Korea was one of the OECD countries most severely affected by the global crisis, even though its financial sector had been relatively healthy.

Korea has been hit hard by the global financial crisis and the earlier commodity price shock, which together ended the expansion and pushed up inflation. Sharp depreciation of the won since mid-September has further clouded the economic outlook. Growth is projected to fall to below 3% in 2009 and then pick up gradually as the world economy improves.

Today, barely more than a decade after its first commercial incarnation, it is difficult to think of a policy domain that is not affected by the Internet.

The Internet and the constellation of information technologies it connects are viewed as essential ingredients in addressing some of the world's most pressing policy issues: sustainable and increasing economic growth, ageing societies, environmental management, energy efficiency, the eradication of poverty, and many more. The implications for economic and social development are far-reaching and profound, including for the next several billion users.

See Joong Choi
Chairman, Korea Communications Commission

In 1998, the Internet was emerging as a major new medium for communications. OECD ministers gathered in Ottawa, Canada, and established policies promoting online activities in areas such as privacy, security, taxation and consumer protection. Since the Ottawa ministerial, the global Internet economy has grown remarkably.

Can you remember life before the Internet? Though quite a new technology, already a world without the web has become as unthinkable for many of us as a world without telephones. But what of the future? Can the benefits of this extraordinary technology be multiplied, and how can the thornier challenges be met?

The number of broadband subscribers in the OECD rose to 235 million by December 2007, up 18% from 200 million subscribers in December 2006.This growth increased broadband penetration rates to 20 subscriptions per 100 inhabitants, up from 16.9 in December 2006.

One country with an exemplary record in broadband is Korea, host of the 2008 OECD ministerial meeting on the Future of the Internet Economy. On broadband reach it is the seventh in the OECD in December 2007, for fibre-optics it lies second only to Japan and is well ahead of the rest of the field, and for download speeds, it is in a comfortable third, after France and Japan. Korea is also a leader in mobile technology.

Both the size and the relative incidence or frequency of the foreign-born population have increased in all OECD countries since 1995. So while there have been large increases in traditional migration countries such as the US and New Zealand, there have also been sharp rises in Denmark, Korea, Ireland, Italy, Norway and Spain, where inward migration has recently taken off.

The Korean economic wave continues forward, with strong growth and low unemployment expected in 2008-2009. But the upsurge appears to have left some younger people behind. True, at 10%, Korean youth unemployment is below the OECD average of nearer 15%, and though the country has a lower employment rate, this reflects a much lower school drop-out rate and high participation in education.

A statue of Korea's legendary General Lee Soon Shin stands guard outside the Ministry of Information and Communications in central Seoul. A poster announcing a major international joint Korean/OECD ministerial conference on the Future of the Internet Economy to be held on 17-18 June hangs at the front of the building.

An acceleration of domestic demand, combined with continued buoyant exports, is projected to keep economic growth at around 5% in 2008-09. Strong demand from other Asian countries is sustaining export growth at double-digit rates, despite the appreciation of the won, which has helped to keep inflation below the Bank of Korea’s target zone.

Despite the dot.com crash of 2001, growth in broadband has been strong. Indeed, the number of broadband Internet connections in OECD countries has risen from an average of 2.9 subscribers per 100 inhabitants in 2001 to 13.6 per 100 in December 2005.

In 1996 just when the Korean government took the initiative and worked hard to join the OECD, some media and civil society organisations were reluctant to extend their support. They worried, saying that it would be too premature for Korea to join the rich man’s club and would cause us great losses.

Welcoming address of Korea’s Deputy Prime Minister Okyu Kwon to a special conference in Seoul 22 September 2006, marking Korea’s 10th anniversary in the OECD.

Korea’s economic transformation has been one of the most remarkable of the past century. From the ashes of a terrible war, in a short period of time it rose to become an industrial power, joining the OECD in 1996. Korea has now set itself the ambition of becoming a knowledge-based economy.

Korea’s economic recovery in 2002 – with GDP growth of 6% despite a sluggish world economy – reflects the success of its economic restructuring programme and the underlying dynamism of the economy. But this should not lead to complacency about resolving remaining structural weaknesses and addressing emerging imbalances, the latest OECD Economic Survey of Korea says.

Korea became the 26th full member of the Paris-based International Energy Agency, a sister organisation of the OECD, at the end of March.

Korea became the 26th member of the International Energy Agency on April 20, the second new member this year after the Czech Republic joined in February. “We heartily welcome the Koreans,” said IEA Executive Director Robert Priddle. “Their membership will strengthen the Agency presence and influence in the Pacific region.”