money and everything

Money and Everything – part 1

There is a feeling right now in Korea that the economy is stronger than it’s ever been. The Won is valued higher than ever, and considered undervalued and the “kospi”, the Korean stock exchange, seems to be breaking new records every day.

As for the Kospi, a friend of mine noted that the relative absence of legalized gambling in Korea – they have a horse track and a few casinos out in the mountains, combined with a national passion for gambling, has turned many people’s interest to the stock market to get their fix. That might be true, but there’s also a sense that fortune awaits.

Meanwhile, I’m also reading columns posting statistics like
“one in four university graduates can’t find a job”
“middle class see income gap widening”
“over 60% of senior citizens say they have no plans for retirement and can’t afford to stop working” (incidentally, the most common reason cited here was because of the costs of private education for their kids - English)

In fact now, almost daily there are reports of how much foreign investment is leaving, or planning to leave Korea. One article titled, “Alarming Corporate Exodus” shows that foreign investment in Korea has fallen from $9.2 billion in 2004 to $3.6 billion last year.

The same article quotes a survey of Korea’s largest foreign
companies, saying that 9 out of 10 plan to relocate in the next 3 years.

Almost half of them, 44% blamed an aggravating business environment as their prime reason for leaving – specifically, higher costs due to the strength of the currency, government regulations and “militant unions”.

As I write this, the picket lines at a local department store have been clashing with police. Just imagine a unionized department store. Even the baseball umpires are on strike.

What do we know about globalization? Large multinational companies move operations into poorer countries to save on production costs. They enjoy cheap labor and less restrictive labor laws.

They don’t like regulations and tend to insist that the local rules don’t apply to them. They also really don’t like unions. They stay awhile, make lots of money and leave with it.

When developing nations themselves become wealthy, the powers of globalization lose interest. Shared prosperity is not really part of the intended plan. These days Korea is doing well; maybe too well for their own good.

It was less than ten years ago, 1998, when they were bailed out by the IMF, saving their economy from ruin. Go back a little further, in the 1980’s, this was a military dictatorship.

Same paper, different page, I’m reading about how the Korean and American Joint Forces here are planning to restructure the war strategy. This plan should be completed by 2012.

To summarize the details, the Koreans will have control of military operations and there will be a significant reduction in US involvement, with many of the US bases here being closed or relocated and many troops being stationed elsewhere.

Sounds like Korea may be slowly losing its relevance to the global forces.

I’ve mentioned this in bars and people think I’m way off. I did find one who agreed with me.