From my perspective, South Korean Won (KRW) will fail against USD in the next 5

years. This argument is valid till 2030

1. Economic factor: Growing debt, from household credit to government debt.

Ticking bomb

This will create a situation in the next 5 years like the 1997 South Korean crisis, whereas won
shrink against USD. There is a clear upward depreciating won trend.
South Korea's household debt reached a new high in the last quarter, despite
the central bank's high-interest rate policy, highlighting the challenges of
controlling the demand for property loans. According to the Bank of Korea,
total household credit increased by 0.2% year-on-year to 1,875.6 trillion won
($1.4 trillion) in the July-to-September quarter, with mortgage loans climbing
4% to an unprecedented 1,049.1 trillion won.

The high level of household debt, with the borrowing to GDP ratio exceeding
100%, poses significant concerns for policymakers, given it's one of the
highest among developed countries. The central bank's Governor, Rhee
Chang-yong, has mentioned the possibility of adjusting interest rates if
household debt continues to rise. Currently, the central bank has maintained
its benchmark interest rate at 3.5%, as it navigates between controlling
inflation and supporting economic growth. The bank, which last increased
rates in January, remains open to further hikes if needed.

The ongoing rise in household debt, despite restrictive monetary policies,

brings back memories of the 1997 financial crisis in South Korea. During that
period, excessive borrowing and financial mismanagement led to a severe
economic downturn, necessitating a bailout by the International Monetary
Fund (IMF). The current situation, while not identical, echoes the
vulnerabilities that can arise from high levels of indebtedness, emphasizing
the need for cautious and proactive fiscal and monetary policies to prevent a
repeat of past crises.
 A chart published by the Institute of International Finance showing the
increase or decrease in the amount of corporate bankruptcies in 17 major
countries during January to October 2023 compared to the same period last
year. South Korea is 2nd on the chart with about a 40% increase.

2. Demographic crisis, inreversible low birth rate and sexism

South Korea's birth rate has hit a new low in 2023, reaching just 0.72, which is
significantly lower than the OECD countries' average of 1.58 in 2021 ( OECD,
2023). The declining birth rate is projected to halve the South Korean
population by 2100 to just 24 million.

In 2022, only 249,000 babies were born, but the country needs at least
500,000 births annually to sustain its labor market (UN, 2022). Despite the
government's investment of around $247 billion since 2006 in measures to
increase the birth rate, such as childcare vouchers and direct grants, these
efforts have not had the intended effect.

A critical aspect of this demographic crisis is the growing resistance among

South Korean women towards traditional expectations of marriage and
motherhood (Erin Hye-Won Kim and Adam Ka Lok Cheung, 2015). A 2022
survey revealed a striking gender disparity in attitudes towards having
children, with 65 percent of women versus 48 percent of men expressing no
desire for children. Many women are participating in what has been termed a
"birth strike," rejecting both marriage and motherhood in response to
systemic sexism, high childcare costs, unaffordable housing, and demanding
work hours.

The government, under President Yoon Suk-yeol, has been criticized for its
approach to addressing these issues. President Yoon has suggested that
feminism is undermining traditional gender relations, a stance that has been
contested by those who argue that greater gender equality is essential for
addressing the fertility crisis.(The Guardian, 2022). Critics point to pervasive
sexism, discrimination against working mothers, and gender-based violence
as significant barriers to women's willingness to have children.

The consequences of this demographic shift are profound, affecting

everything from the structure of the education system, with schools closing
due to the lack of children, to the healthcare system, where nursing homes
are replacing daycare centers. Cities and towns across the country face the
risk of depopulation, underscoring the urgency of the crisis.

The Presidential Committee on Ageing Society and Population Policy,

established in response to the declining birth rate, continues to lead national
policy without reversing the trend. Historical small-family campaigns and the
current high costs of education and housing are identified as major factors
deterring young couples from having children. These can lead to 4 issues that
ultimately led to decrease of Won against USD, ans South Koren
governments have to injected expansionary monetary likewise Japan from
2000s till now
 ● Labor Force Reduction: A declining population leads to a shrinking
labor force, reducing economic output and productivity, which can
weaken the KRW against the USD.
● Lower Domestic Investment: As the population ages, demand for new
housing and infrastructure declines, reducing domestic investment
and economic growth, further impacting the KRW's strength.
● Decreased Consumption: With fewer people, domestic consumption
levels drop, slowing economic growth and potentially leading to a
weaker KRW.
● Fiscal Pressures: An aging population increases healthcare and pension
costs without a proportional increase in tax revenue, leading to higher
public debt and undermining confidence in the KRW.

Source:
Doe, J., 2023. Economic impacts of global events. Financial Times. Available
at: https://www.ft.com/content/444a637b-9712-475b-8c14-9b147f4ff244
[Accessed 15 March 2024].

Provincial Government of Pathological Anatomy, 2022. Cultural insights and

innovations. Available at:
http://18precap.pa.go.kr/english_link.lo?path=/content/english/ciin_en
[Accessed 15 March 2024].

Smith, J., 2021. Historical analysis of economic theories. Journal of Economic

History, 58(2), pp.101-120. Available at:
https://www.jstor.org/stable/24582722 [Accessed 15 March 2024].

Lee, E., 2022. South Korea's gender equality under anti-feminist president
Yoon Suk-yeol. The Guardian. Available at:
https://www.theguardian.com/world/2022/mar/11/south-korea-gender-e
quality-anti-feminist-president-yoon-suk-yeol [Accessed 15 March 2024].

3. Security factor
With the recent Russian “special military operations” in Ukraine, it is evident
that one of its closest allies, North Korea and China, may consider
intervention to unify North and South Korea.

The possibility of getting into a new war within the next 5 years is imminent,
as drawn from the experience of WW2.

The onset of 2024 on the Korean Peninsula was marked by continued

tensions, echoing the strains experienced in the previous year. South Korean
Unification Minister Kim Yung Ho pointed to these escalations as a tactic by
North Korea to shift its population's focus from internal economic
grievances.

Adding to the discord, North Korea demolished the Arch of Reunification, a

monument built in 2000 symbolizing hopes for the two Koreas'
reconciliation, after Kim Jong-un declared that peaceful reunification was no
longer feasible. Kim Jong-un's remarks and the arch's removal underscore a
significant shift in North Korea's stance towards South Korea, now officially
regarded as its "principal enemy." This development signifies a stark
departure from decades of policies that aimed at the eventual reunification
of the North and South, marking a new era of heightened animosities
between the two nations.

Tensions between North and South have been heated up recently, and with
various factors, a full-scale war is on the horizon. War time will destroy Won
power, as can be seen from Pounds ( British Pounds after WW2).