Korea underwent a major financial crisis in 1997, which shook up its entire economy.
On the surface, Korea seems to have recovered since then. And yet, beneath the surface structural defects have got deepened.
Some of them are:
-Innovation engine has not been upgraded.
-Manufacturing jobs have disappeared.
-The middle class base has waned
-Disparity between big business and small business has widened.
-Resources have been mismanaged.
-Monetary bubbles has formed due to increased capital inflows and easy monetary policy
-The levels of debt both at government and household have increased.
Some of these defects are rooted in its economic model which has made Korea rapidly grow its economy. Some are caused by its policy choice and misallocation of resources. Of course, external factors such as a worldwide economic slowdown and capacity overhang have affected them.
Korea has a heap of increasing problems looming.
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