Table of Contents

- Korea Focus - January 2014

- TOC

- Politics 1. Adverse Impact of Abe’s Visit to Yasukuni Shrine 2. Sino-Japanese Conflict and Korea’s Role for Peace in Northeast Asia 3. Writing History to Settle the East Asian Paradox 4. Politics Not Everything in Korea-Japan Relations

- Economy 1. Current Account Surpluses Not Just Blessings for Korea 2. Reflection on Labor Productivity 3. Conglomerates’ Recruitment Exams 4. Safeguard the Fiscal Soundness 5. [DEBATE] Fewer Work Hours

- Society 1. Solution for Fine Dust: Turn Crisis into Opportunity 2. [DEBATE] Bill on Addiction to Online Games 3. Koreans Who Left for Germany 50 Years Ago 4. Permit Marriage between ‘Some Man’ and ‘Some Woman’ 5. ‘Silent Screams’ over Twilight Childcare

- Culture 1. UNESCO’s Bankruptcy Crisis and Korea’s Role 2. Making Kimchi and Sharing Love 3. The National Museum of Modern and Contemporary Art in Seoul 4. Cheers to Speed Skater Lee Sang-hwa 5. Webtoons: A Driving Force behind Creative Economy

- Essays 1. North Korea’s ‘New Economic Management System’: Main Features and Problems 2. Korea, Koreans and Korean Products as Seen by Foreigners 3. Recent Trends in Capital Spending and Policy Implications 4. South Koreans’ Increasing Awareness of the Need for Unification

- Features 1. Google to Promote Hangeul

- Book Reviews 1. Why Do Koreans Say ‘Keep Working Hard’? 2. Poems by 50 North Korean Poets and Criticism

- Interview 1. Chung Kyung-wha: ‘When I laid down the bow, the sound came to me.’

- COPYRIGHT

- Adverse Impact of Abe’s Visit to Yasukuni Shrine

- Sino-Japanese Conflict and Korea’s Role for Peace in Northeast Asia

- Writing History to Settle the East Asian Paradox

- Politics Not Everything in Korea-Japan Relations

Adverse Impact of Abe’s Visit to Yasukuni Shrine

Jin Chang-soo

Director, Japan Center

Sejong Institute

Japanese Prime Minister Shinzo Abe’s recent visit to the Yasukuni Shrine, that enshrines 14 Class-A

World War II criminals, has aroused tremendous rage and concerns among Koreans. Their first

concern is about reduced efforts to mend the strained relations between Korea and Japan. While many

people hope that the relationship will be repaired, the Japanese premier’s controversial shrine visit

threatens to dash their expectations, which already are precarious.

Second, although he repeatedly asserted that the door is open for mutual talks, the right-wing Japanese

leader exhibited his agility in surprising his neighbors, imprinting a bitter lesson. Koreans must be

aware that they can be betrayed at any moment in diplomatic engagements with Japan. It is a lesson

that will remain a resentful barrier to bilateral relations.

A third apprehension is related to the looming specter of Nobusuke Kishi, Abe’s maternal grandfather

and a prime minister of Japan in the late 1950s, who advocated a pro-U.S. stance but campaigned for

the reconstruction of a prewar Japan. Like his grandfather, a Class-A war crime suspect later rescinded

of charges, Abe recently railroaded a state secrecy bill through the Diet, overriding widespread

opposition. His subsequent visit to the Yasukuni Shrine obviously was aimed at rallying the

conservative forces around his ultra-right cause. If Abe wishes to realize his grandfather’s nostalgic

dreams for prewar Japan, the consequences would bring about misfortune to not only Japan but also

the entire Northeast Asian region.

Abe’s act of paying tribute to the war dead literally paved the way for Japanese conservatives to

amplify their rightist perspectives of history. Many of them used to claim that a visit to Yasukuni by

a sitting prime minister underlines the innocence of Japan’s wartime imperialism. The majority of the

Japanese people and mass media disagree. However, the Japanese populace, frustrated by decades of

slow economic growth, may regard the shrine visit as a symbolic return to a “strong Japan,” which

they yearn for.

