From: btlee@emx.cc.utexas.edu (Byungtae Lee)
Newsgroups: soc.culture.korean
Subject: RE:KOREAN ECONOMY
Date: 1 Jan 93 18:57:28 GMT
Organization: The University of Texas at Austin; Austin, Texas

From: shlee@jhunix.hcf.jhu.edu (Seunghun Lee) writes:

:not at all.
:go again any shopping center near you and check small things from Taiwan out.
:They still export small things which made by small and middle companies.
:They have kept developing the quality of small goods and
:provided very nice after-services,
:and still have solid market ground of small things.
:Such small things doesn't need high tech
:it just need small cute idea to improve its quality.

1. Taiwan vs. Korea

     OK. I want to provide my observation on Taiwan and why we can not compare
     two economy easily.  I visited Taiwan in 1989 for business and saw
     many small/medium sized electronic companies. First of all, 
     what impressed me was the special gates for mainland visitors in
     ChangKaiSeik airport. At that time, they were fully exploiting the cheap
     labor from mainlander. When I visited small companies, it was clearer.
     What they were doing was that bringing design from SiliconValley (Taiwanes
     companies), doing processes which requires some special machines or
     techniques and shipping to mainland.  After that, they just were packing 
     products and put "Made in Taiwan".

     At that time, we had very similar difficulties. Businessmen fromm both
     countries did not know what to do. First problems were
     (1) rapid foreign exchange rate's change becuase of the pressure from
        USA (You may remember article 301.)
     (2) Lack of blue workers for small businesses:
        Both countries were short of blue workers partially because younger
       generation prefered service industry to manufacturing industry.
        Luckily enough to Taiwan, Mainlanders provides the solution while
       we did not have.
     (3) Labor disputes:
        At that time, top news in the world in May, Tiananman Square 
        demonstration in mainland and labor disputes in Korea. And one 
        abondoned student' body was found  in Korea, so-called "LEE Chul Kyu
        Kun Byun Sa Sa Kun" if my memory serves correctly.  From outside,
        Korean demonstrations looked much more radical that Tiananman Square.
       Suddenly, Taiwan got the big economic upbeating because many foreign
       buyers temporarly transfered their orders to Taiwan, for example, 
       Nike, Rebook etc....

     Still I think that if we can not cooperate with North Korea economically,
     we have to give up the "labor intensive industry". It is the same logic 
     that we could get those industries in early 60's from Japan. It is also
     very economically natural phenomina. By this circulation, world economy is
     expanding and the poorer countries also can have their chances as we did.

      For me it is very difficult to say that Taiwanese success results from
      purely Taiwan. I rather think they have been really luckier than us.
      They have Pre. Lee rather than former Chang and mainlanders have
      Deung rather than Mao.  They did not have War while we had. 

:let's see korea
:in korea, when someone invent a cute small mechandise, and
:want to get a fund from bank to build a small factory, 
:it is so difficult for him to get money from bank.
:and futhermore let's say he is luck to get money and started to 
:produce the goods. and if it seems to be popular,
:well, CHAEBUL just modify slightly the idea and make the goods and sell it.
:it is not the kind of environment which promote inventment.
:you DO know two persons who owned middle companies committed suicided
:recently, don't you?
:one of them got even a medal from government.
:and they said that it was impossible for them to get a loan from bank.
:even a guy who got a medal from government?
:well, someone might think that maybe these days banks 
:in korea don't have enough money.
:yes they do. there are lots of money in bank.
:but they are very unwilling to give a loan since they know
:in korea small and middle companies are CHAN-BAB (cold-BAB).

2. Chaebol vs. Small Business

    I agree. Almost every body knows it!  Why do you need to repeat it again?
    My question was  then how to build the desirable relationship between
    Chaebol and small business and what 
    made such undesirable now.  But I do not agree that everything is 
    government business. Do you think that government should provide unlimited
    monetary supply or order the bank to give loan to a specific small business
    because goverment awarded a medel to him.

    Blaming is the easist but providing alternatives is not.

    I have heard so  many dillemas and paradox from
    Korean economic policy makers. From their worries, I do not have the right
    solutions to such dillemas either. That's why I do not buy your simplistic
    views.  Sooner or latter, I will provide such dillemas and paradox which I 
    could not answer by myself after finishing my paper revision.
    I like this topic much more than that damn DJ-YS topic.

    In fact, banks do NOT have enough money because we have big underground
    economy and still there is so-called "PRIVATE LOAN" business. 
    This is the simple economic logic: if bank have enough money and 
    the borrower has good credit, why does not bank give him a loan?
    Because the supply can not meet demand, the priority comes up.
    That's why small business
    or indivudual loans are not so available. However, because of high
    inflation, government does not have the option to supply more money.
    
    The declining of some small businesses can be viewed either
    losing ground because of weak economic structure or 
    vanishing foams of hyper- inflation economy by
    gamplings (To-Ki).  If the latter case, in the long run, we can expect
    the competitive industry. No matter its size is, it will be desirable that
    inefficient firm should be gone and the competitive firms prosper.

    I do not have the convincing insights what's going on now because I have 
    been isolated from the real economy for 2 and half year. But what I am
    opposing is  one side interpretation of what's going on.
    Economic logic is more cruel than we desire. When you bring the emotional
    examples of suiside, who can object your arguments?

    But still I have very optimistic view about Korean economy. Back to 8-10
    years, many peolple forecased that Korean economy would collapse soon 
    because of heavy foreign debts. The reason why still I am optimistic is
    simple. The economic prosper more deeply depends on PEOPLE in the long run.
    Go to Tailand, China, ..... and check how many people can not read and 
    how much corrupted government is.
    Korea(Both North and South) is one of the countries which have highes
    literacy in the world. 

 Thank you. 





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