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AsiaGlobal Voices

Trending Opinions From Across the Region

AsiaGlobal Voices is a curated feed of summaries of opinion articles, columns and editorials published in local languages in media from across Asia.

The publication of AsiaGlobal Voices summaries does not indicate any endorsement by the Asia Global Institute or AsiaGlobal Online of the opinions expressed in them.
The Good, the Bad and the Ugly of Globalization
Wednesday, June 9, 2021
The Good, the Bad and the Ugly of Globalization

Jung Jae-hwan, Professor of International Relations at University of Ulsan, in Asia Business Daily (April 6, 2021)

Summary by Soomi Hong (Photo credit: @bts_bighit)

The Good, the Bad and the Ugly of Globalization

It is no secret that Covid-19 is accentuating many pre-existing economic and social problems. Especially in the West, the racism problem is on the rise with the upsurge in violence against Asians. In the US state of North Carolina, an African-American man is reported to have shouted that “Chinese should go home”, while wielding an iron rod. In Atlanta, a white American man shot eight women, four of whom were of ethnic Korean.

On the other hand, only two days before the shooting incident, the boy band BTS gave a performance at the Grammy Awards and, the year before, a South Korean movie Parasite surprised the world by winning in four categories at the Academy Awards, or Oscars. Evidently, globalization is bringing more diversity but is also causing terrible side effects such as racism and nationalism.

While some reckon that the recent surge in violence against Asians is due to the pandemic and some efforts to blame China and Asians in general, it would be more accurate to say that the pandemic magnified existing problems rather than caused them. Prior to the pandemic, the world observed the rise of “Trumpism” in the US and Brexit, both of which were driven by xenophobia and anti-globalization rhetoric.

BTS and other popular phenomena that foster diversity and inclusiveness keep in check racism, xenophobia and nationalism. We would need to look after the people who are “left out” from the benefits of the globalization movement. These are the people who have lost their economic and social competitiveness and are most vulnerable to fall into the dark side of globalization. Without providing appropriate safety nets for this minority, the world will not recover from the negative side effects of globalization even after it overcomes the pandemic crisis.


Senior Ministers in the Government Now Seem to Believe Their Own Lies
Wednesday, June 9, 2021
Senior Ministers in the Government Now Seem to Believe Their Own Lies

Tavleen Singh, columnist, in The Indian Express (June 6, 2021)

Summary by Alejandro Reyes (Photo credit: Government of India)

Senior Ministers in the Government Now Seem to Believe Their Own Lies

It is time that Prime Minister Narendra Modi realized that when his ministers tell barefaced lies, they reduce his personal credibility. The home minister was not seen or heard during the worst days of Covid-19’s catastrophic second wave. He surfaced to declare that we “controlled the second wave in a very short time” and that India has “set a record in the world for fastest vaccination”. Does he know that out of 100 Indians only 15 are vaccinated, compared to 88 in the United States and 96 in the United Kingdom?

When it comes to shameless lies, the master is the chief minister of Uttar Pradesh. He says his state is now a “Covid-safe zone”. Has he noticed the number of people dying in villages of fever and breathlessness without ever being tested for Covid-19? Has he noticed that his officials conceal Covid-19 deaths by handing people death certificates that simply state that they died of pneumonia or a heart attack?

The most tragic irony of all is that senior ministers in the Government of India seem now to believe their own lies. So, they appear routinely on television to declare that it is state governments who are to blame for the grim shortage of vaccines.

India is facing a health crisis bigger than any we have seen in more than a century and the only way to move forward is by rebuilding rural health facilities at supersonic speed. The prime minister needs the help of every chief minister to do this. When it comes to procuring vaccines, though, it is solely his job and he needs to do this with ultimate transparency. The one thing we do not need are for his most trusted lieutenants to be trying to erase the truth. It cannot be erased.


The Advantages of the Greater Bay Area National Strategy
Wednesday, June 9, 2021
The Advantages of the Greater Bay Area National Strategy

James Wang, Research Director at the Bay Area Hong Kong Centre, in Ming Pao (March 8, 2021)

Summary by Alan Yang Gregory (Photo credit: johnlsl)

The Advantages of the Greater Bay Area National Strategy

At the beginning of 2019, the National Development and Reform Commission (NDRC) proposed that China actively promote the expansion of metropolitan areas including the Guangdong-Hong Kong-Macau Greater Bay Area. This national strategy will have a significant long-term impact on Hong Kong for several reasons.

