Korea’s heavy reliance on exports, which account for half of its economy, and the openness of its capital markets make it particularly vulnerable to external factors. In addition, structural weaknesses could threaten the resilience of domestic demand and attitudes, which President Lee Myungbak has recognised.
“When it comes to the economy, the psychology of the people also matters.
Indeed some people refer to the recent crisis as a crisis of confidence. In order to overcome this crisis of confidence, we need to have confidence in ourselves,” Lee told his audience in a bi-weekly radio address to the nation on October 3.