Koreality

The Returnees - South Korea's U.S. Educated Entrepreneurs

2011-12-04T12:24:00.002-05:00

http://www.inc.com/magazine/201112/the-returnees.html

Seoul is home to a burgeoning corps of young entrepreneurs, a shocking number of them born or educated in America. Why aren't they starting companies here?

By Max Chafkin | Nov 30, 2011

Two years ago, Daniel Shin quit his job and started a company.

The act was, by almost any standard, a laudable one, coming as it did in the middle of the worst recession in decades and given that Shin had been enjoying the kind of upper-middle-class life that, once tasted, can be difficult to give up. Born in South Korea, Shin moved to suburban Washington, D.C., with his parents when he was 9. He went to a magnet high school and got into the University of Pennsylvania's Wharton School, where he studied finance and marketing. By 2008, he was comfortably ensconced in the New Jersey offices of McKinsey & Company, where recession-era cutbacks meant that all-expenses-paid Caribbean bacchanals had given way to comparatively ascetic (but still all expenses paid) ski trips. He had an apartment in Manhattan. He was comfortable. His parents were proud.

And yet somehow, this life, in all its dull glory, did not feel like his own. Shin was an entrepreneur at heart, having started two companies while still in college. The first, a website for students looking for housing, failed miserably. The second, an Internet advertising company called Invite Media, which he co-founded with several classmates during his senior year, was more promising. It won a business-plan competition in early 2007 and raised $1 million in venture capital the next year.

Shin's buddies would eventually sell Invite Media to Google for $81 million, but Shin had left the company long before that happened. His parents, who had come all the way from Korea precisely so their son could grow up to work at a place like McKinsey, were not about to see Daniel throw the opportunity away for a money-losing start-up no one had ever heard of. "That was the only reason I was at McKinsey," says Shin. "It didn't feel like a career to me. I'd always wanted to start a business."

By late 2009, Shin was through with consulting, but he didn't have the guts to strike out on his own just yet. He applied for, and was offered, a job in the New York City office of Apax Partners, a European private equity firm. He accepted the offer on the condition that he could delay his start date until the following August, so he could complete the two-year stint he had promised McKinsey. It was a lie; he walked out on McKinsey in November. "It was my chance to get something off the ground without my parents telling me I couldn't do it," says Shin. "I had about six months."

Shin got to work. He and two college buddies holed up in a house with whiteboards, laptops, and an endless supply of McDonald's for a series of all-day brainstorming sessions. Their goal: to come up with a business that would grow fast and require no start-up capital. They started with 20 ideas and, over the course of two months, whittled them down to one: a Groupon-style coupon company that would offer deals on restaurants, events, and merchandise. Shin liked the business model because it had a built-in financing strategy: Cash came in several months before the company would have to pay it out, giving him a supply of free debt. He picked a name—Ticket Monster—collected several thousand e-mail addresses, and launched the site in May.

A month later, Apax called Shin to rescind its offer of employment. The firm had done a background check and discovered that Daniel Shin was not a second-year McKinsey associate but the CEO of a fast-growing company that was doing $1 million a month in revenue. By the end of the summer, Ticket Monster had doubled in size, growing to 60 employees. By the end of the year, the company had doubled in size again.

When I met Shin last August, just 20 months after he quit McKinsey, he had 700 employees and roughly $25 million a month in revenue. "We've always been afraid that we wouldn't grow fast enough," said Shin, a baby-faced 26-year-old with a booming voice and a hulking frame. A year ago, he was one of only two salespeople at the company; today, he is sitting in a brand-new corner office acting like the CEO. "We didn't believe in spending money in the early days," Shin said. "We had this whole macho idea about starting up." A week after he said this, Shin sold his company to the social-commerce site LivingSocial for a price that was reported to be $380 million.

An immigrant starts a business, creates hundreds of jobs, and becomes wealthy beyond his wildest dreams—all in a matter of months. It's the kind of only-in-America story that makes us shake our heads in wonder, even pride. At a time of 9 percent unemployment, it's also the sort of story we Americans desperately need to hear more of.

But Daniel Shin isn't that kind of immigrant. He went in the opposite direction. Ticket Monster is based in Seoul, South Korea. Shin arrived there in January 2010 with a vague plan to start a company; the brainstorming sessions that produced Ticket Monster took place in his grandmother's house in Seoul. Now he is the closest thing there is to a Korean Mark Zuckerberg, despite the fact that upon his arrival, he barely spoke Korean.

Last December, Shin was summoned to South Korea's version of the White House—the Blue House—for a meeting with the country's president, a former Hyundai executive named Lee Myung-bak. In attendance were the CEOs of many of the country's largest companies—LG, Samsung, SK, and half a dozen others. "It was the conglomerates and me," says Shin. "They were saying, 'We have X billion in revenue, and we're in X number of countries.' I'm like, 'We didn't exist a few months ago.'" Shin laughs—a sheepish, nervous laugh—as he tells me this story and shakes his head. It's been a crazy year and a half. "I think it was the first time the president had learned an entrepreneur's name," he says. A few weeks later, President Lee gave a radio address in which he sang Shin's praises and urged the youth of South Korea to follow his example. (In Korean, family names come before given names. Throughout the rest of this story, I've used the Western convention, as do most Korean business people.)

At the end of last summer, I traveled to Seoul, an ultra-modern city of 25 million, because I wanted to know how a twentysomething kid with limited money and limited language skills could become this country's great economic hope. I wanted to know what in the world was going on in Seoul—and also, what in the world was going on inside the head of Daniel Shin of Wharton and McKinsey and McLean, Virginia. Why would a guy who could have just as easily written his own ticket in the U.S. decide to do so on the other side of the world?

The first thing I learned was that Shin was not alone—he wasn't even the only young, ambitious American in the coupon business. His chief competitor, Coupang, was founded by a 33-year-old Korean American serial entrepreneur named Bom Kim, who last year dropped out of Harvard Business School and relocated to Seoul to start his company. After a little more than a year in business, Coupang has 650 employees and $30 million from U.S. investors. Kim hopes to take the company public on the Nasdaq by 2013. "There's an opportunity here," says Kim. "I want this to be a company like PayPal or eBay."

Kim was one of more than a dozen American entrepreneurs I met in Seoul. They were the founders of media start-ups, video-game start-ups, financial-services start-ups, manufacturing start-ups, education start-ups, and even a start-up dedicated to producing more start-ups. "It's a big trend here," says Henry Chung, managing director of DFJ Athena, a venture capital firm with offices in Seoul and Silicon Valley. "There's a growing number of students studying overseas and coming back."

The country to which they are returning is an entirely different place from the one they (or their parents) left years ago. In 1961, the southern half of the Korean peninsula—formally known as the Republic of Korea—was one of the poorest places on earth. South Korea has no mineral resources to speak of, and it ranks 117th in the world in terms of arable land per capita, behind Saudi Arabia and Somalia. Fifty years ago, the average South Korean lived about as well as the average Bangladeshi. Today, South Koreans live about as well as Europeans. The country boasts the world's 12th-largest economy by purchasing power, an unemployment rate of just 3.2 percent, and one of the world's lowest rates of public debt. South Korea's per-capita GDP growth over the past half a century—23,000 percent—beats that of China, India, and every other country in the world. "A lot of Koreans still say that the market is too small," says Shin. "But it's not. It's huge."

South Korea is smaller in area than Iceland but has 166 times its population, meaning that 80 percent of its 49 million citizens live in urban areas. In the capital, retail shops and businesses reach high into the air and far below the earth in miles of underground shopping malls. Many of Seoul's bars and nightclubs stay open until sunup, but just walking the city's narrow, hilly streets—jostled by hawkers and flanked by the neon signs that advertise barbecue joints and karaoke rooms and the ubiquitous "love motels"—can be intoxicating all by itself. An hour's drive west, in Incheon, 50- and 60-story apartment buildings abut rice paddies and vegetable gardens.

The sense of claustrophobic density is magnified by the country's embrace of communications technologies. In the 1990s, the South Korean government invested heavily in the installation of fiber-optic cables, with the result that by 2000, Koreans were four times as likely as Americans to have high-speed Internet access. Koreans still enjoy the fastest Internet in the world while paying some of the lowest prices. The easiest way to feel like an outsider in this country is to board one of Seoul's subway cars, which are equipped with high-speed cellular Internet, Wi-Fi, and digital TV service, and look anywhere but at the screen in your hand.

Have you ever heard the term Pali pali?" asks Brian Park, the 32-year-old CEO of X-Mon Games, which makes games for mobile devices. The phrase—often said quickly and at considerable volume—can be heard all over Seoul; it translates roughly to "Hurry, hurry." Park, who founded his company in early 2011 with $40,000 in seed capital from Ticket Monster's Shin and another $40,000 from the South Korean government, invokes the phrase in trying to explain the three beds I had noticed in his company's conference room.

"It's normal," he says, gesturing at the makeshift bunkhouse. "Our crazy culture." By that, he doesn't mean the culture of the seven-person company. He means the culture of the entire country of South Korea, where the average worker spent 42 hours a week on the job in 2010, the highest in the Organization for Economic Cooperation and Development. (The average American worked 34 hours; the average German, 26.) I saw similar sleeping arrangements at most of the start-ups I visited, and even at some larger companies. The CEO of a 40-person tech company told me he lived in his office for more than a year, sleeping on a small foldup futon next to his desk. He had recently rented an apartment because his investors had become concerned about his health.

In their personal lives, South Koreans are relentless self-improvers, spending more on private education—English lessons and cram schools for college entrance exams—than do the citizens of any other developed country. Another obsession: cosmetic surgery, which is more common in South Korea than anywhere else in the world.

And yet despite this outward show of dynamism, South Korea remains in its soul a deeply conservative place. Shin told me about meeting, in Ticket Monster's early days, with an executive from a large Korean conglomerate about a marketing deal. The executive refused to talk business. He wanted to know why a young man with a wealthy family and an Ivy League diploma was messing around with start-ups. "He said that if his kid did what I'm doing, he'd disown him," Shin recalled. If this sounds like hyperbole, it's not: Jiho Kang, who is chief technology officer of a start-up in California and CEO of another one in Seoul, says that when he started a company after high school, his father, a college professor, kicked him out of the house. "My dad is seriously conservative, seriously Korean," Kang says.

That older Koreans view risk taking with suspicion isn't surprising, given the country's history. The Asian financial crisis of 1997 nearly destroyed the South Korean economic miracle. (In a remarkable show of national resilience, South Koreans turned in hundreds of pounds of gold—wedding bands, good-luck charms, heirlooms—to help their government pay down its debt.) These days, Seoul, which is just 30 miles from the North Korean border, remains on alert for a nuclear or chemical attack. One afternoon when I was in Seoul, the city stood still for 15 minutes as sirens blasted and police cleared the roadways. These drills, which are held several times a year, can be even more involved. Last December, a dozen South Korean fighter jets buzzed the city streets to simulate a North Korean air raid.

Amid all this instability, the Chaebol, Korea's family-owned conglomerates, have been a redoubt of stability, providing the best jobs, training new generations of leaders, and turning the country into the export powerhouse it is today. The Chaebol grew thanks to government policies, instituted in the 1960s, that gave them monopoly status in every major industry. Their power was greatly diminished in the wake of the 1997 financial crisis, but the Chaebol still dominate the economy. The 2010 sales of South Korea's largest Chaebol, the Samsung Group, were nearly $200 billion, or about one-fifth of the country's GDP.

To many South Koreans, being an entrepreneur—that is to say, going against the system that made the country rich—is seen as rebellious or even deviant. "Let's say you're working at Samsung and one day you say, 'This isn't for me' and start a company," says Won-ki Lim, a reporter for the Korea Economic Daily. "I don't know how Americans think about that, but in Korea, a lot of people will think you of you as a traitor." Business loans generally require personal guarantees, and bankruptcy usually disqualifies former entrepreneurs from good jobs. "People who fail leave this country," Lim says. "Or they leave their industry and start something different. They open a bakery or a coffee shop."

The penalty for failure is even more onerous for female entrepreneurs. When Ji Young Park founded her first company, in 1998, her bank not only required her to personally guarantee the company's loans—a typical request for a male founder—it also demanded guarantees from her husband, her parents, and her husband's parents. Park persevered—her current business, Com2uS, is a $25 million developer of cell-phone games—but her case is extremely rare. According to the Global Entrepreneurship Monitor, South Korea has fewer female entrepreneurs, on a per-capita basis, than Saudi Arabia, Iran, or Pakistan. "Most of the companies women are creating are really small, and the survival rates are really low," says Hyunsuk Lee, a professor at Seoul National University of Science and Technology.

Entrepreneurs in South Korea often struggle to raise capital. Though Korean venture capitalists invest several billion dollars a year—about half of which comes from government coffers—most of the money goes to well-established, profitable companies rather than true start-ups. It's not that Korean VCs hate small companies; it's just hard to make money selling them. "The Chaebol don't buy companies," says Chester Roh, a serial entrepreneur and angel investor who has taken one company public and sold one to Google. "They don't need to. They just call you up and say, 'We'll give you a good job.'"

As an American, Daniel Shin wasn't subject to these constraints. His largest institutional investor was Insight Venture Partners in New York City, where his college roommate worked as an associate. "American Koreans have a big competitive advantage," says Ji Young Park. "They can raise much larger investments from outside of Korea, and they can take business models from the U.S. It is much harder for a genuine Korean." This has a cultural component as well: "Korean Americans aren't predisposed to the Korean mindset," says Richard Min, co-founder and CEO of Seoul Space. "They're open to risk."

Min, a 38-year-old Korean American, is a former college swimmer who looks as if he could still do a couple of laps. He dresses well and talks fast, with just a hint of an accent from his native New England. He launched Seoul Space last year with two other Americans as a redoubt of Silicon Valley–style entrepreneurship in Seoul. The company offers discounted office space to start-ups, mentors them, and then introduces them to investors, in exchange for small equity stakes. "We're trying to get an ecosystem going here," Min says, leading me through a sea of mismatched office furniture at which 20 or so young people are pecking away at keyboards.

Min moved to South Korea in 2001 because he was curious about his roots and because he saw an opportunity in his dual identity. His first Korean company, Zingu, was the country's first pay-per-click advertising company. When the dot-com bust hit Seoul, he turned Zingu into a consulting firm to help large Korean companies market themselves outside the country. Two years ago, when the Korean launch of Apple's iPhone gave local software developers an easy route to international consumers, he decided that the next big opportunity was in start-ups. "You have a new generation feeling like they have a pathway that's not working for Samsung," says Min, who is winding down his ad agency in order to focus on Seoul Space. "We're at the forefront of a major shift."

I had assumed that everyone working in Seoul Space was Korean, but when Min started introducing me, I realized that half of these guys were American—there was Victor from Hawaii, Peter from Chicago, Mike from Virginia. Others were Korean nationals but with a decidedly American way of looking at the world. "I was a pure engineer—one of those nerds," says Richard Choi, who came to the United States in 2002, as a freshman biomedical engineering student at Johns Hopkins. "I had no interest in business whatsoever."

Choi assumed he would end up in the laboratory of some large company, but when he and several classmates designed a gadget that made it easier for medical technicians to take blood, he found himself in a business-plan competition. His team won first place—a whopping $5,000 prize—and he was hooked. Choi thought about starting a company after graduation, but he had a problem: His student visa had expired. He didn't have the $1 million in cash necessary to qualify for an investor visa, so he figured his only option would be to get a job and hope that his employer would sponsor his application for permanent residence. He went on a dozen interviews at American medical-device companies, but none were interested, and he finally enrolled in a master's program at Cornell to stay for another year. When it was over, he gave up on the States, returned to Korea, and took a job at the pharmaceutical division of SK, one of the country's largest conglomerates.

Choi worked at SK for three years, but he never got the entrepreneurial bug out of his system. Out of boredom, he started an event marketing company called Nodus, and then he met Min at a party. Min introduced him to the person with whom he would eventually (with one other person) co-found his current company, Spoqa, which makes a smartphone app designed to replace the loyalty cards issued by retail businesses. "It's funny how a small event can change your life," Choi says.

Over the past two years, the South Korean government has launched a series of policies designed to help people like Choi. The Small and Medium Business Administration—South Korea's version of the SBA—has created hundreds of incubators throughout the country, offering entrepreneurs free office space, thousands of dollars in grants, and guaranteed loans. There are government-sponsored missions to the United States and regular seminars for aspiring entrepreneurs. "Our economy can no longer rely only on the conglomerates," says Jangwoo Lee, a member of the Presidential Council for Future and Vision and a professor at Kyungpook National University in Seoul. "This is the 21st century. We need another instrument for economic growth."

That instrument, Lee told me, will be people like Shin. "He's part of a new trend in Korea," says Lee. "He made his success with his ideas and imagination, without a lot of technology and investment." Lee tells me that although South Korea has been very good at commercializing university research, it has been very bad at nurturing the kinds of disruptive companies that are so common in the U.S. "We need to get our young guys dreaming," he says.

That, says Min, is the idea of Seoul Space. "We're focusing on helping people understand how things work in Silicon Valley," he says. I got a taste of this on a Saturday morning at Seoul Space, as I watched half a dozen new entrepreneurs—some Korean and some American—present their ideas to an audience of 100 in the room and, via Skype, to several thousand viewers around the world as part of a Web TV show called This Week in Startups. The language of the day was, of course, English, and Min, who had spent hours coaching the six entrepreneurs on their pitches, leaned against a wall just off camera, watching nervously as his students performed.

Among the presenters was the incubator's biggest star, Jaehong Kim, a slight 26-year-old who wore an untucked white dress shirt and black trousers that stopped 8 inches above a pair of two-tone dress shoes. Kim is a co-founder of AdbyMe, an online advertising company that allows companies in South Korea and Japan to pay the users of social media to hawk their products. In his first four months, Kim turned a profit while taking in an impressive $250,000 in revenue.

AdbyMe graduated from Seoul Space earlier this year, moving its 10 employees into a small apartment across town. When I stop by on a Monday, Kim tells me to take off my shoes, walks me past the inevitable bedroom—"I sleep two nights a week here," he says with a grin—and then introduces me to a group of guys he calls Ringo, Big I, and AI. "His name isn't really AI," Kim explains. "We call each other by code names."

At most South Korean companies—even many start-ups—employees are addressed by their job title rather than their first name, but Kim is trying something new. At the suggestion of one of his co-founders, an engineer who lived in New Orleans as a child, Kim ordered employees to scrap the titular system and pick new names. If they want to get his attention, they refer to him not by the traditional Korean greeting—"Mr. CEO"—but by his nickname, Josh. "The vision is that an intern can tell me something isn't right," he says. I had assumed that Kim had been educated in the U.S., but it turned out he wasn't straight out of Wharton. He lived for two years in Kansas City, Kansas, but his most recent job had been as a first lieutenant in the Korean Army.

In September, Kim raised $500,000 from investors in South Korea. His goal is to raise enough to qualify for an American investor visa.

He isn't the only entrepreneur who talks about coming to the United States. "I know for sure that I want one more stint in the States," says Shin. He is curious to find out if he can replicate his success in America's larger, more competitive market; and even though he now speaks passable Korean, he has never stopped thinking of himself as an American. "I don't know when, and it's too early to think about ideas, but I know I'll probably end up going back and forth," he says. "I think it's possible to do stuff in both places."

South Korea's Economy: What do you do when you reach the top?

2011-11-20T19:04:00.003-05:00

http://www.economist.com/node/21538104

To outsiders, South Korea’s heroic economic ascent is a template for success. But now it has almost caught up with the developed world it must change its approach

It is a crisp autumn morning in Seoul, and a hopeful fisherman sits dreaming by the Cheonggyecheon stream as the world bustles happily by. Glass skyscrapers rise behind him housing the capital’s new financial district. The shopfronts at their base are among the swankiest in Asia. Office workers, families and schoolchildren amble past. Busking fills the air. The water tumbles past plum trees and willows.

Twenty years ago, this background would itself have seemed a dream for anyone foolish enough to be trying to fish the Cheonggyecheon. Its waters, dirty and hidden, were trapped beneath a roaring highway; its surroundings were a slum of sweatshops, metal bashing and poverty. The reclamation of the Cheonggyecheon, one of the great urban-regeneration projects of the world, has about it the air of a dream achieved. So, to a large extent, has the Korea through which the stream flows.

In 1960, in the aftermath of a devastating war, the exhausted south was one of the poorest countries in the world, with an income per head on a par with the poorest parts of Africa. By the end of 2011 it will be richer than the European Union average, with a gross domestic product per person of $31,750, calculated on a basis of purchasing-power parity (PPP), compared with $31,550 for the EU. South Korea is the only country that has so far managed to go from being the recipient of a lot of development aid to being rich within a working life.

For most poor countries, South Korea is a model of growth, a better exemplar than China, which is too vast to copy, and better, too, than Taiwan, Singapore or Hong Kong. All three are richer than Korea but all are, in different ways, exceptions: Singapore and Hong Kong are city states, while Taiwan’s disputed sovereignty makes it sui generis.

South Korea has not merely grown fast. It has combined growth with democracy. Though its spurt began under a military dictator, Park Chung-hee, for the past 25 years the country has had a vibrant parliamentary system. Korea scores the same as Japan in the democracy tally kept by Freedom House, a think-tank in Washington, DC. No other Asian country does as well. At the same time Korea has combined growth with equity. Between 1980 and 1997, its Gini coefficient, a measure of income inequality, fell from 0.33 to an exceptionally low 0.28, before rising back up during the 1997-98 Asian crisis. In 2010, the level was 0.31, a bit worse than Scandinavian countries, a bit better than Canada.

A model that worked

Now Korea can add resilience to its roster of achievements. It was walloped during the global financial crisis, but recovered faster than any other rich country. Between June 2008 and February 2009, Korea lost 1.2m jobs. South Korea’s relatively open financial system made it vulnerable to the volatility in world markets, a vulnerability that continues. This September, foreigners withdrew over 1.3 trillion won ($1.1 billion) from the stock market and the currency slumped 10%.

Yet in 2010, GDP grew by 6%. This year’s expansion is likely to be 4%. The unemployment rate is now a covetable 3%. Some of the recovery is the result of Korea’s happy dependence on China: it exports more capital goods to China relative to the size of its economy than anyone else, even Germany. But this is only part of the explanation (which is just as well given China’s slowdown). The government also initiated a public-works scheme that is mopping up over 2% of the labour force. It introduced an old-age pension and began, then expanded, an earned-income tax credit. All this from President Lee Myung-bak, who was once chief executive officer of Hyundai Construction and is widely assumed to be excessively friendly to big business.

Korea’s relentless convergence towards America’s standard of living (see chart 1) has barely missed a beat. China’s dollar GDP per person would have to grow at 7.5-8% a year for 20 years to reach the heights Korea has already scaled. If the Korean economy goes on growing at 4.5% a year and America’s at 2.5%, Korea would overtake America (in PPP terms) only a few years later.

To keep growing that impressively, though, Korea will need some new tactics. And it will need to develop them from scratch. When a country or a company is playing catch-up it can look at what others are doing and do it better. This Korea has done well. Hyundai has outcompeted Toyota in the market for reliable, efficient, cheap cars. Korea’s shipyards have beaten everyone through economies of scale.

All change

But this way of doing things works only when others have blazed a trail before you. As you join the ranks of the richest, you run out of beaten track to follow. Your economy comes to depend more on innovation and on learning from your own mistakes than on improving on the successes of others. The South Korean model of 1960-2010 remains an example for developing countries; but Korea itself now needs something new.

The Korean model had four distinctive features: a Stakhanovite workforce; powerful conglomerates; relatively weak smaller firms; and high social cohesion. All these are either coming under strain, or in need of reassessment, or both.

South Koreans lay great store by education and hard work. They put in 2,200 hours of work a year, half as much again as the Dutch or Germans. Their reaction to the 2008 slump was to work harder still. During the 2009-10 recovery, reckons Richard Freeman of Harvard University, Korea had the second-largest increase in hours worked in manufacturing, after Taiwan. And the quality of labour has been even more important than the quantity. Along with Finland and Singapore, Korean schools regularly top international comparisons of educational standards, such as those run by the Organisation for Economic Co-operation and Development (OECD), a rich-country club. Korea spends a larger share of GDP on tertiary education than any rich country other than America. Given relatively low wages, this superbly educated workforce is hard to beat.

But with Korea already top of the league tables, it is harder to generate further jumps in income from big increases in hours and skills. Indeed, the immediate problem is merely to maintain its excellence. According to Yeong Kwan Song of the Korean Development Institute (KDI), a think-tank, companies are starting to worry that graduates are emerging from university with the wrong skills. On some estimates, half of recent graduates are failing to find full-time jobs and are going into further study or part-time employment. So while general education remains good, some industrial skills may be declining.

One way to boost the skilled labour force might be to have rather more people working rather fewer hours. The extra people would be women, often highly educated ones. Quite a lot of Korean women stay at home—the participation rate for women aged 25-54 is only 62%, the fourth-lowest in the OECD—even though they are usually better educated than men. In almost all rich countries, the best-educated women are more likely to work than their less-educated sisters. Not in South Korea.

Shorter hours might encourage some of these skilled women into the workforce. So might a change in attitudes to schooling. The job of supervising a child’s education falls to women, which is one of the reasons why relatively few women have jobs.

This does not mean that they have a lot of children instead. Korea has a fertility rate of 1.2, one of the lowest in the OECD. This is in part because those good educations make having children a pricey proposition. An unusually large part of the spending that makes Korean education so good is private, not public. The government spends just under 5% of GDP on education, slightly below the rich-country average. Families add an extra 2.8% of GDP on top of that, easily the highest rate in the OECD. At universities, family spending is three times that of the state. And families spend an estimated 8% of their household budgets on after-hours programmes for each child, an investment which explains the effort mothers put into making sure it pays off. If you have three children, their after-school activities alone could swallow up a quarter of the household budget.

The power of conglomerates. Much of South Korea’s miracle has been the work of big conglomerates, or chaebol. Barry Eichengreen of the University of California, Berkeley, argues that they are “among the most technologically and commercially progressive agents in the Korean economy”. Samsung Electronics, for instance, one of 83 constituent parts of the Samsung empire, sells more smartphones than Apple. Korea’s shipyards have just started work on a new class of container ships called the triple E-class which are easily the largest container ships ever built (Maersk, the ships’ buyer, says the three Es refer to economy of scale, energy efficiency and environmental cleanliness; simpler just to see them betokening EEEnormity). Korea’s large companies employ slightly less than a quarter of the workforce and produce more than half the country’s output. Chaebol-alikes exist round the world, from Carlos Slim’s Group Carso in Mexico to Lee Ka-shing’s holdings in Hong Kong.

The surviving chaebol have proved resilient. During the 1997-98 crisis, some chaebol’s debt-to-equity ratios soared to over 500%; half of them went bust and conglomerates were widely seen as a drag on the economy. Now, those that came through the time of trial have returned to profitability and respectable debt ratios—but their success still has a downside.

After the founding fathers

The chaebol system has proved prone to fraud, dodgy accounting and illegal political contributions. Many of the companies depend to an unhealthy degree on a founder or his family. About half the managers of Samsung’s firms used to work in the chairman’s secretariat—and thus directly for the founder or his son—and owe their promotion to the associated patronage. As with any family business, the moment of greatest danger is when the leadership passes to the next generation. Samsung passed this test in 1987 when the founder handed over to his son, Lee Kun-hee. Now Mr Lee’s son, Jay Y. Lee, has been appointed chief operating officer of Samsung Electronics and a new transition looms. If Mr Lee the third has business acumen, fine. If not, the whole country could suffer.

Find out how much of an Apple iPhone is actually a Samsung with our "teardown" infographic.Moreover, there are signs that the chaebol may be stifling innovation and entrepreneurship. They have proved expert at applying and improving existing technology, even the high technology of touch-screen smartphones. But except in some internet businesses and computer gaming, South Korea has few start-ups or cutting-edge technology firms. It lacks nationwide venture-capital businesses, says Hasung Jang, the dean of Korea University’s Business School, because each chaebol has one of its own. The firms snap up the best and brightest and turn them into company men. Mr Jang compares the conglomerates to light-hogging trees in a forest: their canopy may be impressive, but it is hard for anything to grow underneath.

Koreans perceive fewer opportunities for entrepreneurship than any of their peers in rich countries except Japan, according to an annual survey by the Global Entrepreneurship Monitor, set up by the London Business School and Babson College, Massachusetts. As South Korea moves towards the technological frontier, such attitudes will have to change. Innovation is not going to come if everyone shelters from risk in the chaebol.

Weak small firms. There is a huge productivity gap between Korea’s export-oriented chaebol and small and medium-sized firms (SMEs) which dominate services. Value added per worker in small firms is less than half that in large ones. SMEs’ operating profits were 4.5% of sales in 2007, compared with about 7% for large firms. Small firms spend about half as much on research and development as large ones per unit of sales and borrow far more relative to assets. Over time, their performance seems to be getting worse. Korea, in short, has first-world manufacturing exporters and third-world services.

Coddled, not coping

There are several reasons for the mismatch. Small firms are crowded out of markets for people and skills by the chaebol. And because chaebol pay scales often rise according to years in service, they squeeze wage bills by firing older workers, with the service sector working as a recycling system for surplus labour. Small firms have also been coddled by the government. Korea maintains various entry barriers to shelter mom-and-pop stores from competition. Government support to SMEs rose from under 6 trillion won in 2008 to 10 trillion in 2009. Public credit guarantees rose from 33 trillion won in the Asian crisis to almost 60 trillion won in 2009. Last year, the government “requested” banks to roll over their loans to small firms. Randall Jones of the OECD argues that all this help has made SMEs less, not more, efficient, and damaged competitiveness. The richest economies are switching into services that in Korea are dominated by small firms which cannot compete.

Social cohesion. Korea’s equal distribution of income is changing. Judging by the relationship between the richest and poorest tenth, Korea is becoming more unequal than it used to be. Worse, the growing number of poor people is disproportionately elderly. In other rich countries, people between 66 and 75 are no more likely to be poor than the population as a whole. In Korea, they are three times as likely to be poor. This is all the more worrying because the low birth rate means the country is ageing more rapidly than any other rich country. In 2009, people over 65 were outnumbered ten to one by the working-age population. By 2050, there will be seven over-65s for every ten working-age adults. Disproportionate old-age poverty would have a huge impact on the social backing for policies designed to foster growth.

Not to be left behind
Korea’s equitable income distribution used to provide a sense that society as a whole was benefiting from breakneck catch-up. But discontent is rising both about inequality and about the role of the chaebol, producing growing disenchantment with both main political parties. The recent election for mayor of Seoul produced an upset win for a left-wing anti-establishment maverick.

It is proving hard to resist the trend towards inequality because of another basic feature of Korea’s economic model: total tax revenues are just 26% of GDP. Taxes are especially low on labour, a choice designed to boost work and foreign investment. But as a result, social spending is low (11%); public spending on family benefits is exceptionally low (less than a quarter of the rich-country average); and the tax-benefit system is the worst in the OECD at reducing inequality and poverty. Korea’s tax-benefit system reduces poverty by only 18% (compared with what it would have been without the benefits). Sweden’s tax-benefit system cuts its poverty rate by 80%.

Korea, argues Mr Jones, needs to increase taxes and social spending in order to reduce poverty and inequality. One reason it is reluctant to do this is because it is afraid of the impact on jobs. Its changing demography also suggests caution in expanding the social safety net too fast or far, as it will be used ever more over the decades to come.

And then there is the ever-present imponderable: the possible need, at some point, to finance the horrendous costs of reunification with destitute North Korea when that state collapses. That would make the vast expense of unification in Germany pale into insignificance. At some point in the future Korea may need all the room for future fiscal expansion it can get.

A bridge to the future

The problems of the South Korean model should not be allowed to obscure either its achievements or its continuing strengths. True, over the past 40 years annual GDP growth has declined from about 10% to 4-5% (see chart 2). Business investment has halved from over 30% of GDP in the mid-1990s to 17% in 2010—but that is still 50% over the OECD average. Further declines in growth seem likely.

