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Alexander Szikla

Reflections from South Korea

Recently, I visited South Korea and Mongolia along with a group of McGill University undergraduates and alumni. This trip was part of the Hot Cities of the World Tour organized by Professor Karl Moore of the Desautels Faculty of Management at McGill University. Frankly, South Korea was an incredible place to visit; especially from an economic perspective. South Korea is the world’s 12th largest economy as well as a global leader in the manufacture of automobiles and electronics. Despite these successes however, South Korea’s economy does face key issues. Specifically, South Korea’s financial services sector is surprisingly underdeveloped when compared to OECD peers, both with regards to productivity and employment share. South Korean home loans act as an excellent example which demonstrates precisely how the Korean financial sector is underdeveloped. Typically, Korean home loans have short durations of 10 years, compared to durations of 15 years or 30 years found in North American home loans. Additionally, South Korean home loans require high loan-to-value ratios, typically amounting to 51% of the underlying home value. Keep in mind that in North America, loan-to-value ratios typically stand at 20%. Moreover, before the Great Recession of 2008, loan-to-value ratios often stood at 0%. Granted, the effects of these liberal lending policies were problematic as they led to the subprime lending crisis which triggered the Great Recession of 2008. Korea purposely imposes these high loan-to-value ratios in an attempt to ensure that housing bubbles do not form, effectively mitigating problems in the financial sector. It seems as if these policies may have paid off for South Korea. Not only did South Korean real estate prices decline to a lesser extent during 2008, they also recovered at a quicker rate and more robustly than North American real estate did in 2009. Many of those gains were… Read More

Hot Cities of the World: Moscow & St. Petersburg

I recently had the opportunity to travel to Moscow and St. Petersburg with Professor Karl Moore and 42 other McGill students as part of the Hot Cities of the World Tour. Each year, the tour aims to bring McGill students to various cities which will likely rise to prominence and become global centers of economic activity in the coming years. While representing McGill University, students travelling with the Hot Cities tour have visited Tel Aviv, Dubai, Bangalore, Mumbai, Johannesburg and many other cities.The tour has two primary purposes. Firstly, to allow students to meet with political leaders, entrepreneurs and C-Level executives in order to bolster cooperation, communication and awareness as the global economy becomes increasingly interconnected. Secondly, the Hot Cities Tour has a social component as well. Last year, after visiting South Africa, students raised over $18,000 for the Ubuntu Education Fund; a community institution which provides support for the most vulnerable children while providing them with a pathway out of poverty. Aside from providing children with educational services, the Ubuntu Education Fund provides children with nutritional counseling, professional development, heath exams and related health services.This year, the Hot Cities tour has set out to raise $20,000 for the Kitezh Children’s Community. Collaboratively, we chose to tackle this issue based on the urgency and nature of the various challenges which Russian orphans face. Each year, roughly 15,000 Russian teenagers leave orphanages. Sadly, their fortunes are tied to the adverse circumstances which they must combat while they are further hindered by limited social assistance. Of these 15,000 teenagers, roughly a third are unemployed and homeless. Moreover, roughly 3,000 orphans resort to acts of crime and violence while 1,500 commit suicide. Most startling, approximately half of the girls released from orphanages turn towards prostitution as a means of supporting themselves.The issues that… Read More

The Timing of Terrorism and the Convenience of Conflict

This Friday, the International Atomic Energy Agency (IAEA) released a report which outlined how Iran has recently stockpiled vast amounts of enriched uranium which could easily be converted to weapons grade level uranium. Even more disturbing is the fact that the report mentioned how Iran has installed almost 2,800 centrifuges at its Fordow plant; which was built into the side of a mountain so that it can operate while being significantly less vulnerable to a possible attack. Moreover, development of an underground facility near the holy city of Qom is nearing completion. And while all this has been uncovered by the IAEA, Iranian authorities have not allowed the IAEA to inspect the military site of Parchin, which has been speculated to be a testing area for nuclear triggers by Western officials. Iran denies these allegations. While Iranian leaders claim that their nuclear ambitions are solely intended for peaceful purpose, the steps they have taken towards advancing their nuclear program in tandem with the restrictions they have imposed on IAEA inspections can only be indicative of the contrary.On the other end of the Middle East, another set of events is unfolding. Over the past few years, rocket attacks targeting Israeli civilians have gradually increasing. In 2009, 190 rockets aimed at Israeli civilian targets were fired from Gaza, often hitting their marks. In 2011 that number rose to 375 rockets and in 2012, there have been well over 800 rockets fired into Israel. On October 24, 2012 a significant escalation in rocket fire occurred as 80 rockets were fired from Gaza in less than 24 hours. (http://www.jpost.com/Defense/Article.aspx?id=289059) On November 14th, Israel retaliated by killing the leader of Hamas’s military wing, Ahmed Jabari. (http://www.bbc.co.uk/news/world-middle-east-20328579) Soon after, and for the first time since the Gulf War, rockets have hit Tel Aviv. Additionally, rockets have been… Read More