First, Hong Kong will continue to be favored as an important area for the overall prosperity of China. The World Intellectual Property Organization (WIPO) has recognized Hong Kong and Shenzhen jointly as the world's second largest city cluster in terms of innovation capabilities, further illustrating the important role Hong Kong plays in the region.

Second, as Hong Kong and Shenzhen are neighbours, this supports the development of a twin-city metropolitan area. At the end of 2019, Shenzhen’s population density was about 6,725 people per square kilometer, while Hong Kong’s was approximately 6,800 people per square kilometre. When combined, the two are the most densely populated metropolitan area in the world, surpassing even Tokyo with 6,100 people per square kilometre. Both cities therefore have a great deal to learn from each other in terms of city planning.

Third, Hong Kong will be able to cooperate closely with the other parts of the Greater Bay Area (particularly Shenzhen, Dongguan and Guangzhou) in addressing issues relating to environmental safety and carbon emissions. In addition, there will be a strengthening of collaboration in other important areas such as public health and epidemic control. Regional issues require successful cooperation. The many advantages of this national strategy will clearly outweigh the disadvantages.


Why Doesn't The UK Grant The Rohingya The Right Of Abode?
Tuesday, June 1, 2021
Why Doesn't The UK Grant The Rohingya The Right Of Abode?

Shih Wing-ching, Chief Executive, Centaline Group, and owner of the am730 newspaper, in am730 (February 26, 2021)

Summary by Alan Yang Gregory (Photo credit: KM Asad/European Union)

Why Doesn't The UK Grant The Rohingya The Right Of Abode?

On the grounds that Hong Kong people have been unfairly treated politically and are not granted their political rights, the UK government decided to allow those who hold or have the right to hold British National (Overseas) passports to qualify for right of abode in the UK. The British view this as a moral commitment to the people of a former colony.

The persecution that the Rohingya in Myanmar suffer is far more serious than that of Hong Kong people. If the UK is to perform its moral duties towards the people of Hong Kong, why not do so for the Rohingya, too? In fact, the British are more responsible for their situation. The British moved them from what is now Bangladesh to the northwest of Myanmar. Because the Rohingya are different from the Burmese in appearance, culture and religion, they have been unable to integrate successfully into Myanmar society. Ethnic conflicts have persisted. When it comes to the Rohingya issue, the British were the initiators.

Recently, the problems of the Rohingya have intensified. Myanmar’s government has sent troops to suppress them. Villages have been burned down and citizens killed. Their situation is far worse than that of the dissidents in Hong Kong. While dissidents in Hong Kong have lost their right to stand for election, the Rohingya do not even have the right to citizenship or survival.

The reason why the UK is unwilling to assist the Rohingya is simple: They have no assets to bring to the UK. Most of them have limited skills to earn a living and may become burden to the state. Hong Kong citizens who intend to immigrate to Britain must understand that the UK’s willingness to accept them is not based on morality or responsibility, but merely on political and economic calculations.


Own That Pain And Anger – Why Turn Away?
Tuesday, June 1, 2021
Own That Pain And Anger – Why Turn Away?

Vinita Dawra Nangia, Executive Editor, in The Times of India (May 16, 2021)

Summary by Alejandro Reyes (Photo credit: PradeepGaurs / Shutterstock.com)

Own That Pain And Anger – Why Turn Away?

As the Covid battle roars unabated, all around is the sound of fading faith and breaking hearts. On social media – which in these times has fast transformed from the scourge of humanity to its greatest savior – you hear faint voices of hope gradually turn into doubt, fear and panic before quietly fading away, victims of this insidious virus that taunts humanity and mocks our bastions of security.

Helpless gazes turn to one another, but who amongst us knows any better than the next? Not even the most optimistic any longer hold out a glimmer of positivity. We have been defeated. What is gone is lost forever, and with it is gone our belief of invincibility and the arrogance of knowing all. We thought science and technology had all answers and were infallible predictors of future menaces, ready with antidotes. But of course, that was before an invisible virus taught us better. We debated whether we are the makers of our own destiny or mere puppets in the hands of Nature “red in tooth and claw”. As we helplessly wait for the scourge to end its torment – when it will – there is little left to speculation.

Sadness and desolation are all around, deeply entrenched in our hearts and souls. But at least it proves that we still feel – we feel for each other. As “the sea of faith” retreats with a last “melancholy, long, withdrawing roar”, we still hang on to our humanity, our empathy, pain and anger. And of course, we must! Let us own that pain and anger rather than turning our eyes away – why deny it with talk of positivity and hope, when we can clearly see hope retch and gasp for breath, miserably curled up in a dark corner?


