Korea's 'Divided' Economy in the Spotlight

The Korean economy seems to be in good shape, but the income gap is widening sharply, the Financial Times noted Monday.

In a commentary titled "An economy divided," the daily said Korea "is praised in the same breath as Germany for the speed with which massive export-based conglomerates have powered recovery from the crisis of 2008. But the gulf widens between rich and poor in a faltering and uneven domestic economy."

Big conglomerates like Samsung and Hyundai Motor fared very well despite the recent economic recession, while the country's exports and gross domestic product grew. "However, national economic success disguises financial distress among small businesses and indebted householders that could undermine the recovery," it said. And conglomerates achieve their hefty profits by squeezing small suppliers, who find it difficult to survive, it added.

Quoting Swiss bank UBS, the daily warned that unless Korea lays a strong foundation for its domestic economic structure, it may suffer another crisis again and find it impossible to achieve long-term development.

The FT notes that ordinary people are still tightening their belts. More and more salaried workers opt to have a W1,000 pot of instant noodles at convenience stores rather than a W6,000 lunch at a restaurant. They also use the metro more often, and car pools are increasingly popular among commuters.

With the growing income gap, an increasing number of low-income earners are committing suicide, it added.