That is not surprising. As Kwanho Shin of Korea University and Dwight Perkins of Harvard show, every country’s growth starts to ebb as its income reaches about $10,000 a year. South Korea has kept going longer than most. If it can increase public spending a little to reduce inequality and poverty, boost its labour supply by encouraging more women to work and avoid compromising its educational standards and penchant for hard work, then it should be well placed to pull ahead of Europeans and catch up with America, too.

South Korea has long been a model for outsiders. President Kennedy’s chief economic adviser, Walt Rostow, wanted to use it as a testing ground for his theories about stages of economic growth. But Koreans do not see themselves as a blank slate, or as a new world power. They stress a long legacy of openness and innovation. Before the wars of the 20th century Korea was a bridge between the more closed worlds of China and Japan. It developed movable metal type two centuries before Gutenberg; its last imperial dynasty benefited from checks and balances more extensive than in its Chinese prototypes. The more Korea brings these qualities of domestic innovation to the fore, the better its chances of blazing a new trail for itself.

Ahn Cheol-soo: A New Voice Grips South Korea With Plain Talk About Inequality and Justice

2011-11-20T11:53:00.005-05:00

http://www.nytimes.com/2011/11/20/world/asia/a-new-voice-grips-south-korea-with-plain-talk-about-inequality-and-justice.html

By CHOE SANG-HUN
SEOUL, South Korea — Two days before Seoul elected a mayor last month, an unassuming man slipped into the campaign headquarters of Park Won-soon, an independent candidate. Amid flashing cameras, the man, Ahn Cheol-soo, a soft-spoken university dean who had earlier been seen as a contender for mayor himself, affirmed his support for Mr. Park, entrusted him with a written statement and then left.

“When we participate in an election, we citizens can become our own masters, principle can defeat irregularity and privilege, and common sense can drive out absurdity,” said Mr. Ahn’s statement, an open appeal to voters that quickly spread by way of Twitter and other social networks. “I’m going to the voting station early in the morning. Please join me.”

It was a pivotal moment in an election whose outcome has rocked South Korea. In a country where resentment of social and economic inequality is on the rise, and where many believe that their government serves the privileged rather than the common good, Mr. Ahn’s words — “participate,” “principle,” “common sense” — propelled younger voters to throw their support overwhelmingly behind Mr. Park, the first independent candidate to win South Korea’s second-most-influential elected office.

Nearly 30 percent of the voters who backed Mr. Park on Oct. 26 did so because of Mr. Ahn, according to an exit poll jointly conducted by YTN, a cable news channel, and the Asan Institute for Policy Studies.

Mr. Ahn’s charged comments on themes like inequality, the middle class, the despair of the young and “businesses with a soul and a goal nobler than just making money” are prompting comparisons here with the Occupy Wall Street movement.

Yet, after setting off what stunned politicians called a “tsunami,” Mr. Ahn retreated from public view, declining all requests for interviews. Nevertheless, he remains South Korea’s hottest political star.

His name has attracted those who are disillusioned with the existing political parties. This month, 25 younger lawmakers from President Lee Myung-bak’s governing Grand National Party, responding to the party’s loss in the mayoral race, demanded that the president apologize for “arrogance and disconnectedness.” Recent surveys have found that if the next presidential election were held today and Mr. Ahn were a candidate, he would win.

Politicians have called on him to declare whether he intends to run in the December 2012 presidential election, but he has kept silent. Mr. Park said recently that he did not know whether Mr. Ahn would run, but added, “The fact that he once dreamed of running for Seoul mayor makes it clear that he is disappointed, and in despair, over the country’s politics.”

Although one newspaper columnist has accused him of spreading “the virus of demagoguery,” to his fans he is “Dr. Ahn,” a medical doctor who became an expert on computer viruses and is now ready to turn his healing powers to politics.

“Like Spider-Man, once you have the power, even if you don’t like it, you have to accept the responsibility that comes with it and act accordingly,” Mr. Ahn, a science fiction fan, told the weekly Sisa Journal last year.

The Ahn Cheol-soo phenomenon speaks volumes about why many Koreans often react with distrust to initiatives trumpeted by the political and corporate elite, like the contentious free-trade agreement with the United States, and why Mr. Lee, while winning the admiration of President Obama, is often regarded by his own people as out of touch.

“Professor Ahn represents the people’s aspirations for change,” said Kim Hyung-joon, a political scientist at Myongji University.

Champion of change is a new addition to Mr. Ahn’s unusual résumé. When he was a young medical doctor, Mr. Ahn, now 49, worked for seven years in his spare time to develop what became South Korea’s first widely used antivirus software.

In 1995, he quit medicine and founded AhnLab, the country’s most successful software company. When he retired as its chief executive in 2005, he donated millions of dollars’ worth of shares to his employees. (Many South Koreans see a telling contrast between that gesture and the actions of a parade of well-known businessmen who have been caught breaking the law to channel wealth to their children.)

On Nov. 14, Mr. Ahn said he would donate half of his 37.1 percent stake in AhnLab to charity. His donation, worth about $130 million, would be used to help “the children of low-income families whose opportunities are limited because of social and economic inequality,” Mr. Ahn said in a statement.

In June, Mr. Ahn became dean of the Graduate School of Convergence Science and Technology at his alma mater, Seoul National University. After the election, he resigned as director of a research institute when the governing party, citing his political activities, threatened to end government financing for it.

Mr. Ahn’s interviews, and the lectures that until recently he gave on campuses across South Korea, reveal Mr. Ahn to be not only a mentor whose talks have inspired younger Koreans, but a social critic whose pointed criticism of the country’s big businesses has struck a deep chord.

“Bill Gates wouldn’t have become Bill Gates if he were born in South Korea,” Mr. Ahn likes to say, accusing Samsung, LG and other major corporations of creating “zoos” and “a realm of predators and lawlessness” where, he says, they have shackled small entrepreneurs with slaverylike contracts.

He took on a national icon: Lee Kun-hee, the chairman of Samsung, whose elitism, analysts say, epitomizes South Korea’s national strategy of letting big business drive economic growth, in the expectation that society as a whole will benefit. Mr. Lee famously said, “We need talented people who can each create livelihoods for 10,000 people.”

“What he failed to add,” Mr. Ahn said in an interview this year with MBC TV, “is that if someone keeps those 10,000 livelihoods for himself and takes more from others, then he’s no help to society, where all of us must live together.”

Such remarks tap into what is arguably the biggest public grievance in South Korean society — and, potentially, a political tinderbox.

President Lee, a former Hyundai chief executive, campaigned in the 2007 election on what he called his “747” vision: the economy would take off like a Boeing 747, giving South Korea a 7 percent economic growth rate, a $40,000 per capita income and the world’s seventh-largest economy.

The economy did grow, though not spectacularly. And many Koreans complained that the 747 of growth had only the rich on board. While big businesses reaped profits, often achieved in part by moving jobs abroad, smaller businesses that supplied them earned less and less.

Older Koreans grew up believing that young people, if they worked hard, could climb high even if their families were poor; the classic example is President Lee himself. But young Koreans tend to see diminished opportunities in a country where the rich can afford private tutors for their children while others struggle to pay skyrocketing tuition and the poor are shut out altogether. Sociologists have sounded alarms about antiestablishment hatred boiling in cyberspace.

“In a way, the current system is worse than the old military dictators,” said Kim Ou-joon, who produces a weekly podcast that satirizes the government and is downloaded by millions of South Koreans. “The dictators beat students, hurting them physically. Today’s ruling class destroys young people’s self-esteem by threatening their livelihood. It humiliates their soul.”

In August, Mr. Ahn told the newsweekly Chosun that many of the students who seek his advice break down, crying in despair.

“A lack of justice is a serious problem,” he told MBC TV, explaining why the book “Justice: What’s the Right Thing to Do?” by the Harvard political philosopher Michael J. Sandel became a No. 1 best seller in South Korea. “If we let this problem balloon, the tremendous social pressures can explode.”

Before the Seoul mayoral election, some polls showed Mr. Ahn potentially running far ahead of Mr. Park, but on Sept. 6 he announced that he would not run and would instead back Mr. Park. “The expectations people have had for me are not solely for me,” Mr. Ahn said. “Our society’s wish for change was merely expressed through me.”

If Mr. Park was the great beneficiary of Mr. Ahn’s popularity, the hardest hit has been Park Geun-hye, a leader of the Grand National Party and the daughter of Park Chung-hee, the country’s president from 1963 to 1979. Until Mr. Ahn came along, she polled higher than any other potential candidates in the 2012 election to succeed Mr. Lee, who by law cannot run again.

“She’s suddenly become a symbol of the status quo — old times, old age, old ideas,” said Hahm Sung-deuk, a political scientist at Korea University.

But he questioned whether the halo surrounding Mr. Ahn would survive an actual political contest. “People want a fresh face, and the first face they see is Professor Ahn’s,” Mr. Hahm said. “If Professor Ahn jumps into actual politics, much of the mystique and aurora surrounding him will evaporate, too.”

In an interview with the daily Chosun Ilbo in August, Mr. Ahn’s wife, a university professor with whom he has a daughter, said she saw “little chance” of Mr. Ahn entering politics.

Still, in one of his lectures to students, Mr. Ahn said: “You can’t find out how fast the river is flowing by sitting on the banks and watching. You have to take off your shoes and socks and jump in.”

The Big Business of South Korea's Mega-Churches

2011-10-16T17:57:00.005-04:00

http://www.economist.com/node/21532340

KOREA has long been a hotbed of religiosity. Before a certain Kim Il Sung began having other ideas, Pyongyang (now the capital of North Korea) used to be known as “The Jerusalem of the East”. And in today’s Seoul, practitioners of traditional shamanism, Buddhism, Christianity and even cults such as the Unification Church (better known in the West as the Moonies), all have plenty of followers.

Many of them also have lots of money (not least because religious institutions are tax-exempt). The Protestant church, in particular, seems to have produced a tribe of flashy, mansion-dwelling pastors. This is partly a result of the character of Korean Protestantism: a common theme, for instance, at the Yoido Full Gospel Church in Seoul is that a poor Christian is not a good Christian. However, it is also a result of the incentives created by the sheer size of some churches. Yoido itself ranks as the largest Christian congregation in the world, with over 1m members. Another, Somang Church, has hundreds of thousands of faithful, including South Korea’s president, Lee Myung-bak.

With all these people throwing their spare won into the collection plate, mega-churches have become big businesses. Yoido Full Gospel Church’s founder Cho Yong-gi, who has run the congregation since 1958, has family interests ranging from private universities to newspapers. Members of his church were once asked to pray for higher sales for one of his titles.

A pastor at a Seoul-based church of a mere 60,000 members notes that the likes of Yoido have become “so big, and with assets so huge, that human greed comes into play”. And in late September, following complaints by 29 church elders, prosecutors began investigating Mr Cho over the alleged embezzlement of 23 billion won ($20m) from Yoido’s funds. A documentary aired by MBC, a television station, claims that this money was used to buy property in America. The show also charged that Mr Cho’s wife sold a building constructed with collection money for her own gain. Its buyer was Hansei University—an institution where she also happens to be president. Mr and Mrs Cho deny the allegations.

Yoido Church’s founder is rarely out of the news in South Korea. In March he sparked a storm of criticism by claiming the earthquake and tsunami in Japan was “God’s warning” to a country that follows “idol worship, atheism, and materialism”.

He is also too political for some. When President Lee’s government drew up plans to legislate for Islamic sukuk bonds in South Korea, Mr Cho argued that this would aid “terrorists”, and that the president was forgetting the vital role the Protestant lobby had in electing him. Following concerted efforts by Mr Cho and other South Korean church leaders, the government blinked first, and the plan was dropped.

There are plenty of rank-and-file Christians in South Korea who do not indulge in the cathedralism of the mega-pastors. Many of the underground networks helping North Koreans on the run in China are organised by South Korean Christians. Refugees who reach South Korea are often cared for by church groups, and South Korean church aid-agencies are usually among the first to respond to natural disasters around the world, including the Japanese tsunami in March.

But in a country that thrives on group activities and collective bonding, as well as religion, Seoul is a natural home for mega-churches. The likes of Mr Cho, for all their flaws, provide something that millions of Koreans find irresistible.

Video: Did Koreans Invent Pizza?

2011-10-14T22:31:00.001-04:00

Samsung: Asia’s new model company

2011-10-03T11:35:00.003-04:00

http://www.economist.com/node/21530984

Samsung’s recent success has been extraordinary. But its strategy will be hard to copy
Oct 1st 2011 from the print edition

THE founders of South Korea’s chaebol (conglomerates) were an ambitious bunch. Look at the names they picked for their enterprises: Daewoo (“Great Universe”), Hyundai (“The Modern Era”) and Samsung (“Three Stars”, implying a business that would be huge and eternal). Samsung began as a small noodle business in 1938. Since then it has swelled into a network of 83 companies that account for a staggering 13% of South Korea’s exports. The hottest chilli in the Samsung kimchi bowl is Samsung Electronics, which started out making clunky transistor radios but is now the world’s biggest technology firm, measured by sales. It makes more televisions than any other company, and may soon displace Nokia as the biggest maker of mobile-telephone handsets.

Small wonder others are keen to know the secret of Samsung’s success. China sends emissaries to study what makes the firm tick in the same way that it sends its bureaucrats to learn efficient government from Singapore. To some, Samsung is the harbinger of a new Asian model of capitalism. It ignores the Western conventional wisdom. It sprawls into dozens of unrelated industries, from microchips to insurance. It is family-controlled and hierarchical, prizes market share over profits and has an opaque and confusing ownership structure. Yet it is still prodigiously creative, at least in terms of making incremental improvements to other people’s ideas: only IBM earns more patents in America. Having outstripped the Japanese firms it once mimicked, such as Sony, it is rapidly becoming emerging Asia’s version of General Electric, the American conglomerate so beloved of management gurus.

There is much to admire about Samsung (see article (http://www.economist.com/node/21530976)). It is patient: its managers care more about long-term growth than short-term profits. It is good at motivating its employees. The group thinks strategically: it spots markets that are about to take off and places huge bets on them.

The bets that Samsung Electronics placed on DRAM chips, liquid-crystal display screens and mobile telephones paid off handsomely. In the next decade the group plans to gamble again, investing a whopping $20 billion in five fields in which it is a relative newcomer: solar panels, energy-saving LED lighting, medical devices, biotech drugs and batteries for electric cars. Although these industries seem quite different from each other, Samsung is betting that they have two crucial things in common. They are about to grow rapidly, thanks to new environmental rules (solar power, LED lights and electric cars) or exploding demand in emerging markets (medical devices and drugs). And they would benefit from a splurge of capital that would allow large-scale manufacturing and thus lower costs. By 2020 the Samsung group boldly predicts that it will have sales of $50 billion in these hot new areas, and that Samsung Electronics will have total global sales of $400 billion.

It is easy to see why China might like the chaebol model. South Korea’s industrial titans first prospered in part thanks to their close ties with an authoritarian government (though Samsung was not loved by all the generals). Banks were pressured to pump cheap credit into the chaebol, which were encouraged to enter dozens of new businesses—typically macho ones such as shipbuilding and heavy industry. Ordinary Koreans were chivvied to save, not consume. South Korea grew into an exporting powerhouse. Does this sound familiar?

In China, too, the state draws up long-term plans, funnels cash to industries it deems strategic and works hand-in-glove with national champions, like Huawei and Haier (see article (http://www.economist.com/node/21530974) ). Some of Beijing’s planners would love to think that state intervention is the route to world-beating innovation. No doubt inadvertently, Samsung feeds this delusion.

Of hindsight and survivor bias

For delusion it is, on three levels. Most broadly, South Korea’s prosperity owes less to dirigisme than China’s dirigistes believe, and nothing to dictatorship—South Korea is now a democracy, and much happier for it. Second, the chaebol system has been less beneficial for South Korea than Samsung’s success might imply. Some of the state-directed cheap credit that powered the chaebol produced superb companies, such as Samsung Electronics and Hyundai Motors. But it yielded some costly failures, too. During the Asian financial crisis of 1997-98, half of the top 30 chaebol went bust because they had expanded recklessly. Daewoo, the Great Universe, is no more.

Defenders of the chaebol say that the crisis spurred reforms, curbing the tendency of the chaebol to overborrow and overexpand. They don’t hog credit as much as before—Samsung Electronics now generates oceans of cash to finance its expansion plans. But in general the giants still crowd out small entrepreneurial firms: a former boss of Samsung Electronics has warned that South Korea has too many eggs in too few baskets. And despite a decade of political reform, the ties between the chaebol and the state are still too cosy. President Lee Myung-bak (the ex-boss of a Hyundai firm) has pardoned dozens of chaebol bosses convicted of corporate crimes.

Find out how much of an Apple iPhone is actually a Samsung with our "teardown" infographic.As for Samsung, it is an admirable company, packed full of individual successes that managers (and not just ones in Asia) should study. But inevitably it has not always got everything right—who now drives a Samsung car? And its overall success is not easily replicable. Samsung is patient and bold because the family of its late founder, Lee Byung-chull, wants it to be. Family control is guaranteed by a complex web of cross-shareholdings. This is fine so long as the boss is as brilliant as the late Lee or his son, Lee Kun-hee, the current chairman. But if the founder’s grandson, who is being groomed for the top job, fails to measure up, he will be harder for the company’s shareholders to oust than his peers at GE, Sony and Nokia.

To that extent, for all its modern technology, Samsung’s story is an old one writ new—the well-run family firm, with a strong culture and a focus on the long term, which has made good use of an indulgent state. Celebrate it on those grounds and Asia’s new model has something going for it. Just don’t expect it to keep going at its current rate for ever.

The Slowdown in China: How Much is South Korea at Risk?

2011-07-21T11:46:00.001-04:00

http://www.businessweek.com/magazine/the-slowdown-in-china-whos-exposed-07072011-gfx.html

South Koreans Balk at Saturdays Without School

2011-07-08T10:21:00.002-04:00

http://www.businessweek.com/magazine/south-koreans-balk-at-saturdays-without-school-07072011.html

The government wants to end weekend classes. Mothers revolt
By Sangim Han and Rose Kim

Chung Eunjung, a mother of two sons in Seoul, says South Korea’s plan to give children extra playtime by ending Saturday classes means only one thing: more private tutoring.

On June 14, President Lee Myung Bak’s government announced it would recommend that Korea’s schools end the Saturday classes, a feature of school life since the 1950s. Most schools now hold classes for four hours on two Saturdays a month. President Lee wants Koreans to consume more, and he hopes to wean the school system off its obsession with standardized tests. He figures giving kids and families the weekend off would help achieve both goals.

Don’t expect the playgrounds to fill up with liberated kids, though. “It would be a brave mother who let them play,” says Chung, who spends $1,700 a month on additional classes. Even the kids sound focused. Eleven-year-old Charlie Lee takes 15 hours of cram courses in English and math every week. “I like those classes,” he says. “I can meet my friends and play with them.”

East Asian nations dominate the top five slots in the Organization for Economic Cooperation & Development’s assessment of reading, math, and science skills. U.S. students are ranked 30th in math, 23rd in science, and 17th in reading. President Barack Obama has cited South Koreans’ zeal as an example of the need for American kids to study harder to compete. Three out of four South Korean parents use cram schools, tutors, or online learning to help get their children into college.

Rather than creating more family time, shutting schools on weekends could boost publicly traded cram school operators such as MegaStudy or language instructor JLS, says Kim Mi Song, an analyst at Hyundai Securities in Seoul. “If private institutions expand Saturday classes, I’ll definitely send my son,” says Kim Hyeran, who pays $2,800 per month for out-of-school classes for her 13-year-old, including as much as 20 hours of math. The Kim family, like the Chungs, live in Seoul’s Gangnam district, renowned in Korea for its specialized schools and private academies.

Traditional Confucian reverence for learning matters less to parents these days than the fear their children will be left behind, says Han Zun Shang, a professor of education at Yonsei University in Seoul. Annual per capita income has doubled in the past decade, to $20,759, and wage inequality is increasing.

The Koreans don’t want to repeat the experience of Japan, which cut the school week to five days in 2002. In 2009 the Japanese reversed course after their students began sliding down the OECD’s rankings. Between 2000 and 2006, Japanese high school students slumped from 1st to 10th in math, 2nd to 6th in science, and 8th to 15th in reading comprehension. Japan has added 278 hours back to the elementary school year and 105 hours to junior high school.

The Seoul Metropolitan Office of Education, which governs state education in the capital, says it plans to add two hours to weekday classes and cut some vacation days to offset the end of Saturday school. That doesn’t include all the new cramwork that will eat up those newly empty Saturday hours. “I put great stock in my son’s education,” says Kim, the mother of the 13-year-old boy. “I will make sure he gets whatever he needs.”

The bottom line: Koreans are so scared of falling behind at home and abroad that they do not want to ease up on intensive school prepping.

Virtual Grocery Shopping in South Korea

2011-07-08T10:08:00.001-04:00

South Korea plans to convert all textbooks to digital by 2015

2011-07-03T13:16:00.004-04:00

http://www.engadget.com/2011/07/03/south-korea-plans-to-convert-all-textbooks-to-digital-swap-back/

By Zach Honig

Well, that oversized Kindle didn't become the textbook killer Amazon hoped it would be, but at least one country is moving forward with plans to lighten the load on its future generation of Samsung execs. South Korea announced this week that it plans to spend over $2 billion developing digital textbooks, replacing paper in all of its schools by 2015. Students would access paper-free learning materials from a cloud-based system, supplementing traditional content with multimedia on school-supplied tablets. The system would also enable homebound students to catch up on work remotely -- they won't be practicing taekwondo on a virtual mat, but could participate in math or reading lessons while away from school, for example. Both programs clearly offer significant advantages for the country's education system, but don't expect to see a similar solution pop up closer to home -- with the US population numbering six times that of our ally in the Far East, many of our future leaders could be carrying paper for a long time to come.

Tiger Moms Hire Private Tutors in South Korea as Saturday Classes Scrapped

2011-06-29T05:56:00.002-04:00

http://www.bloomberg.com/news/2011-06-28/tiger-moms-hire-private-tutors-in-south-korea-as-saturday-classes-scrapped.html

Chung Eunjung, a 46-year-old mother from Seoul, says South Korea’s plan to give children more play time by ending Saturday classes means only one thing: more private tutoring.

President Lee Myung Bak’s government said on June 14 it would recommend schools adopt a shorter week starting in 2012, ending Saturday classes that have been a feature of the modern education system since the end of the Korean War in 1953. Most schools now hold classes on two Saturdays a month.

“I’m not the only parent to feel this way,” said Chung, who already spends $1,700 a month on additional classes for her two sons. “It would be a brave mother who let them play.”

The reaction of mothers like Chung helps explain why students in Asia are outperforming the rest of the world. Nations in the region dominate the top five slots in the Organization for Economic Co-operation and Development’s assessment of reading, math and science skills. U.S. students are ranked 30th in math, 23rd in science and 17th in reading.

President Barack Obama has cited South Koreans’ dedication to schooling as an example of the need for American kids to study harder to compete. Three out of four South Korean parents use cram schools, tutors or online learning to get their kids into college. More than half of the students in Asia’s fourth- largest economy take private math and English lessons, according to the government.

Education Stocks
Rather than creating more family time, the plan to shut schools at the weekend would be a boon for academies like MegaStudy Co., or language-course operator JLS Co., said Kim Mi Song, an analyst at Hyundai Securities Co. in Seoul.

“This will be good news for education stocks,” said Kim. “It is clear that the amount of time students spend in private courses will increase.”

Even with the change, South Korean children will spend more time in school than their U.S. counterparts. In his State of the Union address in January, Obama said South Korea treated its teachers as “nation builders.” In 2009, he said: “Our children spend over a month less in school than children in South Korea every year. That’s no way to prepare them for a 21st century economy.”

In the latest round of the OECD’s Program for International Student Assessments in 2009, South Korea placed second in reading, fourth in math and sixth in science. Finland was the only country outside Asia to make it into the OECD’s top five in any of the three categories.

‘Send My Son’
“If private institutions expand Saturday classes, I’ll definitely send my son,” said Kim Hyeran, who pays $2,800 per month for out-of-school classes for her 13-year-old, including as much as 20 hours of math. The Kim family, like the Chungs, live in Seoul’s Gangnam district, renowned in Korea for its concentration of specialized schools and private academies.

South Korean parents spend about $220 per child every month on out-of-school classes, tutoring and online learning, according to government statistics.

Traditional Confucian reverence for learning matters less to parents these days than the fear that their children will be left behind, according to Han Zun Shang, a professor of education at Yonsei University in Seoul. Annual per capita income has doubled in the past decade to $20,759 and wage inequality is increasing, said Han.

Japan, which cut the school week to five days in 2002, is reversing course after its students began sliding down the OECD’s rankings.

Reversing Course
Between 2000 and 2006, Japanese high school students slumped from first to 10th in math, second to sixth in science and from eighth to 15th in reading comprehension.

Japan added 278 hours to the elementary school year in 2009 and 105 hours to junior high school. The Tokyo Metropolitan Government in January last year told schools they could resume Saturday classes twice a month, according to its website.

The Seoul Metropolitan Office of Education, which governs state education in the capital, said it plans to add two hours to weekday classes and will reduce some vacation days to offset ending school on Saturdays.

Hyundai Securities’ Kim is one of 10 analysts with “buy” recommendations on MegaStudy, which prepares kids for college exams. Eleven others rate the stock a “hold,” according to Bloomberg data.

Kim said the stock should rebound from a 13 percent drop in the past 12 months, after the government cracked down on cram schools holding classes past 10 p.m. and changed the way college-entrance-exam questions were chosen.

MegaStudy, Thinkbig
JLS, which offers online courses as well as regular language classes, has declined 7.8 percent over the past year.

Officials at MegaStudy and JLS declined to say if they would begin offering more classes.

Daekyo Co. and Woongjin Thinkbig Co., providers of home- study materials for elementary school students, may also benefit from the end to Saturday classes, said Joseph Shon, an analyst at Shinyoung Securities Co. in Seoul.

Weekly workbooks produced by Daekyo and Woongjin provide a cheaper alternative to private tutors and academies. The companies are setting up study centers where parents can leave children to work by themselves under limited supervision.

Daekyo has gained 9.4 percent on the Korea Exchange this month while Woongjin has advanced 0.6 percent. The benchmark Kospi index has dropped 2.2 percent over the same period.

“I put great stock in my son’s education,” said Kim, the mother of the 13-year-old boy. “I will make sure he gets whatever he needs.”

Wi-Not? South Korea's Seoul To Blanket The City With Free Wi-Fi

2011-06-27T00:10:00.002-04:00

http://www.fastcompany.com/1760834/the-wi-rich-get-wi-richer-south-koreas-seoul-to-add-free-municipal-wi-fi

By Tim Carmody (Fast Company)

South Korea's capital city is already the best connected in the world [1], so it's not surprising that the local government has announced a $44 million project to bring free Wi-Fi Internet access [2] to every outdoor space and street corner city-wide. Surprising, no. But jealousy-inducing? Oh my, yes.

All buses, taxis, and subway trains will be covered, too. Korea Telecom (KT) already had Seoul's subway lines covered with WiBro [3], its nationwide commercial wireless broadband service.

Was that good enough? Not in Seoul.

KT had rolled out that leg of its service back in 2004 and put it into service in 2007. Before North American telecoms got serious about 3G, before much smaller municipal Wi-Fi projects stateside collapsed under their own weight, South Koreans were already living the IEEE 802.16e mobile WiMAX dream.

South Korea's wireless penetration rates and download speeds make most of the U.S.'s cabled broadband look like an anachronistic joke. (Like when your grandmother tells a long, meandering story that's only funny because she's so old and adorable.)

Seoul is already the long-reigning hotspot champ [4]. You can already get wireless almost everywhere. Their version of the last mile problem [5] is getting Internet signal outside. Actually, Seoul's problem (such as it is) illustrates both the genius and the frustrations of municipal wireless plans worldwide.

They boil down to this: City and regional governments don't want to blanket their jurisdiction in Wi-Fi for the benefit of their citizens. At least not directly. They need data coverage for government workers: police, fire, emergency responders, city inspectors, parking meter readers, and so forth.

Putting Wi-Fi everywhere a city worker might go means putting Wi-Fi everywhere in a city. That's expensive. Metropolitan and regional coverage is even more expensive. Nor do these cities or regions themselves typically have the expertise to do it.

Enter the service providers. They agree to wire up the city and run the service on the cheap so long as the city can help give them paid private subscribers on top of the government users. This sounds like a win for everybody.

But then the long-delayed pain sets in. It turns out that citizens (who are now paid subscribers to a public/private service) want Internet access in strange, exotic places, like their homes. Government workers actually don't want Wi-Fi inside your house as much as they want it on your street. They're not going to hang out and watch a movie. Nor would you like them to.

The conflict between the needs of the two user groups means that either one group or the other is unhappy until the ISP runs a lot more string and puts up a lot more cans than it thought it would have to. Meanwhile, big telecoms (at least the ones cut out of the deal) are doing everything they can to throw up obstacles to public wireless, from lobbying the government [6] to whispering (or shouting) about poor service quality.

Sometimes projects go broke; sometimes they fall apart entirely or have to be saved or taken over by the city, like in Philadelphia [7]. Often, there's a big gap between the initial vision of what a public wireless network could be and what it winds up becoming.

These, however, are birth pangs. They are known bugs, to borrow some jargon from software development. Because when it works, it works. It works for all of the reasons everyone wanted to start the thing in the first place: because it's arguably only at the scale of a metropolitan public works project that you really can deliver the smooth, broad, deep data coverage that we all say and believe we want--not just for those who can put down a mint, not just in place of convenience X, Y, and Z, but everywhere, and for everyone, for the public good.

It's worth remembering that even in South Korea, our wireless infrastructure is still in beta.

[1] http://www.focus.com/briefs/mobile-wireless/most-connected-cities/
[2] http://www.physorg.com/news/2011-06-seoul-free-wifi-areas.html
[3] http://en.wikipedia.org/wiki/WiBro
[4] http://money.cnn.com/2006/01/25/technology/wifi/index.htm
[5] http://en.wikipedia.org/wiki/Last_mile
[6] http://www.dslreports.com/shownews/57034
[7] http://www.pcmag.com/article2/0,2817,2357395,00.asp
[8] http://www.flickr.com/photos/gerardosotelo/
[9] http://twitter.com/?lang=en&logged_out=1#!/fastcompany
[10] http://www.fastcompany.com/1728968/south-korea-invests-718-billion-in-smart-grid

Video: Meet Sung-Bong Choi, South Korea's Susan Boyle

2011-06-14T07:18:00.001-04:00

South Korea needs fewer wage slaves and more entrepreneurs

2011-05-21T23:21:00.003-04:00

http://www.economist.com/node/18682342

Earlier this year Humax, a maker of digital set-top boxes based in Seoul, announced that its annual revenues had exceeded 1 trillion won ($865m) for the first time. For South Korea, this is something of a milestone. Humax is a classic start-up, founded in 1989 after a chat between engineering students in a bar. Alas, scandalously few Korean start-ups grow this big.

The Korean economy is dominated by the chaebol, huge conglomerates with tentacles in every stew. The biggest, Samsung, accounts for around a fifth of the country’s exports. Although the chaebol have played a vital role in South Korea’s development, they also suck up credit and obstruct the rise of start-ups. “Everyone knows you don’t compete with the chaebol” is a commonly heard refrain.

Parents of bright young Koreans typically steer them into steady careers in the chaebol, the government or the professions. As in Japan, being a salaryman (or woman) is far more respectable than running one’s own firm. “In Korea, stability is everything,” says one such parent.

Widespread youth unemployment is changing that calculation, however. An impressive 58% of Koreans aged 25-34 have attended university, but 346,000 graduates are currently out of work, up from 268,000 two years ago. Some become entrepreneurs out of necessity: almost 30,000 young South Koreans say they want to launch their own companies, one survey found. And according to the government, the number of “one-man creative enterprises” in the country has risen by 15% in the past year, to 235,000.

