Everyone loves watching K dramas on Netflix. Korean movies and dramas are one of the best in the world. Their creativity is something everyone loves and every other language movie, I won’t say copy but some or the other way inspired by the Koreans movies and dramas.
But we all get this doubt when the actors talk about thousands or millions of Won in the movies or in dramas. Let’s try to understand why those numbers are so high?
The Bank of Korea, headquartered in Seoul, is responsible for coining the coins and issuing the banknotes. Currently, 1, 5, 10, 50, 100 and 500 won coins and 1,000, 5,000, 10,000 and 50,000 won bills are in circulation.
Countries like Korea & Indonesia are generally those that experienced a period of high inflation in the past, and then regained macroeconomic stability and subsequently succeeded in achieving healthy economic growth. In most such cases, that transition took place before it became popular to re-denominate thousands or millions of units of the old currency into a single unit of a “new” currency, thus removing some of those inconvenient zeros from everyday domestic prices.
It is a sign that at some time in their history they were not doing very well, not a sign that they are not doing well now. Korea was an extremely poor country within living memory. But inflation, once it has occurred, cannot be reversed. Though it can be hidden by re-denomination, Many countries have re-denominated their currencies, creating a new money by knowing two or three zeroes of the old money. Before the Euro, the Italian lira was about the same as the Yen, while France knocked two zeroes of its franc in 1960 and Germany invented a new currency after WW2. Japan and Korea have not chosen to do so.
Obvious reasons are :
When South Korean Won is devalued, Americans can buy a lot more South Korean goods with 1 Dollar( 1 Dollar = 1298.35 South Korean Won) i.e. their exports increase. China intentionally devalues its currency Yuan in order to keep exports high and thus increasing its Foreign Exchange (Forex) Reserve.
Trade Deficit:- South Korean imports are much more than its exports, causing a trade imbalance. To avoid depletion of its Forex reserves, it needs to increase its exports and for that it devalues its currency.
Demand and Supply:- Suppose you want to import something from abroad. You go to an exchange to convert your wons to dollars. Since Korean Imports>Exports, there are many people who convert Korean Won to Dollars. Since there are a lot of people who are ready to give their money in exchange for dollars, the value of Korean currency decreases.
Bottom Line:- Low value of Korean currency doesn’t mean a weak economy. It’s simply a result of demand-supply dynamics of the market.
Are the goods really expensive in South Korea or can we buy everything that we buy in other countries like the US? Let’s find out.
For instance, the Big Mac Index in the US is 5.3 and 4.1 for South Korea (in 2018, Economist). Roughly speaking, you would work the same hours for the same job to earn enough money to purchase a Big Mac in both countries. Big Mac index is a standardized Big Mac price, across different countries (and their currencies).
Another illustration would be to look at the minimum hourly wages. In South Korea, the nominal min hourly wage is 6.6 US dollars, and 7.5 for the US. Now, 6.6 US dollars are exchanged for about 7000 Korean Won. The zeroes may look scary, but the value it carries is just a single fast food meal.
10,000 won (만원, I will call it manwon because that is the Korean pronunciation) would convert to approximately 8.42 U.S dollars, so it feels like 10 dollars, just because it starts with 10.
There are a lot of things could buy in Korea with 10,000 won. Cup ramen (컵 라면) is pretty cheap, at about 1,000 won per “cup”, therefore you can buy about 10 cups of ramen with manwon.
You can also buy several cheap gummies, water, chips, etc. Maybe cheap earphones, a League of Legends gift card, a phone case…
On the other hand, 10,000 won to a Korean child is equivalent to HEAVEN. There’s a place in most neighborhoods called a “문방구” (mun bang gu). At 문방구s, you can choose from a wide span of products: hundreds of colorful school supplies, fun toys, unique trinkets, board games, etc. It’s a mini toy store!
Not only is there so much to buy, most things at 문방구s are very cheap, to accommodate to how much money their target audience usually has, which is normally Korean students.
For example, you can buy a pack of Pokemon cards for about 500–800 won! Or a cute character pen for 700 won! Maybe slime for 1,000, or stickers for 600.
Anyways, there’s a lot you can buy with 10,000, but it still isn’t a very large amount of money. But still, yay (lol wot).
Conclusion :
From music to movies, technology to food, the world has fallen in love with everything South Korean.
South Korea, Asia’s fourth-largest economy, is largely dependent on exports and is the world’s leading producer of displays and memory semiconductors as well as the second-largest producer of ships. In recent years the country has also made headlines worldwide with another export hit, its musical culture K-pop, which has a huge economic impact on the country.
South Korea’s K-pop culture and music industry have become increasingly popular and thus have allowed the propagation of the music genre to many foreign nations through the Korean wave, also known as Hallyu. The K-Pop industry generates about $10 bn for the country each year, according to estimates.
The K-pop phenomenom is worldwide, with some of the major markets being the United States, India, Brazil, Indonesia, Mexico, Germany, UK, Philippines, Japan, and France. In 2021, Spotify unveiled its global K-Pop hub and the monthly average K-Pop streams worldwide reached over 7.97 billion per month. The same year, #KpopTwitter broke its own record with 7.8 bn global Tweets, the previous record being 6.7 bn Tweets in 2020.
The main industries include textile, steel, car manufacturing, shipbuilding and electronics. South Korea is the world's largest producer of semiconductors.
Netflix is planning to spend $500 million in 2022 as part of efforts to expand South Korean content.
All in all, South Korea is going to be one of the best economies in the world as always. So Take it easy, enjoy watching K dramas and movies!
References : https://www.theguardian.com/world/2022/sep/04/korea-culture-k-pop-music-film-tv-hallyu-v-and-a
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