Foreign Investors Concerned with Identity Conflict in Korea

The Financial Times reported on July 29 that foreign investors are concerned about investing in Korea due to the ideological conflict between the ruling and opposition parties.

The Financial Times said, “The heart of the political problem in Korea is the deepening ideological conflict between the progressive ruling party and the conservative opposition party,” and added, “Accordingly, foreign investors are questioning which direction Korean society and economy are moving towards.”

Andy Xie, a researcher from Morgan Stanley’s Hong Kong office and who is well acquainted with the Korean economy, said in an interview with the Financial Times that “Korean society, which has replaced the conservatives with new leaders through the presidential election and the general election, is experiencing a reformation era. Although it’s happy news that Korea is becoming a fair and transparent society, there are worries that Korea is moving towards socialism.”

The Financial Times criticized by saying, “Many foreign investors supported President Roh for his public pledges which promised to liquidate irregularities and corruption and accomplish free economy. However, President Roh is focusing too much on reforming society and politics and is overlooking the economy.”

It added, “Before, the politics of Korea, the fourth-ranked major economic power in Asia, was just considered as ‘boisterous and confusing.’ But now, a director of a foreign investment bank in Seoul is advising his investors that Korean politics negatively influence investing in Korea.”

As examples of political confusion, the British economic paper picked Park Geun-hye’s speech, which asked President Roh to make the identity of the country clear, and the speaking of Lee Hun-jae, the deputy prime minister and minister of Finance and Economy, who doubted the “anti-market” politics of the ruling party.

Hyung-June Park lovesong@donga.com