South Korean exports grow rapidly, pressing Southeast Asia rivals
Seoul — In the race for higher and higher exports among Asia's four fastest growing economies -- Singapore, South Korea, Taiwan, and Hong Kong -- the winner in 1981 was South Korea.
Its three rivals pulled ahead of Korea in 1980, and in export size they remain ahead. But in Seoul there is considerable confidence that this situation won't exist a year or two from now.
Overseas shipments expanded 19.9 percent last year to a record $21 billion, with less than one-quarter of the improvement being due to price inflation.
An official of the Ministry of Commerce and Industry says: ''Last year's surge was mainly attributable to sharp increases in shipments of textile and heavy industrial goods (e.g. ships), as well as some extremely good and aggressive marketing by our traders in overcoming the impact of the global economic recession.''
The overall economy has gone through many difficulties in recent times, but exports have not missed a single beat.
Last year's export rise wasn't as good as the average 30 percent growth throughout the 1970s, but it was more than welcome as economic and political disasters piled up.
Concedes a top government adviser: ''Exports saved us from an even worse disaster. The national heroes in 1981 were undoubtedly our entrepreneurs.''
It has become routine for government economic planners and business leaders to set ambitious growth targets each year. Not only are these fulfilled without fail, but they also turn out to have been far too conservative.
Amid last year's cautious economic recovery, the export target was $20 billion -- no mean feat at a time of world trade recession.
This year, the Economic Planning Board (EPB) has set its sights on $24.7 billion -- well on the way to the $56 billion mark the government wants to see achieved in 1986.
Because of the recession in key markets like the United States, ministry experts had figured on no more than 10 percent growth for textile exports last year. To everyone's amazement the final figure was 23.4 percent. As a result, textiles' share of total exports rose from 28.5 to 29.5 percent, in defiance of previous government predictions of inevitable decline in this mainstay industry of the 1960s and 1970s.
The Koreans are managing to wring a few more good years out of textiles by big improvements in productivity and quality through extensive automation.
Says one industry executive: ''We cannot compete in the lower labor-intensive end of the market with lesser developed countries who now enjoy our previous advantage of low wage costs. Hanging on too long would be disastrous. But we can maintain a profitable textile industry for at least a few more years by moving up market. Last year proved the point.''
The ultimate goal, however, is to shift Korea from a light-to heavy-industrial country. This is happening -- heavy and chemical industrial product exports moved up last year to occupy 45 percent of the total, with a figure of 50 percent predicted this year.
Big movers were iron and steel products (up 20.8 percent to $2.3 billion) and ships (127.4 percent to $1.4 billion).
''In light of a sharp decline in ship exports by major shipbuilding countries , Korea's performance can be considered rather unusual,'' said one trade official.
This year, Korean yards are forecasting over $2 billion as their contribution to export growth. The trade picture is still dominated by the US and Japan, but shipments to the American market have shrunk from 35 to 26 percent of the total over the past six years.
Un Suh Park, deputy director-general of the Commerce and Industry Ministry's trade promotion bureau, regards this as a necessary step. Korea, he explains, cannot afford to sink or swim with the movements of the US economy, as in the past.
The shrinkage in one area has been more than made up by increases to other parts of the world. Exports to the Middle East have more than doubled since 1975 , influenced by the penetration of the regional construction market by Korean firms.
Koreans now trade with 137 countries, says Park, and Seoul's policy is to continue to penetrate to all parts of the globe in search of big trade deals.
One concern of government official and businessman alike stems from Korea's all too obvious success; as it advances steadily from being a developing to a developed country, it can expect less and less preferential tariff treatment from the big industrialized nations.
Korea's Asian rivals like Taiwan and Singapore can still gain considerable advantage in this area.