Thursday, 13 September 2012

Korea sets emergency mode

East Asian Economies have been always known for their rapid growth, free market altered by touch of either Confucian thought or Shintoism, feudal structure of employment and business management, but nevertheless very efficient economic environment which has always created jobs, jobs and even more jobs.

It is enough to take a look at average Seoul street to notice it. How many things are there. How many shops with shoes, cloths, cosmetics, how many coffee shop branches, bakeries, necessity kiosks like Family Mart, or E-mart, how many bars and restaurants. These businesses lways have big lines waiting inside and crowds, crowds of customers.

Big portion of Korean economy ( or any other Asian economy) - street vendoring is also visible. Be it street market at Dongmyo Street or any other tiny shop with numerous delicious snacks oferred by skillfull Ajummas and Ajoshis.

But even this rapidly growing environment needs help, government decided.

The steps taken last Monday would save taxpayers some 2.3 trillion won ($2.0 billion) in personal income tax, home transaction tax and domestic sales tax on automobiles and large electronics appliances, the finance ministry said in a statement.

However this may be only a show before the elections to try to convince public that anything is actually done. With household spending rising, Koreans won't likely be risking whatever they save on tax cuts. In unstable economic future tendency to spend shifts into tendency to save. This is slowly killing any economy that has troubles.

Korea has shown it can do a miracle during lifetime of one generation. But will the global crisis hit it too much? Time will tell.

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