A Case Study on South Korean
The essay on case study analysis of South Korea demonstrates the systems of Political, Economic and Legal and the discussion of it’s either the attractiveness or foreign direct investment. It includes the analysis and discussion on the three systems then their inter relationship and evaluation of the need of foreign investment in South Korea’s market.
Basically, Political systems are the formal and informal political processes by which decisions are made concerning the use, production and distribution of resources in any given society (GSDRC 2014.). Economic system is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area (Wikipedia). Market, Mixed and Common are the three types of economy. The political economy is defined as the study of the way in which a government influences or organizes a nation’s wealth (Collins Dictionary). The Legal system refers to a procedure or process for interpreting and enforcing the law .It elaborates the rights and responsibilities in a variety of ways. Three major legal systems of the world consist of civil law, common law and religious law (Uslegal).Foreign Direct Investment (FDI) refers to the investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company. Foreign direct investments are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies (Investopedia).
South Korea has a long political history then it was occupied by Empire of Japan in 1910 A.D. and released on 15th August 1945. After the World War II, a democratic based government (Republic of Korea) was set up in the southern half of Korean Peninsula (CIA World Factbook) under the U.S zones. South Korean current government is Presidential Republic and is the combination of three branches which are The Executive, The Legislature and The Judiciary. With effective administrative division of Nine Provinces, Six metropolitan cities, One Special city as Seoul and One special self-governing city in South Korea and the political leaders during the three decades has brought drastic change in political stability and the economic condition. However, political stability can also be determined by its level of corruption. Despite the government of South Korea is democratic, it has some shares of corruption. According to the study published in 2009, 79.8% of middle and high schools see Korean society as corrupted (The Korea Times, 2009). Corrupt government can display adversely affect towards foreign investors as a country with political risk can be a problematic for the investors.
During the fifteen years of military leadership of Park Chung-hee, the country’s economic regarding Per Capita Income rose up by 17 times in comparison to the North Korea (CIA World Factbook). This was possible because of the export- oriented industrialization strategy that lead to huge growth in economy. After the economic crisis of 1997, Korea experienced the extraordinary growth and its mixed economy led the one of the poorest agricultural nation to the 11th nominal and 13th purchasing power parity GDP (around $ 2 trillion) in the world. After the crisis, South Korea ended up in the agreement to the Organization for Economic Cooperation and Development (OECD) on December 12, 1996, and this membership aid in establishment of legal framework for the stepping into Foreign Direct Investment. A high rate of saving and investment, a strong emphasis on education that boosted the number of young people enrolling in Universities upsurge the Korea’s development. Along with the advancement in technology, South Korea possessed the international popular brands, which impact more in economy, referring as Conglomerates (Chebol) such as LG electronics, Samsung and Hyundai. Their economy is heavily dependent on international trade, which makes them 5th largest exporter and 7th largest importer in the world. Moreover, United States and European Union have contributed as good trading partners for the South Korea, and it has aided in the export increment. The government passed the Foreign Investment Promotion Act, rendered better-quality services like one stop services for foreign investors, introduce motivating mergers and acquisition companies burdened with excessive debt loads or cash flow difficulties by looking for FDI. Possible procedures were adopted in order to achieve significant results in few years. FDI are involved in manufacturing sector, with an emphasis on the IT, electronics, chemical, and machinery industries. Foreign Direct investment in the country provides the huge opportunities for the new jobs, increment in the GDP and escalates the living standard.
South Korean legal system is found to be harmonious with the adoption of European civil law, Anglo- American law and Chinese classical thought. In the existence of extensive regulatory and legal practices, Korean Constitution requires the separation of powers among the three branches: legislative, executive, and judicial. The president and the government are in charge of the administration, the National Assembly is responsible for the legislation, and the Court enforces and interprets laws by making decisions over legal disputes. In the judicial system of south Korea, there is no any jury system, although since February 2, 2008 a limited provision for advisory juries was introduced for the criminal cases and environmental cases where judges decides all the questions of law and fact. Korean citizen have exercised the rights to freedom, religion, assembly, the press, vote, hold public office, petition, education, work, marriage and health, protection against double jeopardy, involuntary labor. South Korea has also the practice of Business contracts, Intellectual Property – National regulation and International Agreements such as Patent law, Trademark, Design, Copyright, Utility Model Law, Legal Frameworks of Business consisting Consumer , Tax, Labor, Customer laws, International Dispute Resolution- Arbitration law (Bodies- Korea International Trade Association KITA). Beside this, South Korea is good in continuing diplomatic relations with 190 nations and has also established Free Trade Agreement (FTA) with the European Union and the European Free Trade Association that includes Norway, Switzerland, Liechtenstein and Iceland), United States, Turkey, Vietnam, ASEAN, Australia, Canada, Chile, China, Colombia, India, New Zealand, Peru and Singapore.
To conclude that, South Koreans are very collectivistic which shows that they put more importance on whole rather than on the individual’s wellbeing. South Korea have international trade relationship with abundant nation and have also experienced significant development because of FDI, Trade agreements but there are some factors that need to be priorities by the government to the trade and investment liberalization. Not to mention that, this country is still lacking strategies in terms of trade and investment, the government should enhance the investing atmosphere for the foreign investors, their culture should make a little change to welcome the foreigners. Moreover, Korea would be much benefitted if its government let other know about the attractiveness and availability of FDI as South Korea has plenty of opportunities to harness the benefits of FDI.
Scott, Z. and Mcloughlin, C., (2014). Political Systems: Topic Guide, Birmingham: GSDRC, University of Birmingham, UK
Political economic System. Retrieved from https://www.collinsdictionary.com/dictionary/english/political-economyEconomic System. Retrieved from
https://en.wikipedia.org/wiki/Economic_system ADDIN EN.REFLIST Legal System. Retrieved from
https://definitions.uslegal.com/l/legal-system/Legal System. Retrieved from
South korea Legal system ( Civil Rights). Retrieved from https://en.wikipedia.org/wiki/Law_of_South_Korea
South korea Legal system ( Judicial System). Retrieved from https://en.wikipedia.org/wiki/Law_of_South_Korea
South Korea Legal system (Types of Law) Retrieved from https://en.portal.santandertrade.com/establish-overseas/south-korea/legal-environment
Legal system of Korea. Retrieved from https://www.latestlaws.com/law-worldwide/legal-system-in-south-korea/
Legal system of South Korea. Retrieved from https://www.latestlaws.com/law-worldwide/legal-system-in-south-korea/Foreign Direct Investment. Retrieved from
South Korea. Retrieved from https://www.nationsonline.org/oneworld/korea_south_profile.html
SOUTH KOREA GLOBALIZATION IMPACT. Retrieved from https://studymoose.com/south-korea-globalization-impact-essayKorea’s embrace of globalization. Retrieved from http://www.koreatimes.co.kr/www/news/biz/2013/05/348_91475.htmlSouth Korea Economic Status. Retrieved from https://www.heritage.org/index/country/southkoreaSouth Korea Trade agreement with international countries. Retrieved from https://www.export.gov/article?id=Korea-Trade-AgreementsSouth Korea Trade agreement. Retrieved from https://en.wikipedia.org/wiki/Foreign_relations_of_South_Korea