International -- Readers Report
Will South Korea's Roh Practice What He Preaches?
"Crackdown on Korea Inc." suggests that South Korea's new government is reforming (Special Report, May 19). Yet only a week earlier, BusinessWeek's Moon Ihlwan fretted that "just two months since taking office, South Korean President Roh Moo Hyun is jeopardizing his reformist credentials" ("Korea's credit-card mess needs a clean sweep," Finance, May 12). On Mar. 31, he contrasted Roh's "fiery rhetoric" on reform with "so much caution" in practice ("Korea can't afford to cop out on corporate reform," Asian Business, Mar. 31). As a fellow Korea analyst and admirer of Moon's reporting, I see the problem: Roh sends mixed signals; he's a hard act to call. But with all respect, this is hedging: Other signs tilt the balance toward pessimism.
Roh is retreating on privatization and looks weak on labor. The last head of the watchdog Fair Trade Commission, Lee Nam Ki, is in jail, accused of taking bribes from the No. 3 chaebol, SK Group, which is accused of cooking its books by at least $1.2 billion. Who will guard the guardians? Meanwhile, SK Group Chairman Son Kil Seung, who faces charges for which prosecutors on May 10 demanded five years in jail, and who still chairs the Federation of Korean Industries, and who is accompanying Roh on his first visit to the U.S., is supposed to convince investors that Seoul is cleaning up its act!
Roh Moo Hyun is shaping up like South Korea President Kim Young Sam (1993-98): talking reform, but shallow and swinging every which way. It was Kim who in 1997 led Seoul to the brink of sovereign default. I hope I'm wrong.
Aidan Foster-Carter
Shipley, England
Editor's note: The writer is honorary senior research fellow in sociology and modern Korea at Leeds University.
The Euro Is Not the Answer to Britain's Problems...
I read with interest your article on the euro and Britain's falling pound ("The wonderful falling pound" (International Business, May 19): My first comment is, what manufacturing industry? According to whom one believes, presently, retailing -- of mainly imported goods -- makes up 60% to 80% of Britain's gross domestic product. The majority of our significant manufacturing industry is composed of "screwdriver" plants that are sheltered by Britain's low minimum wage and beneficial tax regime, allowing them to export tariff-free to mainland Europe. In any case, most industries remanufacture: They must import raw materials, which cost more as the pound sinks, in order to manufacture.
While in strict economics-textbook lore, a lowly valued unit of currency discourages imports, Britain currently has a massive external account deficit, which increases month on month. At some stage, it must be paid for. Since the vast majority of global trade is denominated in U.S. dollars, producers of raw material and partially manufactured items regularly adjust their sales pricing strategy to reflect this reality.
For Britain to join the euro soon would be as catastrophic as Prime Minister Edward Heath's entry into the European Economic Community -- i.e., suicidal bad timing. Despite the political and multinational sales hype, the euro (or any other synthetic currency mechanism) is not a panacea for fiscal and economic ills. Rather, it is the reverse, as the various economic problems now emerging in euro-land demonstrate graphically.
Michael C. Feltham
Shoeburyness, England
...While in Brazil, the Smart Money Is On the Euro
Re "Beware the super euro" (European Business, May 19). In Brazil, the advice is: Change your dollars into euros because today the euro reached 1.15 on the "real money." What would happen if OPEC quoted oil prices in euros?
Alessandro Soncin
Curitiba, Brazil
What's Being Squandered in the India-Pakistan Squabble
Things might have moved a long way in terms of the technology of warfare, but to say that India may succumb to fear of the Iraq effect hits at the national ego of every Indian, to say the least ("The 'Iraq effect' may push India and Pakistan toward peace," International Outlook, May 19). The real factor, as you point out, is the opportunity for development in both countries, which is being squandered. The figure of $2 billion in possible bilateral trade is quite conservative. People on both sides are growing tired of the mindless bickering by politicians or dictators, as the case may be.
One more point: It is only now that the U.S.-India relationship shows a healthy respect for each. America's entrepreneurship and its zeal for free trade and liberty, together with India's intellectualism, its capability to contribute to a knowledge-based economy, and its sound democracy, education, and judicial systems, are building healthy mutual respect. Your article does not serve any purpose except to undermine the process.
R.C. Sarangi
Bangalore, India
E-Biz Tools Aren't Smart Enough for Construction
In "The e-biz surprise" (Cover Story, May 12), you note that the construction industry has come up with a big fat zero. I'm not surprised, because simple-minded e-biz products can't do much for this complicated business. The worldwide construction industry marketplace is measured in hundreds of billions of dollars per year. Give me a set of computerized weapons that will help me reduce my overall project costs. I'll be happy with 5%, 10%, 15% -- or anything I can get.
Back in the '60s and early '70s, I worked for the Japanese shipbuilding industry. We used to hand-crank a bunch of heuristic algorithms to reduce overall project costs by making "smart" resource allocation/acquisition decisions. In the '80s, my associates and I successfully used the same models for many projects for Xytel Group and Xytel-Bechtel Inc. Why can't we use the impressive power of the personal computer and the Internet to do the same things in the 21st century?
Serge Randhava
Unitel Technologies
Mt. Prospect, Ill.
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