Thursday, July 31, 2008

South Korea to end ban on revealing gender of unborn children

South Korea's Constitutional Court overturned a ban on doctors telling parents the gender of unborn babies, saying Thursday the country has grown out of a preference for sons and that the restriction violates parents' right to know.

South Korea introduced the ban in 1987 to try to prevent abortions of female fetuses in a country that had traditionally favored sons in the widespread Confucian belief that males carry on family lines. Abortion has also been illegal but practiced widely.

On Thursday, the Constitutional Court said it was too restrictive to ban doctors from telling parents the gender of the unborn for the entire pregnancy because there was little chance of aborting fetuses older than six months due to risks for mothers.

"The legislation's purpose is recognized in that it helps resolve the sex-ratio imbalance and protects the fetuses' right to life," the court said in the ruling. "But it overly limits the basic rights of parents and physicians by placing a blanket ban through the latter half of pregnancy."

It also said the preference for sons has lessened to a point where the ratio of newly born boys and girls in the country has almost reached the natural level of 100 girls to 106 boys.

"Considering this, we cannot but question whether the sex-ratio imbalance is a serious social problem and whether the fetus gender notification is serving as a cause for abortion," it said.

The court ordered the law be revised to reflect the ruling by the end of next year, and said the current ban will stand until the revision. Rulings by the Constitutional Court cannot be appealed.
Judge Kim Bok-ki, who serves as the court's spokesman, said the ruling means the law should allow doctors to let parents know their babies' gender in the latter half of pregnancies.

The Korean Medical Association, the country's largest doctors' association, welcomed the ruling.

"It is natural for doctors to give patients information collected during diagnosis," the association said in a statement.

The court case began in late 2004 when a lawyer filed a petition after doctors refused to tell him the gender of his unborn baby. The following year, a doctor filed a similar suit after he was suspended for half a year for violating the ban.

A violation of the current ban is punishable by up to three years in prison and a fine of $9,830.
The ban has been enforced relatively strictly at large hospitals, but not at neighborhood clinics that offered gender information in various ways, including telling parents whether the baby is "cute" or "energetic" — allusions to girls or boys.

Wednesday, July 23, 2008

Seoul World’s 5th Most Expensive City

Seoul ranked as the fifth most expensive city to live in, according to a world-renowned consulting firm, Wednesday.

Mercer's recent Cost of Living Survey, which covered 143 cities, showed Moscow as No. 1, followed by Tokyo, London and Oslo.

The survey took into account the cost of 200 items including housing, transport, food, clothing, household necessities and entertainment.

"The higher cost of living for cities such as Seoul, Singapore and India can be attributed to their highly valued quality of living," said Yvonne Traber, Mercer's principal research manager.

Reflecting the current inflationary pressures and the weakened dollar, the researcher pointed out the risk of higher living costs, especially for expatriate-level housing and other services. The Mercer survey is regarded as the most comprehensive cost of living survey, which helps multinational companies and governments determine compensation allowances for their expatriate employees.

In the survey, Moscow was the world's most expensive city for expats for the third consecutive year, while the Paraguayan capital of Asuncion turned out to be the least expensive for the sixth consecutive year.

Three of the world's top 10 costliest cities for expatriates are in Asia. Besides Tokyo and Seoul, the third entry was Hong Kong.

Among other Asian cities, Shanghai climbed two rungs to 24th, while Beijing remained unchanged at 20th.

In Vietnam, Hanoi dropped 35 places to rank 91st and Ho Chi Minh city fell 40 places to 100th.

An increase in residential property prices has helped Singapore climb one notch to 13th. Jakarta and Bangkok were 55th and 95th, respectively.

"Despite Asian cities dominating the top 10 most expensive places to live, the cost of living in Asia will not deter many companies and their employees as Asia is the current focus for foreign direct investment from multinational bodies for higher growth revenue," Asia Pacific Information Product Solutions chief Neo Siew Khim said.

Analysts say the external economic outlook for emerging East Asia has dimmed amid prospects for slower growth, tighter credit conditions and higher inflation, which is pushing Asian central banks to tighten their monetary policies.

Thursday, July 17, 2008

Wisdom in Crowds in Korea?

