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Table of Contents

- Korea Focus - March 2013 - TOC - Politics 1. Getting Prepared for North Korean Provocation 2. Mission of the Nation’s First Female President 3. If Xi Jinping and Park Geun-hye Team Up 4. The First Step to Restoring South-North Relations 5. Opposition’s Chance Five Years Hence 6. Three Facts Koreans Alone Have Yet to Know 7. 130 years of Korean-German Friendship

- Economy 1. Currency War and Each Country’s Hidden Agenda 2. Daunting Trade Issues for Park Geun-hye 3. Small Giants Offer Hope for Korean Trade 4. East Asian Common Market 5. Real Estate Policy Tasks for the Park Administration 6. Open Source Technologies for the World of Big Data

- Society 1. Musical Film ‘Les Miserables’ and Grand National Unity 2. Social Contract for Youth Employment 3. Women’s Career Interruptions and Executive Appointments 4. Arab’s Thirst for Hallyu and Public Diplomacy 5. A Gloomy Era of Vanishing Bookstores

- Culture 1. Cultural Welfare in Dire Need 2. Park Geun-hye’s Fashion Style 3. The Value of Arirang 4. A Movie that We Cannot See at Theaters 5. Korean Perfectionism

- Essay 1. Social, Generational and Regional Cleavages in Transitioning North Korea 2. Korean Household Income: Analysis and Implications 3. LDCs and Korea in Export Markets: The Pursuers and the Pursued

- Feature 1. Parents Think Twice about Spending on Children’s Education 2. A Village with Alleys

- Book Reviews 1. Poet Reminisces on How Life Unfolded with Modern History 2. The Sorrowful History of Abandoned and Hungry Kareiskis

- Interview 1. Park Hyo-nam: “I put all my effort even into a simple soup.”

- COPYRIGHT


- Getting Prepared for North Korean Provocation - Mission of the Nation’s First Female President - If Xi Jinping and Park Geun-hye Team Up - The First Step to Restoring South-North Relations - Opposition’s Chance Five Years Hence - Three Facts Koreans Alone Have Yet to Know - 130 years of Korean-German Friendship


Getting Prepared for North Korean Provocation

News Commentary Yonhap News Agency

North Korea announced on March 5 that it would scrap the Korean War armistice, which suspended hostilities, and halt its activities with the Military Armistice Commission at Panmunjom, the truce village in the Demilitarized Zone bisecting the Korean peninsula. The North said it was acting in response to “hostile acts by hostile forces,” referring to the latest punitive action by Seoul, Washington and the United Nations

Kim Yong-chol, head of the General Reconnaissance Bureau of the North Korean People`s Army and spokesman for the Supreme Command of the People`s Army, read the announcement on North Korean Central TV. Kim is known to have directed the sinking of a South Korean Navy patrol boat, the Cheonan, in March 2010 and the artillery shelling of South Korea`s Yeonpyeong Island in November that year, the North`s worst provocations since it signed the 1953 truce with China and the United Nations.

The statement denounced South Korea, the United States and other nations for approving toughened U.N. sanctions and holding a joint South Korea-U.S. military exercise following the North`s “peaceful launch of an earth satellite” and a nuclear test. It said the North would resort to a “nuclear attack” in response to “nuclear threats” from the United States and South Korea and the two allies` “preemptive strike plans.”


“They will be countered by our diverse means of precision nuclear attack··· Our arms will be launched when we push the button and the targets will then turn into a sea of fire··· The effect of the Korean Armistice Agreement that has so far been perfunctorily maintained will totally be nullified as of March 11 when the joint war game (by South Korea and the United States) enters the critical stage. Our attack will be unleashed at the time and on the targets of our choice without limit in order to achieve the great national task of reunification,” the statement said.

North Korea launched long-range rockets twice last year in violation of a U.N. Security Council resolution prohibiting such actions and conducted its third nuclear test last December in defiance of warnings from the international community. The North`s rocket launches and continued development of nuclear arms pose a direct military threat to South Korea and challenge international peace and efforts to stem the proliferation of weapons of mass destruction.

North Korea`s missile and nuclear development will cause a nuclear arms race among its neighbors. The stiffened sanctions adopted by the U.N. Security Council reflected the serious concerns of the international community. China, which had previously been reluctant to take tough actions against the North, agreed to the strengthened sanctions, which included obligatory search of North Koreabound ships and compulsory financial restrictions. The North`s recent tests prove that it has continued nuclear and rocket development programs over the past 10 years while it was participating in the six-party talks for denuclearization. In the face of this outrageous behavior, the international community needs to effectively apply punitive measures. The big question is what our government should do now that the North has escalated its threats to blatant mention of nuclear attack.

Two approaches are needed: stern response to threats and provocations, and policies for kindling long-term political and economic changes in North Korea. Seoul should implement these policies firmly and consistently, until Pyongyang leaders realize that their threats and provocations are absolutely useless. This realization will force Pyongyang to change course. There are doubts, however, as to whether the overall security posture in the South is based upon a shared awareness of the seriousness of the situation.

It is worrisome that the new government has yet to form its top security affairs team while North Korea makes fresh threats with its nuclear and rocket capabilities presumably improving day by day. Great responsibility falls on our armed forces to be ready to immediately punish the North if it


executes its escalating threats. All possibilities should be considered, ranging from localized attacks to any form of nuclear strike. No loopholes in the defense system shall be allowed at this crucial time of starting a new government.

[ March 6, 2013 ]

www.koreafocus.or.kr


Mission of the Nation’s First Female President

Editorial The Dong-a Ilbo

The era of President Park Geun-hye has opened. As the 18th chief executive of the Republic of Korea, she will lead the nation for the next five years. The world is watching her inauguration with unusual interest as she is the first female president of South Korea, a nation with a long tradition of malecentered Confucian culture and confronted by North Korea. Aware of the huge attention on her, President Park probably feels a huge responsibility rests on her shoulders. She has pledged to usher in an “era of the people`s happiness.” She obviously wants to fulfill the dream of her late father and president, Park Chung-hee. The new president`s dream is that of the country`s 50 million people as well.

Sixty-eight years ago, Korea achieved independence from Japanese colonial rule. Back then, it was impoverished. And the Korean War left the poor state stripped to its bones. Getting the devastated country to stand on its own feet was far from easy. Weathering countless difficulties and challenges in the course of industrialization and democratization, the Republic of Korea has become one of the world`s most successful cases of economic development. Once one of the poorest countries on the planet, the nation became the 14th largest economy last year with per capita income surpassing US $20,000, which is the seventh in the world. The country`s democracy has also taken root. All of this has been possible owing to the concerted efforts of the people and their leaders. Whether the nation will write a new history of peace and prosperity is now in the hands of President Park Geun-hye.


The situation at home and abroad that President Park confronts is far from favorable, however. More than anything, the security on the Korean peninsula is in a volatile situation. With its third nuclear test, North Korea has practically joined the nuclear club. Such weapons of mass destruction in the hands of a rogue state threaten the lives of people on both sides of the divided peninsula as well as world peace. In her presidential campaign, President Park promised to build confidence between the two Koreas based on mutual trust. This ambitious plan, however, is in danger of being scrapped before even getting started. Worse still, diplomatic conflicts over territorial issues with China and Japan have also intensified.

On the economic front, no signs of improvement are in sight in the global economic crisis while South Korea`s economic growth rate has stagnated below 3 percent. Social and economic polarization in the country also continues to deepen. Despite all of this, South Koreans have high hopes for their new government. They want their president to fulfill her pledges such as creating quality jobs through new growth engines, correcting unfair practices in the market, and expanding welfare on a significant scale. Growth and public welfare, however, are largely incompatible. The new president should also curb the rise of sovereign debt and improve the country`s fiscal health.

In varying degrees, concerns over national security and economic crisis have always existed under every government of the Republic of Korea. What matters the most at a critical moment is the president`s leadership as well as the people`s attitude. Any kinds of difficulties or obstacles in the economy or national security can be overcome if the leader sets the right course and earns the people`s consensus for it. This year marks the 60th anniversary of both the 1953 armistice that ended the Korean War and the alliance between South Korea and the United States. Peace comes at a price. To maintain peace on the peninsula, Seoul must strengthen its defense posture and further consolidate the bilateral alliance with Washington. Simultaneously, South Korea needs to be prepared for reunification with North Korea, which may come at any time.

President Park was elected with 52 percent of the vote. She must embrace and earn the hearts of the other 48 percent to integrate the nation and overcome the economic crisis as she promised. She is expected to exercise her leadership in listening to different opinions, including criticism of her, communicating with the public including her political opponents, appointing people from diverse backgrounds across party lines to posts in her administration, and displaying her political acumen through dialogue and compromise to solicit cooperation from opposition parties.


Those who did not support Park in the presidential election and opposition parties should also open their hearts toward the new president. Above all, President Park herself should remember that her first and foremost duty is to safeguard the principles of free democracy, market economy and the rule of law as provided by the Constitution.

[ February 25, 2013 ]

www.koreafocus.or.kr


If Xi Jinping and Park Geun-hye Team Up

Chi Hae-beom Editorial Writer The Chosun Ilbo

Xi Jinping, the new chief of China`s Communist Party, minimizes inconveniences to the public when he makes local tours and eliminates redundancies when he presides over meetings. He also demands officials exercise pragmatism and refrain from authoritarianism and emphasizes distribution of wealth and the well-being of common people. At the end of last year, Xi`s style and priorities were on full display when he visited the mountain hamlet of Baoding in Hubei Province. Sitting on a concrete floor with -10 degrees Celsius weather keeping him close to a kitchen furnace, Xi discussed ways to eradicate rural poverty.

Xi`s demeanor has given him high popularity along with hefty expectations, but here in Korea, there is anxiety over how the Northeast Asian situation will change during his tenure. Sino-Korean relations probably will not change abruptly. Chinese diplomacy stresses continuity, and bilateral trade worth $220 billion along with 6.6 million visitors between the two countries (recorded in 2011) keep relations on a solid footing. However, when we scan the horizon, our vision becomes blurred.

China opposed additional U.N. sanctions on North Korea following its launch of the Unha-3 longrange rocket in December. The stance illuminated how China prioritizes stability ahead of denuclearization as it upholds the principles of “peace, stability and denuclearization� established during the Hu Jintao days.


What vexes us is how Chinese diplomacy focuses on the strategic value of North Korea amid deepening conflict with the United States, paying little heed to the plight of the North Korean people. China demands to be treated like a superpower, but the United States is reluctant to accept such a relationship. Meanwhile, Washington`s renewed attention toward Asia and military encirclement of China is destined to clash with Beijing`s ambitions in the Pacific basin. The friction between the two giants is sending sparks across the Korean peninsula. The theory that China needs North Korea as a buffer ― “Teeth get cold without lips” ― is supported by many Chinese, but changing times require new diplomacy. In the 21st century, with carrier flotillas, fighters and missiles having operational ranges reaching several thousand kilometers, the value of a buffer zone is diminished. North Korea`s nuclear armament only stimulates an arms race among regional powers, hindering China`s strategy of “peaceful rise.”

If economic difficulties lead to the implosion of North Korea, it will cause great confusion in the northeastern region of China. North Korea is turning from a strategic asset to a strategic burden for its giant neighbor. China needs to search for an economic solution and there is none better than helping keep North Korea`s 25 million residents as well fed and warmly clad as the 1.4 billion Chinese.

China, which took the path of market economy decades ago, is the only country that can persuade the Kim Jong-un regime that reform and openness won`t mean self-destruction. China is also the only country that can draw a Maginot Line on North Korea`s military adventurism and practically apply economic pressures on the North when it is feared to cross the line. Park Geun-hye`s “Korean peninsula confidence-building process” has much to cooperate with China as it aims to promote economic and private exchanges with the North on the basis of strong military deterrence. Park, who can speak Chinese, can communicate very well with Xi Jinping. When the two leaders unite in leading North Korea toward economic reform, keeping it from attempting military provocations, the two neighboring nations will open an era of real “strategic cooperative partnership.”

[ January 1, 2013 ]

www.koreafocus.or.kr


The First Step to Restoring South-North Relations

Koh Yu-hwan Professor, Department of North Korean Studies Dongguk University

“Well begun is half done; the first button should be put into the right hole,” said President-elect Park Geun-hye as she stressed the importance of making a good start during her first post-election public appearance.

In inter-Korean relations, as in every other affair, a good start is imperative. The Lee Myung-bak administration has fruitlessly spent its five-year term chanting principles without making any headway with Pyongyang. It believed that Seoul would be locked up by Pyongyang`s inappropriate demands and solicitations if the first button went into the wrong hole. Thus, the Lee government insisted on being the leading party if negotiations with the North were to resume. While the South resorted to the so-called “strategy of waiting” for the collapse of the North Korean regime, Pyongyang continued to step up its provocations against the South and improve its missile and nuclear capabilities. Yet, the Lee administration seems to be expecting a positive assessment for having not abandoned its principles.

The Park Geun-hye administration has taken over many tasks that the Lee administration failed to address. Among them are the North`s fatal shooting of a South Korean tourist at Mt. Kumgang (Geumgang) resort, sinking of the Navy patrol craft Cheonan and artillery attack on Yeonpyeong


Island, and continued development of missile and nuclear programs. The president-elect has proposed a confidence-building process for the two Koreas as she considered the present status of inter-Korean relations to be abnormal. Her “Vision Korea� project includes turning the entire Korean peninsula into an economic community after mutual trust has accumulated and denuclearization efforts make progress.

Pyongyang is limiting the new South Korean government`s options toward it amid anticipation of its third nuclear test. This recalls how the North`s long-range rocket launch and second nuclear test were conducted in the Obama administration`s first year, constraining U.S. options in dealing with Pyongyang.

Under these circumstances, the Cheonan issue will be the key to renewing inter-Korean ties. Seoul imposed sanctions on the North on May 24, 2010, after its torpedo attack on the South`s patrol craft killed 46 Navy crewmen. The South Korean government maintains that there will be no inter-Korean engagement without Pyongyang`s admission and apology. But Pyongyang denies any involvement in the sinking and insists that talks cannot resume until the sanctions are removed.

As long as both sides stick to their demand, an early thaw of relations can hardly be expected. And even if the sanctions are lifted, it may have no effect if the United Nations imposes tougher measures on Pyongyang in reaction to its rocket launch in December. South Korea would not be free to take any measure to reduce the effect of the U.N. sanctions.

After all, the new government in Seoul will have to deal with inter-Korean issues in a comprehensive manner rather than tackling them one by one. Exchange of trusted emissaries may be recommendable. It would be desirable for both Seoul and Pyongyang to express regrets about the incidents that have sunk their relations over the past years and promise no recurrence so that trust can be built for future cooperation.

While the continuity of government both in Seoul and Pyongyang is respected, the new leaders should seek to create a new paradigm in bilateral relations. In order to enter this stage, the two sides need first of all to settle the questions that had kept them from mutual accommodation.

The Ministry of Unification is primarily responsible for this task but its performances during the Lee Myung-bak administration were far from satisfactory. From the beginning, the ministry failed to stake out its importance. It would have been abolished by Lee`s transition committee had it not been for


strong objections from the opposition party and various sectors in society. Although it survived, the ministry was already too weakened to take the lead in managing inter-Korean relations.

It is fortunate that the new administration decided to retain the Unification Ministry. Unification is the utmost goal of the Korean nation, not something that can be affected by the interests of any political groups. Yet, the philosophy of the sitting president influences unification issues. Therefore, the Unification Ministry in the past was too cautious about the thinking of the presidential office. From now on, the ministry should be ready to persuade Cheong Wa Dae or any other government agencies about inter-Korean matters for which it is primarily responsible.

With expert knowledge and information and specialized data in its possession, the Unification Ministry should be entrusted to play the leading role in improving relations with North Korea with a view to programming the future of the Korean peninsula.

[ Hankook Ilbo, January 17, 2013 ]

www.koreafocus.or.kr


Opposition’s Chance Five Years Hence

Chun Young-gi Editorial Writer, The JoongAng Ilbo News 9 Anchor, JTBC

The Democratic Party has lost the two last presidential elections. In retrospect, the party revealed one of its primary weaknesses in 2008, when it recklessly took a ride on the volatile public outrage against importing American beef. Its action displayed a lack of political identity and leadership. By heedlessly joining inflammatory street protests highlighted by mass candlelight vigils, the party neglected its legislative duties and hurt its image as the main opposition party.

In May 2008, about the time the protests began to gain steam, I gave a lecture at a workshop of the party`s National Assembly members. The theme was the party`s next chance in the era of Lee Myungbak. I stressed that the Democratic Party (later renamed the Democratic United Party) should seriously ponder the “epochal signal” of its stunning defeats in the 2007 presidential election by a margin of more than 5 million votes and in the 2008 general election in which it failed to secure even 100 parliamentary seats, the minimum requirement to deter a constitutional amendment. The signal meant the end of the heyday of the so-called “386 generation,” which played an active role in prodemocracy movement, and the progressive leadership of Roh Moo-hyun. Members of the 386 generation (a term coined in the 1990s to refer to people then in their 30s, having attended college in the 1980s and born in the 1960s) were recruited by President Kim Dae-jung as political “young bloods,” and they gained momentum in their fight against a conservative attempt to impeach his


successor, President Roh. However, liberal forces of the two administrations failed to produce a leader capable of commanding nationwide support. Their political standing was worsened by what was dubbed a clique and resentment politics of Roh and his aides, leading to their defeats in the presidential and parliamentary elections.

At the workshop, I called on the party members to learn from two contrasting presidents, Kim Daejung and Park Chung-hee. I noted that Kim, until his futile third try on the presidency, relied primarily on his home turf of Jeolla provinces and dissident groups. But for his fourth bid, he expanded his power base to include Chungcheong provinces and allied his prodemocracy followers with forces prioritizing industrialization to finally seize power. As for Park, who was not necessarily their adversary, I said, Democratic Party members need to broaden their historical perspective by duly recognizing his achievement in boosting the nation`s industrialization, even while criticizing his autocratic rule. Pointing out that Kim eventually reconciled with Park despite their deep-seated animosity, I added that no one can become president with the Roh-style historical perspective that views the history of the Republic of Korea as one dominated by opportunists.

I still believe that the opposition party can regain power if it manages to single out its identity by incorporating Park`s leadership for industrialization and independent national defense, Kim`s drive for democratization and inter-Korean reconciliation and Roh`s emphasis on civic participation and breakup of political-business collusion. However, at the workshop there was no debate on how to broaden the party`s power base or historical perspective. The session was cut short by some radical members who shouted it was not the time for idle discussions when street demonstrations were under way to protest importing American beef, demanding everyone join the rallies.

Then the Democratic Party trod down the road to concede its leadership to the pro-Roh sect, largely in the following procedures. After Roh`s death in May 2009, his confidant Moon Jae-in made a comeback to rally Roh loyalists to challenge the party hegemony. In that process, a satirical political podcast program, titled “Naneun Ggomsuda,” or “I`m a Petty-minded Creep,” was launched in April 2011 with the intention of making Moon the next president. The program rapidly spread online through social media platforms. Following the general election in April 2012, Roh loyalists, including former Prime Minister Han Myung-sook and key figures from the 386 generation, seized the party leadership, choosing Lee Hae-chan, another prime minister of the Roh administration, as party head and Moon as presidential candidate.

What will be the party`s chance of returning to power five years hereafter? Essentially it needs to


keep a political distance from the masses. A political party should be a “leading group” that systematically incorporates public demands into policies, not a “following group” that merely chases after voters. The people will look down on a party that is swayed by popular figures who are active on social networking services. It may well end up as a trainer devoured by his beast. Only political parties can become the ruling power and draw up government programs. The masses can overwhelm a political party and grasp power only when a society is in a state of revolution or anarchy. The Democratic Party must overcome its feeble image of being dragged around by the masses and civic groups. Only when it recovers leadership from the masses and expands its power base, the road to power will open for the party.

If the Democratic Party remains trapped by the legacy and spirit of Roh Moo-hyun, it will end up being a permanent opposition group. It needs to learn from the wisdom of Kim Dae-jung who, in an effort to widen his support base, joined followers of Park Chung-hee, such as Kim Jong-pil and Park Tae-joon, whom he appointed as prime ministers in his administration. The party should also reconsider its narrow-minded criticism of former presidents Syngman Rhee (Yi Seung-man) and Park Chung-hee, and include in its platform a balanced assessment of their merits as well as their shortcomings. It is because nobody who denies the legacy of the Republic of Korea with a masochistic view of history can become its president.

After all, a crucial question arises as to who is most qualified to become the party`s next standardbearer? Sohn Hak-kyu, or Kim Du-gwan, or Chung Se-gyun? How about Kim Bu-gyum and Kim Han-gil? Among the Roh loyalists, Kim Byung-joon who is noted for his sense of balance seems to stand out as well. If consensus is available, the party may search for a new leader from outside, and the most likely choice would be Ahn Cheol-soo, an independent who dropped out of the latest presidential race in favor of Moon, or Seoul City Mayor Park Won-soon, who is closely watching developments in the political world, could be counted on.

[ JoongAng Ilbo, January 8, 2013 ]

www.koreafocus.or.kr


Three Facts Koreans Alone Have Yet to Know

Kim Dae-joong Advisor The Chosun Ilbo

I heard the following from a public official who makes frequent visits to developing countries for talks related to natural resources. He said that many officials of those countries, especially African states, envy Korea`s rapid progress, but they think Koreans seem unaware of their own situation. Three examples are often mentioned: Koreans` high standard of living; the critical confrontational situation in which Korea is placed; and the depth of the potential threats posed by China and Japan.

