S. Korea pulls through '81 in better economic shape

Political stability and a bumper rice harvest have helped South Korea to end 1981 in better economic shape than it began the year. Inflation is down, the balance-of-payments deficit is less than expected, and the economy grew 7 percent - compared with a disastrous decline of 6.2 percent in 1980.

During 1981 Gen. Chun Doo Hwan consolidated his power by establishing the so-called Fifth Republic and being inaugurated for a single seven-year term as President under a new Constitution. Draconian controls on the press and on expressions of political dissent continue, as do small-scale but persistent student demonstrations.

In economic terms, however, the new power structure of former colonels and middle-ranking bureaucrats surrounding the President have proved themselves pragmatic rather than ideological, outward-looking rather than narrowly nationalistic. For example, these officials brought about a number of controversial mergers. But when they saw their plan to consolidate the automobile industry would not work, they abandoned it.

The emphasis is no longer on growth for growth's sake, or on heavy industry vs. light industry. Rather, it's on moderate growth and on making industries capable of standing on their own feet by improving productivity and quality control. The aim is also to finance new plants and equipment without heavy borrowing.

The growth target for next year is another 7 percent. Inflation will continue to be curbed through monetary and fiscal restraints. Workers will be asked to accept another decline in their real wages. In 1980, when inflation reached a whopping 38 percent, wages rose only 22 to 24 percent. This spring, when inflation remained high, wage increases were brought down to the 16-to-18 -percent level. Now that inflation has slid down to 14 percent, wage increases are planned for next spring at 10 to 14 percent. And the closer to 10 percent, the better.

Will workers be persuaded or coerced into accepting such settlements? This will be one key factor determining the success of the government's economic program for next year. South Korea's unemployment rate is not high - it stands at around 4.8 percent of the labor force. But there is a great deal of underemployment, and workers complain that the disappearance of overtime has already brought down their wages by at least one-fifth.

Investment in new plant and equipment, a measure of business confidence, has not revived significantly. According to Dr. Kim Kihwan of the economic planning board, however, production capacity rose overall by 6 percent during the first 10 months of this year. High interest rates abroad and the loss of profitability at home have discouraged many entrepreneurs. This year, most enterprises have managed to restore a small margin of profit, one government source said.

Next year, the government would also like to see exports grow by 10 percent over this year, and to reduce the current-account deficit to $4.4 billion. The target for next year's exports, said Shin Byong-Hyun, deputy premier and economic planning minister, is $24.7 billion. The import target is $27.9 billion.

People in business concerned about the continued slump in domestic demand would like to see a much greater emphasis on exports. But in view of the slow recovery of the world economy as a whole, 10 percent may be as much as South Korea can realistically expect.

The current-account deficit includes ''invisibles,'' like shipping costs and insurance, as well as the trade gap. One encouraging factor is the prospect of stable or even lower oil prices. South Korea has been spending $6.5 billion a year for oil imports.

To move from its usual high-growth economy to a moderate-growth economy is not easy. South Korea has embarked on the structural changes needed to make the transition, and if all goes as hoped during 1982, the result should be a more solidly grounded economy for a nation of 40 million hardworking people.