Michael B. Han, CFA Portfolio Manager
Matthews International Capital Management, LLC

Last month, South Korea’s decision to resume U.S. beef imports triggered massive protests in Seoul. For more than 40 days the city was moved by rallies that escalated into an outpouring of tens of thousands who took to the streets to oppose a trade deal they feared could expose the public to mad cow disease. The issue has posed a political crisis for South Korean President Lee Myung Bak, who took office following a landslide victory just four months ago.

Until about five years ago when a case of mad cow disease was detected in the U.S., South Korea had been among the top importers of American beef. Though many U.S. officials maintained that there were no statistically significant safety risks to U.S. meat exports, Korea, along with Japan and the European Union, imposed a blanket ban, later resuming conditional imports. Then in April, public outcry ensued when President Lee, a former chairman of Hyundai with a reputation for action that has earned him the nickname "The Bulldozer" agreed to lift the U.S. beef ban. The move was seen as one expected to help clear the way for a broader U.S.–South Korea free trade agreement that has been stalled. But by June, growing public uproar over the issue led Lee’s presidential aides to resign over the flap.

In and of itself, the reopening of the domestic Korean market to U.S. beef may not seem to justify the widespread furor that it unleashed. But what the public backlash really represents is Korea’s fear that its government is not acting in its best interest. The mostly peaceful protests have not been demonstrations against the U.S., or against free trade. Rather, the frustrations have been directed at the leadership’s lack of sensitivity to concerns over health risks, and highlight fears that the government prioritizes business over public safety.

President Lee has since publicly apologized over the situation and modified his earlier trade deal to limit U.S. beef imports to younger cattle, believed to be at less risk of mad cow disease. Despite the moves, however, the beef protests have given rise to sharp criticisms of the administration’s other plans for economic reform, including possible plans to privatize the public health care system and plans to build a grand canal. There have also been criticisms over Lee’s cabinet member selections.

How does a president’s landslide election victory plummet to record low approval ratings just a few months later? To begin with, South Korean voter turnout has been quite low, and many voters in the last election generally felt they were choosing between the “lesser of two evils.” Many protesters also regard President Lee’s beef deal as a rash and reckless act that stood to realize merely $1 billion in beef imports.

It is still unclear what will become of any free trade agreements between the U.S. and South Korea but the wider issue is that of Korea’s distrust of government. That Koreans feel inclined to take to the streets en masse may also indicate the lack of effective legal and political systems for public disputes. Compared to the U.S., Korea’s legal system is less approachable for the average person and the society is generally less litigious. When class-action lawsuits are not an option for protection, it is easier to understand why many may be moved to protest publicly. The danger, however, is that the political distrust is breeding voter apathy and diminishing turnouts at election time.

What is remarkable to note, however, is the ability of protesters to affect public policy. Following public backlash to the beef issue, the U.S. has reportedly looked further into establishing a system to verify the age of its livestock. The U.S. media has also begun to urge tighter regulation on the food inspection system. It seems that the aggregate wisdom of crowds and their voices have carried across the Pacific.

Evolution of Democracy
There are significant differences between the culture of demonstration in Korea now, compared to that of 20 years ago. Pro-democracy movements in South Korea in the 1980s were largely driven by college student leaders and frequently turned violent. Though recently there have been increasingly violent clashes between protesters and police, demonstrations over the beef issue began calmly when the majority of ordinary citizens participated. They have included young parents with children, executives in suits, middle school students, Roman Catholic nuns and Buddhist monks. Another important difference is that unlike the pro-democracy movements of two decades ago, the recent beef protests have involved no single, specific ideology, political leaning or special interest group. The protests involved passionate debate among participants, who remained respectful to each other. Commentators have credited Koreans for protesting peacefully, noting the high level of public participation as evidence of a maturing democracy. South Korea’s high Internet penetration rate, and its use of the Internet to mobilize the public over social issues, are also seen as signs of a highly educated society.

Indeed, Korea places great emphasis on education. It ranks fifth out of 35 developed nations in terms of its percentage of graduates under age 35 with four-year college degrees or higher, according to the Organization for Economic Co-operation and Development. The country also ranks third behind only India and China in terms of the number of students it sends to the U.S. each year to pursue higher education degrees. (In 2007, more than 62,000 Korean students came to the U.S. for school.)

