Strengthen South Korea's Economy

Strengthen South Korea's Economy

Low GDP growth and a flagging Samsung risk the country's security against a belligerent North

By James Glassman | Opinion Contributor

May 11, 2017, at 1:45 p.m.

Moon Jae-in won a decisive victory Tuesday to become the next president of South Korea, replacing Park Geung-hye, who was impeached and charged with bribery, abuse of power and leaking state secrets. Moon, a liberal, will take a softer line on North Korea, which grows more threatening by the day. But in the end, the South's security may depend as much on reviving its poor economy as on brandishing threats and weapons.

North and South were divided in 1948, and their separate economic and political paths provided a vivid lesson in the superiority of democratic capitalism. South Korea's GDP per capita is at least 20 times that of the North – and at the same level as Europe.

Today, however, the South faces a challenging period, undergoing a crisis at one of the worst possible times. Park was not only impeached, she was implicated in a scandal involving its largest company. Growth has slowed, exports are down and debt has grown alarmingly. Is there any way for the U.S. to help – for the sake of our own security?

In a headline last year, The Economist called South Korea a "faltering flagship," with repeated tries at monetary stimulus proving futile. "This feels like an economy that's lost its mojo," said Frederic Neumann, co-head of Asian Economic Research at HSBC in Hong Kong.

These assessments, however, preceded the political earthquake of impeachment and of Park's ties to officials of Samsung, the bulwark of the Korean economy, accounting for 20 percent of GDP and 30 percent of exports.

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https://www.usnews.com/opinion/world-report/articles/2017-05-11/south-korean-president-must-boost-samsung-economy-for-security-from-north

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