Won on the wane

October 12th, 2009 by Philip Brasor & Masako Tsubuku

Shinsegae (New World) Department Store's atrium

Shinsegae (New World) Department Store’s atrium

The limousine bus from Busan’s Gimhae airport to the Haeundae beach resort area where the Pusan International Film Festival takes place was almost half-filled with Japanese, which wasn’t necessarily unusual. PIFF is the biggest film festival in Asia so many industry people and press from Japan attend, but it was obvious from the comments these people were making that they weren’t here for business.

“Duck cuisine!” said one woman looking at a billboard. “Sounds delicious.” Her companions chimed in affirmatively. It was something they would definitely check out.

They were middle age, housewives probably, and they had come to PIFF to ogle the Korean movie stars who show up every year at the festival. At the hotel I stayed at they would line the red carpet, alongside the Korean teenage girls, to catch a glimpse of the celebrities as they entered the building to attend one of the many industry parties.

There were a lot more than there were last year for an obvious reason: The won is really cheap for Japanese tourists. Just a year ago, Japanese resorts were all on the verge of translating all their signs and brochures into Hangul, ready to receive a tidal wave of Korean tourists because of the high won. The new national tourist agency was gearing up for the influx — Asian visitors were one of the reasons the organization was boosted to agency status. And then the won’s bottom dropped out.

When we were in Busan last year, it was not long after the infamous Lehman Shock, and in the space of only a few days the yen appreciated enormously against the won. When we arrived in early October 2008, ¥14 would buy a hundred won. A week later, you only needed ¥10 to buy the same amount. When we arrived here five days ago, it was about ¥8.

South Korea is currently worried about inflation, and we’ve noticed that most of the prices have gone up in the last year. Subway fares in Busan increased by 100 won. The ubiquitous kimbap (norimaki, or sushi roll), which last year would cost you about 1,200 won no matter where you bought it, now costs 1,500 won. And while the weaker won has done wonders for South Korean exporters, the average person is doing poorly, since salaries haven’t gone up. It’s apparent that business in general is suffering.

The shopping center where the bulk of the PIFF screenings were held in past years is mostly a shell now. The cinemas are still bustling on the top floor, but the middle floors are all boarded up or totally gutted. In contrast, the Shinsegae complex in the relatively new commercial/residential development area of Centum City, where much of this year’s PIFF is being held, is bustling, probably because of the novelty of the new. The Shinsegae Department Story calls itself “the largest in the world,” which is debatable, but for the time being, at least, it’s probably the most crowded. As in Japan, urban families have little to do on the  weekend together except shop.

But even with inflation, the exchange rate difference means that Japanese tourists (American tourists, too: The dollar does much better against the won than it does against the yen) get a huge bargain on almost everything. Even at PIFF. Tickets to all screenings are 5,000 won, which is about ¥400, but those housewives didn’t necessarily come to see movies. They came to see stars, and spend money on things like duck cuisine.

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