South Korean economic experts are talking bullish again after suffering through the worst slump since the country began its remarkable boom in the late 1960s.
They talk of a return to relatively high growth rates in the 1980s led by a renewed export expansion, and already there are some signals that bear them out.
Shin Byong Hyun, deputy premier and economic planning minister, said recently that he expects a 5 to 6 percent growth in gross national product in 1981. By 1982, he said, the growth rate should be 8 to 9 percent, almost equal to the momentum piled up in the miracle years of the 1970s.
Because South Korea's economy is export-oriented, these high expectations depend to a large extent on the industrial world's performance. And another dose of political instability, such as that which prevailed throughout much of this past year, could dampen the struggling country's economic hopes.
But some key signs have turned in a more favorable direction.
The country is now in its fourth month of an export expansion after a slump that struck in 1978 and continued for about two years.
The goal of $17 billion worth of total exports will almost certainly be met this year -- it was over the $16 billion mark at the end of November. Letters of credit, the most reliable indicator of what's to come in the export field, were up 39 percent. That heralds a busy time in the first half of 1981.
"Exporters now feel they are back to the situation they were in in 1975," one government official said.
He regards the trend as proof that South Korean exports are recovering their competitiveness that was partially lost to other countries after a period in which unusually high wage increases were granted to workers.
The government has been trying to hold down wage increases since early 1979 and believes it is now nearing success, although a round of unprecedented strikes last spring extracted increases of more than 25 percent in many industries.
Early this year, the government also devalued the South Korean won by 36 percent in another attempt to make products competitive and officials say that devaluation is now taking effect in world markets.
Although the long-term forecasts look hopeful, South Koreans are still suffering from the effects of the slump. Real income declined during the late 1970s as inflation ate up the benefits of wage increases. The inflation rate this year will be officially about 30 percent, and some experts claim it really is nearly 40 percent. Unemployment is slowly rising because many marginally profitable small and medium sized business bombed this year.There is a huge demand for housing.
The government is preparing to reflate cautiously and simultaneously trying to put the brakes on inflation. They hope to bring the official inflation rate down to 20 percent next year and to force it all the way down to 10 percent in 1983.
To help ease the pain for the people, the government is planning a major new housing program by offering the first home financing in a country where home buyers in the past have paid hard cash. A new public land development corporation will buy and develop home sites to stabilize skyrocketing housing costs and the goal is to double or triple the availability of housing units in 1981.
The government also will embark on a major road-paving program at a cost of $200 million a year, in part to make it possible for rural dwellers to work in the provincial cities.
The result of the reflation, officials say, will be visible in a generally better standard of living by next fall.
Much of this success will be dependent on South Korea's ability to achieve political stability, which has been in short supply since president Park Chung Hee was assassinated in October 1979. The country has been run by an obscure group of military officers, one of whom, Chun Doo Hwan, was installed as interim president last September.
In the economic field, Chun has moved quickly to revive international confidence in the South Korean economy by bringing to high government posts some of the technocrats who helped to chart the high growth policies of the 1970s.