Thursday, December 13, 2012

The Chuckling Chaebol cheats!


They ignored the potential of ‘Clean capitalism’ ; they were wrong...

Capitalists often wonder why South Korea was nicknamed the ‘Land of the Morning Calm’; there’ve been wars, invasions & power conflicts over decades… So what exactly defines ‘calm’? Alright, for being the capitalists that we are, let us overwrite the follies of the South Korean nicknamers, and move ahead… calling South Korea, the ‘Land of Chaebols’. Yes, we’re talking about those capitalist armies, represented by names like Samsung, Hyundai, LG, Daewoo, SK Corp et al, which are neck-deep into making money, but totally submerged when it comes to attaining power. Now that admixture often leads to one final potion – corruption! And that’s what this tale is all about; about their ride down the path of ‘crony capitalism’... Over the past five decades, as the South Korean economy grew like wildfire, the Chaebols too expanded, gaining great control over almost all the sectors in world economy and today, are proud about being names that control codes to many treasure boxes [or Pandora’s boxes?]. Of course, diversification was most definitely the ‘magic’ key for the Chaebols, with all the big names enjoying multiple feathers in their caps: Samsung, has 63 companies under its umbrella; LG has 51; SK Group has 62 and Hyundai Group has 9. So how did these conglomerates dare to launch a full-fledged attack on Global Inc.? The answer is simple – under the garb of ‘crony capitalism’. 

This confluence of capitalism and policies became the breeding ground for ‘dark secrets and financial manipulations’ by the Chaebols. Dr. Van Jackson of the University of Maryland, who is also the global authority on East Asian History explains how Chaebols should rather be blamed for holding back the South Korean economy, and eroding away fairplay by posing two grave dangers – unstable concentration of capital & corruption. “Both these dangers scare-off risk-averse international investors, which naturally limits FDI. In this sense, it is reasonable to blame the Chaebols for ‘holding back’ the Korean economy,” he asserts. 


 Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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