Scrapping The Kuala Lumpur–Singapore High-Speed Rail Is Unwise
Tuesday, June 1, 2021
Scrapping The Kuala Lumpur–Singapore High-Speed Rail Is Unwise

Cheah See Kian, journalist and political analyst, in Oriental Daily News (January 15, 2021)

Summary by Alan Yang Gregory (Photo credit: MyHSR Corp.)

Scrapping The Kuala Lumpur–Singapore High-Speed Rail Is Unwise

After much controversy, the Malaysian government has announced that it would terminate the Kuala Lumpur–Singapore high-speed rail project. There are various theories as to why this happened. One is that Malaysia cannot cope with such a financial burden. Another is that Malaysia wished to contract domestic enterprises for the construction between Kuala Lumpur to Johor Bahru.

The original high-speed rail agreement was reached between the leaders of Malaysia and Singapore in 2013. The prime minister at the time, Najib Tun Abdul Razak, declared at the time that once the line was completed in 2026, it would only take 90 minutes to travel from Kuala Lumpur to Singapore. Estimates put the cost at between 80 billion ringgit (US$19.4 billion) and 140 billion ringgit (US$33.9 billion). Shortly after taking office in May 2018, Prime Minister Mahathir Mohamad stated that the cost could amount to 110 billion ringgit (US$26.7 billion) and, as a result, his government would suspend the plan.

The government has clearly not considered the economic multiplier and driving force of the project. It would be nonsensical to develop a high-spread railway from just Johor Bahru to Kuala Lumpur without the cooperation of Singapore. In the long run, Malaysia must look around the region so as to not fall behind. Neighbors such as Thailand, Indonesia and Vietnam are all developing their own high-speed railways. In addition, in abolishing the project, the Malaysian government now has to compensate Singapore.

High-speed rail construction should not be regarded as a simple transportation tool or a single industry responsible for its own profits and losses. Instead, it should be viewed as a strategic industry with great significance and should be vigorously supported. The construction of the Kuala Lumpur-Singapore high-speed rail would have actually driven development and been a symbol of progress.


The Economy Is Growing Faster Than The Mainland’s – So What?
Tuesday, June 1, 2021
The Economy Is Growing Faster Than The Mainland’s – So What?

主筆室 (pen name meaning “Chief Writer’s Room”), commentator, in Storm Media (February 8, 2021)

Summary by Alan Yang Gregory (Photo credit: bryan…)

The Economy Is Growing Faster Than The Mainland’s – So What?

In 2020, Taiwan's economic growth rate was 2.98 percent, marking the first time that it surpassed China in 30 years. While this achievement may appear worthy of celebration, it is important to not get too excited.

The key reasons why Taiwan’s growth rate surpassed China’s in 2020 was Taiwan’s successful control of Covid-19 combined with the impact of the Sino-US trade war. In addition, China suffered in the first quarter of 2020 as it struggled to control the epidemic. Obviously, Taiwan’s growth will not exceed China’s after normality returns.

While a higher growth rate is of course a good thing, Taiwan actually no longer requires a rapid growth. There are more important concerns such as the living environment. In addition, attention must be paid to future risks such as the worryingly high degree of unbalanced development. For example, while private investment is growing, semiconductors have an oversized role.

In terms of foreign international economic and trade relations, Taiwan’s marginalization has continued to worsen. In November 2020, the Regional Comprehensive Economic Partnership (RCEP) trade agreement was signed but Taiwan was blocked from participating. Taiwan has also made no progress in joining regional economic and trade organizations such as Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In addition, the shifts in Sino-US relations since US President Joe Biden took office remain unknown, and it is not clear whether they will benefit Taiwan.

There is no point, therefore, in celebrating surpassing China in economic performance under these extraordinary circumstances. Instead, more attention should be paid to how to address the risks and challenges ahead.


For Food Security, Strengthen Domestic Production
Tuesday, June 1, 2021
For Food Security, Strengthen Domestic Production

Agus Yulianto, journalist, in Republika (May 24, 2021)

Summary by Made Ayu Mariska (Photo credit: Erlian Zakia Ayu Anggarani/Pixabay)

For Food Security, Strengthen Domestic Production

Located right on the equator, almost all of Indonesia, from Sabang to Merauke, has high levels of soil fertility. If the proper application of technology accompanies cultivation, then Indonesia can achieve food self-sufficiency and security. Indonesia, however, does not make optimal use of its natural resources so it still imports a significant amount of food meet its basic needs. The farmers’ lack of technology ultimately results in lower production and quality.

