Discussion - 3 challenges for Korea

(my answer to a question regarding the critical challenges Korea will face in the 10 years to come)

I were to select 3 challenges, I would pick :
- one that policies can solve but are addressing counterproductively nowadays (the Brain Drain / Capital Drain),
- another one that policies are having a difficult time tackling (China and regional competitivity), and
- yet another one, utterly unpredictable (North Korea).
The fourth challenge (Demographics) could partly find, in the previous 3, solutions more sustainable than today's massive imports of South East Asian wives for the rural poor.

The most vital challenge is NK. I'm not worrying about nukes but about a brutal social / political / economical collapse, and I keep warning my Korean friends about what I call a "Albania Scenario" : they only benchmark with Germany's reunification, but they should also consider post-Hoxja's Albania, the only case vaguely similar to Kim Il-seung / Kim Jong-il's Xanadu (a country run like a sect, a people unable to live in a democracy, nor to survive in a free market).
=> Worst case scenario : a third Bush-Cheney term, with Shinzo Abe's neofascist clique to wrap it up.
=> Best case scenario : Beijing manages to coerce Pyongyang into tougher reforms (at last)

The Brain Drain / Capital Drain issue could prove more critical than it seems - the golden youth of the country is switching continents and it starts showing.
=> Worst case scenario : Korea's "undeclared emigrants" (the name I give to those who have a home and spend quite a lot in Korea but have other homes, passports and niceties overseas) reduce dramatically the time and budget they devote to their country (ie after the burst of the real estate bubble). Korea is left with a few wealthy people, an impoverished middle class and an ever increasing poverty. Even top chaebols could change nationalities (individuals as well as companies).
=> Best case scenario : Seoul decides to leverage on its diaspora (ie a "coming out / coming home" - more transparency vs less taxes and a lighter military service) to strengthen its links with the US, the Middle East and even Europe. Korea must be loved by its own people again. It must also become the herald of cultural diversity in Asia far beyond the shameful exploitation of the international fad for its disposable celebs.

Regional competitivity remains a priority for this administration, but if Korea wants to become a hub, it will need much more focus (ie too much intranational competitivity and confusion). Especially with the return of ultranationalists in Japan and a much fiercer competition from China, whose revisionists have other ideas in mind : beyond the rewriting of Koguryo history, Beijing intends to create a new regional capital of Korea in China !
=> The system of regional clusters and the strengthening of partnerships with Europe could pay.

Gloomy, but Korea's main asset remains its people. That's one of the reasons why it shouldn't risk losing its most promising talents to the rest of Asia or to the US. Also : Korea should stop selling its soul for short term profits, exports and investments : that would be the best way to become a suburb of Shanghai.

White blogule to OH Se-hoon - swift boats across the Hangang

LEE Myung-bak may or may not become South Korea's next president. Like Sarkozy, he could be leading in the polls too clearly too early. Actually, the man who changed the face of the Capital city (Bus Rapid Transit system, restored Cheonggyecheon, Seoul Sup...) always seems in a hurry and doesn't like to waste time. For a start, he never took the time to change his own face. Plus he was twice convicted for starting an election campaign too early.
But swiftness is certainly not a handicap in Korea. After all, LEE's predecessor did become Korea's head of state in a hurry : GOH Gun assumed ROH Moo-hyun's interim during his short 2004 impeachment transition.
Still, LEE's successor could very well become the "next-former-mayor-of-Seoul president". It's just that 2007 looks a little bit too early for OH Se-hoon, who isn't even of the "former" kind since he only took the mayoral charge last summer. At least, this good looking politician won't have to change his face to seduce the voters.
Yesterday, OH decided to stop the pre-electoral stalemate on real estate issues, the most important topic in a country that doesn't seem to realize North Korea is about to collapse in a meltdown if not nuclear, at least economically ten times more destructive than Albania's*.
Anyway... ROH Moo-hyun's Government cannot go as far as it would like against real estate speculation because the opposition doesn't want it to succeed before this year's elections... the said opposition including many members of the "ruling" Uri party. OH Se-hoon is a member of the Grand National Party but wants to be remembered as a man who reaches for the good of the majority : he didn't wait for national guidelines to set tougher rules on new developments. A small move but a wise and a timely one.
Nowadays, some short sighted Gangnam investors see LEE Myung-bak as their only hope of postponing the inevitable burst of Seoul's real estate bubble. The wisest and swiftest among them are becoming OH Se-hoon's best supporters... with the hope of making in Gangbuk for their future losses in Gangnam : they have already moved their assets north of the Han river, flocking to such areas as Nowon-gu like rats before the shipwreck.


* once again : instead of benchmarking Germany for their reunification scenarios, Koreans would be inspired to remember what happened to Albania after the collapse of Enver Hoxha's regime.