Wednesday, January 23, 2008

Tackling the English Divide in South Korea

The incoming government will seek to phase in English-language content courses for upper primary school graders to curb soaring household spending on private education.

Lee Kyung-sook, chairwoman of the presidential transition team said Wednesday that her advisors have been reviewing possible English training programs for teachers and other options to make this happen.

A Samsung Economic Research Institute (SERI) report found Koreans spent approximately 14 trillion won annually on private English tutoring, almost half of the entire household spending on private education, which has grown rapidly over the past decade.

A National Statistical Office (NSO) report showed that annual household spending on private education during the incumbent Roh Moo-hyun administration totaled 21 trillion won. Experts said that the actual figure is much larger than that.

Chairwoman Lee stated the new government views this problem as serious.

She said the surging household spending on English education is "not an educational problem but a social one."

Korea is struggling to cope with an English divide between children from wealthy parents and those from lower-income families.

In the presidential campaign, President-elect Lee pointed out that the vicious circle of poverty could come a result of the English divide.

He pledged to strengthen English education in public schools so that high school graduates will be able to speak English fluently.

The team said it had reviewed training programs for 3,000 Korean teachers and the setting up of a qualification system for native-English speakers and after school programs at elementary schools.

David Francis, a former team leader of an English immersion program at Young Hoon Elementary School in Seoul, told The Korea Times that the transition team needs to work on the details of these programs.

Francis said effective English-content courses need to include two core conditions ― qualified native-speaking educators and small class sizes.

"Daily language instruction should begin at grade one elementary, no later. During language instruction time the traditional classroom of forty students needs to be split up into at least two or if possible three smaller groups," he said.

Francis has taught literature, the humanities, and language in five countries including Singapore and Indonesia over the last fourteen years before joining Young Hoon Elementary School.

Andy Jackson, who teaches American Government at the Lakeland College bridge program at Ansan College, said English-language content courses would have to be taught as part of a program, rather than on an ad hoc basis, to be effective.

"The program would have to include a year of English immersion (with a test-out option) before content courses begin," he said.

The question is if strengthening the training program for English teachers in public schools will help achieve the policy goal.

A KBS survey in 2005 showed that 272 middle and high school teachers' average score on the Test of English for International Communication (TOEIC) was 718 out of 990.

According to KBS, these teachers had completed a 6-month long English language program before the survey.

The average TOEIC score of the teachers was slightly higher than the English requirement for college graduate job applicants at companies, which is 700.

This result indicates the training program for English teachers may be of little help in achieving the transition team's goal. ◦

Friday, January 18, 2008

Economic Freedom - South Korea only ranked #41

Are the world's impoverished masses destined to live lives of permanent misery unless rich countries transfer wealth for spending on education and infrastructure?

You might think so if your gurus on development economics earn their bread and butter "lending" at the World Bank. Education and infrastructure "investment" are two of the Bank's favorite development themes.

Yet the evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs.

Empirical support for this view is presented again this year in The Heritage Foundation/The Wall Street Journal Index of Economic Freedom, released today. In its 14th edition, the annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom.

The nearby table shows the 2008 rankings but doesn't tell the whole story. The Index also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.

The 2008 Index finds that while global economic liberty did not expand this year, it also did not contract. The average freedom score for the 157 countries ranked is nearly the same as last year, which was the second highest since the Index's inception. This is somewhat of an achievement considering the rising protectionist and anti-immigration sentiment in the U.S., the uncertainty created by spiking global energy prices, Al Gore's highly effective fear mongering about global warming, and the continuing threat of the Islamic jihad.

Former British colonies in Asia took three of the top five places this year. But half of the top 20 freest economies in the world are in Europe. Of the five regions surveyed, Europe is the most free, continuing to advance this year with tax cuts and other business-friendly reforms. The only other region to score above the world average this year is the Americas, which is helped by strong performers like the U.S., Canada, Chile and El Salvador. At the other end of the scale Argentina, Bolivia, Haiti, Venezuela and Cuba dragged down the regional average.

Although overall global economic liberty did not expand, there were a few stars. Egypt was the most improved economy in the world, implementing major changes to its tax policies and business regulation environment and jumping to number 85 from 127th place last year. Mauritius was the second-best performer, moving into the top 20 from No. 34 last year. Trade liberalization and improved fiscal policies, including a flat tax, made Mongolia the third-best performer, and put it in the category of "moderately free" economies.