Young entrepreneurs often favour tech fields such as social media or gaming, where the only barrier to entry is the power of your imagination. Challenging the chaebol at, say, shipbuilding, might be trickier. The previous wave of young entrepreneurs—a result of the first internet boom, and the unemployment that followed the 1997-98 Asian financial crisis—threw up fizzy firms such as NHN, the operator of Naver (the “Korean Google”), and NCsoft, a maker of multiplayer online role-playing games. Each was once tiny but now belongs to the trillion-won club.

These new entrepreneurs are being joined by a growing band of foreigners, including ethnic Koreans from Western countries. Californian Koreans see no stigma in starting your own business. And they see South Korea, where the economy grew by 6.2% last year, as a land of opportunity compared with sluggish America. The country issues about 35,000 investor visas a year, mostly to small-scale entrepreneurs. The Seoul Metropolitan Government’s Global Centre has recently been swamped by expats seeking to attend its classes on Korean business procedures and regulations.

The city has also launched a “Youth 1,000 CEO Project”, to provide young entrepreneurs with free office space and grants of up to 1m won per month. South Korea’s President Lee Myung-bak grumbles that Korea has no Mark Zuckerberg (the baby-faced founder of Facebook).

The problem, though, is not young Koreans, who are both bright and energetic. Nor is it business-throttling regulations: South Korea does better on that score than Japan or Taiwan, says the World Bank. The real obstacle to enterprise is a society that urges its best young minds to aim low.

Hunger in North Korea: Let them eat maize husks

2011-05-21T23:07:00.000-04:00

http://www.economist.com/node/18682803

It is the time of year when the previous harvest has been nearly eaten and the next one has just been planted. Time, in other words, to worry about North Korea’s perennially hungry masses.

North Korea had long grown dependent on food handouts from its estranged brother, South Korea, and from the United States. But the South’s current president, Lee Myung-bak, has taken a tougher line, tying assistance to less provocative behaviour by Kim Jong Il’s nuclear-tipped regime. So Mr Kim’s envoys have travelled further afield of late, reportedly doing the rounds of Europe.

The UN’s World Food Programme (WFP) is now preparing to distribute emergency aid to 3.5m North Koreans suffering from “severe malnutrition”. Programme officials are concerned about the possibility of a famine on the scale of the one in the mid-1990s, in which over 1m died. They blame a series of shocks, including the coldest winter in years, widespread flooding and an outbreak of foot-and-mouth disease among livestock. Some 297,000 tonnes of cereal and 137,000 tonnes of fortified blended food must reach the most vulnerable.

With murky data, and diplomats and foreign-aid staff restricted in where they may travel, not everyone agrees with the WFP’s assessment. Certainly, estimating North Korea’s food needs has long been a politicised business. A member of South Korea’s ruling Grand National Party, Yoon Sang-hyun, says that the North is hoarding 1m tonnes of rice, playing up a shortfall in order to get aid on the cheap. Some say Mr Kim wants the aid in order to announce a bumper harvest in 2012. That year is the 100th anniversary of North Korea’s founder, Mr Kim’s father, Kim Il Sung. Something approaching paradise has long been promised to North Koreans for 2012.

The South’s unification minister, Hyun In-taek, also suspects North Korea of exaggerating its troubles for political gain. Certainly, he says, starvation has begun to overshadow other topics that the South would rather discuss, namely denuclearisation and the North’s refusal to apologise for last year’s shelling of Yeonpyeong island and the presumed sinking in March 2010 of a naval corvette. This is apparently a view shared by Daily NK, an activist network and news source which says that the price of rice in the black market has actually fallen by around half in recent months.

Others, such as Good Friends, a South Korean Buddhist charity long working in the North, insist the situation is very bad—and that tuberculosis is on the rise owing to malnutrition. Rimjingang, a magazine with reporters secretly stationed in North Korea, says that in North Pyongan province by the Chinese border even the army is going hungry.

Stephan Haggard and Marcus Noland, both at the Peterson Institute for International Economics in Washington, DC, say that even though the WFP has overstated the case, “all indicators point to a deteriorating food-security situation”. What is more, they take issue with Mr Lee’s belief that withholding aid will temper the North’s behaviour. Rather, they argue, the response will merely be for the hermit kingdom to “hunker down and tighten repression”. The regime has been consistent chiefly in showing complete disregard for its people.

But arguing is pointless. Widespread malnutrition and starvation in at least some parts of the country is a reality in North Korea. For Jimmy Carter, the former American president, who visited Pyongyang recently, the fault lies mainly with South Korea and the United States. That is presumably tonic to the real culprit for the hunger, the chubby Dear Leader, Kim Jong Il.

Conscription in South Korea: Elvis and the draft-dodger

2011-05-21T22:53:00.005-04:00

http://www.economist.com/node/21516831

Every South Korean man of sound mind and body is obliged to complete 21 months of compulsory military service. For those with enough money or influence though, the temptation to cheat one’s way out of early mornings, crew cuts and square bashing is often too much to resist. Sons of politicians and business leaders are notorious for this, as are the likes of pop star MC Mong, who spent his youthful years on more enjoyable pursuits, e.g., Mr Mong, or rather Shin Dong-hyun, as he is known to the army and the courts, was given a six-month suspended sentence last month (http://sangchusan.blogspot.com/2011/04/rapper-gets-suspended-sentence-super.html) , plus probation and 120 hours of community service, for “delaying” his enlistment. Judges however could not decide on whether or not he deliberately had healthy teeth extracted by a compliant dentist in order to disqualify him from service—hence their relative leniency.

Not everyone in his position is so recalcitrant. Hyun Bin, a hugely popular hallyu (http://www.economist.com/node/15385735) TV actor, last week embarked on the toughest assignment of all: a posting with the marines, to Baengnyeong Island (http://www.allkpop.com/2011/04/hyun-bin-boards-for-baengnyeong-island) —close to the Northern Limit Line and Yeonpyeong, where last November’s lethal North Korean bombardment (http://www.economist.com/blogs/banyan/2010/11/conflict_korean_peninsula) took place. The army’s original plan was to put him on “public relations duty”—appearing in promotional videos, and the like—but highly vocal criticism and Mr Hyun’s reported desire to serve as a marine have seen him sent to the front line.

In a country increasingly preoccupied with the issue of fairness—“Justice”, an academic book on ethics written by Harvard’s Michael Sandel’s sold 1m copies in its Korean edition last year—Hyun Bin’s preference for the Elvis Presley route (http://www.elvis.com.au/presley/elvisandtheusarmy.shtml) to service is likely to go down well. MC Mong, having been seen as trying to sidestep his national duty, will have a harder time turning his service into a virtue. A quick march towards career oblivion seems more likely.

Censorship in South Korea: Game Over

2011-04-16T04:19:00.006-04:00

http://www.economist.com/node/18561127

A liberal, free-market democracy has some curious rules and regulations

Over 700,000 South Korean children own smartphones, such as the Apple iPhone or a local rival by Samsung Electronics called the Galaxy S. Many use them so much for mobile online gaming that some 50 parental associations have called for an imminent night-time curfew for under-16s playing online computer games to be extended to mobile phones.

Concern over computer games is nothing new. Claims that marathon gaming sessions in South Korea’s “PC-bang” internet cafés have led to violence, including deaths, have prompted much soul-searching. All the same, the state seems too keen to use heavy-handed regulation. Its Game Rating Board (GRB), with the legal power to ban any game, now risks obstructing the development of an entire industry, one of the country’s most vibrant.

Graphic games such as Grand Theft Auto III are already off-limits to Korean gamers. But the chief problem is the GRB’s trouble keeping up with the sheer number of new mobile games being released on the iPhone and the rival Android platform, which Samsung uses. The board insists on a long approval process for even the most innocuous games. Apple and Google, which developed Android, are avoiding trouble by simply not selling any games to Korean customers. Related topicsCensorshipSocial issuesGamesHobbies and pastimesVideo games Yet many “indie” games developers in South Korea desperately want to reach customers. With talented programmers and a ready-made market of smartphone-owning game obsessives, this is a natural growth industry. The government pays lip service to the idea of encouraging entrepreneurship among the young. Yet the GRB, says Kim Jin-sung at Pig-Min, a games developer, is “the arch-enemy of the Korean gaming community”. This is all part of a bigger problem: technology-related censorship. In 2009 an online “economic prophet” who called himself Minerva was prosecuted for making gloomy predictions about the South Korean economy and casting aspersions on policymakers. The 30-year-old was later acquitted. The only charge that stuck was the state’s heavy-handedness. Unusually in a democracy, a “real-name” system is now in effect for those posting on popular online forums: any participant signing up to websites must use their national identity number. So would-be Minervas are now easily traced. The spread of false information carries a maximum punishment of five years’ imprisonment and a hefty fine. What is more, since 2008 a supposedly independent Korea Communications Standards Commission has had the remit to promote a “sound and friendly communications environment”. Critics argue that the commission serves as the government’s de facto internet censorship body. It is supposed merely to “advise” portals to remove articles believed to contain falsehoods, obscenity or statements in favour of North Korea that infringe the National Security Act. In fact it may issue administrative orders backed up by law, forcing content to be deleted. Unsurprisingly, its “advice” tends to be followed. Chang Ha-joon of Cambridge University, whose free-trade critique, “Bad Samaritans”, is on a list of books the defence ministry has banned troops from reading, argues that such efforts are counterproductive. “This is not the 1980s, when you could just cut a few telephone lines,” he says. Blocking free speech in one place would simply “start a bushfire” somewhere else. Much of the desire to control the flow of information and ideas can be traced back to longstanding fears over the spread of North Korean propaganda, which remains illegal. The administration of President Lee Myung-bak has additional suspicions about the power of IT thanks to massive, internet-driven protests against imports of American beef that brought Seoul to a standstill in 2008. Yet South Korea’s mild paranoia about controlling information harms its reputation as a liberal democracy and undermines its potential as a creative powerhouse.

Video: The Flavor of Seoul

2011-04-07T10:55:00.000-04:00

Korean BBQ Taco Box in Orlando

2011-04-06T22:40:00.006-04:00

http://www.scottjosephorlando.com/reviews/63-korean/1391-korean-bbq-taco-box Written by Scott Joseph As we gear up to Tuesday’s The Daily City Food Truck Bazaar (gear up; get it?), I thought I would do a preview of one of the bazaar’s participants, Korean BBQ Taco Box. Recently, I told you about Big Wheel Provision’s shiny new truck that is essentially a professional kitchen on wheels. But if Big Wheel’s rig is the Rolls Royce of food trucks, Korean BBQ Taco Box’s is, well, the Dodge. A Dodge Sportsman, to be exact, one of a certain age. Its yellow paint job does not appear to have been professionally applied, and you don’t have to get too close to spot the places where it has been puttied and patched. And from what I could see when I peeked through the open screen door of what is essentially a repurposed camper, it is not outfitted with commercial grade cooking equipment. But the food, though perhaps as quirky as the vehicle, is good. At least the spicy pork taco box I sampled was. Actually, on the menu, it says spicy pork tacos, however there was only one. But a big one. The chunks of fried pork had been marinated in a deliciously spicy sauce and folded with lettuce inside a large flour tortilla. I was hoping it might have some shredded kimchi to further the fusion theme, but alas no. There were some other goodies included in the box, however. There were a couple of small rice balls and two little pieces of an egg roll. One compartment held some lettuce with ginger dressing, and there were a couple of pieces of fried tofu and a fried chicken wing. It was plenty to eat for $5.99. KBBQTB has only one table with two plastic chairs for people who choose to eat their lunches onsite. It’s really more of a take-away sort of truck.

I had only one major complaint, and that was the length of time it took from the time I ordered my food to the point where it was passed through the window, which was more than 20 minutes. That’s a long time to stand around in the hot sun. But when I saw that one of the people who had placed an order before I arrived was handed three bags of about seven boxes, I figured that was the holdup. And when my order was finally ready, the young man who gave it to me apologized for the long wait, so I’m guessing it was an anomaly. During the day -- everyday -- Korean BBQ Taco Box is parked at the Citgo gas station on the northwest corner of Colonial Drive and Primrose Avenue, next door to a McDonald’s. The actual address is 2705 E. Colonial Drive, Orlando. In the evenings, it can be found at a Shell gas station in Oviedo, at 4300 Alafaya Trail and the corner of McCulloch Road. Click this link to go to the Korean BBQ Taco Box website, but you can call orders ahead to 407-844-3990.

Photo: South Korean Street Food

2011-04-03T20:55:00.004-04:00

These are photos from South Korea. I took it at a very famous, open 24/7 shopping central called Dong Dae Moon in Seoul. The lady in the first photo (above) obviously specializes in sea shells and other seafood. In the second photo, you find a menu on the top left corner that reads vertically from left to right,”chicken gizzart, chicken feet, octopus ocellatus, pig skin, seafood pancake, kimchi pancake, and udon. (the rest are not legible due to the reflection.) You also see a big sign on the top middle that reads “Original Mira’s Intestine.” In addition, you see Shin Ramen that you can find at Ralphs, Korean style sushi called “Gim Bap”, and boiled fishcake skewers. http://blogs.kcrw.com/goodfood/2011/04/photo-south-korean-street-food/

Post-Daewoo, GM Plasters Chevy Brand In South Korea

2011-04-01T10:17:00.006-04:00

http://blogs.wsj.com/drivers-seat/2011/03/31/post-daewoo-gm-plasters-chevy-brand-in-sk/?mod=google_news_blog

South Koreans will see more cars and dealerships carrying the Chevrolet logo as General Motors Co. focuses on its core brand globally.

General Motors took a big gamble in South Korea at the start of March by getting rid of the brand name that was long familiar to Korean shoppers, Daewoo, in favor of its Chevrolet brand. So far, the transition is going smoothly, says Mike Arcamone, president of GM Korea. In the past four weeks, GM has re-outfitted its Korean dealers with Chevrolet signage and merchandising. More importantly, car inventory has rapidly shifted into Chevrolet-only product. Daewoo is one of the classic names of Korean business history, one of the major conglomerates to have been built during the 1960s as the country began its meteoric rise from poverty. But it was also the biggest conglomerate to fail during the country’s financial crisis of 1997-98. GM bought Daewoo’s car-building assets in 2001. But GM kept the Daewoo name, in part because South Korean consumers have long tended to favor Korean brands over foreign ones. Renault Nissan bought the car assets of Samsung under the same circumstances and in the same time frame and continues to brand its South Korean cars as Samsung, though they are basically re-badged Nissan models. But the Daewoo brand was tired, Mr. Arcamone said in an interview at the opening of the Seoul Motor Show on Thursday. And the move with the broader reshaping of the General Motors, which recently exited a bankruptcy process that allowed it to trim its brand portfolio and shed troubled assets. “Chevrolet is a global brand, an iconic brand,” he said. “Our studies demonstrated the Korean consumer was ready for this.” This year, Chevrolet will celebrate its centennial. At the Seoul Motor Show (which actually takes place in the suburb of Ilsan), GM added a couple of classic Chevy models sent in from Detroit and placed them near a futuristic concept roadster, dubbed Mi-ray, that was designed in Korea. GM Korea has the third-largest booth at the auto show, after the soccer-field-sized booths of Hyundai and Kia, which together account about 75% of all auto sales in the country. The giant gold Chevy emblem that dominates the booth is visible from much of the convention floor. A small part of the booth displays Cadillac models. The name change came just a few months after the South Korean and U.S. governments in December hammered out the final details of a free trade agreement that had been bogged down by perceptions that U.S. car makers didn’t fare well in the South Korean market. GM Korea has had about 15% market share under the Daewoo brand, but U.S. lawmakers, pressured by Ford and Chrysler to seek better terms in the FTA, rarely acknowledged GM’s toehold in the Korean market. Mr. Arcamone said the timing of the name change was unrelated to the FTA, which GM officially took a neutral stance on. He said the change took a long time to plan and execute, involving tens of millions of dollars in production and merchandising expense. “We never decided to wait for the outcome of the FTA,” he said.

Food-on-a-Stick - Korea and the World

2011-03-29T21:49:00.006-04:00

http://www.seriouseats.com/2011/03/foods-on-a-stick-day-skewers-candy-apples-corn-dogs-yakitori-fondue-pie-pops.html Today is a special day for stick-food lovers. Thanks to SE:Talk, we learned that it's Something on a Stick Day. What qualifies as a stick-food? Corn dogs, yakitori, kebabs, pie pops, fondue, and really anything else that's stabbable with a stick. Slideshow: http://tinyurl.com/4j7l8dk State fairs are usually full of stick-foods. The Minnesota State Fair, for example, sells 60 different foods on a stick, ranging from corn on the cob to spaghetti. In Seoul, South Korea, you can find street vendors selling Tornado Potato, a swirl-cut potato wrapped around a long stick that's deep-fried. Speaking of deep-fried, we've also seen french-fry-coated bacon on a stick, rice-battered hot dogs, and in Ecuador, "chuzos" are deep-fried sausage and plaintain skewers. For those celebrating at home today, here are recipes for 13 of our favorite stick-foods. In most parts of the world, it's not exactly outdoor grilling season yet, so here are some indoor tips.

China cracks down, South Korea speeds up

2011-03-26T15:41:00.003-04:00

http://behindthewall.msnbc.msn.com/_news/2011/03/24/6333593-china-cracks-down-south-korea-speeds-up

By Adrienne Mong

SEOUL, South Korea – It’s a strange thing to be reading about China’s continued crackdown on the Internet from our temporary perch in Seoul.

The last time I was here was in 1989. The Pre-Internet Age.

This time, on my first visit in more than 20 years, South Korea owns the mantle of the world’s fastest Internet connection, according to a quarterly survey known as the State of the Internet by Akamai. It's on average four times as fast as that of the U.S.

But that just isn’t fast enough.

By the end of next year, the South Korean government plans to have every home in the nation hooked up to the Internet at a speed of one gigabit per second. Imagine being able to download the entire Godfather trilogy in 20 seconds.

In the meantime, over in China, land of the Great Firewall, reports are emerging that the download speed of Gmail has plunged. We won’t get into the technicalities of kbps, but let’s just say Gmail is now operating 45 times slower than the most popular free Chinese instant messaging service known as QQ.

The disruptions to Gmail don’t end there. For weeks now, ordinary Gmail users have complained about interrupted service. Writer Wang Lixiong tweeted that he received this message from Gmail when he tried to log in: “Your account is locked, because abnormal activities are detected. You may have to wait 24 hours before you can log in again.”

Another user told my colleague Bo Gu that China Unicom appears to be blocking Gmail entirely from mobile devices.

And in the wake of calls for Jasmine rallies foreign journalists in China have been vigilant about attempts to hack into their email accounts.

The disrupted service coincides with a surge in reported failures of several VPNs (virtual private networks), designed to circumvent China’s Internet firewall.

On Monday, Google accused the Chinese government of obstructing access to its Gmail service, saying the company had checked everything on its own end and concluded that the problems are the result of a “blockage carefully designed to look like the problem is with Gmail.”

The Chinese Foreign Ministry has denied the accusation.

Speedy Internet = Open Internet
South Korea’s drive to lead the way globally in broadband access originated in the mid-1990s, but its efforts stepped up immediately after its economy was crippled by the 1997 Asian financial crisis. And technology became a cornerstone of the government’s strategy to reboot and refashion its economy.

Seoul's approach to the Internet is instructive. Although there are many reasons it has managed to power ahead of the pack, there is one that stands out in sharp relief against what’s happening in China: the open (and highly competitive) nature of its telecoms market.

“The idea behind an “open” system is essentially that, for a fee, broadband providers must share the cables that carry Internet signals into people’s homes,” says one report. “Companies that build those lines typically oppose this sharing. A number of governments, including South Korea and Japan and several European countries, have experimented with or embraced infrastructure-sharing as a way to get new companies to compete in the broadband market.”

China doesn’t allow that kind of openness—either in its infrastructure or in its content.

Japan radiation fear sparks South Korea diaper rush

2011-03-26T15:07:00.002-04:00

http://www.reuters.com/article/2011/03/23/us-japan-radiation-fear-idUSTRE72M74U20110323

By Ju-min Park

SEOUL (Reuters Life!) - The risk of radiation contamination from Japan's damaged nuclear power stations has sparked food bans across the globe and more surprisingly, a buying frenzy from South Korean mothers who fear their favorite Japanese-made diapers may suddenly become unavailable.

Cho Myung-jin, who organizes online group-buying for Japanese diapers, saw her website collapse on Tuesday under the weight of traffic as panicked South Koreans chased brands they believe are better quality than locally-made products.

"The reaction was scary. Some mothers did not go to work to reserve diapers," the 31-year old mother told Reuters.

According to Auction Corp, the second-largest online shopping website in South Korea, sales of Japanese diapers have doubled since the quake.

After her social commerce website collapsed, Cho opened a new message board selling 300 packs of diapers, limiting sales to one pack per person, and said she received 2,000 offers in a minute.

She said the price of Japanese diapers available online has nearly doubled to 150,000 won ($133.30) a package.

"I feel sorry that they sold out, upsetting parents who had waited for days," said Cho, whose 22-month old infant uses the Japanese product.

South Korea’s Smart Grid Will Lead the New Green Revolution

2011-03-23T06:12:00.001-04:00

http://ecopreneurist.com/2011/03/22/south-koreas-smart-grid-will-lead-the-new-green-revolution/comment-page-1/

South Korea is attempting to bring about a new green revolution with its own hands in an attempt to both cut down on CO2 emissions and also to make their electricity market more efficient.

They’re pouring somewhere around the ballpark of $7.18 billion dollars into making a new smart grid for the country. There will be an annual spending of $358 million until 2016. At this point there will be about $2.1 billion spent per year on the project.

It’s estimated that by the year 2030, the complete investment will have been made. You might find yourself wondering what a smart grid could possibly do to help the country. The reason for this is that those using it will only find themselves using as much electricity as they need to.

Even when you try to consciously cut down on electricity usage, you don’t have as much control as you may want to on how much you use. With the implementation of this smart grid, consumers will have a much bigger grip on how much they consume as long as they remember to use home appliance monitoring and give feedback directly through the grid.

In recent years, South Korea has been investing heavily in green technologies and policies. Despite the fact that the nation has been listed as a high-carbon polluter within the member countries of the Organization for Economic Cooperation and Development, critics have been praising the fact that it has been attempting to clean up its act.

For example, it has turned landfills into hydrogen generators, constructed gigantic gardens on rooftops and in some places has even replaced traditional automobiles with electric scooters for police officers. Compared to other countries it has been investing much more in alternative forms of energy. For example, it has been estimated that out of the 972.1 billion dollars included in the United States’ stimulus package, only 11.6 percent has been green technology.

In comparison, out of the 38 billion dollars in South Korea’s stimulus package, a whopping 80.5 percent of that includes green technology. Some countries are doing an even worse job. Japan received 485.9 billion in its stimulus package but only a minuscule 2.6 percent of that is green technology.

South Korea is leading the way for alternative energy usage. The nation’s highways are adorned with solar panels. Seoul is also covered in parks, restored tree-lined streams that were previously covered by urban development and plenty of other green gestures.

For its laudable efforts, the International Council of Societies of Industrial design named Seoul the World Design City for 2010. This is a title well deserved, but only time will tell how much the smart grid will contribute to cutting down on emissions.

Jumbo size burger introduced at GS Supermarkets

2011-03-22T06:01:00.003-04:00

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20110320000362
http://aht.seriouseats.com/archives/2011/03/photo-of-the-day-giant-burger-from-gs-supermarket-in-south-korea.html

A jumbo burger four times bigger than the McDonald’s bulgogi burger has hit the market.

Named “The Greatest Burger,” it is has been available for sale since Friday at GS Supermarkets nationwide.

The super-sized burger, which is 25 centimeters in diameter and weighs about 600 grams, is served in a cardboard box, not wrapped in a paper, as it is about the size of a regular-sized pizza.
Although the price is cheap for its size, the burger has everything inside -- a chicken patty, a slice of tomato, cucumber, lettuce and pickles.

The burger is priced at 12,000 won, but is available at 5,000 won until Thursday during the promotional period.

The burgers were sold out on the first day of the sale, as the news circulated rapidly via word of mouth.

GS Supermarkets’ move to launch the new burger marks the latest entrant in a series of ultra-cheap foodstuffs introduced by big retailers such as Lotte Mart and E-Mart. Lotte Mart stopped selling its 5,000 won chicken, about one-third of usual price, after suffering a backlash regarding its pricing that was said to potentially hurt small chicken franchises.

Expats to teach south Korean students about their cultures

2011-03-20T21:23:00.003-04:00

http://joongangdaily.joins.com/article/view.asp?aid=2933700

Seoul city government said yesterday that it again will sponsor a program in which expatriates will teach the culture and history of their homeland to Korean students by visiting elementary, middle and high schools in Seoul.

"The goal of the program is to nurture students to become leaders in a globalized world and help them understand cultural diversity, as there are more than 260,000 expatriates living in Seoul right now," said Go Hong-seok, a Seoul government official.

Begun in 2009 when roughly 4,000 students took classes by expats, this year’s lectures will start in April and last until December, the Seoul city government said. Roughly 50 foreign volunteers from 16 countries including Nepal and Ireland will teach in classes with less than 30 students.

In an effort to boost the quality of the program this year, the government said it will work with embassies and foreign institutes to encourage teachers to introduce their folk music and dances to Korean students. Seoul city government is now recruiting interpreters. For teachers, applicants can send their resume anytime to the government.

Korea’s Labor Force: Muscle Behind Economic Miracle (April 2010)

2011-03-18T16:27:00.003-04:00

http://www.koreatimes.co.kr/www/news/biz/2010/08/291_63565.html

By Andrew Salmon

Economic pundits examining South Korea in summer 1953 had few positive signs to assess. The war had resolved nothing: The peninsula remained divided; and inter-Korean animosities were fiercer than ever. Much of the nation's urban area and national infrastructure was devastated. Moreover, most of the industry, and key natural resources ― minerals, precious metals, hydro-electric power ― lay in the North. The country was a basket case ― yet three decades later, was being lauded as an ``economic miracle.''

Post-war South Korea had only one significant resource: people. And they hardly looked formidable. Many 19th century Western observers considered Koreans corrupt, backward and lazy; many 20th century observers saw them as fractious and brutal. Yet the seeds to transform a nation of peasants into a nation of workers ― in 1960, workers in the agricultural, forestry and fishery sectors accounted for 63 percent of the labor force; by 2008, this had plunged to 7.2 percent ― were planted early in South Korea's history.

Educational Premium

The nation's first president, Rhee Syngman, enacted universal education. He was building on an existing cultural construct: Educational achievement has been revered by Koreans since at least the 15th century. For a nation as a poor as Korea, Rhee's investment was risky: As much as 19 percent of national budget was devoted to the project.

The system was based heavily on rote-learning, with particular emphasis on successfully inculcating the basics of numeracy and literacy (Korea boasts one of the lowest illiteracy rates on earth). But beyond classroom teaching per se, the culture implicit in the wider educational system helped incubate an effective labor force that was tailor-made for the manufacturing industry that would appear in the 1960s.

In Korean education, the end result ― i.e. achievement in examinations ― is more important than the learning process itself. For this reason, students are expected to study long ― by Western standards, ridiculous ― hours. Moreover, conformity, not individuality is demanded: team mentality dominates. Teachers enforce rules with strict discipline. All these factors would prove effective in forging a labor force that could read and count; was less focused on process than on outcome; was conditioned to working excessive hours; and was disciplined and responsive to orders.

Korean males were subject to another kind of training: national service. Military training further inculcated discipline, spiced with a fierce patriotism ― a force that could be leveraged by authority figures in all areas of life. Nothing was more sacred than working for the group, the company, the nation.

"In the 1960s and 1970s, we had a kind of military morale at work sites,'' said Choi Im-sik, manager of the Labor and Government Relations Team at the Federation of Korean Unions, or FKTU. "Labor obeyed without question.''

A government that prioritized export-led growth provided technical education that upgraded skills as the nation transitioned from light (textiles, wigs, dolls) to heavy (petrochemicals, electronics, construction) industry. In 1967, vocational training was introduced. Technical high schools, such as the Construction High School in Gimhae, South Gyeongsang Province, the Electronics High School in Busan and the Mechanical High School in Gimhae were established. Graduates particularly valued by industry were exempted military service; university departments set aside quotas for technical high school students. In 1976, official policy obliged employers to provide compulsory vocational training.

All for the Company

Unlike communist states, Korea ― which certainly benefited from a strong, Socialist-tinted dose of central planning ― used private, rather than public corporations as its economic growth engine. Companies leveraged their staff to the maximum.

Conglomerates ran courses for new hires that could best be described as indoctrination programs: military-type group training inculcated company spirit. Many companies, even small ones, had a paternalistic side. Teams, shifts and departments fostered close relationships, cemented by after-hours bonding. Firms sponsored in-house sports squads, and weekend excursions that often included games and team-building exercises.

Management was hands on. Department heads attended staffers' weddings and family funerals, even playing the role of match-makers. In the early days of economic growth at least, corporate leadership was personal and charismatic: Hyundai godfather Chung Ju-young was noted for wrestling with his workers. Bosses were known for getting their hands dirty. As CEO of Hyundai Construction, Lee Myung-bak, a typical workaholic, dismantled a bulldozer to see what made it tick.

These various factors engendered powerful loyalties. A 1996 report by global HR agency Humanbridge noted: "Korean employees are expected to dedicate themselves not only to their work, but also to the success of their company. While there is no guarantee of lifetime employment, Koreans generally do not approve of job-hopping.''

The end result was a workforce willing to sacrifice itself for the company. One example was exceptional working hours: Korea routinely topped international surveys (the nation currently has the longest working hours in the OECD). While Korean workers might lag behind those of more developed nations in productivity terms, willingness to work long and hard made up for it.

These fearsome hours ― which corroded quality of life, particularly family life ― did not go unrewarded. As members of an intensely ambitious society, workers sought extra income from overtime and bonuses. A 2007 study by scholars Lee Byung-nam and Rhee Yin-sog, examining manufacturing companies between 1972 and 1987, found that bonuses did, indeed, reflect increased output. "Even these days, Korean workers work hard,'' said Dr. Kang Choong-ho, spokesman for the FKTU. "They want to earn more.'' Indeed: With Korea having customarily been a producer-led, rather than a consumer-focused economy, living costs have always been high.

Dark Side

But there were other factors behind Korean workers' extraordinary output: Growth-obsessed authoritarian governments were untrammeled by such niceties as labor rights or the need to fund social welfare. "From the 1960s to the 1980s, Korean economic growth was the result of the sacrifices of the workers,'' said Kang.

Labor consciousness rose in 1970 after the self-immolation of Chon Tae-il in protest at the sweatshop conditions endured by textile workers (SEE BOX) but the soil for union formation remained stony for another 17 years. For one thing, in the aftermath of the war, any left-leaning organization was looked upon with suspicion. In a 2007 study, researcher Hwang Suk-man found that, absent an environment in which unions could be openly organized, many union leaders based their leadership on personal charisma; when they were jailed or otherwise removed, unions imploded. Moreover, government cynically used the gender divide, pitting males against activist female workers in the 1970s. A 1980 Labor Law revision banned formation of sectoral unions, limiting unions to individual companies.

Historical suppression of unions detonated explosive events in summer 1987, when Koreans won democracy after almost a decade of struggle. Union membership soared. So did industrial disputes: between July and September, over 3,000 conflicts occurred, exceeding the total number in the previous two decades. Some were spectacular: Seoul deployed helicopters, landing craft and more riot policemen to break up a strike at Hyundai than the British government had used soldiers to recapture the Falkland Islands. Wages soared across industries. The early-mid 1990s were the heyday of union activism; a general strike in 1997 forced the Kim Young-sam administration to back down from changes to labor laws. But in 1998, with the specter of mass layoffs hovering due to the Asian economic crisis, a Tripartite Commission, formed of representatives of government, management and labor was formed to mediate industrial disputes.

Korea's Labor Force Today

An iconic image of today's Korea is massed ranks of head-banded unionists, waving banners, thrusting fists in the air and roaring in unison: ironically, militaristic organization, so valuable to management in the past, is now utilized by labor. Two national umbrella unions remain active, and continue to use the language and paraphernalia of struggle.