I initially regarded the remarks as a casual comment, but soon realized that they are an accurate and truthful assessment. The first point is related to our economic standing, the second to our precarious national security situation holding a “powder keg,” and the third to the nation`s survival through the conduct of astute neighborly diplomacy.

There may be disagreement among Koreans as to whether they live well. But, viewed by people in developing countries, Korea as an OECD member with a per capita national income of more than $20,000 can be rated as moderately affluent. Although a criterion for evaluating people`s livelihood is relative, if Koreans compare their living standards to those of 10 or 20 years ago, complaints are apt to be branded as “discontent in comfort.” The second point raises critical questions. Foreigners think Korea lies in a “very dangerous


neighborhood,” and they wonder how Koreans hardly exhibit any traces of serious concern over their security. Prolonged exposure to danger is apt to make a person apathetic but when it concerns a nation`s survival and self-esteem, the situation can cause serious problems. Indeed, Korea is in a queer situation in the eyes of foreigners. It has been in a state of “ceasefire” for some 60 years, after being devastated by a catastrophic “local war” (the Korean War) enormous number of casualties. Now the truce line is fortified by more than one million heavily armed troops on both sides. And they are backed by the world`s greatest powers, the United States and China, with nuclear-armed North Korea sitting on the shoulder of the denuclearized South. Yet more eccentric is that the South has hordes of supporters and sympathizers of North Korea, a totalitarian hereditary dynasty that destabilizes the region with provocative acts.

Under these extraordinary circumstances, the National Assembly deliberating the government budget bill for 2013 slashed over 300 billion won from defense spending, the biggest cut among various sectors. The budget reduction reflects the legislators` lax perception of national security. Another deplorable development is the delayed construction of a naval port on the southern island of Jeju. Despite the vital need for the base, it has been subjected to a series of public protests, a situation defying understanding of other nations, whether developed or developing. What`s more, the successive governments in the South have tried to “shake hands” with top North Korean leaders and “buy peace” at exorbitant prices, displaying a populism that is absurd enough to stir up skepticism among world nations.

The third point about Korea`s relationship with its powerful neighbors, China and Japan, could be casually raised by foreigners who do not know much about the history of Northeast Asia. Koreans have a history of humiliating relations with China spanning over thousands of years and with Japan over centuries, so they have a tendency to distrust and keep their distance from the two countries. It is a display of their national identity but foreigners may view it as contempt, or even futile bravado, toward stronger neighbors.

Many of the developing countries have their own bitter histories of colonization and, even after having gained independence, face the cold reality of relying on big powers for their survival. Perhaps those countries may wish to learn from Korea`s experience of conducting diplomacy with China and Japan for their own deals with relevant big powers.


In this regard, Korea should not perform ostentatious diplomacy, as if reacting in a short temper, without providing an exit or roundabout way. Long gone are the days when Korea paid tribute to China and became a colony of Japan. Koreans would not leave their future overshadowed by their disgraceful past. But, before trumpeting such a conclusion in haste, we must be mindful of the probability that calamity and conflict could befall us in the form of economic colonization and territorial disputes.

Korea has grown to become a focus of intense international concerns as well as candid exhortations on its position in economics, national security and foreign relations. The time has come for us to offer our own answers on points that foreigners think we Koreans alone are unaware of.

[ January 8, 2013 ]

www.koreafocus.or.kr


130 years of Korean-German Friendship

Kim Jae-shin Korean Ambassador to Germany

To most Koreans, the most popular images of Germany are German beer, sausages and car brands such as Mercedes-Benz and BMW. Less known are such historical facts that it was German musician Franz von Eckert who composed the national anthem and served as military band master for the Korean Empire (1897-1910), and German medical practitioner Richard W端nsch attended to Emperor Gojong as his personal doctor and Korean medical doctors` association later established the W端nsch Awards to commemorate his efforts to prevent the outbreak of malaria in Korea.

The official diplomatic ties between Germany and Korea were established when they signed the Treaty of Friendship and Commerce on November 26, 1883. Over the past 130 years the bilateral relationship has grown ever stronger and deeper as both nations went through a turbulent history of world wars, the Cold War and divisions, the demise of the Cold War and the reunification of West and East Germany.

As we reflect on the bilateral ties, one of the most memorable events that come to our mind is Korea`s dispatch of miners and nurses to West Germany. In 1961 the South Korean government headed by President Park Chung-hee asked West Germany to help its poor economy. In response, the German government requested Korean miners and nurses. Under an agreement between the two governments, more than 8,000 mine workers went to Germany between 1963 and 1977, and over 10,000 nurses


between 1964 and 1976.

When President Park and his wife visited West Germany in December 1964, they met with Korean coal miners in the Ruhr to personally praise their hard efforts and sacrifices to earn foreign currency to finance the country`s economic development. The dispatch of Korean labor force to Germany was the first and the largest of its kind before the Korean government sent troops to the Vietnam War and construction workers to the Middle East in a desperate bid to secure foreign currency and aid to develop its economy.

Today Germany has risen as a leader in the world political and economic landscape as well as in the Eurozone. Having successfully completed reunification, Germany has become the economic engine of Europe and its political clout has also grown significantly over the years.

Korea and Germany share commonalities in their economic characteristics as both achieved development through export-driven industrialization. The two economies also focus on the manufacturing sector as they largely lack natural resources. The Korea-EU Free Trade Agreement, which came into effect as of July 1, 2011, will continue to deepen the commercial ties between the two countries. It is also notable that there is enormous potential for further cooperation in the area of renewable energy. Germany has the world`s largest manufacturing base for wind power facilities and the world`s second-largest for solar energy facilities. The country is implementing a bold plan to put an end to the use of nuclear energy by 2022.

Korea also has much to learn from German experiences when it comes to reunification of divided nations. Germans tend to demonstrate great interest in the geopolitics of the Korean Peninsula due to their own recent experience. The German reunification cost more than 2 trillion euros, and the early phase of the reunification process proved to be a particularly difficult time for the Germans. However, 23 years after the fall of the Berlin Wall, Germany is thought to have successfully completed the task of political unity and social integration.

The year 2013 marks the 130th anniversary of Korean-German diplomatic relations and the 50th anniversary of the dispatch of Korean miners to West Germany. A series of commemorative activities are planned to reflect on the past and envisage the future of the bilateral relations between the two countries. As part of the joint celebration, the two governments are going to print commemorative stamps, launch a logo, and organize conferences and cultural festivities. A documentary program about the lives of Korean migrant workers in Germany is scheduled for broadcast, while Korean


musicians and artists are going to put on a performance for them.

In December 2012, German Chancellor Angela Merkel invited President-elect Park Geun-hye, former president Park`s daughter, to Germany to jointly commemorate the 130th year of diplomatic ties between the two countries. Chancellor Merkel extended her invitation when she telephoned Park, the first call from a foreign government leader to congratulate Park on her election victory. I hope many Koreans will visit Germany in this important year to enjoy over 5,000 German beer brands and drive on the famous autobahn highway system. In Germany, they will be happily surprised to witness the slew of Korean electronics and automobiles, and the increasingly popular Korean cuisine and pop culture.

[ Dong-a Ilbo, January 18, 2013 ]

www.koreafocus.or.kr


- Currency War and Each Country’s Hidden Agenda - Daunting Trade Issues for Park Geun-hye - Small Giants Offer Hope for Korean Trade - East Asian Common Market - Real Estate Policy Tasks for the Park Administration - Open Source Technologies for the World of Big Data


Currency War and Each Country’s Hidden Agenda

Seo Jeong-hui Stock Editor The Maeil Business Newspaper

A weak yen is nightmarish for Samsung Electronics Co. and the Hyundai Motor Group. It is making matters worse for the beleaguered business conglomerates, whose surge in revenue has magnified potential attacks by economic democracy advocates. But they would be one-eyed if the weak yen`s other effect is ignored.

The horror of a weak yen is pushing President Park Geun-hye`s incoming administration to arm itself for a fight over foreign currency rates. Such attention is a tremendous help to exporting conglomerates and has assisted the Ministry of Strategy and Finance`s battle to retain oversight of international finance against those who advocate its transfer to the Financial Services Commission for coordination with domestic finance.

What really is behind the push for a weak yen? Is it an act of deviance by Shinzo Abe, who is blinded by his pursuit of power? If so, why is the United States keeping silent? Why do some international organizations and European countries act as if they were responsible as well?

We are agonizing over exchange rates again ahead of the inauguration of a new administration. Except for the Roh Moo-hyun administration [which took office in 2003], all recent administrations have had to deal with the issue. A rash or myopic decision would invite failure in the management of exchange


rates. A case in point was the Lee Myung-bak administration`s initial policy on foreign exchange rates, which proved to be incorrect and remained an irritant throughout its term.

The U.S. Federal Reserve started quantitative easing. It was followed by the European Union, with the European Central Bank pouring a virtually unlimited amount of money in its fight against the fiscal crisis in Europe. Now Japan`s new government has jumped on the bandwagon. Japan had tolerated its currency`s strengthening to 80 yen per U.S. dollar, but the new government wants to weaken the yen to help boost exports and end deflation.

Not every country can increase its money supply as much as it pleases through a central bank`s quantitative easing. It is a privilege accorded to the U.S. dollar as a key currency and other currencies used for international settlements, such as the euro, the pound and the yen. Quantitative easing, which does not cost much, has a great Seigniorage effect. What should be noted is that all of these countries are printing money at this time.

Then, what do the United States, the European Union and Japan think about a weak yen? Here, we have to keep our eyes wide open.

U.S. Treasury bonds have been propping up the world economy since the 2008 global financial crisis, most of them purchased by China. European countries, which cannot afford to buy U.S. treasuries any longer, are now trying to sell their own debt instruments to China. Thus, China has gained leverage over the United States and Europe. To maintain its influence the United States will have to keep China in check. No wonder the United States condoned Japan`s push to devalue its currency. Now of great concern is how China will respond.

How will the game end? No one knows. If history is any guide, there is a long road ahead. There are close parallels to what is happening today in the decades that included the first and second world wars and the Great Depression ― the period which Winston Churchill called the “Second Thirty Years` War in Europe.� The first to withdraw from the gold standard during that period were the United Kingdom and Japan (in 1931). France was the last to devalue its currency (in 1936). Then protectionism emerged, dividing the world into confrontational currency alliances.

What do we have to do? We should keep ourselves from absent-mindedly engaging in a short-term currency war. The Lee administration, unaware of an approaching global financial crisis, pushed down the value of the won in the name of export promotion, only to hurt the nation when the crisis


erupted.

For us to move first would be to show our cards. Instead, it is important to try to tame short-term fluctuations in exchange rates, be it through the introduction of a Tobin tax or the adoption of other measures. Instead of focusing on exchange rates, it is also necessary to keep track of the balance of payments accounts, the competitiveness of major Korean export items against that of Chinese and Japanese counterparts and other indicators of the real economy. It is the same with a weak yen. A short-term response would be risky. The yen would fall to an internationally permissible level. A Maginot line would be drawn around 90 yen per dollar and probably not higher than the 95-yen-perdollar level.

A currency war is not simply a financial war any longer. It is a hegemonic war involving diplomacy and defense as well. What would be the best positioning strategy for us at a time when such world powers as the United States, China, the European Union and Japan are flexing their muscles? It is time for us to think hard about it in a wider frame of mind.

[ January 29, 2013 ]

www.koreafocus.or.kr


Daunting Trade Issues for Park Geun-hye

Choi Won-mok Professor, Law School Ewha Womans University

Park Geun-hye`s historic victory in the December 19 presidential election seems to reflect the nation`s desire for national unity and new economic prosperity, as she symbolizes her father`s economic development policy, which is credited for the nation`s rapid economic growth in the 1960s and 1970s.

The challenges facing President-elect Park appears to be particularly strong in international commerce. Her government will have to deal with several significant trade issues that will have impact on the nation`s interests considerably. Our biggest pending issue is opening the rice market, scheduled for late 2014. In 2004, the Korean government reached an agreement with the World Trade Organization to postpone tariffs on rice to 2014 in exchange for a gradual increase in market access. With the end of the 20-year grace period two years away, the government must now decide import tariff rates for rice, compensation for damage to rice farmers and restructuring of the nation`s rice industry.

Another hot-button issue is negotiations to revise the Investor-State Dispute Settlement (ISD) clause of the Korea-U.S. Free Trade Agreement, which took effect in March 2012. Amid the Korean people`s concern about possible side effects of the ISD provisions, U.S. private equity firm Lone Star Funds recently filed investor-state dispute lawsuits against the Korean government for losses related to its investment in the Korea Exchange Bank. Against such a backdrop, the ISD clause will need to be


revised to some extent. On the basis of experts` objective analyses, additional mechanisms will need to be devised to prevent multinational companies from abusing the ISD system. It is also necessary to ensure that the ISD clause will not conflict with the local judicial system.

In accordance with the demands of the times, Korea should play a leading role in the construction of a Northeast Asian free trade network that comprises a free trade agreement (FTA) between Seoul and Beijing. Korea`s bilateral free trade agreements with the United States and the European Union represent its pursuit of market liberalization and systematic settlement of pending trade issues. In contrast, Korea`s ongoing FTA negotiations with its neighboring countries are expected to pave the way for the grand integration of Asia.

A Korea-China FTA is not simply aimed at making inroads into the vast Chinese market. It will help build up a systemic framework in goods, services, investment, trade remedy, country of origin, intellectual property rights and environmental cooperation. Such a framework will then form the foundation of a Northeast Asian economic community, which will surpass North America and Europe to become the world`s biggest regional bloc. Asian countries engaged in free trade negotiations should no longer depend on the FTA model developed in the United States and Europe. They should instead seek a new Asian model.

Another daunting task for Park`s incoming government is to cope with sensitive factors of conflict between Korea and the United States. If our side demands the revision of the ISD clause, Washington will probably make a counterproposal that seeks further opening of the Korean market to U.S. beef. The U.S. government may also demand that American super supermarkets in Korea not be subjected to local regulations on business hours. In addition, Washington will probably ask that Korea guarantee a certain mandatory import quota for American rice under the bilateral FTA in time for its planned liberalization of the rice market.

These sensitive trade issues are set to be handed over to the next Korean government. It needs to engage in practical trade diplomacy to prevent the knotty issues from getting out of control. Soon after its inauguration, the Lee Myung-bak government was virtually paralyzed for months by antigovernment candlelight demonstrations that were triggered by its resumption of U.S. beef imports. Consequently, Lee`s policy agenda drifted aimlessly for a while.

The Park Geun-hye government must avoid such chaos. The people and the government should actively communicate with each other and form a consensus to establish and implement policies in a


way that enhances national interest. Trade policies should be implemented and evaluated through reasonable discussions with private advisory groups. The newly introduced law on foreign trade procedures providing reasonable rules of negotiation between the National Assembly and the administration should also be respected. If international trade issues are swayed by domestic politics, trade retaliation is inevitable from trade partners. In that case, the subsequent economic cost would be enormous. We should keep this lesson in mind.

[ Chosun Ilbo, December 25, 2012 ]

www.koreafocus.or.kr


Small Giants Offer Hope for Korean Trade

Han Duck-soo Chairman Korea International Trade Association

An annual Trade Day ceremony last year featured the catchphrase, “Toward a global trading superpower beyond one trillion dollars!” Since the early 1960s when an ambitious economic development plan was launched, Korea has tirelessly pursued and achieved robust economic growth. In 2011, our nation became the world`s ninth country to achieve one trillion dollars in annual trade volume. Korea’s trade volume again topped one trillion dollars last year for the second year in a row. The meaningful milestone was achieved in spite of the escalating Eurozone debt crisis and ensuing uncertainties in the global economy. Notably, Korea overtook Italy as the world's eighth-largest trading country in 2012 and our nation’s first-ever entry into the ranks of G-8 in trade surprised the world. Korea`s achievement of one trillion dollars in trade in 2011 was particularly noteworthy in the economic history of the world. The feat may be attributed to abundant global liquidity, as major advanced countries implemented economic stimulus packages to overcome a global financial crisis. But it was accomplished despite unfavorable circumstances at home and abroad. Korean enterprises redoubled their efforts to increase exports, while the government and trade support organizations collaborated to provide the best possible services.

Critics have long said that the Korean trade sector is excessively dependent on specific products and


markets and thus highly vulnerable to external economic fluctuations. But such fears proved groundless last year, as the nation`s trade statistics indicated. Though Korea`s major trading partners, including the United States, China and Europe, were mired in an economic slump, Korean companies` exports to emerging markets registered a robust growth, offering a new ray of hope for the national economy. Similar changes occurred in the composition of leading export items. Shipments of Korea`s mainstay export products, such as wireless communication equipment and ships, were sluggish in 2012. On the other hand, auto parts and general machinery registered year-on-year growth of 6.8 percent and 6.7 percent, respectively, in the first 10 months, paving the ground for the one trillion dollar milestone.

Such a reversal has been made possible by small and medium-sized enterprises (SMEs), which aggressively explored overseas markets in pursuit of new business opportunities amidst the simultaneous slump of major overseas markets. The SMEs contributed significantly to Korea joining the ranks of G-8 in trade last year. Another major contributor has been emerging markets.

Over the past five decades, Korea`s main export markets were the United States, Japan, Europe and other developed economies. China, which normalized relations with Seoul in 1992, became Korea`s largest trading partner in the 2000s. But the fundamental determinants in Korean trade remained largely unchanged.

Korea`s exports to its major markets simultaneously slumped last year, however. During the JanuaryOctober period, the nation`s exports to the European Union, China and Japan fell 11.5 percent, 1.2 percent and 1 percent, respectively. By contrast, Korea`s exports to member countries of the Association of Southeast Asian Nations (ASEAN), which had not drawn our attention in the past, rose 8.1 percent over the previous year. Of the nation`s five major export markets, Korean shipments to the ASEAN showed the biggest increase. Moreover, our exports to the Middle East surged 15.2 percent last year. It is emerging markets, rather than advanced countries, that helped Korea solidify its position as a member of the “one trillion dollar trade club.”

We have now secured very valuable resources in opening the era of two trillion dollar trade at an early date. They are SMEs and emerging markets. In particular, more SMEs will need to establish themselves as global companies in emerging markets, as well as in advanced countries, by taking advantage of free trade agreements and reinforcing their marketing activities. More small-butpowerful global companies are needed to upgrade Korea`s brand value and spread “Made in Korea” products in overseas markets. That is the way for Korea to become a trading superpower.


[ National Economy, January 2013, published by the Korea Development Institute ]

www.koreafocus.or.kr


East Asian Common Market

Rhee Chong-yun Professor Emeritus, Hankuk University of Foreign Studies Executive Vice Chairman, Korea-Japan Economic Association

Korea will swear in Park Geun-hye as its new president on February 25, about two months after Shinzo Abe officially took over as Japan`s prime minister. Since last year, tensions have escalated between Korea and Japan over historical and territorial issues. With Abe regarded as a far-rightist politician, diplomatic conflicts are likely to continue this year.

At this juncture, there is one clear thing to remember: the two countries` economies have been in a protracted slump. Highly reasonable behavior is needed to overcome the downturn but progress will be impeded if economic activities are swayed by the political climate. Therefore, the two countries have to separate politics from economics. They should hold fast to the principle of “economic rationality� and seek ways to boost bilateral cooperation accordingly.

Global trade now stands at a crossroads. Since the beginning of the global financial crisis in 2008, the U.S. economy has been in the doldrums. The U.S. government has changed the direction of its economic policies in a way that weakens the financial industry and enhances the competitiveness of the manufacturing sector. To accommodate the strategy, the U.S. Federal Reserve has suppressed interest rates and the value of the dollar.

The U.S. influence over the global economy has weakened considerably since 2008, though the


development of shale gas, an alternative energy source, and its increased production could somewhat brighten the outlook for the American economy. The economy of the European Union (EU) also remains bogged down by the Eurozone debt crisis. It won`t be easy for the EU countries to rebound in the near future, due mainly to their unsustainable social security systems.

East Asian countries have depended on the markets of the United States and the EU, which have virtually led the global economy since the end of World War II. The Asian countries now need to significantly change their growth model. The change can be directed at creating reciprocal demand among East Asian nations, or an East Asian common market. Needless to say, such a market should be based on market principles and all predictable economic activities should be guaranteed.

It is our expectation that the new governments of Korea and Japan will cooperate and play leading roles in creating an East Asian common market. Both Korea and Japan need stable overseas markets more than any other country because they lack natural resources and have a high population density. To create their common market, the two neighbors first need to boost cooperation in resource development and infrastructure construction mainly in East Asia. The revitalization of regional resource development and infrastructure buildup will help improve the two countries` economic vitality and play an important role in stimulating regional trade and investment.

Another priority is intra-industry division of labor. This has been missing since the 1960s. As a result, a highly competitive structure has been formed between major industries of both countries. That structure has triggered excessive bilateral competition in third-party markets, worsening both sides` terms of trade. Hence the two countries have to expand intra-industry division of labor and widen the scope of cooperation.

One of the ways to realize the goal is to stimulate two-way exchanges of people and goods. The exchanges will naturally lead to further division of labor between peer industries of the two countries, spurring regional infrastructure construction and resource development even more actively. The new governments in Seoul and Tokyo are asked to share the view that the establishment of a viable structure for mutual cooperation is crucial to overcoming their respective economic slump.

