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Korea Reinforces Soft Power

Korea is competing against Japan and China, two economic powerhouses of Asia, to win over global society.

Supported by its economic and cultural resources, Korea is endeavoring to enhance its national brand image, including the signing of three currency swap agreements of USD 20 billion this month.

According to the Bank of Korea (BOK), Korea’s foreign exchange reserves reached USD 331.1 billion as of the end of August and ranked 7th in the world. Korea now has not only the cultural influence but also the economic power to compete against Japan and China.

Korea is building its national brand with Psy, who made his song “Gangnam Style” a worldwide hit last year, other K-pop stars and Korean cuisine. Korean companies, including Samsung Electronics and Hyundai Motors, are also expanding to the world.

A high-ranking official at BOK noted that a country’s national prestige is enhanced if the country can provide currency swaps, supporting another country’s economy.

Korea does not need to intervene in the exchange market to avoid a decrease in the value of won due to speculative trading for short-term margins due to its huge foreign exchange reserves. On the other hand, Indonesia and Malaysia, which signed currency swap agreements with Korea, were affected by current financial turbulence.

The signing of the currency exchange swap with the United Arab Emirates (UAE) is likely to help Korea invest in the UAE’s oil industry and win large-scale oil contracts.

Korea, once a poor, underdeveloped country, became the world’s 14th economic powerhouse and went from being an aid recipient to an aid donor. The Korean government has allocated KRW 2.3 trillion for aid for developing countries in next year’s budget. The amount is an increase of 9.9 percent from this year and accounts for more than 2.5 percent of the Korean government’s total budget for next year.

Lee Sang-jae at Hyundai Securities noted that swap agreements and foreign aid seem to be Korea’s long-term strategies to reinforce its influence in global society.

Soft power has become as important as hard power. According to Billboards, a music publication in the United States, profit generated by K-pop stars, including Girls’ Generation, reached USD 3.4 billion.

K-pop is also drawing popularity in Malaysia, Indonesia and other Southeast Asian countries. Top Korean singers visit these countries to perform at sold-out concerts almost every month and buyers line up for days to purchase the brand new Samsung smartphone in Malaysia.

An employee at a Malaysian law office noted that Korean pop stars always show unique and distinct dances and that their songs are popular, adding that Korean singers perform to make their fans happy.

Another worker at an Indonesian telecommunications company uses a Samsung smartphone, likes Korean food and watches Korean dramas.

She said that she encountered Korean culture three years ago and started watching Korean dramas and listening to Korean songs.

Korean television dramas are also drawing popularity in China and Japan.

Professor Oh In-gyu at the Center for Korean Studies at Korea University noted that now, Korea sees more positive answers when young generations around the world are asked about the image of Korea, adding that this shows the strengthened soft power of Korea.

Source Text

Source: Newsis (Oct. 22, 2013)

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