President-elect Lee Myung-bak has named David Eldon, Chairman of Dubai International Finance Center Authority, as a member of his Transition Committee. Mr. Eldon will assume the post of Joint Chairman of the Special Committee for Strengthening National Competitiveness, making him the first foreigner to assume a post in a presidential transition committee. So does this mean that LMB will be more friendly to foreign investors and market oriented economics? Or is Mr. Eldon simply window dressing? On the other hand, maybe LMB is hoping to import the Dubai way of doing things in order to build the canal of his.
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“So does this mean that LMB will be more friendly to foreign investors and market oriented economics? Or is Mr. Eldon simply window dressing? ”
I think LMB has already made it fairly obvious that he wants to attract foreign investors.
LMB wants foreign investors, as there is not enough capital and growth potential in the Korean economy to achieve the 7% growth he’s promising without substantial foreign investment.
It’s not yet clear whether he wants foreign investors enough to allow them to make money here in Korea. His background as a chaebol man would tend to indicate LMB could be a traditional Korean developmental-mercantilist, who wants foreign investors to “donate” money for the Korean economy while any profits earned are retained here. But LMB could surprise us — deregulation for chaebol could mean deregulation for all.
As for me, I think it’s window dressing. I am, however, hopeful for change.
The most pressing issue right now, from my perspective, is deregulation of the labor market.
I guess this is the model that LMB is after, with a significance shift in the balance between the govt rle and that of (domestic) business:
(From the Heritage foundation Index of Economic Freedom)
I think Brendon is correct that “LMB could be a traditional Korean developmental-mercantilist, who wants foreign investors to “donate” money for the Korean economy while any profits earned are retained here.” In addition, he’s not going to make it easier for foreign firms to do business here on their own; the pressure to hook up with a local comprador will be great. The fact that Lee wants to remove any effective restrictions against the jaebol entering and dominating the financial sector is the giveaway. He’s going to assist them to increase their strangehold on the local economy, because the alternative - keeping the jaebol out of the financial sector - necessarily means increasing foreign participation there, from whence foreign interests will start to get more traction throughout the local economy without having to enter into marriages of convenience with local trolls.
LMB is trying to bring Korea up to international standards (if such things exist at all).
LMB is moving the country in the right direction. He will open more business up for international access.
Today, Secho Dong community meeting was conducted in English. Korea is changing in light speed.
#2,
Sure, he want investment but whether he’ll prevent foreign investors from profiting from their investments without sharing some of it with a cheabol is yet to be seen.
“LMB could be a traditional Korean developmental-mercantilist, who wants foreign investors to “donate” money for the Korean economy while any profits earned are retained here.”
You’re implying those savvy foreign investors are all fools.
“I think it’s window dressing.”
I think you’re wrong here again as you were in the Presidential election. I think he probably knows the economic theory well enough to put it into practice as an economics or accounting major, together with his business background. None of his predecessors would have understood the economics and the economy as he would.
hear, hear!
No, I’m implying that Korea Inc. still thinks those savvy foreign investors are all fools. Clearly they’re not — notice how foreign investment in Korea has plummeted to levels not seen since before 1997, and people reportedly laugh out loud at government investment-promotion road shows?
Refresh my memory on my prediction for the Presidential election, because I don’t recall making one.
LMB could have the capacity to be a real reformer; I just don’t believe that he will in fact be that reformer. Got my fingers crossed for the pleasant surprise, though: I make my living from FDI.
You heard it all here. Come back in about a year, and reevaluate who was right. I’ll be part of the 10% who say Lee is moving the country toward full liberalization (foreigners or not). He’s been talking about liberalizing the economy non stop, and also the fact that he is the first professional CEO president who seem to know something about the economy - unlike all the past SK presidents. Change may seem painfully slow to happen in Korea, but when change does happen, you either don’t feel that there has been significant changes (eg. S.Korea doing away with traditional preference for sons), or they happen so quickly that you don’t believe it.
Hey, man, I’m all for a deregulated economy, with strong institutions like the Fair Trade Commission, Financial Supervisory Service, and the judiciary enforcing the same rules on all parties impartially. But let’s not forget, Here is Korea™.
“Refresh my memory on my prediction for the Presidential election, because I don’t recall making one.”
“Chung Dongyoung is likely to win the election.”
For some reason my link didn’t work. Here is the address: http://www.rjkoehler.com/2007/.....-in-seoul/
Hey, you’re right. You got me. I underestimated both the cravenness of the Public Prosecutors’ Office and the depth of public disgust with Comrades Roh and Chung.
