Financial thoughts

A week-long strike by South Korean truck drivers has cost Asia's fourth-largest economy about $5.92 billion in lost trade, dealing a blow to the main growth driver.

The strike disrupted $2.89 billion worth of exports and $3.03 billion worth of imports between June 12 and June 17, the Ministry of Knowledge Economy said today. That's about one percent of the value of South Korea's total trade last month.

The threat of slowing economic growth is another blow to South Korean President Lee Myung Bak, whose support plunged by more than half since he was elected in December. Anger at his decision to resume importing U.S. beef that triggered near- 80,000-strong street protests in Seoul, and strikes threaten his ability to push through the economic-growth agenda for which he campaigned.

“It's bad news for the economy and the government,'' said Chun Chong Woo, an economist at SC First Bank Korea Ltd. in Seoul. “This political headache could hurt June's economic performance.''

As many as 13,496 truck drivers, including members of the Korea Cargo Workers Union, stopped moving freight nationwide from June 11 to protest surging fuel costs, demanding higher transport fees and bigger government fuel subsidies.

Blockade

About 30 companies including LG Chem Ltd., Hanwha Chemical Corp quick payday loans. and Honam Petrochemical Corp. are having trouble operating plants in South Korea's largest petrochemical complex in Yeosu, where truckers are blocking the entrance of the complex, according to Cho Hyun Deock, assistant director at the Ministry of Knowledge Economy.

Overseas shipments, which made up about half of the economy's 0.8 percent expansion in the first quarter, jumped 26.9 percent in May from a year ago, a report by the Korea Customs Service showed this week.

“It's more bad news for the export-driven economy facing record oil and quickening inflation,'' said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. “This could hurt exports and factory output this month.''

Hyundai Motor Co., South Korea's biggest automaker, said this week that shipments of finished vehicles in the local market were only half the normal levels, though exports had been unaffected. Truckers have also blocked gates at plants operated by Posco, the nation's biggest steelmaker.

Lee may make a public address this week regarding the negative public sentiment over his administration. He may also announce a Cabinet reshuffle.

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