The latest statistics from the Central Bank of South Korea show the terms of trade index for the country continued to deteriorate last year, dropping 4.1 percent below the previous year and dipping to its lowest point since 1988. The reason is that import prices are rising whereas South Korean semiconductor and electronics export prices continue to decline.
On Feb. 18, Chosun Iibo advised the South Korean government to prioritize the problem: in the fourth quarter last year, South Korea's real GDP expanded by 5.5 percent compared to the previous year, but real GDI -- real income -- was only 2.4 percent, after deducting losses from terms of trade.
Both presidential candidates have been admiring Singapore's and South Korea's economic performance. However, Taiwan, Singapore and South Korea are all similarly facing the challenge of a development bottleneck.
Hwan C. Lin is a research fellow at the Taiwan Public Policy Council and associate professor of economics at the University of North Carolina at Charlotte.
TRANSLATED BY ANGELA HONG
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