession as demand for exports increased after the region's lockdowns
eased. Besides that, as announced by the Bank of Korea, the South Korean economy
expanded by a seasonally adjusted 1.9 percent from the previous quarter during the July-
September period. In September, South Korean exports to the U.S. increased 23.2 percent
from a year ago, and to Europe rose 15.4 percent. The turnaround comes when key
international markets are reopening their economies in the second quarter after tight
lockdowns. The relative strength of key areas of its export market, however, has helped
counter the slowdown and signs of a turnaround have started to appear in some sectors. The
economy of South Korea resumed its recovery from a pandemic recession, with exports and
manufacturing production growing in November, giving a hopeful indication that, amid the
return of the virus, global demand remained stable. Exports grew by 4 percent in November
from a year ago, backed by strong demand for technology.

Weaknesses

A conservative index of joblessness, the unemployment rate edged up to 4.2 percent in April,
while in May it risen up to 4.5 percent. After January, the South Korean labor force at wide
has already been losing. In March alone, after company closures, 1.6 million staff were
required to take temporary time off from work. 467,000 employees lost their jobs throughout
April.
 Source from: OECD Economic Surveys South Korea 2020

The relative poverty rate in Korea is the third highest in the OECD, powered by the OECD's
worst age-old relative poverty rate, even as the nation has achieved one of the most
remarkable economic results in the world over the past half century. Economic inequality is
the 7th largest in the OECD, as calculated by the Gini coefficient after taxation and transfers.
Although in recent years the government has worked to counter income disparities, even by
raising the minimum wage by about 30 percent, results have been unable to emerge.

Opportunities

The Korean government has also taken responsibility for reacting quickly to the vulnerability
of companies in the short and medium term, especially for small and medium-sized
enterprises (SMEs). The fund that the Government helped the SMEs companies is by funding
the debt subsidies and wage branches. Hence, provided help by the through the provision of
loans or guarantees for export activities. Other than that, Korea Trade Insurance Corporation
(KTIC) also provide lower insurance or pledge fees for small to medium-sized export firms.
Not only that the income and corporate tax cuts are given to increase current domestic
operations while drawing to a close or shrinking overseas operations to facilitate the return to
Korea of overseas firms. The decline rate for the first 5 to 3 years would be 100 percent, then
50 percent for a further 2 years.
Threats

-Pandemic Covid-19

South Korea faced a pandemic threat to their trade when South Korea cases peaked at 851
new cases a day in March. In January 2020, Korean exports fell by 6.1 percent year-on-year
due to less working days. Until seeing a turnaround in January 2020, the daily average
exports plummeted for 14 months consecutively. Local worries about COVID-19 spread,
leading to a shortage of job and lower industrial production, threatening to further decrease
exports.