The evolution of democracy in Korea is also evident in the decreasing signs of corruption where business and politics overlap. In the 1980s, two former presidents, Chun Doo Whan and Roh Tae Woo, had received illegal contributions of $1 billion and $500 million, respectively, from businesses. Both former presidents were convicted, and subsequent leaders have been accused of taking far less in kickbacks from business. The most recent offense—involving $10 million in controversial campaign contributions—by former President Roh Moo Hyun indicated there is a large decline in the size of dubious financial contributions to politicians.

Economic Democracy, the Next Evolution
Just as political democracy benefits grassroots movements, economic democracy benefits minority shareholders. Following the 1997 Asian financial crisis, Korean officials improved government transparency by adopting accounting standards similar to those of the U.S. The next step is to improve corporate governance.

In Korea, public participation, not activist hedge funds, paved the way to economic democracy. Non-government organizations (NGOs), which comprise professors and lawyers, have been involved in shareholder activism over the past decade. NGOs such as the People’s Solidarity for Participatory Democracy and Solidarity for Economic Reform, backed by minority shareholders’ voting rights, initiated a proxy battle against majority shareholders of what is known as chaebol, or large family-controlled conglomerates. Chaebols have played a significant role in the exportoriented growth of Korea’s economy. Though many chaebol affiliates have grown to become top-tier players in their fields, many could still benefit from improvements to corporate governance.

Armed with professional volunteers, NGOs have uncovered tax evasion cases or revealed other questionable corporate transactions that have benefited chaebol families at the expense of minority shareholders. NGOs are developing the skill of using litigation and proxy battles to enhance public awareness over complicated corporate governance practices. The organizations have also rallied against bad policy proposals regarding the adoption of poison pills.

Shareholder activism initiated by NGOs has also begun to move institutional shareholders. The National Pension Service (NPS), the country's leading institutional investor and the only national pension fund, voted against two business tycoons (both formerly convicted of fraud) who were seeking re-election to the boards of their respective corporate subsidiaries. The NPS’ first attempt to remove the two board members failed because the two tycoons had large holdings.

The fund currently has $220 billion in assets under management, and its asset allocation in the domestic equity market has been growing rapidly, which indicates that NPS may play a significant role in the future. There also appears to be a stronger likelihood that, going forward, people will be more concerned with corporate governance, which is critical to the performance of their retirement savings. Corporate governance and political transparency deserve more public attention than they currently receive. Fortunately, we continue to see signs of positive change—even if it’s in the form of surprisingly massive beef rallies. We see an evolving sense of democracy among those who are mobilizing to shape public policy. As these trends continue we hope minority shareholder value will be enhanced and a more vibrant sense of entrepreneurship will evolve.


Thursday, July 10, 2008

Video: Bluetooth in Korea

Interested in technology? See my Future of Less blog

Progressively Paperless in Korea

I took this picture today in the Jungang subway station in Taegu (aka Daegu), the third largest city in South Korea. You can buy a condensed book (looks like less than 50 pages) for about US$2 in the vending machine. Several of the titles were about Warren Buffet, becoming a CEO, and other business management kinds of things. Many of the books were about learning English, one of Korea's national pastimes. Hillary’s book was for sale too.

Certainly, in a place like Korea, this technology will soon be replaced with machines with thousands of titles that will be transferred directly from the machine to your phone. Paperless doesn’t mean no paper. But digitizing the content means thousands more titles to choose from, lower distribution costs, more revenue, and happier customers. And after that, no machines. It will all be books on demand downloadable over the air.


The cell phone turns 20 years old in Korea

Making mobile calls was a privilege of the very rich in 1988 when there were only 784 subscribers who dared to pay 4 million (about US$4,000) for a bulky handset heavy as a dumbbell. Now after two decades, phones have become as light as a cigarette lighter and the industry has become one of Korea's most lucrative businesses with more than 44 million regular customers.

The mobile service industry today celebrates its 20th anniversary here. While the number of subscribers has grown more than 56,000 times, the average phone price has dropped from 4 million to virtually zero when including subsidies, making it an every-day, every-hour item for modern Koreans.

