South Korea, World’s 11th Largest Economy, in Deep Trouble

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South Korea’s gross domestic product (GDP) is $1.4 trillion (nominal), which puts it in 11th place among world nations. Due to trouble at Samsung, the country’s largest conglomerate, worries about military and cyberattacks from North Korea, and a scandal that may push its president out of office, its economic health is at risk.

Behind China and Japan, South Korea is Asia’s third largest economy, and it trails Canada and Brazil by very modest numbers. The economy is large enough that trouble would ripple to other countries.

Samsung’s revenue is nearly 20% of the country’s GDP. It is fighting to shrug off a number of problems. According to Bloomberg:

Samsung Electronics Co. and heir apparent Jay Y. Lee are facing rising pressure from investors for broad change at South Korea’s most valuable company.

Samsung executives and Elliott Management Corp. have been talking with investors in the U.S. and Korea to sound out opinions on the activist investor’s proposals to overhaul the Suwon, South Korea-based technology giant, people familiar with the matter said. Shareholders are voicing dissatisfaction with the status quo after Samsung’s smartphone battery crisis that will cost at least $6 billion and has seen its offices raided twice as part of a widening political scandal in Korea.

The presidential crisis could bring the government to a halt. According to Reuters:

Hundreds of thousands rallied in central Seoul on Saturday for a fifth week of protests against President Park Geun-hye, in the largest ongoing series of demonstrations in the country since the 1987 movement to democratize South Korea.

Park’s presidency has been rocked by allegations that a close friend used her ties to the leader to meddle in state affairs and wield improper influence.

Prosecutors investigating the case have indicted her friend, Choi Soon-sil, and are seeking to question the president about her role in the scandal.

North Korea continues to agitate with threats of missile attacks. One such action would rock the economy.

How important is South Korea’s place in the global economy? As a major supplier of consumer electronics, cars and heavy industry production, very.