TEL AVIV — The Nobel Prize ceremony is usually an occasion for celebration in Israel, as there is often at least one Israeli citizen among the honorees. This year, two Israelis were awarded the Nobel Prize for Chemistry, but the country’s pride was bittersweet since both scientists live in the United States.
The rise in emigration among the most well-educated is a challenge faced by many countries, but in Israel the debate has taken on undertones of virtual desperation. The brain drain here is more severe than in other Western countries, and Israel has been seized by a fear that its people are starting to jump ship.
The debate about emigration is turning into a national identity crisis. Israel depends on Jewish immigration for its survival. The highly sought-after immigrants are called olim, meaning “those who ascend,” while emigrants are yordim, or “those who descend.”
Emigration clearly has an image problem, but according to a survey by Israeli Channel 10 this does not diminish its appeal for ordinary citizens. Of those surveyed, 51% admitted having thought about leaving their homeland.
The exodus of scientists is often linked to the state’s decision to cut funding for education to bolster the military and to finance construction of new settlements. According to a new study, for every three scientists who stay in Israel, one moves to the United States. But scientists are not the only group leaving their home behind. Young people and those in creative industries are also leaving in droves — and many are heading to Germany.
To Berlin and back
Israeli Finance Minister Yair Lapid, who lived in the U.S. for a few years himself, recently spoke out against those “who are prepared to throw away the only homeland the Jews possess simply because life is more comfortable in Berlin.” There was more than a whiff of accusation in the air when he spoke of the estimated 17,000 Israelis who currently live in the German capital.
It’s not just the parties and cultural life that draw them to Germany. The lower cost of living is also an important factor. According to the newspaper Haaretz, Berliners need to save 67 months’ salary to buy an apartment, while in Tel Aviv the figure is 170.
But the debate goes far beyond the bare figures. The German ambassador to Israel, Andreas Michaelis, was quick to point out that most Berlin-based Israelis do not stay in the city on a permanent basis. Instead they return to their homeland “inspired,” which he characterized as a sign of a good partnership. Of the 15,000 citizens who leave Israel each year, 10,000 return. At eight million, Israel’s population is 10 times what it was when the state was founded 65 years ago. But the country is still plagued by a fear that the Zionist dream will falter.
When the father of modern Zionism Theodor Herzl developed his plan for a “homeland for all Jews” during the era of nation states, he could not have predicted how globalization would affect his dream. Now the country he helped to create in the ancient land must face a very modern crisis of identity.
Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.
SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.
The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.
It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.
Seoul housing prices top London and New York
In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.
According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.
Average home loans are equivalent to 270% of annual income.
One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.
According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.
Playing the stock market
At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.
A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."
In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.
42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s
Game of survival
In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.
But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.
This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.
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