[ Korea Economic Daily, January 17, 2013 ]

www.koreafocus.or.kr


Real Estate Policy Tasks for the Park Administration

Kim Jong-hoon Chairman, Hanmi Global Co. Co-leader, Construction Vision Forum

When the “Arab Spring,” a revolutionary wave of prodemocracy demonstrations that began in Tunisia, spread to Egypt, Yemen, Libya and other Middle East and North African countries in late 2010 and 2011, one of the biggest public grievances concerned housing shortage. At that time, home prices were skyrocketing in those countries, as housing supply failed to catch up with population growth. Middle- and low-income people could not afford to buy a house.

As the global attention was shifting to a possible spread of the Arab Spring in Saudi Arabia, the largest country in the Arabian Peninsula, the country`s king hurriedly returned home from a trip to the United States. After the Saudi king announced a set of appeasement measures, public agitation began to subside. The appeasement policy called for about 500,000 new middle-to-low priced houses at a cost of US$66.7 billion (about 74 trillion won) within five years and elevating a government organization in charge of housing construction to ministry status. Amid the prolonged slump in Korea`s real estate market, “house poor” and “rent poor” individuals have emerged as a major social problem. The “house poor” refer to those who spend a large proportion of their income on mortgage payments and have trouble meeting other financial obligations. They obtained excessive mortgages during the housing bubble but are now struggling to service their debt. The “rent poor,” who have little disposable income because they have to use all their money to pay


rent, are also financially strapped. They are forced to spend most of their discretionary income on rent or borrow heavily to pay for rent, as the price of Jeonse, or lump-sum deposit-based rental, has skyrocketed. Due to fading expectations for a housing market recovery soon, demand for houses has been replaced by demand for rental properties.

To all outward appearances, the house poor and the rent poor belong to the middle class, which forms the backbone of consumption. But their falling buying power has actually caused a cash crunch. If their loans turn sour due to household income reduction or job loss, it may trigger a wave of insolvencies of financial institutions. The middle-class households should be helped out of their liquidity trap in order to revitalize our economy and boost domestic demand.

A recovery of housing transactions is crucial. President-elect Park Geun-hye has promised to introduce a so-called “stake sale system” to help the heavily indebted house-poor households. The stake sale system aims to let the financially troubled homeowners sell off shares in their properties to designated public organizations and use the revenues to repay parts of loans from financial companies. The public organizations can raise funds by using the purchased stakes as collateral and issuing asset-backed securities to financial companies and pension and funds operators. The public entities can also collect rent over the sold stakes from the house poor to pay operating expenses, including interest payment for investors. Park`s campaign pledges for the rent poor can be summarized as “happy house” and “tenant-friendly Jeonse.” She promised to build about 200,000 happy houses on artificial land and sell them at half the market prices. Under the tenant-friendly Jeonse system, homeowners will be given the option of taking out loans and saddling their tenants with the interest payments. Park`s campaign promises can be seen as desperate measures to help the house poor and rent poor. They cannot be the fundamental solutions. It will take a very long time before the support measures can produce substantial effects.

The government`s real estate policies including those concerning the housing problem can have considerable ripple effects on the entire national economy, not to mention the construction industry workers. The level of ripple effects is particularly high in Korea where houses and residential real estate account for nearly 70 percent of households` total assets. Nevertheless, Korea`s real estate policy has been shaken whenever a new government arrives. The lack of policy consistency and durability has created enormous confusion among the people.

In the real estate market, almost all people can be considered market participants and their interests


are closely intertwined. For that reason, there has been constant discord between “winners” and “losers” and between “haves” and “have-nots.” The local housing market has now reached a stage where a simple supply increase alone cannot satisfy market demand nor revitalize housing transactions. Reflecting the recent demographic changes and smaller household sizes, the types of housing demand have been gradually diversified and segmented. Silver house, peanut house and miniature house are among the examples.

President-elect Park has repeatedly said that the broad focus of her housing policy will be shifted from mass supply and development projects to improving housing welfare. We hope Park`s government will secure the trust of the market and guarantee policy consistency by implementing effective housing policies. We expect that President-elect Park will contribute to upgrading the Korean people`s residential welfare by stabilizing the market.

[ Korea Economic Daily, January 18, 2013 ]

www.koreafocus.or.kr


Open Source Technologies for the World of Big Data

Suh Jung-sik CEO KT Cloudware

In the IT (information technology) circles, the buzzword now is big data. Selecting big data technologies as the most significant technological drive, the 2012 World Economic Forum proclaimed that personal data is becoming a new economic “asset class� just as conventional asset classes, including currency and gold.

Big data commonly refers to a very large collection of data sets that have enormous potential for future use but feature analytical difficulties due to its astronomical size, complexities and varieties in structure. The various data sets that appear on social network services (SNS) are an example. The information and data that are exchanged via SNS are gigantic in size and highly varied in type, structure and content, which make it an extremely complex job to analyze them in a meaningfully interpretable way. Big data technologies attempt to do the job to better inform decision makers in the private and public sectors. Enterprises are keen to get a grip on their consumer transaction data for their product development activities, for instance.

Big data technologies are already transforming our daily lives. Online shopping enterprises analyze users` purchase data to comprehend consumption patterns, while SNS service firms utilize the large amounts of personal and relational data to inform their business decisions. Conventional industries such as manufacturing and distribution are also in need of big data technologies mainly to apply in


their marketing strategy and customer services.

KT, Korea`s largest telecommunications company, analyzes more than hundreds of millions of call data a day in real-time to address user inconvenience and improve product quality. In another example, the U.S. National Institutes of Health launched a genetic analysis service at a low cost. Using big data analytics system, the genetic diagnosis is done within a day. In the past, a week was needed. The Nomura Institute in Japan provides transportation information on the least timeconsuming driving paths within one second of data analysis based on 360 million data received from 12,000 taxis operating in Tokyo.

Open source software (OSS) contributed to the development of big data technologies. OSS refers to computer software whose copyright holder made public its source code so that it can be freely utilized, copied, distributed and modified. OSS helps to cut cost in establishing an integrated information system, while also fostering development of domestic software industry. However, Koreans have tended to underestimate OSS technologies.

Recently the spread of big data services has transformed the domestic perception of OSS technologies. Instead of using high-cost commercial software developed by Oracle, for example, OSS technologies lead to cost efficiency in big data services. The Korean big data industry is taking advantage of OSS technologies to boost its competitiveness. Many domestic big data firms opt to utilize globally standardized OSS to process and analyze large data sets at a commercially competitive rate to compete against foreign corporations.

According to market research firm IDC, the global big data market is estimated at US$6.8 billion in 2012 and forecast to grow 40 percent annually to amount to US$16.9 billion by 2015. Gartner, another technology market surveys provider, anticipates the big data-related industry will generate 4.4 million jobs for the next three years. The figure encompasses new jobs in diverse value-added industries as well as the typically IT jobs that are needed to develop big data infrastructure.

I expect domestic big data software companies to fare well since Korean IT professionals have demonstrated their capacity and agility to successfully develop their own big data platforms to collect, manage and analyze large data sets. Using widely adopted OSS programs, Korean companies proved their competitiveness in international big data markets. In a bid to promote big data services industry, the Korean government also launched a series of related pilot projects. Based on public information dispersed in different organizations, the government wants to develop a big data information system


to predict natural disasters, for example.

In the era of big data technologies, running an enterprise can be likened to navigating a sailboat in the vast ocean of data. A company can survive the fierce global competition if it possesses the insights that come from big data analytics. If a company lacks its own capacity to utilize big data technologies, it is advised to get assistance from an IT firm with expertise in big data analytics. When employing a specialized external agency, it is important to judge whether the firm has a big data specialist, whether it has successful big data-related track records and operates on a successfully approved big data platform.

Now an irreversible trend, big data is going to bring about a sea change that is beyond our imagination. It is important to remember that we could not exactly gauge the extent of the global transformation when the Internet first appeared, and the companies that failed to properly respond have already perished. The sooner the better a company`s decision whether to perish into history or to thrive into the future.

[ Seoul Economic Daily, January 15, 2013 ]

www.koreafocus.or.kr


- Musical Film ‘Les Miserables’ and Grand National Unity - Social Contract for Youth Employment - Women’s Career Interruptions and Executive Appointments - Arab’s Thirst for Hallyu and Public Diplomacy - A Gloomy Era of Vanishing Bookstores


Musical Film ‘Les Miserables’ and Grand National Unity

Kim Mi-hyun Professor of Korean Language and Literature Ewha Womans University

Every trend has its reasons. The musical film “Les Misérables,” released on December 19, Election Day, has crossed the threshold of four million viewers in Korea. At the same time, Victor Hugo`s novel of the same name and the film`s original soundtrack also got on the bandwagon, enjoying soaring popularity. Then to begin a new year, a familiar tune from this musical accompanied the opening routine of figure skating star Kim Yu-na at the Korean Figure Skating Championships on January 4-6. Given these circumstances, one may say the “miserable ones” seem neither miserable nor wretched. Why the buzz about the 19th-century French literary classic in Korea these days? One plausible explanation is that the film well reflects the sense of defeat and despair of 48 percent of the electorate who voted for the opposition candidate in the presidential election. The song “Do You Hear the People Sing?” from the film, sung by the masses during the rebellion of Parisians in 1832, as well as the famous line “Let others rise to take our place until the earth is free,” leaves a lingering impression on people, just as “another Kim Yu-na” did by gracefully performing to music from “Les Misérables” and thereby redeeming her own mistake on the previous day. However, aren`t there any viewers who find “I Dreamed a Dream,” a solo sung by Fantine in despair, leaving a rueful resonance that lingers even longer in their hearts?


My question is based on the conflicts rampant in our society, dividing regions, ideologies, classes, sexes and generations, which were reaffirmed through the presidential election. Victor Hugo`s message from his preface, “So long as ignorance and poverty exist on earth, books of the nature of Les Misérables cannot fail to be of use,” still seems to remain valid and relevant nowadays. This is even more so, if there still are many people taking pity on themselves as “the miserable ones” who have lost their dreams. Given that the incoming president will emphasize “grand unity,” along with “people`s livelihood” and “women`s welfare,” as one of the key policy issues of her administration, in her inaugural address on February 25, the new government will have to strive to remove the root causes of conflicts on its way to achieving the goal. There are concerns that it may end up being a slogan for “fake unity” as has been the case with previous governments. This is because one may consider the value of “unity” from a pessimistic standpoint of an “impossible possibility,” rather than from an optimistic perspective of a “possible impossibility.”

Conversely, there is no world where there is no conflict. Hence the need for removing conflict itself can be seen as repression, just as hope can be a torment and healing can aggravate disease. If so, we can say conflict is not always negative.

For example, let us look into the conflict between generations, which is one of the hot issues these days. The different voting rates and ideological schisms between generations factored heavily in the election outcome, which made voters in their 20s and 30s despair over what they perceived as the “unfairness of the country for the elderly.” In contrast, those in their 50s and 60s assert that “a society overly tolerant of alcohol” is dangerous. Both sides raise their guard against each other, claiming the other is wrong because they are different.

And yet the 40-somethings, sandwiched between the two opposing generations, cannot offer a solution; they cannot remain in their 40s forever. Keeping the balance between the two sides will not help much, either. Instead, it is important for each generation to maintain their distinctive sensibilities. The 20s-30s generation is supposed to be properly rebellious, while the 50s-60s generation should be thoroughly responsible.

Homo empathicus is often emphasized as the human capacity to understand and share the emotional states of other persons in order to overcome conflict and attain unity. “Empathy” is different from


“sympathy”; the former refers to sharing the same emotions “with” others, while the latter means a feeling and concern “for” others. Therefore, “difference” matters more than “sameness.” Empathy is an ability that is more required in a “community” rather than a “monolithic group,” because it is more useful for interaction between “two individuals with different identities” than “two individuals with a single identity.” In this regard, it is necessary to make good use of conflict. This is not to instigate but redefine conflict.

Members of the National Assembly Budget Committee made headlines by traveling overseas after ramming through the 2013 national budget in a hotel room after missing the year-end budget deadline for the first time. The 20s-30s and 50s-60s generations, who raise different voices for their respective happiness, may be more productive than lawmakers who are united for their own interests beyond party lines. Unity is not always good. Likewise, conflict is not always bad. Although we set out to look for the answer in unity, we could find it in conflict.

Man is lonely; youth is painful; and conflict is resilient. The greater the force of gravity is, the stronger the repulsive force becomes. This is why the conflict between the two majority groups ― 48 percent who supported the main opposition candidate and 51.6 percent who voted for the ruling party candidate in the latest presidential election ― can be unexpectedly valuable.

[ Chosun Ilbo, January 10, 2013 ]

www.koreafocus.or.kr


Social Contract for Youth Employment

Choi Young-ki Senior Fellow Gyeonggi Research Institute

Young people have started frantic job searches again. Some 2,560 people applied for 40 vacancies open for administrative jobs at a university for an annual salary of 20 million won (US$18,000), with the competition ratio reaching 64 to 1. Among the successful applicants were 13 master’s degree holders as well as former employees of major conglomerates. Recently, in Changwon, South Gyeongsang Province, college graduates even applied for the city`s street cleaning jobs. All this shows that young job seekers rush to any kinds of job if the normal retirement age is guaranteed with an acceptable pension plan. Young people in this country are faced with the gloomy reality of being ridiculed as the “880,000won generation� in the labor market, in spite of their unprecedentedly high job qualifications. Some one million university students are taking leave from school to look for jobs, delaying graduation, with 200,000 to 300,000 of them seeking to transfer to another school annually to obtain degrees in other majors deemed advantageous in landing decent jobs. It takes an average student five years and six months to graduate, and another 11 months after graduation to find a job. But more than half of the new employees leave their first jobs in less than two years.

These days, a growing number of young people remain jobless past the age of 30. Employment is important to everyone. But society has to realize that youth unemployment is a national disaster. This


is because the value of young people drops quickly in labor markets and, just like fresh foods past their shelf life, they will soon lose their value completely as additions to the labor force.

This year, with a new administration taking office soon, expectations have grown higher than ever for bold policy measures to boost youth employment. But it hardly seems that the ruling Saenuri Party`s election promises alone can meet the surging expectations. No matter how urgent the situation is, however, any effort to increase youth employment should start with the understanding that there is no silver bullet and that there are not many things the government can do alone.

The incoming government should demonstrate its leadership in achieving consensus among major economic players to fulfill their responsibility of creating jobs for young people, rather than attempting to develop ingenious policy programs. With a shared realization that youth unemployment should no longer be left unaddressed, the government, businesses and labor unions would better formulate a social contract on a concrete action plan for youth employment.

The contract should include key programs to increase jobs for young people by three percent annually over the next five years. If every company with 100 or more employees abide by the contract, up to 124,000 young people would be hired. Companies with no need to increase employees so much may also participate by operating educational programs for young job seekers.

The government will have to offer tax breaks to those companies that fulfill the contract, so as to help them cut expenses. The existing tax credit for job creation, providing 1.8 trillion won, may be utilized for this purpose. Labor unions of companies complying with the contract could participate by refraining from demanding wage hikes for five years beyond the level of commodity price increases. Overtime could also be reduced drastically to shorten working hours. Considering that cooperation from the opposition parties is essential, it is fortunate that they have already promised to push the legislation for mandatory employment of young people.

The contract requires grand compromises among all concerned parties based on a society-wide resolution to make special investments for young people over the next five years. The five-year time frame, overlapping with the term of the incoming administration, is based on the expectation that youth employment will noticeably increase in five years, owing to the retirement of baby boomers and a decline in youth population.

The contract should provide systematic incentives to motivate young people to enter into society upon


completing their education, by making them realize that delaying graduation and studying extra subjects or honing their language skills to earn better qualifications would be of little use in landing a job. To that end, it would be desirable to officially recognize their work experience at regional communities, service sectors, or small nondescript companies suffering from a shortage of manpower as qualifications. Public enterprises and large conglomerates may well give extra points to those who have such experiences.

Companies are training institutes for human resources. Especially, knowledge and experience gained at good workplaces become lifelong assets for young people. Businesses that invest in young people with the conviction that they are helping the young people acquire skills necessary to perform their roles somewhere in the industrial world, if not employed right away by the companies where they train, are fulfilling their social responsibility as respectable enterprises.

[ Hankook Ilbo, January 11, 2013 ]

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Women’s Career Interruptions and Executive Appointments

Kwon Dae-bong Professor, Department of Education Korea University

The ruling and opposition parties have recently submitted to the National Assembly a joint bill making it mandatory for public corporations to fill 30 percent of their boards of directors with women. The bill envisions forcing public enterprises to appoint female executives to 15 percent of their board seats in the next three years and 30 percent in another five years, and releasing the list of firms that failed to abide by the legal provisions.

In its early days, the Lee Myung-bak administration set a personnel management guideline for public corporations, advising them to try to increase the ratio of female executives to more than 30 percent, but to no avail. The reason was that no thick layer of mid-level female managers had been formed and the guideline was not compulsory. Looking deeper, the failure was due to women`s career interruptions.

A quota system benefits the disadvantaged by offering opportunities that are otherwise denied to them, but can also impose restrictions on others who have prepared themselves for the opportunities. The so-called “quota system for female executives� has stirred controversy due to its conflicting consequences: it can serve as a well-intended stimulus in organizations with sufficient qualified female employees, but it can just dampen the career development of male employees elsewhere.


When asked about this issue, most experts, both male and female, replied that the problem of women`s career interruptions should be resolved ahead of introducing a quota system favoring women. Dr. Byeon Jeong-hyeon, a female researcher at the Korea Employment Information Service, said, “We need a system for helping women move up the career ladder without seeing their career interrupted at the mid-level, instead of setting a quota for women in executive appointments.”

For example, she explained, if a competent female employee is promoted to an executive position, she will become a role model for other female employees and encourage them to develop their own career. But if a woman who is not professionally competent or ethically respected is appointed as an executive, she will possibly hamper other women's career development and dampen their motivation. “The percentage of female executives remains low because it is difficult for women to balance work and family,” said Kim Jae-hyeon, a male research professor at Korea University. “Before introducing a law for female quotas in executive appointments, it is more urgent to create conditions enabling women to continue to pursue their careers while raising a family and caring for children.”

The so-called career interruption, whereby working women`s careers are severed due to pregnancy, childbirth and child rearing, is a serious problem in Korea. A comparison of the women`s economic participation rates in Korea and European countries clearly shows how Korea lags behind in creating a favorable environment for working women so that they can get sufficient support to pursue their careers through marriage and childcare. In most European countries which have produced many female executives, women who enter the workforce in their 20s can continue to work without interruption until they are in their 50s and 60s. Therefore, those countries have many professional women who are qualified to be executives.

In Korea, however, most women discontinue working in their late 20s or early 30s, due to pregnancy, childbirth and childcare, and later find new jobs, creating an M-shaped pattern of economic activity. This is why Korea has fewer female managers at higher levels; few women accumulate enough expertise to move up the corporate ladder without interruption.

In recent years, however, young Korean women in their 20s and 30s have been doing as well as, or even better than, men in many public service examinations, including bar exams, higher civil and foreign service exams and teachers recruitment tests. If women of this generation continue to seamlessly pursue their careers, there will be far more professional women who are qualified to serve in executive positions in the future.


After all, the key is how to resolve the problem of women`s career interruption. There is the need to encourage the corporate culture to appoint more mid-level female managers to important positions closer to the executive suites. The clues to the resolution can also be found in creating women-friendly jobs and workplaces and building the infrastructure of maternity and childcare support for working women to help them balance family and career, while diversifying employment patterns, including a more active implementation of flexible working hours. The resolution of women`s career interruptions will help thicken the layers of mid-level female mangers and lay a broader foundation to expand appointments of female executives.

[ Herald Business, January 21, 2013 ]

www.koreafocus.or.kr


Arab’s Thirst for Hallyu and Public Diplomacy

Ma Young-sam Ambassador for Public Diplomacy Ministry of Foreign Affairs and Trade

As soon as the curtain came down, a group of women wearing hijab flocked to the stage. Making a V-sign with their fingers, they frantically took pictures of with our performers. The jumbled crowd caused a great confusion. From African villages to Middle Eastern cities, the audience response was always the same with the Korea-Arab Friendship Caravan, which marked its fifth anniversary this year. There wasn`t even a single Hallyu star among the performers. If I may exaggerate a bit, this is certainly a “phenomenon” or “syndrome.”

The craze for Korean pop culture is hot throughout the global village. Seats are filled quickly with audiences overflowing onto stairways and aisles, and not a few turned away. Some speak Korean pretty well. “I love Korea very, very much,” a female Arab student said to me in Korean, smiling brightly. They say they love everything Korean, whatever it is ― K-pop, dramas, food, or even the strong affection of Koreans. Showing off Korean-made cell phones or laptop computers, they say, their dreams are now to own Korean-made cars. “Public diplomacy” is a buzzword these days. Traditionally, diplomacy was considered to be conducted between governments. Nowadays, however, governments are trying to communicate with the general public in other countries. In these efforts, the soft power of culture, arts and sports is playing the key role. Moreover, people are becoming more vocal, thanks to democratization,


openness, globalization, and the development of the Internet. No government can afford to ignore their opinions.

The United States has increased its budget and manpower for public diplomacy around a State Department organization established long ago. China also pursues public diplomacy as one of its major foreign policy strategies, setting up Confucius Institutes in many countries as strongholds to spread Chinese culture and language. Our public diplomacy is not much different from these countries. We are making efforts to create an attractive image of Korea as a country giving a good impression to foreigners and making them want to visit again.

The key point of public diplomacy is to win the hearts of foreigners. First, public diplomacy should be based on two-way communication. If we want to spread our culture abroad, we should understand the culture of the other party. When our performers played local Arab music occasionally between our music and dance, the audience responded even more enthusiastically, applauding and shouting “encore” so much as to interrupt the performance. They wanted us to respond to their culture by cheering for it themselves. Like this, cultural exchange based on understanding and respect for each other creates synergistic effects.

