Tag: economy

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]

Read the whole thing at the link.

A China hard-landing would be devastating for South Korea, finance minister tells WSJ @Kwanwoo http://t.co/WAZ6y2KFiz pic.twitter.com/Efi2aRT20l

— Alastair Gale (@AlastairGale) September 4, 2015

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]

70.5% of South Koreans think #China will be the economic superpower. More on #SouthKorea's outlook: http://t.co/eZxPHcc3yL by @Snydersas

— Council on Foreign Relations (@CFR_org) May 4, 2015

https://twitter.com/SouthKoreaDaily/status/593496512610607106

After reading this article it struck me that North Koreans are doing what many small business owners in South Korea are already doing by setting up small shops in front of their homes in various neighborhoods:

More residents are enjoying the convenience of using home-run stalls selling simple items, compared to conventional marketplaces that come with restrictions in operating hours, Daily NK has learned.

“You can sell and buy goods from these residential stalls as long as you have an established level of trust with the owner,” a source based in South Pyongan Province told the Daily NK on Thursday. “More people are converting rooms in their homes and selling goods day and night.”

This foundation of trust is bolstered by three chief pillars: the customer has evidence of a steady source of revenue, and is neither an undercover official looking to crackdown on the operations, or a swindler hoping to cut and run with the goods. Passing muster can take time and requires a number of others within the right circles for validation.

According to the source, these home-operated stalls started popping up in the 1990s, mostly around schools to sell snacks to students. Starting a few years ago, more people have been converting or extending parts of their homes and selling electronics–namely televisions, refrigerators, and washing machines–and food in bulk.   [Daily NK]

You can read more at the link.

Interesting article in Forbes that explains why the U.S. economy has passed the point of no return:

Chinese leader Xi Jinping knows something Barack Obama doesn’t: America is finished. The U.S. economy is an ocean liner holed below the waterline. In the stateroom, the band plays on – but, on the bridge, the outcome is clear.

With the arguable exception of the late-era Soviet Union, America is sinking faster than any Great Power in history.

As a proportion of national output, America’s foreign debts are already larger than those of any Great Power since the rotten-to-the-core Ottoman empire a century ago. For those who need reminding, the Ottoman empire, which had flourished for more than six centuries, was then within a decade of final collapse.

Because every dollar of current-account deficit (the current account is the largest and most meaningful measure of trade) represents an extra dollar that has to be funded from abroad, America’s foreign indebtedness is now accumulating at a rate of more than $1 billion a day.

There is no way America can export itself back to national solvency. As Xi Jiping knows only too well, this is a matter of technology. As soon as American corporations come up with a more efficient new production technology, they ship it to China or elsewhere overseas where it will boost the productivity of foreign workers. Any corporation that wants to sell in China must not only manufacture there but bring its best technology. Then it is expected to export back to the United States. All this means that the American economy has passed the tipping point. It is now simply too hollowed out to make a recovery. Even apparently solid U.S. manufacturers like Boeing, Caterpillar, and Corning Glass have long since sourced many of their most advanced components and materials from Japan, Korea, Germany, and other manufacturing-focused nations. (For a closer look at Boeing, click here and here. Much of Boeing’s most valuable technology has long since been transferred to East Asia, not least its avionics and its incomparable wing technology.)

In proceeding full steam ahead towards national bankruptcy, the United States is world history’s ultimate example of the triumph of ideology over commonsense. Beginning in the Eisenhower era, succeeding Washington administrations have bet the farm on ever-freer trade. Supposedly this would strengthen American economic leadership. To say the least, the powers that be in Tokyo, Seoul, and Taipei, as well as in Bonn, Frankfurt, and West Berlin, discreetly laughed at such epochal naïveté.

No nation has understood the stupidity of America’s trade policy more clearly than post-Mao China. On the one hand, American leaders have thrown the U.S. market wide open to Chinese exports. On the other, they have ignored Beijing’s in-your-face blocking of virtually all advanced American exports to China. The United States has been by far the most serious victim of Chinese protectionism. ( Forbes)

You can read more at the link, but the article goes on to explain how American corruption is worse than in China and how South Korea gets more goods through the Chinese wall of protectionism than the U.S. does.

So are we watching slow motion national suicide?