Such high-profile activism masks that the fact that just 10.5 percent of the workforce is unionized, and Korea's top company, Samsung, lacks a union. While foreign firms routinely beg Seoul to "increase labor market flexibility'' (i.e., ease dismissal rules) over 50 percent of the workforce, the FKTU notes, is either part time or temporary. Moreover, as services industries expand, union organization becomes more difficult. (One exception to this truism is Korea's finance sector, which has unusually strong unions by global standards.)

Korean workforce vulnerabilities include increasing wage levels and poor productivity, but retain strengths against counterparts in, for example, China, Southeast Asia and Eastern Europe. Dr. Lee Jong-il, an HR specialist at Samsung Economic Research Institute lists them: "Creative capacity, high global literacy, high attainments in scholarship ― more than 80% of workers have university degrees ― and a high IT capacity.'' Koreans agonize that the education system that successfully supported the metal-bashing era is inappropriate for a knowledge-based economy, but hundreds of thousands of Koreans studying abroad bring home new skills and new concepts.

The rise of Korea from war's ashes is not exclusively due to labor. Vision; efficient central planning; authoritarian governments that prioritized economic growth over political development; generous post-war U.S. aid, trade and technology transfer terms; imports of industrial consultants from Europe, Japan and the U.S.; all contributed to Korea's economic ascent.

But historically, labor's role, has been underplayed. None of the factors above would have taken effect without the efforts ― and sacrifices ― of the workforce; Korea's labor was the muscle that built the miracle.

Massages in Seoul

2011-03-18T16:03:00.003-04:00

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20110318000838

If working hard has left you keen for a break, but you’re all out of holidays, then look no farther than Seoul. For exotic, blissful relaxation in the big city ― on a range of budgets ― let your mind travel and your body experience the pleasure of some of the world’s best massage traditions.

Thai massage uses deep pressure and stretches and is based on the idea that air, or “lom,” enters the body and travels along a myriad of “sen” or vessels. Therapists manipulate these sen lines and combine this with positions akin to yoga.

Located in a sleepy residential enclave of Gangnam, Rai Ra offers a truly restful taste of this globally recognized treatment.

Set in a house, the atmosphere is welcoming. You are greeted by floral decor and a living room complete with fireplace. Therapists here are Thai, making for an authentic experience.

In place of a massage table, Rai Ra use mats on the floor ― as in Thailand. Customers also wear pale pink Thai trousers with matching T-shirts if they opt for the country’s traditional massage, known there as “nuat phaen boran,” or ancient manner massage.

After carefully covering you in warm towels, leaving just a candle in the corner and a softly-dimmed bulb for light, the massage begins, feet first.

Slow and expert, the therapist maneuvers your body with full use of theirs. With a moderate level of pressure, the massage incorporates not only hand techniques, but also knees to knead buttocks and feet to ease down on heels.

Ever-gentle, the therapist sneaks in some more precise deep tissue work ― with special concentration on the shoulders ― but there is never a hint of pain.

Ending in a cross-legged position and a dream-like state, this soothing massage helps you happily drift off to the idyllic beaches of Thai islands.

An hour’s full-body massage at Rai Ra costs 55,000 won. For more information and directions call (02) 567-4711.

“Champissage,” or Indian head massage is said to unblock pockets of negative energy. Particularly recommended for those suffering with achy necks and shoulders, they are also said to help clear the mind and improve mental clarity.

“This treatment helps stimulate the auto-immune system of the body by relieving stress-induced tension and filling the body with positive energy,” explained Sarah Kim, Team Leader of AWAY Spa at the W Seoul Walkerhill.

Tricky to find in Korea, Indian head massages are a real treat ― especially for those who work hunched in front of a computer.

Amid an ultra-modern, plush white setting, the AWAY spa experience starts with a firm shoulder, neck and chest massage, kneading away knots.

The therapist begins on the head slowly, working a sesame aromatherapy oil ― infused with menthol and lavender ― in circular motions into the scalp, one small section at a time.

Gradually, pressure and speed intensify. Using whole palms, each side of the head are rubbed in grand, sweeping motions. The movements then become faster, honing in on acupressure points ― some shooting a tingling sensation down the back of the legs.

The treatment culminates with a warm head wrap and gentle arm stretches. From here, customers are guided to the W Chill room, for a choice of hot and cold teas, five channels of chill-out music and the chance to lay back and fully enjoy a moment of calm.

An Indian Head massage at the W Seoul’s AWAY Spa starts at 120,000 won for 60 minutes. For more information call (02) 2022-0450 or visit www.wseoul.co.kr.

Japanese Shiatsu for health and healing

Shiatsu, Japanese for “finger pressure,” is a rejuvenating massage using precise, rolling motions and compressions to promote the body’s flow of energy ― ki ― and therefore good health.

“Shiatsu’s principles evolved from a hybridization of traditional Japanese massage, Chinese medical practices and ‘Western’ anatomy and physiology,” said Dr. Sean Kim, CEO of Sky Wellness Center in Itaewon.

The clinic focuses primarily on corrective and chiropractic treatments, but therapist Lance Kim offers more massage for relaxation, fusing his Korea-influenced techniques with other traditions.
In bright and professional environs, clients are asked to complete a form about their health prior to their session to ensure maximum benefit. The staff here ― Koreans and expats ― are extremely knowledgeable.

After changing into shorts and a T-shirt, the therapist begins, placing slow but strong compressions along the length of the body. For him, the massage is an active affair, as he uses hands, feet and forearms to achieve the desired result. For the client, it is a fantastic way to unwind.

The massage is recommended by the clinic for people with back, neck and shoulder pain, as well as headaches, insomnia, stress and a host of other complaints ― and it’s not hard to understand why. Lulled into a deep relaxation during the massage, the gradual end to the session ― arriving through satisfying stretches ― leaves you feeling light and supple.

Shiatsu massage at Sky Wellness costs 69,000 for an hour for one person, with a reduced rate of 62,000 won each for a couple. For more information and reservations call (02) 749-4849 or visit www.skychiro.com.

Swedish luxury

Developed at the University of Stockholm in 1812, the classic techniques used in Swedish massage are now used as a foundation for many other massages around the world.

In particular, they are “effective in improving the blood’s circulation and releasing muscle pain by stimulating the outer muscles,” said Jeon Sook-jin, team leader at the Grand Hyatt’s spa.

The Swedish full-body here is for all-out pampering, as down to every detail this experience is luxurious.

The Spa is designed on a natural theme, blending hues of cream and white for its soothing color scheme, with a mix of fresh white flowers adorning each room.

As this is an oil massage, clients are requested to undress in the adjacent, well-equipped, shower room first. Beginning face down, you are treated to the aroma of cleansing frankincense through the face-hole in the massage table.

To the sounds of one of eight tranquil background tracks such as “calm” or “classical,” the masseuse begins by enveloping each foot in a warm, wet cloth, before gently rubbing a soothing balm into them.

Then the sweeping, sunflower-oil-coated strokes, typical of Swedish massage, begin. Working toward the heart, the hand-waves work their magic from tense backs down to tired, knotted calves.

The knee work here really stands out. The therapist walks a delicate line, with encircling finger tips, between lingering sensitivity and rippling tension release.

After a period of relaxation, and a dash of energizing face mist, the therapist gently eases you to a sitting position. From here you are free to rouse yourself slowly in a nearby arm chair, with rooibus tea and macaroons for refreshment.

The Classic Swedish 60 at The Spa costs 145,000 won. For more information and reservations call (02) 799-8808 or visit http://seoul.grand.hyatt.com.

Invigorating Chinese foot rub

The ancient practice of foot massage in China goes back about 5,000 years. It was originally intended for healing within Oriental medicine, rather than for relaxation purposes.

Using the principles of reflexology, it focuses on acupressure points on the feet, which are said to correspond to other parts of the body. A toe massage, for example, is said to clear sinuses.

Hongsuryeo is a dedicated Chinese massage shop in Apgujeong. The friendly staff here all hail from China.

Quiet and atmospheric, with warm, Chinese-themed decor, customers are ushered directly into one of the treatment rooms to change into the shorts and T-shirt provided.

To begin, feet are plunged into a steaming hot lemon soak, and you are left to luxuriate and unwind, coddled in a warm blanket.

The massage itself takes place with the customer lying face-up on a massage table. After moisturizer has been liberally rubbed into both feet, the invigorating massage starts.

Both fast and vigorous, this is one which should leave you feeling sprightly and refreshed. The strong rubbing motions ensure that you feel the boost in circulation, even as you lay motionless.

Using a quick combination of techniques, the therapist alternates the intriguing mastery of acupressure with rolling leg motions.

To get the blood to flow from tired and weary feet, a particularly impressive move ― quick and firm ― begins at the ball of the foot and continues up past the ankle and right up the lower leg.

The session culminates using elements of sports massage.

An hour-long Chinese foot massage at Hongsuryeo costs 55,000 won. For more information call (02) 549-1005.

Koreans in Japan: Shoddy Treatment

2011-03-14T20:51:00.002-04:00

http://www.economist.com/node/18338862?story_id=18338862&fsrc=rss

A foreigner in her own home
Shoddy treatment of its Korean residents once again deals Japan a black eye

In a part of Kyoto so trusting that vegetables are sold via honesty boxes, a 72-year-old woman hides in her house in fear, she says, of foreigner-baiting right-wing thugs. On March 4th it emerged in parliament that she had donated ¥250,000 ($3,000) over five years to the political funds of Seiji Maehara, whom she befriended when he was a fatherless teenager and who rose to become foreign minister. On March 6th he resigned.

The donation was illegal because she is a resident of Japan who was born in what is now part of South Korea. That makes her technically a foreigner. Mr Maehara says he did not know of her gift, and she says she did not know it was forbidden. Speaking bitterly through the intercom of her home, she says that she came to Japan when she was five, has paid tax and “the highest amount of national health insurance” since she started her barbecued-beef restaurant 37 years ago, and “knows nothing about South Korea”. But because she has never taken Japanese citizenship, she is not allowed to play a role in politics.

Like other of the 406,000 zainichi, Koreans resident in Japan, she has sought to avoid discrimination by adopting a Japanese name (which, mercifully, the press has not disclosed). That would make it hard for any politician to know her nationality. But Shoji Nishida, an opposition lawmaker, heard that a photograph of her and Mr Maehara hung in her restaurant. Barbecue restaurants are often run by zainichi, and Mr Nishida combed the minister’s political-funds report to see if she was a donor. For Mr Maehara, the repercussions were swift.

The incident exposes the unsatisfactory status of Koreans in Japan as descendants of those brought over, often forcibly, during Japan’s brutal colonisation of the Korean peninsula. The Democratic Party of Japan has unsuccessfully sought to change the law to allow permanent Korean residents to vote in local elections.

On the one hand, such permanent residents are free to renounce their South Korean citizenship (and roots) in order to secure their political rights, however much they dislike Japan’s historical legacy. On the other, shoddy tactics to expose what looks like a well-meaning woman’s mistake will only make them less trusting of the only place they know as home.

Japan Quake Affects Little in South Korean Economy, So Far

2011-03-14T06:48:00.005-04:00

http://blogs.wsj.com/korearealtime/2011/03/14/quake-affects-little-in-sk-economy-so-far/

By Evan Ramstad
The effect of Japan’s earthquake and tsunami on South Korea’s economy seemed small on the first day of business since the twin disasters.

South Korea’s benchmark stock index, the Kospi, initially traded lower Monday. But as the day wore on, investors gained confidence that the South Korean businesses would experience few effects, stock prices recovered and the Kospi ended the day at 1,971, up almost 1% from Friday’s close of 1,955.

There was a notable exception: Korean firms associated with the nuclear-power industry suffered steep drops in share value. Shares in KEPCO Engineering & Construction, a designer of nuclear power plants, and KR Plant Service & Engineering, which maintains and operates nuclear plants, both fell about 14%.

Various branches of the government and the Bank of Korea announced they were setting up “emergency” committees and task forces to assess the potential effect on the Korean economy. Several committees in the National Assembly said they would hold hearings to review how South Korea was helping Japan and what the economic impact might be here.

On the trade front, South Korea imports about $65 billion worth of goods from Japan every year, accounting for about 15% of overall imports. Much of that is production equipment that South Korean manufacturers use to make steel, cars, electronics and petrochemical products.

At mid-afternoon, South Korea’s Ministry of Knowledge Economy noted the connection in its first official assessment, which said: “Some Korean firms rely significantly on Japan for materials and components to complete their products. If conditions in Japan worsen, that will also disrupt our industries, hurting Korea’s exports.”

The ministry cited several key components imported from Japan that might be among the first disrupted, including steel for shipbuilding, system integration chips for electronics products and components for flat-screen panels.

Several Korean companies said Monday they were in touch with Japanese suppliers to find out what was happening, but no one announced any disruptions in supplies from Japan or production in Korea.

Analysts at Citibank published a sector-by-sector analysis on the potential impact in South Korea. They concluded that Korean petrochemical companies will benefit because they’ll be asked to fill in for some of the refining capacity that Japan lost in the disaster. Steel companies may benefit from higher steel prices shaped by disruptions in Japan’s steel output.

Korean banks and insurance firms, with little exposure to Japan, fell in a neutral category in the Citibank assessment.

The sector most likely to lose, the Citibank analysts said, was tourism and, to a smaller degree, retail. Japanese tourists have poured into Korea since early 2009, when the gap between the Japanese yen and Korean won made it very cheap for them to visit and shop in South Korea. Japanese tourists account for about 2% of sales at some department stores.

Longer-term, South Korean businesses, government officials and economists will watch ever more closely the value of the Japanese yen. If the yen strengthens against the U.S. dollar as some economists predict, that will make the value of the Korean won look less expensive against the dollar. In turn, that should make Korean products that are exported to dollar-based markets more attractive and boost the Korean economy.

South Korean team to head for Shanghai to investigate sex scandal

2011-03-13T16:34:00.003-04:00

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20110313000136

A team of South Korean officials arrived in Shanghai on Sunday to investigate an alleged sex-for-influence scandal involving a Chinese woman and several South Korean diplomats.

South Korean officials said the previous day that the team of officials from the Prime Minister's Office and foreign ministry plans to make the on-site investigation at the South Korean Consulate General in Shanghai from Monday for six days.

At least four South Korean diplomats, including a former consul general, were found to have had relations with the 33-year-old Chinese woman, who allegedly exercised her influence over them to help Chinese people obtain South Korean visas quickly and easily.

The diplomats were also reportedly accused of leaking information such as phone numbers of high-level South Korean officials to the woman, identified by her surname Deng.

Analysts, however, say that the probe efforts in China may face obstacles as Deng's whereabouts still remain unknown and it is not clear whether Chinese authorities will cooperate with the Korean investigation team if it goes digging outside of consular affairs in the tightly controlled nation.

"We will cooperate with the investigation team's probe so that it can promptly wrap up the case that took place within the consulate office and stabilize consulate affairs," said Ahn Chong-ki, who replaced the scandal-ridden former consul chief on Friday.

Video: Dunkin Donuts in South Korea

2011-03-13T09:53:00.001-04:00

Biting Quip by Samsung’s Lee Shocks Korea

2011-03-12T06:39:00.005-05:00

http://blogs.wsj.com/korearealtime/2011/03/11/biting-quip-by-samsungs-lee-shocks-korea/

By Evan Ramstad

Samsung Electronics Co. Chairman Lee Kun-hee automatically gets lots of media attention as the head of South Korea’s largest business and because he is the country’s richest person.
He usually doesn’t do much with it though. Mr. Lee hasn’t given any media interviews since the 1990s.

Typically, his media appearances amount to a comment or two as he passes from the baggage claim of an airport to his waiting car.

And in the rare moments he does talk publicly, the substance of his comments can best be described as Delphic.

For instance, when Mr. Lee passed through an airport in Seoul earlier this week, he said: “We have no time to think and should quickly put current undertakings back on track. We should make greater efforts to launch high-quality products globally and make them top-selling brands.”

So when Mr. Lee decided on Thursday to speak out about a debate going on in the South Korean government right now about the well-being of small- and mid-sized companies, his comments generated big headlines.

Mr. Lee responded to a question about an idea being discussed by the Presidential Commission for the Shared Growth of Large and Small Companies to develop a method of profit-sharing. No formal proposal has been made and not even the commission has fully defined the idea.

Even so, Mr. Lee said on Thursday: “I studied economics for a long time as I grew up in an entrepreneurial family, but I have never heard of this anywhere else, nor do I understand the concept, either.”

Mr. Lee said he wasn’t trying to express whether he was for or against the idea, but in expressing that thought he appeared to question the ideology of government leaders. “I just don’t know if the system is from a socialist economy, capitalist or communist economy,” he added.

The issue holds particular importance for Samsung, a group of approximately 60 companies that, in addition to being largest in size, also generates the biggest profits and is frequently criticized by left-wing politicians and interest groups. Samsung Electronics Co., the biggest of all Samsung firms, last year earned a record 16.15 trillion won, or about $14.6 billion, far more than any South Korean company ever has.

On Friday, Chung Un-chan, the immediate past prime minister and chairman of the commission that Mr. Lee criticized, responded to Mr. Lee’s remarks.

“It’s not fair to underestimate the meaning (of profit-sharing) just because he didn’t see the concept in the books that he studied,” Mr. Chung said. “Believing that profit-sharing is designed to steal profits from big businesses and connecting it to ideological issues is misunderstanding the true meaning.”

South Korean news media on Friday afternoon carried reports from anonymous officials in the presidential office that were also critical of Mr. Lee. Officially, the Blue House said nothing, however.

Asked whether Mr. Lee’s comments represented an official position of Samsung, a representative of a Samsung’s global communications office, issued this response:

“Chairman Lee has always emphasized the importance of cooperation and mutual growth among large corporations and medium-sized companies. When asked by reporters about the profit sharing system yesterday, Chairman Lee said he was neither in a position to approve nor disapprove because he did not understand the concept of the system. Chairman Lee said that he did not understand the concept of the profit sharing system. It is therefore inappropriate and unreasonable to interpret his comments as political or to consider them as Samsung’s official position.”

And in response to a question about when Mr. Lee last made a political comment, the representative said:

“Chairman Lee has in the past responded to reporter questions regarding the South Korean economy, IT industry, and the future of Samsung.”

Last September, Mr. Lee attended a meeting of business leaders hosted by President Lee Myung-bak where the topic of big companies helping smaller ones was first discussed.

When he left that meeting, the Samsung chief appeared to signal he was on board with the government’s thinking. “I will take this matter more seriously and do what I can do to make a system and infrastructure for co-prosperity of big and small firms,” Mr. Lee said at that time.

For a country that’s accustomed to Mr. Lee not saying much of anything, his statement on Thursday was a shock. Various news accounts described it as “rare” and “controversial” and “shaking political circles.” Some called it “uncomfortable,” “direct” and “arrogant.”

The last time Mr. Lee said something that caused such a stir was in April 1995, when he complained about South Korean politicians to Korean reporters in Beijing.

“Korea can’t become a ‘first-class’ nation unless regulation and ‘a sense of power’ disappear,” Mr. Lee said at the time. “The nation’s politics is the fourth-class, bureaucratic are the third-class, and business is the second-class.”

Those remarks appeared to challenge a Confucian hierarchical tradition that Koreans are taught, in which intellectuals were celebrated as the highest of four classes and businessmen and merchants as the lowest.

North Korea’s Digital Underground

2011-03-12T06:31:00.004-05:00

http://www.theatlantic.com/magazine/print/2011/04/north-korea-8217-s-digital-underground/8414/

To smuggle facts into or out of North Korea is to risk imprisonment and even execution. Yet today, aided by a half-dozen stealthy media organizations outside the country, citizen-journalists are using technologies new and old to break the regime’s iron grip on information. Will the truth set a nation free?

By Robert S. Boynton

The Democratic People’s Republic of Korea is the very archetype of a “closed society.” It ranks dead last—196th out of 196 countries—in Freedom House’s Freedom of the Press index. Unlike the citizens of, say, Tunisia or Egypt, to name two countries whose populations recently tapped the power of social media to help upend the existing political order, few North Koreans have access to Twitter, Facebook, or YouTube. In fact, except for a tiny elite, the DPRK’s 25 million inhabitants are not connected to the Internet. Televisions are set to receive only government stations. International radio signals are routinely jammed, and electricity is unreliable. Freestanding radios are illegal. But every North Korean household and business is outfitted with a government-controlled radio hardwired to a central station. The speaker comes with a volume control, but no off switch. In a new media age awash in universally shared information—an age of planet-wide instant messaging and texted manifestos—the Democratic People’s Republic of Korea remains a stubborn holdout, a regime almost totally in control of its national narrative.

Given this isolation, it’s even more remarkable that since 2004, a half-dozen independent media organizations have been launched in Northeast Asia to communicate with North Koreans—to bring news out of the country as well as to get potentially destabilizing information in. These media insurgents have a two-pronged strategy, integrating Cold War methods (Voice of America–like shortwave broadcasts in; samizdat-like info out) and 21st-century hardware: SD chips, thumb drives, CDs, e-books, miniature recording devices, and cell phones. And as with all intelligence-gathering projects, their most valuable assets are human: a network of reporters in North Korea and China who dispatch a stream of reports, whether about the palace intrigue surrounding the choice of Kim Jong Il’s successor, or the price of flour in Wŏnsan.

Run on shoestring budgets by North Korean defectors and South Korean and Japanese activists, these groups walk a line between journalism and advocacy. The two Koreas are still at war, and neither side is above employing censorship, disinformation, and outright propaganda. South Korea, for example, blocks access to North Korean Web sites and broadcasts. Its National Security Law promises lengthy prison sentences for any activity or material that the government judges to be pro–North Korean. Last November, for example, its top court upheld a jail sentence for a woman convicted of possessing instrumental music with composition titles that praised the North. It would be naive to assume that these independent news organizations aren’t influenced by these pressures. But regardless of where they fit on the South Korean ideological spectrum or whether they fully support the hard line toward North Korea of South Korea’s current president, Lee Myung Bak, these new media organizations are helping to create something remarkable: a corps of North Korean citizen-journalists practicing real journalism inside the country.

Their work is illegal and extremely dangerous, and it is producing results. In December 2009, for example, one reporter for the Daily NK, a Web site based in Seoul, embarrassed Pyongyang by intercepting a copy of Kim Jong Il’s annual message, a critical document that sets the ideological tone for the year, before it appeared in North Korea’s official newspaper, Rodong Sinmun. This past December, Open Radio North Korea, a broadcast-news organization, broke the story that a train headed for Pyongyang with gifts from China for Kim Jong Un, the heir apparent, was reportedly sabotaged and derailed, in one of several sporadic and mostly unreported acts of resistance that would have been unthinkable a few years ago.

The sudden availability of so much timely information about what Donald Gregg, the former CIA chief and U.S. ambassador in Seoul, once called the world’s “longest-running intelligence failure” has shaken up the world of Pyongyang watchers. Until recently, experts could say more or less whatever they wanted about North Korea, because nobody could prove them wrong. Conventional wisdom, planted intelligence, and hoary rumors have long been the coin of the realm.

We’ve seen how serious the consequences of this uninformed punditry can be. Assured by North Korea experts in 2002 that the regime was “on the brink” of collapse, president George W. Bush saw no point in negotiating with Kim Jong Il, whom he loathed and wasn’t inclined to deal with in the first place. Not only did the regime not collapse, but in October 2006 it detonated its first nuclear weapon.

The impact of these new groups on journalism has been transformative. Hardly a story about North Korea appears in The New York Times, The Wall Street Journal, or The Washington Post that hasn’t either originated in, or been confirmed by, outlets like the Daily NK or Open Radio North Korea. “The international media gets most of its information on North Korea from them,” says Kim Young Sam, an editor of South Korea’s oldest monthly magazine, the Chosun Monthly, whose sister publication, the newspaper Chosun Ilbo, regularly cites their stories. “Nobody else has the resources, contacts, and expertise.” Even agents from South Korea’s National Intelligence Service (formerly the KCIA) sometimes contact the Daily NK and other such outlets to request information.

Not everyone is a fan. This spring, the North Korean government expressed its displeasure: “We have been entrusted with issuing a strict warning in the name of the Republic to those organizations which will be the first targets for severe punishment.” The announcement referred to the news organizations by name, and Pyongyang watchers noted that the phrase We have been entrusted indicates the message comes directly from Kim Jong Il. These were no idle threats. Last spring, two North Korean spies posing as defectors were sent to assassinate Hwang Jang Yop, the highest-level North Korean official ever to defect to South Korea. (Hwang died, peacefully, of a heart attack in October.) And in January 2010, a North Korean factory worker was publicly executed by firing squad for phoning news about the price of rice to someone in South Korea.

Housed on the second floor of a dingy commercial building that anyone can find, on a small, winding street just blocks from Seoul’s Gyeongbokgung Palace, the Daily NK looks more like a call center than a bustling international news organization. Editors sit in 17 gray cubicles encircling the room. Phones ring and are answered with a grunt, hung up, and then redialed—the paper’s routine for communicating with its reporters.

One of the Daily NK’s founders, Park In Ho, spends much of his time recruiting and training reporters on the North Korean border with China. Published in Korean, Chinese, English, and Japanese, the site receives 150,000 visits a month. Like most of the other independent news organizations, it receives funds from the National Endowment for Democracy, as well as other NGOs and private donors. The Daily NK, like its peers, pays its North Korean correspondents small monthly retainers (more for scoops), and additional funds that they can use to bribe their way out of difficult situations.

Park tells me about recruiting one of his reporters. “I met him in China through an NGO. He was a graduate of Kim Il Sung University, so was destined to become a member of the elite. The first thing he asked me was to help him get some dynamite, so that he could blow up Kim Jong Il. He thought that everything in North Korea would change if he killed him.” They spent three months together, talking and reading books about the history of Northeast Asia. “I wanted him to understand the situation in the region, and persuade him not only that terrorism was wrong, but that it wouldn’t change anything.” The man is now a trader inside North Korea, and because his work requires constant travel, he has become one of the Daily NK’s most valuable correspondents.

There have been a number of close calls. In 2008, a security officer caught one of the Daily NK’s reporters as he was crossing the river into China. The reporter had been surreptitiously recording conversations with party officials, and was carrying three memory cards filled with audio files. North Korea had recently launched several test missiles; the reporter and his contacts were discussing the international reaction.

As he had rehearsed with Park, the reporter told the officer that he was only a cog in a larger operation. He was delivering the cards to a relative in China, who then would sell the information to journalists and give him a cut. You can bribe your way around virtually anything in North Korea, it seems, unless it involves either South Korea or religious materials. If the officer discovered that the reporter was working for the Daily NK, he would be sent to a labor camp, or even executed. The reporter suggested that the officer call his relative in China to confirm his story.

Park works according to a strict protocol. He carries several cell phones, each assigned to a different reporter, and they agree to communicate only at certain times on certain days. Any unscheduled call is cause for suspicion. So when his phone rang, Park answered in his best Chinese-Korean accent. The officer assumed he was speaking to the reporter’s relative and demanded $5,000 to release him. After several calls back and forth, the bribe was paid and the reporter freed (though without the memory cards). However, the officer sensed that he was onto a good thing, and tried to enlist Park as a business partner. “He called me every day for a month, like a stalker. He wanted to deal North Korean drugs. He’d send them to me, I’d sell them, and we’d divide the profit,” Park says.

Another of Park’s sources of high-level intelligence is the widow of a party official who she believes was unjustly purged. She is bitter and gives the information she learns from her children—many of whom have government jobs—to Park during trips she takes to China. She lives near the Yellow Sea and sometimes gets a ride across with local fishermen. During one journey, the fishing boat was boarded by a North Korean naval patrol. The only place for her to hide was among the layers of fish and ice stored in the bowels of the ship. She escaped undetected, but with a bad case of frostbite. Park paid for a two-month stay in a Chinese hospital, where she recovered. “Don’t worry about me,” she assured him. “I’m too old to remarry, so my looks don’t matter.”

In the late 1990s, a daring strategy emerged for using video to supplement information collected through interviews in North Korea. To learn about this, I travel to Osaka, Japan, to meet Ishimaru Jiro, 48, a diminutive, serious man with a neatly trimmed goatee, who works for Asia Press International, a consortium of freelance journalists famous for its coverage of war zones in Afghanistan, Iraq, and elsewhere in the Middle East. During the past 12 years, its reporters in North Korea have shot some of the most dramatic footage ever to emerge from the country.

Ishimaru began making trips to the China–North Korea border in the ’90s, interviewing refugees, shooting video, and writing. Twice, he crossed into North Korea legally, and another time he used a forged Chinese passport. One day in 1998, Ahn Chul, one of the young men who moved back and forth over the border, made an extraordinary proposal: “Why are you putting yourself in such danger by shooting video here?” he asked. “Give me a camera, and I’ll shoot video inside North Korea.”

Ishimaru gave him some rudimentary training in video photography and a camera hidden in a shopping bag. They set a date to meet three months later. The footage Ahn brought out was shocking: filthy, barefoot children scavenging for food, picking kernels of corn from cow manure. Glassy-eyed, the children told the interviewer that their parents had died and they were homeless and alone. The footage was beamed around the world.

The experiment was so successful that Ishimaru started training other aspiring reporters, using crowded Chinese markets to teach them how to film secretly. Now Ishimaru meets in China with his North Korea–based reporters every few months to pick up and help edit their tapes.

How did a country so closed become porous enough to support such news-gathering by watchers in the South? The answer goes back to the collapse of Communism in the late 1980s, which deprived North Korea of the Eastern Bloc subsidies it had long relied on to sustain its people. In the mid-1990s, a series of floods obliterated several harvests and ushered in a famine that ultimately killed an estimated 1 million North Koreans, or nearly 5 percent of the population. The government food-distribution system collapsed, and people who had relied on it for 50 years didn’t know what to do. Many starved. Others, despite great peril, crossed into China in search of food. The number of defectors who traveled through China to South Korea—previously never more than a few each year—increased tenfold between 1998 and 2002.

Once these North Korean defectors made it across the Yalu or Tumen River, they were startled to discover that even the poorest Chinese had higher living standards than they did. Food was abundant. If anything, the Chinese were growing wealthier.

The famine encouraged the spread of open-air markets throughout North Korea. They had begun appearing after Kim Il Sung’s death in 1994. People lucky enough to farm small plots of land sold their extra produce. Riots broke out when the police tried to shut the markets down, so the government decided to look the other way. As the markets spread, they soon became places where one could buy not only rice, but also bootlegged South Korean soap operas and used electronics.

The spread of such trading gave Ishimaru another idea. Could market forces be used not just to get information out but to smuggle footage in? He and his colleagues started with a video about the Kim Il Sung era. Its ideological content was subtle: by praising the decades when life was good and food was plentiful, it was implicitly criticizing the current Kim Jong Il era, in which neither is the case. The video was edited in Japan and sent to China, where a few hundred copies were burned. Traders on the border were eager to get free merchandise, and within days the discs were being bought and sold in markets throughout the country.

Across the border, as the Chinese got richer, they were trading in their Walkmans and cheap computers for iPods and computers with larger hard drives and DVD burners. And what do a billion Chinese do with their old stuff? Sell it to their poor neighbors. (A 2009 survey found that 58 percent of North Koreans had regular access to a cassette recorder with radio, and 21 percent watched videos on video-compact-disc players.) The confluence of these developments created a remarkable journalistic opening: just as defectors in unprecedented numbers were bringing more information out of North Korea, the spread of markets and secondhand technology was creating a conduit for getting more information in. As the North Korea experts Stephan Haggard and Marcus Noland report in a recent study based on their surveys of refugees, “Not only is foreign media becoming more widely available, inhibitions on its consumption are declining as well.”

The North Korean government has always been of two minds when it comes to technology. Despite its guiding philosophy of “self-reliance” (juche), it has relied on neighbors to enable it to enter the information age. Its official YouTube videos, Twitter feed, and Facebook accounts are registered in China. Until the late 1990s, all international phone calls were routed through Beijing or Moscow. And what few connections to the Internet the country does have come via a cross-border link to China’s Unicom.

No more than a few thousand North Korean researchers and high officials have access to the Internet. Most North Korean citizens must settle instead for the Kwangmyong (“Bright Star”) intranet portal, which provides access to censored news and official documents and has a rudimentary e-mail service. Launched in 2000, Kwangmyong is based on a Japanese version of Microsoft Windows. It can be accessed at universities and in government offices, as well as in the hundred or so cyber cafés where young people in the country’s largest cities go to play games and watch videos.

