Korean Economy

If that flashy title didn't' grab you then this pic will.


Money, money, money...milk and honey...it's a rich man's world!--Abba

One thing I like about Korea is things happen in chunks. By that I mean that almost everything: e.g., investment trends, newspaper articles, social issues happen in large waves here. The same happens elsewhere too, of course, but the amplitude here seems to defy belief sometimes. So, when it comes to doing a roundup of the news here I find it pretty easy to find a common thread...let's see how it goes.

Basically, the economy here is not so hot. The think tanks are talking about a Double Dip Downturn (say that 10 times quickly) with slowing growth, falling apartment prices and slower real estate sales (an area that many Koreans kind of bank on to provide for their investment returns, as the local stock market is brutal) and corporate governance issues making headlines yet again (corporate governance has to do with bribery, accounting scandals and other white collar crime). Bankruptcies are also happening, with the Young Chang, Samick merger being called off on account of government intervention due to threat of competition matters (good job, watchdog!). Even the hookers are having a tough go of it with the double-whammy of a slow economy and new policing measures. All of this shows up in none-too-pretty numbers such as increased insurance fraud, people not paying their phone bills and even suicide.

North Koreans who came here to escape the repressive regime of 'Dear Leader' have not had a good time, either. Many are marginalized by South Koreans and end up in rather unsavoury or unclean jobs (the dreaded 3Ds: Dangerous, Dirty and/or Difficult). Even native Koreans who are lower down the ladder (such as part-timers) are having a tough go of it and workers at Korea's nuclear energy sites are facing their own health concerns. Of course, as anyone who has been in Korea for any length of time may know: all workers have the threat of the 회식/hwei-shik (office party) above their heads at the end of the working day.

This could be part of the reason why China is rapidly closing the tech gap between the two countries. Another problem is Koreans are just making too much money, which makes competing with the Indonesias of the world more difficult (but Koreans perhaps are a lot more productive...I think the jury is out on that, though). In Japan, though, where the economy sucks and their wages are among the highest in the world they can still continue to move along (slowly) because their internal consumer base keeps on buying. To counter these threats from China, Korea is exporting its 'expertise' in credit cards and, in a tit-for-tat arrangement, starting to open its rice market to imports and even lowering tariffs in many goods that may come from overseas (although I doubt many Koreans could buy a non-Samsung or non-LG plasma display).

There are some bright points, though. For one, the rich are still buying Ferraris and Maseratis. Samsung has trumped the world's chip-makers and got down to 60-nanometer processing power. Korea has developed Super TVs. New car models are starting to rev up sales here. In financial news, the risk premium on Korean bonds has dropped (which is a good thing). And, a new, healthier ginseng beer has been developed--finally!

Korea is also moving ahead with its (Stalin-like?) plans to develop industries (like IT) and even whole cities and regions to attract foreign capital and investment. They're taking on such huge markets as Russia as well (with their mouthwatering Choco Pies, for starters) and, when that fails, workers are even opting to work outside of Korea in order to achieve their dreams. This, I think, is a good thing because even though they say that kids learn the same in any language and some new education concepts are being tried here I believe the strict family, school and (for men) military training that virtually all kids go through here leads to less creative thought and an unnaturally high regard for hierarchy. But, that's the way things are here.

Ok, that's it...if you read every article linked too you probably took over an hour to read this. If you're still bored there is an interesting board on tax matters in Korea (written in English) that I found lately...enjoy.