Second, Hallyu should take root as a cultural genre with universal appeal beyond sheer entertainment. To that end, localization is indispensable. It is not just a groundless concern that the bubble of Hallyu will soon burst. Culture loses its fresh appeal as time passes, leaving people bored. There is still time, however. There are about 800 Hallyu fan clubs around the world, with the total membership approaching seven million even before the global sensation of “Gangnam Style.” Fans of Korean pop culture must have increased to tens of millions across the world by now. In order for its global popularity to take root, Korean pop culture needs active response from fans. Performances need to be planned and hosted by local fans.

Third, public diplomacy requires active participation by people, who can open the minds of people in other countries more easily than the government. What can people do and how? There are many things they can do more easily than thought. Everyone, as a self-appointed diplomat, may try to have heart-to-heart communication with foreigners they happen to meet inside and outside of the country.

Public diplomacy is a process of winning the hearts of foreigners, and in order to do so, we must first change ourselves. We must learn to be considerate of others in our everyday lives. The process of people changing into truthful individual ― this is true public diplomacy.


[ Hankook Ilbo, January 17, 2013 ]

www.koreafocus.or.kr


A Gloomy Era of Vanishing Bookstores

Moon Tae-joon Poet; Producer Buddhist Broadcasting System (BBS)

Freezing weather is pulling the wagon of time. I feel as if standing before an icy wall. Zhang Chao, a great writer of the Qing Dynasty, said in his book You Meng Ying (Quiet Dream Shadows) that winter is good for reading classics because the mind is pure and not distracted. He also said that summer is good for reading history, autumn for reading philosophy, and spring for literary collections. Although he recommended books suitable for reading each season, Zhang Chao himself probably read all year round. Novelist Lee Tae-joon (1904-?) wrote in an essay that books are “clothing and shelter for emotion, mind and thought.” He praised books, saying, “Among all man-made cultural objects, books are the real flowers, angels and kings.” Lee wrote that he turned into a radical whenever he dropped by a bookstore. As far as books were concerned, he wrote, he bought to own them without hesitation. The delight of opening the first page of a new book upon boarding a tram couldn`t be compared to anything. “The longer the way home, the more blessed I felt,” he confessed. Thus he described the overwhelming joy of the moment he encounters a new book in a bookstore.

Lately I have been hearing often that bookstores are collapsing. A quite well-known online bookstore was sold off, and Gwangjang Seojeok, an old bookstore near Seoul National University, went bankrupt. This bookstore with a long history had been founded by a politician as a social science


bookstore. Given the statistics that Koreans read a mere 0.8 book a month on average, it is no wonder the publishing market is suffering a slowdown with bookstores and wholesale dealers going out of business one after another.

According to the Daily University News Network, undergraduates read 2.2 books a month on average, with 18.4 percent of them not reading at all, and a great majority of them spend their leisure time browsing the web. Other research reveals that four counties in Korea have no bookstores at all. The number of bookstores that sell only books has decreased by 68 percent in the past 15 years.

Looking back, in this era of vanishing books and bookstores, I have personally lost quite a few bookstores myself. Jangbaek Bookstore near Korea University, Books for Today near Yonsei University, and Chongno Bookstore that I frequented so often in my college days ― they are all gone. Considering all these once relatively thriving bookstores collapsed, the small bookstores that disappeared from my old neighborhoods of boarding homes should be incalculable.

Bookstores were much more than places that sold books. They were venues for small and big appointments, first meetings and reunions. Bookstores were the places where love and romance budded and bloomed. And they were places that appeased the hunger of soul for many people. We used to wait for several days after ordering a book at a neighborhood bookstore. However, waiting was far from boring, but felt like a beautiful time of anticipation. It has been much the same in many movies, too. In “Notting Hill,” a popular actress visits a neighborhood bookstore and eventually falls in love with the owner. In “Marine,” a restaurant critic falls in love instantly, at first sight, with a woman he bumps into in a bookstore. “Before Sunset” features a bestselling novelist who comes across his bygone love at Shakespeare & Company, a timehonored bookstore in Paris.

As business grows increasingly tough for bookstores, the government has reportedly set out to support them. Meanwhile, neighborhood bookstores are making desperate efforts to survive. They organize round-table meetings of residents to seek ways for bookstores and communities to help each other. Lectures by writers, public reading sessions, and reading forums seem to be popular suggestions.

Unhappy is an era when books disappear from people`s concern. Miserable is an era when bookstores become extinct in neighborhoods. Losing books means we will also lose our mirror, key, light, autonomy and harmony. Just imagine if bookstores are never seen again in our neighborhoods. Our


souls would become more snobbish and finally be locked in a banal stereotype. How horrible would it be if insight, mystery, wonder and leaping evaporate from our minds? Without bookstores, neighborhoods will barely differ one from another. It`s already frustrating that neighborhood stores are dying out.

Rainer Maria Rilke said that a piece of poetry can animate an object by talking about and adoring it. Paul Celan wrote that “poems are under way; they are making toward an addressable Thou.” It`s not only poems but a book also creates a new world, a new universe. If we lose more books and bookstores, we will witness the decline of this wondrous power. After losing books and bookstores, only a desert will remain in our souls. As Federico Garcia Lorca wrote in his poem “Some Souls···,” we may lose “blue stars,” “mornings pressed between leaves of time,” “dreams” and “chaste corners with an ancient murmur of nostalgia” all together to find ourselves tormented by “phantoms of passion.”

[ Dong-a Ilbo, January 12, 2013 ]

www.koreafocus.or.kr


- Cultural Welfare in Dire Need - Park Geun-hye’s Fashion Style - The Value of Arirang - A Movie that We Cannot See at Theaters - Korean Perfectionism


Cultural Welfare in Dire Need

Do Jae-gi Culture Editor The Kyunghyang Shinmun

The Ministry of Culture, Sports and Tourism made a policy report to the presidential transition committee on January 17, its content remaining unknown as expected. The committee has been dubbed “pitch dark� for its unwillingness to communicate since day one. The Culture Ministry probably proposed measures to enable more people to enjoy cultural activities, build more cultural facilities for tourists, reinforce the cultural heritage management system, and encourage creative cultural and artistic activities.

The reason why we are interested in what the ministry has to say is because President-elect Park Geun-hye`s campaign was weak on culture and arts compared to other areas. What caught the voters` attention was maybe the promise to allocate 2 percent of the tax revenues to culture-related programs. Cultural circles wonder if the Park administration can indeed keep its word because the budget allocation has barely reached 1.14 percent now, 13 years after surpassing 1 percent in 1999. The government is most stingy when it comes to spending on culture and the arts, and the culture and arts circles are fully aware of that.

In the new government`s culture-related policies, expansion of cultural welfare is most desperately needed. And to what level cultural welfare will be expanded and how efficient and elaborate it will be is the center of attention. Right now Korean society needs as much cultural welfare as economic


welfare. In a hyper-competitive, fragmented society, the community has disintegrated and social ties have been severed. The side effects are being felt everywhere. Many people suffer from depression, many youths and elderly people commit suicide, and people feel lonely even when they are with others.

Going to see concerts and arts exhibitions and reading more books in a society where people are struggling to make both ends meet may sound far-fetched. However, there is nothing like cultural welfare when it comes to soothing minds and emotions, and its effect has been proven. Drama therapy, art therapy and music therapy are some of the examples. The Clemente courses were open for the poor and the weary to study the humanities and regain confidence, a good example of how powerful culture, not finance, is. Performances, exhibitions, and books blend joy, anger, sadness and happiness of human life, transcending time and space. People take comfort in them, get recharged and regain self-esteem. This is the reason why we need to review welfare, a crucial topic in our society today, from a cultural perspective in a more serious and elaborate manner. The Korea Culture and Tourism Institute recently published a report titled “Socioeconomic Valuation of Cultural Welfare Policies and Policy Direction,� which clearly describes the effect of cultural welfare. Statistical difference was shown in those who have benefited from cultural welfare and those who have not in terms of increase in happiness, satisfaction with leisure life, self-esteem, interpersonal communication skills, health and creativity. Cultural welfare policies, including vouchers for cultural activities, supporting instructors who teach culture and arts courses at schools, and building public libraries, museums and art galleries, were found to contribute positively to higher quality of life as well as social integration.

The report also stated that the employment coefficient of cultural welfare programs was 13.2, which is significantly higher than the average industrial employment coefficient of 8.3. This indicates cultural welfare can be an alternative to job creation in an era of jobless growth.

There needs to be more work done for cultural welfare to be more effective. For one, agencies should not be allowed to engage in redundant projects or compete against each other under a cultural guise. A thorough survey could lead to more systematic management and oversight. Public officials should also change their mindset as they seem to think they are doing their job by providing one or two free concerts and exhibitions. They need to be sent out to where the action is so that they can feel with their hearts, not just think with their heads, about cultural welfare. That way they can do more for the people.


The government alone cannot provide cultural welfare. It needs to work with the artists by supporting local artists in promoting creative activities and providing incentives to invite their participation. After all, they are the ones who know best what each locality needs and how to connect with the local residents.

[ January 21, 2013 ]

www.koreafocus.or.kr


Park Geun-hye’s Fashion Style

Song Ho-keun Professor of Sociology Seoul National University

To a Korean man who hates nothing more than to stand out among the rest, talking about fashion is like speaking in a foreign language. There is, however, an exception to keeping close to the norm even in men`s fashion and that is men`s ties. If you see a man wearing a bright-colored tie, beware. Men who want to impose their presence do so by matching their ambitions with appropriate colors. President Lee Myung-bak wore a jade green tie for his inauguration and again at the ceremony commemorating the third year of his term. Presidential contenders Moon Jae-in and Ahn Cheol-soo both wore bright colored ties when they were engaged in a tug-of-war to finally settle on a single candidate, making the statement that they would not budge an inch.

On the other hand, women can express themselves in so many ways that it is difficult to discern from their ingenious and versatile dress what is on their minds. Women emit different messages with their jewelry, shoes, bags, and so on. Standing apart from the average woman is Korea`s first female president Park Geun-hye who is easier to read. She has her own distinct “Geun-hye style.”

During the last 40 years, Park has worn her hair up in her ever-so-classic style, which was in fashion during the 1960s and the 70s and which looked so good on her mother, the late First Lady Yuk Youngsoo. Park`s wardrobe is as consistent as her hair. During the presidential campaign, Moon`s camp attacked Park, saying that she wore “133 kinds of clothes” during the past three years but that shows


how little they know about women. Her wardrobe was accumulated over 33 years since Park left Cheong Wa Dae, and it roughly translates to four new outfits every year.

The focus should have been instead on how similar her clothes are in design and how she firmly stands by her principles. Like her hairstyle, her fashion style has not changed the past 32 years. This hints at Park`s political character that is to be expected for the next five years. She is most likely to be very determined in executing her plans and she will go at it whatever the cost.

The president-elect has three variants to her fashion: regular, prudent and combative. They are all formal suits, but sometimes Park wears her jacket collars down on regular days and when she has to present herself politely, and other times up when she is in her prudent or modest moods. She dons herself in safari style if she is to go into combat. If her jacket has many buttons, visible stitches and epaulets, then she means business. If she wears a belt, the alert level must be the highest.

In 2002 when Park met with Kim Jong-il of North Korea, she was unusually dressed in a long skirt with her jacket collar down. To her, this is the most formal attire. In 2005 during her party`s “tent office” days, she preferred the safari-type jacket, and these days she enjoys a Mandarin collar. It shows that she is being very cautious and lying low. Perhaps following her lead, the presidential transition committee is lying low and keeping silent, trying its best not to appear menacing or domineering. This is welcome news indeed.

Chairman Kim Yong-joon led Park`s transition team behind closed doors from the beginning. As a lawyer would, he reminded the people of the laws related to the team. He also added the warning, “Regardless of his title and position, if any member of the committee causes trouble by engaging in misconduct, then that person shall be held accountable.” And thus the unprecedented down-in-thebunker presidential transition committee was launched. This prompted complaints from the journalists who needed a lead to write their stories with. Committee member Hong Gi-taek of the economy 1 department showed up wearing a baseball cap low and handed out oranges to the journalists. When they recognized him and gathered around him, Hong whispered, “Shush!” The committee`s password thus became shush.

The people in general are in agreement with the modest, prudent ambience of the transition committee. However, there is concern about the committee being reduced to a quiet workshop. The designers of a new administration should be an elite force that can handle the burden of painstakingly analyzing the current times and arm themselves with aggressive thinking. They must solemnly


propose intellectual prescriptions and strategic action plans, and discuss them in earnest. The previous administrations did not implement all the policies in their manuals because they did not know them. They realized that if they do not mediate the disputes between social groups and lobby groups then the failure would deal a fatal blow to the government.

Therefore, it would be good to take advantage of the media as a filtering mechanism. A little noise would not hurt. Chasing away the messengers, a.k.a. journalists, as if they were nosey spectators is the same as chasing away the people who are rightful owners of power. If the communication channel is cut off and the committee appears out of nowhere in a month and announces the policy roadmap right before it disbands, it may spell the beginning of yet another failure. That is why I hope that the president-elect changes into her combat gear and tightens her belt across the safari jacket.

The transition committee doesn`t have to be perfect. There may be a few bumps along the way in the 100-day planning period before the inauguration and in coming up with a six-month strategy and a one-year plan. They are excusable. Why should the committee be silent when it needs to communicate with the people about the philosophy and action plans to enable grand union and happiness, the daunting challenges of the times?

[ JoongAng Ilbo, January 15, 2013 ]

www.koreafocus.or.kr


The Value of Arirang

Gu Seung-jun Director, Content Business Department The Economic Review

Imagine that you find yourself in a situation to claim before everyone that the woman with whom you have shared a bed with until this morning is “truly my wife.” You would be struck dumb, let alone outraged. Such a totally absurd situation has ended in one and a half years. I am talking about the recent dispute over the ownership of Arirang, a traditional Korean folk song, between Korea and China.

The news report in August 2011 that China had placed Arirang sung by the ethnic Koreans in its territory on the list of its national intangible cultural assets awakened us to the presence of the song, which has been an unquestionable part of our lives for so long. Indeed, if China had not made a nasty attempt to suck the entire history and culture of Northeast Asia into its own heritage under the name of the “Northeast Project,” we would not have set out to make all-out efforts to attain the song`s inclusion in UNESCO`s Representative List of Intangible Cultural Heritage of Humanity.

In this sense, China`s move may be seen as a blessing in disguise. It made our eyes open to the priceless worth of the song, which had been almost forgotten, in addition to acquiring global recognition for the song`s value. But, contrary to our assumption, the “war on Arirang” has not ended but entered a second phase. This time around, several local autonomous organizations are engaged in a war of nerves, each asserting that its version is the origin of the song. Locking horns are not only


the birthplaces of the three most renowned versions, that is, Jeongseon of Gangwon Province, Jindo island of South Jeolla Province and Miryang of South Gyeongsang Province, but two seemingly unlikely contenders, Mungyeong and Yeongcheon, both of North Gyeongsang Province. Each offers plausible reasons for its argument. Jeongseon insists that its version of Arirang, famously known as “Jeongseon Arirang,” constitutes the “umbilical cord” of the song on the grounds that it is the most nature-oriented and closest to the native archetype. Mungyeong underscores its geographical affinity, noting that the Gogae, meaning “pass,” which frequently appears in the lyrics, refers to its mountain pass called Saejae, or the Bird Pass. Yeongcheon also has a lot to say; it asserts the Arirang sung in Northeast China these days has its roots in “Yeongcheon Arirang.”

The concerned local governments have announced ambitious plans to conduct massive Arirangrelated cultural projects. Miryang County disclosed a plan to invest 29 billion won (US$27 million) in building an “Arirang park”; Jeongseon County came up with a plan to construct a cultural complex for exhibitions and performances with 28 billion won; and Mungyeong City has joined the competition with a plan to found a “national Arirang museum” that will cost 120 billion won. The war is gradually escalating with no end in sight.

Actually, there have previously been similar regional rivalries over cultural heritage. Iksan, of North Jeolla Province, and Buyeo, of South Chungcheong Province, engaged in a lawsuit over their claims on the birthplace of King Mu of the Baekje Kingdom, also known as the legendary “Yam Boy” (Seodong); Jangsu, of South Jeolla Province, and Jinju, of South Gyeongsang Province, competed for legitimate lineage to Nongae, a famous Gisaeng courtesan who martyred herself to kill a Japanese general during the Japanese Invasions of 1592-1598; and Jangseong, of South Jeolla Province, and Gangneung, of Gangwon Province, were embroiled in a dispute over the legacy of Hong Gil-dong, a fictional bandit leader.

As they believe the future of their regional tourism rests on the results, none of the localities would back off easily. In another notable case, two small towns in Namwon City, named Aeyeong and Inwol, in North Jeolla Province, vied for the right to the setting of the popular folk tale, “The Story of Heungbu.” As the competition became overheated, they eventually agreed to build a “Heungbu village” along the border between the two towns. The “storytelling marketing” boom reflects a global trend. There has long been controversy between


France and Belgium over the origin of “French fries,” and a debate was held on the issue with historians from both countries last year. This reminds one of another long-standing dispute over the site of the first green tea farm in Korea, between Gurye in South Jeolla Province and Hadong in South Gyeongsang Province.

In storytelling marketing, discovering a story is essential, but no less important is its consistent improvement and management. A well-composed story can contribute to enhancing the attractiveness of products, increase the competitiveness of a city, and further serve as a springboard for “successful nation branding.” But a banal story instantly alienates customers. The point is now that we are aware of the value of a story called Arirang, it would better be handled by the government more carefully and systematically, rather than being left in the care of local autonomous bodies.

[ No. 647, January 18, 2013 ]

www.koreafocus.or.kr


A Movie that We Cannot See at Theaters

Shin Hyo-seop Pop Culture Editor The Chosun Ilbo

“Dazzlingly beautiful, poetic and touching.” “It is truly a masterpiece.” “It splendidly portrays the different lives of people in the same world in an extreme but persuasive manner, arousing universal sympathy.” All these praises were bestowed on the movie “The Weight,” director Jeon Kyu-hwan`s 2012 work. It won the Queer Lion award at the Venice International Film Festival, the Best Director award at the Tallinn Black Nights Film Festival in Estonia, and the Silver Peacock award for best director at the International Film Festival of India. Koreans, however, cannot see the film since it has been rated “restricted screening.” The Act on the Promotion of Motion Pictures and Video Products (Article 43, Paragraph 1) stipulates that “nobody shall screen a movie rated ‘restricted screening` at places or facilities other than the theaters specifically designated for films rated as such.” But there is not a single theater for such films in Korea. The Korea Media Rating Board gave “The Weight” the “restricted screening” rating on the grounds that “the movie has the high possibility of damaging the integrity and value of human beings, as well as causing emotional harm to people.”

Specifically, the movie is said to include scenes of corpse raping and homosexual love, but I don`t have much to say about these problems because I haven`t seen the movie yet. Before “The Weight,” two other films had received the same rating: “The Wayward Cloud” which won the Silver Bear for


Outstanding Artistic Achievement at the Berlin International Film Festival, and “Battle in Heaven” which was entered for competition at the Cannes Film Festival. Advocates of the “freedom of expression” have demanded scrapping the rating system, asserting that “the restricted screening rating effectively violates the Constitution by banning film screenings through pre-censorship.” The Korea Media Rating Board contends that “the rating system is the minimum safeguard to protect children and teenagers from harmful video products, and other countries including the United Kingdom and Australia also have the restricted screening rating.”

This is no trivial issue from the standpoint of arts policy. To most movie fans, though, the dispute seems like a “battle among themselves.” For moviegoers, it is a far more salient question where they can watch the movies that have earned both critical acclaim and “restricted screening” rating. Under these circumstances, the concerned authorities and the film community should put their heads together to seek realistic ways to provide opportunities for movie lovers to watch movies like “The Weight.”

The question is simpler than thought. The key lies in securing theaters where such films can be screened. Here I want to suggest an alternative solution. It is to introduce a system allowing theaters to screen films with “restricted screening” rating on a temporary basis. Under the proposed system, if an ordinary theater applies to show a film rated “restricted screening,” it would be permitted to screen the specific movie for a given period. The Act on the Promotion of Motion Pictures and Video Products provides that theaters for films rated “restricted screening” should show only such films all year round. Considering that some 10 or so films receive such rating a year, the provision is extremely unrealistic from the standpoint of theater owners who have made huge amounts of facility investment.

The system would cause no legal problems. All it takes is to revise Article 43, Paragraph 3 of the Act on the Promotion of Motion Pictures and Video Products, which prohibits the theaters designated for films rated “restricted screening” from showing other films. If such a flexible system is introduced, it is highly likely that theaters specializing in non-mainstream movies, like IndiePlus, Cinecode Seonjae and Spongehouse, will respond enthusiastically. It is time for the incoming government and the National Assembly to give an answer.

[ January 12, 2013 ]

www.koreafocus.or.kr


Korean Perfectionism

Colin Gray Head of Media and Public Affairs British Embassy in Seoul

“I need to do better.” This was the solemn response of a colleague who received a B+ on a recent exam. Not only is this a safe pass, it`s a commendable grade but there was no convincing my colleague — for her, a B+ was akin to failure. This attitude is not uncommon and gave me pause for thought on Koreans` quest for perfection.