Owning computers is legal, although they must be registered with the local authorities. Most computers, which generally run on pirated Microsoft software, come from China. The country’s only computer-manufacturing company, Morning Panda, produces barely 10,000 a year. If computers are rare, printers are even more so. They are closely monitored because of their potential for spreading anti-regime documents. Similarly, citizens are forbidden to own fax machines, which can be found only in national post offices and in business offices. Sending a fax requires the approval of a high-level employer. Cell phones, both legal and illegal, have become a fact of life only during the past five years.

Radio is the chief technology through which the regime communicates with its citizens and is, for a variety of reasons that include patterns of historical use, the technology of choice for the exile-media outlets. A few target specific audiences. North Korea Reform Radio, founded in 2007, directs its free-market message at government bureaucrats (it recently aired a 44-episode series on China’s economic liberalization); North Korea Intellectual Solidarity, or NKIS, a hybrid think tank and news organization, concentrates on the intelligentsia (“The bottom of the population are too ignorant and brainwashed, and the elites are too hardline,” says its founder, Kim Heung Kwang).

Much of the programming has a distinct social-media character. Free North Korea Radio’s Voices of the People features man-on-the-street interviews with North Koreans, their voices digitally distorted before being broadcast back into their country. NK Reform Radio interviews defectors now living in South Korea. Some are unable to fit into South Korean society, and their ambivalence about their new home comes through in their comments—itself evidence of their newfound freedom of speech.

The subject that most interests North Koreans is the country’s ruling dynasty: founder Kim Il Sung, his son Kim Jong Il, and his presumed heir, Kim Jong Un. Most of their subjects know little more than the idealized history of the Kims churned out by the state’s propaganda mill. They are shocked to learn that Kim Jong Il was born in Russia, and not on the mythic Mount Paektu; Koreans are quite socially conservative and are aghast that he has fathered several children with women other than his wives.

Editors have wasted no time creating a suite of Kim-centric programs. Open Radio North Korea broadcasts an original serial drama called 2012, whose title refers to the much-anticipated 100th anniversary of Kim Il Sung’s birth. It starts with the premise that Kim Jong Il has been incapacitated by a second stroke, and imagines what North Korea might be like in the near future. Radio Free Chosun has dramatized several memoirs about the ruling family, including one by Kim Jong Il’s chef. And even NK Reform Radio is getting in on the action with an original drama called What Did Kim Jong Il Eat During the Famine?

The bet is that a mix of entertainment and news is more compelling than broadcasts that focus on famine or human-rights abuses (things most North Koreans are well aware of). The evidence suggests that such programs work. In their surveys of North Korean refugees, Haggard and Noland found a clear correlation between the “consumption of foreign media” and “more negative assessments of the regime and its intentions.” Kim Seong Min, the founder of Free North Korea Radio, credits his own political awakening to shortwave-radio programs. As a North Korean propaganda officer, he sometimes listened to the illegal radios he confiscated. One night he heard a South Korean program that contradicted a number of the myths surrounding the Kim family. After a little research, he discovered that the broadcasts were true. Was everything he’d been taught a lie, he wondered? It wasn’t long before he defected.

Without a doubt, North Korea Intellectual Solidarity is the organization that has thought most about the role of technology. Its reporters are equipped with South Korean, rather than Chinese, cell phones, because NKIS technicians believe their encoded protocol is more difficult for North Korean intelligence to track. Not content to buy voice and video recorders off the shelf, NKIS uses customized devices, whose battery life and recording times are reputedly superior. My request to see one is (pleasantly) denied.

The group’s technical emphasis comes from its founder, Kim Heung Kwang. Kim was a professor of computer science at Hamhung University of Technology, a branch of the North Korean military. He looks a decade older than his 51 years, and has the haggard mien of someone who has fallen afoul of the authorities. In North Korea, he was training students for careers as engineers or soldiers. The best were recruited by the army’s elite hacker units, which reportedly disrupted South Korean and U.S. government Web sites in 2009. Two of his former students defected recently, and now work with him at NKIS.

Kim’s facility with technology got him into trouble in the North. “I had several e-books, which I got from China. The national security force arrested me for possessing them,” he tells me. The books were pretty innocuous fare, mostly motivational titles like Dale Carnegie’s How to Win Friends and Influence People. “These weren’t anti-regime books, so why was this a crime?” he asks bitterly. “I saw that there wasn’t any hope for the North Korean system. I started to dream of going somewhere where I had the freedom to read what I wanted.” Kim defected in 2003 and arrived in South Korea a year later.

One of the first things Kim’s team created was an e-book called Window to the Global Village. A 204-page primer about South Korea and the rest of the world, it is loaded with embedded video, music, photos, and voice files. The three-gigabyte thumb drive had extra space, so he added a math program for children, a fortune-telling program for adults, games, and a bunch of computer tools.

Kim reaches into his pocket and shows me one of his specially programmed thumb drives. It will read “empty” when it is plugged in to a computer, just in case it falls into the hands of a border guard. When the savvy (or unsuspecting) user double-clicks on the logo, the program launches, and installs a file called “Welcome World” on his computer. (Some funders object to these surreptitious distribution techniques, fearing they might endanger innocent people.) Then there is the self-destruct option. “We set it to erase itself after a month, or after a certain number of downloads,” Kim explains, holding up one of the thumb drives. “Even if you are caught reading the e-book, the national security police won’t be able to trace it. After all, you can say that when you got it, you thought it was empty!”

Given the grip that the North Korean regime retains on information, the mission of these subversive organizations can seem quixotic—an act of faith as much as it is journalism. Of all the narrowcasters tenaciously targeting North Korea, the narrowest is Shiokaze (“sea breeze,” in Japanese), a station created by the Investigation Commission on Missing Japanese Probably Related to North Korea, or COMJAN. In the late 1970s, North Korea began randomly abducting Japanese citizens from beaches and parks, and holding them captive in Pyongyang for the next quarter century. Their families assumed they had either eloped or died. Precisely why they were abducted has never been clear, although it most likely has to do with training spies. Even the exact number of abductees isn’t known. At a 2002 summit with Japanese Prime Minister Junichiro Koizumi, Kim Jong Il confessed to having taken 13 Japanese, five of whom were still alive (and were soon returned to Japan). The Japanese government insists that at least 17 were kidnapped, and refuses to believe that the others have died. From the third floor of a less-than-spiffy apartment building near Tokyo’s Iidabashi railway station, COMJAN advocates on behalf of abductees not officially recognized by the Japanese government, and hopes to reach them with its radio broadcasts.

On the day I visit, Araki Kazuhiro, a professor of Korean studies and COMJAN’s chairman, is sitting in the tiny, makeshift plywood radio booth, reading news about recent nuclear-arms negotiations for one of Shiokaze’s twice-daily shortwave broadcasts. After he finishes, we sit at a conference table and have some tea. Araki says he believes that more than 400 Japanese have been abducted, and that the kidnappings continue even today. As with many of the other shortwave broadcasts, North Korea often jams Shiokaze’s signal. Shiokaze regularly switches frequencies, but the North quickly locates the new one, and jams it.

While the Daily NK and other outlets occasionally interact with their listeners, Shiokaze operates in a virtual void. Other than the five Japanese released in 2002, no abductee has ever been heard from. I reluctantly broach the subject: Does Araki have any evidence that anyone in North Korea—abductee or not—has ever heard the broadcast?

Araki and his producer consult with each other. “Well, we once heard about a high-school student who was able to pick up the program in Pyongyang, but we’re not sure about that,” he says. After more tea, Araki excuses himself and returns to the booth. It is almost noon, and he needs to finish one more Korean-language segment before the afternoon program is beamed across the sea and into North Korea.

Ferrum Tower, a foodie mecca

2011-03-09T05:54:00.002-05:00

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20110304000737

Four premium restaurants drawing gourmands, more outlets coming

When Ferrum Tower opened last summer it looked every inch the slick office building. Slicing the firmament, this Dongkuk Steel-owned 28-story high skyscraper shouted corporate cool.

Located flush up against shopping-and-tourist hotspot Myeongdong, the new addition soon started attracting rave reviews from bloggers.

No, it wasn’t because of its stunning architectural prowess or because it first opened last summer. It was because a set of restaurants started setting up shop in November.

Paul Bassett, an upscale coffee shop, and the venerable Hanilkwan were among the first to open. Three authentic Japanese restaurants ― Anzu, Manten-Boshi and Yamaya ― soon followed in December. Then, in February, the famed Swiss chocolatier Teuscher opened its first South Korean outlet.

Word spread. Foodies came. They tasted. They conquered.

Then again, when there are only six venues to hit, it isn’t so hard to get around.

“Plans are to have more restaurants open on the second basement floor,” Ferrum Infra team head Ham Eun-seong said over the phone. “We are looking into bringing in stores that specialize in noodle dishes.”

Ham said that noodles were selected as a theme because of their mass appeal and that plans are to have the new shops open within this year.

At this point, it may be too early to call Ferrum Tower a food mecca. However, most of the establishments serve up good fare.

Here is a look at what the place has to offer.

Anzu

Seoul has its fair share of tonkatsu shops, but the fried breaded pork cutlet at Anzu is crisp and feathery on the outside, tender and succulent on the inside.

Thick and round, rather than thin and flat, Anzu’s tonkatsu is about maximizing flavor and density per bite.

According to manager Cho Sung-ha and educational head Park Sung-yoon, the pork is brought in fresh and wet-aged for a week.

Anzu’s shrimp katsu ― translucent pink and plump ― is equally delicious.

Shiso cream salad sauce spices up the standard bed of finely shredded cabbage. Dessert in the form of tofu made from cream and ground apricot stones glides down the throat with silken, nutty ease.

Anzu is open from 11 a.m. to 3 p.m., 5 p.m. to 11 p.m. daily. Katsu-based set courses cost 14,500 won ($13) to 32,000 won. For more information call (02) 6353-8948.

Manten-Boshi

Hailing from Japan, Manten-Boshi specializes in juicy hamburg steaks doused in a velvety demi-glace sauce. The key is in the sauce, which takes a week to make.

Yet, the best part about this restaurant is the fact that it makes excellent puddings. Quivering, soft and covered in golden, clear caramel sauce, each spoonful of custard imparts a sweet moment of bliss.

Manten-Boshi is open from 11 a.m. to 3 p.m., and 5 p.m. to 11 p.m. daily. Hamburg steak dishes cost 15,000 won to 21,000 won. For more information call (02) 6353-8943.

Teuscher-Seoul

Boasting nearly 80 years of history, this Swiss chocolatier creates mouthwatering morsels so tempting, so beautiful, they are hard to resist, none more so than Teuscher’s famed Champagne truffles crafted with Dom Perignon.

“People who know about Teuscher only order the Champagne truffles,” said Teuscher-Seoul CEO Shi Sung-jin.

Indeed, the upscale truffle is an ideal marriage of fragrant aromas and rich creamy textures. The kick at the end, more an elegant tap than a kick, is a pleasant reminder of its Champagne cream center.

Teuscher is open from 8 a.m. to 9 p.m. and is closed Sundays. Chocolates cost 240 won per gram. Solid chocolates cost 200 won per gram. For more information call (02) 755-5004.

Hanilkwan

The historic hansik restaurant, which first opened in 1939, saddened many a loyal patron when it moved from its original Jongno spot to Sinsa-dong in 2008. In November, Hanilkwan opened a third outlet in Ferrum Tower, a location strikingly close to its old spot.

“Lots of customers missed us so we chose to open here,” said advisor Kim Dong-wol.

The menu is a bit more simplified than the main store in Sinsa-dong and there is a new walk-through area where customers in a rush can get food to-go.

“We offer complementary traditional Korean tea while you wait for your order,” said Kim.

Hanilkwan is open from 11 a.m. to 9 p.m. daily. Popular half-course meals cost 11,000 won to 14,000 won. Korean donburi to-go costs 8,000 won to 9,000 won. For more information call (02) 1577-9963.

Yamaya

Yamaya specializes in motsunabe. Essentially a soup made from beef offal, motsunabe is considered a traditional dish of Fukuoka, Japan.

In a tatami-clad space that resembles an izakaya, customers can dip into steaming hot pots of authentic soup made from one out of three broths ― soy sauce, miso or ponzu sauce.

Yamaya is open from 11 a.m. to 3 p.m., 5 p.m. to 11 p.m. daily. Motsunabe per person costs 13,900 won. Lunch sets cost 13,000 won. For more information call (02) 6353-8946.

Paul Bassett

World Barista Championship 2003 winner Paul Bassett opened his first namesake cafe in Ginza, Tokyo, in 2005, serving up perfectly roasted brews to a nation responsible for the development of hand-drip coffee.

Here, at Bassett’s second South Korean outlet, espresso aficionados can tip back strong, full-bodied macchiatos or sip at intense yet creamy cappuccinos.

Paul Bassett is open from 8 p.m. to 10 p.m. weekdays, from 10 a.m. to 8 p.m. Saturdays, till 6 p.m. Sundays. Coffee-based drinks cost 3,500 won to 5,000 won. For more information call (02) 6353-8991.

Ferrum Tower

To get there, go to Euljiro 1-ga Subway Station Line 2, Exit 3. Ferrum Tower will be to your right. Teuscher and Paul Bassett are located on the first floor. Restaurants are on the first basement floor.

South Korea's suicide rate is the highest in OECD

2011-03-08T12:54:00.002-05:00

http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_642705.html

Suicidal South Koreans increasingly chose Han River bridges instead of subway stations for their fatal leaps after platform screen doors were installed at many stations, police said on Tuesday.

The number of people who jumped off river bridges in Seoul increased 30 per cent to 108 last year, the National Police Agency said in a report submitted to a ruling party lawmaker, Yoon Seok Yong. Twenty-eight of the 108 died while 80 others survived.

In contrast, the number of people who attempted suicide by throwing themselves in front of subway trains fell drastically to 29 last year from 77 in 2009, according to the report.

Most of the incidents happened at stations without screen doors, indicating such barriers were effective in preventing suicides.

'Just as screen doors were established at subway stations for the safety of citizens, we need to prepare various measures to prevent impulsive suicides on Han River bridges,' Mr Yoon was quoted as saying by Yonhap news agency.

South Korea's suicide rate is the highest among member nations of the Organisation for Economic Co-operation and Development, with 15,413 taking their own lives in 2009.
(See: http://www.sourceoecd.org/pdf/societyataglance2009/812009011e-08-04.pdf)

Concern over Korea’s fast aging society

2011-03-08T05:20:00.003-05:00

http://joongangdaily.joins.com/article/view.asp?aid=2933148

Nearly two out of five Koreans are expected to be aged 65 or older in 2050, a report showed Monday, raising concerns that the nation’s fast-aging population could raise the financial burden for younger people in taking care of senior citizens.

According to the report by Statistics Korea, the ratio of those aged 65 or older to the nation’s total population will likely grow to 38.2 percent in 2050. The ratio is much higher than last year’s 11 percent and 3.8 percent in 1980.

The spike in the ratio of senior citizens is attributable to rising life expectancy and falling birthrates, coupled with enhanced medical technology that helps cure many previously untreatable diseases.

Koreans’ average life expectancy has been on the rise over the past few decades.

The report showed that life expectancy for Koreans stood at 80.5 years in 2009, compared with 65.7 just 31 year ago.

As the ratio of senior citizens is expected to sharply increase, the report expressed concerns that the financial burden that working-age people have to shoulder in taking care of them will also likely spike.

According to the report, every 100 working-age people should take care of 72 senior citizens in 2050, sharply up from the 15 older people that they needed to support last year.

Among the employed in the country, those who are 55 or older accounted for 15.2 percent of the total in 2000 and 19.4 percent in 2009.

The percentage is expected to surpass 20 percent two years later.

The latest forecast comes as Korea is fast becoming an aged society, in which more than 14 percent of the population is 65 or older.

Korea became an aging society in 2000, when the ratio exceeded 7 percent.

The average of the country’s population reached 29.5 in 1990 and rose to 33.1 in 2000 and to 38 last year. It is expected to increase to 40.4 in 2015, exceeding 40 for the first time, and reach 50.4 in 2040.

Challenges posed by an aging population have been drawing keen attention here as of late, as fears rise that the demographic shift could dent overall productivity and growth potential down the road due to a declining workforce and an increase in welfare and medical costs sapping the country’s budget.

The report showed that 30.5 percent of the nation’s total health care expenditures were used to treat senior citizens in 2009, the first time the ratio has exceeded the 30 percent barrier.

In 1999, it stood at a mere 17 percent.

According to the 2010 population census that was conducted last year, the country’s population increased to 48.21 million, up 2 percent from 2005, the previous census, and the number of households rose 9.1 percent to 17.33 million over the same period.

The portion of single-person households was 9 percent in 1990, 20 percent in 2005 and 23.3 percent last year.

South Korean President Lee asks churches to play greater roles in promoting social unity

2011-03-03T03:33:00.003-05:00

http://www.koreatimes.co.kr/www/news/nation/nation_view.asp?newsIdx=82395&categoryCode=113

President Lee Myung-bak said Thursday that he hopes Christian churches will play greater roles in bridging social divisions and promoting national unity in South Korea.

His remark came as local churches have protested the government's push for a bill calling for tax benefits to holders of Islamic bonds, or "sukuk," in an effort to encourage local companies to issue such debts and lure more Middle Eastern oil dollars.

Christian groups say it is unfair to give tax benefits to a certain religion.

On Thursday, Lee made no mention of the issue during an address to an annual gathering of South Korean church leaders, known as "Korea National Prayer Breakfast," held at COEX in southern Seoul, only calling for churches to help promote social unity.

"I believe it is essential for us to understand and respect others in order to get our society to unite and mature," Lee said at the meeting.

Churches in South Korea have "always taken the lead in changing society in a positive way," Lee said, expressing hope that they "practice sharing more actively and take the lead in taking care of those in the shady parts of our society."

Lee also said the world economy is facing uncertainties amid political unrest in the Middle East, but he believes South Korea can overcome difficulties if the country pulls together in meeting those challenges.

Lee also wished North Korean people blessings and said he will try to be a "president who listens to the people in a more humble manner and devotes himself to the country." (Yonhap)

Varying life expectancies among Seoul residents reveal economic disparities

2011-02-25T19:07:00.003-05:00

http://www.koreaherald.com/national/Detail.jsp?newsMLId=20110225000401

South Koreans living in the more affluent central southern part of Seoul tend to live longer than those in the north, a study said Thursday, a reflection of widening disparities in the quality of life among the residents of the 10-million-strong capital.

According to the study conducted by Cho Young-tae, a public health professor at Seoul National University, an average person living in one of the three most well-to-do districts in Seoul is expected to die at an age above 80 while none of those living in the remaining 22 districts would make it past the mark.

The life expectancy in Seocho district, the most affluent in southern Seoul, was 83.1, while that of Gangbuk district - located in the northeastern part of the city - was 77.8, the study showed.

The study pointed out that people with higher income and social statuses can better afford to live in environments favorable for their health, attributing its findings to socioeconomic factors.

Seoul expanded southward across its landmark Han river as the country's economy grew rapidly in the decades following the 1950-53 Korean War. Riding on the back of heavy investment and modern city development, the central southern part of the capital is considered posher than the northern half, drawing a population with greater buying power and even sparking debate over distribution of wealth.

Home Internet May Get Even Faster in South Korea

2011-02-22T09:45:00.004-05:00

http://www.nytimes.com/2011/02/22/technology/22iht-broadband22.html

By Mark McDonald

South Korea already claims the world’s fastest Internet connections — the fastest globally by far — but that is hardly good enough for the government here.

By the end of 2012, South Korea intends to connect every home in the country to the Internet at one gigabit per second. That would be a tenfold increase from the already blazing national standard and more than 200 times as fast as the average household setup in the United States.

A pilot gigabit project initiated by the government is under way, with 5,000 households in five South Korean cities wired. Each customer pays about 30,000 won a month, or less than $27.

“South Korean homes now have greater Internet access than we do,” President Obama said in his State of the Union address last month. Last week, Mr. Obama unveiled an $18.7 billion broadband spending program.

While Americans are clip-clopping along, trailing the Latvians and the Romanians in terms of Internet speed, the South Koreans are at a full gallop. Their average Internet connections are far faster than even No. 2 Hong Kong and No. 3 Japan, according to the Internet analyst Akamai Technologies.

Overseeing South Korea’s audacious expansion plan is Choi Gwang-gi, 28, a soft-spoken engineer. He hardly looks the part of a visionary or a revolutionary as he pads around his government-gray office in vinyl slippers.

But Mr. Choi has glimpsed the future — the way the Internet needs to behave for the next decade or so — and he is trying to help Korea get there. During an interview at his busy office in central Seoul, Mr. Choi sketched out — in pencil — a tidy little schematic of the government’s ambitious project.

“A lot of Koreans are early adopters,” Mr. Choi said, “and we thought we needed to be prepared for things like 3-D TV, Internet protocol TV, high-definition multimedia, gaming and videoconferencing, ultra-high-definition TV, cloud computing.”

Never mind that some of these devices and applications are still under development by engineers in Seoul, Tokyo and San Jose, Calif. For Mr. Choi, nothing seems outlandish, unthinkable or improbable anymore. And the government here intends to be ready with plenty of network speed when all the new ideas, games and gizmos come pouring out of the pipeline.

“The gigabit Internet is essential for the future, absolutely essential, and all the technologists will tell you this,” said Don Norman, co-founder of the Nielsen Norman Group, a leading technology consultancy in Fremont, Calif. “We’re all going to be doing cloud computing, for example, and that won’t work if you’re not always connected. Games. Videoconferencing. Video on demand. All this will require huge bandwidth, huge speed.”

The South Korean project is also meant to increase wireless broadband services tenfold.

Even as South Korea aims for greater, faster connectivity, Internet addiction is already a worrisome social issue here. Deprogramming camps have sprung up to help Net-addicted youngsters.

One South Korean couple, arrested last year, became so immersed in a role-playing game at an Internet cafe that their 3-month-old daughter starved to death — even as they fed and nurtured a virtual, online daughter named Anima.

But industry executives are plowing ahead.

“The name of the game is how fast you can get the content,” said Kiyung Nam, a spokesman for the Korean consumer electronics giant Samsung Electronics. “People want to download and enjoy their content on the go. But right now it’s not seamless. It’s not perfect.”

The idea of the gigabit Internet is not a new one, said Mr. Norman, the American consultant. But large-scale adoptions have not yet taken hold, especially outside Asia.

Hong Kong and Japan offer gigabit service. Australia has a plan in the works for 2018. Google is drafting pilot programs for part of the Stanford campus and other locales in the United States. And Chattanooga, Tenn., has started a citywide gigabit service, reportedly at a staggering $350 a month.

Any technical hurdles in upgrading the existing South Korean infrastructure are minimal, according to engineers and network managers. DSL lines — high-speed conventional telephone wires — will have to be replaced. But fiber-optic lines already widely in use are suitable for one-gigabit speeds.

South Korea, once poorer than Communist North Korea, now has the world’s 13th-largest economy. It recovered from the ravages of the Korean War by yoking its economy to heavy industries like cars, steel, shipbuilding and construction. But when labor costs began to rise, competing globally in those sectors got tougher, so “knowledge-based industries were the way forward,” Mr. Choi said.

South Koreans pay an average of $38 a month for connections of 100 megabits a second, according to the Organization for Economic Cooperation and Development. Americans pay an average of $46 for service that is molasses by comparison.

Mr. Choi declined to guess what private South Korean service providers might charge for the one-gigabit service. But he said it would be nowhere near the $70 a month charged for gigabit rates in Japan.

“I can’t imagine anyone in Korea paying that much,” he said. “No, no, that’s unthinkable.”

Mr. Choi’s gigabit program is just one of several Internet-related projects being coordinated by the government here over the next four years. Their overall cost is projected to be $24.6 billion, with the government expected to put up about $1 billion of that amount, according to the Korea Communications Commission.

Private South Korean firms, notably KT (the former Korea Telecom), SK Telecom and the cable provider CJ Hellovision, are the principal participants in the gigabit project. The government’s financial contribution in 2010, Mr. Choi said, would be just $4.5 million.

For now, most Korean consumers use their blessings of bandwidth largely for lightning Internet access and entertainment — multiplayer gaming, streaming Internet TV, fast video downloads and the like. Corporations are doing more high-definition videoconferencing, especially simultaneous sessions with multiple overseas clients, and technologists are eager to see what new businesses will be created or how existing businesses will be enhanced through the new gigabit capability.

One of the customers already connected to Mr. Choi’s pilot program is Moon Ki-soo, 42, an Internet consultant. He got a gigabit hookup about a year ago through CJ Hellovision, although because of the internal wiring of his apartment building his actual connection speed clocks in at 278 megabits a second.

But even that speed — about a quarter-gigabit — has him dazzled.

“It is so much more convenient to watch movies and drama shows now,” he said.

Seoul Hotel Break-In Has Makings of a Spy Novel

2011-02-22T09:36:00.003-05:00

http://www.nytimes.com/2011/02/22/world/asia/22korea.html

By Mark McDonald

Police officials are investigating a mysterious break-in at the five-star Lotte Hotel, an odd bit of cloak and dagger in Room 1961 whose storyline includes bumbling spies caught red-handed, negotiations for a supersonic jet fighter, a stolen laptop and a conveniently timed meeting with the president of South Korea.

Accounts from the police, local news media, government officials and hotel employees laid out a whodunit tale of the break-in, which took place last Wednesday when visiting Indonesian government and military officials left their rooms at the Lotte for a late-morning meeting with President Lee Myung-bak.

The Indonesians went to the Blue House, the presidential residence and offices, to discuss the purchase of military jets from the government-backed Korea Aerospace Industries. (The Korean plane, the T-50 Golden Eagle, is an advanced jet trainer that can be upgraded to a fighter-bomber. It is being considered for purchase by the Indonesians, who are also considering a subsonic Russian plane, the Yak-130.)

The Indonesians, traveling with their own security personnel, left their rooms unguarded, with their work computers and private documents inside, the police and Indonesian officials said later. The Indonesian group comprised as many as 50 people, reports said, including Defense Minister Purnomo Yusgiantoro.

Soon after the Indonesians left their rooms, two men and a woman went up to the 19th floor and entered Room 1961, the police said. Inside were two laptops.

One version of the events, first reported by the newspaper Chosun Ilbo, said that the woman was there when an Indonesian aide returned to the room — his room — and surprised her. She said she had entered the room by mistake, then quickly left.

According to another account, the Indonesian man had interrupted the woman while she was downloading files from a laptop into a small U.S.B. drive.

Meanwhile, the men whom the police have described as her accomplices were discovered in a stairwell with a laptop that did not belong to them. It had been taken from Room 1961, and the Indonesian aide had reported the theft to the hotel. Minutes later, when a hotel employee confronted the men in the stairwell, they handed over the laptop and fled.

Subsequent reports in the press and from the police have implicated the National Intelligence Service, South Korea’s principal spy agency. Chosun Ilbo said the intelligence service’s agents had been seeking information on the jet deal and other possible military sales.

The police precinct commander, Seo Beom-kyu, said Monday that a spy agency investigator appeared at the Namdaemun police station at 3:40 on the morning after the break-in, asking to speak to the chief of detectives overseeing the case. It was not immediately clear what the agent was seeking.

A spokesman for the spy agency declined on Monday to comment on the matter. The Blue House also declined to comment.

“Even if it turns out it was the N.I.S., there wouldn’t be any real benefit in punishing them, now, would there?” said the national police chief, Cho Hyun-oh. “If the N.I.S. did it, it was for our own national interests.”

A spokesman for the Indonesian Defense Ministry, Brig. Gen. Wayan Midhio, denied Monday evening that a military laptop or secret data had been stolen. He said a staff aide to the coordinating minister for economic affairs, Hatta Rajasa, had his laptop taken by another hotel guest. The guest, the general said, had entered the staff member’s room by mistake, thinking it was the guest’s own room. Then the guest took the laptop, thinking it was his or her own.

General Wayan said the room was being cleaned when the incident took place. “Because the room was open,” he said, “the person thought it was their room. But as soon as they saw the laptop wasn’t theirs they returned it to the receptionist.”

The general said no one in the Indonesian delegation was carrying secret military information. “The laptop did not belong to the Defense Ministry,” he said.

A South Korean Foreign Ministry spokesman said Monday that Jakarta had asked for an official inquiry. The spokesman, Cho Byung-jae, said, “We agreed to inform them as soon as we are done.”

My favorite South Korean actress, Lee Young-ae, gives birth to twins

2011-02-21T09:20:00.006-05:00

이영애, 아들.딸 쌍둥이 출산
http://www.koreaherald.com/national/Detail.jsp?newsMLId=20110221000449

South Korean actress Lee Young-ae, widely popular across Asia, has given birth to twins, her agent here said Monday.

Lee, 40, became a mother of fraternal twins, a boy and a girl, at 10:30 a.m. Sunday at a Seoul hospital, said Storms Company.

"The mother and the babies are healthy," it said.

She was secretly married in 2009 in the United States to a Korean businessman, surprising fans everywhere.

Lee, considered one of the most influential actresses in South Korea with a broad fan base built on the Korean Wave throughout East and Southeast Asian countries, debuted in a television commercial in 1991. She started gaining stardom in TV dramas and movies with her composed image and acting prowess.

Lee's popularity exploded after her starring performance in the popular Korean drama "Jewel in the Palace (Dae Jang Geum)," about life of a court lady in the Joseon Dynasty, first released overseas in 2004 and quickly won a following. The fictional historical drama reached as far as Iranian television in 2007 and drew 86 percent of viewers in the Middle East nation, an unprecedented record for a Korean show.

After staring in the 2005 film "Sympathy for Lady Vengeance," directed by Park Chan-wook, she has kept a low profile over the past few years.

More Korean teens having plastic surgery

2011-02-17T10:47:00.003-05:00

http://joongangdaily.joins.com/article/view.asp?aid=2932392

The plastic surgery mania in Korea is led by women in their 20s. That may soon change: the big new market for cosmetic procedures is teenagers.

According to an e-Seoul survey, 41.4 percent of teens interviewed said they were “willing to have plastic surgery for beauty.”

“The comparison with older age brackets is stunning: 41.4 percent among teens is almost 10 percentage points higher than interviewees in their 20s, almost 20 percentage points higher than those in their 30s, and nearly 30 percentage points higher than interviewees who were 40 or over, which would seem the prime market for cosmetic surgical improvements,” according to a recent survey.

Even middle school students, female students mostly, are choosing to get their face surgically altered. “The overall client age group has decreased. Among teenagers, high school students were the main clients, but these days, an increasing number of middle school students aged 15 to 16 have been visiting the clinic,” said Jo Seon-hui, manager of Real Cosmetics in Apgujeong-dong, southern Seoul.

Lee Seung-hwan, head surgeon of BK DongYang Plastic Surgery Clinic in Nonhyeon-dong, southern Seoul, also said his clinic has seen a gradual increase in teenage clients. “Compared to 2007, the percentage of teenage clients has gradually increased in 2010. What to take note here is the fact that the minimum age group is decreasing to middle school students in grade eight or nine,” Lee said. A female high school student, surnamed Lee, said she wasn’t confident with her looks. “My small eyes were the cause of low self-esteem,” said Lee. “My mom and I made a deal that if I did well on my midterm exams, she’d let me have [plastic surgery].”

After receiving double eyelid surgery during the winter break in her second year in high school, Lee said she got more confident. Korean teens value beauty highly, and getting plastic surgery is no longer considered shameful or embarrassing. And students who have attractive features gain popularity among their peers. The plastic-surgery trend has also been boosted by the popularity of idol groups such as the girl group LGP, which admitted in a TV show interview that “the total of all the plastic surgery operations the members underwent was 27.”

Parents also have a powerful influence on whether their children get plastic surgery. Another female student, surnamed Kim, got double eyelid surgery at the age of 15 at the suggestion of her mother. “My mother was actually quite positive about me getting plastic surgery,” she said. “My mom said that I should be confident when entering high school.”