Three essays in the 2008 Index help illustrate why economic liberty matters to human progress. In "Economic Fluidity: A Crucial Dimension of Economic Freedom," Carl Schramm, president of the Kaufmann Foundation, explains that growth-driving innovation results not only from sound macroeconomic policy, but also from dynamism at the micro level.

Most important is the interaction between "institutional, organizational and individual elements of an economy," which gives rise to "the entrepreneurial energy and the speed of economic evolution." Such "fluidity," he writes, "facilitates the exchange and networking of knowledge across boundaries. This fosters both innovation and its propagation through entrepreneurship."

Mr. Schramm's essay illuminates why successful economies cannot be centrally planned. Fluidity, he writes, resembles "the idea of the 'the edge of chaos,' the estuary region where rigid order and random chaos meet and generate high levels of adaptation, complexity and creativity." It is "ideas on the margins, challenging the status quo, that lift the trajectory of an economy's performance." Try that in Cuba.

In "Narrowing the Economic Gap in the 21st Century," Stephen Parente, associate professor of economics at the University of Illinois at Urbana-Champaign, debunks several World Bank myths by showing that it is not the resources -- land, workforce and capital -- of an economy that play the most important role in explaining higher income countries. Instead it is "the efficiency at which a society uses its resources to produce goods and services."

Mr. Parente cites the microeconomic research of McKinsey Global Institute, which estimates that modern industry in India could take a huge bite out of its productivity gap with U.S. competitors by simply upgrading production techniques. India doesn't need another multilateral education project. It needs to tap into knowledge already available in successful economies -- the information and technology is out there. The trouble is that it is unavailable in many countries like India, because government barriers and constraints to limit competition make access difficult or impossible.

French journalist Guy Sorman's "Globalization is Making the World a Better Place" is a treatise on "one of the most powerful and positive forces ever to have arisen in the history of mankind." It fosters economic development, moves countries from tyranny to democracy, sends information and knowledge to the most remote corners of the globe, reinforces the rule of law, and enriches culture. International commerce in post-World War II Europe, he reminds us, wasn't invented by diplomats, but by entrepreneurs who wanted to end centuries of strife on their continent and build a peaceful union based on commerce.

Today's entrepreneurs, across the globe, have similar aspirations and abilities. If only the politicians would let them be free.


Tuesday, January 15, 2008

Samsung Electronics Sales Top $100 Billion

By Kim Yoo-chul
Staff Reporter
The Korea Times

Despite lingering woes in the chip industry, Samsung Electronics posted more than $100 billion in global sales last year on the back of brisk movements in liquid crystal displays and mobile handsets.

Samsung said Tuesday it made $103.4 billion or 96.1 trillion won in sales including those from overseas operations last year, for the first time ever.

At home, Samsung posted 7.42 trillion won in net profit on sales of 63.17 trillion won.

Nevertheless, the global tech giant failed to overcome the glut in the chip industry in the fourth quarter.

Samsung reported a 6.6 percent drop in fourth-quarter earnings following losses from computer memory chip sales. The company earned 2.21 trillion won ($2.36 billion) in the Oct.-Dec. period, compared with 2.36 trillion won a year earlier. Revenue jumped 11.4 percent year-on-year to 17.47 trillion won.

Operating profit fell 13.1 percent to 1.78 trillion won. The company's operating profit margin in the memory chip business, once the company's cash cow, remained at 9 percent.

"Profits at our semiconductor division are expected to decline in the first quarter," said Chu Woo-sik, executive vice president of Samsung Electronics in charge of investor relations. "We will activate our capital spending in the memory business this year."

Samsung, which produces diverse electronics goods including LCDs, mobile handsets and semiconductors, was the second to report quarterly earnings among tech companies. On Monday, LG.Philips LCD, another flat-panel maker, said its fourth-quarter earnings reached 760 billion won, a turnaround from a loss of 174 billion won.

In the past decades, DRAMs have been the main growth engine for the world's largest computer-memory chip manufacturer but ever-declining product prices sparked by an industry-wide oversupply forced global players to reduce prices.

Samsung is worried that memory prices will likely remain weak until the second quarter of this year as investment made over the past two years by manufacturers will start to translate into more products on the market.

Against this backdrop, LCDs and mobile handsets were a savior for Samsung. Samsung reported its sales of LCD panels jumped 11 percent to 4.46 trillion won from three months earlier. Its operating profit improved 37 percent to 0.92 trillion won.

Stabilizing panel prices mainly drove the strong performance. At the end of last year, the price of a 17-inch LCD panel, one of the most favorable displays for TVs and computers, stood at $134, up from $123 a year earlier, according to an industrial consulting firm DisplayBank.

