This monetary fund was important to South Korea, because the country experienced fairly high poverty levels and also low industrial growth. Therefore, this initiative was aimed at fostering economic growth and development of the county. In addition, this initiative has played a vital role in helping South Korea to achieve its current economic levels and development at large.
Currently the nation has the eleventh largest economy in the world. This is a result of the long struggles in the sector. The International Monetary Fund insisted that crucial yet fundamental changes be awaken in the economy.These changes were also to affect the area in institutional structures. The body could not offer funds until these demands were met.
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South Korea was advised to apply traditional mix in its fiscal policies. This is done by imposing higher taxes and using less government spending. Another initiative was the credit tightening; this included the use of high interest rates as applied in Latin America. These policies that were brought by the International Monetary Fund and the World Bank were conditions that had to be met (Heard, 2007).The nation had to adhere to hem for help to be given considering that South Korea experienced a fall in its economy after the business of semiconductors had reduced.
This trade was the major export for South Korea, and it dropped from 1. 7 percent to 4. 7 percent in only a year for its GAP.
These monetary bodies have greatly influenced the nation’s current status. This is seen as a means to an end; it had to abandon fixed-exchange rate policy, and, therefore, the currency value was left for the market. It was due to these actions that the nation had its value in currency determined by its market.
Shrinking South Koreans current account deficit through increasing on its taxes and reducing the nation’s governments spending was a huge step for the nation. It is true that South Korea has challenges in poverty levels, and life for many people is challenging. It is necessary to consider that seventy percent of its inhabitants work on land; this forms forty percent of the nation’s income. South Korea is quite left behind in terms Of industrial development.
If to Compare to countries like India, South Korea lacks a dependable judicial system and civil services.The population of South Korea is greatly important in sustaining its growth. Currently having a huge market in technology, the nation has industries that are a common source of employment. Its citizens form the major source of labor for these industries and companies. These individuals are vital in performance index that results in the improvement in economic growth. For instance, the nation was considered the best in technology in the world, thus, this was a huge contribution of its citizens. Far from industrialization, it IS a highly profitable nation for businesses.
It is important o consider the fact that the nation has the highest income spending per individual (Heard, 2007). Moreover, people always look for ways to spend the money they earn; some prefer to use their money for fashion and technology. This shows that the nation has high revenue that the economy reaches after transaction.
It is necessary to stress that public spending in developing nations marks the rate of public employment. In South Korea, research is vital in sustaining various technological and agricultural sectors.The researches work endlessly to ensure that there are innovations that would boost their reference and productivity with time. Another challenge would be the changing climatic conditions that demand competence in adjusting for continued realization of results. A healthy population would work in ensuring that this endeavor is achieved.
Foreign aid has been a key factor in propelling South Korea to its current status. The leadership of the nation has used international aid in strengthening various areas like health care. Many diseases had been reported, thus requiring adequate approaches that would counter the tragedy of the infections.Therefore, in the year 1995, the nation appealed for international aid in its health sector. In 1 995, South Korea was heavily dependent on foreign aid as it could not sustain its population with its natural resources.
This was a hard period for the nation and its leaders. In the year 2005, the dependence on foreign aid ended, thus, foreign aid was stopped. At this point, South Korea and its resources strengthened so much that its population could easily rely on it. In conclusion, although currently South Korea is not highly dependent on aid from the International Monetary