CHAPTER 14 Economy 키워드 삼성 삼성물산 ( 주 ) 을 주축 으로 성장 · 발전 한 기업체 군 . 주요 사업 분야 는 전자 , 무역 · 섬유 · 식품 · 중화학 · 건설 · 금융 · 보험 · 유통 · 광고 등 이 며 , 창업자 는 이병철 ( 李 秉 喆 ) 이 다 . 모기업 인 삼성물산 ( 주 ) 은 1938 년 3 월 사과 · 건어물 · 소맥분 등 을 만주 등지 로 수송 하 는 삼성 상회 로 출발 , 1952 년 1 월 삼성물산 ( 주 ) 으로 법인 등기 했 다 . 1975 년 삼성그룹 관계 회사 의 모든 수출 부서 를 흡수 해 그룹 의 공식 적 인 해외 무역 창구 가 되 면서 국내 최초 의 종합 무역 상사 로 지정 되 었 다 . 삼성그룹 은 1953 년 5 월 제일제당 ( 주 ) , 1954 년 9 월 제일모직 ( 주 ) , 1955 년 12 월 ( 주 ) 신세계백화점 , 1969 년 1 월 삼성전자 ( 주 ) , 1970 년 1 월 삼성 전관 ( 주 ) , 1977 년 8 월 삼성 항공 산업 ( 주 ) 등 을 설립 하 여 기업 그룹 의 면모 를 갖추 었 다 . 1983 년 64 KD 램 VLSI 개발 성공 을 시작 으로 반도체 산업 의 발전 을 이끌 었 다 . 1997 년 무리 하 게 자동차 사업 에 뛰어들 었 다가 위기 에 몰렸 던 삼성그룹 은 국제통화기금 ( IMF ) 구제 금융 체제 하 에서 구조 조정 을 통해 59 개 계열사 를 45 개 로 줄였으며 , 삼성 중공업 의 지게차 부분 ( 볼보 ) , 건설 기계 사업 부분 ( 클라크 ) 등 총 10 개 사업 부 를 해외 자본 에 매각 했 다 . 주요 계열 회사 로 는 전자 관련 기업 으로 삼성전자 · 삼성 SDI · 삼성전기 · 삼성 코닝 · 삼성 SDS , 기계 관련 기업 으로 삼성 중공업 · 삼성 테크원 , 화학 관련 기업 으로 삼성 종합 화학 · 삼성 석유 화학 · 삼성 BP 화학 · 삼성 정밀 화학 · 제일모직 ( 스타렉스 사업 본부 ) , 금융 관련 기업 으로 삼성생명 · 삼성 화재 · 삼성카드 · 삼성증권 · 삼성캐피탈 · 삼성 투자 신탁 운용 · 삼성 투자 신탁 증권 · 삼성 벤처 투자 가 있 다 . 그 밖 에 삼성물산 · 삼성엔지니어링 · 제일모직 · 유니텔 · 삼성 에버랜드 · 신라호텔 · 제일기획 · 에스원 · 삼성 라이온즈 · 삼성 의료 원 · 삼성 경제 연구소 · 삼성문화재단 · 삼성 복지 재단 · 호암재단 · 삼성 언론 재단 이 있 고 , 임직원 의 교육 을 담당 하 는 삼성 인력 개발 원 , 기술 연구 기관 인 삼성 종합 기술원 , 디자인 연구소 인 삼성 패션 연구소 · IDS · SADI 등 이 있 다 . 본사 는 서울특별시 중구 태평로 2 가 250 번지 에 있 다 . 현대 현대건설 ( 주 ) 을 모기업 으로 하 여 성장 한 기업체 군 . 창업자 는 정주영 ( 鄭 周 永 ) 이 다 . 모기업 인 현대건설 ( 주 ) 은 1947 년 5 월 25 일 설립 된 현대 토건 사 를 모체 로 하 여 1950 년 1 월 정식 으로 설립 되 었 다 . 1955 년 11 월 현대 상운 ( 주 ) 을 합병 , 1966 년 국내 건설 업체 로서 는 최초 로 해외 건설 시장 에 진출 하 여 타이 의 고속도 로 공사 에 참여 했 고 , 1972 년 3 월 울산 현대 조선소 건설 에 착공 했으며 , 1973 년 12 월 조선 사업 부 를 현대 중공업 ( 주 ) 으로 분리 · 독립 시켰 다 . 1976 년 사우디아라비아 의 주 베일 산업 항 공사 를 시작 으로 인도네시아 , 이란 , 바레인 등 중동 에 진출 하 여 세계 적 인 건설 회사 로 성장 했 다 . 중동 건설 경기 의 퇴조 이후 1980 년 5 월 충청남도 서산군 과 홍성군 의 2 개 군 9 개면 에 걸친 1 만 5 , 594 ha 의 대 규모 간척지 공사 를 착공 , 1991 년 6 월 완공 했으며 , 1982 년 6 월 100 억 달러 건설 수출 의 탑 을 수상 했 고 , 1983 년 10 월 사옥 을 신축 하 여 현재 의 사옥 으로 이전 했 다 . 1984 년 12 월 기업 을 공개 하 고 주식 을 증권 거래소 에 상장 했으며 , 1989 년 11 월 중기 사업 부 를 현대 중 전기 산업 ( 주 ) 으로 분리 · 독립 시켰 다 . 남북 경제 협력 사업 에 적극 성 을 띠 어 1997 년 북한 경수로 건설 공사 에 참여 했 고 , 1998 년 에 는 정주영 이 소 500 마리 를 이끌 고 북한 을 방문 해 금강산 개발 에 합의 했 다 . 같 은 해 11 월 금강산 관광 선인 금 강호 가 첫 출항 을 했 으며 , 1999 년 에 는 북한 온정리 금강산 문화 회관 건설 에 착수 했 다 . 국제통화기금 ( IMF ) 구제 금융 체제 하인 1998 년 기아 자동차 ( 주 ) 를 , 1999 년 LG 반도체 를 각각 인수 했 다 . 그러나 2000 년 9 월 경영 권 을 둘러싼 내 분과 2001 년 3 월 정주영 명예 회장 의 사망 을 계기 로 자동차 · 전자 · 중공업 등 그룹 의 주력 사업 부문 이 독립 하 면서 현대그룹 은 축소 되 었 다 . 계열 회사 로 현대 석유 화학 ( 주 ) · 현대 엘리베이터 ( 주 ) · 현대증권 ( 주 ) · 현대 울산 종합 금융 ( 주 ) · 현대기업금융 ( 주 ) · 현대캐피탈 ( 주 ) · 현대 종합 상사 ( 주 ) · 현대 상선 ( 주 ) · 현대아산 ( 주 ) · 현대 택배 ( 주 ) · 현대정보기술 ( 주 ) · 현대 경제 연구원 · 현대 기술 투자 · 아산재단 · 현대 유니 콘스 ( 주 ) 등 이 있 다 . 본사 는 서울특별시 종로구 계동 140 번지 2 호 에 있 다 . 대우 ( 주 ) 대우 를 주축 으로 성장 · 발전 한 기업체 군 . 주요 사업 분야 는 무역 · 건설 · 조선 · 중장비 · 자동차 · 전자 · 통신 · 컴퓨터 · 관광 · 호텔 · 증권업 등 이 었 으며 , 창업자 는 김우중 ( 金 宇 中 ) 이 다 . 모 기업인 ( 주 ) 대우 의 전신 은 1967 년 3 월 설립 된 대우 실업 ( 주 ) 으로 , 소규모 봉제품 전문 생산 · 수출 업체 로 출발 했 다 . 1970 년 대 봉제품 및 섬유 제품 의 수출 호조 와 경제 고도성장 에 힘입 어 급속 하 게 발전 하 여 1975 년 5 월 종합 상사 가 되 었 다 . 1972 년 9 월 고려 피혁 ( 주 ) , 1973 년 쌍미 섬유 공업 ( 주 ) 과 동양증권 을 인수 했 다 . 1974 년 1 월 대우 전자 ( 주 ) 를 설립 했으며 , 1976 년 10 월 해외 건설 면허 를 취득 하 고 대우 엔지니어링 ( 주 ) 을 설립 했 다 . 1977 년 7 월 제철 화학 ( 주 ) 과 1978 년 8 월 옥포 조선 ( 주 ) 을 인수 하 고 , 같 은 해 9 월 대우 조선 공업 ( 주 ) 을 설립 했 다 . 1977 년 6 월 기업 을 공개 , 주식 을 증권 거래소 에 상장 한 이후 1995 년 말 까지 1 억 1 , 309 만 6 , 623 주 를 발행 했 다 . 1981 년 말 해외 건설 의 확대 와 수 주대 형 화 를 위해 대우 개발 ( 주 ) 을 흡수 · 합병 하 면서 상호 를 대우 실업 ( 주 ) 에서 ( 주 ) 대우 로 변경 했 다 . 