Korea`s miraculous transformation from postwar poverty to the world`s 12th largest economy owes a lot to the work ethic and conscientiousness of its citizens. Since arriving in Korea in 2011, I have been consistently impressed by the drive and determination shown by my Korean colleagues. Forget pointless pleasantries like “Have a great day”; at the end of the day, a typical parting might see one person tell another, “Work hard,” or “Sugohaseyo.”

Nowhere is this hard work more visible than in education. Korean students spend an inordinate amount of their young lives in classrooms, both at schools and in private institutions. The average parent spends more than US$1,000 per month on each child`s education. On the face of it, the results speak for themselves. According to OECD data, Korea tops the global literacy and numeracy league tables. Politicians all over the world point to Korea as a shining light of academic attainment. Richly deserved praise, but at what cost?


A recent intern at the British Embassy has just secured a job with a prestigious international firm. Having attended a top university, her future is bright. So imagine my surprise when she said she was staying on to retake a class in an effort to marginally improve her grade point average. She`s in the door with a top employer but still she wants more. What drives this quest for improvement? Some say peer pressure, some say personal pride. She says it`s just “pretty common.”

Those who work hard and push themselves deserve our respect and commendation, but are young people in this country burning themselves out? Korean students also top another OECD league table — the world`s unhappiest students. Tragically, this unhappiness partly accounts for Korea`s alarmingly high suicide rate. It`s not just the dash from the campus to the private classroom followed by the hours of homework that leads to this unhappiness. It`s the traditional lack of value placed on subjects like physical education, music or art. Some schools do get “Sports Days” but they are often on a Saturday, outside the normal timetable. I met a Korean high school student recently who told me she dreams of becoming a professional musician. She told me she feels guilty asking her parents to fund private lessons and knows they want her to get a “proper job” with one of the country`s prestigious employers.

It`s not just in work and education that I`ve witnessed the quest for perfection and pressure to perform. Another Korean friend asked for my view on her proposed cosmetic surgery. She`s a young, successful professional and attractive too, but she thinks there`s room for improvement. I shouldn`t be surprised. Korea is the world`s largest market for cosmetic surgery where one in five women has gone under the cosmetic surgeon`s knife.

Earlier this month, on my arrival back at Incheon Airport, I noticed a sign saying it had the world`s best duty free title — for the second year running. The poster sat proudly alongside another proclaiming that Incheon Airport itself has been voted the world`s best for seven years in a row. I don`t argue with that, it`s a fantastic facility. I also think it is right to celebrate success and take pride in achievement. But I do wonder if this is indicative of a wider trend, whereby people are put under enormous pressure to be number one, to be “perfect.”

I love living in Korea and I love the pride people take in their performance and their country. But sometimes we need to praise B+ and recognize when people have done their best, even if that`s not the best.


[ JoongAng Sunday, January 28, 2013 ]

www.koreafocus.or.kr


- Social, Generational and Regional Cleavages in Transitioning North Korea - Korean Household Income: Analysis and Implications - LDCs and Korea in Export Markets: The Pursuers and the Pursued


Social, Generational and Regional Cleavages in Transitioning North Korea Park Young-ja Research Professor, Institute of Unification Studies Ewha Womans University

I. Introduction The mainstream academic assessment of North Korea paints an unstable picture of the country`s economic structure paired with relative stability in the political arena. Over the past 20 years, food shortages and the emergence of private markets have distorted the North`s state planning and distribution system. Yet, the hereditary power structure, now in its third generation, remains resilient. The launching and orbiting of the Unha-3 rocket and Kwangmyongsong-3 satellite on December 1213, 2012 symbolized its tight grip. How can the basic functions of a nation be so out of sync? Perhaps the answer lies in the absence of social elements that link its political and economic operations.

This study seeks to answer three questions: 1) Who are the leading forces in North Korea in this time of food shortage, emergence of private markets, corruption among political and economic elites, social inequality with widening gap between the rich and poor and the spread of non-socialism?; 2) How can the cleavages in the lives of these actors be identified?; and 3) Who will be the main players that can take advantage of the divisions and change the regime?

To answer these questions, this study looks at the years since the 1990s as a period of transition that fundamentally differs from the 1980s. Social components in the post-1990s time frame are divided by such models as classes, generations and regions, and the cleavages in each sector are analyzed to clarify their structure and present situation.

II. Class Divisions 1. Class Structures

The South Korean Unification Ministry classifies North Korean residents into four groups. The top 1 percent, or about 200,000 people, consists of the relatives of the Kim Il-sung family; the descendants of anti-Japanese partisans; persons recognized for meritorious services during the Korean War and in


the founding of the DPRK and their descendants; and current high-ranking officials in the party, government and military, and their families. They enjoy the highest privileges like hereditary aristocrats. Immediately below this group is the “core class,� which accounts for 27 percent of the total population. These people, the power elite of North Korean society, are the main supporters of the Kim Jong-un regime.

Next is the basic populace, the largest group comprising 45 percent of the population. It includes members of various occupational unions and youth leagues. These people maintain direct or indirect relations with the core class people. The rest of the population, dubbed the miscellaneous group, is considered a possible threat to the North Korean regime. Accounting for 27 percent of the total population, these people are under constant surveillance and control of the authorities. The 2008 North Korean Population Census jointly conducted with the U.N. Population Fund on October 1-15 that year counted 23,349,859 residents. Extrapolating the head count, the top power group (1 percent or 233,498) and the core class have a total of 6,537,959 persons, the basic class (45 percent) has 10,507,436, and the unstable class (27 percent) has 6,304,461.

Industrial distribution of the North Korean population in 1993 saw 41.6 percent engaged in the secondary industry sector of manufacturing and construction, 30.7 percent in farming and fisheries, and 18.2 percent in service businesses. But the 2008 census revealed that the secondary industry work force was reduced to 32.6 percent while the primary industry rose to 36.0 percent and the service area to 33.6 percent.


The redistribution of labor reflected the decline of the secondary industry and the rise of the service sector. This means that manufacturing decreased under economic difficulties while people chose other ways to survive, including private service businesses. But the service sector subsequently produced a wide gap between those who quickly became rich and those who survive with daily labor.


With the new occupational composition, the primary criterion for classification of North Koreans has changed from political orientation to standard of living. As such, symbiotic networking between power and money created the North Korean version of nouveau riche. As the rationing system broke down, markets emerged as the center of economic activities, creating wealth for a limited number of people. Before the “March of Tribulation� in the latter part of the 1990s, state rationing and salaries ensured largely equal standards of living among North Koreans apart from the privileged 1 percent. As supplies dwindled and the state rationing system buckled, not only the unstable and the lowest hostile groups but a considerable percentage of the core class turned to private markets for survival. With more and more people depending on the markets, variations in income widened and socio-economic divisions emerged. Like a capitalist society, distinction of high, middle and low classes came to be generally accepted in North Korea.

Judging from their meals, the high-class people always have rice accompanied by meat and fruit, and ice cream and cookies are readily available. The middle class also has rice often but with other grains and limitations in side dishes and refreshments. The lowest class mainly eats mixed grains, and refreshments are luxury available only on holidays.

The proportion of each class varies from region to region. Before the currency reform in 2009, the top class accounted for 10-30 percent, the middle class 30-50 percent and the low class 20-60 percent. But, refugees who left the North in 2011, two years after the currency reform, reported that the percentages changed to 10-20 percent belonging to the high class, 30-40 percent to the middle class and 40-60 percent to the low class.

2. Income and Occupations

Differences in living standards and income levels accelerated with the reorganization of private markets into general markets in 2003. By 2006, the high class spent an average of 1 million North Korean won a month, mostly employing live-in housekeepers. The middle class lived on 90,000 to 150,000 won and the low class survived on 30,000 to 40,000 won, according to refugees who left the North in 2007 and 2008. However, the North`s steep inflation and the unstable value of its currency makes population classifications based on income levels unreliable.

This study made extra efforts to collect information through interviews with refugees who left the


North in 2011 or later, especially those who graduated from university and belonged to the mid-tohigh classes, which gave them a better grasp of the overall social situation. They revealed that the highest 15 percent of the population had at least US$10,000 in their possession, the middle class of 35-40 percent had $5,000 to $10,000 and the remaining half of the population rarely had any foreign currency.

According to a refugee who had run a restaurant in Pyongyang for foreign customers, the most privileged residents in Pyongyang keep $300,000 or more, about 15 percent have at least $30,000, and some 35 percent have $10,000-$30,000. The lower class of 35 percent has no foreign currency and the poorest 15 percent have no money at all in reserve.

Another refugee who had worked at the Ministry of Foreign Trade in Pyongyang said that about 10 percent of the population lives comfortably in apartments that are about 160 square meters. They include members of the 39th and 38th Offices and other powerful agencies and military officers who are engaged in external trade. About 40 percent have jobs that guarantee them enough food and the remaining 50 percent are regarded as the low class depending on unstable rationing. A former Labor Ministry official said the top 5 percent have more than $100,000 each and the next 5 percent have more than $30,000. The next 10 percent have $10,000 or so, 30 percent have $5,000 or less, and the rest have no savings, he said.

An artist refugee who earned a living in the North by giving private lessons explained that the top class, comprising about 10 percent of the total population, consists of senior military officers and their families, arms traders, international trading agents, ranking diplomats, descendants of antiJapanese fighters, managers of state enterprises, party secretaries, university presidents and school principals. The middle class of 30 to 40 percent includes tutors who earn up to $250 a month by teaching five students, and office clerks and merchants at markets with comparable incomes. Ordinary workers account for 30 percent and the lowest 20 percent survive on gruel cooked mainly with wild plants, she said.

High officials, such as department heads, deputy heads and ranking political officers at government agencies like the Ministry of Public Security, can maintain top-level living standards, but it requires special “skills” to enjoy both a high position and a materialistic lifestyle. People connected with these officials can heighten their living standards by using their influence in trading businesses. Party secretaries in charge of state enterprises and their managers can also enjoy high-end living. However, not all public security officials enjoy a comfortable life; only those who practice “secret tricks” can


join the high class and those who do not fall into the middle class.

3. Lifestyle, Education and Health A woman in her late 20s, who was a store salesperson until her defection in January 2010, said: “The top-class people in the North lead as good a life as people here in the South. Their houses are just a little humble and they have no cars. They can afford to run a company and own a car, but these are not allowed in the North. So when they earn money, they buy gold and exchange their money for U.S. dollars or Chinese renminbi, which they store in boxes in their homes. They eat meat everyday and wear expensive clothes worth 1 million won or 1.5 million won. When these rich people show off designer dresses, imitations are made soon and we wear them.” A middle-aged woman propaganda worker, who left the North in July 2010, said: “The richest people not only buy foreign dresses in the market but specially order them as well. Chinese-made clothes are of bad quality··· they are soon deformed and discolored. Those people live more luxuriously than the Chinese and even South Koreans. They build a huge house with a garden with their own money; they live almost like capitalists in China. In contrast, many low-class people live in a single room without a toilet. They use public outhouses··· they have to come down from their third-floor unit to relieve themselves.”

A person`s wardrobe is the primary means to determine class differences in the North. Many highclass people pay several hundred thousand won (North Korean) to buy South Korean or Japanese clothes. The lower-class people usually buy a jacket or jumper once every two years or so, or wear clothes discarded by the rich. Health and medical care are also directly affected by individual wealth. “Medicine has to be bought 100 percent with your own money. Rich people get South Korean medicine via China. Hospitals in the North have expensive drugs, which rich people can take by using their connections, but the lowclass people cannot even dream of taking them. We go to pharmacies instead of a hospital. Druggists have almost become doctors in the North,” the middle-aged female refugee said.

North Korean families mostly have one child, especially after the economic difficulties. Many parents want their only child to become an artist. They send their son or daughter to private classes after school. The Youth Palace has such classes but private tutors give specific courses to meet their needs. They also send their children to private Chinese, Japanese or English classes. All levels of families,


except for the extremely poor, try to build up special talents in their children so they can be better recognized in university and during military service, and later in society.

4. Structure of Class Division

Social classes were based on politics before the severe food shortages of the 1990s. Then, starting in the early 2000s, wealth became an additional determinant. However, classifying North Koreans by income levels can be inaccurate because their currency fluctuates sharply. Their disposable income also has been unstable the past two decades because of inflation, changes of policies and systems, unrealistic wage structures, bureaucratic corruption and a mushrooming unofficial economy. Therefore, U.S. dollar-based estimation of private wealth can better define the class structure in North Korea. The U.S. currency is widely used in the isolated communist state to preserve wealth as well as for transactions. In addition, bribes as unofficial income also should be considered in determining class division.

The proportion of each class varies among locales but since 2011, classification based on power and wealth allotted 10-20 percent to the upper class, 30-40 percent to the middle class and 40-60 percent to the low class. Members of the upper class have more than US$10,000 in their private possession. The middle class has $5,000 to $10,000 and those with no dollars are lumped into the lower class. By occupation, those who have both money and power make up the upper class; intellectuals, artists, professionals and merchants, including international traders and local retailers form the middle class; and menial workers, farmers and vendors in markets constitute the lower class.

The difference between the upper and middle classes is more evident in their housing and clothing but the distinction between the middle and lower classes is exposed clearly in their diet. Health and medical services are other factors of social disparities because power and connection provide better treatment. Education through prestigious university leads to opportunities for better jobs and easier service in the military. Most North Korean families have one child and richer families send their children to three to four private tutoring classes after school and middle class families also provide at least one private class.

The middle-class people have the strongest dissatisfaction with the present North Korean system and the lower-class people have the highest acceptance of the market economy. In social networks, most important are family ties and sponsorship of bureaucrats acquired by means of bribes. Business partnership, military and school connections and relations created through occupational and


geographical contacts also play significant roles.

III. Generational and Regional Divisions 1. Generation of Rationing, Transition, Food Shortage and Markets

In any society, people born and living in the same period of time share common ideas shaped by their shared history and culture. Differences of consciousness between generations, therefore, are an important subject in observing the political structure of a society. Especially in a time of abrupt transition, different ideas and cultures of successive generations are useful indicators in understanding the past and present and predicting the future.

In North Korea, generational concepts are drawing attention as important factors in the transition of political elite and the installation of the Kim Jong-un regime. Theorists in Pyongyang tend to divide the power elite into four generations of socialist revolutionaries, starting with the generation of Kim Il-sung and his comrades who fought the Japanese in Northeast China (Manchuria). However, this is nothing but a concoction to idolize the founder of their country. So, it is now necessary to divide generations in accordance with the history of life and change of thinking of the North Korean people and social experiences they have commonly shared.

Thus, based on research conducted through interviews with refugees and experts on North Korean affairs, the North Korean population as of 2010 is divided into four categories. The food shortages and famine of the 1990s and emergence of private markets were importantly considered in making the division, shown in Table 2.


A survey was conducted with refugees to identify differences of consciousness between generations. The result is shown in Table 3.

All of the interviewees were asked about their generation`s overall loyalty to the state, expectations on Kim Jong-un, the new leader, expectations for unification and acceptance of the market economy. All generations expressed relatively high degrees of acceptance for the market economy (4.60) and expectations for unification (4.45). On the other hand, they all gave much lower opinions about loyalty to the state and expectations on Kim Jong-un. Noteworthy was that all respondents believed that there are significant gaps between generations in their social and political awareness.

Loyalty to the state was highest (3.54) among members of the transition generation. Aged between the mid-40s and the mid-50s, they are the cornerstone of the North Korean system at present. They also showed the highest expectation on the leadership of Kim Jong-un (2.77). In contrast, the market generation, which is the youngest generation and is also called the generation of individualism and materialism, revealed the lowest degree of loyalty (2.11) while the oldest rationing generation showed the lowest expectation on Kim Jong-un (1.83), reflecting their concerns about his young age and untested ability.


Those in the transition generation experienced the orderly rationing system of the past as well as its rupture in recent years. As the conservative bastion of the North Korean regime, they are willing to understand the difficult situation of today. They comprehend the changes in the younger generation, but they also remain loyal to the state and preserve their old lifestyle. Yet, the desire for a better life with material affluence is spreading from the younger generation to this conservative stratum. At present, they have complex feelings, despaired at the incompetence of the system, and are slowly developing a new lifestyle and thinking under a reality that forces them to live in a manner incompatible with socialist principles. Some of them face individual difficulties, caught in antisocialism inspections, and make the crucial decision to leave North Korea. The food shortage generation passed its youthful years during the period of the “March of Tribulation” in the 1990s. They show remarkable decline of loyalty to the state and responsibility for protection of the system compared to older generations. They began to watch economic decline in the late 1980s when they were undergoing the period of developing self-awareness. The World Festival of Youth and Students in Pyongyang, staged shortly after the 1988 Seoul Olympics, and the overhaul of the socialist system in 1989 influenced the views on South Korea and the outside world of this generation.

A female refugee in her late 40s, who left the North after the botched currency reform in 2009, remarked: “Our parents were stubbornly loyal to the state. They were anxious not to have us distracted. Parents nowadays are different···. And the young ones now are different from us. I told them, ‘Let`s wait and see, things may change,’ but my daughter wouldn`t listen. She said, ‘There`s no future here, let`s leave here quickly.’ My daughter is not unique. Many girls of her age are coming to the South, leaving their parents behind in the North. They are different from us.”

The middle-aged people who had grown up under their parents` staunch loyalty and adherence to collective life are realizing that they and their children have discarded such values and adopted individualism with their love of family and money. Most notable are the members of the market generation, who think and act more aggressively than those of the food shortage generation. They show extreme attitudes about love, going so far as to threaten suicide when opposed by their parents, and some even indulge in drugs which they “prefer to eating and sleeping.” Schools can no longer prevent them from going to extremes in their materialistic and individualistic behaviors. The fastdeveloping market culture is stimulating youths to look for targets to vent their passion.

The case of a refugee of the market generation is especially illuminating about the changed thinking of North Korean youths. Moving from the countryside through a phony marriage, he became an urban


dweller and first ran a noodle shop. He next operated a restaurant, earning a high income and establishing connections with powerful people. Seeking a capitalist venture, he developed a wholesale item and cast his eyes on South Korea and the outside world. Believing that a moving fool is better than a static genius, he went to China and then ended up in South Korea.

2. Regional Divisions: Border vs. Inland, Cities vs. Rural Areas

Residents of Pyongyang have enjoyed various kinds of privileges over the decades, because of their role in sustaining the North Korean regime. More than anything, they still benefit from a relatively stable rationing system. The Pyongan and Hwanghae provinces close to Pyongyang have mainly continued collective rice farming. Changes in lifestyle take place more slowly here than in areas bordering China, due to lower exposure to external information. Pyongyang city and Pyongan and Hwanghae provinces, known as the inland region, contrast sharply with the border provinces of Hamgyong and Yanggang in both socio-economic situation and social structure.

Among other special areas under control of the central government are Sinuiju where large amounts of trade goods are handled, Kaesong city where an inter-Korean joint industrial complex is in operation, and Kangwon Province which is a special military district, and Rajin-Sonbong (Rason) which is a special economic zone. In general, differences exist between cities and rural areas with the latter maintaining the collective and conservative agricultural lifestyle.

To define the situation and structure of regional differences, refugees were asked about the general level of wealth and the degree of discontent among people in their places of origin. The results are shown in Table 4.

Respondents from the border provinces of Hamgyong and Yanggang gave 3.46 points for their


average level of wealth and scored 4.08 points in the degree of discontentment. Those from the inland regions in Pyongan and Hwanghae provinces and Pyongyang city have an average wealth score of 3.40 and dissatisfaction score of 3.67. To sum up, the border areas had higher standards of living compared to the inland areas (excluding Pyongyang), but their residents were more dissatisfied with the present system than those in the rest of the country.

Asked to name the most affluent regions, respondents cited Pyongyang, Sinuiju, Rason, Hyesan and Pyongsong, in that order, and as the poorest regions, Kangwon, Hwanghae, Chagang and Yanggang provinces. Most loyal places were Pyongyang, Kangwon, Kaesong, Rason, Sinuiju, Samjiyon and Daeungdan, whereas North Hamgyong and Yanggang provinces and Chinese border towns of Hyesan and Hoeryong were picked as the most dissatisfied regions.

V. Conclusion This study examined the characteristics of the social components of North Korea that link the politics and economy of the country. Generational, regional and class divisions in this period of systemic transition were analyzed based on study of actor-based models. Two findings stand out.

First, there are significant levels of class and regional division in North Korean society and the overlapping cleavages increase inequality and cause structural conflicts. When the residents of a specific region constitute the upper class while those of other regions form the lower class, internal conflicts escalate.

Second, those who are more apt to behave separately are 1) residents of border cities, 2) middle-class residents, and 3) the generations of the food shortage and market emerging periods. Therefore, the most likely agents of social movement in North Korea who can create the political opportunity of system and regime change are middle-class residents of border areas in their 20s to 40s.

[ Journal of the Korean Political Science Association, Vol. 46, No. 5, Winter 2012, published by the Korean Political Science Association ]

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Korean Household Income: Analysis and Implications Kim Young-tai Director, National Accounts Coordination Team, Bank of Korea

Park Jin-ho Economist, National Accounts Coordination Team, Bank of Korea

I. Introduction According to recent reports such as one from the Stiglitz Commission, officially the Commission on the Measurement of Economic Performance and Social Progress, a society`s material welfare should be evaluated according to income and spending rather than production. This means that when evaluating economic performance and analyzing economic structures, focus should be gradually switched from production metrics such as GDP to the earning, distributing and spending of main economic agents such as households and companies.

