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Yonhap Headlines- (3rd LD) S. Korea qualifies for eighth consecutive FIFA World Cup despite loss to Iran
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- S. Korea qualifies for eighth consecutive FIFA World Cup despite loss to Iran
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Monthly Archives: April 2012
A Different Kind of IMF 시대. The Good Kind.
Seoul Pledges $15 Billion to the IMF
In the late 1990s, South Korea faced sovereign default. The things you read about Greece? Korea was in virtually the same situation. It received enormous international financial assistance, in the form of loans from the International Monetary Fund (IMF). In Korea, this was called IMF시대 (please don’t say “HEY! Just like 소녀시대). Controversy ensued, but Korea paid back the loans, with interest, and in advance. It was an era of austerity for Korea and the Korean economy. One dollar bought 2,100 Korean Won at the time.
How Things Have Changed
This week, the IMF doubled the size of its reserves. Why? Europe, virtually the entire continent (except Germany and Great Britain), is being engulfed by debt that it cannot handle. Hat in hand, IMF President Lagarde, an elegant Frenchwoman, has secured pledges from the international community. Not surprisingly, the IMF has turned to Asia. One of the donors? South Korea, to the tune of $15 Billion. So while struggles continue for everyday Koreans, and the stress level is high, the correct context is that Korea has come very, very far in a remarkably short period of time. This seemingly small headline is just a simple reminder of that incontrovertible fact.
Posted in Korean Economy, Korean Society
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Japan’s Excruciating, Inevitable Economic Decline and Korea
This Is NOT An Personal Vendetta Against Japan, Nor The Japanese
Let’s get this straight. Japan has accomplished the near-impossible. No natural resources, surrounded by no allies to speak of, and thousands of miles away from the largest developed markets, Japan had, at one time, grown to the second largest economy in the world, with less than half the population of the U.S., the world’s largest economy. But things change, and the decline of Japan is akin to the train wreck that no can help but to watch. The Seoul Gyopo Guide has pointed this out on many occasions. And while the Japanese language is easy for native Korean speakers to learn, this blog has stated that learning Japanese is a huge waste of time.
Japan’s Inexorable Economic Decline Continues
Recently, some headlines have grabbed the attention of the Seoul Gyopo Guide. One, here at CNBC.com, points out the decay of the Japanese manufacturing sector. From electronics to automobiles, Japan’s decline has been relatively swift. Perhaps most punishing of all, Sony, the standard-bearer of Japanese excellence, has become a second-class citizen in the technology world. To readers of this blog, these articles are not news at all. A very strong Japanese Yen, coupled with an aging population that doesn’t demand the absolute best features in its products, add up to a very unsavory combination. Where innovation is king, Samsung and Apple now carry the torch. Thirty years ago, Sony was the unparalleled, unchallenged leader. Their slogan at that time? Sony. The One and Only.
Today, perhaps it should be “Sony. One of Many.” or “Sony. One of the Lonely.”
Lessons For Korea
Korea and Japan share a very complicated relationship. Love, hate, and envy are just a few words that can be used. Hallyu stars are enormous in Japan. Kara et al probably spend more time in Japan than Korea. It makes sense; Japan still has a population more than twice the size of South Korea’s. It has been said that the economic revelations in Japan usually exhibit themselves in Korea a decade later. Fortunately, this has not been the case so far. Beaten down by the Asian currency crisis, and IMF involvement, Korea has avoided the over-expansion that has plagued the Japanese banking system. That said, there are certain similarities. The first of those is the unwieldy corporate structure of the chaebol is similar to the conglomerate structure of Japan. The second is that the Korean population is rapidly aging. So while in the past, Japan has been a model of sorts for Korea, now it is merely a model of what to avoid, and not what to become.
Posted in $JPY, $KRW, Japan, Korean Economy, Korean Society
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