"It is the coming-of-age day for the mobile phone. It is not just a means of communications anymore. It is the center of communication,'' said Kim Shin-bae, CEO of SK Telecom. "It is not exaggerating to say that Korea's IT industry, which accounts for 29 percent of its gross domestic product, started from the spread of mobile phones.''

Korea's mobile phone service took off as a car-mounted system in 1984, known as car phones. Korea Mobile Telecom, which was a subsidiary of Korea's public telephone company, was its lone operator.

It was July 1, 1988 when Korea Mobile Telecom launched a full-swing mobile phone service that used handheld phones made by Motorola and other foreign firms in Seoul and the metropolitan area, in time for the Seoul Olympic Games that fall.

The critical moment came in 1996 when the government adopted a new technology platform called CDMA (code division multiple access) for the first time in the world, while many other countries opted for the GSM (global system for mobile communication) type. The decision has helped local electronics firms such as Samsung and LG use Korea as a test bed for CDMA phones before they export them to the United States and other nations.

Samsung and LG are now the world's second and fourth largest mobile phone sellers. Exports of mobile phones grew from a mere $470,000 in 1996 to $18.6 billion last year.

The network service industry too has seen remarkable growth. Korea Mobile Telecom was privatized in 1994 when SK Group purchased its controlling share. KTF and LG Telecom later joined the race, while others like Shinsegi and Hansol were merged into SK Telecom and KTF, respectively.

Technological advancement and competition among the three firms have continuously lowered the call rate. In 1988, users were charged 1,286 won for a three-minute call from Seoul to Busan. This is now 324 won on average for the same call, which is about 3 percent of the 1988 price when considering inflation.

One victim of mobile phone's rapid success is the pager. It was the dominant communication device in mid and late 1990s, with some 15 million users in its heydays. Now about 40,000 people are using them, many of them medical workers.


Monday, July 07, 2008

Video trailer: Sympathy for Lady Vengeance


Sunday, July 06, 2008

U.S. beef selling well despite protests

American beef began reaching Koreans' dinner tables despite anti-U.S. beef candlelit vigils and lingering public concern over its safety.

Most big discount stores are still reluctant to deck their shelves with American beef in fear of public backlash. But it seems to be a matter of time before refrigerators of restaurants and households of Koreans are filled with "Made in U.S.'' beef.

Midday Friday, dozens of people were standing in line in front of a five meter square butcher's shop "A-Meat FC'' in Keumchon, southwestern Seoul. Some, seemingly from remote areas, rushed to join the crowd after parking their vehicles in nearby spaces. The shop's inside was bursting at the seams with customers while five workers were busy tapping electronic cash registers and packing ordered meat.

"We have skipped meals for days,'' a cashier said. "Customers gather from opening till closing time.'' This imported-meat-only shop began selling American beef on Tuesday, six days after the government's official notification of U.S. beef imports.

"It's selling like hot cakes,'' said Park Chang-kyu, the shop owner. "Of course, it was not an easy decision to sell American beef amid public sentiment hostile to U.S. beef. But look. It's amazing.''

A male customer, who drove to the shop from Yeoido to buy beef, said "I will buy U.S. beef equivalent to 100,000 won ($100). American beef fits our taste and is much cheaper than Korean beef.''

Prices of U.S. beef vary― sirloin is 2,300 won per 100 grams, and beef for Bulgogi and soup are 900 won and 650 won, respectively.

"The prices are roughly one third of Korean beef,'' Park said. "We purchase 5 tons of U.S. beef per day but it's insufficient to meet customers' demand. We plan to buy more.

''Currently, there are only two beef shops dealing with American beef in Seoul including A-Meat F.C. But a growing number of shops are expected to handle American beef from next week at the earliest as the demand for the imported beef soars.

According to the association of meat importers, 2 tons of U.S. beef have been sold since July 1 through the two butcher shops.

Two other restaurant chains with 50 branches nationwide ― Damiso and Oredrim ― are considering adding U.S. beef to their menu.

Hi-Food, a mass-circulator for imported beef, also said it planned to ask the quarantine office to check 400 tons of U.S. beef they imported from August but recently decided to advance the date to next week to meet customers' demand.