The national sugar needs are met by issuing import allowances to factories with industrial business licenses for entry into any port without the government’s permission. There has been no incentive to maximize domestic production. Indonesia is also importing increasing amounts of salt, soybeans, corn and garlic.

President Joko Widodo proposed importing rice in 2021. Due to criticism and pressure from several parties, however, Jokowi finally decided that there should be no imports until the end of this year unless there is an emergency that forces the government to maintain the national rice reserve stock.

So far, there has been initiative to strengthen the domestic food processing industry and increase the production of raw materials so that it does not always depend on imports, which are detrimental to local farmers as they put deflationary pressure on prices. The government, therefore, must change mindset. Food security should be reached by farmers maximizing domestic production. This would not only allow Indonesia to be independent from other countries’ production but it will also improve the livelihood of farmers.

Indonesia is a large nation with an incomparable abundance of natural resources. It must be appropriately managed for the welfare of the people and not for the wealth of the few people who take advantage of Indonesia's “deficient” conditions by importing.


What is Really Behind the Calls to Cancel the Olympics?
Tuesday, June 1, 2021
What is Really Behind the Calls to Cancel the Olympics?

Miyake Kuni, President of the Foreign Policy Institute and Research Director at the Canon Institute for Global Studies, in The Japan Times (May 30, 2021)

Summary by Alejandro Reyes (Photo credit: Dick Thomas Johnson)

What is Really Behind the Calls to Cancel the Olympics?

I received my first Covid-19 vaccination. It gave me a new perspective on the pandemic. If we have the right organization with the right chain of command in place, we can not only address the spread of Covid-19 but also host the Olympic and Paralympic Games.

The Asahi Shimbun, a major sponsor of the 2020 Tokyo Games, called in an editorial for the Olympic and Paralympic Games to be canceled – the only national paper calling for the games to be scrapped. The editorial made waves and raised several questions, including whether it is part of a political game aimed at weakening Prime Minister Yoshihide Suga.

The Asahi editorial urged Suga to make a decision on the cancellation, although the paper is aware that the authority to cancel the games belongs to the International Olympic Committee. This raises the question as to whether its position is motivated by politics rather than journalism. A general election must be called by this fall. Was the Asahi editorial part of a subtle attempt by the left-leaning paper to damage the ruling Liberal Democratic Party-led coalition and to help opposition parties?

Many ordinary Japanese are tired and stressed, having had to wear face masks as part of their daily lives since March 2020 and maintain proper social distance. They have been so frustrated that they are psychologically not prepared to hold the Olympics and Paralympics this summer. But this does not necessarily mean that all Japanese have lost confidence in the games.

Given the growing capability of the government to start controlling, if not containing, the Covid-19 pandemic, Tokyo should be able to handle the Olympics without exacerbating the spread of the virus. A narrative could even be framed that it would be proof that the world is overcoming the disease.


How Many More Body Bags Can We Take?
Tuesday, May 25, 2021
How Many More Body Bags Can We Take?

Beatrice Louise Gabon Santillan, 18-year-old high-school senior, in Philippine Daily Inquirer (May 25, 2021)

Summary by Alejandro Reyes (Photo credit: Robinson Niñal/Presidential Communications Operations Office)

How Many More Body Bags Can We Take?

After my mom had fully recovered from Covid-19, I thought the storm had passed. It turned out the worst was yet to come. On the night of Jan. 18, Covid-19 took the life of my beloved grandmother.

From the moment I saw my grandmother in a body bag carried by a vehicle meant for water deliveries with no memorial service, I knew that more could have been done to save her, and that so many others have undergone the same loss due to our country’s poor health care system and governance. It became clear to me that many people did not have a fighting chance to begin with. I realized that there is a bigger issue at hand.

The other viruses our nation is facing include an administration that is not proactive in dealing with the pandemic, politicians that “help” Filipinos but are really just documenting their actions to kickstart their campaign for the 2022 elections, and individuals who were given priority status in hospitals while other patients died out in the cold. The system has been broken for so long. This pandemic just shed even more light on its complete dilapidation. The leaders we placed into power have not done us any good, nor do they plan to. Their empty promises and selfish actions have only managed to push our nation further into decay.

People often tell me that I am young, and that I have much to understand about the system and how it is virtually impossible to change, but I beg to disagree. I am eligible to vote in the upcoming elections. Although casting my ballot will create merely the smallest change, if at all, it is a good place to start.


