Social Conflict Costly for Korea
|June 26, 2009||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
Social Conflict Costly for Korea
As two Koreas talk, US tracks the North’s ship
Payment for land is vital to both labor and capital, as Korea shows. We trim, blend, and append three 2009 articles on Korea from: (1) ChinaView, Jun 19; (2) Reuters, Jun 19, by Jack Kim; and (3) Korea Times, Jun 24, by Kim Tae-gyu.
by ChinaView, by Jack Kim, and by Kim Tae-gyu
- S Korea, DPRK wrap up latest talks over joint venture
The third round of talks since the inauguration of the Lee Myung-bak regime between South Korea and the Democratic People’s Republic of (North) Korea (DPRK)’s delegation concluded.
It was held in Kaesong (in the North), where 106 South Korean companies operate with some 40,000 DPRK workers, making a variety of products, from electronics and watches to shoes and utensils.
Earlier, DPRK asked South Korea to quadruple monthly wages for workers from $70-$80 to $300, as well as raise land rent to $500 million, a 31-times increase from the current $16 million. That rent is one of the few sources of hard cash for the destitute communist state.
Following previous talks on April 21 and June 11, the two sides met after South Korean President Lee Myung-bak called Pyongyang’s demands “unacceptable” in a summit with US President Barack Obama earlier this week. The DPRK strongly denounced the comment.
The delegation from the South focused on the South Korean worker who has been detained in the DPRK since late March and proposed a joint survey of foreign industrial parks.
The DPRK did not provide any information on the detained worker but said they intended to lift the traffic curfew in the industrial park which slows the movement of materials and workers.
Both sides agreed meet again July 2.
- Two Koreas talk, US tracks ship
The US Navy was tracking a North Korean ship, the first shadowing under the UN sanctions adopted after Pyongyang conducted a nuclear test May 25 that put it closer to having a working atomic bomb.
The sanctions bar Pyongyang from trading in weapons, including missile parts and nuclear material. “North Korea will endlessly try to export arms. (That) is a very profitable business compared to other goods,” said Cho Myung-chul of South’s Korea Institute for International Economic Policy.
North Korea warned it could fire another intercontinental ballistic missile, toward Hawaii, in defiance of UN resolutions. That could be part of efforts to consolidate leader Kim Jong-il’s power in preparation for succession in Asia’s only communist dynasty.
US Defense Secretary Robert Gates said he had redeployed anti-missile assets in the Pacific region, including advanced radar and other defensive systems that might succeed in bringing down medium-range ballistic missiles.
North Korea in April fired what it said was a rocket to put a satellite in orbit, but regional powers said the launch was actually a disguised test of the long-range Taepodong-2 missile, designed to fly as far as US territory. The rocket flew about 3,000 km (1,860 miles), well short of the 7,000 km needed to take it to Hawaii.
- Social Conflict Costly for Korea
In social conflicts, South Korea ranks fourth worst among member countries of the Organization for Economic Cooperation and Development (OECD). The Samsung Economic Research Institute (SERI) claims social conflicts cost Korea up to $250 billion a year in GDP. Many analysts said the figure is too high, nearly 20-25% of GDP, but they agreed the cost is quite high.
“For 27 OECD nations, the average is 0.44,” SERI researcher June Park said. Only three states, Turkey, Poland, and Slovakia, chalked up worse figures than Koreas 0.71.
European countries, especially those in Scandinavia, scored best: Denmark led with 0.24, followed by Sweden with 0.25, and Finland with 0.28. France and Britain were in the middle at 0.38.
Japan’s figure was 0.42 while that of the United States was 0.44, the average.
Park said the causes of Korea’s severe social throes are political feuds, militant trade unions and “rent-seeking” activities of government officials. Reducing the index to the average means the nation’s GDP per capita would jump from last year’s $18,602 to about $24,000.
Communications consultant Michael Breen asked “opinion leaders to articulate goodness of individualism, civic rights and responsibilities, the free market, and the rule of law. It is also important to replace the idea that democracy means rule by public sentiment with the notion of representative democracy.
An American asset manager working here said, Frequent social disputes are one of main reasons behind the Korea Discount along with North Korea’s threat.
JJS: Sounds like a job for geonomics. Places that have recovered rents and spread land ownership enjoyed less crime and less militancy. Korea has taxed land somewhat and even has a small Georgist (geonomic) movement, so dont count out the best basic idea for progress!
Jeffery J. Smith runs the Forum on Geonomics.!
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