President Roh Tae Woo predicted today that South Korea, with its economy doubling in size, will enter the ranks of advanced industrialized nations by 1992. He also announced that this country will reduce its dependence upon exports for growth.
In a major budget speech, Roh told the National Assembly that during his term of office, South Korea, which only two years ago owed the world’s fourth-largest foreign debt, will be transformed into a creditor nation.
South Korea’s won currency “will then become an international currency, enabling our citizens to travel around the world with only Korean money in their pockets,” he said.
Although he set no precise target within his term, which ends in early 1993, Roh said deregulation of banking, liberalization of foreign exchange controls and opening of South Korea’s capital markets--all sought by the United States--will be carried out “on a phased basis.”
“A better balance between exports, on which we have been depending heavily for growth, and domestic sales” will also be achieved, said Roh, who became president in February. It was the first time any South Korean leader has deemphasized the need for exports--40% of which have gone to the United States in recent years.
An increase in per-capita income from slightly above $3,000 last year to $6,000 in 1992 will ensure steady growth of the domestic market, Roh said. Leading-edge industries will continue to expand, and the government will invest more in infrastructure, “virtually assuring an annual economic growth of around 8%" in real terms.
As a result, South Korea will sustain growth with vigorous domestic demand and less reliance upon exports, he said.
The president, however, made it clear that he is not mimicking Japan, which has promised to seek its growth entirely through demand at home. South Korea’s exports, Roh predicted, will climb to $90 billion in 1992, “making Korea one of the 10 largest trading nations in the world.”
Last year, the nation recorded $47.3 billion worth of exports globally. The American Embassy here predicts that South Korea’s global exports this year will rise to $57.5 billion.
In a reference to organized labor’s rising demands, Roh said that South Korea’s economic success to date threatens to create “public expectations and demands (that) are likely to soar to unrealistic heights.” He warned that “no one can come up with a magic formula to satisfy the aspirations of all citizens in one fell swoop.
By the end of his single term in 1993, which is all that is allowed under the country’s constitution, Roh predicted that “farmers, fishermen, wage earners and low-income urban residents will cease to feel that they have been left out of the economic mainstream” and will consider themselves part “of a stable middle class.”