S. KOREA’S EXPORTS TO HIT NEW RECORD

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Whenever the Korean economy faced a crisis, such as oil or foreign exchange shocks, it was able to rebound thanks to exports. Outbound shipments are predicted to record an all-time high this year despite the pandemic. However, the increase in exports is not resulting in more jobs being created.

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Since achieving 100 million dollars in annual exports in 1979, Samsung Electronics has been at the forefront of South Korea's trade. It has become the first domestic manufacturer to record 110 billion dollars in annual exports.

[Soundbite] Kim Dong-won(KB Securities) : "Despite disruptions in the global supply of components, booming chip exports played a crucial role. Exports of smartphones and consumer electronics are also booming."

The success is not limited to Samsung. This year, South Korea's overall exports are predicted to surpass 640 billion dollars. The nation's trade volume is likely to exceed 1.25 trillion dollars. That's a record high amount. Exports of semiconductors already surpassed 100 billion dollars. Outbound shipments of 15 major items are growing at a double-digit rate. If the trend continues, by 2024 Korea could become the world's sixth economy to see its exports surpass 700 billion dollars. Unfortunately, this does not result in more jobs. For every one billion won invested in exports, only 6.9 new jobs are created, and their number keeps dwindling by the year.That's the lowest level compared to the job creation effect of consumption or investment. This is happening because domestic demand for labor force is decreasing due to growing production stemming from international division of labor and technological innovation. Another reason lies in the growing share of high-tech export items such as chips, which have a low employment creation effect.

[Soundbite] Lee Jae-soo(The Federation of Korean Industries) : "The job creation effect is quite strong, but customized measures are needed to boost employment in the automotive and food sectors, where exports are declining compared to around a decade ago."

Despite the pandemic, Korea's exports are at an all-time high, and their role in supporting the domestic economy is as strong as ever. However, job creation and supply chain issues remain as stumbling blocks.