Also notable is the mounting Japanese backlash to the criticism raised in Korea and China against

Yasukuni visits by Japan’s political leaders. Under these circumstances, rightist views of history, often

regarded as taboo in the past, will expand in the Japanese political world and the chances of forging

a shared interpretation of history by Koreans and Japanese will diminish. As long as Abe is in office,

it seems difficult to lay the ground for a summit between the two countries as well.

Adverse repercussions of the Japanese premier’s provocative shrine visit are not confined to the

Seoul-Tokyo relationship. An aggravation of relations between Korea and Japan, both allies of the

United States, will influence Washington’s “pivot to Asia” policy that calls for close collaboration

among the three countries. Already tense relations between Beijing and Tokyo will deteriorate further.

China will continue to flex its military muscle in front of Japan, which would respond with a concerted

campaign to become a “normal state” armed with offensive capabilities. Consequently, Northeast

Asian nations would lose all trust in one another and either cling to the United States or indulge in an

arms race.

In this respect, the Korean government should refrain from adhering to intransigent measures to avoid

stoking negative public sentiment. It needs strategic fortitude to prudently weigh the level of its

response while closely watching steps being taken by Beijing and Washington. Seoul must not wage

a proxy war for Beijing but strategically apply pressure via Washington. Also necessary is an in-depth

review of the effectiveness of its policies thus far taken toward Japan.

Prime Minister Abe’s recent behavior eloquently testifies that historic viewpoints pose a long-range

question that cannot be easily settled. Therefore, institutional devices are required to change Japan’s

historical perception in the mid to long term through sustained efforts for dialogue, research and

investigations on history. Also needed is a forward-looking government policy to cope with the

vicious circle of growing mistrust among Northeast Asian nations.

Defying all adversities, Korea ought to maintain its efforts to resolve the “Northeast Asian paradox”

in its relations with Japan. This should be done within the frame of its Northeast Asia Peace and

Cooperation Initiative, which calls for a wide range of concrete policies and programs.

[ Korea Economic Daily, December 30, 2013 ]

www.koreafocus.or.kr

Sino-Japanese Conflict and Korea’s Role for Peace in Northeast Asia

Editorial

The Kyunghyang Shinmun

On November 23, China declared an air defense identification zone in the East China Sea that

overlaps with Japan’s airspace and includes the disputed Senkaku Islands, also known as the Diaoyu

Islands. Before they pass through this zone, foreign aircraft should submit their flight plans in

advance, Beijing said. If they violate the rules, China said it will take “defensive emergency

measures” by sending its military aircraft into the zone.

In fact, China’s air force sent its first planes, including fighter jets, to enforce the rules on the same

day. Japan scrambled its own fighter jets soon afterward. Japanese Prime Minister Shinzo Abe held

an emergency cabinet meeting after China’s declaration, and the Japanese Foreign Ministry lodged a

stern protest, saying that China’s action “aggravated the situation.” The ministry also was expected

to call in Chinese Ambassador Cheng Yonghua soon to make Tokyo’s position clear to Beijing.

In a statement, U.S. Secretary of State John Kerry called China’s action “an attempt to change the

status quo... and undermine regional stability.” U.S. Secretary of Defense Chuck Hagel also expressed

worries in a separate statement, citing the “risk of accidents.” China’s tough action came a year after

Japan designated territorial baselines around the Senkaku Islands.

The Sino-Japanese confrontation over the islands looks very ominous, because any attempt by either

side to apply military pressure risks unintended escalation into an actual clash. Nobody can guarantee

that it can’t occur.

As shown by the statements by Kerry and Hagel, China’s action raises concerns that it could lead to

a conflict between Washington and Beijing. By the same token, as shown by Washington’s recent

expression of open support to Tokyo’s right of collective self-defense, the United States seems to be

hoping for an expanded Japanese military role in Northeast Asia.

If it doesn’t want a rearmed Japan helping the United States try to contain China, Beijing should seek

a dialogue with Tokyo, rather than irritating it. Of course, Tokyo should also act prudently so the

U.S.-Japan alliance won’t be misunderstood as an arrangement to contain China. Sino-Japanese

confrontation could leave the entire Northeast Asia, a region that has already been driven into a multi-

layered conflict, unstable and crisis-prone.