1992 년 10 월 합작 사업 승인 을 시작 으로 , 1995 년 12 월 말 국내 기업 중 최초 로 남포 에 민족 산업 총 회사 라는 합 영 회사 를 설립 하 는 등 남북 경협 을 선도 했 다 . 그러나 무리 한 차입 경영 과 확장 경영 으로 국내 60 조 원 , 해외 30 조 원 등 총 90 조 원 에 달하 는 부채 를 감당 하 지 못하 여 1998 년 그룹 이 해체 되 고 김우중 은 회장 직 에서 물러났 다 . 대우그룹 으로 인해 주식 시장 이 폭락 하 고 채권 을 떠안 게 된 금융 기관 들 이 부실 의 늪 에 빠지 는 등 국민 경제 는 엄청난 타격 을 입 었 다 . ( 주 ) 대우 의 주요 사업 내용 은 수출입 업 · 구상 무역 · 삼 국간 무역 · 특수 복합 거래 · 금융 · 자원 개발 · 국내외 투자 사업 · 해외 투자 프로젝트 등 이 었 다 . LGLG 화학 을 주축 으로 성장 · 발전 한 기업체 군 . 주요 사업 분야 는 화학 , 전자 , 통신 · 서비스 분야 등 이 며 , 창업자 는 구인회 ( 具 仁 會 ) 이 다 . 모체 는 1947 년 1 월 에 설립 된 락 희 화학공업 ( 주 ) 으로 , 1974 년 2 월 ( 주 ) 럭 키로 상호 를 변경 했 다 . 1951 년 11 월 국내 최초 의 합성수지 성형 제품 을 생산 했으며 , 1953 년 11 월 럭키금성상사 ( 주 ) 의 전신 으로 수출입 전문 회사 인 락 희 산업 ( 주 ) 과 1958 년 1 월 ( 주 ) 금성사 를 설립 했 다 . 1954 년 국내 최초 로 연고 치약 인 럭키 치약 을 개발 했 다 . 1962 년 5 월 금성 전선 ( 주 ) 의 전신 인 한국 케이블 공업 ( 주 ) 을 설립 하 고 , 1966 년 3 월 국내 최초 의 합성 세제 공장 을 건립 했 다 . 1967 년 5 월 미국 칼 텍스 석유 사 와 합작 으로 호남 정유 ( 주 ) 를 설립 하 고 1968 년 그룹 으로 발전 했 다 . 1969 년 10 월 금성 통신 ( 주 ) , 1970 년 12 월 금성 전기 ( 주 ) , 1971 년 12 월 금성 통신 전기 ( 주 ) , 1978 년 3 월 럭키 석유 화학 ( 주 ) , 1979 년 9 월 금성 정보 통신 ( 주 ) 의 전신 인 금성 반도체 ( 주 ) 를 설립 했 다 . 1982 년 이후 홍콩 · 오사카 [ 大阪 ] · 로스앤젤레스 등지 에 해외 사무소 를 설치 · 운영 하 고 있 다 . 1986 년 2 월 온산 공장 무공 해 농약 원제 공장 및 1987 년 7 월 여의도 에 종합 사옥 을 준공 했 다 . 1988 년 6 월 무공 해 농약 에토 펜 프록스 와 1989 년 6 월 γ - 인터페론 을 개발 하 는 등 유전 공학 분야 에 도 진출 했으며 , 1991 년 5 월 최초 의 한 · 소 합작 회사 인 ' 리스코 ' 를 설립 했 다 . 1995 년 그룹 이미지 통합 작업 을 통해 그룹 이름 을 LG 로 바꾸 고 회사 로고 등 도 고쳤 다 . 1996 년 LG 에너지 를 설립 하 고 , LG 종합 기술원 을 개원 했 다 . 창업자 인 구인회 와 그 의 사돈 이 었 던 허만정 사이 에서 시작 되 어 이어져 온 LG 그룹 은 2005 년 1 월 동업 관계 가 청산 되 면서 LG - Caltex 정유 , LG 건설 , LG 유통 , LG 스포츠 , LG 홈 쇼핑 등 이 ( 주 ) GS 홀딩스 로 법 적 분리 되 었 다 . 모기업 인 LG 화학 은 1970 년 2 월 기업 을 공개 하 고 증권 거래소 에 주식 을 상장 했 다 . 1974 년 이후 에 는 플라스틱 을 비롯 한 생활 용품 과 석유 화학 분야 등 에서 발전 을 거듭 하 여 울산 · 여천 · 청주 등 전국 각지 에 생산 공장 을 건설 했 다 . 한화 쌍용 전경련 부동산 실업 률 Economy Grow Korea recently pulled through an economic storm that began in late - 1997 . This crisis , which roiled markets all across Asia , had threatened Korea ’ s remarkable economic achievements . However , thanks to the faithful implementation of an IMF agreement the Korean government ’ s strong resolve for reform , and successful negotiation of foreign debt restructuring with creditor banks , the nation is currently on track to resume economic growth . Since the onset of the crisis , Korea has been rapidly integrating itself into the world economy . The goal of the nation is to overcome problems rooted in the past by creating an economic structure suitable for an advanced economy . Korea once known to be one of the world ’ s poorest agrarian societies , had undertaken economic development in earnest since 1962 . In less than four decades , it achieved what has become known as the “ economic miracle on the Hangang River ” a reference to river that runs through Seoul - an incredible process that dramatically transformed the Korean economy while marking a turning point in Korea ’ s history . An outward - oriented economic development strategy , which used exports the engine of growth , contributed greatly to the radical economic transformation of Korea . Based on such a strategy , many successful development programs were implemented . As a result , from 1962 to 2002 , Korea ’ s Gross National Income ( GNI ) increased from US $ 2 . 