As its income level rises with per capita gross national income reaching US$22,489 as of 2011, Korea should also put more emphasis on related study and analysis in order to switch from export-oriented quantitative growth characterized by “material investment – low wage labor” to qualitative growth that has a virtuous cycle of “income growth – spending growth – job creation – human capital accumulation – sustained growth – income growth.” In other words, a growth model that strengthens domestic spending would be more appropriate.

As such, this report analyzes the current state of household income in Korea by using its income account, which reflects the “production – income – spending – production” structure of a country`s economy. Thus, the income account can provide an understanding of how economic revenue is distributed among the institutional sectors that account for production, spending and savings.

The content of this report is as follows. In the second chapter, we analyze the present condition of Korea`s household income using its income account. In the third chapter, we analyze the causes of the slowing growth of household income and its impact. And finally the fourth chapter provides a comprehensive summary of the analysis and the implications.

II. Analysis of Household Income based on Income Account


Gross national income (GNI) is distributed to households, companies and the government, which supply labor and capital for economic output. Households provide labor and capital and secure income in such forms as wages, interest on deposits, stock dividends, or operating profit (small scale self-employed). Companies don`t earn wages since they don`t provide labor. Instead, they earn operating profits, receive interest income and generate dividends by providing management and capital. The government provides administrative services and earns value-added tax and other revenue. As seen in <Figure 1>, Korea`s household income growth (annual average of 8.5 percent during 1991-2011) has remained below its GNI growth rate since the 1990s (9.3 percent), representing a continuous drop in the proportion of household income in the GNI. On the other hand, the nation`s corporate income growth rate (11.4 percent) has remained above its GNI growth rate, showing the rise in the ratio of corporate income to the GNI.

Household income growth stayed slightly below (0.4 percentage point) GNI growth in the 1990s, but in the 2000s, the growth gap widened to 1.0 percentage point (see <Table 1>). The gap has been especially wide since 2006 (0.9 percentage point during 2001-2005 → 1.2 percentage points during 2006-2011). Meanwhile, corporate income growth was similar to GNI growth in the 1990s (+0.3 percentage point), but it went up much higher above GNI growth in the 2000s (+3.7 percentage points).

Korea`s ratio of household income to GNI is clearly on a downward trend (see <Figure 2>). The ratio has shrunk 8.9 percentage points since 1995 (70.6 percent in 1995 → 61.6 percent in 2011), while the average drop for OECD was merely 4.1 percentage points (73.1 percent → 69.0 percent). This shows that the share of GNI distributed to households in Korea is shrinking compared to major industrial countries. In contrast, the ratio of corporate income to GNI rose 7.5 percentage points (16.6 percent → 24.1 percent), much higher than the average rise of OECD (2.0 percentage points, 16.1 percent → 18.1 percent).


III. Causes of Slow Growth in Household Income and its Impact 1. Causes of Sluggish Household Income

The relatively slow growth of household income compared to GNI growth is due to a decline in the corporate profit flowing into households as shown in lower wage growth, slowing growth in the operating profit of the self-employed and a sharp drop in their net interest margin. As seen in <Figure 3>, household income growth stood below corporate income growth during 2001-2011, as the income sources of households such as wages and interest income grew less than corporate income. Accordingly, the ratio of household income to corporate income dropped from 4.2 times in 2000 to 2.6 times in 2011.

1) Weakening Flow of Corporate Income into Households As wage growth lagged behind the growth of operating profit, the weakening inflow of corporate


income into households seems to have caused the relatively slower growth of household income. Of course, the growth of companies` operating profit, which is the balance after wages are paid, helps boost the income and asset growth of households owning companies through higher stock prices and additional dividends in the medium to longer term. So higher operating profit ultimately helps build up long-term savings in overall national economy. In the short term, however, companies retain their operating profit in their own savings. This constrains outflows into households, crimping household income. The growth gap between wages and operating profit was very small in the 1990s (1.1 percentage points, operating profit growth vs. wage growth) but the gap significantly widened to 3.0 percentage points in the 2000s.

This is mainly attributable to the weak labor absorption capacity of export and manufacturing industries, which have led Korea`s economic growth since the 1997 Asian currency crisis. During 2001-2011, the real value added of manufacturing industries grew 6.4 percent on average per year while the number of employed people in the manufacturing sector dropped by an annual average of 0.2 percent, showing that the growth of the sector didn`t lead to higher employment.

2) Meager Growth in the Operating Profit of the Self-employed The low growth in the operating profit of micro businesses, which is included in the household sector,


also contributed to the slowing growth of household income. Comparing the operating profit growth between the micro and incorporated enterprises, the operating profit growth of the former significantly tumbled in the 2000s (10.2 percent in the 1990s â&#x2020;&#x2019; 1.5 percent during 2001-2011), falling far below that of latter. Thus, the growth gap (operating profit growth of incorporated enterprises vs. operating growth of the self-employed) widened from 2.6 percentage points in the 1990s to 8.7 percentage points during 2001-2011.

This is mainly because the operating profit growth per person for the self-employed sharply fell as the traditional service industries such as wholesale, retail, food and lodging face fiercer competition and tend to become larger in scale and more specialized, when 57 percent of the self-employed are engaged in these businesses. The proportion of the self-employed and unpaid family workers among the total number of employed people is very high in Korea (28.2 percent in 2011), compared to major countries such as the United States (6.8 percent) and Japan (11.9 percent). However, the growth of the number of the self-employed has been in negative territory since 2000 (1.5 percent in the 1990s â&#x2020;&#x2019; -0.4 percent during 2001-2011) in Korea due to the emergence of large retail stores, super supermarkets and non-store retailers like e-commerce. This also seems to have affected the sluggish operating profit of the self-employed (see <Figure 4> and <Table 2>).


3) Plunging Net Interest Income Another cause of declining household income is shrinking net interest income since the 2000s due to household debt growing faster than household deposits. In the 1990s, the growth rate of interest received (annual average of 15.0 percent) and paid (annual average of 15.8 percent) by households was similar. Since the 2000s, however, the growth of interest received by households has stagnated at an annual average rate of 0.6 percent while the growth of interest paid by households has soared by 4.8 percent, resulting in a sharp drop in net interest income (see <Table 3>).


The situation can be understood by looking at changes in the composition of household assets and debts. Since the start of the 2000s, the proportion of stocks, which deliver no interest, to household financial assets has significantly risen, flattening the interest received by households. On the other hand, household debt has rapidly increased, causing a sharp uptrend in households` interest payments (see <Figure 5>, <Figure 6>, <Figure 7>).


2. Impact of Sluggish Household Income

The slow growth of household income is weakening the financial integrity of households, dragging down consumption and household savings, increasing consumption variability and discouraging investment, ultimately denting domestic demand and consumer sentiment.

Korean households spend 97.3 percent of their income (disposable income), showing a higher propensity to spend than the OECD average (95.4 percent). However, due to the relatively slower growth of household income, the ratio of household expenditure to GDP in Korea, which stands at 59.8 percent, is much lower than the OECD average of 68.5 percent (see <Figure 8> and <Figure 9>).


The sluggish household income also suppresses the household savings rate. This restricts the smoothing of private consumption and increases its fluctuation, exerting a negative impact on macroeconomic stability. The savings rate of Korean households is much lower than that of France (9.9 percent) and Germany (8.7 percent), and doesn`t even meet the OECD average (4.6 percent) (see <Figure 10>). Unlike major countries (except the U.K.), the variability of Korea`s private consumption (standard deviation of growth rate) hovered above the variability of GDP during 20012011. The sluggish household income also suppresses the household savings rate. This restricts the smoothing of private consumption and increases its fluctuation, exerting a negative impact on macroeconomic stability. The savings rate of Korean households is much lower than that of France (9.9 percent) and Germany (8.7 percent), and doesn`t even meet the OECD average (4.6 percent) (see <Figure 10>). Unlike major countries (except the U.K.), the variability of Korea`s private consumption (standard deviation of growth rate) hovered above the variability of GDP during 2001-


2011.

Considering the correlation between household income and corporate investment, the downtrend in household income is highly likely to reduce capital investment amid declining domestic demand. Korea`s corporate savings rapidly rose at an annual average of 11.2 percent during 2001-2011 while corporate investments merely rose 4.5 percent, probably because the sluggish household income growth reduced demand and companies, uncertain about their future sales, built up their cash reserves. Domestic investment seems to be affected more by demand factor such as consumption rather than by supply factor such as lack of investment resources as in the past.

4. Summary and Implications In view of the increasing importance of analysis of â&#x20AC;&#x153;household income and expenditure,â&#x20AC;? we have analyzed the current condition and trend of Korea`s household income and compared them with other countries to identify the implications.


As a result, it is clear that the growth of Korean households` income compared to the nation`s GNI has slowed down since 1990, unlike major industrialized countries such as the United States and Germany. On the other hand, corporate income has grown notably higher than GNI. The slowing growth of household income is ascribed to wage growth lower than the growth of companies` operating profit; meager growth of micro businesses such as wholesale, retail, food and lodging businesses, due to their structural recession; and increasing household debts raising interest payments by households, causing a decline in their net interest income.

Even though Korean households spend nearly all (97.3 percent) of their disposable income, the ratio of household consumption to GDP remains at a mere 59.8 percent. This causes problems such as households` weakening capacity of leveling consumption and intensifying fluctuation of consumption. In addition, slowdown of household income growth is likely to have negative impact on domestic investment in the long term by weakening the basis of domestic consumption.

In light of these circumstances, it is necessary to draw up measures to cope with the slow growth of household income so that the nation will move toward a balanced growth of domestic consumption and exports driven by a virtuous cycle of “income growth – consumption growth – job creation – accumulation of human capital – sustained growth – income growth.”

[ BOK Issue Paper Series, No. 2013-1, January 14, 2013, published by the Bank of Korea ]

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LDCs and Korea in Export Markets: The Pursuers and the Pursued Kang Suk-ki Researcher, Institute for International Trade Korea International Trade Association

I. Introduction In 2011, the number of Korean products that had the largest shares in global export markets totaled 61 (according to the six-digit HS system), 10 less than the previous year. The nation maintained its top rankings in 45 export items, including semiconductors, steel, shipbuilding, petrochemicals, and auto parts and components, and surged past major industrial countries in 16 new items. On the other hand, Korea failed to maintain its No. 1 status in 26 items in the face of strong challenges from China and other competitors. The setback was due mainly to China`s rapid advances. In contrast, however, Korea was the second-largest exporter in 124 items in 2011, up 15 from the preceding year.

China was Korea`s biggest rival in securing largest market shares. China surpassed Korea to become the top exporter in 12 out of the 26 items where Korea failed to retain its largest market share in 2011. The number of items in which China replaced Korea as the top exporter remained at four in 2008, but surged to 12 in 2011, underscoring the ever faster pace of China`s advancement. Even in the 61 items in which Korea remained at top, China had the second-largest market share in 13, forcing Korea to urgently look for ways to cope with its pursuit.

To maintain or increase the number of items with the largest market share, Korea needs to strive to continuously develop new export products and expand its overseas presence. Even in the 16 new items where Korea became the top exporter in 2011, their marketing lead was less than solid. The gaps in market share with the second-largest exporters were less than 10 percentage points, which reflects the need for strengthening the products` competitiveness to shake off challengers. Worse yet, while Korea is the world`s seventh-largest exporter, it is not in the top 10 in the number of items with the largest market share, a problem the nation should solve as soon as possible. It`s time both the government and businesses made diverse efforts so that Korea will become top marketer in an everincreasing number of export items.

This survey has been aimed to measure the competitiveness of made-in-Korea products by identifying which of them enjoyed the largest share in global export markets in 2011. It was also designed to


provide basic data for maintaining and increasing the number of market-dominating products, by analyzing their volume and market shares.

The global market shares in this report were calculated only in terms of export value. Non-price competitiveness such as quality and brand power was not considered. The Ministry of Knowledge Economy selects its own “world-class” items among Korea`s exports ranked at fifth or higher in terms of global market share, by also taking their technology, marketability and national image into account. It is based on a different concept from this report`s definition of the “items with the largest share in global export markets.”

This report analyzed data by using the U.N. Commodity Trade Statistics (UN Comtrade). The study is based on the universally-recognized six-digit HS product classification to make international comparison easier (a total of 5,051 export items as of 2007). The survey covers the period of 20072011. A partial revision can be made later on to the existing research results and 2011 data, due to continuous updating of the U.N. Comtrade data.

II. Major Countries` Top Export Products China topped the 2011 list of countries with the largest number of market-dominating items, with a total of 1,431 top exports. Following China`s lead were Germany (777), the United States (589), Italy (230) and Japan (229). Korea was ranked 15th with 61 items.

The changes in the number of market-leading exports varied from country to country. China showed the biggest increase with 78, while the United States (-42), Italy (-21), Japan (-22) and Belgium (-3) showed declines. Korea also saw its number of market-leading items fall by 10.


The most noticeable change was China`s rise. China`s number of global top export items has steadily increased since 2007 to exceed 1,400 for the first time in 2011. On the other hand, major industrial countries such as Germany, the United States, Italy and Japan saw their numbers continue to decline. For Korea, the number fluctuated after 2007 until it fell for two consecutive years, starting in 2009.

In 2007, industrial countries were the top exporters of semiconductors and TV cameras, but China took their places in 2011.


The number and composition of market-dominating items held by developed and less developed countries (LDCs) have sharply changed since 2007. The number of market-leading items held by industrial countries declined from 3,488 in 2007 to 2,881 in 2011, as they were surpassed by LDCs in 607 items. * Change in the number of market-leading items held by industrial countries: 3,488 (2007) → 2,881 (2011) (607↓) * Change in the number of market-leading items held by LDCs: 1,563 (2007) → 2,170 (2011) (607↑)

the composition of top export items held by industrial countries, textile products recorded the most noticeable declines with 121, followed by agricultural products (-101), chemical goods (-97) and steel products (-58). The chase of LDCs moved beyond agro-fishery and light industrial products toward heavy and chemical products, such as chemical goods, steel, non-electronic machinery, and electric equipment.


Major countries` rankings in top exports are roughly similar to their overall export volumes. Most of the top 10 exporters in 2011 are also ranked within 10th places in terms of market-leading items. However, Korea and Russia, which are the world`s seventh- and ninth-largest exporters, respectively, were ranked at 15th and 21st places in the number of top export items.


III. Korea`s Market-leading Export Items 1. Changes in Korea`s Market-leading Items

In 2011, Korea saw the number of its global top exports fall by 10 to a total of 61. China overtook Korea in 12 items, pulling down the latter`s overall total.


On the other hand, the number of export items in which Korea had the second-largest shares increased by 15 over the previous year.

The shipment value of top export items recorded a negative growth rate in 2011 for the first time since 2007. Their share out of total exports also fell below 20 percent for the first time since 2007.


Chemical products and steel took No. 1 positions in more than 10 items, followed by textiles (8 items) and electric equipment (6 items).

Most items except for leather/rubber/footwear and agricultural products remained little changed or fell. The number of items belonging to chemical products, electric equipment and transportation machinery has continued to fluctuate but remained largely unchanged, while those related with steel and non-electronic machinery have slid since 2009. In the agricultural sector, two export items entered into the ranks of global top items for the first time since 2007.


China is closely behind Korea, becoming the second-largest exporter in 13 items where Korea had taken the top position. The gap of market shares in steel pipes and rubber inner tubes have become so narrow that the nation needs to prepare for China`s catching up. In most other items, however, Korea is maintaining a competitive edge by widening the gap of market share to 10 percentage points or more.


Japan took over the No. 2 position in eight items. The gaps in market share remained wide in vesselpropelling engines and some chemical products, but those in fiber yarn and fabric grew narrower to threaten Korea`s No. 1 positions


Besides, the United States, Germany and Italy were No. 2 in items where Korea was the top exporter.


2. Competitiveness of Korea`s Market-leading Export Items

1) Long-term Market-leading Items Since 2007, Korea has maintained the largest share in global export markets in 26 items, including semiconductors, shipbuilding, petrochemicals, steel, and auto parts. As of 2010, the nation was the top exporter in 45 items.


Also, these items` market shares have increased since 2007.


On the other hand, market shares of fiber yarn, fabric, home appliances (washing machines) and general machinery have fallen somewhat when compared to the 2007 levels.


Meanwhile, the gap in market shares of some top export items with the second-largest exporters are less than 10 percentage points, demanding the concerned industries make efforts to strengthen their competitive edge to maintain their top positions.


2) Korea`s New Top Export Items In 2011, Korea saw a total of 16 export products become No.1 in their markets, overtaking the United States, Italy, Japan and Germany, among other countries. By industry, the steel sector produced the most such items with 5, followed by chemicals (3) and textiles (2). In particular, two Korean agricultural products became top market leaders for the first time.


The market share gaps with the second-largest exporters were mostly less than 10 percentage points, indicating that the leads of Korean industries are not very solid. Yet the gaps were wider than 10 percentage points among some items, such as welded steel pipes (HS730621) and iron or non-alloy flat-rolled steel products (HS720836).


3) Items in which Korea Lost Top Exporter Status Korea lost its top exporter status in 26 items in 2011 compared with the previous year. The nation yielded its foremost market leader position in its traditionally strong sectors such as liquid crystal devices, petrochemicals and steel, lagging behind major competitors. In market share, Korea managed to keep a narrow gap with new top exporters, with the gap in petroleum asphalt the widest at 17.5 percentage points.


China caught up with Korea to become the largest exporter in 12 items, becoming the most formidable competitor. Following China`s lead were the United States, Germany and Spain, each surpassing Korea in three items, and Japan, which replaced Korea in one item.

China`s progress is accelerating, as seen in the increasing number of items in which the giant rival has surpassed Korea in recent years. * The number of items in which China caught up with Korea: four (2008) → two (2009) → seven (2010) →12 (2011)


China overtook Korea to become the largest exporter in three items â&#x20AC;&#x2022; textiles, steel and chemicals â&#x20AC;&#x2022; for the first time.


IV. Conclusion and Implications The number of products in which Korea carved out the largest share in global export markets totaled 61 in 2011. The nation maintained marker-leader status in its traditional export industries such as semiconductors, shipbuilding, petrochemicals, steel, and auto parts. It emerged as top exporter by surpassing industrial countries in many items, including two agricultural products.

China`s advancement has been accelerating since 2007, overtaking Korea in four items in 2008, and the comparable number sharply expanded to 12 in 2011. This explains why Korea saw a sharp decline in the number of its market-dominating items. Among the 26 items where Korea lost its top exporter status, China took the largest market share in 12 items to become their new market leader.

From now on, Korea needs to continuously develop new products and expand its export markets to raise the number of its market-dominating items. Even in the 16 items in which it newly became the largest exporter, Korea maintains a shaky lead with the gaps in market share with the second-largest exporter less than 10 percentage points. Korea is the world`s seventh largest exporter, but is ranked way below the top 10 in the number of market-dominating items.

To cope with aggressive pursuit of rival countries and develop more items ensuring comfortable lead, both the government and businesses will need to mount diverse efforts. In addition to strengthening the competitiveness of the current No. 1 items, Korea will need to develop next-generation top export items, especially in markets with exceptional growth potential, and expand investments in technological development in these areas.


[ Trade Focus, Vol. 12, No. 13, January 2013, published by The Institute for International Trade ]

www.koreafocus.or.kr


- Parents Think Twice about Spending on Childrenâ&#x20AC;&#x2122;s Education - A Village with Alleys


Parents Think Twice about Spending on Childrenâ&#x20AC;&#x2122;s Education

Lim Mi-jin Staff Reporter The JoongAng Sunday

When somebody knows for sure where his life is heading, he will not waver. In this sense, reaching 40 in Korea can no longer mean Bulhok, a point in life where a person is free from vacillation. Koreans in their 40s are now leading different lives from previous generations. They are no longer like racehorses dashing for promotions and success in society.

Moreover, as parents, they are no longer willing to sacrifice themselves wholly for their children`s education. Now, they think their own lives are no less important than their children`s. They claim that they still have too many years to live, so it is unwise to invest everything they have on their children. There are some Koreans in their 40s, standing at the crossroads of their lives, who insist their lives will be different from those of earlier generations.

# Lee Jeong-gil, 47, Financial Firm Manager, Jamwon-dong, Seoul Recently, Lee quarreled with his wife. Although their bickering started over a down jacket, it ended up with private education spending. â&#x20AC;&#x153;I told my wife I wanted to buy a new jacket to replace my old one. She said we could not afford a new jacket because of the tight family budget. But it was total nonsense because we usually spend over three million won (US$2,800) every month on our son`s


private education,” he said.

Lee`s son, a second-year high school student, is taking four courses at Hagwon, private education institutions, and receiving private tutoring for four subjects during this winter break. Although the Lee family has two incomes, it is able to set aside less than one million won a month for retirement because of exorbitant private education costs. Lee spends the whole weekend driving his son to several private institutions like a personal chauffer. He has to wait for his son until the class ends at one institution, and then he takes him to another. “I seem to have no life of my own. I really want to tell my wife there is no point in my escorting our son to the institutions, because he is old enough to take care of himself,” Lee said. “But I won`t do so, because I don`t want to fight with her. We cannot expect that our children will take good care of us when we get older because we sacrificed our lives for them. So it is time for us to prepare for our post-retirement years and enjoy our own life.” He added, “A growing number of fathers living in Gangnam [an affluent district in Seoul] think the same thing. Some of them have already cut back on spending on their children`s private education.”

# Park Yeong-han, 44, Employee of Major Company, Bangbae-dong, Seoul In another case, Park has two daughters, fourth and sixth graders, but his monthly spending on their private education stands at less than 500,000 won (US$450). His two daughters began to attend a private institution for math in the latter half of last year, according to their own wishes. “Private academies usually offer advanced learning, but I don`t think it`s necessary. Instead, I allow them to take music and physical activity courses at private institutions, and my wife teaches them English at home,” Park said.