Currently, the region is beset with tension on three spheres: Beijing-Tokyo, Seoul-Tokyo and

Washington-Beijing. Despite their efforts to promote bilateral cooperative relations, Seoul and

Beijing alone cannot bridge all the differences. Nevertheless, Seoul has a very important role in

contributing to stability and peace in Northeast Asia.

Among the Northeast Asian nations, only Korea stands at a crossroads of conflict and cooperation. It

could be pulled into a vortex on the one hand and serve as a peace bridge on the other hand. What is

clear is that Korea will have a more advantageous strategic position if it is proactive in seeking

dialogue and cooperation in the region, instead of being stuck in between or watching from the

sidelines.

[ November 25, 2013 ]

www.koreafocus.or.kr

Writing History to Settle the East Asian Paradox

Cho Hae-joang

Professor of Cultural Anthropology

Yonsei University

Public attention has been drawn again to the possibility of Northeast Asian nations jointly producing

a history textbook. While attending an international academic conference marking the 50th

anniversary of the founding of the Korea National Diplomatic Academy on November 14, President

Park Geun-hye backed the idea, saying it would help resolve the “paradox of Asia,” where countries

are getting closer economically, but experiencing more political, cultural and military conflicts.

“The goal,” Park stressed, “is to make the region peaceful and lead to cooperation between Eurasia

and the Pacific region.” If they are connected to each other, APEC (Asia-Pacific Economic

Cooperation), an Asia-Pacific economic community, and ASEM (Asia-Europe Meeting), an Asia-

Europe forum, can create a new economic cooperation framework, she added.

The president suggested that a joint textbook written through sustained dialogue and cooperation

could contribute to reconciliation just as it did when Germany, which started World War II, jointly

published a history textbook with France and Poland. Park’s initiative is good but it would not be

easy to execute unless there is a shared understanding of history. Simply put, World War II was a war

among Western powers, with Japan being an “outsider.” After the war, German people sincerely

joined the joint history textbook project in Europe, while remaining thoroughly contrite for the

atrocities they committed.

But Japan, which entered the war in a desperate effort not to be disdained and sidestepped by Western

powers, was a second fiddler which ultimately surrendered after being hit with atomic bombs. Would

the United States have dropped atomic bombs on Germany, where relatives of many Americans lived?

This question is raised in the context of Japan still believing it was a war victim and having an

inferiority complex toward the West, despite its wartime aggressions.

In fact, Korea and China, which have achieved “economic miracles,” also feel inferior toward the

West and are obsessed with catching up. If we are to write a history “by the nations, for the nations,

of the nations” in Northeast Asia, we need to get rid of feelings of inferiority and focus on the region’s

unique modernization. We should begin with the present and understand that it will be impossible to

reach a perfect consensus on the past.

In the current academia of historical studies, there are roughly three groups of historians. The first

group consists of neo-liberalists, who advocate sustainable economic growth to survive in a jungle of

life-or-death competition. The second group is postmodernists who pay attention to the socio-cultural

crisis that is deteriorating as a consequence of unbalanced economic development. And the third

group is determinists who believe that history is determined by scientific and technological

development. Little exchange occurs among these groups.

Who should we trust to compile a joint history textbook for Northeast Asia? The answer is all of

them. What is important is to let each party concerned admit that it is impossible to reach a consensus

due to differences in their views of the world, while avoiding a hasty agreement. They will only have

to write chapters, where they find it difficult to reach a consensus. Indeed, history is a temporary

conclusion, isn’t it?

From this perspective, we need a new concept of a textbook ― that it is a process of looking for

several answers, not a single one. The textbook writers should focus on areas where there is no

agreement.

If she really wants to push ahead with this project, President Park will only need to bring together

historians who share the same historical perspectives, from across borders, and support them so that

they can work together delightfully. She will only have to provide them with an opportunity to

produce their work with pride. I mean it is important to avoid unnecessary conflict, but implement

the project on a gradual basis.

History is a process of reaching a consensus. Writing a history involves “communicative rationality”

for “sharing perceptions.” Only when we have respect for “differences” without seeking a hasty

agreement; and abandon the idea of using history as a tool for economic development will Park’s

dream come true and sustainable peace in Northeast Asia become possible.