In Preparing For A Taiwan Contingency, Tokyo Must Remain Discreet
Monday, May 24, 2021
In Preparing For A Taiwan Contingency, Tokyo Must Remain Discreet

Funabashi Yoichi, Chairman, Asia Pacific Initiative, and editor-in-chief of Asahi Shimbun (2007-10), in The Japan Times (May 22, 2021)

Summary by Alejandro Reyes (Photo credit: Mass Communication Specialist 2nd Class Erica Bechard/US Navy)

In Preparing For A Taiwan Contingency, Tokyo Must Remain Discreet

Successive US administrations have stuck to a basic policy of strategic ambiguity on the subject of the Taiwan Strait. “Strategic ambiguity” refers to a deliberate refusal to clarify whether or not the US would hasten to Taiwan’s defense in the event of a Chinese military attack. It was devised as a means of simultaneously deterring both a declaration of independence by Taiwan and a Chinese offensive aimed at forcing Taiwan’s unification with the mainland.

Some are raising doubts about the effectiveness of strategic ambiguity. Yet a transition to a policy of “strategic clarity” with regard to Taiwan carries risks. China could overreact, setting off an arms race. The US could fall into a trap if it presents strategic clarity as a red line. Observing it would become a litmus test for American credibility. Furthermore, such clarity is not very effective when it comes to gray-zone geopolitical challenges involving cyberattacks, supply-chain disruption and social media battles for political influence.

We should not overestimate China’s abilities. Experts are divided on the question of China’s ability to launch an invasion of Taiwan and the merits of its strategy. Taiwan’s growing strategic value to both the US and Japan is undisputable. If Taiwan is lost, the US will no longer be able to maintain a line of defense along the first island chain. This would signal the demise of the US as a power in the western Pacific. It would also jeopardize the US-Japan security alliance and the security of Japan’s sea lanes.

The reference to Taiwan in the 2021 joint declaration clearly considers a possible Taiwan contingency and the role of Japan. It is precisely for this reason that we must keep our “words” discreet and quietly prepare for “actions” that serve the goals of deterrence and dialogue.


The Biden Administration and DPRK Human Rights
Thursday, May 20, 2021
The Biden Administration and DPRK Human Rights

Jeong Sang-hwan, lawyer, prosecutor and standing commissioner (2016-19) at the National Human Rights Commission of Korea, in Maeil Shinmun (March 15, 2021)

Summary by Soomi Hong (Photo credit: Jeon Han/Korean Culture and Information Service)

The Biden Administration and DPRK Human Rights

The approach toward North Korea adopted by the US under Barack Obama was that of “strategic patience”, whereas that of the administration of Donald Trump was “top-down”. The former continued to bring up the human rights issue, whereas the latter completely ignored it. Both approaches failed.

The administration of President Joe Biden is expected to take a different approach in regards to human rights in the Democratic People’s Republic of Korea (DPRK). With the reality of intercontinental ballistic missiles bringing the actual threat ever closer to the US and the hard line the US is already taking with China, it would be difficult for Washington to remain silent on the humanitarian issue in DPRK.

Unfortunately, in South Korea, the administration of President Moon Jae-in has been sidelining the human rights issue. The foundation for DPRK human rights provided for under a law enacted in 2016 has still not been launched, and the Ministry of Unification remains ever so silent on human rights issues. Even the National Human Rights Commission limits itself to lip service by addressing “softer” issues such as the rights of the disabled and women rather than addressing the core human rights problems in the DPRK. Even the North Korea Leaflet Prohibition Act hurriedly passed last year has outright cut off the only means through which civil society in South Korea can speak out on the human rights issue in the North.

This course of action, however, is unlikely to continue with the expected pressure on Seoul from the Biden administration to break the silence on human rights issue in the North. It is no longer reasonable or acceptable to remain silent on the DPRK’s horrendous human rights record for the sole reason of keeping the dialogue with Pyongyang.


From Mao To Modi: The Link Between Great Power And Great Suffering
Thursday, May 13, 2021
From Mao To Modi: The Link Between Great Power And Great Suffering

Ashutosh Varshney, Sol Goldman Professor of International Studies and the Social Sciences at Brown University and Director for Contemporary South Asia, in The Indian Express (May 6, 2021)

Summary by Alejandro Reyes (Photo credit: Government of India)

From Mao To Modi: The Link Between Great Power And Great Suffering

Is mass suffering, inflicted by policy design or emerging as a policy byproduct, an integral part of the Narendra Modi regime’s view of national power and national revival?

