[Column] As South Korea profits from arms, North Korea pays in lives

Ukrainian troopers practice alongside the frontlines of the conflict with Russia on Jan. 1, 2026. (Reuters/Yonhap)

By Lee Bon-young, senior financial system and enterprise reporter

Say that somebody knew a yr in the past what is occurring in right this moment’s monetary markets. What kind of decisions would they make in 2025? Little question they’d take every part that they had, perhaps much more than that they had, and pour all of it into key shares listed on the KOSPI.  

The activation of buy-side circuit breakers that momentarily paused buying and selling on Monday and Tuesday displayed simply how stock-crazy individuals are today. Samsung Electronics, SK Hynix, and the Hyundai Motor Firm — if you need your jaw to drop, simply pull up the 10-year charts for these standout stars on the KOSPI. What you’ll discover just isn’t a delicate enhance in slope, however an exponential cliff. 

Whereas it’s simple to dismiss the latest inventory surge as an indication of an abnormally frothy market, it’s tougher to console those that have been overlooked of the rally.  

For individuals who aren’t precisely followers of the chaebol system, the scenario leaves an disagreeable style in a single’s mouth for an additional motive: everybody and their brother have now tied their very own fates to these of Samsung’s Lee Jae-yong, SK’s Chey Tae-won, and Hyundai’s Chung Eui-sun. 

Concerning the affect that shares have on the employees’ consciousness, individuals typically level to the privatization of dozens of public British companies within the Eighties beneath Prime Minister Margaret Thatcher. Individuals who as soon as thought of themselves workers started to establish as asset holders as soon as they owned some shares, making a extra compliant workforce. 

It’s simple that the belongings of proprietor households enhance as extra individuals purchase extra shares.  There may be additionally the impact produced by decreasing taxes for inheriting belongings and/or transferring possession. 

Nonetheless, investing in chaebol companies whereas calling for reform isn’t as contradictory as it might appear. It’s a name for fixing issues; it’s not lambasting productiveness and innovation.  

A priority of a unique nature pops up when one seems to be at share costs for protection companies, which make up a good chunk of chaebol. These within the monetary trade appear optimistic on the subject of the prospects of protection shares this yr. Along with Korean cultural exports, individuals at the moment are speaking about Korea’s protection trade exports. Contemplating that Korean troopers used M16 rifles equipped by the US through the Vietnam Battle, the world has modified significantly. 

Whereas Korea’s manufacturing energy is behind a few of this transformation, there may be additionally the essential factor of timing. We’re within the fourth yr of the conflict initiated by Russia’s full-scale invasion of Ukraine in February 2022. The US and Europe supplied huge quantities of navy support, and US President Donald Trump has pressured allies to extend protection spending since taking workplace in January 2025. By counting on the US for protection whereas saving by itself protection prices, European nations which have benefited from such “peace dividends” now discover themselves ready the place they need to rearm. Europe has now overtaken the Center East to turn into the most important marketplace for the American protection trade. 

Korea has benefited from this transformation. Kang Hoon-sik, the Blue Home chief of workers, is at present touring a number of international locations beneath the grand title of “particular delegate for strategic financial cooperation.” The time period “military-industrial advanced” acknowledges that the navy and the protection trade are inextricably linked. Now, amid the development towards “state capitalism” led by US President Donald Trump, politics and trade appear to be jelling right into a political-industrial advanced on a worldwide scale. 

Since these international locations’ governments are those shopping for Korea’s arms, it’s comprehensible that our authorities would assist the way it can. In any case, it’s the federal government’s job to keep up the steadiness and development of the nationwide financial system. 

Nonetheless, we have to suppose severely in regards to the full disappearance of the idea of moral investments. Isn’t investing in retailers of demise in the end rooting for a rise within the manufacturing of deadly weapons?

Simply check out the conflict in Ukraine. If the conflict ends all of the sudden and peace reigns all through Europe, the demand for weapons may flounder. Share costs of protection companies may additionally drop. If that’s the case, hoping for the conflict to tug out or intensify is logical from the standpoint of an individual who’s “purely investing.”
 
For some time, individuals have been saying that lobbying from US protection companies and the revolving door with authorities officers have performed an element within the continuation and enlargement of the conflict. 

As normal, cash is the most important enemy of ethics and rules. Many nationwide pension funds of European nations are forbidden from investing in fossil fuels or the protection trade attributable to calls for for “socially accountable investments.” Russia’s conflict with Ukraine is altering this perspective. As Europe now faces direct navy threats, it can not realistically proceed to exclude investments within the protection trade. The geopolitical threat is proving greater than the moral threat.  

Norway’s nationwide pension fund, the world’s largest, has began reconsidering its ban on investing in main protection companies primarily based within the US and Europe. 

Different nationwide funds are starting to ease restrictions on capital used for investments in non-public and navy trade. Except it’s a weapon topic to worldwide sanctions, like cluster bombs, they appear prepared to put money into it. But nationwide safety is the justification; the actual motive is revenue.  

South Korea is now promoting weapons, whereas North Korea, having nothing left to promote, is exporting younger troopers. 

“From Mount Halla to Mount Baekdu / Be gone, all you scraps of metal / Let solely the aromatic bosom of grime stay,” the poet Shin Dong-yeop wrote in his poem “Be Gone, Husk.” These phrases ring empty like by no means earlier than. Such is our harsh and heartbreaking actuality. 

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