Samsung sold a record 46.3 million phones in the fourth quarter. The company, which recently overtook Motorola to become the world's No. 2 handset maker, expects to sell 200 million handsets this year. ◦

Wednesday, January 09, 2008

A New City in South Korea

Forty miles Southwest of Central Seoul, South Korea, thousands of construction workers swarm across a 1,500-acre pile of mud. Fifteen towers rise out of the dirt. A handful of paved avenues intersect the ruts of dump trucks, bulldozers and backhoes. It's work on a colossal order, the site of a planned 50 million square feet of office space, 35 million of residential, 4 million of retail, 5 million of hotels and 10 million of parks and greenswards.

Rome wasn't built in a day, and New Songdo City won't be complete until 2014, at the earliest. By then, perhaps 65,000 people will live, and 300,000 will work, in this fabricated-from-scratch urb. There will be an international school (already half-built), a hospital, museums, a convention center, a golf course overseen by Jack Nicklaus, a giant mall designed by Daniel Libeskind and a 65-story office tower. Songdo is being pitched as a digitally linked and model green city. Total estimated cost: $30 billion. That doesn't include the $10 billion the Seoul government is kicking in for infrastructure, like a 7-mile bridge (half-completed) with a suspension span to link Songdo with Incheon International Airport. "Unless you've been to Dubai or China," says Christopher Niehaus, vice chairman of Morgan Stanley Real Estate, which has an 8.75% interest in the venture, "it's hard to grasp the scale of this thing."

Hard to fathom, too, that behind this megaproject is a little-known Manhattan developer called Gale International, with a 70% stake in Songdo. Founded 22 years ago by Stanley Gale, the privately held developer has scraped out improbable deals in the past. In 2001 it spent $350 million in a frumpy Boston market to build the first office tower on spec there in more than a decade; after leasing the building for three years Gale sold the 36-story One Lincoln tower for $705 million in 2004, at the time the largest real estate deal in Boston's history. Last year it unloaded most of its portfolio to the REITMack-Cali Realty Corp. for $545 million. What's left: a piece of the $1 billion complex in Florham Park, N.J. of training grounds for the New York Jets, plus residential and commercial properties, and two Boston projects, one to develop Seaport Square ($3 billion), the other to develop One Franklin Street ($700 million), site of the old downtown Filene's.

Gale has never attempted anything like Songdo. "This isn't about one building," says John Hynes III, Gale's partner and chief executive. "This is about master planning a whole new city, and that will get anyone's blood flowing."

Brazil's new city BrasĂ­lia was something of a flop, as was suburban Columbia, Md. Will it be different this time?

Since it signed on six years ago, Gale has battled intractable bureaucrats, a greedy Korean partner, hidebound ideas of urban planning and a public long wary of foreign investors. There have been commercial hurdles: Gale has so far nailed not a single blue-chip tenant. And physical challenges, too. Because the land underneath Songdo didn't exist, the government of Incheon dumped 110 million cubic yards of dredged sand and mountain rubble into the Yellow Sea. To support the skyscrapers, engineers called for 7-foot-diameter concrete piles to be drilled through 23 feet of landfill, 108 feet of seabed and 56 feet of bedrock.

Gale and Hynes arrived in South Korea serendipitously, without prior experience in Asia. Firmly planted in New York City, Gale, 57, had real estate roots going back to his paternal grandfather, Daniel, who became a broker in 1922 (the Daniel Gale Agency is now part of Sotheby's). Hynes, 49, opened Gale's Boston office in 1999 after spending 20 years brokering leases. A co-captain on Harvard's hockey team, Hynes comes from blue-blooded stock. His grandfather, John B. Hynes, was Boston's mayor from 1950 to 1960; the city's convention center bears his name. Hynes' father anchored Boston TV newscasts for decades.

The road to Songdo ran through the International Monetary Fund. As part of a $58 billion bailout, following the Asian currency crisis of the late 1990s, the bank insisted that South Korea increase its foreign reserves and seek outside investment--a requirement that collided with a longstanding law that barred non-nationals from owning Korean soil. (That law changed in 2003.) Seoul agreed to appoint a foreign developer for Songdo. In 2001 project officials selected Jay Kim, a Korean-American and former senior scientist of nuclear power plant design at Westinghouse, to approach U.S. developers. Kim, who lives in Pasadena, Calif., came to the U.S. 50 years ago after his family was separated in the Korean War. (If his brother is alive, he's somewhere in North Korea.) Kim found that few American companies wanted anything to do with a risky venture abroad. "Most developers were making a ton of money right here," Gale says. Kim dug up Gale when reading an Internet article about One Lincoln tower. Hynes agreed to meet Kim for a 20-minute cup of coffee in Boston. That afternoon Hynes agreed to fly to Korea. Two days later he called from Incheon: "Stan, you've got to get over here. These guys are serious. This is for real."