[ The Hankyoreh, November 20, 2013 ]

www.koreafocus.or.kr

Politics Not Everything in Korea-Japan Relations

Noh Jae-hyun

Editorial Writer

The JoongAng Ilbo

Last week, Sen Genshitsu, the most authoritative and celebrated master of the Japanese tea ceremony,

visited Seoul. Sen served as the 15th-generation head of the Urasenke, the largest school of Japanese

tea ceremony, until he passed on the reins to his son in 2002. The 90-year-old virtuoso is now revered

as Daisosho, or Grand Master.

The grand tea master has received numerous honors, including a doctoral degree from Chung-Ang

University in Seoul. He came into the international limelight in 1984 when he performed a tea

ceremony at the Vatican for Pope John Paul II. He visited Seoul in 1998 at the invitation of President

Kim Dae-jung to serve tea and have a long talk with the president at Cheong Wa Dae. Last April he

conducted a tea ritual at the U.S. Capitol for members of Congress. He acts as a cherished ambassador

of Japanese tradition and culture.

During his latest visit to Seoul, I had the privilege of joining a luncheon for the master. Other guests

included Kim Yong-woon, a former executive of the Korea-Japan Cultural Exchange Council; former

Foreign Minister Gong Ro-myung; Chung Ku-jong, director of the Japan Center, Dongseo University;

and Japanese Ambassador to Korea Koro Bessho. All of them have profound knowledge and concerns

about Korea-Japan relations, which are at their lowest point. However, their conversation did not

touch on any contentious issues often being raised by politicians and the mass media of the two

countries.

Instead, they talked about tea and ancient histories of the two nations. Their conversation began with

the massive migration of Koreans from the Baekje Kingdom to Japan around the seventh century, and

moved to Japanese Emperor Akihito’s revelation in 2001 that the mother of his distant ancestor,

Emperor Kammu in the eighth century, was a descendent of King Muryeong of Baekje. Their

conversation also touched on an episode that Sen Rikyu (1522-1591), Mr. Sen’s ancestor and the

founder of the Urasenke School, had to die for advising his patron Toyotomi Hideyoshi against his

Korean invasion.

It is said that Sen Rikyu was ordered by Hideyoshi to commit a self-immolation of seppuku for

reasons that, aside from his objection to the invasion, included his profiteering from the sale of

expensive tea wares and his refusal to offer his daughter to the powerful daimyo. The present-day tea

master stressed that his forefather deeply appreciated and loved Korean tea vessels and sincerely

wished to maintain peace. Sen Rikyu’s attachment to Korea and its pottery art is well described in the

history novel depicting his life, “Rikyu-ni Tazuneyo” (Ask This of Rikyu), which received the Naoki

Prize.

During their Seoul visit, Mr. Sen and his group attended various social functions such as a tea

ceremony wishing for harmony between Korea, Japan and China; a symposium on the East Asian tea

culture; and a panel debate on East Asian culture and peace. As anticipated, these events received

scant attention from the Korean mass media. At a time when relations between Korea and Japan are

at the rock bottom, few would pay attention to an elderly master of Japanese tea culture.

High-ranking officials (of assistant vice minister level) of the three neighboring countries ― Korea,

China and Japan ― met in Seoul last week for policy coordination, but the meeting was held in an

awkward and chilly atmosphere. Korea and Japan convened a high-level economic consultation in

Tokyo early this week, but few expected a fruitful result from the outset of the gathering. Vice defense

ministers of the two nations are set to meet today to review bilateral defense issues with a slim chance

of achieving a productive outcome.

As long as Japanese Prime Minister Shinzo Abe maintains his ultra-right stance irking neighboring

countries and one of his aides publicly blames Seoul for the absence of a summit between President

Park Geun-hye and Abe, relations between the two countries will remain strained. Notable in this

respect is President Park’s comment made during her recent trip to Europe that it would be “pointless”

to hold a summit in the absence of prospects to ameliorate mutual relations, a remark that clearly

underlined the chilly state of bilateral ties.

