Korea in focus.A People and History in Harmony, Детальна інформація

Major Tasks and Policy Directions

To revitalize the economy, the Kim Young Sam Administration, which was inaugurated  in February 1993 as the first civilian democratic government in over three decades, is endeavoring to construct a new developmental paradigm called “the New Economy”. This signals a clean departure from the  past, when the government directed and controlled the concentrated investment of capital, labor and other resources in selected “strategic” industrial sectors to achieve rapid economic growth. Instead, the New Economy will promote the autonomy and  creativity of all economic actors in order to maximize efficiency, while ensuring the equitable distribution of income. In that way, it seeks to enable the nation to leap into the ranks of the developed nations within the next five years.

As an initial step, the new Administration implemented a short-term 100-Day Plan for the New Economy in March 1993, designed to promptly create conditions conductive to revitalizing the economy. This was followed by the development of a new five-year economic development plan. Formally announced in July 1993, the Five-Year Plan for the New Economy was conceived primarily to lay the basis for joining the ranks of advanced countries and thus to effectively prepare for the eventual unification of the Korean Peninsula.

The Government will continue its efforts to ensure the effective implementation of the five-year plan through the spontaneous participation of the people by reforming economic institutions including the improvement or simplification of existing financial and tax systems and administrative measures. Furthermore, the Government will continue to endeavor to fully realized the nation’s economic growth potential, strengthen its international competitiveness, and improve the economic conditions of the public.

If the plan is implemented as intended, the Korean economy is projected to change as follows:

First with increased efficiency and greater realization of growth potential, the gross national product should rise at an average annual rate of about 6.9 percent, raising per capita GNP to US$14,076 in 1998.

Second, greater price stability should prevail as balance is maintained between the more steadily rising demand and the more briskly expanding supply, while wage increases are linked to rises in productivity. The stabilization of the value of the won currency should help stabilize the prices of imported goods and services. The net effect should be to hold down the rise in consumer prices to an annual average of 3.7 percent, the increase in producer prices to an annual average of 1.6 percent and the rise in the GNP deflator to an annual average of 4.6 percent.

Targets of the 5-Year Plan for the New Economy

‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘93-’98

GNP growth, % 8.4 4.7 6.0 7.1 7.2 7.1 7.0 7.0 6.9

Per capita GNP, US$ 6,518 6,749 7,306 8,196 9,339 10,716 12,305 14,076 14,0762)

Rise in producer prices, % 4.7 2.2 1.8 1.8 1.7 1.6 1.5 1.4 1.6

Rise in consumer prices, % 9.3 6.2 4.9 4.3 3.7 3.6 3.2 2.9 3.7

Rise in GNP deflator, % 11.2 6.3 5.3 5.3 4.8 4.5 4.1 3.8 4.6

Balance on curren account, 8.7 4.6 1.4 0 0.9 2.1 3.7 5.3 5.32)

US$ billion









Exports 1) ,US$ billion 69.6 75.1 82.3 82.3 99.3 110.1 122.6 136.3 136.32)

   Rate of increase, % (10.2) (7.9) (9.5) (9.5) (10.2) (10.9) (11.3) (11.2) (10.4)

Imports, US$ billion 76.6 77.3 81.3 81.3 95.8 105.3 116.1 128.1 128.12)

Rate of increase, % (17.5) (1.0) (5.1) (5.1) (9.3) (9.9) (10.2) (10.3) (8.8)

Note: 1) On a balance-of-payments basis

 2) In terms of 1998 current market prices

The Real name Financial Transaction System

On August 12, 1993, the President took a decisive step toward revitalizing the economy and eliminating corruption by announcing the inplementation of the long-anticipated real-name financial transaction system. In the past, it had been possible to open accounts and conduct business transactions under false names, directly and indirectly fostering institutionalized-corruption and illegal financial dealings. Deeming this reform as the most important in the creation of a New Korea, the President announced this action in a Presidential Emergency Decree, stating that the real-name system was essential for cutting the dark link between politics and business.

With the introduction of the real-name financial transaction system, it appears that financial dealings are  becoming fully transparent and underground economic dealings and nonproductive land speculation are diminishing. It is hoped the funds that had been channeled into political circles in the past as a result of government-business collusion are now available for more productive activities.

Encouraging Signs