3 billion to US $ 477 billion , which it ’ s per capita GNI soaring from US $ 87 to about US $ 10 , 013 . These impressive figures clearly indicate the magnitude of success that these economic programs have brought about . GNI and per capita GNI drastically dropped to US $ 312 billion and US $ 6 , 744 in 1998 due to the fluctuation in foreign exchange rates but these figures returned to the pre - economic crisis level in 2002 . Korean imports have steadily increased thanks to the nation ’ s liberalization policy and increasing per capita income levels . As one of the largest import markets in the world , the volume of Korea ’ s imports exceeded those of China in 1995 , and were comparable to the imports of Malaysia , Indonesia , and the Philippines combined . Major import items included industrial raw materials such as crude oil and natural minerals , general consumer products , foodstuffs and goods such as machinery , electronic equipment and transportation equipment . Korea developed rapidly from the 1960 s , fueled by high savings and investment rates , and a strong emphasis on education . The nation became the 29 소 member country of the Organization for Economic Cooperation and Development ( OECD ) in 1996 . With a history as one of the fastest growing economies in the world , Korea is working to become the focal point of a powerful Asia economic bloc during the 21 st century . The Northeast Asian region commands a superior pool of essential resources that are necessary ingredients for economic development . These include a population of 1 . 5 billion people , national resources , and large - scale consumer markets . Industrial Development The Korean government is taking major initiatives to improve the nation ’ s economic competitiveness by adopting a floating exchange rate system making available short - term export financing , simplifying customs procedures , and foreign investment . Korea ’ s First Five - Year Economic Development Plan ( 1962 - 1966 ) focused on laying a foundation for industrialization . The plan successfully initiated , and then accelerated , a structure from subsistence agriculture to modern manufacturing and export trade . In the process of its economic growth , Korea has carried out comprehensive industrialization . The share of primary industries in the overall industrial structure decreased steadily from 31 . 5 percent in 1970 , to 15 . 7 percent in 1980 , and further to 5 percent in 2002 . on the other hand , the share of manufacturing industries increased from 14 . 7 percent in 1970 , to 36 . 0 percent in 2002 . The share of the service industries stood at 47 . 5 percent in 2002 , by far the leading growth sector in the economy . Korea ’ s economic growth was initially led by labor – intensive light industries , especially textiles . The light industries were steadily replaced by the heavy and chemical industries that have come to account for over half of the nation ‘ s total manufacturing output . For instance , with the completion of the third Gwangyang blast furnace in December 1990 , Korea became a major steel producer in the world . Korea also produces a wide range of industrial machinery and equipment . The nation ’ s shipbuilding and auto manufacturing industries have reached their peak , while its electronics industry is the leading growth sector and an increasingly important generator of foreign exchange . Korea is ranked the sixth - largest auto manufacturer in the world , with a production of over 3 million vehicles annually . To meet ever - increasing fuel demand , large petrochemical complexes , supported by several large refineries , have been developed along the coast of the country . Other principal industrial products include cement , processed foods , plywood , chemical fertilizers , footwear , clothing , ceramics , glass , nonferrous metals , and farm implements . In line with the advancement of the nation ’ s industrial structure over recent years . Korea has continued to increase its investment in the manufacturing sector . In particular , government and corporate investment in information and communications technology has been increasing . Construction - related investment has grown with government support through infrastructure expansion projects , such as railways , roadways , marine ports and airport facilities . This government - led investment is combined with private sector demand for construction of new housing , office building and factories . In 2002 , consumer prices in Korea posted a 2 . 7 percent increase , while producers ’ prices rose 1 . 6 percent . During the early 1990 s , consumer prices recorded eight to nine percent inflation levels . However , thanks to government efforts to contain inflation as well as improvement in the distribution structure of farm and fisheries products , inflation has decreased considerably . Korea ’ s overall agricultural production doubled over the last 15 years . Although agricultural growth has since slowed , the much - emphasized goal of self - sufficiency in rice , the staple food of Korea , was attained with an output of 4 . 9 million tons in 2002 . Agricultural development efforts have been concentrated mainly on maximizing yields from the country ’ s limited arable land , which comprises only About 19 percent of total land area . New high - yield varieties of rice and other crops have been introduced . Also , a large - scale fertilizer and pesticide industry has been developed to keep farmers adequately supplied with these essential products . There has also been rapid growth in the production of fruits , vegetables and other high - value cash crops , as well as livestock products . The spread of vinyl greenhouses greatly contributed to the increased volume of the nation ’ s vegetable harvest . The process of industrialization resulted in a steady decrease in Korea ’ s farm population . The ratio of rural residents to the overall population plunged from 57 percent in 1962 to below 9 percent in the late 2000 s . This trend has also affected the employment structure of the nation ’ s industry . To solve the problem of rapidly dwindling rural labor , major efforts have been undertaken to promote farm mechanization . Mechanization has progressed has significantly in the planting and harvesting of rice . A nationwide reforestation program has been underway since the early 1970 s . The program consist of planting new trees and protecting existing forest areas in the hills of the country , account for some 64 percent of Korea ’ s land area . Also , new varieties of trees that are more productive and resistant to pests and disease are being developed . To conserve forestry resources until they become fully productive , tree cutting is strictly controlled . For over a decade , timber production has been limited to around 1 , 500 , 000 cubic meters . Most domestic timber demand has thus been satisfied by imports . As an adds benefit , these efforts have greatly contributed to the control of flood and soil erosion . The expansion and modernization of Korea ’ s fishing industry has been remarkable over the past two decades , making it an important source of foreign exchange