By Mathew Maavak
Seoul has been included in two top ten lists in separate global surveys conducted recently.
First the bad news. The Korean capital is reportedly the second most expensive city in the world after Moscow, according to a survey by the Mercer Human Resource Consulting group. The property market played a pivotal role in Seoul's inclusion into this list.
The cost-based propinquity to Moscow and other cities seems based on basic deductions. The ground reality however is far more complex.
In Seoul, someone earning $30,000 to $40,000 per year can rent a two-bedroom apartment in a middle-class enclave near the city center for just $400 a month. A two-bedroom unfurnished apartment in Tokyo, however, costs $2,352 a month, $1,999 in New York and $1,700 in London.
An otherwise decent income bracket -- by global standards -- can consign newly-arrived migrants to the periphery of the Big Apple's real estate, where they are further taxed during the long commutes to work.
Seoul's excellent public transportation -- interconnected within an encompassing grid of subway and bus routes -- can cost less per month than a single cab fare from Manhattan to a New York suburb.
When the aggregate cost of living in Seoul is juxtaposed vis-a-vis Korea's per capita income, Seoul can indeed stretch one's wallet. Even then, comparisons have to account for the complexities arising from Seoul's remarkable recovery from the East Asian financial crisis of 1997.
The recent spurt in real estate activity has caught the Korean government and citizens by surprise. Only 10 years back, the Korean economy and its chaebols were reeling.
There were social tensions which made global headlines, ultimately forcing a massive multi-pronged restructuring in all tiers of the economy and society. The delicate fiscal balancing acts that followed continue till this day.
One of the niggling issues that remain are official strictures against property speculation, and this issue has pitted President Roh Moo-hyun's "blue collar" administration against business lobbies and mayors of burgeoning suburbs in Korea, especially around Seoul.
Seoul fares better in terms of mundane expenses. These range from delicatessen offerings to cigarretes to cab fares, despite coffee being used as another yardstick by the survey to name Seoul as the second most expensive city in the world.
A cup of coffee plus service, according to the report, costs $3.07 in Moscow and $2.94 in Seoul, compared with $2.26 in New York and $1.90 in London. A music CD costs an average $13.29 in Moscow, while in New York it costs $10.77.
This doesn't factor in dollar-denominated peculiarities elsewhere. Back in the 90s, Moscow's trendy nightclubs were so exorbitant that the entertaiment allowances of Western executives couldn't match free-flowing dollars-only bacchanalia of Russian oligarchs and their hangers-ons.
Seoul's inclusion in this list points to contradictions that accompany Korea's stunning comeback from the 1997 currency turmoil, and the appreciating won. On one hand, there are immense pressures from the blue-collar populace to level living standards. This is best epitomized by the annual summer labor strikes in Korea. This year's season has already kicked off.
On the other hand, wealthier segments prefer a laissez-faire society to one that streses social security.
Another contradiction happens to be the listing of Seoul, and in particular the suburban township of Goyang, as 9th most dynamic city in the world, after New Delhi, by the Newsweek magazine.
Goyang is connected by Subway Line No. 3 to the center of Seoul. While the commute here is two-way, a singular flow from Goyang happens to be the local "hallyu" pop culture. The suburb is now dubbed the "Hallyuwood" of Korea.
As the Newsweek report notes: "Until the early 1990s, this was quiet farm country on the Han River, lined with barbed wire to keep North Korean infiltrators at bay."
That's a better metaphor for Seoul's transformation rather than subway transports which are erroneously described as "bullet trains." Subway rides trundle as steadily as living costs, and they are both efficient and well-managed, so far.
Published in The Korea Herald on June 27th 2006
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