“I don’t see the possibility of serious developments in the market,” Seoul’s top financial regulator, Kim Jong-chang, told reporters when asked if growing tensions following the sinking of a South Korean warship would seriously impact stock and currency markets.
Was this a mandarin trying to reassure investors rattled by the risk posed by North Korea? Possibly. Or a head-in-the-sand statement from the citizen of a nation confronted by arguably the world’s most dangerous state? May be.
But if he was just trying to soothe nerves then at least he has the data to back him up: in the past South Korean financial markets have soon recovered after Northern provocations such as naval skirmishes and nuclear tests. (Leading finance officials to joke, “Kim Jong-il is playing the Seoul bourse.”)
And if his head is the sand, then he has good company. Most South Koreans seem sure this will not lead to war.
Although the 26 March sinking of the corvette Cheonan, killing 46 sailors, is the deadliest Northern attack on the South since the 1983 mid-air bombing of a South Korean airliner that took 115 lives, Seoul is unlikely to counter with a military strike. This newly prosperous nation has too much to risk from all-out war, even though pundits say the South Korean-US alliance would steamroller North Korea were a war to occur.
And with Seoul having lived with Pyongyang’s threats for six decades, provocations that might panic more settled states are dealt with calmly. “I don’t believe war will break out in Korea,” said Sunny Choi, 40, who runs a downtown Seoul marketing agency, echoing a common opinion. “My daily life has not changed, I have no plans to change anything.”
While global media trumpet “rising tensions”, Seoul – which lies within artillery range of the North – remains calm. Downtown shopping districts are packed; there is no panic buying of instant noodles or bottled water; nobody has been spotted digging bunkers under backyard kimchi pots.
Yet South Korea’s military is reportedly on its second-highest level of alert: the navy is scouring the Sea of Japan for two North Korean submarines, and a two-day, 10-ship anti-submarine naval exercise is under way in the Yellow Sea. Yet reserves have not been called up, nor have any civil defence drills been run. This laid-back attitude concerns some experts who believe North Korea constitutes a more serious threat than Southerners dare to believe.
“Somebody once said Damocles learned to live with a sword hanging over his head because otherwise he would have gone crazy; likewise, South Koreans would not have been able to function if they had not developed a certain indifference,” says Brian Myers, a North Korea expert and author of The Cleanest Race. “But I do think they are a little bit blasé, there is fatalism: Koreans are loathe even to speak about scenarios they do not like to think about.”
While scenarios might not include war, they could involve further asymmetric attacks. Longer term, a Northern regime implosion would be a nightmare for the South, which would face political instability and massive economic costs. So South Koreans hope for the status quo to continue. Nobody discusses worst cases.