Trade officials meet lagging 1980 exports by diversification
Trade officials of Seoul were natually disappointed that Korea last year recorded the lowest export growth of any country in Asia. It was only 16 percent, which would be very acceptable in many countries, but not for a nation that has become accustomed to an annual average of over 30 percent.Skip to next paragraph
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But the Koreans have quickly recovered their confidence.
The Economic Planning Board (EPB) has set an export target of just over $20 billion for 1981, and the business community in general believes this is well within reach.
Imports will also rise sharply, to about $26 billion. So, unhappily, there will be no improvement in the country's balance-of-payments position compared with last year's disaster.
Overseas confidence in Korea was shaken to some extent by the political convulsions of last summer, but a rapid surge in new export letters of credit since last October has convinced everyone the corner has been turned.
When presenting President Chun with an economic outlook for the current decade, the EPB in January projected the nation's annual exports would reach $55 ,000 in 1986. This is premised on an annual growth rate of 7 to 8 percent in the gross national product -- the nation's total output of goods and services -- and continued political and economic stability.
Price stabilization, labor-management cooperation, energy savings, and quality control are all being strongly stressed by the government to ensure Korean goods stay competitive in a tough world.
In 1979 the government designated 10 industrial groups as general trading companies patterned after Japanese giant trading firms like Mitsui and Misubishi.
These have more than justified the government's faith. Led by Daewoo, Samsung, Hyundai, and Kukje, the 10 firms last year exported goods worth $7.2 billion and plan to increase this to $9.4 billion this year.
Their own efforts are backed up by the Korean Trade Promotion Corporation (KOTRA) and the Korean Traders Association (KTA), which, from offices throughout the world (even in countries with whom Korea has no diplomatic relations), conduct detailed market research and stage various promotion activities.
They are spearheading a determined Korean effort to diversify into all corners of the globe.
The Middle East has suddenly emerged as a very important part of the Korean export strategy -- especially as this country's oil imports continue to cause balance-of-payments problems. The activities of Korean construction firms in the region naturally have generated increasing demand for building materials from home.
This is one of the factors in the achievement of $1 billion in sales to Saudi Arabia last year.
Hwang Don, director of the KTA, sees this trend spilling over into neighboring countries. There is a strong expectation of big postwar orders from Iraq, for example.
The Koreans are also spreading out into Africa, with the establishment of diplomatic relations recently with Nigeria, Libya, and Sudan. All three are considered to have strong potential for Korean goods and services (construction).
Another big effort is being made in Southeast Asia to try to match the strong Japanese presence.
There is considerable pragmatism in the Korean trading stance. Seoul's continuing confrontation with North Korea is a handicap but in itself does not prevent Korean companies from trading with the communist bloc.
This, however, remains limited because of the need very often to pass goods through third countries.
For instance, there is now active trade with China through local traders in Japan and Hong Kong. Some general trading companies in Seoul have now begun to explore to possibility of setting up local corporations, say in Hong Kong and Singapore, to boost this trade.
No one will say how much the trade is currently worth, but it certainly runs to several million dollars at least. South Korea's principle exports to China now are black and white television sets, synthetic textiles and machine parts, while coal, silk fabrics, silk yarn, and medicinal herbs flow in the other direction.
With oil prices rising, many Koreans are interested in getting their hands on more Chinese coal.
Traders in Seoul would also like to do business with the Soviet Union. But like China to a large extent, one major handicap is the protests emanating from North Korea -- a creation of the two communist superpowers.