On top of the previously mentioned economic problems, South Korea is losing confidence as job growth slows and the country has nearly a 100% reliance on imported energy. This country also faces intensifying competition from China with regards to manufacturing.
In his plans to deal with the economic issues in his country, President Lee believes strongly in deregulation and free trade. Similarly, he has put a high priority on reforming the tax system in place and regulations restricting foreign investment.
In his vision of economic recovery, President Lee plans to lay the ground work for his ambitious 10 year goals, or his 747 Plan. This plan consists of 7% GDP, $40,000 average household income, and emerging as the world’s 7th largest economy.
The iShares MSCI South Korea Index (EWY) is down 26% year-to-date. It’s most heavily allocated in consumer goods (28.9%) and industrial materials (21.1%).