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.

Red blogule to Korea's hubs - meanwhile, in China...

While Busan, Incheon and several Seoul areas compete to become Asia's next hub, China plays "baduk" at a much larger level in order to host the future center of Korea.

Claiming Korea's cultural heritage is not enough. Even if their army of revisionist historians don't succeed in putting Koguryo on the Map of China, Beijing's strategic planners will use their multitudes to build a Great Wall of Korea on Chinese soil.

This future "Korean triangle" is meant to become even more powerful than Shanghai. The bay around Dalian being safe from freezing winters, it can compete with both Incheon and Busan and become the ideal spot for the future Eurasian railways terminals - no need to bother completing these silly inter-korean lines boys, we're taking care of everything from Motherland. Look, the "Bay of Korea" bathes our shores, we're not like those naughty Japanese imperialists who renamed the Sea of Korea "Sea of Japan" or worse, called Dokdo "Takeshima" as a tribute to their colonial craft (they say "bamboo island" comes from the shapes of the rocks but we all know how bamboo grows : Takeshima doesn't describe this dust on the sea but celebrates the first implantation of the Empire on a foreign soil).

China's building the ideal home for Koreans, leveraging on its strong local ethnic minority and intending to lure natives from the Korean Peninsula : either from the North (escaping from Hell), or from the South (escaping from a country with the World's lowest fertility rate, an insane education system and fewer opportunities in general) in a XXIst Century wild West gold rush (by the way, while we're at it, why not have some drafting sessions in LA's Koreatown as well ?). Thats a serious threat for a country whose most valuable assets are intangible or related to the very character of its population.

To make it even worse, the recent politico-military deal clinched between Japan and the US further precipitates Seoul in the welcoming arms of Beijing. And Korea can't find much disinterested support from its other giant neighbor Russia. Kofi Annan won't be of much help to Roh Moo-hyun for a better respect of fair play in the region. Korea needs to federate other Asian nations worried about China's and Japan's neo-imperialism, become a herald of cultural, economical and political diversity in the region... without angering Beijing too much because it can't afford it.

Korea can become a hub after all. But only if its major cities play as a team instead of competing with each other.