Gale hired Kohn Pedersen Fox Architects to design the city. (Among its projects: the Mohegan Sun Casino and the Shanghai World Financial Center.) The plans proved to be a little difficult because the landfill didn't yet exist. "The zoning back then was high-tide, low-tide," Hynes laughs. Gale spent two years and $10 million investigating the viability of the project. By the time it submitted the master plan in 2002, Gale had persuaded Morgan Stanley to join as a minority partner for $350 million in cash. That investment has so far secured $4 billion in loans from Korean banks, which Gale has used to buy land and build. It will borrow in chunks and eventually blow through $20 billion in loans at interest rates of 7% to 8%, retiring the debt as it sells property and splitting the profits with small shareholders, like Morgan Stanley and Lehman Brothers, and large ones like 30% owner Posco, the $25 billion (sales) Korean steel and construction giant.

The Incheon government agreed to sell the initial 100-acre parcel for $50 million in cash plus a promise from Gale to build a $150 million convention center and donate it to the city. Under the original deal, the government was going to pay for the center but extracted the freebie in return for expedited condo approvals. The convention center may well become Songdo's signature for its arching, multipeaked structure that evokes Sydney's opera house. But for Gale the building would prove to be the first of many hiccups.

The developer offered to build a 100-acre park and donate it to the city--if it got permits to build an underground parking garage, a nature center and an art museum. These, Gale figured, would provide cash flow to service debt on the park buildings. But municipal officials first okayed, then backed off the deal. After a year of haggling, Gale finally got approval for its plans.

Gale has also sparred with its Korean partner. It all started after the first sale of apartments in May 2005. The application line stretched for 2 miles, as Gale drew 170,000 qualified offers for 2,200 units. They sold out in one day for $1 billion. Posco--due 30% of the construction jobs, some commercial, some residential--cheekily asserted that going forward it would build all residential projects, trying to avoid holding equity in the riskier office buildings, of which it was obliged to front 30%. Gale said no but invited Posco to be part of the competitive bidding for the remaining 70% of residential. "They should win those bids," says Hynes. "But are they happy with that? No. They wanted the sure thing." Such accommodation would have wrecked Gale's business. It depends on netting 20% on residential projects in order to have enough cash to reinvest in office space. Posco says it's abiding by all its agreements.

Add to that some hostility from the Korean press, which has pegged Gale as a slash-and-burn opportunist, a typical American capitalist. Dallas' Lone Star Capital faced government charges of stock-price manipulation after it bought 71% of Korea Exchange Bank for a cheap $1.2 billion in 2003 following unrest in Korean credit markets. The Seoul government later blocked a May 2006 sale of that stake for $7 billion. "There is a desperate effort in Korea right now to compare us to Lone Star," Hynes says, "but we couldn't be any more different."
Some Koreans view the whole project with skepticism. "I think it's too early to say whether it will be successful or not, but initial opinions here aren't favorable," says Sohn Hyun-duck, economics editor at the Maeil Business Newspaper, Korea's vanguard publication. Gale has come under fire for building lucrative residential units before commercial lease buildings. Koreans want to see commercial space built and filled with big international companies with cachet.

So does Gale, even though it has only one such potential customer, United Technologies, the industrial conglomerate. Helping with introductions was Christine Todd Whitman, the onetime New Jersey governor and chief of the Environmental Protection Agency, who sits on the Songdo International Advisory Board and is a director at United Technologies. "No decisions have been made," says a United Technologies spokesman. Hynes says Gale is in discussions with Boeing and Microsoft, as well as Samsung Life, Shinhan Bank and Korean Air, among others.

Songdo will be one of the world's greenest cities. Wastewater from sinks and showers will be recycled for irrigation and toilet flushing, requiring two sets of pressurized waterlines in each apartment and office. Gearless elevator systems from Otis will use 75% less energy than standard ones; its elevators have flat polyurethane-coated steel belts that require no lubrication. United Technologies' Otis will debut its ReGen drive, which draws energy from a fully loaded descending elevator or a lightly loaded ascending car and converts it to electricity.

