Understanding Korea

1
Understanding Korea
2
Korean Flag
3
Korea had generally occupied this region as a
unified state for nearly 1000 years before
division in 1948.
4
Relation with the Rest of World
Military invasion by France (1866) and the United
States (1871), which were attempting to establish
trade relations with Korea. In 1895 Japan defeat
ed China in the Sino-Japanese War,
In 1905, Japan was victorious over Russia in the
Russo-Japanese War. 1910 Japanese annexation of
Korea and the end of the Choson dynasty.
5
JAPANESE RULE (1910-1945)
Protectorate Treaty (1905), forced on Korea after
the Russo-Japanese War. Under this treaty, Japan
assumed role of protectorate. In 1910 Japan forma
lly annexed Korea. From 1910 to 1919 Japan solidi
fied its rule by purging nationalists, gaining
control of the land system, and enforcing rigid
administrative changes. During WWII, Japan impose
d several measures designed to assimilate the
Korean population, including outlawing Korean
language and even Korean family names.
6
Division by USSR US After 1945
7
Korean War
8
Korean War (June 1950 to July 1953)

• North Korea invaded South Korea in June 1950
• Before the North Koreans were stopped in August,
  
  
• they had captured Seoul, and the Americans and
  South Koreans had been pushed back to Pusan.
  
• In September, a daring amphibious landing at
  Inchon, MacArthur drove the invaders out of
  South Korea and pursued them to the Chinese
  border.
• In October, China initiated a new conflict by
  sending troops into Korea, The Communists
  reoccupied Pyongyang on December 5 and, sweeping
  into South Korea, recaptured Seoul in January
  1951.
• Wanted to fight a total war with China, but Fade
  away
  
• Under superior firepower, the Chinese slowly
  withdrew from South Korea. Seoul fell to the UN
  again in Mar 1951.

9
A Very Costly War

• In July 1953, the truce agreement was signed at
  P'anmunjom.
  
• The U.S. suffered 157,530 casualties deaths from
  all causes totaled 33,629, of which 23,300
  occurred in combat.
  
• South Korea sustained 1,312,836
• military casualties, including 415,004
• dead
• Estimated Communist casualties were
• 2 million.

10
First South Korean Leader

• Educated in Harvard and Princeton
• 1919-41, president of a Korean government-in-exile
  based in Hawaii
  
• 1948-1960, elected president, instituted several
  reforms in education and in the ownership of land

11
The Remarkable Park Chung Hee
a schoolteacher a soldier in Japanese army in
Manchuria took over power in a coup in 1961 and b
ecame a dictator (KCIA) launched energetic econom
ic reforms and, despite widespread opposition
concluded a treaty with Japan in 1965
Earned foreign exchange by sending troops and
contract workers to aid the United States during
the Vietnam War Assassinated in 1979 by KCIA
Father of the Korean Miracle (1961-1979)
12
An Astonishing 57 Times Increase in Real GDP
13
Chun Doo Hwan Transitional Figure
trained with the United States Army and led a
regiment of South Korean forces during the
Vietnam War Took over power in a coup in 1979 In
1980 he declared martial law, military troops
killed several hundred civilian protesters in the
city of Kwangju. Following a series of mass prote
st in 1987, President Chun promised democratic
reforms, including direct presidential elections.
President of South Korea (1980-1988)
14
From Dictatorship to Democracy
First Elected President (1988-1993)
First Opposition President (1998-2003)
First Civilian President (1993-1997)
15
A Remarkable Democracy Fighter
Born in a poor farmers family
Went to Shipping and publishing
Democracy leader, elected to National Assembly
many times Nearly killed in 1971 accident Put
in jail or house arrest many times and sentence
to death in 1980, exiled in 1982
Ran for president in 1987, 1992 and won in 1997.
16
Continued Rapid GDP Growth 1980-1996
17
Equity Market Capitalization (1980-1997)
18
Financial Ratings and Ratios
Methodology By comparing the financial ratios
with rating tables, one can judge for yourself
whether a company has a good financial health.
19
Financing Pattern
3
Question Which country had too much financial
leverage? Why France and Japan do not suffer
from financial crisis?
20
Percentage Change in Fixed Assets
Question Why Asian countries (Korea) are
investing feverishly?
21
Total Current Liability/total Liability ()
Warning Most payment due within a Year!
22
Cash flow-EBITDA/Interest payable
EBITDA-earnings before interest, taxes and
depreciation. Interest payments too high and
earnings too little for Korea.
23
Return on Capital Employed before Tax
Deteriorating earnings may have contributed to
crisis in investor confidence.
24
EVA Return on Capital Employed (ROCE) - lending
rate
Korean companies were not making enough
money to cover their cost of capital. France and
German firms also were wasting their capital.
25
Market Value/book value of asset (x100)
26
What Does Kim Jung IL Want?
A playboy known to like Disney Cartoons, Cognac
XO, and Women Leader of poorest nation on earth
Clever in play with US Would like to end internat
ional isolation.
Great Leader
Has launched economic reform by freeing prices
Like to learn from Chinas reform experience, not
like Castro Would like to get three things from U
S a) Non-aggression b) Food Aid Investment c)
Respect
27
Could be A Very Costly War!

• North Korea has thousands of artillery pieces and
  hundreds of missiles within striking range of
  Seoul.
  
• At more than a million men under arms, North
  Korea's army is one of the largest in the world.
  
• The CIA thinks North Korea has enough material to
  have constructed one or two crude nuclear bombs.
  
• Pentagon estimate suggested four months of
  high-intensity combat would be required, using
  more than 600,000 South Korean troops and half a
  million U.S. reinforcements to the personnel
  already stationed in South Korea.
• Expected 52,000 U.S. casualties in the first 90
  days of combat alone! Civilian casualty could be
  in the millions.