earnings . The amount of fish harvested has increased rapidly as modern , motorized vessels began to operate in coastal waters as well as the open seas . Korean fishing bases have been established in Foreign Samoa , Las Palmas and other locations , while consumers now enjoy cuttlefish caught in waters off the Falklands . Korea ’ s deep - sea catch reached a peak in the mid 1970 s and then declined sharply due to rising fuel costs and the declaration of a 200 - mile economic sea zones by many nations . Korea has negotiated fishing agreements with a number of coastal nations to secure fishing rights in their territorial waters and is continuing efforts to reinforce its deep – sea fishing industry . Economic Challenges Over the past three decades , Korea has enjoyed an annual average economic growth rate of 8 . 6 percent and has emerged as the world ’ s 12 소 largest trading nation . In less than two generations , the nation has established itself as one of the world ’ s leading shipbuilders and manufacturers of electronics , semiconductors , and automobiles . International financial markets positively regarded Korea ’ s economic achievements , including sustained high growth , moderate inflation , high national savings , nominal external deficits , and significant government budget surpluses . Recently , however , these impressive accomplishments have been overshadowed by the difficulties of several major conglomerates and financial institutions . These failures raised doubts among foreign investors , which led to a serious liquidity crisis in late 1997 . The crisis also created serious unemployment problem . However , following the change of government in 1998 , Korea renewed its resolve to work with the IMF to fully implement comprehensive reform measures . As such , Korea was determined to adopt stringent adjustment measure to overcome the economic crisis . The new leadership took steps to promote reform in the financial , corporate , public and labor sectors with a view to restoring and strengthening foreign investors ’ confidence as well as maintaining a commitment to a free - market economy , restructuring of the jezebel - based system , and increasing flexibility in the market . The nation ’ s foreign currency reserves that totaled a mere US $ 3 . 8 billion as of the end of 1997 rose to $ 121 billion as of the end of 2002 and the nation has been able to repay all the US $ 13 . 5 billion rescue loan from the International Monetary Fund ( IMF ) . The IMF Executive Board on December 16 , 1999 declared that the foreign exchange crisis in the Republic of Korea was completely resolved . Korea ’ s credit rating meanwhile was restored to investment grade . Financial Restructuring A modern market - based economy cannot function efficiently without dynamic and well - supervised financial institutions . The Financial Supervisory Commission ( FSC ) , which serves as a regulatory mechanism to establish universal banking practices , has created a new system of prudent regulations and supervision , as well as a schedule for reform implementation . In the process of financial sector reform , the government has closed a number of non - viable financial institutions . Other viable banks are following through on the strong remedial actions imposed by the FSC to further improve their soundness . Korea ’ s non - bank financial sector also underwent restructuring . Four insolvent life insurance firms were suspended and will be ultimately taken over by other insurers . A total of 640 non - bank financial firms were suspended or had their licenses revoked . Korea ’ s government has mobilized fiscal resources totaling 159 . 