As the South Korean economy has reached a more mature stage of its economic growth, what are the evolving challenges it has had to face?

What are its prospects of continued economic success in the increasingly globalised world economy?

The rapid growth and development in the newly industrialising economies (NIE's) in recent decades has been nothing short of spectacular. Now among the world's most dynamic industrialised economies, the NIE's of Singapore, Taiwan Hong Kong, and South Korea which will be the focus, stand as perhaps the best examples of successful economic development. The economic development of South Korea, which has been among the most rapid in the world is typical of the 'miracle' that is the NIEs.

Korea has come far since the days it was 'a nation of hungry rice farmers', by pursuing an industrialisation-led development commitment since 1961, which has since produced annual GDP growth of 8.4% per annum, second only to China. The success of South Korea, has been identified by a number of factors including the shift away from import substitution strategies towards e

Governments in the NIEs have been remarkably stable. This has had obvious benefits on the economy. There is no standard formula for government in the NIEs and there are differences between them across nations. Singapore for example has a paternalistic government whilst Hong Kong is essentially "laissez-faire" Stability is the only real link between governments of the NIEs.

Furthermore, the greatest of the challenges Korea has had to face to date was the Asian Financial Crisis of 1997. Up to this point in time many economists looked favorably upon the economic fundamentals of Korea. However, due to excess short term debt over the long term debts, excess debt over equity and the generating of wealth through asset price bubbles, which was clearly unsustainable, these vulnerabilities only required a small shock which was initiated by the devaluation of the Thai baht in July 1997.

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Approximate Word count = 2163
Approximate Pages = 9 (250 words per page double spaced)