A recent survey of 250 mothers throughout Korea, conducted by Dove, a personal care brand famous for its soap, showed that one in four moms suggested their teenage child get plastic surgery. “Mass media and the Internet have a big impact on students in their formative years,” said Dr. Park Won-jin of Wonjin Plastic Surgery. “They are easily exposed to television and the concept of “lookism” [discrimination or prejudice based on personal appearance] is thrust on them through the Internet.”

According to several plastic surgeons in Gangnam, southern Seoul, the number of student patients peak during school vacation season in December and January and make up about 5 percent to 10 percent of the total number of patients.

Double eyelid surgery is by far the most popular procedure among young students since it is comparatively low risk. But an operation on certain bones, such as the nose, is not advisable until the student has fully grown because there could be dangerous side effects. Park said as a patient grows, his or her bones could shift after surgery and cause permanent damage. “If plastic surgery is performed on young bones it can trigger problems in the future and may require more surgery,” said Park.

Blueprint for establishing a fair society in South Korea

2011-02-17T10:44:00.002-05:00

http://joongangdaily.joins.com/article/view.asp?aid=2932393

The Blue House revealed yesterday President Lee Myung-bak’s blueprint to make Korea a fair society, announcing a series of projects to be implemented throughout 2011 that will help the country realize the goal.

Lee hosted the first monthly meeting for the fair society campaign at the Blue House yesterday and the prime minister presented the blueprint.

Five themes in the blueprint were selected to be represented, including eradicating corruption in Korea by operating laws and systems fairly, guaranteeing fair opportunity, protecting rights without privileges, creating a healthy market economy and caring for minorities.

Since Lee presented his “fair society” vision during his Liberation Day address last year, the president has said he will come up with projects that will bring about tangible outcomes to realize the vision.

In addition to the prime minister, ministers from the defense, finance, labor, education, public administration and knowledge economy ministries also presented their ideas at the meeting.

Civilian experts and civic group heads joined the discussion as well, and key projects were selected among the five themes.

They include fair military service duty, fair taxation, protection of workers’ rights and interests and fair personnel appointments in the government.

Other ideas include using education as an opportunity to ease the wealth gap, ending discrimination linked to educational background and facilitating the harmonious growth of conglomerates and smaller companies.

The Lee administration will also work to root out the country’s decades-long practice of allowing former colleagues to give retired judges and prosecutors special treatment when they become lawyers in private practices.

According to the government, the prime minister’s office will be in charge of continuing to check up on the progress being made in the key tasks.

Lee will host a meeting every month from now on to follow up on the progress.

Financial articles submitted by a student

2011-02-15T11:09:00.002-05:00

Thanks Hamilton.

Seoul court rejects multi-million suit against Lehman Bros
http://news.ph.msn.com/business/article.aspx?cp-documentid=4635772
A Seoul court Friday ruled in favour of Lehman Brothers International Europe in a damages suit filed by a South Korean firm to recoup lost investments in LBIE's collapsed Dutch subsidiary.

Lehman Brothers Unit Wins S. Korean Court Case on Derivatives
http://www.bloomberg.com/news/2011-02-11/lehman-brothers-unit-wins-s-korean-court-case-on-derivatives.html

The FSB Conference of Financial Reform in Seoul
http://fsckorea.wordpress.com/category/fin_ancial-pol_icy-in-korea/financial-regulation-reform/
Need for the standardization and transparency of derivatives traded through over-the-counter

Matchmaking across the Koreas

2011-02-11T14:22:00.003-05:00

There's an old saying among Koreans: South Korean men are known for their looks and North Korean women for their beauty.

Choi Young-Hee took that adage and turned it into a business model. Choi is a matchmaker, bringing hundreds of South Korean bachelors and single North Korean female defectors together.

It's an idea that on the surface appears hopelessly flawed, given the current geopolitical status between the North and South. But Choi had a hunch when she opened her matchmaking agency five years ago that this sort of pairing would work.

She was right.

Nearly 500 marriages later, with only three divorces among them, this self-made Cupid is seemingly a statistical success. Proof, says Choi, that the main barrier to reunification and peace on the Korean peninsula is not the Korean people but politics.

"As I wed each and every couple and the people around them see them living happily together," says Choi, "I think they'll realize they may not like the Kim Jong Il leadership, but they'll know that regular North Koreans are not like that. I think that it's the most important thing in speeding up reunification."

Choi Hyung-Min (unrelated to Choi, the matchmaker) was one of the matchmaker's eligible bachelors. She matched him with one of her North Korean defectors, and they fell in love and married.

CNN met them as they celebrated the first birthday of their daughter, Ye-Ran. The North Korean defector said CNN could not air her picture or reveal her name, fearing that Pyongyang would punish her remaining family in the North.

But she does have a message to share with CNN's viewers and readers.

"From the bottom of my heart, I really hope for reunification," she says.

"We talk about this all the time," says her husband, who has never met her extended family. "Visiting her hometown after reunification."

The North Korean defector says her marriage shows that despite the political differences and years of warlike disputes between the two nations, there is hope for a peaceful peninsula.

"There may be differences with the policies and institutions of the two countries. But we're all the same people, right? We're the same people."

To say that the unions are borne of a desire to reunify the country would ignore a reality in the matches.

North Korean women, says Choi, desire the automatic acceptance and stability a South Korean husband offers. South Korean men want a traditional Korean wife, believes Choi, which North Korean women offer, unlike modern South Korean women.

In crisp blue and yellow file folders, eligible bachelors are noted for their height, education, and job status. But that's not as important as a proper personality match says Choi, who then takes those South Korean men and matches them to North Korean women in her database.

Choi matches couples personally. When pressed what makes a match a marriage, she can't quite say.

Choi's colorful clothing, a leopard fur print jacket and sparkle headband, reveals little of the dark story of her defection out of North Korea.

In 2001, she slipped out of the North into China with her 11-year-old daughter. Her tale is filled with complicated twists and turns, she says. The end result was that a year later, after spending some time in a Mongolian prison, she and her daughter made it to South Korea.

Choi, like many North Korean defectors, suddenly found herself needing to make ends meet in a new capitalist society with not much of a support system. What she knew, she says, is what North Korean women and South Korean men want.

"They say that if you wed three couples, you go to heaven," laughs Choi, "so I guess I have a seat reserved."

Marriages with foreigners soar in South Korea

2011-02-06T09:34:00.002-05:00

http://www.koreatimes.co.kr/www/news/nation/2011/02/113_80843.html

One out of every 10 South Korean men and women gets married with a foreigner, with Chinese and Vietnamese brides being the most popular, according to data released Sunday.

Statistics Korea said 33,300 South Koreans tied the knot with foreigners in 2009 alone, accounting for 10.8 percent of all marriages here. It marks a big increase from 4,710, or 1.2 percent, in 1990 but a decline from 42,356, or 13.5 percent, in 2005.

In particular, 11,364 South Korean men wedded Chinese women and 7,249 others married Vietnamese women in 2009, the agency said.

The number of Filipino brides stood at 1,643, followed by Japan with 1,140, Cambodia with 851, Thailand with 496, the United States with 416, Mongolia with 386, Uzbekistan with 365 and Nepal with 316, it noted.

Can Mubarak's Egypt Follow South Korea’s Path?

2011-02-05T09:01:00.005-05:00

http://www.cfr.org/middle-east/can-mubarak-follow-south-koreas-path/p24006

By: Peter M. Beck

As the world holds its breath to learn if the Egyptian people's amazing struggle for democracy ends with a breakthrough or a bloodbath, President Hosni Mubarak would do well to consider the South Korea option. Ultimately, Korea's dictators and democracy were both winners.

Like Egyptians, South Koreans endured decades of American-backed dictatorship. In the spring of 1987, Korea's military government held sham elections not unlike the ones held in Egypt last November. However, in both places, a combination of repression and rising expectations proved a combustible mix. If the actual trigger for Egyptians was the sudden overthrow of Tunisia's dictatorship last month, Koreans drew inspiration from the “People Power” overthrow of Ferdinand Marcos in the Philippines the year before. Indeed, “Marcos” became a code word for Korean reporters to describe their own dictatorship.

As in Cairo today, student-led demonstrations drew hundreds of thousands into the streets of Seoul 24 years ago. Like Egypt's Muslim Brotherhood, Korea's Christians played a supporting role at the outset. After weeks of clashes and teargas, on June 29 the government announced that a free and fair direct presidential election would be held within six months. Given that almost exactly seven years earlier, the military unleashed a crackdown that killed over 200 citizens, the question we must ask is, what had changed?

When facing persistent social unrest, all dictators invariably undertake a cost-benefit analysis of cracking down versus opening up. In 1980, Korea's coup leaders correctly determined that there would be little or no cost for killing. Indeed, within months of wiping the blood off of his hands, General-turned-President Chun Doo-hwan was one of President Ronald Reagan's first foreign guests at the White House. Later that same year, Seoul was awarded the 1988 Summer Olympics.

China reached a similar conclusion in June of 1989. After two weeks of martial law, the butchers of Beijing calculated that firing on demonstrators in Tiananmen Square would be of great political benefit and little cost. Indeed, foreign investment actually increased in 1990 and exploded thereafter.

Far from incurring any costs, China and Korea's dictators were rewarded for their bad behavior. For the United States, the price was much higher. A generation of Koreans became virulently anti-American because of our support for a hated regime. Can the U.S. afford such blowback in Egypt?

In Korea in 1987, by contrast, not only were the demonstrations much larger than in 1980, but the Reagan Administration was now insisting that the Chun regime begin the transition to democracy. More importantly, Korean military leaders revealed later that they had considered a crackdown, but feared losing the Olympics if they had turned the streets of Seoul red.

Many pundits have declared that the United Sates is a mere bystander to the struggle for democracy in Egypt, powerless to shape the outcome. This could not be further from the truth. Not only does the U.S. provide $1.3 billion a year in foreign aid (largely to the military no less), but the U.S. is also Egypt's leading trade partner.

Since last Friday, the Obama Administration has only hinted that future U.S. assistance could be linked to the government's behavior. If he has not already done so behind the scenes, President Obama must not waste a moment to make it clear to Mubarak that if the Egyptian army opens fire on innocent demonstrators, U.S. aid stops and sanctions begin. Thugs and camel jockeys will prove unequal to the task of quashing the uprising. If Mubarak still decides to clamp down, then it is time to reevaluate all U.S. overseas assistance. If we cannot shape outcomes in the country that is our second leading aid recipient, then it is time to conduct our own cost-benefit analysis.

If President Mubarak has time to read to the end of the Korean case, he might even fully embrace the decision to open up. Largely free and fair elections were held in South Korea in December 1987 as scheduled, but due to a divided opposition, the military's candidate (and a leader of the previous coup and crackdown no less) managed to win the election. We will never know if there would have been a military coup had one of the opposition candidates won. Once a civilian was elected president five years later, Chun and his successor did briefly spend time behind bars, but they are now living out their days as elder statesmen.

Korea's transition to democracy was conservative and gradual, but democracy was the ultimate winner. Korean legislators may still favor fistfights over filibusters, but Korea is now the most vibrant democracy in Asia. It is not too late for Mubarak to start Egypt down that path.

More Free Trade Follies

2011-02-05T08:36:00.003-05:00

http://www.nytimes.com/2011/02/05/opinion/05sat2.html?_r=1

It’s been more than three years since the Bush administration signed a trade agreement with South Korea. And for more than three years Congress has been balking at it. To overcome that opposition, the Obama administration got Seoul to improve the terms for American carmakers. Capitol Hill seemed happy — until it wasn’t.

The agreement is the nation’s most significant trade pact since the North American Free Trade Agreement and decidedly good for the United States. It would cement relations with an important ally in a dangerous region and boost American exports by at least $10 billion a year. Unfortunately, some powerful members of Congress, from both parties, seem more concerned about politics and narrow parochial interests.

The House speaker, John Boehner, is now suggesting that the South Korea deal must be passed “in tandem” with long-delayed trade agreements with Colombia and Panama. Those two deals face fiercer resistance from trade-wary Democrats. And it is hard not to suspect that Mr. Boehner is more interested in embarrassing the White House than using the South Korea deal to leverage the other two deals through.

Meanwhile, in the Senate, Max Baucus, the chairman of the Finance Committee, which handles issues related to trade, said he remains opposed to the South Korean pact because it doesn’t go far enough to open its beef market — an issue near and dear to his constituents in Montana. He is demanding that South Korea drop its ban on beef from cattle older than 30 months, imposed after a scare over mad cow disease in the United States.

Mr. Baucus warns that if the United States accepts South Korea’s 30-month cutoff, other importers in the region, like China, Japan or Taiwan, could, too. Still, he is doing no favors to American cattle ranchers, whose exports to South Korea are soaring. The pact would cut tariffs on most beef by 40 percent, which would save them hundreds of millions of dollars.

President Obama needs to push the deal forward and argue its case with Mr. Boehner and Mr. Baucus. This shouldn’t be that hard. The business community, an important Republican constituency, does not want the South Korean pact put at risk. And while Mr. Baucus may want to get more for the beef industry, if he pushes too hard, the industry, and the whole country, will lose out.

While he is on the subject, Mr. Obama should be gearing up to push Democrats to pass the Colombian and Panamanian agreements. They are also very good for the United States.

Changes in the works for workaholic South Koreans

2011-02-01T04:31:00.004-05:00

http://nz.entertainment.yahoo.com/news/article/-/8757183/changes-in-the-works-for-workaholic-south-koreans/

It's well after 8.00 pm in central Seoul's commercial district, but the lights are still burning brightly in many office towers.

A nine-to-five existence sounds humdrum in other countries, but for most South Korean office workers it's a distant dream. Even a normal working day lasts 10 hours...and then there's the overtime.

"I work overtime at least four days a week," said a 30-year-old who asked to be identified only by an alias, Lee.

His company, like most others, does not pay overtime to office workers. But staff still stay on for at least 30 minutes to one hour, and sometimes longer, after the official workday ends.

In a nation which worked itself out of acute postwar poverty into prosperity, some feel a moral compulsion to linger late. Others fear they will damage promotion prospects by leaving the office before the boss.

Whatever the reason, South Koreans work longer hours than any other member of the Organisation for Economic Cooperation and Development -- an average 2,243 hours a year or 46.6 hours per week, according to 2009 OECD data.

This is 500 hours more a year than Japan and about 900 hours more than Germany.

However, the organisation's data on productivity in all sectors -- comparing national output to hours worked -- ranks Korea third from the bottom of 30 OECD countries.

The labour ministry says shorter hours could improve both lifestyles and productivity. But ingrained attitudes take time to change.

"Korea's economy still has potential to grow and Koreans have a strong ethnic characteristic to compete and to finish their jobs as soon as possible," Yang Yoon, a psychology professor at Ewha Womans University, told AFP.

"With those two factors combined, it makes the so-called overworking culture exclusive to Korea."

Employees generally don't complain about their long days.

"Working late is understandable. Much of the time, I stay late to finish my report or task of the day," said a 29-year-old electronics company employee, Shin. Like others, he asked to be identified only by his surname.

Sometimes, it's the company hierarchy -- and a perception that overtime working is virtuous -- which keeps lower-level employees sitting tight at their desks till late in the evening.

"The older generation, who worked through the boom time for the Korean economy, are simply so used to working overtime, like Japan in the 1970s," said professor Yang.

"It's hard to just walk out if the clock says I can go but my boss is still there," agreed Kim, 29.

"I once had a boss who would make me stay late by giving more work right before I go home or would simply ask me, 'Why are you leaving so early?'"

Lee said the "smothering" office atmosphere -- and a fear of damaging promotion prospects -- makes staffers linger at their desks.

The labour ministry in 2004 announced a 40-hour work-week policy for companies with more than 1,000 employees. It has since progressively extended this to smaller firms.

In December the ministry announced the policy would apply from July to companies with fewer than 20 employees. This is estimated to cover about 300,000 firms with about two million employees.

"Although Korea has the longest working hours in the OECD, if the policy is implemented, the quality of life and efficiency are expected to improve," said ministry official Jo Won-Shik.

"Labour productivity usually is inversely proportional to working hours, so lower working hours are likely to mean higher productivity," Jo told AFP in a phone interview.

"Moreover, shorter working hours will increase leisure time, improving the quality of life."

It might even boost the nation's chronically low birthrate.

The health ministry in January 2010 announced it was turning off the lights in its offices at 7.30 pm once a month to encourage staff to go home early and make more babies.

Professor Yang is optimistic the workaholic culture will die out in time.

"When Korea's economy reaches its peak, and when the current young generation takes key positions in companies, then the culture will eventually disappear," he said.

But workers themselves are not holding their breath.

Shin acknowledged the situation in his electronics company was much improved. But to further reduce pointless overtime, it should actively take part in the government's drive, he said.

Jeon, a 25-year-old trading company staffer, said overtime was definitely not positive. "But I have work flooding in and it doesn't just go away."

Reporting in North Korea: Journalism that carries the death penalty

2011-01-24T18:56:00.002-05:00

http://www.economist.com/node/17969948

The only publication written by North Koreans, about North Korea, for consumption by the outside world, is named after a river that flows from the North to South Korea and into the Yellow Sea. Rimjingang’s eight reporters are dotted about the totalitarian state; their backgrounds range from factory work to the civil service. In China they were trained in undercover recording techniques. And then they went home to begin their work. If caught, they surely face death.

Their reports are smuggled back into China, and then to Japan, where the magazine’s publisher, Asiapress, is based.

Rimjingang produced a shocking video (http://www.telegraph.co.uk/news/newsvideo/8113817/Inside-North-Korea-exclusive-footage.html) late last year of a homeless young woman, her face blackened with dirt, foraging on a mountainside. Images of the woman, who may have died soon after, went around the world.
Rimjingang is emblematic of the challenges to the regime of Kim Jong Il posed by technology. Reports can be carried across the border on memory sticks, or transmitted via Chinese mobile phones that pick up signals on the North Korean side of the Yalu river.

Rimjingang, and a publication about North Korean conditions by a Buddhist aid group, Good Friends, have been exceptions. Most of the information that flows is inward, from outsiders countering state propaganda and hoping to foment anti-regime sentiment. Open Radio for North Korea, founded five years ago in America, combines Korean pop with human-rights information.

Open Radio, though, is starting to find ways to work in both directions. A month ago, the station broke the story that a train bound for Pyongyang containing gifts from China for Kim Jong Un, the heir-apparent, was sabotaged and derailed. The source was apparently an official from North Pyongan province, the region in which the incident occurred. Last March Free North Korea Radio claimed to have equipped three North Koreans with satellite phones, which offer a lower risk of detection.

Perhaps the greatest force for change remains pirated DVDs from China. Though not a part of any deliberate effort to subvert the system, they mean that nearly everyone has seen South Korean soap operas and knows how prosperous Seoul really looks. “Fear still rules,” says a defector. “But people know more about the world than you might think.”

South Korea, home to the world's fourth-largest federal pension fund, becomes more assertive

2011-01-23T12:25:00.003-05:00

http://www.economist.com/node/17913534/print

JUN Kwang-Woo, the boss of South Korea’s National Pension Service (NPS), has a big job on his hands. With an average life expectancy of 80 years, and a birth rate of just 1.15 children per woman—one of the lowest in the world—South Korea is a demographic time-bomb. But the task of ensuring that the country’s ever more numerous pensioners get their monthly payments is complicated by the fact that NPS is what Mr Jun calls “a whale in a pond”.

With assets of 314 trillion won ($280 billion), NPS is by far the largest investor in the country’s domestic fixed-income and equities markets. Listed South Korean firms have a combined market capitalisation of just over 1,000 trillion won. That limits NPS’s investment opportunities at home. What’s more, declining South Korean bond yields are making it harder for the fund to hit its target of a 7% return.

The answer is to put more money into foreign investments. Mr Jun, who spent 12 years at the World Bank, wants to raise the proportion of NPS’s assets invested abroad from 9.8% in 2010 to 12.6% this year, with a rough target of 30% in ten years’ time. As a result South Korean pensioners’ money is increasingly finding its way into international equities and alternative assets. In October the fund joined Kohlberg Kravis Roberts, a private-equity firm, in buying Chevron’s stake in Colonial Pipeline, an American fuel carrier. It has also made trophy property investments, such as the £773m ($1.3 billion) purchase of the HSBC building at Canary Wharf in London and deals in Berlin, Paris and Sydney.

Investments like these, and last year’s purchase of a 12% stake in Gatwick, London’s second-biggest airport, will inevitably change NPS’s profile. It remains a little-known quantity abroad. But this cannot last for ever: by 2015 NPS is expected to have almost 500 trillion won of assets, with 100 trillion invested abroad. The NPS already faces criticism at home for having a “skyscraper agenda”, aimed more at boosting South Korean national pride than at investment returns. Mr Jun rejects any suggestion that the fund is being run for foreign-policy aims: “We are not a sovereign-wealth fund.”

NPS is becoming more assertive at home, too. Many investors reckon that South Korea still shows too little respect for minority shareholders, particularly those who invest the more dynastic of the family-run chaebol conglomerates. Mr Jun refers to corporate governance as a prime factor in the “Korea discount”, which makes South Korean shares the cheapest in Asia on price-earnings ratios and subdues the value of NPS’s domestic investments. As the largest shareholder in many of the country’s listed companies, the fund has plenty of clout and is increasingly ready to use it. The proportion of “no” votes exercised by the NPS at shareholder meetings has risen steadily from 1.2% in 2002 to 8.1% in 2010.

Addressing South Korea’s demography will take more than decent returns. Plans to increase the retirement age beyond 60 will help. Dramatically increasing immigration, or encouraging married women to return to the workforce, would make a big difference, too. In the meantime NPS needs to keep flexing its investment muscles.

U.S.-South Korea Trade Pact: A Turning Point for American Exports?

2011-01-12T18:30:00.004-05:00

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2671

Last March, when President Obama announced his National Export Initiative, aimed at doubling U.S. exports by 2014, critics argued that this ambitious goal was unrealistic. The President wasn't really serious about trade, they said; he was just trying to appease the business community. After all, since taking office the previous year, he had turned his back, the critics maintained, on opportunities to push through Congress the Bush-era trade pacts that the United States had earlier signed with Colombia, Panama and South Korea.

Those deals were simply too unpopular with Congressional Democrats, according to the naysayers, and Obama wasn't going to risk his political capital pursuing an agenda fostered by his predecessor. The critics remained unimpressed after the United States posted a 22% growth rate for exports for January through September 2010. Sure, those numbers looked good, they said, but only in comparison with the dismal results of 2009. In November, the criticism seemed to be confirmed at the G20 Summit in Seoul, when the United States and South Korea failed to announce a revised, politically acceptable version of their 2007 pact.

Now it seems as if the pessimists may have been wrong all along. Much to the surprise of many who had given up on the issue, the U.S. and South Korea finally reached agreement on a revised pact early in December. If, as many anticipate, the deal is approved by the new Congress next spring, it will be by far the largest U.S. trade pact since NAFTA went into effect in 1994. No longer a small, struggling market, South Korea imports $250 billion in manufactured goods from the rest of the world each year. Its industrial market is much larger and more sophisticated than that of other partners in recent U.S. free-trade pacts.

For U.S. exporters, the deal is "huge news," says Charles Dittrich, vice president for regional trade initiatives at the Washington-based National Foreign Trade Council (NFTC). "We have turned a corner -- it means another $11 billion in U.S. exports annually," he notes, citing an analysis by the U.S. International Trade Commission. "The Obama administration has seized the moment and the opportunity."

Calling the deal "a win-win for both sides," Laura Baughman, president of Trade Partnership Worldwide, a Washington consultancy, notes that the pact will go beyond merchandise exports and spark demand for a significant volume of U.S. services in such areas as banking, software and tourism. "In economic terms, this is by far the most important [bilateral] free-trade agreement" to date, she says.

A great deal is at stake beyond Korea. Approval of the pact could open the door wide to approval of the two other long-delayed U.S. bilateral free-trade deals -- with Colombia (signed by both governments in 2006) and Panama (2007). It could also fuel support for even more ambitious U.S. trade initiatives, such as the Trans-Pacific Partnership, which would add Malaysia, New Zealand and Vietnam to an Asian Rim free-trade area of U.S. partners that already encompasses Australia and Chile.

While the Obama administration failed to act on the three pending agreements from the Bush years, some of the country's largest trading partners were aggressively moving forward with their own pacts, threatening the long-term competitiveness of U.S. exporters in many key markets. For example, the European Union signed its own pact with South Korea, and the EU is currently negotiating deals with Argentina, Brazil, Canada and India, among others. Meanwhile, China is negotiating or planning to negotiate bilateral agreements with the Association of Southeast Asian Nations (ASEAN), Australia, Costa Rica and India -- but not with the United States. And Japan is negotiating with Australia, the Gulf Cooperation Council, India and New Zealand. The list goes on.

The potential reverberations of those free-trade agreements could be very harmful for U.S. exporters if the U.S.-Korea deal doesn't go through, says Rob Mulligan, who heads the Washington office of the U.S. Council for International Business (USCIB), which represents U.S. companies at the International Chamber of Commerce.

Even the timing for approval is of the essence, says William Reinsch, president of the NFTC. The pact needs to go into effect before July 1, when the EU-South Korea deal becomes effective, or the latter pact will set key technical standards for trade between the United States and South Korea.

What's more, the fate of the pact has national security implications, says Brian Pomper, a partner at the Akin Gump law firm in Washington, D.C. and a former trade counsel for Sen. Max Baucus, a Montana Democrat who heads the Senate Finance Committee. With a nuclear-armed North Korea once more threatening military conflict, "some may wonder how can the United States give South Korea a stiff arm" by rejecting the deal? South Korean President Lee Myung-Bak has been widely criticized at home for his weak and indecisive response to a recent artillery attack by North Korea. If Congress rejects the deal, it will be a slap in Lee's face. So beyond economic considerations, Pomper says, "this [deal] is the sort of symbol of U.S. leadership in Asia that many other countries -- who are looking at China with a nervous eye -- have been [seeking]. It is reasserting American interests in Asia. The President has put his reputation on the line."

What People Tell the Pollsters

But is there, in fact, sufficient political support for such a pact in the United States? Will Democrats, independents and Tea Party followers suspicious of globalization oppose the pact because of their ideological objections, or fears that their constituents will hold it against them in the 2012 elections? Although the new text of the Korea pact won quick approval from the United Auto Workers union -- because it eliminates tariff and non-tariff barriers to U.S. auto exports to South Korea -- it was quickly rejected by Richard Trumka, president of the AFL-CIO. Trumka argues that the agreement's provisions for investment and government procurement "will encourage off-shoring" by multinationals rather than maximize opportunities for U.S. job growth. Even under the revised treaty, both U.S. and South Korean workers would "continue to face repeated challenges to their exercise of fundamental human rights on the job -- especially freedom of association and the right to organize and bargain collectively," he adds.

Pomper says many Americans tell pollsters they support stronger exports, but they don't necessarily link such a desire to bilateral or multilateral agreements that improve access to foreign markets. In other words, exports are not automatically linked with job growth in the U.S. mindset. Lately, the tide of public opinion has been turning even further against free-trade pacts among many independents and conservatives who traditionally back other kinds of initiatives -- such as lower corporate and individual tax rates -- that expand opportunities for businesses. Free traders have reportedly done a poor job of explaining how these pacts can promote U.S. jobs by opening up markets. That's the key connection that supporters are promising to make this time around. One such supporter is Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers (NAM), who notes that manufacturing exports to South Korea supported 230,000 American jobs in 2008, the last year for which statistics are available. And that's, of course, before the new pact adds to the export flow.

Vargo and other supporters have a lot of work to do. For one thing, not everyone believes in such numbers. In a recent Pew Research Center poll, "two-thirds of Tea Party people say that free-trade agreements lead to job losses, and this belief is starting to affect the Republican Party," says Pomper. "The Tea Party is a form of populism, and I am nervous that this view will start to filter up."

More broadly, most Americans tell pollsters that trade is fine when it is with countries that are widely viewed as friendly, but not necessarily with others. In the Pew poll, 76% of the respondents said they favored trade with Canada and rated that country highest as a trading partner. More than 50% of respondents were also positive about the benefits of trading with Brazil, the European Union and Japan. But fewer than half of the respondents -- only 45% -- had a positive view of trade with China and South Korea. Why were so few Americans positive about South Korea, a longtime military ally of the United States? Pomper says pollsters believe the explanation is that "many Americans are geographically challenged," confusing South Korea with North Korea, which attracts a lot more attention in the mainstream media.

Overall, only 33% of the respondents said that trade agreements have been "good for the U.S." Some 44% were opposed to them, and 46% said that they had been hurt personally by the agreements. In the October Wall Street Journal/NBC News Poll, 53% of respondents said that free-trade agreements have hurt the country, up from 46% in 2007 and only 32% in 1999. Even very-well-educated, upper-income people are now more likely to oppose free trade, according to the poll. Among those earning $75,000 or more, 50% said that free-trade pacts have hurt the United States, up from 24% in 1999.

The Tea Party Factor

During the fall election season, some Democratic and Republican candidates sought to leverage widespread xenophobia and fear of globalization by suggesting that their opponents had supported free-trade measures that wound up "exporting jobs" to China. David Spooner, a former U.S. trade negotiator who is now an attorney at Squire, Sanders & Dempsey in Washington, D.C., believes, however, that both parties had only limited success with such appeals. Spooner, a Republican, notes that Republican Rob Portman, the U.S. Trade Representative under President Bush, won his race for an Ohio Senate seat by a wide margin despite the fact that his opponent hammered away that Portman, during his tenure as Trade Representative, had supposedly sold out U.S. manufacturing jobs to China.

With Portman now in the Senate and other pro-trade Republicans in key positions -- such as new Speaker John Boehner of Ohio and Majority Whip Eric Cantor of Virginia -- it is tempting to believe that both the House and the Senate will quickly push through the Korea agreement and then move on to Colombia, Panama and other trade pacts. But everything hinges on the ability of the President to assert his leadership on the Korea deal. "The President has demonstrated leadership," says Dittrich, "and we have no reason to think that he won't continue to do so." The battle over the Korea agreement seems likely to pit Obama on one side -- along with pro-trade Republicans. On the other side will be anti-trade Democrats and Tea Party Republicans.

Many leaders of the business community fear that the Tea Party will undermine their efforts to promote pro-trade initiatives by shooting down this deal and others. "You can't assume, as in the past, that a Republican Congress is entirely pro-trade," says USCIB's Mulligan. "The Republicans have developed this populist tinge, and they are focusing on the China trade" as a key target.

Although they are Republicans, Tea Party supporters voiced views in that recent Pew poll about trade that were "by a wide margin" more hostile than that of the average American, notes Pomper. Only 24% of Tea Party supporters said trade agreements were good, and 63% said they were bad, reflecting their widespread fears that the United States signs away its sovereignty whenever it joins such pacts. And, as noted earlier, two-thirds blame the pacts for job losses. If that poll is accurate, the Tea Party faithful could wind up being less supportive of free trade than the general public. Spooner, the Republican trade negotiator, is somewhat optimistic that the Tea Party people will ultimately bend in support of pro-trade initiatives, provided that more pro-trade Republican leaders like Boehner and Cantor pressure them firmly.

"The Tea Party is a bit all over the place," notes Gerald McDermott, a professor of international business at the University of South Carolina's Darla Moore School of Business and a former Wharton professor. "On the one hand, it has a very libertarian feel to it," supporting free markets and small government, and arguing for an investigation into the powers of the Federal Reserve Bank. On the other hand, "they have an 'us-them' mentality that doesn't fit well with trying to do trade." The key question, notes McDermott, is "at what point does their populism run up against their libertarianism? Their reaction to government has been induced by the domestic economic crisis. The notion that elites and the federal government have signed free-trade agreements with other elites [from other countries] could run up against the ideology of free trade" that has been a foundation of Republican economic and foreign policy for decades.

For his part, NAM's Vargo is optimistic about the Korea trade pact, but reluctant to view it as a panacea. "To double exports from 2009 over a five-year period, we would need average annual growth of 15%. I don't see why we can't hit the 15% growth rate." Free-trade deals like the new one with Korea --- and others to follow -- will help, he notes, but trade pacts alone won't be enough to achieve more ambitious long-term goals for U.S. exports, such as narrowing the trade deficit with China and restoring U.S. competitiveness in many high-value manufacturing sectors. Says Vargo: "We also need more export promotion, more export financing and a better way of managing our export controls."