0 trillion won ( approximately US $ 134 billion ) to support viable financial institutions in regard to their re - capitalization and the disposal of non - performing loans and resolve non - viable financial institutions . The financial institutions have also intensified their own rehabilitation efforts , including downsizing and the inducement of foreign capital investment . Corporate Restructuring In the corporate sector , overall results of restructuring have been quite positive . The debt - equity ratio of the manufacturing sector has improved dramatically , from 396 % in late 1997 to 130 % in September 2002 . And the ‘ too - big - to - fail ’ myth disappeared while 16 of the 30 largest conglomerates were sold , merged , and liquidated . Rule setting for transparent and responsible management has been carried out and reinforced through the appointment of outside directors , the introduction of audit committees , and the obligatory publication of combined financial statements . Capital Market Liberalization Korea ’ s strategy for capital market development centers on two interrelated policy initiatives , namely market liberalization and market augmentation . Capital market liberalization will directly increase Korea ’ s access to foreign capital and technology , while market augmentation will improve the operational efficiency of the capital market . Significant progress has already been realized in the implementation of measures to further open the Korean capital market and reduce barriers to portfolio and direct investment . Foreign investment will be fully liberalized for all industries , except for those involving national security concerns and cultural considerations such as the mass media . Certain sectors subject to international negotiations over foreign investment such as the communications and shipping industries will also remain controlled . Foreigners will be treated equally with Korean nationals when purchasing land for business purposes as well as non - business purposes . All limits on foreign investment in the local bond and money market have already been eliminated , as has the ceiling on foreign investment in the stock market . Foreign banks and securities companies are also allowed to establish local subsidiaries . As of May 25 , 1998 , foreign investors have been able to buy shares of any Korean firm without consent of the board of directors or governmental approval , except for defense industry companies and public corporations . Foreigners can now purchase up to 50 % of the outstanding shares of some public corporation . All types of takeovers , including hostile acquisitions of Korean corporations , are permitted by both domestic and foreign investors . Furthermore , foreign exchange transactions will be authorized for all financial institutions meeting certain requirements . In May 1998 , the aggregate ceiling on foreign investment in Korean equities was abolished . Government bonds to be issued over the next two or three years will carry a maturity of three years . These bonds will be issued on a monthly basis . Korea has also developed an institutional framework for mutual funds so that these funds can function as a key instrument for long - term financing . Private investors , both domestic and foreign , are now allowed to easily establish mutual