Containers are stacked at Busan Port in the southeastern city of Busan on Nov. 29, 2024. (Image couretesy of Yonhap)
SEOUL, Dec. 19 (Korea Bizwire) – Nearly one-third of South Korea’s small and medium-sized exporters report being negatively impacted by the country’s ongoing political turmoil, according to a survey conducted by the Korea Federation of SMEs.
The survey, conducted from December 10 to 13 among 513 exporting SMEs, revealed that 26.3% of respondents had experienced setbacks due to domestic political uncertainty.
Key issues included delayed, reduced, or canceled contracts (47.4%), increased inquiries from overseas buyers (23.7%), disruptions in orders and deliveries (23.0%), and challenges related to high exchange rates (22.2%).
An additional 63.5% of respondents expressed concerns about potential future losses.
One manufacturing firm in Cheongju reported hesitancy from foreign buyers to provide upfront payments, citing unstable domestic conditions. A non-manufacturing business in Busan noted that a buyer postponed a December visit and delayed orders until 2025 due to uncertainty.
The sharp rise in the won-to-dollar exchange rate following the political crisis also caused financial strain. A manufacturer in Gyeonggi Province stated that payment terms were tightened after exchange rate spikes, while a firm in Chilgok faced price renegotiations and contract delays from its partners.
When asked about strategies to mitigate damages, 51.7% of companies emphasized explaining the situation to reassure buyers, while 13.3% focused on seeking new clients. However, 25.5% admitted having no clear countermeasures.
Exporters highlighted the need for government action, particularly efforts to restore South Korea’s international credibility and stabilize exchange rates.
The survey also revealed varying expectations about the duration of economic uncertainty: 49.3% believed it would persist for six months or less, while 32.2% expected it to last one to two years.
Chu Moon-gap, head of the Economic Policy Division at the Korea Federation of SMEs, stressed the urgency of restoring the nation’s reputation and stabilizing currency markets. “Exporting SMEs are facing significant challenges due to declining trust and rising exchange rates. Addressing these issues is critical to their recovery,” he said.
M. H. Lee (mhlee@koreabizwire.com)
