Economic Notes

Low wages attract investors to South Korea A particularly cynical article in an economig supplement to the January 27 issue of the New York Times shows exactly what is meant when the Americans claim that they are defending South Korea for the "free world." Entitled "Low Korean wage draws investors," the article reads: "Low wage scales and the ability to learn new skills quickly are attracting an increasing number of foreign investors to Korea....Thirty-nine foreign concerns are operating here sr have secured Government approval to invest in wholly owned plants or ventures with Korean businessmen, The investments total $50 million and nearly twice that in loans, Twenty-five companies are American, ' . with investments ef $41 million, Their lines range fren oil refining to fertilisers, electrenic products, truck manufacturing, sweater knitting, and mink breeding. "Major American concerns include Gulf, Caltex and Skelly oil cempanies, Three } electronics manufacturers are setting up plants around Seeul te assemble such products as integrated circuits and television tuners,...0ne American economic i official here said: ‘Korea is probably the last frontier in the free world where you can find a large supply of low-cost and competent labour.’ With this in mind, representatives ixf more than 100 American companies visited Seoul last year to look into investment possibilities. A survey conducted two years ago placed the average Korean wage one-eigith that of Jan, one-fourth of Hong Kong and one-half of Taiwan." (Editorial note: these figures are not misprints.) "....Aeeming to recent Bank 9f Korea figures, the average factory worker earns roughly $21,15 a month," (Approximately £7. 12s) "But the low wage is not the only factor that makes foreign investments profitable, Equally attractive is the adaptability of Korean workers to new skills. "ttf we had looked only for low wages we could have gone to Africa," James Stekes, president ef the Signetics Korea Corporation, said, The company, employing Korean girls, has recently begun producing integrated circuits ata temporary plant in dewntown Seoul,......Another thing I like about Kereans is that they're very hard workers, They're used to hard work and they don't mind working long hours...."" Of course, when the Korean workers start to organise against the super-exploitation "communist subversion" will be blamed. The affects of the July measures Recently published National Income and Expenditure figures (from the Treasury Bulletin) show the economic consequences *f the July measures, Wages - after taking into seasonal adjustments - rose only 3% in the third quar r, against 14% between the first and second quarters, Personal consumption fell by 2% in the third quarter and there was a sharp reduction in personal savings (although this figure is subject to a wide margin or error), Company profits were some 4% lower in the first nine months of 1966 compared with the corresponding figure for 1965, Dividends were £30 millicn higher in the first three quarters « of 1966 than in the same period of the preceding year - this rise was concentrated mostly in the first quarter, Private investment was nearly #5, down —- with the fall largely concentrated in housing - while public sector investment rose by %,