Cultural Exchange: In South Korea's entertainment industry, exploitation remains an issue

2011-01-09T11:06:00.003-05:00

http://www.latimes.com/entertainment/news/la-ca-cultural-exchange-20110109,0,6986036.story

By John M. Glionna, Los Angeles Times

January 9, 2011

She was a young actress with designs on mega-stardom. But to realize her dreams, Jang Ja-yeon was resigned to take her place in the seamy realm of the South Korean sexual casting couch.

In the end, the disgrace proved too much. In the seven-page note she wrote before her March 2009 suicide, the 27-year-old TV sitcom regular described how her manager forced her to have sex with industry VIPs such as directors, media executives and CEOs, many of whom she cited by name.

Jang's death stunned this nation transfixed by celebrity and all its trappings. Since 1990, a half-dozen TV and film actresses have committed suicide over the stress that comes with success in South Korea. The aftermath of Jang's suicide triggered a federal government investigation into "slave contracts," in which young talent, mostly women, become locked into exclusive contracts by their agents requiring them to work long hours for low pay, receive unwanted plastic surgery and, in Jang's case, turn to prostitution.

Nearly two years after her suicide, critics say, little has changed in the cutthroat "Korean Wave" of TV, film and music that each year draws thousands of young hopefuls ready to endure whatever it takes — including sexual abuse and exploitation — to make it big.

While the film and music businesses in such nations as India and the U.S. can also be shady, scholars worry over the perverse treatment of women in South Korea's relatively small but growing entertainment industry, which is making a cultural impact throughout Asia and the West.

An April 2010 survey conducted by a human rights group here found that 60% of South Korean actresses polled said they had been pressured to have sex to further their careers. In interviews with 111 actresses and 240 aspiring actresses, one in five said they were "forced or requested" by their agents to provide sexual favors, nearly half said they were forced to drink with influential figures, and a third said they experienced unwanted physical contact or sexual harassment.

Though two of Jang's former managers were each sentenced to 12 months in jail last October for extortion, nearly two dozen executives named in the actress' suicide note — now known as the "Jang Ja-yeon paper" — were never charged.

Other cases have surfaced. A government review panel in Seoul recently ruled that many entertainment contracts illegally infringe on performer privacy and limit an individual's ability to change agencies.

Critics say the entertainment industry scandal runs to the very roots of Korean culture, in which powerful authority figures, beginning with the military regimes overthrown a generation ago, feel unchecked in their dominance.

"Nowadays in South Korea, money really does matter," said Lee Myoung-jin, a sociology professor at Korea University in Seoul. "To cash in on stardom and wealth, young people do whatever their agents say. There are people out there taking advantage of the situation. It's a tragedy."

Jang's life story plays out like a TV soap opera, the venue of her first success. Orphaned as a child when her parents died in a car crash, she set her sights on the movie industry. After making her debut in a 2006 television commercial, Jang's first big break came when she landed the role of a vindictive schoolgirl in the popular TV soap "Boys Over Flowers."

But off-screen, her life was anything but rosy. In her suicide note, the actress described being at the mercy of studio bosses who forced her to have sex with clients and once to serve drinks on a high-roller golf trip to Thailand. "I was called to a bar and pressured to accept a request for a sexual relationship," she wrote in her suicide note.

When police later raided her manager's office, they discovered a shower and bed in a "secret room" they believe was used for Jang's forced dalliances. After the actress asked to terminate her contract, she was allegedly threatened and beaten, according to her last note. On March 7, 2009, Jang called her sister to lament of her "overwhelming stress." Hours later, the sister returned to the family home to find Jang's body hanging from a stairway banister.

In a newspaper op-ed published days after Jang's death, a former national broadcasting official cited the immense pressure on celebrities to keep in the public eye. He said those "who do not make frequent appearances are treated as losers. To avoid this, they often have to go too far."

The governmental Fair Trade Commission met in July to investigate the "slave contract" phenomena after three members of the now-disbanded male pop-idol group called TVXQ filed a lawsuit to end a 13-year exclusive contract with their manager. The panel ruled that the management's contract was illegal and suggested an ongoing problem in the industry.

A former English tutor for the popular South Korean pop band Wonder Girls also claimed last year that members were mistreated during a North American tour — kept in isolation and denied medical treatment. The band has denied the claims.

But Jang's suicide hit hardest. Even 22 months after Jang's death, bloggers still rue the death of a fragile celebrity many believed was destined to become one of South Korea's biggest movie stars. When she took her life, Jang was awaiting the release of her first two films, which were later both well received. In the first two days after her death, nearly 1 million fans visited her website.

Activists say there are probably other actresses like Jang caught up in the secret web between power and celebrity in South Korea. But they don't expect the situation to improve soon. Many actresses, they say, fear reprisals as well as public shame if they come forward.

Said Lee Eun-sim of South Korea's sexual violence relief center: "Jang's death was the tip of the iceberg."

K-pop Video: Korean Music Video with Surprise Ending

2011-01-07T09:44:00.004-05:00

South Korea Makes Quick Economic Recovery

2011-01-07T09:25:00.004-05:00

http://www.nytimes.com/2011/01/07/world/asia/07seoul.html

By MARTIN FACKLER

SEOUL, South Korea — When the global financial crisis struck more than two years ago, customers disappeared from the Dongdaemun market, a cramped maze of clothing and fabric shops in the shadow of a medieval city gate. But in contrast to the economic conditions in the United States and Europe, business quickly rebounded here and in the rest of this vibrant, technology-driven nation, a resilience that many South Koreans attribute to their bitter experience of having survived an even worse downturn, the currency crisis of 1997.

“This time didn’t feel so much like a real crisis,” Kim Soon-nam, 70, said as she surveyed customers from her small stall, which is filled with running pants and brightly colored dress shirts. “It was hard back then, but that hardship made me stronger.”

The Asian currency crisis is known popularly here as the I.M.F. crisis because the danger of economic collapse forced South Korea to swallow a tough bailout package from the International Monetary Fund that closed big banks and industrial companies, led legions of workers to be laid off and prompted citizens to donate their gold to the national treasury. It was a collective trauma that is remembered here on the scale of the Great Depression in the United States.

But South Korea was able to bounce back and resume the soaring growth rates that have enabled its gross domestic product to double since 1998, catapulting South Korea into the ranks of the world’s wealthiest nations. The latest surge began within months of the financial panic of late 2008 and has continued in every quarter since, according to the Bank of Korea, with the South Korean economy now ranking as the 15th largest in the word. The nation’s capacity to emerge from not one but two debilitating financial crises without prolonged stagnation is drawing attention in a world that suddenly needs economic role models.

“Korea has many differences with the United States, but they certainly did financial reform right,” said Barry Eichengreen, a professor of economic history at the University of California, Berkeley. “Korea under the I.M.F. did radical surgery.”

Economists are quick to caution against making sweeping comparisons between South Korea and the United States. In the late 1990s, South Korea suffered from a “crony capitalism” in which banks lent too freely to corporate customers, while the United States’ financial troubles are rooted in excessive borrowing by individuals. South Korea remains a developing, manufacturing-led nation that is still catching up to the postindustrial economy of the United States.

The dollar’s status as the world’s reserve currency also gives American policymakers options that were not available in 1997 to South Korean officials, whose most immediate problem was a collapse in the value of their currency, the won.

Still, economists say, South Korea’s hard-landing approach can offer pointers to the United States, especially at a time when Republicans have taken over the House of Representatives with vows of “restoring fiscal sanity.” One such lesson, they say, is to avoid relying too much on stimulus spending and to make painful structural changes so that the economy can find its natural bottom and resume its growth. Another is to make the changes quickly and decisively to restore the public’s faith.

“Sooner or later, the U.S. must make some cruel choices,” said Chung Duck-koo, who was a Finance Ministry official during the 1997 crisis and is now a professor at Korea University. “Making them sooner is the best way to restore confidence.”

In 1997, the Korean economy almost collapsed under the weight of profligate corporate borrowing and a growing trade deficit and was forced to accept a $60 billion bailout from the I.M.F. The package pushed South Korea to shut down excess production capacity, causing the collapse of 14 of the nation’s large industrial conglomerates, like the once formidable Daewoo group. The survivors, like Samsung Electronics, emerged with less debt and healthier balance sheets.

Mr. Eichengreen and other experts said the most noteworthy changes came in South Korea’s then-crippled banking industry. The government closed or restructured 12 of the 32 largest banks and spent about $60 billion to write off bad loans and replenish the cash reserves of the remaining banks. The Korea Asset Management Corporation, a public fund, bought about two-thirds of the problem loans on the banks’ books, freeing up capital to restart a virtuous cycle of lending.

By contrast, analysts fault Washington for keeping many struggling banks afloat after the subprime-lending fiasco and for failing to clean up enough of the mortgage-related securities that are clogging the American financial system.

“Korea did a better job of moving quickly to clean up its banking system once and for all,” said Naoko Nemoto, a banking analyst in Tokyo for Standard and Poor’s. Ms. Nemoto, who wrote a book on the South Korean reforms, compared the South Korean response with that of her native Japan, where officials’ reluctance to close “zombie” corporate borrowers contributed to the country’s economic stagnation since a financial crisis in the early 1990s.

Ms. Nemoto and other analysts say that the United States should resist the temptation to mimic Japan’s reliance on quick fixes. South Korea’s central bank was forced to raise interest rates during the 1997 crisis to shore up its currency and restore investors’ confidence.

The higher rates were unpopular because they helped cause the hard landing that forced 1.4 million Koreans, about 7 percent of the work force, out of their jobs. But South Korea’s ability to endure such hardships and bounce back points to another lesson: the need for a sense of shared national purpose and willingness to sacrifice. South Koreans rallied to help their nation, spending less, saving more and learning to be more competitive.

“Nobody was buying back then, so I slept less, worked harder,” said Ms. Kim, the stall owner in the Dongdaemun market. “And I saved and saved and saved.”

Economists say the United States needs a similar national consensus to reduce borrowing and to invest more in education and other ventures that will raise productivity, which they say is the only way to regain a sustainable growth rate. Some worry that the United States may have missed its best chance, now that the worst of the public’s crisis-inspired worries have subsided.

“Our commitment to education and our diligence were what helped Korea in 1997,” said Kang Man-soo, who served as vice minister of the Finance Ministry during the 1997 crisis. “The U.S. needs to get back to basics.”

South Korea Unveils World’s First Commerical Electric Bus

2010-12-30T00:00:00.001-05:00

http://inhabitat.com/south-korea-unveils-worlds-first-commerical-electric-bus/

South Koreans worry too much about a free-trade deal

2010-12-29T21:31:00.004-05:00

http://www.economist.com/node/17680899

America's FTA with South Korea

ON THE 38th parallel, a country that aims to be one of the world’s most open trading nations sits next to one of the most closed. That North Korea has deadly warheads aimed at Seoul means South Korea needs friends. But since the South gave in to American pressure to amend a free-trade agreement on December 3rd, many of its citizens have accused it of paying a high price for that friendship. Opponents of its president, Lee Myung-bak, playing on the mood of the moment, have likened the deal to being hit by North Korean artillery fire.

The government in Seoul insists that its desire for American support in dealing with North Korea never entered the free-trade equation. But whereas Barack Obama has used the agreement to burnish his pro-business credentials and win favour with some of his political opponents, in South Korea few are happy. In the National Assembly on December 7th both the ruling and opposition parties demanded an apology from the trade minister for breaking a promise not to tamper with the 2007 agreement, which has yet to be approved by either country’s legislature.

Choi Seok-young, the chief trade negotiator, admits the South Koreans reluctantly gave in to American demands but insists they got concessions. He expects a big political battle to have the updated agreement ratified. The Obama administration boasts that by postponing the elimination of American tariffs on South Korean cars and trucks, and winning concessions on safety and environmental issues, it has helped American carmakers. It also won the right to protect America’s carworkers from “harmful surges” of South Korean imports. South Korea’s main payoff was a miserly two-year extension of tariffs against imports of American pork. To the chagrin of some prominent Democrats in America, it also managed to stave off further pressure to reopen its market to American beef.

The tariff scorecard is only part of the story. South Korea exports far more cars to America than vice versa (see chart). Even Ford, the biggest-selling American carmaker in South Korea, barely sells enough in a month to fill a multi-storey car park.

Cheong In-kyo of South Korea’s Inha University says his country could still benefit immensely from the agreement. He says the amendments were necessary in order to ensure the deal’s passage by Congress. What’s more, he argues, the agreement will benefit South Korea by bringing competition into heavily regulated and inefficient service industries.

South Koreans may groan, but their trade negotiators are held in awe by their counterparts in countries like Japan, whose car industry competes fiercely with South Korean brands. Now that South Korea has an agreement with America to go alongside an earlier agreement with the European Union, it hopes to gain almost unrivalled access to the world’s two biggest markets. If that makes the South feel any more comfortable about the North, so much the better.

Risking life and limb for hot pizza in South Korea

2010-12-29T07:03:00.003-05:00

http://www.latimes.com/news/nationworld/world/la-fg-korea-pizza-20101229,0,6982566.story

South Korea's motorcycle deliverymen speed, run red lights and drive on the sidewalks to make it. Now an increase in accidents is leading the nation to rethink the need for such quick arrivals.

By John M. Glionna, Los Angeles Times
December 29, 2010

They're on the streets at all hours, the motorcycle deliverymen slicing through traffic in their race against the clock, defying both the law and common sense to get their cargo delivered on time.

Run a few red lights? Pull a last-second dash across six lanes of traffic? No problem. And if the zigzag through gridlock fails, there's always the sidewalk; pedestrians know to stay out of the way.

"It's not that I want to deliberately disobey traffic laws, but when you have customers breathing down your neck, it's really hard not to," deliveryman Bang Chang-min said. "When I'm on a bike, I'm under so much pressure that I feel I transform into somebody else."

But the recent death of a pizza deliveryman may cause South Koreans to rethink their obsession with zippy fast-food conveyance. On Tuesday, government officials announced a new educational campaign to encourage consumers to think safety over speed.

In the last five years, 4,098 vehicular accidents nationwide involved motorcycle deliverymen, a subculture dominated by teenagers looking for part-time work, according to government statistics.

Activists blame a deadly mix of youthful recklessness and a corporate system that demands that drivers take chances. And such accidents are on the rise: Last year saw 1,395 accidents involving deliverymen. Although there are no statistics on related fatalities, unions estimate that such deaths have reached double digits for the last decade.

In South Korea, all kinds of food are advertised with quick home delivery, varying from burgers and fried chicken and items bought at mom-and-pop groceries. The result is often road chaos. Deliverymen dash about the city with boxes strapped to the backs of their motorcycles. Some drive one-handed so they can carry more orders.

Delivery jobs are stressful and the turnover rate is high. With some pizza companies, drivers must absorb the loss if they arrive late and the food becomes free. Others pay drivers, most of whom make less than $5 an hour, an incentive of 40 cents for on-time arrivals. Some even display a ticking clock on their websites when an online order is completed.

Activists say that speed kills.

"The clock starts as soon as the order is taken, putting immense pressure on these young men," said Kim Young-kyung, president of the Youth Community Union. "Companies train new employees to use every available method regardless of the law. The bottom line is to get there on time."

Pressure put on firms has produced little results.

"Companies tell government investigators that young men like to ride their motorcycles fast, so there's little they can do," Kim said. "These kids are often too young to think on their own. But instead of emphasizing safety, the bosses exploit them."

Last week, a 24-year-old Pizza Hut deliveryman was killed when he was hit by a taxi that had run a red light. On the same day, an 18-year-old driver for another firm was injured in a collision with a bus, officials say.

Protesters recently rallied outside the Employment and Labor Ministry, holding up placards, one of which read, "The 30-minute delivery system kills people."

In its announcement, the ministry said it would launch a TV, radio and subway advertising campaign, along with the dispersal of leaflets at fast food outlets, emphasizing the high accident and injury rate among motorcycle deliverymen.

Activists say companies have a long way to go to ensure the safety of deliverymen. One hamburger chain, for example, requires drivers to wear helmets without chin guards because they fear the fuller head gear looks menacing to customers. Drivers have since endured facial injuries in road accidents, Kim said.

Bang said he has worked for two firms, each with the same rules.

"Both said safety was a priority," he said, "but the aim is to get to the destination as fast as possible."

How Korea was Caffeinated

2010-12-27T19:17:00.003-05:00

http://10magazine.asia/2010/11/27/how-korea-was-caffeinated/

To learn the story behind Korea’s fixation on the coffee bean, you have to travel from the streets of Seattle to the slopes of North Korea’s Mt. Baekdu.

Words by Andray Abrahamian

Green coffee beans sit in a large bag, waiting to be micro-roasted in the machine just next to a barista, who is absorbed frothing milk for a cappuccino. The beans will soon be dark, rich and above all, fresh. Is this a scene from Milan? Brooklyn? Melbourne? No.
It’s from Yanji.

Where? Yanji is a small city just north of the DPRK and only two hours from the Russian border. Shoddy buildings, traffic flows, buildings, rubble and rabble combined with Hangul on all the signage make it seem like you’ve stepped into 1970’s Seoul. What is a microroastery doing here, 26 hours train ride from Beijing? Simply: South Koreans come here on the way to hike Mt. Baekdu, and South Koreans have become the coffee connoisseurs of Asia.

In every major city in South Korea, in-house roasted beans, extensively trained baristas and expensive imported Italian machines deliver coffee to an increasingly sophisticated set of consumers. Baristas usually display their qualifications behind the bar, especially if they’ve placed in one of the many barista competitions around the country.

It wasn’t always like this. It was more like this:
You deposit a bit of pocket change and push a button. A paper cup rattles into the cavity, various powders get excreted into it, dowsed with piping hot water and presto! Not 10 seconds after your coins plopped into the machine, you’re holding a small cup of “coffee.” Really, it’s just a few freeze-dried granules of the lowest-possible-grade coffee beans, a bunch of sugar and whitener, which includes stuff like sodium caseinate, diglycerides and a host of other chemicals that sound like baddies from Dr. Who.

For a generation, slurping one of these abominations to stay awake at one’s desk or to taste something sweet after a belly full of salt and spice was coffee for Koreans. Even at dabang—pseudo-traditional Korean cafes you can still spot from time to time—only instant coffee was to be found.

How did this grim situation change? One word, four syllables: Starbucks. Say what you will about the chain: that it’s fast-foodized coffee; that it contributes to a generic urban landscape; that it has sacrificed quality for market share; that it’s overpriced; that the pastries are packed with preservatives; that the founder is responsible for the underhanded destruction of the Seattle Supersonics. Yes. Say all those things.

But what Starbucks has done all over the world is introduce people to coffee as a luxury good. Especially in Asia, going to Starbucks has become a social signifier: “I’m a sophisticated, modern consumer.” In Korea, this gave rise to a specific brand of poseurs: dwoenjangnyeo (된장녀), young women who eat a cheap triangle kimbap for lunch so they can spend their meal allowance at Starbucks, being seen all afternoon.

Starbucks opened their first Korean branch in 1999, had over a hundred outlets by 2004 and are planning to hit 360 nationwide in the coming months. In Korea, they have the only Starbucks with no English sign (스타벅스 커피 in Insadong) and for a time the largest Starbucks in the world, a five-story monster in Myeongdong that has since changed hands. They are the biggest player in a market dominated by several chains, both foreign (like Coffee and Tea Leaf) and local (like Caffe Bene). Thanks to them, words like “barista,” “macchiato” and “double shot” are now part of the Korean language’s extensive list of loan words.

As more Koreans travel abroad and learn to appreciate foreign cuisine in general, the education provided by chain coffee shops has helped local coffee nerds find a market for their passion. Independent cafés started opening up in the 2000s and now are easy to find in any downtown or university neighborhood. Usually very comfy, these indies also have a unique sense of style: hand-drawn art, local music and patterns of patronage and service make Korean cafés distinctive.

Many cafés are table service affairs. You order at the counter, but the coffee is brought out to you, often with pictures – “latte art”—sketched in the milk. Almost all baristas have undergone training for this. Attention to detail at independent coffeehouses tends to be very high. Menus are often more extensive than in the United States, with rarely seen Italian derivatives of espresso such as longo (a shorter, stronger pull of espresso) and shakerato (espresso shaken over ice, like a martini) alongside local favorites such as green tea latte or sweet potato latte (better than it sounds).

With perhaps a stereotypical penchant for exam-taking, most Korean baristas study formally for anywhere from three months to two years. They receive certification and are thus very knowledgeable and dedicated to their craft. Cafés stay open until late, making them hotspots for couples on dates and groups of friends who want to hang out but not drink booze. Unlike the west, coffee is not yet needed to start the day. Outside of the chain cafés, it’s unusual to find a place pulling shots before 11 am.

Though it may sound bolder than a blue mountain hand-drip, I’m prepared to say that the average cup of coffee at a Korean café is of better quality than in the United States. The speed at which this has become the case is staggering; five or six years ago, a good cup of coffee was about as rare as a DMZ tiger. Today, pastries and cakes sometimes lag behind due to a lack of artisanal bakeries, but this too is gradually improving.

Korea has taken coffeehouse culture from Europe, via America and made it its own. If this is a form of cultural imperialism, you don’t hear many traditionalists complaining, though this is probably because they’re addicted to caffeine. To get their fix, they can visit quality, independent cafes in almost every Korean city. For Seoulites, flip the page for a list of ten true gems just waiting for you to discover.

Emperor Gojong: Coffee Lover
The first Korean coffee connoisseur came long before the Starbucks invasion, around the time of the more insidious Japanese takeover of Korea.

Japanese expansionists were putting the Joseon Dynasty under tremendous pressure at the end of the 19th century. In 1895, they judged Empress Myeongseong to be an obstacle to their political ambitions and had her assassinated. Fearing a coup d’état or worse, her husband Emperor Gojong took his court and fled from the palace to the Russian Legation early the next year.

There, he was introduced to a heavily sugared style of coffee, which he grew to love and drink regularly. He governed the country and served coffee as he gave audiences to various officials and envoys. Sadly, coffee culture didn’t take off at that time, but to be fair, Koreans had slightly more important things to worry about.

China’s North Korea Shift Helps U.S. Relations

2010-12-24T08:56:00.003-05:00

http://www.nytimes.com/2010/12/24/world/asia/24diplo.html
By MARK LANDLER

WASHINGTON — Few debates have strained relations between the United States and China more this year than how to handle an unruly North Korea. But after a tense week, when the threat of war hung over the Korean Peninsula, the Obama administration and Beijing seem finally to be on the same page.

Administration officials said the Chinese government had embraced an American plan to press the North to reconcile with the South after its deadly attacks on a South Korean island and a warship. The United States believes the Chinese also worked successfully to curb North Korea’s belligerent behavior.

China’s pressure, several senior officials said this week, might help explain why North Korea did not respond militarily to live-fire drills conducted this week by the South Korean military, when a previous drill drew an artillery barrage from the North that killed two South Korean civilians and two soldiers.

As evidence of the policy shift, officials pointed to recent remarks by China’s foreign minister, Yang Jiechi, in which he urged the North and South “to carry out dialogue and contact.” Previously, Beijing’s response had been to propose an emergency meeting of the six-party group that negotiates with North Korea over its nuclear program, a step the United States opposed as rewarding the North’s aggression.

China and the United States still have major differences on issues ranging from currency policy to climate change. And just last Sunday, skeptics pointed out, Beijing blocked a statement in the United Nations Security Council that would have explicitly condemned North Korea for the artillery attack.

Still, the agreement on how to deal with North Korea removes a substantial irritant in the Beijing-Washington relationship four weeks before President Hu Jintao of China makes a state visit to Washington. It also creates a glimmer of hope, officials said, that the United States can resume a dialogue with North Korea, whose hostile behavior has raised tensions to the highest level since the Korean War.

“The silver lining of last weekend is that the Chinese, for the first time, were worried that things were spinning out of control,” said Victor Cha, a Korea expert at the Center for Strategic and International Studies who worked in the George W. Bush administration. “It moved the Chinese more in the direction we wanted them to move.”

The Obama administration claims some credit, too, noting that the change came on the heels of a visit to Beijing by American officials, led by Deputy Secretary of State James B. Steinberg. A week before that, President Obama called Mr. Hu and bluntly urged him to put a tighter leash on the North Korean leader, Kim Jong-il.

China swiftly dispatched a senior diplomat to Pyongyang, the North Korean capital, and officials said he conveyed a strong message about “the unacceptability of attacks and killings of South Koreans,” said a senior American official, who spoke on condition of anonymity in order to discuss sensitive diplomatic matters.

“The idea that there could be these one-off provocations without expectation of a military response, as the North had behaved in the past, the Chinese now understand that this is no longer the reality, no longer acceptable,” he said.

China’s push for a rapprochement between the North and South is even more significant, another official said, because it unifies the five parties that deal with Pyongyang: the United States, China, Russia, Japan and South Korea. China’s reluctance to press North Korea was sending Pyongyang a mixed message, he said, especially since China is the North’s most influential ally.

Russia’s role has also been important, officials said. The Russian foreign minister, Sergey V. Lavrov, spoke out against the North Korean artillery shelling. And the comments by Mr. Yang, China’s foreign minister, about the need for North-South engagement came in a phone conversation with Mr. Lavrov that was released by the Chinese Foreign Ministry.

North Korea signaled that it was open to such an engagement in meetings with Gov. Bill Richardson of New Mexico, who made an unofficial visit to Pyongyang last weekend. Mr. Richardson said the North was willing to ship spent fuel rods to South Korea — a move that could effectively end its production of plutonium, from which it has manufactured several nuclear bombs.

Administration officials played down Mr. Richardson’s trip, saying he was carrying no proposals from the United States. Shipping fuel rods to South Korea is not a new idea, one official noted, and the South Korean president, Lee Myung-bak, seems in no mood to accept it. North Korea has also done little to alleviate concerns about its recently disclosed uranium-enrichment facility, aside from its offer to Mr. Richardson to allow nuclear inspectors back into the country.

Nevertheless, Mr. Steinberg and Jeffrey A. Bader, a top White House adviser on Asia, are likely to visit Seoul soon to explore whether the temporary lull in North Korea’s aggression creates an opening for diplomacy.

If the North makes amends for the shelling last month of Yeonpyeong Island and the torpedoing of the South Korea warship, the Cheonan, which killed 46 sailors, officials said it could open the door to contacts between the United States and North Korea. But they were vague about what kind of gesture would be sufficient.

“The South needs to have satisfaction that their concerns over these acts have been addressed,” an official said. “The North cannot go around the South; they cannot sidestep the South.”

By going ahead with military drills in the face of North Korea’s threats, analysts said Mr. Lee might have bought himself some room to negotiate. But, they added, outsiders should not read too much into the North’s decision to hold its fire; the government’s motives were, as ever, cloaked in mystery.

How the U.S. Unfroze a Trade Deal with South Korea

2010-12-12T17:21:00.003-05:00

http://www.businessweek.com/magazine/content/10_51/b4208031737438.htm

Ford's Mulally was consulted nearly every step of the way
By Hans Nichols and Mark Drajem

It wasn't exactly Bretton Woods, the bucolic New Hampshire location where nations met in 1944 to establish a new financial world order. This time the scene was a Sheraton hotel in Columbia, Md., and a manmade lake. Such was the backdrop for the U.S.-South Korea trade deal, whose final details came together on Dec. 2 after the top two negotiators took an hour-long stroll in frigid temperatures alongside the nearby lake.

The day before, President Barack Obama, on the eve of a secret trip to visit the troops in Afghanistan, was in frequent touch with negotiators, say White House aides who spoke on background so they could talk candidly about negotiations with foreign leaders. Obama had been hearing all year that a testy relationship with business was preventing him from realizing his goal of doubling American exports in five years to create jobs and spur economic growth. A reworked free-trade agreement with Korea, initially negotiated by President George W. Bush, could be the first step toward healing that rift.

Ford Chief Executive Officer Alan R. Mulally, representing the U.S. auto industry and the auto company with the most at stake, was consulted nearly every step of the way, Administration officials say. As the talks hit a roadblock, he was asked to attend a Dec. 1 meeting in Treasury Secretary Timothy R. Geithner's office. The White House wanted his support, along with that of Bob King, the United Automobile Workers president, and the top Democrat and Republican on the House Ways and Means Committee, Sander M. Levin and David Camp, both from Michigan.

The backing of executives, union leaders, and lawmakers raises the odds of winning passage of the deal in Congress next year. And Obama wants the Korea pact to serve as a new model for trade talks, says Michael Froman, the Deputy National Security Adviser and one of the lead Columbia negotiators. Obama sought "to forge a new coalition of support for trade and then sold it personally" to South Korean President Lee Myung Bak, says Froman. "The Korea deal is important," U.S. Trade Representative Ron Kirk says, "but the importance of concluding it goes beyond Korea."

The Administration is now working on reducing nontariff trade barriers, such as arbitrary license plate size requirements, with other trade partners. It's also discussing reducing similar nontariff barriers, such as onerous safety standards, with Mexico and the European Union. Trade talks with Panama and Colombia are pending, and there may be new ones with Vietnam and Malaysia. Obama hopes a widely supported trade deal with South Korea will soften opposition to future deals, the officials say.

The pact, which the White House says will increase trade with Korea, now $68 billion a year, by some $11 billion, almost died when Obama and Lee failed to agree at the November Group of 20 summit in Seoul, mostly over differences on auto tariffs. "It was a courageous move in Seoul to walk away," says Ziad Ojakli, a Ford lobbyist. "A bad Korea auto template would have been there for the Indians, the Chinese, and others."

South Korean and American negotiators, sequestered for two days at the Sheraton Columbia Town Center Hotel in suburban Maryland, about an hour's drive from the White House, were again at an impasse on Dec. 1. The hang-up: how quickly to phase out a 2.5 percent tariff on imported Korean autos. The tariffs make Korean cars more expensive in the U.S., giving Ford a leg up with price-conscious consumers. The U.S. tariffs, however, are far lower than the 8 percent levy Korea imposes on American cars. Ford initially wanted the tariffs for 10 more years and had already come down to seven years. Seoul wanted three or four.

Mulally joined Geithner and National Economic Council Director Lawrence Summers at Treasury. Froman, on a speakerphone from Columbia, reported that the talks were foundering. The officials asked Mulally if he could abide a five-year tariff phaseout. He said he'd have to discuss it with the UAW and Michigan lawmakers. That evening, Obama summoned Froman and Kirk to the White House for consultation. They brought some good news: Mulally, the UAW, and Michigan lawmakers had signed off on the five-year deal.

At 10:30 that night, Obama called Lee with a framework for an agreement, including the five-year language. In an hour-long conversation, their second since a North Korea artillery barrage killed four South Koreans on Nov. 23, Obama stressed the importance of a trade pact to the two countries' strategic relationship. Lee was noncommittal, though he wanted the Maryland negotiations to continue.

On the morning of Dec. 2, with the talks still stalled, Froman suggested a walk with his counterpart, Trade Minister Kim Jong Hoon, who had been ducking outside to smoke. Froman and Kim strolled alongside the nearby lake, which was in the process of being dredged. Froman warned that failure would be a missed opportunity for Seoul to improve ties with Washington, the officials say. Kim relented, as long as Korea could prolong tariffs on U.S. exports of pork products to his country from 2014 to 2016. He also wanted a more generous allocation of temporary work visas. After midnight, Froman e-mailed Air Force One, en route to Afghanistan, that they had a deal.

The accord allows the U.S. to end its 2.5 percent auto tariff in five years. South Korea will cut its 8 percent tariff on U.S. automobile imports to 4 percent immediately instead of eliminating it, a White House fact sheet says. Ford and other U.S. automakers can send 25,000 cars that meet U.S. safety standards annually to South Korea, even if they do not meet Korean standards.

Not everyone is pleased. Senate Finance Committee Chairman Max Baucus, a Montana Democrat who had demanded that South Korea drop restrictions on U.S. beef imports from cattle older than 30 months, said he was unhappy with the agreement. American beef producers will gain an advantage over Australia under a 15-year phaseout of a 40 percent tariff.

