Asia’s crisis is not receding. In South Korea, for example, deaths from suicide exceed those from car accidents. Police patrol bridges and high rise apartments on the look-out for leapers. Since job loss often equates to dispossession, thousands of homeless families are now camping in parks, forests, and the streets of Seoul.
Fiery trade unionists affirm they will fight to the death to prevent factory closures, while workers amass arms and barricade the gates. Large, bloated corporations, with debt four-to-five times equity, stagger on as their family owners express willingness to sell art collections, or other private assets to help out.
A country used only to accelerating growth has neither the social security safety nets nor the legislation to tidy up the mess.
One consequence is a confusion of mixed signals in all arenas. Take marketing and media. A bitter price war between new discount stores and traditional department stores has erupted. In the midst of this many manufacturers have stopped supplying retailers which, they feel, cut prices too deeply. The problem was not erosion of the manufacturers’ margins but “distortion of distribution patterns”.
And then there is the problem of zealous bureaucrats. Korea’s cable TV industry, launched in 1995, is now on the brink of collapse, with debts of more than 1 trillion won. There were problems even before recession.
Regulations which were de-signed to prevent large corporations dominating the TV industry kept most companies with the necessary technical or financial clout out of the sector. Licensing rules accidentally ensured that many operators were restricted to regions too small to generate enough subscribers.
Content regulations kept foreign programming off-air, even though no plans had been made to increase domestic programming resources sufficiently. Consequently some channels simply switch off when the programming runs out. Yet as the industry slowly slips under, the ministries of culture and information, both of whom have jurisdiction over parts of the industry, remain locked in conflict about whose plan should be used to restructure the industry.
Add nationalistic sentiment to the pot and it is easy to see why a new Unified Broadcasting Law could be debated and delayed for years, with arguments about allowing foreign participation in the industry. Meanwhile, an unused broadcasting satellite has been spinning overhead for three years waiting for a decision about who should use it and how.
But there are glimmers of hope. Around the year 2000, The Korea Broadcasting Advertising Corp (Kobaco) – a government agency which controls the sale of advertising time in broadcast media, sets rates and determines agency commissions – is to lose its monopolistic powers which should usher in a freer market for broadcast airtime.
And what of Japan? It now seems that bad bank debts are not the meager $550bn once claimed, but a wholesome $1tn. But don’t be too surprised if there proves to be a zero missing.
The engine that was suppose to pull Asia out its crisis will be stalled for a good while to come.v