An alarming exodusA JoongAng Ilbo report about the number of South Koreans applying for a 10-year visa to Malaysia having doubled from a year ago to 1,500 has been shocking. An recent event in Seoul explaining U.S. green card grants with a minimum of $500,000 investment was recently crowded with people. Emigration-related overseas real estate purchases also reached 300 billion won ($253 million) in the first half of the year.
The exodus suggests that Koreans have lost hope in their mother country. One businessman in his 40s said he decided to leave the country due to excess stress over labor costs and various taxes. He wants to settle in Malaysia, which does not have any inheritance or gift taxes.
The conditions in Korea can explain why they want to leave the country. Employers are struggling to sustain their businesses against multiple whammies — unfriendly policies like sharp hikes in the minimum wage and a universal cut in working hours on top of lackluster demand. The government pressed on with income-led growth policies over the past two and a half years.
The results had been disastrous. The economy has been in the dumps from industrial production to consumption. Except for increases in part-time work for senior citizens, jobs have been wiped out especially for those in their 30s and 40s, the backbone of our economy. Income disparities worsened despite the liberal administration’s push for aggressive redistribution policy. The economy has been moving at a snail’s pace of around 1 percent. The vacancy rate in Sinsa-dong, a commercial district in southern Seoul, has reached a whopping 18 percent.
In the meantime, corporate tax rates have shot up, bucking the global trend. Inheritance tax rates on businesses hovers at the world’s highest of maximum 65 percent. It is no wonder people want to leave. Businessmen and the wealthy are shunning the country because the government has turned a deaf ear to their repeated pleas and instead have raised taxes.
Lee Ho-seung, senior presidential secretary for economic affairs, claimed that the economy has been faring well. But the rush of emigrants tells a different story. The government must not think lightly of the sharp increase in emigrants. The country must provide a good environment for business to keep businessmen at home and fuel the economy.
JoongAng Ilbo, Oct. 15, Page 30