Economy

Jobless Exceed One Million for First Time
The impact of the financial crisis is hitting the economy hard with the number of jobless exceeding one million for the first time in the country's history. According to a report released by the National Statistical Office, the number of jobless was tallied at 1,235,000 in February, an increase of more than 300,000 from the January figure of 934,000. This means the number of people out of work increased by 674,000 in the first two months of the year. Since more than 10,000 persons a day have lost jobs since the beginning of the year, analysts estimate the number of jobless will reach 1.5 million by the end of this month.

Two More Merchant Banks to Be Shut
The Ministry of Finance and Economy on March 29 ordered two more merchant banks to be closed, noting that the two have the least possibility of any of those under surveillance of being returned to viability due to excessive borrowings. The official said the newly-formed Financial Supervisory Board will oversee the rehabilitation of 14 merchant banks now operating normally to screen for further insolvency. Of the country's 30 merchant banks, 11 have been shut and three others - First, Samyang and Daegu - are certain to be closed. If critical cases Nara and Daehan succeed in staying afloat, the country's surviving merchant banks will number 16.

Banks Lay Off 12,500 Workers
Korean banks sacked a total of 12,500 employees in just 100 days since the country sought economic assistance from the International Monetary Fund (IMF). Between mid-December and March 12, 8,170 employees were ousted from their workplaces at 15 Seoul-based commercial banks, 2,900 from provincial banks and 1,460 from state and special-purpose banks.
The IMF has demanded tough restructuring measures within troubled banks that include layoffs in return for rescue loans. The laid-off workers accounted for 9.9 percent of the total 126,100 employed by the nation's 30 banks.


Per Capita GNP Falls to $9,511 in 1997
A prolonged economic slump and financial turmoil last year brought to an abrupt end the era in which Koreans could claim a per capita income of $10,000. The nation's per capita gross national product (GNP) declined 9.78 percent to $9,511 in 1997 from $10,543 the previous year, the central Bank of Korea (BOK) reported. The fall came only two years after national per capita GNP broke the $10,000 ceiling for the first time, when it reached $10,037 in 1995. It rose slightly to $10,543 in 1996.

The ministry has said it is looking to record a trade surplus on a customs clearance of $25 billion this year and the figures indicates the nation is well on its way to meeting the objective. The impressive trade performance was made possible through increased exports of semiconductors, iron and steel, petrochemicals and petroleum. Another encouraging fact is that exports to advanced countries, including the United States, the European Union and Japan, increased 29.6 percent for the year as of March 20 while those to developing countries in Asia rose by 14.3 percent.
On the other hand, the import of capital and other foreign goods has been falling at a drastic rate over the same period, falling on average by 35.5 percent compared to their 3.8 percent dip in 1st Qtr. 1997.

Consumer Product Imports down 41.4 Pct in 1st Qtr.
The reduction in the import of consumer products has considerably surpassed the rate of decline in total inbound shipments in the first quarter of this year, with some falling by as much as 96 percent. The Ministry of Commerce, Industry and Energy said in a report that imports of consumer goods for the year stood at $2,055 million as of March 20, down 41.4 percent over the corresponding period of last year. Total imports, by comparison, were off by 35.5 percent The proportion of consumer goods to all imports also fell to around nine percent, considerably lower than the 11 percent recorded during the same period of last year.

Listed Firms Record Worst-Ever Losses in 1997
Nineteen ninety-seven was a devastating year for Korean companies as their earnings deteriorated sharply due to financing burdens and foreign-exchange losses following the onset of the nation's financial crisis. The Korea Stock Exchange (KSE) reported that 510 listed companies whose fiscal year ended Dec. 31 suffered a combined net loss of 4.55 trillion won, a performance in stark contrast to the 3.81 trillion won in net profits achieved in fiscal 1996. In particular, the 26 listed banks recorded a net loss of 3.83 trillion won in 1997, a severe setback in comparison with the 1.01 trillion won in net profits a year before.

PC Demand Greatly Decreases Due to Financial Crisis
The personal computer industry is being badly hit by the financial crisis. According to the industry, PC sales in February fell by 30 percent from the same period of last year customer demand shriveled. With the trend to lower-priced PCs in the 1.5 million to two million won range becoming more pronounced, the manufacturers' revenue position continues to erode.

Foreign Banks in Korea Triple Net Profits in '97
Foreign banks operating in Korea turned in an outstanding performance last year. In stark contrast to the poor results of domestic banks, foreign banks experienced close to a tripling in their net profits. Some 39 of the 53 foreign banks doing business here reported a combined total of 930.48 billion won in net profits for the 1997 fiscal year, a dramatic rise from the 313.08 billion won a year before, the Office of Bank Supervision (OBS) said. "The surge was achieved by a remarkable increase in earnings from foreign-currency transactions and investment in derivatives," said an official at the bank watchdog agency.

Home Electronics Exports Hit 89 Pct of Industry Turnover
Exports of home electronics are reaching new highs with overseas sales accounting for as much as 89 percent of industry turnover. The surge is due to beefed-up marketing efforts by leading companies and the weak value of the Korean won. Industry sources report the deep recession in the domestic market has left companies with no alternative but to direct their efforts overseas and in the process are reaping stunning rewards.

Six out of 10 Chaebol Suffer Losses in 1997
Six of the top 10 business conglomerates suffered huge deficits last year due foreign exchange losses and high interest rates. The listed firms of the 10 top business groups also saw a decrease in turnover growth, which had been running at an inflated high rate over the past few years The listed corporations whose balance sheet is settled in December - the month the impact of financial crisis began to strike home - performed even worse. Only Samsung, Daewoo, Lotte and SK chalked up profits while the remaining six were in the red, according to the Korea Stock Exchange.

Imports of Luxury Consumer Goods Drop 73 Pct in Two Months
Imports of luxury consumer goods during the first two months of this year plunged to nearly one-fourth those reported a year ago. Imports of 20 major consumer goods in the two-month period were valued at about $93 million, down 72.6 percent from $349 million a year earlier. The 72.6 percent fall in consumer goods imports was more than double the decrease of total imports in the corresponding period.