funds in Korea . No qualification requirements are being imposed on investors who are sponsoring new mutual funds , with only minor standard exceptions . In essence , equal treatment has been guaranteed . Social Welfare Employment The employment structure of Korea has undergone a noticeable transformation since the dawn of industrialization in the early 1960 s . In 1960 , workers engaged in the agricultural , forestry and fishery sectors accounted for 63 % of the total labor force . However , this figure dropped to a mere 9 . 7 percent by 2002 . By contrast , the weight of the tertiary industry ( service sectors ) has gone up from 28 . 3 percent of the total labor force in 1960 to 71 . 2 % in 2002 . In the latter half of the 1970 s , the Korean labor market went through a series of major changes . Korea emerged as a competitive country in the global market with its labor - intensive industry such as textiles and footwear . And the stabilization of supply and demand in the Korean labor market enabled workers to demand their rights , which resulted in the organization of an increasing number of trade unions and collective action . The wages of workers has sharply increased since then . As Korea faced the economic crisis of 1997 - 98 , a national consensus has been established on the need for a flexible labor market . In March 1998 , the government introduced a law which permits companies to lay off employees if there is no other feasible alternative . The law has been in effect since June 1998 . Housing As in other countries , industrialization in Korea proceeded in line with its urbanization . In 1960 , only 38 . 0 % of Korea ’ s population lived in cities . By 2000 , 88 . 3 % of Korea ’ s population lived in cities . This rapid population growth in urban areas led to a housing shortage and spiraling land prices in cities . In order to solve the housing shortage problem and stabilize housing costs , increasing the supply of land available for residential construction and the building of small housing units have continuously been one of the top priorities of the government , In 1988 , the government established and promoted its “ Two Million Housing Units Construction Plan ” for the period of 1988 - 1992 . Actual housing construction for the period totaled 2 . 7 million units , and this massive supply contributed to a sharp stabilization of previously rising housing prices . The government has supplied an average of 500 . 000 to 600 . 000 housing units per year from 1993 to 1997 . As a result of these efforts , the housing supply ratio increased to 100 . 6 percent in 2002 from 72 . 4 percent in 1990 . In Korea , housing rental involves a unique system . Rental with monthly payments are rare , with most rentals requiring the payment of a lamp sum deposit , usually ranging between 20 to 70 % of the housing unit price . The deposit is refunded when the contract expires . This system , known as jeans , gives the property owner profit in the form of interest on the deposit . About 66 % of those who resided in rental system . With rising land prices and modernization of lifestyles due to economic growth , the ratio of people living in apartment buildings has continued to increase as well . The ratio is higher in larger cities with nearly half of all households ( 55 percent ) in the nation ’ s seven metropolitan cities living in apartments . Health and Medical Services Due to Korea ’ s success in economic development , the overall health of Koreans has improved significantly over the past three decades . In 1960 , the life expectancy at birth was 51 years for males and 54 for females . These figures have increased to 72 . 