The economy of the Republic of Korea (henceforth Korea) has been on a steady growth path despite the global financial and eurozone crises. Recently, Fitch and S&P, the global credit rating agencies, upgraded Korea’s sovereign credit rating by one notch. Fitch’s rating for Korea, AA-, is the fourth-highest rating on its rating scale and a notch higher than those of the PRC and Japan. Notwithstanding these positive signs, Korea’s economy faces many internal and external challenges. One of the most serious is excessive household debt. Korea’s household debt has increased drastically since 2000. For the past 12 years, household debt has increased by an average of 13.3% every year, far in excess of the average annual nominal GDP growth rate of 6.2% during the same period. [Read more]
Grameen Bank (Village Bank) in Bangladesh is the world’s most well-known microfinance institution. It lends $1.5 billion a year to 8.4 million people. The establishment of Grameen Bank shows that we do not always have to accept the systems we are given. Sometimes we have to think the impossible if we are really going to change the world. My first venture into such small-scale lending was not carefully thought out or based on any previous research; rather, it was an instinctive response made when I came face-to-face with gross injustice. In 1976, I was teaching economics in the port city of Chittagong in Bangladesh. [Read more]
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