S. Koreans don't like to be measured by Japan economic yardstick
``Korea is not another Japan, but. . . .'' When South Koreans hear this refrain from Americans more or less politely asking them to hold back on exports, or increase imports, or raise domestic demand, ``it gives us pain,'' as one economic official said.
Like Japan, South Korea has a trade surplus with the United States which reached $4.5 billion last year and will be substantially larger this year. Like Japan a year ago, South Koreans are being told their currency, the won, is undervalued and should be allowed to float upward against the dollar. Like Japan, South Korea needs to liberalize imports.
In all these areas, and many others, South Korean government officials and business leaders feel it is very unfair for their economy to be judged by the same yardstick that is being applied to Japan.
First, South Korea is still basically a developing country. The soaring office towers of Seoul are impressive, as are its gleaming subways and its elegant shopping malls. But walk through the maze of alleys behind some of these skyscrapers, and you will see hole-in-the-wall workshops where girls are furiously stitching away or noisy restaurants where pungent kimche and ginseng tea are being served.
South Korea's gross national product is about one-thirteenth that of Japan -- $92 billion compared to $1.2 trillion. Japan is the world's largest creditor nation, while South Korea's foreign debt amounts to $47 billion.
Second, as the southern half of a divided country facing an aggressive and unpredictable communist North Korea, South Korea's 40 million people spend 5.5 percent of their gross national product on defense, compared to 1 percent by Japan's 120 million people. Helped by the ``three lows'' -- low oil prices, low interest rates, and the low dollar (or rather the low won, since the won has been linked to the dollar), South Korea's economy is experiencing a boom this year. Exports are at an all-time high.