However, in light of the thousands of years of history between the two nations, we have to question

if the bilateral relationship should be dominated by political, military and diplomatic affairs alone. At

a critical juncture like this, we need to calmly review the whole spectrum of affairs from broad and

long perspectives.

Lying between the two countries is not only hardware but also software, or culture, which has played

more important roles throughout their long history. The Korean pottery art that Sen Genshitsu’s

forefather so deeply adored was simply among the extensive software knowhow and expertise handed

over to Japan. In a similar context, Korea imported modern academic knowledge and scientific

technologies from Japan, which had succeeded earlier in modernization, for its own development.

It is a pity that a long history of such mutually beneficial relations was stained by one side’s forcible

annexation and colonization of the other in the last century, a tragedy that still overshadows their ties

even after the latter’s liberation nearly seven decades ago. In the Korea-Japan relationship, politics

and diplomacy are not everything. There are economic and cultural exchanges in a mature stage and,

what’s more, diverse grassroots contacts between the two peoples. A political bottleneck should not

hamper the rich and multilayered exchanges and cooperation in other fields.

Frankly speaking, the current state of bilateral relations is so frustrating that even worse conditions

would not necessarily be a bad development. Should the relations hit “the real bottom,” both parties

might well be able to distinguish, among the piles of pending problems, including territorial disputes

and history issues, what can be settled relatively quickly through compromise from what should wait

longer.

It is not desirable for both parties to leave issues excessively swayed by politics. In a sense, the Korea-

Japan relationship is in a phase of major restructuring that calls for more lasting and fundamental

elements like active cultural exchanges. Summit talks? There’s no need to hurry, I think.

[ November 13, 2013 ]

www.koreafocus.or.kr

- Current Account Surpluses Not Just Blessings for Korea

- Reflection on Labor Productivity

- Conglomerates’ Recruitment Exams

- Safeguard the Fiscal Soundness

- [DEBATE] Fewer Work Hours

Current Account Surpluses Not Just Blessings for Korea

Shin Min-young

Head of the Economic Research Department

LG Economic Research Institute

The nation’s current account surplus exceeded $9.5 billion in October, pushing the total surplus in the

first 10 months of 2013 to $58.3 billion. Should the current condition be maintained until year-end,

the current account surplus will be around $70 billion, or nearly equal to 6 percent of the gross

domestic product. If so, it will have surpassed that of Japan for the first time.

A current account surplus is quite important for nations such as Korea, whose currency is not a reserve

currency in central banks around the world. High current account deficits in the early and mid-1990s

pushed Korea into a currency crisis. When the U.S. Federal Reserve indicated in May that it could

taper its quantitative easing soon, volatility in global financial markets spiked upward. Major

emerging economies experienced turmoil for several months amid huge current account deficits.

But the problem is that current account surplus isn’t something that the nation can wholeheartedly

welcome without any reservation. The surplus in the trade of goods accounts for 84 percent of Korea’s

current account surplus. But the trade surplus is not in good shape.

A healthy trade surplus is produced when exports and imports are rising simultaneously. But growth

in Korea’s exports is slowing while its imports are falling. During the first 10 months of 2013, exports

grew year-on-year at a snail’s pace of 1.9 percent while imports fell 1 percent. In other words, Korea’s

trade surplus is a “slump type” surplus. Growth in its exports has slowed with the global recovery

remaining tepid and imports have also declined amid the sluggish domestic economy.

Imports are not increasing because corporations are withholding investments and consumers are not

opening their purses. A slowdown in corporate investments causes a decline in capital goods imports,

pushing up a trade surplus. Capital goods as a percentage of the total imports dropped from 40 percent

in 2000 to a 27-28 percent range in 2012 and 2013. Korea had huge current account surpluses when

it experienced a currency crisis in 1998 and a global financial crisis in 2009. Its corporate investments

plummeted on both occasions.

A downturn in domestic consumption also increases a trade surplus. Raw materials imported for the

manufacturing of domestic goods account for 35 percent of the nation’s total imports. A drop in local

spending thus constrains imports.

