Then vs. Now: South Korea
It was with mixed emotions that I read through this old travelogue on South Korea, which I wrote for Tatler magazine back in June 2010. At the time, I noted that South Korea “may be the only democratic country in the world where two former presidents have been sentenced to jail terms by the courts for corruption, and it’s arguably one of the few where the desire to create a just society is still strong.”
Fourteen years later, two more former South Korean presidents were jailed, bringing the total to four, although all of them have since been pardoned. Just earlier this month, the nation was rocked by the sudden announcement of martial law by its current president, Yoon Suk Yeol, who is now facing impeachment.
Like most people around the world, I was shocked to learn about the sudden, albeit brief, enforcement of martial law. I knew that the South Korean people would quickly react negatively to the news.
There is an acute sensitivity to any hint of dictatorship in South Korea, rooted in the country’s history of Japanese occupation and the years under Park Chung-hee. Any sign of dictatorship or corruption would elicit a strong and immediate response from the public, and this explains why four former South Korean presidents were sentenced to jail.
As an investor, however, this political event has not changed my view of South Korea as an investment destination. On the contrary, I see a strong sense of democracy and freedom, which are critical factors for building resilient and profitable companies.
If anything, I remain bullish on South Korean stocks, in particular the technology sector.
Here is the original Tatler article:
Korea Objectives
It’s South Korea’s culture, as much as its heavy industry, that makes its economy strong, writes Mark Mobius
Landing at the new incheon International Airport in Seoul is a pleasure. It is as well laid out, efficient and convenient as its counterpart in Hong Kong, with the added advantage of a more orderly retail layout; at Incheon you don’t need to navigate through the confusing gamut of shops that confronts you at Chek Lap Kok. It’s hard to believe, looking at modern Incheon, that it was the location of General Douglas MacArthur’s Korean War landing, when his troops risked the extreme tides that could quickly transform the beaches of the area into a muddy quagmire.
I always come alive in Korea because the people are so expressive and human. Also I find that my health improves, thanks to the healthy Korean food and the boiling hot “saunas” – in reality not just saunas, but a combination of 40C pools and ice-cold ones that give you an endorphin high when you alternate between them.
These days, Seoul’s Myong-dong upscale retail district is packed every day with tourists from Japan, China and other Asian countries. I was surprised to see two cute girls dressed in pink outside a clothes shop bowing and shouting the Japanese welcome “irrashaimase.” The Korean retail scene exhibits enough creativity and product variety to indicate that the country can hold its own in its attempts to appeal internationally in areas such as fashion, jewellery, accessories, watches and so on.
Of course, foreign brands now stand side-by-side with Korean brands; Zara’s mammoth new store at one corner of Myong-dong shows the foreigners have arrived. Suddenly, walking through Myongdong, we had to get off the street as bodyguards in regulation black suits cleared the crowds for a posse of black suvs with tinted windows. We turned the corner and saw basketball star Kobe Bryant, set to appear at an Adidas shop opening, with a crush of fans trying to get a glimpse. Then we saw another sports star in the shape of American football player Hines Ward, son of a Korean mother and an African-American father, who is much loved in Korea; on tv we saw him giving sports lessons to local teenagers.
You find culture in the most unusual places in Korea. Working at our office in Yeouido island’s financial district, we went down to the basement (well, one of the basements – the building goes seven storeys below ground level) for something to eat, and as soon as we sat down I heard piano music. We searched around and found that the building had a beautiful concert hall. The Korean Liszt Society was holding a Hungarian Embassy-sponsored concert featuring six beautiful Korean women playing Liszt’s Bravura Opera Transcriptions. We were given free entry and found the most fantastically expert pianists playing Liszt’s frighteningly difficult pieces.
On this trip I wanted to get out of Seoul to see some of the operations of various factories, so we took the three-hour fast train to Busan and checked into the beautifully refurbished Westin Chosun hotel on the famous Haeundae Beach. Haeundae is Korea’s most popular beach and a haven for millions of summer sun worshippers.
The Haeundae area has become a huge building site with new condos stretching beyond the beach along the coast, resulting in serious traffic snarls. From Busan city we first drove for an hour and a half to one of the high-tech machine factories that dot Korea’s countryside and contribute to the country’s industrial and export strength. HNK Machine Tool is one of a new generation of high-quality, high-tech metal-product companies. After a lean 2009, new orders are beginning to come in from US aerospace companies, Chinese railways and Indian power plants. hnk makes very large machines that each cost as much as US$1 million. The firm concentrates on the niche, specialised machine tool market, where mass production is not an option. Domestically, companies like HNK continue to develop new types of machine tools to replace more-expensive imported tools in areas such as Computer Numerical Control (CNC) Gear Hobbing Machines, and cnc High Frequency Machines for wind-power components.
At another Busan plant, that of Taewoong, new orders were growing for its industrial fittings. This was our third visit to the factory and, as before, the factory yard was full of finished industrial fittings waiting to be shipped. About 60 per cent of the company’s components are for petrochemical plants, 17 percent for ships and drilling rig parts, and the rest for electric power plants. The 50-year-old company, which claims to have the world’s largest forging press, at 15,000 tonnes, is trying to aggressively expand its international presence.
That means being close to the big international engineering firms that place orders for plant components, so Taewoong has opened a branch in Houston, Texas. Since power-plant construction is a potentially larger market than petrochemical plants, the firm is putting more emphasis on customers in the power-plant construction arena, particularly nuclear plants. Taewoong just acquired a certificate from the American Society of Mechanical Engineers to supply nuclear power-forging components, and it also works with companies such as Westinghouse. It currently sources raw materials such as steel ingots domestically and imports steel slabs from Brazil and Russia, but in order to increase margins it plans to build an electric arc steel production facility that’s expected to cut manufacturing costs by 20 percent.
We finished our trip to the Busan area with a visit to former President Roh Moo-hyun’s birthplace at the nearby town of Gimhae, where he committed suicide in May 2009 by jumping off the 45-metre Owl’s Rock cliff behind his rural home.
The humble home underlines his background as the soon of a poor farming family. Roh was South Korea’s President between 2003 and 2008. His election was heavily influenced by internet activists, a Korean first. He represented the so-called “386 Generation,” people who were in their 30s (3), attended university in the 1980s (8) and were born in the 1960s (6). They were the ones who protested against authoritarian rule when they were students, and many of them joined Roh’s staff. His administration was accused of incompetence, personal clashes with opponents, feuds with the media and diplomatic friction with the US and Japan. After leaving office he became the focus of a bribery scandal that led to his suicide; one of his presidential platforms was the eradication of corruption.
Roh’s suicide underlined the strict morality and dogged pursuit of justice that are powerful forces in Korean culture, heavily influenced by not only Confucian values but also Christianity, which is popular in the country. It may be the only democratic country in world where two former presidents have been sentenced to jail terms by the courts for corruption, and it’s arguably one of the few where the desire to create a just society is still strong. For those reasons, and many others, Korea holds a special place in my heart.