Another goal: to make Songdo the largest so-called ubiquitous city, where wireless networks and radio-frequency identification will link all information systems--every laptop, stoplight, cell phone, TV and toaster. Residents, it's hoped, will be able to time their commute out the door with the changing walk signals on the street 50 stories below. The buildings' heating and air patterns will adjust as weather changes.

"Seven more years," muses Hynes. "It's a marathon, but we're hitting some milestones now." That's making a virtue of necessity. The last American who tried for a quick conquest of Incheon was Douglas MacArthur, in 1950.


To save, South Koreans use credit cards

By Choe Sang-Hun
International Herald Tribune

Whenever Park Kyung Jin goes shopping, she methodically reviews which of her many credit cards to pull out. Not that the 28-year-old office worker is a shopaholic; rather, like millions of other South Koreans, she knows this is an easy way to trim costs.

"You feel like a loser if you pay in cash," she said, noting the generous discounts South Korea's intensively competitive credit card companies offer as incentives to use their products.

Thanks to what began in the late 1990s as a government campaign to fight corruption, South Korea has become one of the world's most credit card-friendly countries. As part of its effort to fight the all-too-free flow of cash in the underground economy, the government encouraged consumers to use credit cards and threatened tax audits of enterprises that refused to accept them. It even gives income tax rebates to people who report their annual expenditures using credit cards.

The result is that last year nearly half the 454 trillion won, or $491 billion, in private consumption in South Korea was settled with credit cards, one of the highest ratios in the world, government officials said.

Although South Korea ranked just 34th in per capita income among countries in 2005, it ranked fifth in per capita credit card spending, according to the Bank of Korea, the country's central bank.

Paying electronically is easy in this technology-savvy, densely populated country. In 2005, for every million people, there were 403,000 electronic cash registers that allowed them to pay with credit and debit cards, Bank of Korea data show. In Japan, there were 10,765 such terminals for every million people. This means South Koreans can pay for virtually anything with credit cards: parking tickets, highway tolls, pizza deliveries, even a 2,000-won bill at a street-corner noodle shop.

With cards everywhere, the challenge to vendors is to stand out to attract consumers. Gasoline stations, bookstores, airlines, shopping malls, telephone companies, bakeries, amusement parks, KFC outlets - even hospitals - give discounts if a customer presents the right type of card.

The incentives are so many and so diverse that, Park said, "Here a credit card is not just a tool of payment, it's also a way of saving money."

For instance, when Park wanted to buy a knitwear shirt for her husband, she visited a department store run by the Hyundai conglomerate, because her Hyundai card gave her a 5 percent discount and she could pay in interest-free installments over three months.

On her way home from work, she often buys groceries at a store owned by the Lotte conglomerate, where her Lotte card gives her a 5 percent discount.

Elsewhere, she uses her Citibank card, which gives her two free miles on the South Korean airline Asiana for every 1,500 won she spends. With 30,000 miles, she hopes to get a round-trip ticket to Japan.

Card companies also give their cardholders "point cash," a small percentage of each settlement. This point money, saved in the cardholder's account, can be spent like cash. People use it to buy movie tickets, pay for gasoline, make political contributions or donate to the homeless.

Card companies can also deposit the point money in the customer's personal bank account, as happened to Park in October, when she received 50,000 won of point money saved on subway and bus fares she had paid by credit card.

For both card companies and retailers, point money has become an essential tool for attracting customers through partnerships. For each credit card, there are up to two million shops where the consumer can use the card and get point cash.

"In South Korea, for virtually any payment you make at retail shops, there is a way you can save money if you use a credit card," said Jeong Sang Ho, a vice president at Hyundai Card, which has six million cardholders and controls 13 percent of the country's credit settlement market."

South Korea is a tough place to be a card company. You have to keep coming up with creative new incentives to stay in competition."But," he added, "it's the best place to be a cardholder."

Hyundai Card, a joint venture between the South Korean automotive giant Hyundai Motor and General Electric of the United States, plans to expand into the United States, China and India. It hopes that some of the business models developed for the picky South Korean retail market - a graveyard for some of the most competitive global brands, like Wal-Mart, Nokia, Nestlé and Google - will help.

In one business model Hyundai Card is proud of, it lends point money, usually 500,000 won, for the purchase of a Hyundai car with a Hyundai card. The cardholder must pay the loan within three years using point cash accumulated through other purchases on the card.

"This ensures that the cardholder will continue to use our card," said Kang Byung Kyoo, a Hyundai Card executive.