Consider three big events causing mass suffering since Modi came to power. First, the 2016 demonetization produced long lines of people waiting to convert their currency, many collapsing out of sheer exhaustion. Second, the national lockdown of 2020 witnessed millions of rural migrants – tired, shocked and hapless – walking miles and miles to reach their homes. Finally, we have the biggest spectacle of all unfolding in our midst today, bringing sickness and death to thousands and thousands of Indians.

The prime minister neither expresses adequate remorse, nor sufficient compassion. What he does is the opposite of remorse and compassion. The Modi regime cannot accept governance failure, for to accept failure is to show weakness.

The obsession with state strength, national power and leader infallibility on the one hand and insensitivity to mass suffering on the other have been associated mostly with the big Communist polities. The most discussed case is of Mao Zedong and China. Mao was unmoved by the suffering. After retreating and fixing the food deficit, he returned to the theme of national reconstruction and Chinese glory. The Cultural Revolution was inaugurated. An estimated 2 million Chinese died. National renaissance and a return to China’s glory were infinitely more important than a couple of million lives.

Is it too much to expect Modi to admit that even if the virus is more virulent, India is actually going through a man-made disaster? How else can one understand the lack of oxygen, the scarcity of hospital beds and, most of all, the shortage of vaccines in the vaccine capital of the world? Could not the planning have been better?


A Strategic Solution To End The Conflict In Papua
Wednesday, May 12, 2021
A Strategic Solution To End The Conflict In Papua

Jannus TH Siahaan, commentator on defense and security issues, in Tempo (May 4, 2021)

Summary by Made Ayu Mariska (Photo credit: Frida Skjæraasen/Norwegian Agency for Development Cooperation -Norad)

A Strategic Solution To End The Conflict In Papua

The government’s decision to classify the armed criminal group in the provinces of Papua and West Papua as terrorists might be the wrong step in solving the ongoing conflicts. By classifying the group as terrorists but keeping military actions secret, the government will only receive more criticism from various parties for violating human rights.

Instead of labelling the Free Papua Movement (OPM) as a terrorist group, the government needs to carry out widespread education nationally to achieve consensus from the Indonesian public that the OPM is a rebel group that wants to establish an independent state and destroy the unity and integrity of the Republic of Indonesia. Indonesia must convince the international public at the UN that the conflicts in Papua are an internal, not an international, affair.

Beyond military and diplomacy issues, the economic and social problems in Papua must be addressed. The government must take Papua’s development to the next level. The region suffers from more than just a lack of infrastructure, Papuans struggle with poverty, unemployment, and social inequality, while witnessing their rich natural resources being exploited. The government has to increase their presence to deal with sociocultural and environmental-protection issues.

Fiscal spending for social and cultural development must be determined proportionally, along with the budget for environmental preservation, in addition to the establishment of fundamental regulations for protecting the environment and cultural development. The regulations related to social order must be addressed humanely and with environmental nuances, not only taking into account economic considerations, but also the sustainability of Papuan culture and environment.


Close Real Estate Tax Loophole
Tuesday, May 11, 2021
Close Real Estate Tax Loophole

Song Ki-gyun, economic researcher, in Pressian (March 27, 2021)

Summary by Soomi Hong

Close Real Estate Tax Loophole

There is a lot of talk about a “tax bomb” for rich homeowners due to the comprehensive real estate tax. The cause for the buzz is the combined increase in the official assessment value of properties (determined by the government) and the increase in the tax rate. This year alone, official assessment values have risen by an average of 19.19 percent in Seoul district. According to the Ministry of Land, an average homeowner in expensive Gangnam district in Seoul would pay about US$5,000 in taxes.

In theory, the tax rate increases significantly when a homeowner owns more than one property. The tax is designed to encourage such owners to sell their properties and make home ownership more affordable. There is a big loophole, however. An owner may purchase the property before the value exceeds the official assessment cut-off of US$531,000 and register it as a rental property. In this case, no matter by how much the value of the rental property increase, the owner would not be subject to the real estate tax.

According to the aggregate exemption logic, rental properties would be counted separately in the tax calculation so if an individual property does not exceed the cut-off value, there would be no real estate tax due. According to one study based on the Ministry of Land database, the top three property owners in the country each own 753, 591 and 586 properties. It is estimated that without this loophole, each owner would be subject to over US$8 million in real estate taxes. Civil society groups have pressured the government to close this loophole, but it seems unlikely that the current administration would do so.