"We have received numerous calls from clients. We cannot help handling American beef again despite outstanding concern over the meat,'' said Park Bong-soo, Hi-Food president.

The meat-importing association, comprised of 130 wholesalers and retailers, will launch a nationwide campaign from July 15 to raise public awareness of safety of U.S. beef and to boost consumption.

The Ministry for Food, Agriculture, Forestry and Fisheries said Friday more than 1,000 tons of American beef have completed quarantine inspection.


Thursday, July 03, 2008

Korean Wives Decide Where the Money Gets Spent

Korea is behind other countries in terms of gender equality, but is not so when it comes to who controls the household budget. Statistics show that women in two out of every three couples are in charge of the money.

The National Statistical Office (NSO) published the Life of Woman in Statistics report to commemorate the week of women, running from July 1 through July 7.

The report showed that wives in 65.3 percent of households determined where money was spent. 29 percent said the husband and the wife jointly decide, and only 5.7 percent left the man in charge.

Women also controlled the education of children ― as to which private institute they should go. Only 3.1 percent had fathers decide children's education while 39.2 percent left it totally to moms. The rest made decisions jointly.

The statistics show that around half of women are economically active. Women in their 40s were the most active, with 65.8 percent participating in economic activities. For those in their 30s, meanwhile, the ratio was 56.3 percent, reflecting the fact that many women of this age quit their jobs to take care of kids, returning to the job market later.

The results showed that an increasing number of women succeeded in getting good jobs. Some 19.3 percent of females were in professional or managerial level positions, up 7.1 percentage points from a decade ago. Among rookie diplomats who passed the difficult government exam last year, two out of three were female. Among lawmakers, 41 out of a total 299, or 13.7 percent, were women. Although this is still low compared with other countries, the ratio has been rising continuously. In 1996, only 3 percent of lawmakers were female.

In some workplaces there are too many women. About 73 percent of teachers at elementary schools were female. In 1990, the figure was only 50.1 percent.

Women are getting married older than before. The average age of a first time bride was 28.1. Grooms, meanwhile, were 31.1 years old on average. In 2000, however, brides were 26.5 years old, and grooms, 29.3 years.

Things have gotten better for baby girls as well. Parents are not preferring boys as much as before. There were 107.4 boys born to every 100 girls in 2006, while a decade ago it was 111.6 boys to every 100 girls.

Korea's female population totaled 24.19 million, or 49.8 percent of the entire population. They can expect to live to 82.36 years on average, 6.62 years more than males whose life expectancy hovered around 75.74 years. The gap has been decreasing since 1985, when women outlived men by 8.37 years.

The biggest death factor for women in 2006 was cancer, followed by cerebro-vascular disease, heart disease, diabetes and suicide.

Last year, 29,140 foreign women married Korean men, and 9,351 married foreign men.


Wednesday, July 02, 2008

Speaking a Foreign Language is Sexy in Korea

Tip for men on a blind date: learn some foreign words beforehand. Women are impressed, according to a survey.

"I like men speaking good English. It makes them look sexy, intelligent and very competent,'' said Yang Mi-kyoung, a 24-year-old who works for a fashion goods company.

"They also look very confident and I feel I could proudly introduce him to anyone,'' she added.

"I would like to marry a woman who can teach our future children English by herself. I know it sounds a bit selfish but we can save money and they can learn the language during life,'' Kim, who works at a construction company, said.

Matchmaking company Duo and English educational institute franchise conducted a survey of 242 single males and 315 females and found more than 66 percent of males and 82 percent of women have had experience of being attracted to the opposite sex with good foreign language skills.

Most replied that fluent foreign language speaking skills made their date eligible and competent, while some said the quality is important because they themselves do not have it. Both men and women thought being able to speak other languages is a basic attainment for everyone. Some said they want their counterpart to teach their future children English.

Moreover, 31 percent of women said a man's foreign language skill guarantees better income, indicating economics is a key reason for attraction.

However, the respondents themselves had little expectation for themselves in improving their language skills. About 77 percent said they have studied other languages after work. However, they said it was for their own satisfaction and that all they need is to be able to watch movies without having to read the captions below all the time. Instead, they had high hopes for their future spouses. The majority said they want the other to speak other languages in life.