Coyner’s Comment:
In too many ways, commentators have noted how Korea has emulated the Japanese. Yet one more case in point: when I worked in Japan during all of the 1990′s, it was obvious there were two Japans coinciding in the same market. There was the export-focused Japan and the domestic market Japan. It was clear that the latter subsidized the former to make Japanese exports price competitive. As with today’s Korea, Japanese products were – and continue to be – more expensive in Japan than in the US.
To be fair, part of the retail pricing include costs of inefficient distribution systems found in both countries, with Japan traditionally being the worse of the two countries. If anyone has shipped anything to and from Japan/Korea, the lion’s share of costs are created during the first and last 20 miles. The international transport costs are relatively negligible. And that important factor is not addressed in the below essay.
But in terms of macroeconomics, the writer makes a solid point that is worth considering.
For consumers’ sake, let won float
It is clear that far too much of the ‘Miracle on the Han’ has been accomplished by punishing Korea’s consumers.
By Robert E. Kelly
Korea JoongAng Daily
Sept 27, 2011
