THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

South Korea

Ranked 35th of 149

At a glance

Ranks

35 th on the Legatum
Prosperity Index™

29th
36th
41st
17th
19th
29th
73rd
105th
91st

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, South Korea performs best on Education and Health and scores lowest on the Social Capital sub-index.

Visit our Rankings table to see how South Korea compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Despite outstanding performance in Education and Health and real improvements in Natural Environment sub-indexes, an over-delivery in South Korea has disappointingly turned into a deficit in the last decade mainly due to diminishing democracy and social capital.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The Prosperity Index shows South Korea as a stable country in search of new ways to augment its prosperity. It shares with many other Asian countries a focus on education, health, and stability while struggling with accommodating the impacts of globalisation on its traditional family ties and social values. Despite worrying developments like the recent constraints in political rights, the country shows a promise and provides inspiration to the region in terms of economic reforms and environment protection.

Governance and Education in South Korea and OECD countries
South Korea has seen significant education achievements but needs more democratic and transparent governance

Education is a dominant priority in South Korean society, heavily influenced by Confucian philosophy. The annual College Scholastic Ability Test constitutes the most significant national event. A certificate from a prestigious university is seen as highly important, notably as route to higher social status and a source for family pride. The ferocious competition and accompanying anxiety may explain the discrepancy between the country’s superb performance in measurements for education quality and the dissatisfaction expressed by its citizens on the same subject. Ranked at the 17th in the Education sub-index, South Korea is second only to Singapore in pupils’ achievements in international education assessments; with almost the entire population literate, the country also boasts a well-functioning education system for anyone from kids to adults, demonstrated by its 100 percent primary completion rate and the world third highest tertiary education years per worker. Therefore, the findings of surveys that only 56% of Koreans are satisfied with their education system should be read in this context.

Confronted with slowing economic growth, the two governments in the past decade have both targeted reforms in business and environmental policies to boost the economy. Park Geun-hye, the first female elected president in South Korea’s history, has also made great efforts in increasing female labour participation. Loosened labour market policies, redundancy costs have fallen from 91 weeks of salary to 28, coupled with favourable fiscal and monetary policies encouraging corporates to invest, have pushed South Korea to the 4th easiest place in the world to start a business, a substantial improvement for a country famous for its rigid labour regulations. Although almost half of Korean women choose not to work, progress has been made as one percent more females have joined labour force since 2010. More highlights come from the Natural Environment sub-index, both wastewater treatment and air pollution reduction have seen remarkable improvement in the last ten years, and a 15-rank jump in this sub-index in turn rewards the government’s consistent policy focus on environmental issues.

While progressive in gender and environmental issues, more repressive patterns are also captured by the country’s deteriorating standing in the Governance sub-index. Tougher action against political opponents and increasing use of online censorship have reduced the country’s hard-won political rights. The more centralised governing style see recently has also generated criticism of a lack of transparency in policymaking and concerns over judiciary independence. Moreover, recurrent allegations of official corruption have undermined the government’s reputation, and eventually prompted the approval of greater anticorruption law in 2015. All these regressive changes culminate in a sharp decline in South Korea’s Governance score, and a subsequent 4 rank fall over the last decade.

South Korea’s biggest prosperity deficit, however, is found in the Social Capital sub-index. The country is in the bottom third of the world on this measure, following a plunge of 14 ranks since 2007, which should ring alarm bells in a country proud of its family traditions and national solidarity. The rapid urbanisation in the last few decades has aggravated a sense of alienation and aloofness as satisfaction with opportunities to make new friends and experience of helping a stranger are both below world average. In addition, the country’s relatively high level of linkage between family members and friends has suffered big loss in past decade, a vivid testament of globalisation’s debilitating effects on traditional family-based social structure.

Overall, South Korea is still one of the most prosperous countries in Asia. However, despite rising wealth, prosperity growth has not kept pace. Equally as important as economic and environmental reforms, are democratic and transparent governance, which should also be strengthened for a more prosperous state.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.