North korea and south korea different perspectives on globalization and its effects
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North Korea and South Korea: Different Perspectives on Globalization and Its Effects. A ndras Konya A dam Schlegel A manda Baldwin. Introduction. Compare the effects of globalization (or lack thereof) on two comparable countries with similar culture, history, and definite point of separation.

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North korea and south korea different perspectives on globalization and its effects l.jpg

North Korea and South Korea: Different Perspectives on Globalization and Its Effects

Andras Konya

Adam Schlegel

Amanda Baldwin

Introduction l.jpg
Introduction Globalization and Its Effects

  • Compare the effects of globalization (or lack thereof) on two comparable countries with similar culture, history, and definite point of separation.

    • Pinpoint strengths/weaknesses of globalization

    • Method, not apples/oranges

History korean war l.jpg
History: Korean War Globalization and Its Effects

  • 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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Path to Globalization Globalization and Its Effects

  • 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 d’etat, Park Chunghee takes over

  • Park Chunghee begins to build South Korea into economic power

    • stablity but still not democratic

    • tool: chaebol

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Chaebol System Globalization and Its Effects

  • 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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Park’s Globalization and Its EffectsEconomic 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

    • 1960’s to 1990’s

    • big enough to utilize limited resources effectively

    • government contracts and subsidies

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Top Chaebols in South Korea Globalization and Its Effects

  • 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) Globalization and Its Effects

  • 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) Globalization and Its Effects

  • 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 Globalization and Its Effects

  • 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 Korea’s economic crisis (1997)

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Globalization (Financial Crisis) Globalization and Its Effects

  • 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 and Its Effects

  • 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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History: North Korea Globalization and Its Effects

  • After Korean War, Kim Il Sung takes over

  • Nationalization versus Chaebol

    • “people’s” 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 Globalization and Its Effects

  • Refusal to join global markets through Juche

    • lower standard of living

    • police state: complete lack of democratic institutions

    • army needed for government’s lacking legitimacy: massive famines

  • Notable exceptions to global markets

    • Drugs

    • Arms Trade

    • Significant portion of GDP

      • used for making the military bigger, not food

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Conclusion Globalization and Its Effects

  • North Korea is control group for complete nonacceptance of globalization

  • While South Korea experienced problems, it is now on a democratic path with an economy that is substantially better in every aspect