This study seeks to examine the reasons for Korea’s export stagnation in the domestic environment, thereby identifying measures to resolving the issue.
In recent times, Korea’s national competitiveness on its export goods has been weakening compared to other competing countries including China or Japan, going through a downturn in both the local and international market. Korea’s exports, having marked a growth of more than 25% between 1986 and 1988, made a drastic fall in 1989 falling to 3.5% in the 1990s. In 1991, export trade rose back to 10.5% but fell back to around 6.6% in 1992. Given the persistent downturn, forecasts for the future are very unclear. In the context of the global market, Korea’s market share, which was 2.91% in 1989, fell to 2.02% in 1991. Even the market share in the United States fell from 4.6% to 3.1%, On the other hand, China’s market share in the United States is 4.8% while Japan holds a share of 5.3%.
Internal reasons for this downfall can be summarized as the following. First, there are inadequate roads and traffic equipment for automobiles and goods distribution facilities that can accommodate the high rate of growth and increasing exports. Moreover, supply facilities have not yet been modernized, impeding maximum traffic efficiency. Second, mandatory working hours decreased as hourly wages increased and statutory working hours were modified. Although the authoritative atmosphere and senior-preferring system has weakened, a free and autonomous working environment for workers was still not built, resulting in a fall in labor efficiency.
In order to address this issue, both short-term and long-term approaches are needed. Looking from a short-term approach, a feasible suggestion for the government is to hold a more active role in expanding its exports of plants, a newly rising industry. As the allowed period to defer imports is been extended from 90 to 120 days, the period should be extended to 180 days to meet the international norm or the range of deferrable items expanded. Looking from a long-term approach, more work needs to be done inside in order for Korea to withstand the polarization of the world into ‘blocs’ and survive the intense competition among the least developed countries. The country will have to seek ways to reinforce its technological capacity, increase its investment in labor and decrease logistical costs asides from improving the conditions for trade. Caution is also needed to not harm the stabilized price system.
수출부진. 경쟁력강화로 대응해야(Study of export stagnation and reinforcement of competitiveness as a countermeasure)
|Series Title; No||정책포럼 / 제1호(9301)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|