South Korea Country Risk Analysis Research Paper

South Korea Country Risk Analysis - Research Paper Example South Korea is politically stable and has excellent infrastructure. With consistent reformation policies, the Government has been able to transform the country into a knowledge-based service-oriented economy. The labor market is flexible but the wages are higher than the neighboring countries. The workforce is highly qualified but the country has an aging population as the population growth rate is extremely low. Unemployment rate in the country is very low. Having a culture of uncertainty avoidance, risk assessments would be done and precautions and risk measures adopted. Being a collectivist society, loyalty is given importance. Economically too, the country is sound with low inflation rate, and the currency resilient to shocks. South Korea is an open economy ranking among the top 20 economies in the world. The private sector can operate freely without Government interference. The two major concerns are the aging population and corruption prevalent in the country. However, with the right business partner and sound knowledge of the economy, would help foreign businesses achieve the desired objective. Introduction South Korea, the Republic of Korea, is a presidential republic, a developed country with high standard of living. Having its origin in the World War II, South Korea is a fully functional modern democracy. However, political and economic analysis would help a multinational evaluate investment decisions. Location/Climate South Korea is strategically located on the Korean Strait covering a total area of 99,720 sq. km with a coastline of 2,413 km (CIA, 2012). This mountainous peninsula has the Yellow Sea on the west, and the Sea of Japan on the east. The southern tip of the peninsula lies on the Korea Strait and the East China Sea (Southkoreangovernment, 2012). Most of the land in South Korea is not arable. The peninsula comprises of about three thousand islands that are mostly small and uninhabited. South Korea has a temperate climate with very cold wint ers and a short rainy season. The average January temperature range is -7Â °C to 1Â °C (19Â °F to 33Â °F) in Seoul. Along the southern coast the winter temperatures are higher but they are lower in the inner mountainous areas. June through September is the rainy season. Population The population of South Korea as of July 2012 was 48, 860,500 with 73% of the population being in the 15 to 64 years age group. Population in South Korea has been growing at the rate of 0.204 percent which is considered a very low rate, leading to an aging population (Datamonitor, 2009). The population is mostly homogenous with just about 20,000 Chinese residing in South Korea. However, people of South Korea are either Buddhists or Christians and almost half the population (49.3 percent) does not follow any religion (CIA, 2012). The literacy rate is 97.9 percent while the unemployment rate is 9.8 percent. Most South Koreans live in urban areas because of the excessive migration that took place during t he country’s expansion between 1970 and 1990. As of April 2005, the number of foreign laborers in South Korea was 378,000 and 50% of these were without official authorization. Most foreign workers are from South Asian and Southeast Asian nations in addition to workers from the former Soviet Union countries and Nigeria. About 11,000 expat English teachers also live in South Korea apart from 31,000 US military personnel (Southkoreangovernment, 2012). Cultural Values The cultural dimensions of any nation are essential