NOT SO LONG AGO, the South Korean economy was loping along happily with the other Asian tigers, heading swiftly and surely for ever-better times. But then something went wrong. Now it moves slowly and a bit erratically, not entirely sure where it is going next.
This makes South Korea a nation with a remarkable economic past but a somewhat uncertain future. A few decades ago it ranked with some sub-Sahara African nations in the development league; since then it has become one of the few Asian nations invited to join the Organisation for Economic Co-operation and Development, an official self-help club of the world's richest states.
But South Korea these days shares problems with several Asian neighbours which have also seen a global economic slowdown slash exports and growth rates; its exports are down 12 per cent, and the official growth forecast for this year has been cut to two per cent from an original six per cent. At the same time, structural changes - in Korea as elsewhere - have seen low-wage jobs move overseas, creating an employment void that no one is quite sure how to fill completely.
'What will be our competitive edge in the future?' asks Donghyun Li, an executive at Seoul's Chohung Bank who believes the country has moved far beyond relying on the cheap labour which drove growth in past years. 'Will it be management? Technology? Does Korea have these? I'm not quite sure. That's why our economy is fragile.'
Fragile perhaps, but not desperate. Even with growth trimmed to two per cent, South Korea is doing much better than Asian tigers like Singapore and Taiwan. The global glut of electronics goods has hurt - South Korea is a major chip producer, for example - but it is fortunate to retain some healthy sectors from the old economy. Its shipbuilding industry remains competitive, and its auto industry is succeeding overseas.
The country has other assets as well. The labour force is industrious and literate, and a population of 47 million gives local industry a reasonable home market for its goods, even though exports account for 30 per cent of the gross domestic product.