It is amazing how interconnect the world has become when Britain leaving the European Union is having financial ripple effects across the entire world to include in South Korea:
Korea’s stocks and currency plunged as investors panicked over the possible fallout of Britain’s surprise vote to exit from the EU, dealers said.
Analysts said growing uncertainties on global financial markets, triggered by the Brexit, will overshadow the sluggish Korean economy. They ruled out any immediate huge direct impact on the real economy, but said it will weaken overall investment and consumer sentiment.
The benchmark KOSPI closed down 3.09 percent at 1,925.24 points. The tech-loaded KOSDAQ market plunged 4.76 percent to 647.16.
The won tumbled, closing at 1,179.9 won against the dollar, losing 29.7 won from the previous day.
Analysts said the Seoul stock market will remain weak for the time being on growing uncertainties in global financial markets. [Korea Times]
Over at Rimjin-gang they have an interview posted with one of their North Korean contacts in regards to the recent Workers’ Party Convention. The interview concludes with the North Korean explaining why the Kim regime will never implement Chinese style reforms that would improve the well being of the people:
The reporters for the congress should report only about ‘the developing Pyongyang.’ Ordinary people in Pyongyang earn a living through a business. A woman in the photo is selling Chinese made sausages. Taken by Koo Gwang-ho at Moranbong District on June 2011. (ASIA PRESS)
Q: What is your expectation from Kim Jong-un regime?
A: I hope that they would open the door like China. Frankly speaking, if they do so, there would be no people who flee from their hometown (North Korean defectors). I don’t know why they fear so much about opening, or reform. While drinking, an official, one of my acquaintances, said: “If we open like China, we would be overthrown. So the top never open our door.”
Q: Do you mean that they don’t try to reform since they know their regime to be overthrown even if the opening would bring better off for the people?
A: Absolutely! Those son-of-bitches (Kim Jong-un and his followers) think that they should survive to the last. That is why they don’t. (open the door) [Rimjin-gang]
It appears the generational divide in South Korea is getting worse as young people are now describing themselves as the “give up” generation. Imagine if Koreans after the Japanese colonization and the Korean War decided to “give up” where would Korea be today? Instead they worked extremely hard and built the country we see today that the younger generation is complaining about:
The younger generation have had to give up so many things that they are now calling themselves the “n-Po” generation. University student Chan-mok Lim, 25, said, “Myself and a lot of my friends are working part-time jobs to pay for tuition. If when we graduate there wouldn’t be a problem finding a job, we could smile through the difficulties we have now. But the reality is that when we graduate, finding a job will be a real problem. Even for those friends who have found a job, they worry about getting married. The ones who got married, they worry about how to buy a home. We are calling ourselves the ‘n-Po‘ generation because we are giving up all the things that are of value in life.”
The barriers young people are facing are reflected in their self-depreciating language. Internet communities made up of young people are creating new slang at a fast pace. Words alluding to current slang such as “dirt spoon” in comparison to “golden spoon” (someone who was born in a wealthy household). “Dirt spoon” refers to young people who grew up in a poor home, and have little financial support. [Korea Observer]
I think this line from the article sums up quite well what is happening:
Kim Su-han, professor of Sociology at Korea University, “Looking at the situation here the ‘whining strategy’ becomes rampant. Young people who cannot enjoy any benefits in life are feeling angry or disenfranchised and have taken to mockery and self-depreciation. The older generation is recognized for their hard work, but the younger generation is more known for inheritance than hard work when it comes to achieving success. This way of thinking reflects the difficulties young people face today.”
I think the concentration of wealth that you see both in the ROK and the US has to do with crony capitalism where politicians are serving business interests more than the public at large:
The top 10 percent of South Koreans control 66 percent of the country’s wealth, with the inequality gap becoming more acute over time, a recent report showed.
According to the report by Kim Nak-nyeon, an economics professor at Seoul’s Dongguk University, Asia’s fourth-largest economy is encumbered by a sizable difference in wealth between the haves and have-nots.
While the rich monopolized wealth that includes both financial and property holdings, the lower 50 percent only accounted for 2 percent of the country’s assets.
The scholar, who based his findings on public data released by the National Tax Service from 2000 through 2013, said the size of wealth controlled by the top 10 percent started growing in the 2000-2007 period, before the global financial crisis, with the average wealth held totaling 624 million won (US$544,500). [Korea Times]
What I find most amazing about this report is that Germans on average work four months less a year than Koreans. This just shows how unproductive the hours by Korean workers likely are when Germans are able to have a manufacturing and export based economy like Korea without the need for long hours:
Company employees and self-employed Koreans worked an average of 2,124 hours per person last year, second only to Mexico, at 2,228 hours.
Koreans work 354 more hours every year than the OECD average of 1,770. This calculates to 6.8 more hours of work each week.
In addition, the average number of hours worked by Koreans rose by 45, up from 2,079 hours in 2013.
Korea had the highest average number of working hours until 2007 when Mexico exceeded this.
The lowest average of working hours is in Germany, at 1,371 hours a year. This is equivalent to eight months of working hours in Korea. [Korea Times]
This article by Professor Hong Sung Ki of Ajou University further demonstrates the failure of the Sunshine Policy and how giving economic aid to the Kim regime does nothing to help the North Korean people or reform their economy. I have said for years that the Kim regime will never give up their nuclear weapons or commit to Chinese style economic reforms because it would threaten the stability of the regime and Professor Hong also agrees with this assessment. I highly recommend reading the whole thing, but here are Professor Hong’s key points:
President Park’s July 1st, 2015 suggestion that steps towards nuclear disarmament be traded for infra development in North Korea’s SEZs certainly fits within the conservative party’s mold. But these tactics have continually failed in the past and we have no expectation that things will change for the better in the future. Once the North gets rid of their nuclear capabilities, they know that the South and the world at large will be able to simply ignore them.
In this light, North Korea really does not need our economic assistance at the moment. As we have seen from Jang Hyeong Soo’s paper, the North is skilled at bringing in and retaining foreign currency, which it can use to put out any economic fires should they arise. The real explanation for their economic depravity is hidden within the nature of the regime itself. The upper elite feed off the misery and suffering of the common citizens. Without this oppression, they would not long be able to retain their positions of authority. For these reasons, North Korea has an incentive to continue antagonistic behaviors on the world stage in order to get attention. South Korean presidents have a one term (five year) limit, which gives them little time to make progress in the face of such antagonism. North Korea is the only winner in this game of chicken, of provocation and aid solicitation. That’s why South Korea’s policies have been so inept at dealing with the Kim Dynasty up to this point.
South Korea should respond in kind to the North’s antagonistic behaviors. South Korea needs to continue the legal and large scale introduction of foreign ideas and information into North Korea while simultaneously pressuring the regime to disarm their nukes. It’s time to stop looking at the North as a little brother in need of economic assistance. Now is the time to look for the regime’s breaking point in order to stop the horrors that they regularly commit on their people in order to retain their authority. The time has come for a fundamental shift in policies regarding North Korea. Considering the fact that the North will never willingly throw away their nuclear capabilities, the South needs to develop a system of political and military counter measures in tandem with a new diplomatic approach. [Daily NK]
The unemployment and under-employment of young people in South Korea continues to get worse, but I have to wonder how much this has to do with jobs that younng Koreans will no longer do:
The number of young people out of work has reached a record high in the first half of this year.
Statistics Korea said on Sunday that 410-thousand people in their 20s were unemployed in the January-June period, which is the largest first-half figure since 2000 when the nation began to compile related data.
The number of unemployed young people, which posted 308-thousand in 2013 and 380-thousand last year, surpassed the 400-thousand mark this year.
Analysts attribute the rise to the sluggish economy and aftereffects of increased employment last year.
Statistics Korea said that one out of three people aged between 15 and 29 are hired for temporary or part-time posts as their first jobs. [KBS World Radio]
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