South Korea Export driven powerhouse
With its economy slated to be the 10th largest contributor to world growth by 2019, South Korea has battled to make its mark on the world stage.
In less than four decades, South Korea has achieved remarkable progress transforming its economy into an export-driven powerhouse. One of Asia’s fast growing economies, South Korea is the home turf for electronic and automobile giants like Samsung Electronics, Hyundai Motors, LG Electronics and KIA Motors. The country is also the headquarters of 14 of the global Fortune 500 firms. Today, South Korea is the world’s 12th-largest economy and leading global supplier of LCD screens, memory chips and mobile phones. The country’s population is highly educated and technologically advanced with the world’s highest level of broadband penetration. As a result, South Korea has bagged the first place in Bloomberg’s Global Innovation Index 2014. Even though the trade powerhouse’s exports slipped modestly in August, Korean exports were up six percent year on year in the first six months of 2014 with China and Europe as its main trading partners. Apart from export of semi-conductors, cell-phones and other electronic goods, motor and heavy industrial equipment also dominate the country’s export volume. Geographically, Korea finds itself squeezed among three titans: China, Japan, and Russia - a position that confers great challenges and, potentially, great benefits. Economically, the country is poised at a critical juncture. Given that its mighty manufacturing engine powered it to great heights, this export-driven economy relies heavily on air freight for transportation of goods. South Korea takes pride in its largest airport Incheon International Airport which is the world’s second largest by cargo volume, and for nine years in a row (2005–present) has been rated the best airport worldwide by Airports Council International. Hosting regional and international passenger and cargo services for over 40 airlines, Incheon is a hub for airlines such as Korean Air, Asiana Airlines, Jeju Air, Air Incheon and Polar Air Cargo. Korean Air, the flag carrier of South Korea, is now the largest carrier of airfreight on international routes. Riding on South Korea's flourishing technology industry, the airline carries semiconductors, flat-panel TV screens and cellphones to over 100 destinations across the globe. Korean Air runs its own exclusive cargo terminals at Incheon, New York, Los Angeles, Osaka, Tokyo. Korean Air maintains its quality services better at these exclusive cargo terminals, which make possible direct operation control and close monitoring and evaluation of ground service based on a customer-oriented scale. All exclusive terminals are equipped with temperature-controlled coolers, freezers, vault rooms and other facilities. This year, Korean Air became the first airline in Korea to introduce B747s and B777Fs. The carrier reported 367,934 freight tonne kilometers for the first quarter of 2014. This translates to nearly 10 percent increase from its previous year’s figures. Another important and growing player in the Korean air cargo space is Air Incheon, which operates scheduled and charter cargo services domestically as well as to China, Japan and Russia utilising 737F equipment operated by Jeju Air. The carrier moves heavy equipment for the oil and gas industries to Russia and garments and electronic goods to China and Japan. The airline, which uses Incheon as its hub, began commercial services in 2012. Earlier this year, Air Incheon started six weekly scheduled flights to Narita in Japan and three weekly flights to Yantai in China. These new flights are expected to contribute to Incheon International Airport becoming a regional hub for cargo handling feeder routes. South Korea’s government has several initiatives underway to foster sustainable economic growth. This includes building on the success of sectors that are already globally competitive, such as construction engineering, but also expanding health care, tourism and financial services. The country is also developing its SME sector and aims to become one of the top ten business-friendly economies in the world, encouraging foreign investors through incentives such as tax support, simplified regulations and grants. South Korea’s economy grew 2.8 per cent in 2013 and could achieve 3.8 per cent growth in 2014 according to the Bank of Korea; by 2019, South Korea’s economy is set to be the 10th largest contributor to world growth.