Park said those in their 40s now must be the last generation that feels it is their responsibility to take care of their parents and, at the same time, the first generation that does not expect their children will feel the same. “I don`t think excessive private education leads to my children`s happiness. And failing to secure stability for our later years will impose a great burden on our children,” he added. For this reason, although he is the only one working in the family, he saves 1.5 million won every month for the couple`s retirement years.

Koreans in their 40s are now changing. They are no longer a group of Ajeossi and Ajumma, collective


terms for middle-aged men and women raising children. For these people, the well-being of their children is important, but their own life and happiness are equally important. They are greatly interested in their own health, appearance and leisure activities. They are now going by a shortened term, “NOMU (No More Uncle).” It means “stop calling us uncle,” reflecting their changing attitude toward life. They are also the “house poor” generation for whom it is a very dangerous idea to bet all the money they have on children`s education because they are living in an era when the average life expectancy reaches over 100 years. In Korea, the “house poor” refers to those who have very little cash because almost all of their net worth is tied up in their houses. This new generation is taking a different path from previous generations who poured all they had into their children`s education, even to the point of going into debt. Such a change among those in their 40s has greatly affected private education, distribution, and financial industries as a whole.

30 Percent of Private Institutions in Daechi-dong Out of Business One of the most salient changes is the decline in private education spending. In the past, those in their 40s with children attending middle and high school were vital to the local private education market. In 2009, families with household heads in their 40s spent 13.6 percent of their annual income on their children`s private education. Since then, they have reduced the ratio to 12.4 percent as of the third quarter of last year. Experts link the changing attitudes of those in their 40s to the sagging private education market, which has recently seen as much as 30 percent of the private academies shut down in the Daechi-dong area in Gangnam. “The private education industry has been hit hard since the financial crisis in 2008. And the sluggish consumer sentiment caused by the depressed real estate market and the diminishing disposable income resulting from soaring consumer prices over the recent years were the key factors in the market slowdown,” said Yang Jeong-ho, a professor at the Education Department of Sungkyunkwan University.

However, others argue that the economic slowdown is not the only explanation for the sluggish private education market. Since the 2008 financial crisis, the monthly pension payments of those in their 40s have jumped by 36.2 percent, from 99,669 won in 2009 to 135,751 won in the third quarter of last year. The ratio of pension payments to their total income has also risen from 2.6 percent to 2.9 percent over the same period. On the other hand, households headed by those in their 50s have seen


their pension payments rise 29.4 percent, from 104,485 won to 135,237 won in the corresponding period. And yet, the ratio against income gained only 0.1 percentage points from 2.8 percent to 2.9 percent. These figures suggest that those in their 40s have a more keen interest in saving for their retirement than those in their 50s. “The second baby boomer generation, or those between 39 and 45, bears more financial debt and is expected to live longer than the first boomer generation, or those aged between 50 and 58. So they feel more burdened by preparing for their retirement. They eventually realized the importance of providing for their old age relatively early compared to the first baby boomer generation, thus increasing their life savings,” said Hwang Won-gyeong, a researcher at the KB Financial Group.

Money for Business Startup, Rather Than Private Education The reality in which the returns on private education investment have sunk lower and lower has contributed to the changing attitudes. Parents have seen how today`s young university graduates, having received lavish private education, now constitute the “880,000-won generation,” a moniker for low-paid non-regular workers. According to a report titled “Analysis of the Rate of Return to Investment in University Education,” released by LG Economic Research Institute in November last year, among the graduates in 2011, some 670,000 earned less than the cost of their college education, with some 1.13 million university graduates remaining unemployed. “The phenomenon in which gains fell short of the costs invested into college education started 10 years ago. The rate of return on investment might be much lower when the costs invested both in college and private education are combined,” said Lee Ji-seon, a researcher at the institute. “Even if my child is admitted into a prestigious university as the result of excessive private education, he will, at best, end up being a salaried employee at a large company. And also, becoming a doctor or a lawyer today can`t guarantee he will make enough money to rebuild the family fortunes,” said an executive at a medium-sized company, who identified himself as Park, 44. He added, “Looking at famous entertainers like Psy, an internationally famed singer, or Park Myeongsu, a famous comedian, I started to think that the era has passed in which doing well in school can ensure a child`s success. Some of my friends even joke that if you have money to support your children`s private education, it is better to use that money on plastic surgery for your daughter or to


offer your son seed money for a business.” Some suggest that Generation Xers in their 40s have become a “My Way Generation.” Generation X is a term for people born between 1965 and 1976 and characterized by their strong ego and personality. The majority of Generation Xers, regarded as those “defying definition” and “rejecting the existing order of the previous generations,” have begun to enter their 40s. “People in their 40s are a hybrid generation sharing the characteristics of both the older and younger generations. They tend not to believe in the success stories of others or the existing politics and polices. Instead, they are more likely to believe in their own choices and invest in themselves,” said Jeong Deok-hyun, the author of “The Secrets of the 40s.”

Bae Min-geun, a researcher at the LG Economic Research Institute, explained that unlike the previous generations whose major concerns were career advancements and financial investments along with their children`s education, those in their 40s today have given a lot of thought to issues like ‘What do I want?` or ‘Who am I?” He suggested that the changing attitudes of those in their 40s are reflected in the trend of the local publishing market that is releasing books primarily in the humanities such as philosophy, targeting readers of that age group.

Consumption Jumping in Leisure, Apparel and Cosmetics Analyses suggest that even after becoming parents, the Generation Xers, who valued individuality and personal taste, have a tendency not to reduce investment in themselves. The share of male consumers in their 40s exceeded 40 percent in the total sales of luxury watches at Hyundai Department Store last month. In other words, men aged between 40 and 49 have emerged as another key consumer group in the luxury watch market in which most of the sales are made for wedding gifts. “Last month, the total sales of men`s clothing increased only 0.4 percent at the Hyundai Department Store in Sinchon. However, as far as the sales made by men in their 40s are concerned, the figure rose by as much as 4.5 percent. The share of this age group is sharply increasing in the areas of leisure, apparel and cosmetics,” said Ha Ji-seong, deputy head of the public relations department of Hyundai Department Store. It was seven to eight years ago, when Generation Xers started to enter their 40s, that the local distribution industry began to pay keen attention to NOMUs who aggressively invest in their own health and appearance.


Experts agree in unison that it is socially desirable for people in their 40s to increase investments in themselves and their retirement years. Excessive private education expenditures will prevent parents from preparing adequately for their later years and reduce disposable household income, which will depress domestic consumption. “Unlike people in their 50s and 60s who resorted to various means to increase their fortune, those in their 40s have yet to possess their own house. Even if they do own one, most of them are burdened with heavy debts. Reducing private education spending will enable Koreans in their 40s to gain sufficient disposable income, which will translate into increased life savings. Only by doing so, they will lead comfortable and stable lives in 20 years,” Professor Yang advised.

However, many skeptics argue that such a trend will not easily or quickly capture all parents in their 40s. Roh Ick-sang, president of Hankook Research, said, “According to a survey, people in their 40s with children attending middle and high schools are found to be the age group showing the strongest attachment to their children and putting a great emphasis on their children`s education. The recent decline in private education spending is an illusion caused by the economic slowdown. Therefore, this trend is unlikely to affect Korean society as a whole.” “It is true that there is a sharp distinction today between people in their 40s and those in their 50s,” said Jo Yeong-tae, professor at the Graduate School of Public Health, Seoul National University. “In addition, the percentage of households with one child is remarkably high among these in their 40s. So even if they agree that it is wise to invest their money in the well-being of the whole family and their retirement, it is not actually easy for most of them to stop pouring their hard-earned money into educating their only child.”

[ No. 306, January 20, 2013 ]

www.koreafocus.or.kr


A Village with Alleys

Choi In-gi General Secretary Korea Democratic Street Venders Confederation

On a day bursting with large snowflakes, my expectation for beautiful snowy scenery pushed me out of my house. Carrying a camera, I headed for Gaemi Maeul (Ant Village) in Hongje-dong, north of the old city center in Seoul. I rode the subway Line 3 to Hongje Station, where I came out through Exit 1, and then took a back seat in the shuttle bus to the village. I asked a woman beside me a few questions about the origin of Ant Village. She said the name “Gaemi” dates back to 1983. The neighborhood had formerly been called Indian Village, which was not created by villagers. Long ago, people there lived in a tent, which reminded them of Indians, then the name was changed to Hwanggeum Maeul (Gold Village) later. However, many people nowadays call it Gaemi Maeul, because its residents lead a diligent life just like ants.

It is said that this village has about 420 residents. As is often the case with hillside neighborhoods around Korea, the entire village is comprised of illegal buildings because many residents moved in after their houses were torn down by force for redevelopment in other areas. The village had been a subject of discussion about development and preservation until 2009, when Seoul City`s Joint Committee on Urban Construction passed a “proposal for change in Type I district unit plan and resolution on district unit plan” concerning the village`s 34,611 square meters of land. The village thus became a candidate for a “residential environment management project” and subsequently a regional housing project cooperative was formed. The plan called for building single- and multi-


family homes with four stories or less, with a maximum 150 percent in floor space index, excluding apartment units.

Compared to other hillside neighborhoods I have visited, Gaemi Maeul is not so large. If you walk slowly down from the last bus stop on the hilltop, you reach the entrance to the village in no time. Finally arriving there at a snail`s pace after crawling and sliding back on the snow-covered hill, I found the village comfortably nestled at the foot of Mount Inwang. The old houses and buildings, looking somewhat shabby, evoked a vague sense of nostalgia. The village spread out like a fan, starting from the bus stop in front of a small store. Hoping to get a better look at the whole village, I climbed up the stairs leading up in the diagonal direction where I could overlook its snowy scene from a short distance. Although the roads were not so entangled, I became short of breath after only several steps, probably because of the steep slope.


This neighborhood began to be known in earnest in 2009. In the summer of that year, a group of art students and volunteers started to create cultural villages in the name of “Light-painted Harmony Village” under the auspices of Kumho Industrial Co., LTD. Afterward, thanks to the digital camera boom, the photos of this village were posted on the Internet, drawing attention of photographers. A friendly puppy painting in the photos has become an iconic mural of the village. In 2010, the Seodaemun District Office said it would preserve the village as a special cultural zone for shooting movies and dramas, with a view to initiating a new change to the neighborhood and thereby preserving it as a shelter for the needy. In addition, there have been plans to include the village in an urban visit program.

In spite of various improvement and support plans, however, it remains doubtful whether such decisions were made through proper communication with the residents. After many twists and turns, the Residential Environment Department of the Seoul Metropolitan Government said, “The goal of the project is to have the original dwellers live on in their village, not to remove the old houses for redevelopment. We will improve the living environment in the manner of managing the area on a daily basis by giving loans for house repairs and securing public parking lots.” Practically, however, the fate of the village rests on how development will proceed, led by the cooperative.

There are three small stores in this tiny village, all maintaining their territory over the years and positioning themselves as familiar fixtures. I opened and stepped in the door of Beodeu Namu Gagye (Willow Store), with a large turtle painted in the center of its wall. The shopkeeper appeared puzzled to see a stranger with a camera entering his shop on a snowy day. When asked to sell a bowl of instant


noodles, he poured in the bowl of noodles hot water from a kettle which was boiling on a briquette stove. When I asked his age, he replied he was born in the Year of the Rooster. I carried on, “My father lives in Bupyeong and he was born in the same year as you.” The man said he used to live near Pyeongtaek [in southwestern Gyeonggi Province], but moved to Hongje-dong for his children`s education in 1979. He has been running the store here for over 30 years. To a man who dropped in his quiet store all of a sudden and chattered on, the shopkeeper gradually opened his heart. “Transportation is good here and the air is really clean, though within Seoul, because Mount Inwang stands at the back. Everything`s good but as the project is not profitable, builders are not interested. By the way, why did you come here when there`s not much to shoot?” The shopkeeper also confided in me about his poor family affairs: All of his three children live apart from he and his wife, and he hurt himself while repairing his house last year. When I asked him what became of the district office`s plan to make a filming site a long time ago, he said it was stopped due to the opposition from residents. A vehicle for filming happened to cause an accident and residents have since hated the plan. “When do you usually close the store?” “I open it at seven in the morning and close at around ten thirty at night.” “My parents-in-law runs a small shop in Daejeon, too. They say it`s like in a jail as they are confined to the store every day···” “We`d lived down over there for a while, then moved up here in 1979. Afterward, a removal notice came in a yellow envelop to the houses above ours. They intended to tear down all the houses but we stopped them.” “At that time too, they developed in an indiscriminate manner, didn`t they? How did you stop them? Can I have coffee, too? And a boiled egg? No, you don`t have? With gray hair and dark eyebrows, you go strong···” “If you ate all, go out now. I have to go to the restroom.”

The shopkeeper said that because residents had been wishy-washy, supporting and opposing the proposal for development, their hearts were in chaos then. He felt that the village should be developed as soon as possible.


When I opened the squeaking door and came out, the big snowflakes had not stopped, neatly shrouding the village, including a flowerbed, which seemed to have been taken good care of until a short time ago.

In retrospect, alleys in the past were literally alleys. Just as the sky was the sky and the earth was the earth, alleys were alleys which spread before you once you opened the gate and came out of the house. It`s been a while since the word â&#x20AC;&#x153;alleyâ&#x20AC;? became unfamiliar and now it is a place you can only encounter in a film set or in a special spot. It is really difficult to come across an alley in its true sense. As this change took place in an instant, not gradually over a long period of time, it`s hard to meet alleys unless we are determined to find them.


Out of a wooden gate attached to the wall facing the broad street, an old man appeared with a broom in his hand and began to sweep the snow diligently. Though the snow weakened, it continued to pile up. Thinking he might know well how the village has changed, I stroke up a conversation with him. Clad with a cap and gloves, he said, he was over 80 years old and had lived in the village more than 40 years or so. He has a son and a daughter but lives alone in the village.

When asked what would become of the village, he seemed to be against development. He said, “The present house of mine is 40 pyeong (132 square meters) in size. How much more would it cost to rebuild it, even for a 30-pyeong house? Better to repair it. I doubt the development will go on properly as the height of buildings is limited even if a cooperative is organized. The real estate market is slow these days, so I don`t know what will happen to our own houses if the development goes awry. You know Hobakgol (Pumpkin valley) in Hongeun-dong over there? They say they`d become beggars if they agree to the cooperative`s plan.”

Even a few years ago, Seoulites were swept in a craze of development to the extent that more than 15 percent of households in Seoul were under the influence of the “new town” redevelopment projects. As these large-scale projects led to a supply of mostly mid- to large-sized condominiums, over 80 percent of original residents had to move out of their places. According to the statistics of Seoul City`s Residential Environment Improvement Council, 86 percent of the houses had a long-term lease with a deposit called Jeonse that was less than 40 million won. However, such Jeonse houses have all disappeared after the development while the deposit for apartments around the new towns soared. This is a big crisis to renters in the city. The situation being so, many residents of Gaemi Maeul seem to be hesitant about development though some call for it.


There`s something called “minimum housing standards” for the poor. It was legislated with the amendment of the Housing Act in 2003. However, according to the Seoul Research Institute, as of 2009, 34 percent of low-income households in Seoul live in houses that fall short of the minimum housing standards. Some 51 percent of these vulnerable low-income households have a ratio of rent to income exceeding 30 percent. But no strong legal means have been devised to support these households. Feasibility of a measure, if any, is low because it is of a level “to reflect in the government policy for reference.” Needless to say, it is urgent to expand public rental housing for poor people in our society, who belong to the vulnerable class like residents of Gaemi Maeul.

Midway up the village, there`s Dongnae Supermarket and before that small store stand a bus stop and short street lamps. When the lamps are turned on, one by one, a totally different world unfolds in this hillside village. When the windows are lit on the walls, this quiet village looks even cozier in harmony with the white blanket of snow covering the rooftops. In the Dongnae store, a couple in their late seventies operates the shop in comfort. Perhaps, their child living far away gave them a call to inquire after their health. The old woman, maybe sick in bed, seated herself to take the receiver and looks glad to talk with her child on the phone. She seems to have a lot of stories to tell, about sweeping the snow, repairing the boiler, news about her grandchildren, and even back biting her husband for getting up late in the mornings.


The shuttle bus struggles on the icy road, with vroom, vroom, to deliver villagers who called it a day and came home. How many people would have waited here to go to work? Some might have waited for their family members on a rainy day, holding up their umbrellas. Others might have stopped in the store to buy steamed buns and rushed home to see their children, who were looking forward to their return home on a day like today. Now the snow has stopped after falling all day on the alleys, on which people have trodden in their hard and tough lives.

[ Cham Sesang (True World), January 15, 2013 ]

www.koreafocus.or.kr


- Poet Reminisces on How Life Unfolded with Modern History - The Sorrowful History of Abandoned and Hungry Kareiskis


Poet Reminisces on How Life Unfolded with Modern History

Han Yun-jeong Staff Reporter The Kyunghyang Shinmun

“Moonlight of Two Centuries” (668 pages, 23,000 won); “Ideology of the Wind” (1,067 pages, 27,000 won) By Ko Un, Hangilsa Publishing Co. “Add useless to useless, it only becomes even more useless. When days of coincidence are piled on top of one another, they form an era of inevitability; my life is also loitering around the fringes of such inevitability.” Poet Ko Un published a collection of conversations titled “Moonlight of Two Centuries” and his personal journal from the 1970s titled “Ideology of the Wind,” and had a press conference at the Korea Press Center on January 7. The conversations, conducted with novelist Kim Hyeong-su, are from a serial column that the Kyunghyang Shinmun published from 2010 to 2011 under the same title as the book. It traces the poet`s thinking during his younger years from the 1930s to the early 1950s. He reflects, broadly but ever so elaborately, on his life and literary work against the backdrop of history and civilization. The journal, dated from April 1973 to April 1977, is a living document of the period of military dictatorship, dubbed Yushin (Revitalizing Reform). “When I look back, yesterday seems just like today. I guess I am inherently unable to tell the past, present and the future apart from each other,” Ko said during the press conference.


In “Moonlight of Two Centuries,” the poet recollects his memories of his early days when as a young boy he lost his mother tongue under the colonial rule and then embraces liberation. He comes face to face with the war from a corner of which he takes his first step into the world of poetry. To him the hometown was a community of close friends and family that cherished the legacy of the agricultural society, but such a hometown turns into ashes amidst the war. The young Ko Un is frustrated because there is no longer a home that he can lean on; this propels his mind to take on an adventurous journey. The novelist Kim Hyeong-su said at the press conference, “Through our conversations, we were able to rediscover that Ko Un`s earlier work does not reveal ideational nihilism but transcendental existentialism.” The poet pursues return to ruins, futility and point zero by bearing existence in a painful, absurd world. Ko said, “A few decades of lost sovereignty and national division that I experienced formed my ego vis-à-vis world history. This was a chance for me to reveal the meaning of the landscape that I had been exposed to for a long time.” The conversation ends with the Korean War when his suicide attempt fails, covering one-fifth of the poet`s life. The book contains 50 sessions plus the final conversation. “Ideology of the Wind” contains what remains from the poet`s journal he kept in the 1970s, that was not confiscated by authorities or lost. He had witnessed many deaths during the Korean War, which left him in a mentally devastated state. He became a Buddhist monk but returned to secular life when he joined pro-democracy activities. He started a diary in the late 1960s. The book shows his transition from a poet pursuing pure literature into an outspoken litterateur amid the nation`s turmoil under military dictatorship. From a straightforward accusation like, “Are you turning a pure poet like me into a political poet? This age of soldiers! An age of the army! An age of guns and bayonets! An age of tanks! An age of cheaters!” or from a solemn confession like, “I have been cast. My body I cast has become one cast. I don`t know whether I will fall due to gravity or fly up and away beyond the vanishing point to float around as a spirit,” the reader will realize that the poet`s ego was always rooted in history. “In the 1970s, literature and history were considered synonyms, and I was so naïve that I laughed and cried from an illogical perspective,” Ko recalls. “I think that`s when we were young and pure. My home is the ruins after the war of the 1950s. That`s my birthplace, and the 1970s is like my second home.” He continued, “Today people seem too removed from the landscape of the 1970s, so I thought it would be a good idea to show them what it looked like. The past was dreary and desolate when you


live in it, but it takes on colors when you look back at it. The past is like a landscape that everyone has to keep in his heart.” Ko cited “moonlight” and “wind” as eternal motifs of his literature: the moonlight holds and reflects sunlight, and the wind never stays still. He will receive an honorary doctorate from Ca`Doscari University in Venice soon, and stay on there as a visiting professor from February to June.

[ January 8, 2013 ]

www.koreafocus.or.kr


The Sorrowful History of Abandoned and Hungry Kareiskis

Ye Jin-su Staff Reporter The Munhwa Ilbo

“150 Years of Eurasian Goryeoin” By Kim Ho-jun, Juluesung Publishing Co., 555 pages, 30,000 won

Goryeoin, or the Kareiskis, meaning ethnic Koreans in Eurasia, say their ancestors lived the life of Mankurt (“man wolf”) under the Stalin regime. Mankurts were slaves who were made to forget everything but basic human activities with camel hide tied around their heads. That was a cruel way of invaders to make obedient slaves. And this is the image of early Korean immigrants in the Russian Far East as embedded in the Kyrgyzstani myth; they worked hard without knowing their identity.

