South Korea’s economy threatens to become like Japan’s

IN 1989, ATGDP the peak of Japan’s economic and financial heyday, few dared suggest the country might one day be supplanted as the richest large nation in Asia. Per person, South Korea was not even half as affluent. But then mighty stock and land bubbles popped in Tokyo, kick-starting several “lost” decades for the Land of the Rising Sun. Meanwhile South Korea’s economy boomed. By 2018 its per person, adjusted for purchasing power, .Similarities between the two economies extend beyond converging income levels. Both built their wealth during periods of export-led growth. Now South Korea’s working-age population is shrinking, as Japan’s did after the mid-1990s. Most uncanny are echoes between the financial risks which emerged in Japan in the late 1980s and those mounting in South Korea today. They, too, could trap Asia’s mightiest tiger in the doldrums for decades.