The Economic Impact of National Division

The Korea Times carried an interesting article  today suggesting that fear of the "Three Ds" was weighing on the Korean economy.  The Three Ds are

• asset Deflation


• won Depreciation, and


• Daepodong missile

I'd like to focus on the last of these, because it illustrates a continuing problem.  According to the Korea Times article, Pyongyang's test-launching of ballistic missiles has wreaked havoc on the Korean won, as demonstrated several times, particularly in 1998 and 2006.  During the following four weeks after the Stalinist country fired ballistic missiles, the won depreciated 3.4 percent in 1998 and 2 percent in 2006.

``In hindsight, the North's missile launches have negatively affected the South's financial markets,'' IBK Securities economist Park Ok-hee said.

Beyond the impact of actual or threatened missile launches, the reality is that national division entails a military confrontation with the North that exerts a continual drag on the South Korean economy.  This is largely because the media around the world frame so much of their coverage of Korea in terms of the North Korean nuclear problem, its missiles and the six-party talks.  The fact that South Korea has achieved its current level of economic growth is even more remarkable in light of the continuing effect of press coverage about North Korea.

The Australian on "The Peril Brewing in Pyongyang"

As everyone knows, President Lee Myung Bak has been visiting Southeast Asian countries, including Australia.   Today a very perceptive article appeared in The Australian . Entitled "The Peril Brewing in Pyongyang," it began the sentence "No one knows when North Korea will do the almost inevitable and either implode or explode."  The article is basically built on a fundamental reality in Korea, that it remains the only nation in the world that was divided because of the aftermath of World War II and the long Cold War. Recommended reading.

Korea Ranks Second in the World on the ITU's New ICT Development Index

The International Telecommunications Union has just issued a new report entitled Measuring the Information Society: The ICT Development Index.  Earlier indexes constructed by the ITU included the digital access index, and the digital opportunity index (DOI)  In recent years, South Korea had ranked number one in the world on the DOI.  Essentially the new ICT Development Index (IDI) is a response to calls for a single index that will allow nations of the world to assess their progress toward building the information society and eliminating the digital divide.  As shown in the accompanying graphic, all of the top ten countries on the IDI are from Northern Europe, with the exception of South Korea.  The complete report can be downloaded in a PDF version from the ITU's website, using this link.