January 2023

Current Korea

The Hope-Filled New Year

Korea is determined to rise from the current economic crisis by implementing an “export-focused” strategy that will turn the crisis into new opportunities.

Written by Sohn Ji-ae,
contributing writer

For Korea, exports have long been a major growth driver of the country, salvaging its economy from major economic crises in the past. However, there are grim signs that the nation’s exports are losing stream and are unlikely to improve much in 2023 in the face of worsening economic conditions.

China’s recently lifted strict virus curbs since the COVID-19 pandemic are cited as a heavy drag on the ex(port-driven economy because access to one of the world’s largest markets had been hampered by lockdowns in its major cities.

The nation’s dwindling exports eventually contributed to its all-time high trade deficit of USD 47.2 billion in its history. In the meantime, Korea’s imports of crude oil, gas, and coal spiked due to high international oil and other raw material prices stemming from the protracted war between Russia and Ukraine. It was Korea’s first trade deficit in 14 years.

The latest trade data shows that the nation’s strong export capabilities are no longer secured. To weather this challenge, President Yoon Suk Yeol announced in his New Year’s address that his government would make boosting exports a top policy priority in the new year. “Exports are our key to overcoming this complex crisis. They form the basis of our economy and create jobs.”

‘Export First’ Policy

The Korean leader believes that it is time to revamp the nation’s export strategy, as the current challenges are worsening global inflation, global supply chain disruptions, and other economic threats.

“Our export strategy must differ from the past. Those countries that share the universal values of freedom, human rights, and the rule of law are banding together through their economies and industries. This solidarity based on these universal values is the most strategic choice in the current diplomatic landscape.”

The government vowed that it would launch “a $50 billion project” to help domestic businesses win overseas orders, as well as to strengthen infrastructure construction, nuclear plants, and the defense industry as new export engines for the nation.

‘Startup Korea’

The government is also determined to focus on new economic drivers, including aerospace, artificial intelligence(AI), and advanced bioengineering. Yoon believes that identifying and developing new technologies and industries through innovation will result in “creating quality jobs and achieving sustainable growth.”

Along this line, the president vowed to user in an era of “Startup Korea,” highlighting that “investments in future strategic technology will be made in a preemptive and bold manner.” To this end, Yoon emphasized a “strong public-private partnership,” promising business leaders “full government support” for them to succeed on the global market.

The nation acknowledges that the possibility of the world economy slipping into a recession this year is higher than ever before. Many experts share their sentiments that global demand is feared to weaken further in 2023 due to high interest rates and other negatives.

Despite the growing concerns and uncertainty, optimism abounds as the government set its export target for 2023 at a record high USD 680 billion. President Yoon, too, looks on the bright side, believing that the nation will overcome the current challenges with his people’s hard work and determination, as it did with the unprecedented pandemic and subsequent economic woes.

“Together with our great people, we will achieve a new takeoff. In this new year, let’s venture out into a greater sea where freedom thrives, and opportunities abound.”