South Korea: Known as a Tiger Economy

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South Korea is located between China and Japan the north and south of Korea had been in a war for three years (from 1950). The population of the Republicof Koreawas approximately 5.9 million in 1997, and the capital city, which is Seoulhas more than 11 million inhabitants. Since 1950 it has developed rapidly (and is known as a tiger ecomony) and as a result there has been a lot of migration from the rural to the urbanised parts of the country. There has also been a great shift in industry, presently there are many more people in the country working in the secondary sector that before whereas prior to the 1950s the majority of people were employed in the primary sector or subsistence farming (for themselves). This influx of people moving into the urbanised areas is due to higher wages being paid by TNCs and also by the higher standard of living and quality of life.

The TNCs were interested in locating in Korea for a number of reasons, Firstly there was a large pool of cheap (for them) labour, although the wages that they paid to the were quite high relative to other jobs available. Also the government backed investment by TNCs. This meant that the environmental laws were lapse, there were no trade unions (to campaign for better working conditions and pay) and the import taxes were made high to encourage spending on local goods. The position of South Korea makes it very accessible to eastern markets. Due to these factors the products made in Korea were cheaper and so they become very competitive in the world markets. Leading Chaebols in Korea dominate much of the market and produce 60% of the country's manufactured products. Such companies include Samsung, Hyundai, Daewoo and LG. Positive effects of these investments by the TNCs are that the money earnt means that GNP and GDP levels of South Korea rise and the government has extra cash to invest back into the country, in areas such as infrastructure, health and education. These foreign companies also provide new...
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