South Korea’s “resilient” economy

Among other things, Walmart Stores Inc. is known for its variety of store-brand general-merchandise product lines through a variety of brand names. Expansion of manufacturing to either South Korea or Russia is somewhat dependent on the particular product(s) that will be manufactured at such a facility, mostly due to the availability of raw materials or availability and reliability of shipping in the two prospective countries.

According to an unsigned article from independent news website Deutsche Welle, Russia’s economy has been turbulent, but its inflation has remained consistently low throughout the past decade (Deutsche Welle, 2018., n.p.). This means that compared to many other nations’ economies, Russia’s location-specific resources such as real estate and ground transportation should be cheaper than South Korea’s. However, in his article “Navigating The Complexities Of Doing Business In Russia,” Mark McNamee points out a correlation between sporadic political skirmishes between Russian and the United States, and regional and municipal governments across Russia preemptively harassing American businesses there by way of frivolous raids and regulations (McNamee, 2017, n.p.). This problem is not likely to resolve itself considering the long history of turbulent relations between Russia and the US. One possible result this could have is that overzealous facility managers could attempt to bribe local government officials to act favorably toward our facility. It would be necessary to include a clause in the facility managers’ employment contracts forbidding them from using facility resources and profits for this purpose. Also due to the constant political turmoil between Russia and the United States, there is a very real possibility that Russian workers at the facility may work to sabotage the product for political gain. As a protective measure, it would be necessary to maintain American quality control inspectors at the facility for the duration of the facility’s operation.

In their article “South Korea: Finding Its Place On the World Stage,” Stephen Roach and Sharon Lam describe how, despite South Korea’s “resilient” economy (their words), South Korea’s national infrastructure and property values pose a Catch-22 for corporate expansion to the country: While property values in urban areas like Seoul and its surrounding cities are steadily climbing, property values in most of South Korea’s rural areas are “sluggish.” On the other hand, infrastructure outside of the aforementioned urban areas remains spotty, and in some areas, remains at third-world levels (Roach and Lam, 2010, n.p.).