An Economic Comparison of
South Korea and Japan have had a close relationship from ancient history to the present day. Because of this reason, their economic growth and development have similarities and disparate differences. This paper will discuss some of the two countries’ major characteristics including geographic, social, and political characteristics and look at their histories and economies.
Another reason that it is natural to compare them is their economic growth has mirrored one another. Both emerged from a war with its economy devastated and its infrastructure in ruins. Both countries changed with the ...view middle of the document...
” During the next three decades, the South Korean economy grew at an average rate of nearly 9%, and per capita income increased more than a hundredfold.
South Korea was transformed into an industrial powerhouse with a highly skilled labor force. In the late 20th century, however, economic growth slowed, and in 1997 South Korea was forced to accept a $57 billion bailout from the International Monetary Fund (IMF), then the largest such rescue in IMF history. The country also wrestled with reforming the chaebol and liberalizing its economy. Nevertheless, its economy enjoyed a recovery in subsequent years, and the country entered the 21st century on a relatively firm economic footing.
Japanese industry and infrastructure, which were virtually destroyed during World War II, were systematically rebuilt to transform the country into a global economic leader by the mid-1960s. Post-World War II, the seven-year U.S. occupation of Japan proved to be a blessing in disguise as the Japanese received $2 billion in aid from the U.S. in the form of food, fertilizers, petroleum products and industrial materials.
The country was also saved from spending on defense, adhering to the World War Peace Clause that asserted that Japan would not maintain its own military forces, and the U.S. would provide it military protection, if necessary. Moreover, Japanese families saved extensively between 1950 and 1960, with funds channeled through the banking system to finance business and investment in the economy at relatively low rates of interest. This came to be called the “post-war economic miracle.”
Statistical Comparison: South Korea Japan
Population: 50 Mln (25th) 128 Mln (10th)
GDP (PPP) $1.6 Trillion (12th) $4.4 T (4th)
GDP (PPP) per capita: $23.749 (32nd) $34,739 (25th)
GDP (nominal) $1.1 T (15th) $5.9 T (3rd)
GDP Growth: 3.9% -0.9%
Inflation (US=1.9%) 4.2% 0.3%
Unemployment: 3.4% 4.7%
Ease of Doing Biz: 8th 20th
Exports: $555.8 Bln (7th) $800.8 Bln (4th)
Gross Debt: $380.6 Bln $2.2 Trln
Debt as a % of GDP: 33.3% (93rd) 208.2% (2nd)
At first glance, one would assume that the Japanese economy is in much better shape: Japan has over twice their population, three times their Parity GDP, 5 times their Nominal GDP, a vastly lower inflation rate, and has half again the number of exports that South Korea has.
However, this does not fully take into account the downward trend of Japan in nearly all categories: including its aging population, that is also declining over all. (Japan overall population growth rate is -.2%, which makes it 207th among 230 measured countries). The dire status of Japan’s economy can be measure in its negative GDP growth and its huge debt. Even though the US has a much higher debt, it is 108% of GDP: a number that has caused a firestorm of controversy here. In comparison, Japan’s debt percentage is over 208% of their total GDP.
These numbers and the amount of increased competition that Japan has...