The South Korea deal has brought Obama some rare praise from the U.S. Chamber of Commerce, which fought the President's agenda on health care and financial regulation. "The Administration has done its part," U.S. Chamber of Commerce President Thomas Donohue said in a statement. Now, he said, the Chamber will help round up votes.

The bottom line: Obama hopes a South Korean trade deal will improve ties with American business and pave the way for more accords with other nations.

Korean not allowed to be spoken at language cafe

2010-12-12T10:00:00.003-05:00

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101212000170

When ifriends opened in a former bar in Shinchon, customers could have taken it for just another coffee place that this college area in Seoul is saturated with.

As it hits two o’clock, groups of fours and fives populate a dozen tables to practice foreign languages in a relaxed environment.

Girls looking for jobs with airlines conduct mock interviews in English. Office workers seeking to enhance conversational Chinese chat for hours in Mandarin. Most common of all, college kids looking to raise their English proficiency test marks brush up their comprehension with hand-out materials prepared by the group leader.

There is one condition ― no Korean inside the cafe.

Since opening in 2008, ifriends has blossomed into a cafe, a banquet hall, a classroom and most of all, a foreign language immersion center.

The goal, says co-owner Sohn Ju-youn, is to offer a comfortable place to chat in foreign languages.

“People feel uncomfortable practicing their English in other cafes when there are so many of us who want to speak English, Japanese, Chinese, Spanish, you name it, to get jobs and perform better at work,” the former office worker said.

“A lot of the first comers become regular members once they are placed into a particular group. They come here to talk, so people socialize easily and hang out for drinks afterwards.”

Crowds help themselves to unlimited amounts of coffee and tea from an espresso bar for an entrance fee of 5,000 won ($4.40). The cafe does not charge customers for organizing study groups or conversational sessions where a native speaker is hired to lead the group.

“On Wednesdays we have a job hunting group where members share recruitment information and practice answering interview questions in English. It feels great when some of them come back for a party after they get an offer,” Sohn said.

The study groups, running seven days a week, ranges from TOEIC-speaking, translation sessions to advanced Japanese. The cafe gives small incentives to leaders who volunteer to head their group.

Moon Hyung-chul, 27, says his participation in the job hunting group for the past three months helped him to ace a corporate job interview where he received an offer.

“I did my undergraduate (degree) at an Australian university so I was quite confident with English to start with. But discussing current affairs with people like me on a regular basis polished my speaking,” Moon said.

The Miracle Is Over in South Korea. Now What?

2010-12-05T16:35:00.004-05:00

http://online.wsj.com/article/SB10001424052748704791004575519703277433756.html

South Korea boomed by turning a rural economy into an industrial power. To keep growing, it's going to have to make some fundamental—and difficult—changes

By EVAN RAMSTAD

As it welcomes the leaders of the 20 richest nations this week, South Korea is coming to grips with an uncomfortable truth: The stunningly successful economic strategy that put it in position to host such a meeting is nearing the end of its useful life. And replacing it won't be easy.

Fifty years ago, seemingly trapped in poverty and hunger, South Korea began a rapid rise into affluence while also staring down its neighbor, North Korea, which had invaded it just 10 years earlier and continues to threaten it today. South Korea is now the 15th-biggest economy in the world, home of globally recognized companies like Samsung and Hyundai and a model for developing nations.

But the economic strategy that worked so well for so long has run its course. South Korea has essentially reached the level of wealth that it can attain by relying on exports to turn a rural economy into an industrial one. More of its economic output—43%—comes from exporting goods than in any other advanced nation.

"The country is at an inflection point," South Korean Finance Minister Yoon Jeung-hyun said in a speech in July. "Apparently, there is a limit for export industries to create new jobs and added value."

The question South Korea faces now is both simple and difficult: Can it make the necessary changes—economic, political and cultural—that will let it continue its upward path?

To keep growing, economists here and abroad believe, the country will have to make fundamental changes to its hierarchical, male-dominated society—not only bringing more women into the workplace, but also encouraging innovation and entrepreneurship, promoting by merit rather than seniority and opening the door to immigrants.

It will have to reduce the government's pervasive involvement in the economy, a vestige of a time when powerful presidents and cabinet ministers made hard choices about what to do with scarce capital. And it will have to loosen the country's adherence to Confucian-based hierarchies, following the path taken by such neighbors as Japan, China, Hong Kong and Singapore.

In an interview on Friday, South Korean President Lee Myung-bak described the situation in broad terms. "There is a lot of work to do in reforming many of the social institutions or the norms and the practices and traditions we've had in this country for many, many years," Mr. Lee said. "Some of them have been an obstacle to us becoming a more advanced country. There is a need now for us to try to change."

How South Korea confronts its challenges will be watched by dozens of poorer countries that have emulated the country's successful export-led development model, and by middle-income countries, including Taiwan, Saudi Arabia, Israel and Portugal, which are also hitting plateaus in growth and future potential.

Rise and Stall
South Korea's fast rise began in the 1960s under military dictator Park Chung-hee, who directed scarce capital and resources into many of the same industries that made Japan a powerhouse—textiles, steel, autos and electronics. South Koreans rebelled against authoritarian rule in the 1980s and established a constitutional democracy in 1987, but the economy continued to grow rapidly.

South Korea's per-capita income reached $20,000 in 2007, and while the Asian financial crisis in 1997 and 1998 dealt a blow to the country's traditions of lifetime employment and forced its companies to focus more on profits than growth for growth's sake, the disruption to the country's upward trajectory was brief.

Under the surface of that rising prosperity, however, the seeds of trouble were starting to grow.

South Korea's economic growth averaged 4.3% a year over the past decade, down from 6.2% in the 1990s. The country this year will grow around 6%, better than most advanced countries, but that's coming after two years of marginal performance. Economists' forecasts for next year range from 3% to 4.5%.

What's more, the country's growth potential has dropped further in the past 15 years than any other developed country, according to the South Korea Chamber of Commerce and Industry. Its recent study showed South Korea's growth potential—the maximum possible output when all production factors like labor and capital are used—is now about 4% annually and will likely shrink to between 2% and 3% in the next 10 years.

All this is happening in South Korea at a much lower income level than when it happened in Japan, whose development model, laws and culture South Korea mirrors to a great degree. In the late 1980s, when Japan's growth potential fell to 3% to 4%, its per-capita income exceeded $30,000. South Korea's now hovers around $20,000.

Fewer People, More Skills
Part of the reason for the economic stall is demographic: The country simply doesn't have enough people to drive into jobs to fuel growth. At just 1.15 babies per woman, South Korea's birthrate is the lowest of all developed countries. The number of people in the 25-49 age group has already peaked, and around 2017 to 2019 the overall working-age population will begin to contract.

In addition, South Koreans have reached a point where so many people have become educated that fewer apply for lower-paid, lower-skilled jobs. That's left the nation's farms and manufacturers scrambling for labor, at the same time many college graduates spend their 20s waiting for opportunities in large companies and the government.

Park Ju-eun, a student at Hongik University in Seoul, decided to delay graduation for a year after encountering a difficult job market. "These days, no one graduates as scheduled," she says. "Students put off graduation to have a better chance to get hired."

Ms. Park, who is 24 years old and a management major, applied for jobs at 15 companies, but she wasn't invited to interview at any. She'll get her degree next year and, if she still can't get a job, will study foreign languages and take certification tests to build up her credentials.

The model now for South Korea, economists say, should be countries in Europe and North America that developed robust service industries, which absorb highly skilled workers and complement existing manufacturing competence, and embrace more diverse working environments that stimulate invention and creativity.

To get there, South Korea will need to reshape its economy to be driven from the bottom up, rather than the top down, and confront the cultural traditions that are creating work barriers for women and immigrants.

"Korea has to decide whether it will reconstitute itself and stay in the limelight or get ready for a Japan-style sunset," says Jasper Kim, a law professor at Ewha University in Seoul.

A Heavy Hand
No. 1 on the government's to-do list: Stop micromanaging the economy. Such involvement made sense in a country rising from nothing with limited capital and a low level of education. But South Korea is no longer such a place, and the government's hand is widely seen as stifling competition and growth.

Regulations, for instance, say that a company that brews beer in South Korea must be able to produce at least 3.8 million bottles a year, preventing start-up companies from trying to take on the country's two established beer makers. In another area, after an outcry last year over the salaries paid to workers at Korea's privately owned stock exchange, the government took it over and slashed pay.

Government officials acknowledge the problem. But they haven't been able to fix it.

In 2007, South Korea's president, Mr. Lee, campaigned on a promise of economic growth he pitched as the "747" plan—7% annual growth, $40,000 per capita income and the world's seventh-largest economy by 2018. A key element: government downsizing.

Mr. Lee initially set out to privatize about 40 of the country's 400 or so government corporations in hopes of spurring profit-motivated work. By early this year, officials had moved on just one sale—a minority stake in the company that runs the international airport in suburban Seoul. Then, in September, they even stopped that sale in response to political critics.

A similar resistance has arisen when it comes to the government's monopoly of the rates and sale of television advertising. Two years ago, the nation's constitutional court ordered an end to that control, saying it was an illegal monopoly.

The result was that even more government agencies jumped in, wanting to sell advertising or have the power to decide who will. Meanwhile, with government-set TV rates acting as a ceiling to most other advertising, South Korea's media industry accounts for less than 1% of gross domestic product, compared with more than 2% in Japan and 3% in the U.S.

Most visibly, capital-intensive construction projects remain a major tool of influence for South Korea's political leaders, a force that sways both the costs of private development and the land available for projects. Mr. Lee's own megaproject is a $14 billion dredging of four rivers.

This summer, Mr. Lee and his deputies tried to change plans for a $20 billion city that lawmakers had designated as a new home for half of the national government, arguing that the project should be driven by the needs of the private sector. But he lost the battle in parliament. Mr. Lee's second-in-command, Prime Minister Chung Un-chan, an economist who questioned the viability of a government-centric city, resigned over the matter in July. "I felt guilty for failing to prevent the expected waste," he said.

Part of the reason the government's heavy-handed role in the economy is accepted is because it's in line with Korean society's Confucian-rooted belief in the power of hierarchies. That same belief spills over to everyday work. South Koreans routinely defer to people older than themselves, a habit that preserves order but chills interaction and suppresses new ideas.

And the hierarchical tradition is further complicated by the power it assigns to men over women. Until the 1990s, Korean textbooks preached that women should stay at home. Even now, women are routinely encouraged to quit work when they become pregnant. And it was only this April that a judge for the first time held a South Korean company liable in a sexual-harassment case involving a male boss and female subordinate.

Today, only 53% of Korean women work, below the 57% average of all developed countries, a problem that will loom even larger when the labor force starts to contract later in the decade. The average salary for a South Korean woman is about $16,931, just over half the $32,668 average for men, the biggest wage gap among developed countries.

And for the women who do work, opportunities for advancement are stifled by the outsize role that a late-night, male-centric drinking culture plays in business life. In its most extreme form, after-hours socializing takes place in so-called room salons where young female hostesses pour drinks and converse with groups of men, an atmosphere that excludes their female colleagues from opportunities for business deals and networking.

The Unwelcome Mat
The fastest spur to growth would be to welcome more foreign workers and immigrants to the country. South Korea has 557,000 foreign workers, about 2% of its work force of 23 million. That's higher than in Japan, where the number is less than 1%, but well below the 10% of the U.S.

But foreigners can stay only five years at Korean-owned companies, according to work laws. Permanent immigration is extremely rare, though it has grown in recent years for a special category of immigrant: women from other countries, mainly in southeast Asia, who marry the single farmers left in rural areas after young Korean women moved to cities.

Min San-gi, who owns a car-parts company in the city of Suwon, is limited to just 10 foreigners in his factory of approximately 50. His foreign workers will stay the five years with him, but his Korean workers tend to go quickly, sometimes after just a few months or a year. Despite relatively low pay, Mr. Min treats his foreign workers well, and even won an award from a Catholic charity group for his work with immigrants.

Meanwhile, as with other small employers, Mr. Min's company experiences a high turnover rate among his Korean workers who, as part of a dwindling pool willing to do factory work, are seeing more opportunities.

As a result, Mr. Min has essentially allowed his company's growth to be centered elsewhere: Three years ago, he opened a larger factory in Vietnam, where he's had no problems finding a stable work force. "I feel it's a kind of shame to have left Korea," he says.

What It Will Take
Confronting the problems today is more difficult than mustering the will to rise up from poverty was in the 1960s, says Huh Chan-guk, an economics professor at Chungnam University in Daejeon. "We don't have that consistent meeting of the minds with staying power compared to the magnitude of the problems," Dr. Huh says.

For economists specializing in South Korea, the country's growth dilemma has become grist for theorizing; several investment banks recently issued formulas for jump-starting its medium-term and long-term growth.

A study by Danny Leipziger, a professor at George Washington University and a former World Bank vice president, showed that, with enough productivity improvements and greater employment of women and the elderly, South Korea could reach even the 7% growth target Mr. Lee touted in his presidential campaign.

"The future isn't written in stone," Dr. Leipziger says.

Book review: The New Korea

2010-12-01T11:07:00.002-05:00

http://knowledge.smu.edu.sg/article.cfm?articleid=1329

When a country can will and work itself out of post-war poverty to become the world’s 15th largest economy, re-invent its closed-door chaebols (conglomerates) to breed competitive multi-national corporations and have its national car brand go from laughing stock to win the coveted 2009 “North American Car of the Year” award, it is time to sit up and notice.

In their book, The New Korea: An Inside Look at South Korea’s Economic Rise, former journalists Myung Oak Kim and Sam Jaffe examined the nuts and bolts of a nation way advanced in technology adoption, strong in its determination to succeed, yet also fiercely nationalistic and wary of Western influences.

What has transpired is a five-part look into the country’s history, economics, trade, industries, society and the parts they play in Korea’s future. Crisp summaries of broad trends are interjected with anecdotal accounts of historical trail-blazers, life stories of ordinary Koreans and its immigrant population, which adds an interesting and personal touch to what might otherwise have been a staid analysis of the global economic powerhouse.

New Koreagives a broad understanding of what the authors call a “prosperous yet often perplexing nation”, exploring questions like: Can Korea compete with low-wage countries like China and India? Will it go on the path of safe, zero economic growth like Japan? Will its closed social structures and government involvement in every technological development hamper its progress towards dynamic growth?

Sharing a painful history

The key to a country’s present is to understand its past. “History is as much a part of the present as it was of the past,” wrote the husband and wife team of Jaffe and Myung. “History, to a Korean, is not what happened. It is who you are, and what you do, why you do it.”

A large part of who Koreans are is defined by a “pain sharing” spirit, which, despite its negative feel, has proven to be an asset. This collective mindset led the people to donate their gold to help pay foreign debt in the 1997 Asian Financial Crisis, and also, to respond to the call for wage freezes, concessions and job-sharing measures in the recent global economic downturn of 2008. They would even roll up their sleeves and turn up in droves to clear up an oil spill voluntarily.

On the other hand, two thousand years of hostilities between the former Silla, Baekje and Goguryeo kingdoms that made up the Korean peninsula has resulted in social prejudice that still exist amongst people in these provinces today. More recently, the Korean War (1950-1953) which killed millions and left many more displaced, has created the deep rift between the capitalist South and the communist North that shows no signs of ending. Germany, the most prominent divided country as a result of the Cold War, in contrast, is celebrating its 20th anniversary of reunification this year.

This divide hovers overhead the Korean peninsula like a dark cloud till today. According to the authors, “All of them have scars that they have passed on to their children and grandchildren.” However, if there is something that the North and South have in common, it is pride in their history of self-reliance that has come about following repeated invasions from the Chinese, Japanese and Mongolian forces throughout history – attempts that can perhaps explain why the country resists opening itself up to foreign influences and elements.

Uzbek bar girls, Nigerian dockworkers

But the homogenous face of Korean society is changing. The authors observe that while foreigners used to come to Korea as “tourists or conquerors”, they are now coming in droves from around the world, seeking job opportunities. Foreign-born residents now number more than one million and account for more than 2% of the country’s population. They range from the Western English teachers to Chinese- and Japanese-Koreans who come for marriage or jobs. Then there are the labourers like “Filipino factory workers, Uzbek bar girls and Nigerian dockworkers”, that work in “3D jobs” or work perceived by the locals to be “dirty, dangerous and demeaning”.

The foreign influx is an upward trend, said the authors. “The flow of foreigners into the country is expected to increase as the country ages and the native workforce shrinks.” Even the chaebols – life-long employers (just like companies in Japan) – are looking outside the country for their top executives. LG Electronics, for example, has recruited several into its top executive ranks; Samsung, the largest chaebol, also went on a “foreign hiring spree” for its executives in 2008.

Gender imbalance adds to the equation. Korean men look to Vietnam and China to find brides as many young women move from farms to cities for a better life; and in the cities, fewer women are marrying.

While Korea seems to be adopting a more open attitude these days, practical inconveniences for the foreigner still abounds. Foreigners in Korea are issued identity cards with five or six digit numbers, whereas locals hold cards with 13 digits. As a result, foreigners’ cards cannot be used for some online transactions.

Foreigners also have to wait at least three months to open a bank account and then another three to use an Automated Teller Machine. Even mobile phones are restricted to one per foreigner. One telephone company even goes as far as to not allow foreigners to sign up for its mobile phone service. “So, while the government advocates a welcoming attitude towards foreigners, more work needs to be done to make that attitude reach down to the level of everyday matters,” the authors wrote.

Steel mills and Ponies

The Korean story is incomplete without remarkable accounts of how its domestic enterprises had been built as well as the feats of engineering and infrastructural projects. When General Park Chung Hee was elected Korea’s president in 1963, he had a dream: Build the steel industry then the road system, then the cars. Naysayers back then said Korea would never be more than a farming economy. They were, of course, proven wrong – many times over.

Park Tae-Joon, an army contemporary of President Park, who had no experience or expertise in steelmaking, took on the challenge and built Korea’s first steel-producing company. In 1973, the first steel sheets rolled out from the furnaces of the Pohang Iron and Steel Company (POSCO). Park and his employees “learned it all from others, while making many visits to Japanese steel plants, which at that time were considered among the world’s best”. By 1992, its factories produced almost 21 million tonnes of crude steel yearly. The company was listed on the New York Stock Exchange two years later. “The company’s plants are considered among the most efficient and modern in the world and can produce steel at US$100 less per tonne than the largest US steel firms,” the authors noted.

Next was the Kyungbu Expressway that runs from Busan to Seoul. Farmer-turned-auto mechanic Chung Ju-Yung’s construction company, Hyundai, won the government contract at a ridiculously low bid of US$649 million (others placed bids as high as US$1.4 billion). More amazingly, Hyundai finished building the tunnel and Highway 1 within two years and four months. And so, the dream was soon to be complete.

Wanting to move beyond being a subcontractor for American car brands, Chung and President Park set their sights on building a real Korean car company. Chung took the hard route, building the company from scratch – with designers from Italy, and a British car executive overseeing the factory’s construction. The “Pony”, became the first Hyundai car to roll off the assembly line in 1976, and this compact family vehicle soon became “the most common car on the Kyungbu Expressway”.

From then on, there was no stopping Chung. He exported the Pony to 30 countries simultaneously (again defying recommendations by his advisers) and launched a “Cars That Make Sense” marketing campaign in North America in 1986. By the following year, some 300,000 cars had been sold in the US, Canada and Mexico. In 2009, Hyundai won the coveted North American Car of the Year award with its Hyundai Genesis, a relative cheap US$40,000 entrant in the lucrative luxury car market.

Soon after, other brand success stories followed. LG, the former Lucky-Goldstar, transformed itself from a manufacturer of unknown cheap commodity goods into “one of the world’s most valuable brands”, surpassing, in 2008, Sony Ericsson (a Japan-Swedish joint venture) as the fourth-largest mobile phone maker in the world. Samsung, a mere “parts supplier” in the electronics industry until as recent as the 1980s, has become the South Korean giant in areas like mobile phones, consumer electronics and semiconductors. The Samsung Group, which is also in construction, ship-building and other key industries, accounts for around 20% of the country’s exports.

Korea, declared Myung and Jaffe, is now recognised as the industrial giant that it had “somehow willed itself to become”, earning its place as one of the four Asian economic “tigers” alongside Hong Kong, Taiwan and Singapore.

Towards Korea 3.0

As the country move towards a new era from its Asian tiger years, some questions are raised: will it continue to stay hungry for progress, wean itself off its high dependence on fossil fuels, improve on its weak environmental record, open up its closed social systems and navigate the choppy waters of volatile relations with the North?

If it can, then it is the authors’ view that the nation can stand alongside the most advanced countries in the world. And rightly so, as it has repeatedly proven that it can compete with the best and the brightest through “sheer will power, hard work, and an emphasis on education and setting ambitious goals.”

What remains is for the former Hermit Kingdom to crawl out of its shell and share its story more effectively with outsiders. “The tools that made Korea 2.0 successful will not necessarily work for Korea 3.0,” Myung and Jaffe concluded. “A centrally planned economy is not the answer to future growth, and neither is a rigid networking and communication system. It is time to shed the Hermit Kingdom label once and for all, and to show the world all that Korea has to offer.”

How do you solve a problem like Korea?

2010-11-27T20:43:00.003-05:00

http://www.economist.com/node/17577117?story_id=17577117

If ever a ruling elite seemed to justify the Bush-era doctrine of “pre-emption”, it is the Kim dynasty in North Korea. No government anywhere subjects its own people to such a barbarous regime of fear, repression and hunger. And the Kims are complicit in international outrages ranging from murderous terrorism and nuclear proliferation to drug-smuggling and currency-counterfeiting. The present dictator, Kim Jong Il, is apparently not long for this world, and seems to be boosting his 27-year-old son and anointed successor as a victorious warrior. When the elder Kim was himself dauphin, in the 1980s, he earned his spurs through international terrorism.

This week the North waged war for the second time this year with South Korea when it shelled a South Korean island near the disputed maritime boundary, killing two soldiers and two civilians, injuring others and burning a score of houses. In March, when one of its torpedoes sank the Cheonan, a naval vessel, killing 46, North Korea could, albeit implausibly, deny culpability. This time, though the North describes its aggression as retaliation (for a harmless South Korean military exercise), there is no gainsaying its responsibility for one of the most serious incidents since the end of the Korean war in 1953. To add to this dismal catalogue, the latest onslaught came just three days after the revelation that, in defiance of international efforts to curb its nuclear programme, North Korea has developed a sophisticated facility for enriching uranium. That gives it a further potential source of material for bombmaking.

The starting-point for answering the North’s aggression has to be that, in the most basic sense, the Kims will almost certainly get away with only a symbolic return of fire. It is entirely wrong for North Korea to act as it does. But punitive military reprisals against the North risk a spiral of escalation and catastrophic war. Deterrence works badly against a dictator who blithely imposes famine and gulags on his people during peacetime. Even if there are doubts about the efficacy of its tiny nuclear arsenal, North Korea has enough men under arms, and enough conventional ammunition within range of Seoul—just 35 miles (60km) from the frontier—to make war seem very much a last resort.

If war and the threat of war are hardly even options, what can the world do? The best card in a bad hand is to heal the divisions among other countries about how to handle North Korea. That means, in particular, making China see that a tinderbox it has long regarded as a strategic asset has become an appalling liability. China also struggles to control North Korea. But a united front would change the environment that encourages the rogue state’s bad behaviour.

China cannot be blind to the Kims’ bungling and bellicosity, nor welcome their nuclear ambitions. But it has had two worse fears. One is of a rekindled war on the peninsula, which would damage China. The other is of North Korean collapse, with millions of desperate refugees pouring into China and South Korea or even American troops on China’s border. It is as a bulwark against this “instability” that China cossets the Kims. It refused to condemn them even for the sinking of the Cheonan, and this week issued blandly even-handed calls for restraint. It apparently believes that if their only ally abandons them, the Kims might do something really rash.

But they already have. Whatever it says publicly, China must surely see that this regime flirts with war as an instrument of diplomacy and that its desire to shock the world into negotiating with it requires ever greater outrages. Ultimately, this pattern of behaviour threatens the very stability China craves. China’s alliance with North Korea thus undermines not just its image as a global power but also its own interests.

So how to nudge China in the right direction? One possibility is the revival of the six-party forum, chaired by China and involving Japan and Russia. Talks stalled after North Korea forged ahead with its nuclear programme. The Kims would regard a revival as a victory. But talks will eventually have to resume if North Korea’s nuclear ambitions are to be negotiated down. If they also help persuade China to rein in North Korea, that would be a double benefit.

North Korea's succession

2010-11-20T15:01:00.003-05:00

http://www.economist.com/node/17259065?story_id=17259065

When North Korea’s leader, Kim Jong Il, and his son and newly anointed heir, Kim Jong Un, stepped onto a balcony to watch a display of dancing and fireworks on October 10th, the audience in the square below applauded politely. But as loudspeakers blared recorded cries of “long life, long life”, many did not join in. The Kim dynasty has fixed its succession but its propaganda grip is weakening.

The authorities, normally reluctant to let foreign journalists explore the grimness of what they call “beautiful and modern” Pyongyang, were so excited by Kim Jong Un’s coming out as leader-in-waiting that they let down their guard. More than 70 journalists were suddenly given visas to attend a series of events on October 9th and 10th that afforded the outside world a first glimpse of the man now to be known as the “young general”. They also had rare access to an austere city many of whose citizens suffered hunger earlier this year after a shock currency revaluation in November. The leadership’s attempts to convince them that theirs is a “people’s paradise” are likely to fall on many deaf ears.

Kim Jong Un’s appearances, after more than a year of speculation abroad about his being groomed to take over from his ailing father, were choreographed for maximum political effect. North Koreans saw his face for the first time in a photograph published by the state media on September 30th. This followed his elevation earlier in the week to the rank of general and vice-chairman of the ruling party’s military commission (though not yet to the National Defence Commission, which wields supreme power). Mr Kim, who is in his late 20s, has little, if any, military experience.

A few outings in early October with his father—to an artillery drill, a concert and on an inspection tour of a theatre—were enough to prepare Mr Kim for much bigger audiences and for the world’s media. Foreign journalists saw him for the first time on October 9th at a mass gymnastic performance in a Pyongyang stadium. The next day, he and his father took centre stage at a huge military parade through the city that was broadcast live to the nation. The symbolism was striking: father standing next to son, separated by a couple of paces, on a balcony. Below them a huge gold-framed portrait of a grinning Kim Il Sung, Kim Jong Il’s late father and founder of the dynasty, completed the trinity. The portly, podgy-faced Kim Jong Un, wearing a dark Mao suit, looked the spitting image of his grandfather at a similar age.

After the troops, tanks and missiles had thundered past, the audience waved and cheered with seeming enthusiasm when Kim Jong Il waved at them from the balcony. But at the fireworks and dancing display that evening at the same venue—Kim Il Sung Square—the response was less rousing. A few of the thousands of performers wept (as had a couple of female paratroopers as they passed the balcony during the earlier parade). But little fervour was otherwise in evidence.

The grooming of Kim the younger is only just beginning. His voice has yet to be heard in public (Kim Jong Il’s only got an airing 12 years after he emerged as his father’s successor). But he is likely to get an accelerated initiation. The appearances in Pyongyang seemed partly designed to show that Kim Jong Il, who is 69, remains very much in charge. But the North Korean media did not show what Western hacks clearly saw: the leader holding onto the balcony for support as he walked, left leg clearly limping. After a stroke in 2008, he is believed not to be well.

Another message the authorities apparently hoped to send was that Kim Jong Un will have others to guide him. Military expertise will be provided by Ri Yong Ho, North Korea’s chief of staff, who for much of the parade stood between the two Kims. Kim Jong Il’s brother-in-law, Chang Sung Taek, and sister Kim Kyong Hui will also be crucial figures. The state media said they had joined Kim Jong Un on his recent excursions. The conspicuous presence of a senior member of China’s ruling Politburo, Zhou Yongkang, at the October 10th events was designed to show Chinese support for these arrangements. Kim Jong Il encouraged him to wave from the balcony.

The public will be harder to convince. The parade and dancing were extravagances (staged to coincide with the ruling Korean Workers’ Party’s 65th birthday) that contrasted sharply with daily life in the city. There are a few more cars on the streets these days, many of them Chinese-made. But these are for the elite (perhaps as gifts bestowed by influence-seeking Chinese). There are also a few bicycles (for men only: Kim Jong Il apparently disapproves of women on bikes). But most take rickety public transport or walk.

There is no sign of the “radical improvement” in North Korean living standards that officials once talked of achieving this year. Neon lights blazed in a few places during the journalists’ visit, but foreign residents say that the city is normally dark at night. Power is so intermittent that policewomen (invariably young and pretty) still direct traffic at intersections with traffic lights, which are a very recent innovation in Pyongyang.

An unsupervised visit to a department store (a rare treat for normally chaperoned foreign journalists) revealed Pyongyang’s dearth of consumer culture. In half an hour, your correspondent saw only a trickle of customers and just four items being sold: a pencil, a wind-up plastic frog, a quilt and a golden statuette of a soldier. On the fourth floor a member of staff adjusted a red curtain at a marble shrine to Kim Il Sung. Others watched television, amid swathes of unused floor space.

At a nearby shop, several people milled around a counter selling DVDs—a hint that DVD players are becoming household items. Foreign residents say DVDs from South Korea are helping to spread knowledge of the South’s far greater affluence. Several people also sported mobile telephones. Pyongyang is said to have gained some 200,000 subscribers since the mobile service was introduced a couple of years ago. Most are permitted only to call other North Koreans, not people abroad or even foreign residents.

The city seems to have largely recovered from last November’s revaluation of the won, which permitted only limited amounts of old bills to be exchanged for new ones. From January until mid-February, when the authorities relented and re-allowed transactions in hard currency, commerce almost ground to a halt. It became nearly impossible to buy food except at great expense on the black market. Inflation soared. “When in Rome, do as the Romanians do,” one official assigned to mind foreign journalists kept telling them, oddly. The Kims, mindful of the grisly end of Romania’s Nicolae Ceausescu in 1989, will try to ensure that disgruntled North Koreans do no such thing.

Gender arbitrage in South Korea

2010-11-04T07:33:00.008-04:00

http://www.economist.com/node/17311877

If South Korean firms won’t make use of female talent, foreigners will

Another joyful day at the office.“DO YOU know you have to give everything to become a TV announcer?” These words cost Kang Yong-seok, a member of South Korea’s parliament, his membership of the ruling Grand National Party in July. His insinuation that a woman must sleep her way to the top to work in television embarrassed his colleagues and set off a national debate about sexism.

Working women in South Korea earn 63% of what men do. Not all of this is the result of discrimination, but some must be. South Korean women face social pressure to quit when they have children, making it hard to stay on the career fast track. Many large companies have no women at all in senior jobs.

This creates an obvious opportunity. If female talent is undervalued, it should be plentiful and relatively cheap. Firms that hire more women should reap a competitive advantage. And indeed, there is evidence that one type of employer is doing just that.

Jordan Siegel of Harvard Business School reports that foreign multinationals are recruiting large numbers of educated Korean women. In South Korea, lifting the proportion of a firm’s managers who are female by ten percentage points raises its return on assets by one percentage point, Mr Siegel estimates.

South Korea is the ideal environment for gender arbitrage. The workplace may be sexist, but the education system is extremely meritocratic. Lots of brainy female graduates enter the job market each year. In time their careers are eclipsed by those of men of no greater ability. This makes them poachable. Goldman Sachs, an American investment bank, has more women than men in its office in Seoul.

Only 60% of female South Korean graduates aged between 25 and 64 are in work—making educated South Korean women the most underemployed in OECD countries. That may change, however. Marriage and fertility rates have plunged. There were 10.6 marriages per 1,000 people in 1980, but only 6.2 last year. South Korean women have an average of only 1.15 children, one of the lowest rates anywhere. That has troubling implications for the country, but should help women in the workplace. Firms will have to use all the talent they can find. If they don’t, their rivals will.

The Global Surge in Currency Reserves

2010-10-31T21:26:00.001-04:00