It was the sort of bland instruction that bespeaks a leader at least temporarily out of specific solutions. Obviously, neither rising oil prices nor Ford's falling fortunes, which probably influenced the company's decision to pull out of the Daewoo deal, are Kim's fault. The index recovered some of those losses in ensuing sessions, but the damage to sentiment had been done. Initially, it was the pullout by Ford that grabbed the biggest headlines. The oil price rise and Korea's interdependence on oil is a factor I cannot ignore.
Many analysts feel the same way.
Blame for the problem has so far been leveled at Korean manufacturers for being too heavily dependent upon oil. Some analysts say South Korea's policy of subsidizing energy in the 1970s in a bid to boost manufacturing exports is the culprit. The criticism may not be entirely fair, however. Lee Eng Lock says South Korea uses comparatively more energy than Japan and the U.S. to produce a given amount of GDP because the structure of its economy is different. It has fewer service companies and, in general, lower-value manufactured output than its more developed counterparts.