North Korea and South Korea: Different Perspectives

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North Korea and South Korea Different
Perspectives

• One peninsula with one nationality who share a
  common history and culture.
• Two countries with different governments and
  economic systems.

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Warm Up - Korea

• What nations have influenced the culture and
  history of Korea?
• Why are U.S. soldiers in Korea?
• Why does North Korea have a lower standard of
  living than the south?
• What divides Korea?
• What organizations dominate the South Korean
  economy?

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Geography of Korea

• Mountainous
• Peninsula
• Strong neighbors
• China
• Japan
• Russia
• Divided by DMZ

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Korean People

• Buddhist
• Hard working

• In addition to the 46 million people in South
  Korea and 23 million in the North, some 6 to 7
  million people of Korean descent, or
  approximately 10 percent of the population of the
  two Koreas combined, live outside the Korean
  peninsula. In proportion to the population of the
  home country, the Korean diaspora comprises one
  of the largest groups of emigrants from anywhere
  in Asia.

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North and South Korea

• How are North Korea and South Korea similar?
• How are North Korea and South Korea different?
• Is the south a true democracy?

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20th Century in Korea

• Controlled by Japan until 1945
• Divided by superpowers during Cold War
• North invades south in 1950
• Cease fire results in divided country

28,500 military personnel from U.S. stationed in
South Korea.
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History Korean War

• Soviets and Americans decide to divide Korea into
  their own sphere of influence
• North and South (1948)
• Secretary of State Dean Acheson neglected to
  include Korea in the US sphere of influence in
  Asia.
• Kim Il Sung took initiative to invade the South
  (1950)
• not Stalin but Stalinist
• War ends ends in stalemate, 38th parallel, DMZ
• Both countries are ruined in the similar manner
• Ideal comparison
• Each embraces different ideology totalitarian
  vs. authoritarian

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China and United States

• North Korea is an ally of China and Russia
• South Korea still has U.S. troops
• Two million soldiers on peninsula!

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Path to Globalization

• Following the Korean War, a decade of political
  turmoil begins
• First President Syngman Rhee ousted from office
  (1960)
• rigged elections for vice president cause student
  riots
• Democracy not initiated
• military coup detat, Park Chunghee takes over
• Government in south not democratic
• Park Chunghee begins to build South Korea into
  economic power
• stablity but still not democratic
• tool chaebol multinational corporation

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Chaebol System

• Conglomerate
• large corporation with many unrelated
  subsidiaries
• centrally planned though private
• lack of input from minor shareholders
• financial security for all companies involved

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Parks Economic Plans for Chaebols

• creation of export-oriented industries
• creation and fostering of heavy industry
• maintenance of anti-union behavior
• protection of domestic market
• pegging won to dollar
• chaebols are major force in the South Korean
  economy
• 1960s to 1990s
• big enough to utilize limited resources
  effectively
• government contracts and subsidies

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Top Chaebols in South Korea

• Hyundai
• Automobiles
• Engineering, construction, shipbuilding and
  industrial activity
• Finances
• Samsung
• Electronics
• Petrochemicals
• Construction (Petronas Towers in Malaysia)
• LG
• Home appliances and electronics
• Petrochemicals and chemicals

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Emerging Globalization (Advantages)

• Through the chaebols, South Korea emerged as an
  export leader of the world
• Import raw materials to manufacture exports
• Industrialization and Service Economy
• Higher standard of living
• better education
• more material possessions
• increased leisure time
• GDP skyrockets from third world equivalent to
  Western European standards

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Emerging Globalization (Disadvantages)

• Profits appease populace as long as they are
  positive
• economic downturn leads to civil disobedience and
  revolution
• no democratic process or structure to deal with
  problems
• political stability dependent on economic
  situation
• authoritarian until 1987, numerous revolutions,
  undemocratic
• chaebols are undemocratic by nature

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Decline of Chaebols

• Ultimate decline of chaebols
• Too big to manage effectively
• Core competency (unrelated industries)
• Decline
• rise in labor cost
• standard of living
• competition from other Asian countries (China)
• cheaper workforce
• Effect
• lower of standard of living to match
  competitiveness
• contributed to South Koreas economic crisis
  (1997)

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Globalization (Financial Crisis)

• Convergence of misfortunate economic events
• banking sector was burdened with non-performing
  loans
• excess debt
• lower credit rating
• chaebol oversight and accountability low
• Democracy swiftly corrected recession
• 1998 GDP -6.6
• 1999 GDP 10.8
• 2000 GDP 9.2
• allowed for greater input of populace

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South Korea Conclusion

• Globalization
• started to higher wages
• demands for social reforms
• South Korea became less competitive
• Ironically, the good of globalization caused the
  bad

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One people, two countries

• North Korea

• South Korea

• 23,000,000 people
• Pyongyang
• Mountainous, cold
• Natural resources
• Cold
• Authoritarian
• Command

• 47,000,000 people
• Seoul
• Densely populated
• Import resources
• Warmer
• More democratic
• Capitalist

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KoreaNorth or South?

• North Korea

• South Korea

• Open society
• Labor unions
• Large corporations
• Higher standard of living
• Export products

• Few civil rights
• Government controls economy
• Shortages
• Nuclear weapons
• Mr. Kim

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History North Korea

• After Korean War, Kim Il Sung takes over
• Nationalization versus Chaebol
• peoples property versus the highly private
  chaebol
• while abuses in both, higher standard of living
  obvious only in one
• Juche (self-reliance)
• closed all capital flow
• "the hermit kingdom
• Militarization versus Chaebol
• to secure power Kim Il Sung diverted a third
  economy for military instead of economic reform
  (South Korea, 3)
• 22 million population, 1.2 million military
• wastes the most able-bodied men of society with
  unproductive job
• famines every year, starving people

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North Korea Economics

• Refusal to join global markets through Juche
  state mandated belief system
• lower standard of living
• Police state complete lack of democratic
  institutions
• Army needed for governments lacking legitimacy
  massive famines
• Significant portion of GDP used for making the
  military bigger, not consumer goods

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Conclusion

• North Korea is the best example of complete
  nonacceptance of globalization and capitalism.
• While South Korea experienced problems, it is now
  on a democratic path with an economy that is
  substantially better in every aspect

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Phillippines
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Taiwan
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Hong Kong