1 for males and females in 2000 . The infant mortality rate has likewise declined sharply , along with maternal mortality as well . These improvements are all directly related to improvement in diet as well as in available health and medical services . The ministry of Health and Welfare ( MOHW ) is responsible for all aspects of health services , including the strategic planning for the maintenance and promotion of national health and social welfare . The annual budget of MOHW has been growing recent years . In 2003 , it amounted to 8 . 35 trillion won . People are relying on medicine and medical services with growing frequency , and the share of medical costs to total household expenditures has increased accordingly . In 1985 , national health expenditure per capita was 85 . 000 won which increased to 654 . 000 won in 2000 . Health care in the form of medical insurance and medical assistance was first produced in 1977 . However , the coverage rate was only 29 . 5 percent up until 1980 . As of 2002 , 96 . 97 percent of the population had access to health insurance , with the remaining 3 . 03 % being able to receive direct medical assistance . The supply of hospitals and medical personnel has continuously increased . The total number of hospitals and clinics in the nation ( including Oriental medicine hospitals and clinics ) was 11 , 188 in 1975 , which increased to 40 , 276 in 2001 . Meanwhile , the number of licensed doctors , that totaled 16 , 900 in 1975 , increased to 75 , 295 in 2001 . National statistics for 2000 showed that there was one physician for every 556 persons , one dentist for every 2 , 609 and one pharmacist for every 929 . Social SecurityVarious systems related to social security have been implementing since the late 1980 s . These included expansion of medical insurance and medical and assistance in 1988 and 1989 , and the introduction of an Unemployment Insurance System in 1995 . The government has thus provided the basis for building a society that can ensure the well being of its people . The National Pension System , when first introduced in 1988 , covered employees at workplaces with 10 or more workers . It was revised to cover workers in workplaces with five or more employees in 1992 and was expanded to cover those engaged in agriculture and the self - employed in rural areas in 1995 . Finally , it came to cover the entire nation in 1999 . While the primary goal of the above systems is to provide minimum guarantees to the economically active population in the case of economic difficulties , there are also welfare programs directed to those not economically active . These public subsidy programs consist mainly of the following two parts : subsidies for living expenses and medical assistance . Due to increased living standards and the improvement in health and medical services , the average age of Koreans has increased rapidly , which means that the number of elderly has increased significantly over the years . In 1960 , the population aged 65 and over comprised 2 . 9 % of Korea ’ s total population . By 2002 , this ratio had increased to 7 . 9 percent , and is expected to rise to 14 . 4 percent by 2019 . So , Now the Pension Fund faces difficulties of Payment abilities , and improper regulation evokes conflicts with citizen movement volunteers .