Other card companies like Samsung and Shinhan make similar loans to people who buy electronics or newlyweds who purchase furniture.

When the South Korean began encouraging credit card use in the late 1990s, card companies established kiosks on the streets and even issued cards to college students, luring them with cash gifts.

In a country with 23 million economically active people, the number of credit cards surged to 105 million in 2002 from 42 million in 1998. The bubble burst a year later, when the number of defaulters soared 41 percent to 3.7 million. Some were driven to suicide.

After huge debt write-offs, mergers and tightening standards for issuing cards, the six leading credit card companies posted a combined 2.2 trillion won in profit last year, recovering from a 7.7 trillion won loss three years earlier.

Now there are an average four credit and other settlement cards for each economically active South Korean, compared with an average five for an American.

With such cards being a principal tool for attracting customers, virtually every retail chain in South Korea is issuing "membership cards," which look like credit cards and offer discounts but are not used for payment. The most popular are membership cards from SK Telecom and KTF, the two main cellphone companies in the country. They give discounts at thousands of restaurants and movie theaters. Increased used of a cellphone yields greater discounts.

So the wallet of Lee Ji Won, a 29-year-old office worker, is crowded with a dozen credit and membership cards, including one from her dermatologist.

"There are so many," she said, "you sometimes really need to study the manuals to figure out which card you should use at which place to get which benefits." ◦

Saturday, January 05, 2008

Postcard: North Korea

By: Jenn Gearey

There were seven of us gathered in the Red Wall Hotel in Beijing—an Australian criminal lawyer for the insane, a Scottish lord living out his 007 fantasies, two communism-curious retired Italian mechanics, a retired Italian pilot who made a sport of traveling to the world's most inaccessible places and a young Italian accountant living in Austria. And me, the not-so-secret journalist from Canada who was surprised to even be invited. We had all signed up for a most peculiar adventure: we were going to North Korea. As tourists.

This was made possible by a little-known NGO based in Europe called the Korean Friendship Association, which has created "friendship" (a.k.a. tourism) delegations for foreigners who want to catch a glimpse behind the curtain of the Hermit Kingdom. Anyone can apply—anyone, that is, with a passport that isn't from the U.S., Japan or South Korea. I turned in my application in September, and two months later I was in Beijing, where I plunked down $4,000 in cash for the 10-day trip. The next day my fellow travelers and I received our visas and boarded a Soviet-era Tupolev plane belonging to Air Koryo, the national North Korean airline, for the two-hour flight to Pyongyang. We had no itinerary because our trip was considered "secret" information at that point. After landing, we were asked to hand over any cell phone, computer with GPS, radio and video camera—all forbidden from that moment forward.

Before we arrived at our government-run hotel (which had authentic North Korean touches like no heat or hot water despite the freezing temperatures), our minibus stopped at a statue of the deceased Great Leader Kim Il Sung, where we were told to bow and present flowers. Being a tourist in North Korea was going to be even more bizarre than we had thought.

Our tour guides were, of course, actually government minders. They led us through each day's treadmill tour of statues and museums dedicated to Dear Leaders past and present. But their real job was to keep an eye on us and to control the images we would take back home. For example, when we passed any sort of poverty still life—women washing dishes in the gutter, an old dirty truck piled high with cabbage—they either ordered us to put our cameras down or deleted our pictures after the fact. The guides also had an unsettling habit of taking pictures of us at every tour stop, for reasons they never quite explained. Every once in a while they let slip information that made it obvious they were electronically monitoring our hotel rooms and phone calls. All in a day's work for a North Korean tour guide.

How did we respond to Big Brother? Some among us were braver than others. The Austrian-based accountant tried to goad the guides into talking politics; the Italian retirees criticized the constant Kimilsungist propaganda, but only in Italian. After a while, I rebelled against the picture policing, even daring to sneak a snapshot of a grim military convoy with thousands of conscripts headed to points unknown.

Others on the tour just gave in. At a stop near the end of our trip, our Australian comrade wrote in a guest book, "Long live North Korea and good luck with the war against the United States."

If there was a highlight to all this strangeness, it was our visit to the demilitarized North--South Korean border. It was there, of all places, that we expected to be on a leash. But in fact, we were freer there than we had been anywhere else—permitted to take pictures of the soldiers on guard and given enough space by our minders that we could have even made a dash for the South Korean border. I don't know if tourists have ever defected from North Korea, but after more than a week of constant surveillance and ceaseless propaganda—basically, living like a member of its society—it didn't seem like such a bad idea.