Why have Korea and other Asian countries pursued its mercantilist export model in the first place? The dollar peg, taxation, regulations, and big business-centered industrial structure revolve around this model.
Who is engineering the dollar peg?
Who are the beneficiaries of these policies?
The success of export-dependent economic model comes with a cost. In promoting this model, Korea has depressed its currency, purchased the U.S. treasuries, pegged its currency to the USD, and nurtured the chaebol-centered industrial structure. This policy apparatus served Korea well in the early stage of industrialization. For instance, it helped Korea to grow its economy and build its industrial base rapidly. And yet, ironically, the problems Korea has been facing in the later days of industrialization are largely attributable to this model.
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
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