Please explain how “full liberalization” works if participation in the economy excludes or significantly regulates funds flows controlled by foreigners or involves massive jaebol monopolies of all sectors of the economy at the expense of both foreign AND domestic players. Or are you talking about the “Korean model” of “full liberalization” (=something else entirely)?
Aren’t those Roh policies? Lee hasn’t even been sworn in yet. Or is your point, all Koreans are alike, think alike robots, and there’s only one opinion, Korean mass opinion.
Eldon’s credentials go a bit beyond Dubai…. He was the Chairman of Hong Kong Shanghai Bank and a founding member of the Seoul Int’l Business Advisory Council, among other things. This appointment bodes well for Lee. Clearly, he’s focused on doing more than paying lip service to boosting ROK’s international business stature.
No, my question is the same, though: how to you square your apparent belief that full liberalization is coming with the notion that it can effectively exclude foreigners (as you more than imply)?
And, actually, Roh’s policies re foreign investment weren’t markedly different from any of his predecessors, save DJ - and DJ’s policies were born of sheer necessity, not conviction, which is why it was so easy for Roh to backpedal.
Obviously, the jury on LMB will have to remain out for sometime yet. And there are people in his camp who at least pay more convincing lip-service to the idea of liberalization than others. His chief spokesman during the campaign, e.g., Park Hyung-Joon, was one of the young proponents of KYS’ original seyghewha. But in my judgment the auguries are not good that LMB will be the kind of conservative modernizer/reformer that, say, TR was in the US. And that’s not because Korea is always Borg-like, but because there are in fact traditions, institutions, elite and popular mentalities, etc. that heavily militate against it.
I’d really like to be surprised by LMB, but I’m not betting my investment dollars on it - something that judging by the recent investment conference I was at in HK where people hooted derisively at the Korean presentations, no one else is about to do either.
“No, my question is the same, though: how to you square your apparent belief that full liberalization is coming with the notion that it can effectively exclude foreigners (as you more than <imply)?”
Really? Is that your impression of my post? Can you please point out where I imply full liberalization is coming without excluding foreigners?
And with that I end my contribution to this thread here with this: let’s wait and see - I can be wrong but I’ll throw the dice anyway and I’ll bet Lee will surprise.
Sorry, I should have wrote:
“Can you please point out where I imply full liberalization is coming with exclusion of foreigners?”
And do you think that HSBC’s attempted acquisition of Lone Star’s Stake in KEB has more to do with the making or the acceptance of the appointment? And does it say anything about anything other than the intensity of HSBC’s desire to finally effect the acquisition of a Korean bank?
Sure CM:
“I’ll be part of the 10% who say Lee is moving the country toward full liberalization (foreigners or not)”
Actually, I read this statement of cm’s to mean “full liberalization, without regard to nationality of the investor” — which I think is impossible although I’d be delighted to see it.
Sperwer, you misunderstood.
yes, i’ve had the same experience, and also in hong kong at asia-pacific investor conferences. the government is much more adept at fooling the less-than-savvy inside korea than the savvy outside. in fact, it’s one of their core competencies.
my money is on the chaebols which will only strengthen inside the country while rooting out entrepreneurial support and market diversification. only a fool would bet against them.
Roger that, which is why it would be foolish to bet of LMB for any fundamental changes, especially given his status as a jaebol creature, and that given that The Roh-Nothings retreated meekly in the face of threatnened jaebol retaliation, makes the likelihood of the GNP motivating the public at large to stop acting like jaebol lemmings, even more remote.
OK, I can understand the pessimism. But at least it’s a start. There are two foreigners appointed to high positions that will advise the president, maybe they’ll help in influencing change of thinking in Korean government. If change is to happen, it has to begin somewhere. Korea won’t be no free dealing Hong Kong, but I think the door may just open a bit more than it is today.
Korea: a ridiculous place where appointing an old white guy to a corporate board represents a progress toward “diversity”.
“Korea: a ridiculous place where appointing an old white guy to a corporate board represents a progress toward ‘diversity’.”
You’re so right. Eldon only ran the second largest corporation in the world for nine years. What does he know?
What about our diversity? If we hadn’t allowed your co-ethnic John Yoo into the country, we might not now have the “Patriot Act”.
Can’t help but think of the Nobel prize winner Robert Laughlin appointed as President of KAIST - who resigned when most of the Korean faculty opposed his reform plans. It shows what happens when the window dressing really tries to exercise power. Eldon better not have any ideas if he wants to keep his position.
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[...] be honest — I’m not sure if I like LMB appointing David Eldon as co-chair of his transition team. Not that I’m questioning Eldon’s financial skills, and I’m sure he’ll [...]
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