The ancestors of today`s Goryeoin in Central Asia crossed the Tumen (Tuman) River and migrated to Primorsky Krai, beginning in the 1860s. They were hungry people already abandoned by their own country. Historically, Primorsky Krai had long been inhabited by Korean people. But Stalin persecuted ethnic minorities and forcefully deported Kareiskis to the barren fields of Central Asia in 1937. It was a tragic event that completely changed the lives of Goryeoin forever. They have since been forced to forget their roots, homeland and history.

The author says that the forcible deportation of Kareiskis, which formed a modern diaspora, epitomized the state terrorism of the Soviet Union. Since the death of Stalin, with the 20th congress


of the Communist Party of the Soviet Union in 1956 as the turning point, the ethnic Koreans in Central Asia began to express nostalgia for the Far East that they once called home. The book is a historical narrative spanning over 150 years, tracing the history of 500,000 ethnic Koreans who are scattered over the vast Eurasian continent. Presently, some 10,000 Goryeoin are working in Korea, about 4,000 of them as permanent residents. This year marks the 150th anniversary of Korean emigration to Primorsky Krai. The book attempts to restore the painful historical truths of those years that have been forgotten.

No Korean historian has ever written a synoptic history about the ethnic Koreans in Eurasia. The author of this book is not a historian but a journalist. He has been interested in historical issues and added to his imagination was the fiercely inquisitive mind of a field investigator. In the past 10 years, he visited Russia and Central Asia more than 10 times to explore the places where the history of Goryeoin transpired. He conducted field trips and interviews with an acute journalistic viewpoint and perused a lot of literature.

The author delved into the lives of Goryeoin under the past czarist rule to the Stalin era from the perspectives of minority groups who were oppressed, exploited and discriminated against. His focus was on shedding light on the cruelty of Stalin`s policy to forcefully relocate 180,000 Kareiskis in the Far East to Central Asia at once. The Stalin regime brutally persecuted Kareiskis, leaving an unprecedented, shameful legacy of oppression and human rights violation in world history. Uzbekistani painter Nikolai Shin`s “Requiem” is a panoramic masterpiece that solemnly presents the tragedy of Kareiskis who died in great numbers from the pains of forcible relocation. Through this series of paintings that remind them of Picasso`s “Guernica” or “Massacre in Korea,” the Goryeoin ruminate on the tragic deaths of 16,000 people who perished during their long, painful journey to Central Asia. Too much of their pathetic history remained in the dark. It was only after Gorbachev`s perestroika that it began to be known through the former`s Soviet Union`s declassified documents. The author said, “A lot of materials on Goryeoin were found in Russia, Kazakhstan and Uzbekistan, and reinterpretation of the data set the effort going to restore the lost history.” Historical data accumulated in the ethnic Korean society as well as the research taking place in Korean academic community and personal research of the author combined led to the birth of this book. The author firmly believes that only the people who remember the lessons taught by history can evolve and live forever.


Kareiskis have withstood their difficulties and built an important ethnic group in Central Asia. One of their success factors is gobonjil, or seasonal migration for collective farming. Gobon means the investment individuals make in a common project, and -jil is the suffix to denote some kind of activity. According to the book, those who engaged in this type of farming had to spend eight to nine months a year in the wild plains away from their families. It was a speculative, high profit-seeking enterprise, but Goryeoin gladly took on the risk. The author interviewed Anatoly Shin who became a millionaire through this business.

The book is also a dramatic recollection of Goryeoin`s pro-Japan track record of the 1920s, participation in founding North Korea after liberation, purges by Kim Il-sung, relocation to different countries after the fall of the Soviet Union, and efforts for comeback in the 2000s.

[ January 4, 2013 ]

www.koreafocus.or.kr


- Park Hyo-nam: “I put all my effort even into a simple soup.”


Park Hyo-nam: “I put all my effort even into a simple soup.”

Kim Yun-deok Staff Reporter The Chosun Ilbo

Chef Park Hyo-nam, 51, has only nine fingers. The digit finger on his right hand is missing two joints. When asked if that isn`t a great handicap for a chef, he shakes his head and says, “I still have four perfectly good fingers.” The son of a coal briquette seller, Park did not make it past middle school. He is famous for the three-line resume he submitted for his first job as a kitchen hand at the Hyatt Hotel: “Graduated from x elementary school. Graduated from x middle school. Chef`s certificate.” Today, as in the past, Park likes to say that having no higher education is no big deal. “The world is changing. Gradually ability will become more important than academic credentials,” he says. As if to prove this argument, Park was appointed the first-ever Korean executive chef for the international hotel chain the Hilton Group. He was 40 years old at the time. ◈ Doing French Cuisine Better than the French

In the hotel kitchen full of chefs in white uniform busily going about their business, it was not hard to spot Park. Short and slight in build, Park, the least striking person present, is the food authority at the Millennium Seoul Hilton. Though very much a Korean-style figure, perhaps better suited to the more simple title of “cook” than “chef,” he has a reputation for being “the Korean person who does French cuisine better than the French.” Unlike the other star chefs, he has neither studied overseas nor at a famous culinary school, but Park Hyo-nam`s name is legend among young culinary hopefuls.


Busy with the end-of-year season, Park met us at “Seasons,” the restaurant where he has worked for 30 years. Though he stands only 160cm tall, Park goes by such nicknames as “Steel” and “Giant.” Somehow, he seems to be a man who knows how to deal with the difficulties of our times. The year 2013 marks Park`s 30th year at the Hilton.

Q. It looks like you`re very busy with the year-end season.

A. This is the busiest time of the year for the hotel`s food and beverage team. Sales are more than double compared to normal months. Though we deal with this every year, each time my nerves are strained and I am always tense. It`s no good if the guests think that there`s nothing new, so we have to come up with new menu items.

Q. You`ve worked at the Hilton for 30 years now.

A. In 1987 I went to the Hilton Hotel in Brussels for training. The executive chef there was an elderly man who had worked at the Hilton for 25 years. The under-chef had been there for 24 years. We were all amazed. It was awesome that someone could work at the same hotel for so long. I wanted to be that kind of chef, too. ◈ The Chef Coveted by Lee Kun-hee

Q. They say Samsung Chairman Lee Kun-hee has tried very hard to recruit you for the Shilla Hotel [owned by Samsung]. Is this true?

A. I once had a catering job in Hannam-dong. I was taken aback when I realized it was the home of Lee Kun-hee. I wondered why he had called for a chef from the Hilton instead of the Shilla. Then two weeks later I got a call from the Samsung Group. They asked if I would be interested in working for the Shilla. They promised a high salary and stock options, but I rejected the offer. I am who I am because of the Hilton, not the other way around.

Q. Are you a conservative person?

A. I met my wife at the Hilton and we have three children now. My fellow chefs are like my family. When the Daewoo Group [former owner of the Hilton Korea] went under, I cried. I don`t know what the rest of the world thinks of Kim Woo-choong [former Daewoo chairman], but I respect his


ambitions and his drive.

Q. I hear that you also refused a university professor position?

A. The chef`s job is to cook well.

Q. You`re known as the Korean man who cooks French cuisine better than the French? Would you agree?

A. The French government gave me a medal (Ordre du Merite Agricole, or Order of Agricultural Merit), so I mustn`t be too bad at it. (Laughs)

Q. You are the youngest executive director in your field, and the first locally appointed head chef of any Hilton Hotel. What is the secret of your success?

A. The president and the general manager of the hotel might laugh to hear this, but I always think of myself as the owner of the Hilton. I`m a rich man (Laughs). I always tell my younger colleagues that it is necessary to have a sense of ownership. In the way housewives keep a housekeeping log, hotel chefs have to keep detailed accounts. When I first started working at the Hilton, the general manager, a man named Smith was the chef. When I arrived at dawn to work, I would see him in his business shirt going into the hotel kitchen and rummaging through the garbage. I would think, â&#x20AC;&#x153;Why is he doing that? Doesn`t he trust us?â&#x20AC;? I was young back then, but now I understand. If there`s a lot of waste in the use of ingredients then the quality of the food declines and costs go up. In fact there`s nothing in the kitchen that cannot be used. Leftover carrots and onions from the salad can be added to the broth to increase the flavor. The garbage bin should not be considered as some nuisance underfoot. The able chef should treat the garbage bin as something precious.

Q. Do the Hilton chefs know the cost of the ingredients?

A. Of course. Whether it is carrots or cucumbers or Foie gras, the chefs have to know the price of the ingredients to cook with them properly. In meetings I sometimes question the staff on prices. Anyone who can`t answer is raked over the coals.

Q. But doesn`t good cooking mean not skimping on the ingredients?


A. I don`t mean we skimp on ingredients that should go to the guests. That`s robbery. A good chef has to think properly about the ingredients he uses and manage them wisely. ◈ Reason for Not Eating Breakfast

Park Hyo-nam specializes in French cuisine. Gourmets rave over the French food made in Park Hyonam style. Park stresses that it is not fusion cuisine. “I simply cook French food in a way that will appeal to Koreans,” he says. He uses a lot of abalone, prawn, and other seafood that Koreans are fond of and makes dressings using vinegar, sesame seeds and lemon instead of olive oil. His salad made with raw chestnuts was a hit and he likes to use Korean red pepper paste (gochujang) to make spicy dishes, which are popular with the French as well. “Taste is a common legacy of humankind. In the age of globalization what is the point of distinguishing between mine and yours? If I make it then it`s mine,” Park says.

Q. Is it true that you don`t eat breakfast to keep your palate clean?

A. A chef grows lazy if the stomach is full. The five senses are the keenest when you`re hungry, and that`s when you can create the best flavors and aromas.

Q. You don`t drink or smoke at all? A. I “mastered” smoking when I was in elementary school. (Laughs) There was a brand of cigarettes called “Hwarang,” which had no filter. When my father, who was a soldier, was at the base and my mother was out shopping, I would steal a few of my father`s cigarettes and smoke them under the blankets with my friends. The blankets stank of smoke, so I was caught right away. I got the biggest scolding, and I never smoked again.

Q. Can you explain the episode about the writer Peter Hyun, the famous gourmand who is said to have awakened your sense of taste?

A. It was a long time ago. He came to our restaurant and ordered a seafood stew from the southern part of France. I made it using the finest ingredients and wines. But it was rejected. I was astonished, but I made it again, and once again the dish was sent back. I went to his table and asked him what was wrong with it. He said, “It`s not seasoned properly.” That`s when I realized my mistake. All along I had been cooking to my own taste.


Q. Is that why you test the seasoning three times? You`ve said that`s the hardest part of cooking.

A. No matter how good the ingredients in the food you cook, it`s useless if the special flavor of those ingredients doesn`t come out. And don`t forget that taste differs from person to person. That`s why I started keeping notes. I wrote down what food certain customers liked, and what food they left on the plate. I was looking for the right taste. I started to cook according to the customer`s tastes, but the good chef sometimes awakens people to new tastes.

Q. They say a cook`s pride is hurt to see guests putting salt and pepper on their food.

A. Well, that`s how much pride we have in what we make. These days, some people automatically put salt and pepper in the soup without even tasting it first. (Laughs)

Q. You must like the guests who clean the plate.

A. It`s what gives us the greatest pleasure. All cooking techniques are actually quite similar. The issue is the taste. Cooks create different tastes with the same ingredients and recipes. The difference is in the personal touch, what Koreans call the “taste of the hand.” The flavor is not literally hidden in the hands. In the end it`s about the effort you make. How much of your heart you put into it.

Q. You have called Josef Hausberger, the Hilton executive chef whom you met in 1986, your “eternal teacher.”

A. The only thing he cared about was cooking. He scolded me a lot. He never overlooked the smallest mistake, even by a junior kitchen hand. He didn`t scold anyone about their cooking, only when preparations were not thoroughly made. From the selection of ingredients to placing the food in dishes in the most appetizing way — he never missed a single detail. The night before his contract ended he was working in the kitchen until 11 p.m. He was the total professional.

Q. Your passion for cooking would equal his, right?

A. Well, even now I dream about cooking. I fall asleep struggling to memorize the orders called out by the head chef. (Laughs)


Q. Is cooking so stressful?

A. There`s no after-sales service with cooking. Unlike auto parts or something, you can`t recall your cooking. ◈ Dark Beads of Sweat on Father`s Face

Park Hyo-nam was born in Goseong, Gangwon Province. He came to Seoul in 1974 when his soldier father left the army. His father started a number of businesses but they all failed. Finally, his father opened a store selling coal briquettes [a major source of home heating in the past], and Park spent his junior high years delivering the briquettes to homes. He had three younger siblings who had to be put through school, so Park gave up the idea of going to high school. “My goal was to learn a skill quickly and make life easier for my parents,” Park says. His encounter with cooking was a stroke of fate. One day he knocked on the doors of Soodo Cooking School, whose sign he had seen every day from the bus. In those days, there was a stigma attached to men who cooked, but Park did not care. Cooking changed his life. The middle-school graduate became a legend.

Q. How has your hometown of Goseong in Gangwon Province influenced your life as a chef?

A. It is a source of inspiration for my cooking and gives me strength in life, the mountains and the fields, the earth and the wind, everything about it. It snowed so much that we had to clear the roof for fear of it caving in under the weight. As children, my friends and I raided fields for potatoes and roasted them, and caught fish in the stream and cooked them with bean paste that we had brought from home.

Q. How did you hurt your digit finger? A. I was at my friend`s house cutting straw for the cattle… Blood came streaming out but it didn`t even hurt at first. A military officer from a local base treated it, but in winter it still hurts.

Q. Isn`t that a disadvantage for a chef?

A. Not at all. Holding the knife and turning it is a skill that you master with your own know-how, so it makes no difference. But it would be terrible if I lost the other fingers. I`m grateful that I`ve only hurt one.


Q. You had a hard time when you first came up to Seoul.

A. Coal briquettes are very heavy. With long tongs I held two in each hand, walking up and down steep hillside neighborhoods. Delivering the briquettes built up my stamina (Laughs).

Q. You gave up high school because of poverty. Did you hold any resentment against your parents?

A. Coal briquettes actually sell better in summer. One summer night I caught sight of my parents with black beads of sweat running down their faces. When it`s hot and you wipe the sweat with your hands, your face turns black because of the coal dust. The sight of my parents` faces made me grow up quickly. I vowed to be good to my parents, to learn a skill and earn money.

Q. Would you be in a much better position today if you had continued with your education?

A. I believe one`s disposition is more important than education. If you have a clear goal and work hard towards it, then there`s no reason why you shouldn`t succeed.

Q. You started work at the Hyatt right after studying at Soodo Cooking School.

A. My first teacher was Ha Sook-jeong. I was a young man trying hard to learn how to cook, and she treated me so well. She recommended me to someone at the Hyatt right after I got my certificate. The first French restaurant in Korea had just opened in the hotel. Though I was only a kitchen helper who did lowly chores, I found cooking to be fascinating and exciting. You can`t imagine how thrilled I was to be there. After work I stayed in the kitchen to practice. When I went to work in the morning, I felt like a child going on a picnic.

Q. Do you think you have a natural talent for cooking?

A. I was often told that I was clever with my hands, but I owe everything to hard work. I first worked in a hotel kitchen at the age of 17. I was full of ambition and wanted to learn everything as fast as I could, a soup, a sauce, anything. To do that I had to reduce the time I spent peeling potatoes and washing dishes. So on the subway to and from work I held a boiled egg in my hand and madly practiced potato peeling.


Q. I understand there`s a strict hierarchy in a hotel kitchen and people are even hit on the head with a frying pan.

A. If something like that happened these days, you`d be arrested for assault. (Laughs) I tell my junior staff that “good cooking depends on good character.” Those who are respectful of others and filled with a passion to learn are welcomed anywhere. They learn more than others. I have to smile first if I want others to smile back. Before you learn how to cook, you have to learn how to live in harmony with others and to care about other people.

Q. Are you the kind of executive chef that makes the staff shake with fright?

A. The hotel kitchen is like a battlefield, so you have to be strict to take command. But I try not to be unnecessarily hard on the staff. Sometimes I kick their butts, but all in fun. We don`t stand on formality. I encourage them to relieve any stress from work at work, so that they can go home with a light heart. ◈The President`s Food

Q. It is said that former British Prime Minister John Major was an admirer of your cooking. You must have a lot of regular customers.

A. There are a few people who bring me menus and the recipes of dishes that they enjoyed on their trips overseas.

Q. You often have the chance to meet presidents and famous politicians.

A. Former First Lady Lee Hee-ho comes often, and I have seen President Lee Myung-bak and his wife on various occasions such as the Davos Forum in Switzerland, the G20 Summit, and the Seoul Nuclear Security Summit. But it seems to me that presidents are the most unfortunate people in the world. Food should be enjoyed but since they are always pushed for time they can`t take pleasure in their meals. I went to cook at Cheong Wa Dae [presidential residence] when President Obama came to Korea, but because the summit went on longer than scheduled, they only had 20 minutes for dinner. They had hardly tasted all that good food when they had to get up from the table. They may be presidents but I wouldn`t call them happy people.


Q. The Korean banquet at the 2010 Davos Forum in Switzerland — was that the highlight of your career so far?

A. Every event is special, because I am a professional cook, not an amateur. I put all my effort even into a simple soup. Q. Some people joke that you are “the Park Geun-hye of the cooking world.”

A. That`s not true. (Laughs) She came to our restaurant once. I respect her as a woman with strength and ambition.

Q. You meet mostly high-ranking figures and rich people. Do you ever envy their authority and wealth?

A. I am proud of the work I do. I don`t delude myself into thinking I am like my high-ranking customers. If I did I would become conceited and end up ruining my cooking. If they thank me and say that they enjoyed the meal, I am happy with that.

Q. What do you think of star chefs like Edward Kwon who enjoy great popularity?

A. It`s a good thing if we are all successful. If you have the strength and talent then you`ll enjoy a long career. If not, then you`ll enjoy fame for a while and disappear. I`m one person who has to keep studying to stay on top, since I have not had any formal training. That`s why I go to France every year to learn new dishes.

Q. Have you ever thought about giving up cooking?

A. When the Hilton opened in Seoul in 1983 I was taken on as first cook. My colleagues had all been promoted, but I had simply moved sideways. I was young at the time and found this discouraging. But looking back, that time served as the catalyst for faster promotion. As our skills were evaluated in relation to rank, I had an advantage having similar skill but lower rank, which meant I was judged more generously.

Q. Every year some 20,000 new cooks enter the market.


A. At the Hilton alone we have 150 chefs. It`s my belief that those who value their names are the ones who succeed. To have your name remembered it`s not enough just to work hard. You have to give it everything you`ve got.

Q. A lot of men are turning to cooking after retirement.

A. Whether the goal is to make a living or to simply enjoy cooking, one thing is certain: when the man cooks, the home is peaceful. (Laughs) Even if a hired chef does the cooking in a restaurant, the chances of success are higher if the owner knows about food.

Q. We`re living in an age when food is considered a form of healing.

A. Food can comfort a wounded heart. A lot of doctors come to our restaurant. These people cure others of all sorts of diseases, and it feels really good to know that the food I cook for them can make them happy.

Q. Is it true that the more expensive the food, the better it is for you.

A. Of course not. The best food is the food that tastes good. Q. You`ve said your soul food is â&#x20AC;&#x153;Mom`s doenjang jjigaeâ&#x20AC;? [soybean paste stew]. How do you, Park Hyo-nam, make this dish?

A. I cook the vegetables in the broth first. I don`t slice the bean curd but mash it and mix it with some bean paste, then put in the pot last of all. That way, the scent of bean curd remains. Kimchi jjigae also tastes good when made with bacon instead of fresh pork belly.

Q. You`ve said that it takes 20 to 30 years to really know what cooking is all about.

A. I`ve been doing this for 30 years now, so I`m just starting. Ha, ha!

Q. You`re a middle-school graduate legend. Do you have a word of encouragement for all the young people out there who are struggling to get ahead?


A. If you can`t avoid it, enjoy it. If you keep grumbling that life is tough, then even breathing becomes a chore. Don`t let yourself be dragged around by life. Instead take control of your own life. Life will be more enjoyable and rewarding that way.

[ December 29, 2012 ]

www.koreafocus.or.kr


COPYRIGHT

Korea Focus is a monthly webzine (www.koreafocus.or.kr), featuring commentaries and essays on Korean politics, economy, society and culture, as well as relevant international issues. The articles are selected from leading Korean newspapers, magazines, journals and academic papers from prestigious forums. The content is the property of the Korea Foundation and is protected by copyright and other intellectual property laws. If it is needed to reprint an article(s) from Korea Focus, please forward your request for reprint permission by fax or via e-mail. Address: The Korea Foundation Seocho P.O. Box 227, Diplomatic Center Building, 2558 Nambusunhwanno, Seocho-gu, Seoul, 137863, Korea Tel: (82-2) 2151-6526 Fax: (82-2) 2151-6592 E-mail: koreafocus@kf.or.kr ISBN 979-11-5604-015-6

Publisher Kim Woo-sang Editor Lee Kyong-hee Editorial Board Choi Sung-ja Member, Cultural Heritage Committee Hahm In-hee Professor, Ewha Womans University Hong Chan-sik Chief Editorial Writer, The Dong-a Ilbo Hyun Jung-taik Professor, Inha University Kang Byeong-tae Chief Editorial Writer, The Hankook Ilbo Kim Hak-soon Professor, Korea University Kim Yong-jin Professor, Ajou University Peter Beck Korea Represetative, Asia Foundation Robert Fouser Professor, Seoul National University Son Ho-cheol Professor, Sogang University â&#x201C;&#x2019; The Korea Foundation 2013 All rights reserved.

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