OECD Urban Policy Reviews, Korea 2012

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This Urban Policy Review of Korea  assesses Korea’s approach to sustainable urban development as expressed in its recent urban policy reform and national green growth agenda. The government has responded to the economic, environmental and social challenges that have resulted from Korea’s rapid urbanisation process with, on the one hand, urban policy reform based on qualitative urban management and urban competitiveness and, on the other hand, the adoption of a National Strategy for Green Growth that emphasises the role of cities in achieving stronger environmental and economic outcomes. The Review proposes a series of recommendations designed to advance Korea’s sustainable urban policy approach, which include (i) developing a comprehensive, multi-sectoral approach to urban development that is tailored to the different needs of urban areas, (ii) closing the gaps between expected and actual outcomes in urban planning, (iii) maximising economic efficiency in the building and transportation sectors and (iv) improving policy co-ordination across public agencies.   



Assessment and Recommendations

Korea has proven itself to be one of the world’s fastest-growing countries, despite few natural resources and constant demographic pressures within a relatively small territory. Highly compressed economic growth since the 1960s propelled Korea to bring its per capita GDP to the level of developed countries. This strong economic performance has been supported by economic development strategies that have successfully evolved over time to adapt to changing priorities and global conditions. Total GDP was approximately USD 1 344 billion in 2008 (converted to Korean University of Technology PPP), while estimated national income per capita was about USD 27 000 in PPP in 2009, slightly below the OECD average. Korea has also consistently shown resilience to recent economic shocks, including the 1997 Asian financial crisis and the 2009 global economic crisis. It has been one of the first OECD countries to show signs of recovery from the most recent crisis, thanks to the implementation of a large fiscal stimulus package composed of additional public expenditures (3.2% of GDP) and tax cuts. However, a high level of household debt, exceeding 150% of household income, the heavy dependence of domestic consumption on imports, relatively low levels of labour productivity, and an ageing workforce have been identified as potential threats to Korea’s continued economic success.


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