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South Korean Regulatory Reform Committee, 2023

Agenda: Discussing the South Korean Economy, with Special Emphasis on the Chaebol Monopoly

South Korea, a country in Eastern Asia, is bordered by the Yellow Sea, the Sea of Japan, and North Korea. South Korea’s economic system includes private freedoms alongside centralized planning, government regulation and benefits from membership of the Asia-Pacific Economic Cooperation (APEC) and the Asia-Pacific Trade Agreement (APTA).

Emerging from the ashes of the Korean War, the South Korean economy faced a formidable challenge. At its inception, businesses were but humble seedlings, struggling to find their footing amidst an economic landscape marred by destruction. However, resilience proved to be their greatest asset. With both the passage of time and the infusion of foreign and domestic support, these enterprises began to flourish. The economy spread its wings, embracing urbanization and embracing the marvels of modern technology. The nation, once marked by scarcity, now basked in the glory of accessibility to abundant commodities. Yet, this crescendo of progress did not come without its share of obstacles.

In 1989, a dark cloud cast its shadow over the South Korean economy. Labour costs soared to new heights, while strikes raged throughout South Korea, quaking the very foundations of national progress. To further complicate matters, interest rates rose steeply, tightening the economic noose. Fearful of a declining workforce and diminishing productivity, industries turned to the sole cause of the industrial revolution—automation.

However, not all is idyllic in this realm of economic grandeur. As time progresses and new challenges arise, the South Korean economy is left in a trade deficit. While the decline of Chinese–South Korean trade is one of the most important reasons for this deficit, there are other factors affecting their economy too - for example, the depreciation of South Korea’s currency due to the rising US dollar.

Another profound dilemma looms large – the question of the chaebols. These corporations stand as testaments to South Korea's pursuit of prosperity. Organized and managed by powerful families, conglomerates like Lotte, Samsung, Hyundai, and LG form an intricate web of interconnected affiliates and reign supreme, dominating the nation's economy. In 1962, the government, driven by pragmatism and a desire for rapid growth, favoured these entities, ignoring all long-term consequences. This led to the South Korean economy boasting an annual growth rate of 8% over the next four decades. Yet, with such power and influence comes the burden of responsibility—a responsibility that the chaebols struggle to bear.

The chaebols, once heralded as beacons of prosperity, have now become tangled in a web of their own making. As they stretch their branches to encompass multiple businesses, the weight of substantial debt threatens to consume them. They must carefully navigate their decisions as they place themselves on a thin line between success and catastrophe. Political parties and the chaebols intertwine, scratching each other's backs by exchanging favours to benefit each other in a multitude of ways. For instance, generous financial support and tax cuts are granted to these companies, while politicians and political parties receive plentiful contributions for their support.

In the heart of this grand narrative, one truth remains resolute—the overwhelming existence of the chaebols. They stand as both architects of progress and architects of doom. Their desire for domination and their insatiable hunger for monopoly threatens to derail the very foundations of South Korea's economy, and the fate of a nation hangs in their balance.

Will South Korea rise above the shadows that threaten to engulf it, or will it succumb to the weight of its own ambitions? The answer lies in the decisions taken by you, delegates. Will you be able to lead South Korea away from economic doom, or surrender to the corrupt temptations of individual gain during the process?

Letter from the Director

Dear Delegates,


It is my pleasure to welcome you to the 27th session of the Cathedral Model United Nations. I am filled with excitement to introduce to you, The South Korean Regulatory Reform Committee.


In most Model UN conferences, the ultimate objective is to arrive at a comprehensive resolution. In the idyllic world that our conferences reside in, these resolutions usually achieve several goals - most commonly peace, cooperation, and stability. To ensure that these goals are met on a national level, countries unceasingly introduce economic reforms and regulations. However, they may be hindered by private firms, as is the case in South Korea.


Today, one of the most pertinent problems affecting the South Korean economy is the existence of the Chaebols. Nearly 60% of South Korea’s GDP of the total revenue generated in the country in 2021 was due to the ten largest Chaebols. With large sums of money in their control, these chaebols can manipulate and bend regulations and laws in their favour. It is imperative that a reform is introduced, to enforce stricter regulations to curb the growth of practices like corruption that stem from the existence of these chaebols.


While considered beneficial in some cases, we must ask ourselves whether the Chaebols are required to reorganize themselves to equip South Korea with a more stable economy. As delegates of this committee, it will be your role to lead South Korea in the right direction, and away from an economic crisis, while responding to an array of challenges and crises.


To conclude, a potential economic breakdown can be owed to a multitude of factors, but none are as impactful as the presence of the chaebols, who inherently wish to establish a monopoly in the South Korean economy. You will be conflicted between the choice to help the chaebols increase profits and enjoy a personal gain in the process or prioritize the betterment of your people. While I hope that you make the right decision for your country, do not forget to create some lasting memories over the 3 days.


I, Kabir Chawla, am a Grade 12 IBDP student who is passionate about Mathematics (Yes this is what you call it, not “Math”) and Physics. This will be my 4th and final CMUN and I hope to make it the most memorable one yet. Beyond academics and MUN, I love playing football and watching F1 (Carlos Sainz is Ferrari’s Number 1 driver.)


I would like to remind you all that CMUN is magic. It’s the kind of experience that would leave a shy math nerd with a burning obsession to learn more about the world. From decolonizing Africa in 1887 to solving the Global Economic Crisis of 1930, CMUN has made me a devoted aficionado of global affairs and I hope to bring some of that magic to you. If you have any queries, please feel free to reach out to our Executive Board at skrrc.cmun2023@gmail.com.


Until August,


Kabir Chawla,
Director,
The South Korean Regulatory Reform Committee. 

Kabir Chawla - SKRRC.jpg

Kabir Chawla

Director

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