The size of a current account surplus does matter. Pressure is mounting on the Korean currency to

strengthen as Korea’s surplus is expanding. Korea, together with Germany and Taiwan, is among the

nations producing the biggest current account surpluses in the world. Given that Germany, as it

belongs to the euro zone, cannot adjust the euro’s exchange rates by itself, Korea is one of the few

countries exposed to the highest level of pressure to strengthen its currency from countries sustaining

current account deficits. For example, a U.S. report on foreign exchange rates in October criticized

the valuation of the Korean won.

Actually, the Korean won is strengthening against the Japanese yen, which is falling fast as a result

of both the “Abenomics” and the U.S. tapering of quantitative easing. It poses a great threat to the

competitiveness of Korean business enterprises and their profits.

Theoretically, a strong Korean won curbs exports and encourages imports, reducing the nation’s trade

surplus and helping to balance its current account. A strong won’s mechanism of readjusting the

current account may not work in the way that it is desired by Korea, however. Consumption and

investments may further contract as the Korean population is graying fast and the Korean economy

is fragile.

As such, it is more desirable to reduce the current account surplus than to strengthen the won. The

surplus will decline, easing the pressure on the won to appreciate, when investments, aimed at laying

the foundation for growth, are expanded and, as a consequence, spur capital goods imports to increase.

It is also necessary for Korea to boost service industries if it wishes to pull its economy out of the

low-growth mode. If investments increase in medicine, tourism, education and other services,

improving their quality, it will raise the level of happiness for Korean consumers. They will also boost

raw materials imports.

[ Dong-A Ilbo, December 17, 2013 ]

www.koreafocus.or.kr

Reflection on Labor Productivity

Kim Yung-bong

Chair Professor of Economics

Sejong University

Korea’s labor productivity per hour was $26.20 in 2012, according to the Organization for Economic

Cooperation and Development (OECD). That was 67 percent of the OECD average, placing Korea

28th among the 34 OECD members. The data has several implications.

First, the low ranking means that Korea’s national income is also in the bottom tier. That’s because

labor productivity is calculated by dividing a country’s GDP by the total number of workers or

aggregate labor hours. Accordingly, Korea ranked 23rd among OECD countries in both per capita

national income and per capita labor productivity.

In 2011, Luxembourg ranked first in the OECD in both per capita labor productivity ($124,000) and

per capita national income ($107,000). In 2012, Norway ranked first in labor productivity per hour

($62.70) and ranked second in per capita national income. In 2011, Korea ranked 23rd in per capita

labor productivity and 29th in labor productivity per hour. That was due to the 2,090 working hours

per person that year.

Korean politicians have frequently called for legislation to cut the nation’s maximum working hours

and increase the number of official holidays, contending that Koreans work the most hours among

the OECD members. Currently, Korea’s labor productivity is only half of the average of advanced

countries. Domestic companies can hardly maintain their competitiveness and employment if shorter

working hours increase the minimum hourly wage.

Second, Korea’s low labor productivity is attributed to the rock-bottom productivity of the service

sector. In 2010, our manufacturing sector’s per capita labor productivity stood at $97,000, the second

largest in the OECD, while the corresponding figure of our service industry reached just $45,000.

Korea’s service sector, which consists mainly of restaurants, lodging facilities, wholesalers, retailers

and other low value-added and privately owned businesses, has remained totally backward.

The backwardness has largely been caused by excessive regulations. The Korean manufacturing

sector has steadily improved its global competitiveness through open competition. In contrast,

authorities have stuck to a protectionist policy for high value-added service industries such as

education, finance, law and medical treatment. The agricultural sector is no exception.

Like the manufacturing sector, a new ecosystem should be formed in the nation’s agricultural and

service sectors. Market liberalization and free corporate activities should be permitted in those

sectors, while investments and business foundation by domestic and foreign capitals should be

encouraged. By doing so, our non-manufacturing sectors will also be able to achieve the highest levels

of industrial competitiveness and labor productivity in the world.

Third, labor market inefficiency, which is the fundamental cause of low labor productivity, should be

addressed. According to the “Economic Freedom of the World: 2013 Annual Report,” which was

published jointly by the Seoul-based Center for Free Enterprise and 88 other research centers

worldwide, Korea ranked 33rd in terms of economic freedom. Notably, