Seoul Gyopo Guide Recommends
Yonhap Headlines- mK Business Daily
- Financial Times: Beyond BRICs (South Korea)
Category Archives: Korea
The Lost Seoul to Detractors: The Yen Taketh Away
S&P is way up, but the JPY is keeping the KOSPI flat at best
Popular Press Has Caught Onto What Readers of this Blog Already Know
I receive a fair amount of ridicule from readers that have said that my observations regarding the JPY/KRW rate was a gift to Korea. it was a gift that certain chaebol have used to build their competitiveness on the global stage. However, that advantage is now gone: the KRW/JPY rate has returned to its pre-financial crisis levels.
Bank of Korea Had No Other Choice
The previous posts here suggested that the BOK had to act, and fast. And they have. Lower interest rates was the only choice that the BOK had. There will be limits to the amount of flexibility available to the BOK. It appears that we will learn how much progress the Korean economy has truly made.
Posted in Korea
Leave a comment
SK Global: Is the Tide Turning on Corporate Governance in Korea?
Do Not Pass Go. Do Not Collect $200.
SK Group now-ex-chairman Chey Tay-Won was convicted of embezzlement and ordered directly to jail for 4 yours. Just wow. This blog has reported and comment on this issue, many times, in the past. This isn’t the first time that this has happened in Korea, nor is it the first time that Mr. Chey and SK has become familiar with the Korean penal system. In fact, the amount of money embezzled is small in scale compared to the past infraction of huge accounting abnormalities at SK Energy, for which Mr Chey has served a 1 year jail sentence. It is a little-known fact that the Korean government chose to not prosecute Mr Chey to the fullest extent possible at that time; the most -likely reason is that the government believed that the Korean economy was too weak to take such a massive blow.
One Small Step
This blog has taken risks by pointing out these irregularities. This money has been taken, in effect, by Mr Chey (alone, without anyone else’s knowledge whatsoever? Uh, no, is a very good guess), from the owners of SK: shareholders of the equity. Who is that? Foreign investors, who largely live in jurisdictions where 4 years is small compared to the penalty in their home countries. Who is that? Koreans, who own mutual funds or have rights to pensions, that have invested in SK. While it is true that in other nations, this would mean the end of Mr Chey’s professional life, he has survived in the past.
Board of Directors and Influential Shareholders
The only way for those that have taken from everyday Koreans, in such a blatant fashion, is for the Board of Directors and influential shareholders, such as the National Pension Fund and the Korea Investment Fund, to take a stand and prevent this from occurring in the future. Board of Directors should not merely be hand-picked by the founding family of a corporation, and the influential investors must block any such proposal, as is their right. The Korean justice system has stepped forward, and given Boards of Directors and influential shareholders the ammunition required to wage such a war against this type of activity. In this small way, the financial benefits from Korea’s rise in the global economy can be distributed as capitalism intends, and not solely to the few, who don’t share in the financial risk.
Not That Simple
Mr Chey cannot be stupid, of course. Strictly speaking, he is highly educated. The argument can be that the CEO of such a large, successful corporation should be highly compensated, and it is factually correct that a CEO of a corporation in the U.S. or Europe would earn far more than Mr Chey has. That, however, is the for the board of directors and ultimately the shareholders to approve. How Korean companies reach that objective cannot be reasonably foreseen at this time. Mr Chey will have four years to consider how that path can be traveled.
Posted in Korea, Korean Economy
Leave a comment
DID ANYTHING HAPPEN WHILST I WAS ON BREAK?
Back and Better Than Ever….
Ya take a little time off, and a few things have occurred, right up the Seoul Gyopo Guide’s alley….
1. Some bird got elected to be the President of Korea, and in the most ironic of twists, she probably represents the greatest juxtaposition of recent Korean history, economics, and gender that someone could possibly imagine. WOW WOW WOW (Settle down if you a woman over the use the word “bird,” which means female in Britain.)
2. Some dude totally failed logic in the U.S., and it lost him a win-able election. Oh, he also failed math. Oh, he has a Harvard MBA. The winner just did what he was supposed to do, despite himself. And the mayor of Chicago sat there, saying to himself, “I would never have let it come to this. It would’ve been over MONTHS ago.”
3. Some nutbag jumping around singing a meaningless song, in a nation that probably wins the “best collective nation at singing” contest in the world, created the most-watched video EVER on YouTube. Wonder how the musically-gifted in Korea (there are many) get a full-night’s sleep?
4. Korean companies did their annual, year-end, productivity-seeping, economically useless, chair shuffle, as shareholders watched the KOSPI lower by 15% compared to the 2012 high.
5. Housing in Gangnam has slid EVEN MORE (as predicted here), with policy solutions not helping. It is now too late. Over.
6. Don’t look now, but the Japanese Yen is MUCH CHEAPER now compared to the Korean Won, at exactly the wrong time.
Happy New Year, I gotta get writing….
Posted in Bank of Korea, Business, Korea, Korean Economy, Korean Society, KOSPI, South Korea, TV, USA
Leave a comment
Protected: This Just In: Ratings Agencies Are Useless. Look at Korea.
Posted in Korea
Enter your password to view comments.
Think Korean Education is Competitive? Try India
There are 1,200,000,000 Indians
This is an almost inconceivable number. OMG. Average age? According to Wikipedia (take that with a small grain of salt), 50% are under 25 years old. OMG OMG. Average income? $1,527 USD. That is something like 1,650,000KRW a year. Do you get the picture? Enormous country, enormous poverty, all young. When you think about your stress going from Anyang to Seoul, and the pain of the endless traffic, you should think again about the fact that Korea’s standard of living was about the same after the Korean War. If you take a taxi in Mumbai for an hour, you will see what I mean. People on foot for as long as you can see. You know those areas near Namsan (which are being “renovated”)? It is like that for miles and miles. Literally.
Big Hopes, and Big Problems
Let’s leave out the typical regional differences, and number of languages that exist in India. Here are some comparisons to Korea. In India, corporate corruption is alive and well. Misrepresentations are everywhere, running largely unchecked. That is to be expected in any emerging market country. The clever are too smart for antiquated customs and rules that are not keeping pace with the modern global economy. Again, this shouldn’t be surprising to any observer of the global economy. As has been stated here, the large young population could make India a global economic power on demographic influence alone. Do you think aspiring Indians don’t know this? You would be thinking wrongly.
Education? That is Another Matter
In Korea, there is the ubiquitous SKY (Seoul National, Korea, Yonsei) set of universities. Yes, in Korea, it has increasing becoming only “S” as the predominant university. It seems like the difference is widening, not narrowing, which is pretty remarkable. Nevertheless, there are other excellent schools in engineering, for example, like KAIST and POSCO. If you are new to Korea, or do not know anything about Korea, KAIST is the MIT/CalTech of Korea. There isn’t much debate about the order, so the creme de la creme are all trying to jam themselves into a virtual pinhole. In the US, there are many schools within spitting distance of MIT/CalTech (alums may dispute this generalization, but let’s move on).
Now multiply by, oh, let’s call it 20 times. That is India. It has one admission test, much like Korea (despite the gradual changes). Everything rides on it in India. So basically, there are literally more than 10,000,000 people who could, theoretically, take this exam every year. In Korea, there are now at least a few universities that represent top universities, even in engineering. In India, there is ONE top engineering college, the Indian Institute of Technology (IIT). So before Korea entertains complaints about the extreme competitiveness, it should think again, a simple plane ride west will prove this fact.
If you take out the extremely poor in India, the illiterate who could not afford a basic education (a large problem), that would reduce the amount of applicants versus spots at IIT enormously, but guess what? It would still be many, many TIMES more competitive than getting into KAIST. Best way to tell, ask a KAIST graduate what he thinks of IIT (if he met someone from there). That isn’t to say that Korean students don’t live a difficult life (especially compared to the US), but this is one reminder of how far Korea has come in a very short time.
If you think I am exaggerating, read this article about Delhi University, a largely non-engineering school.
Posted in Korea
Leave a comment
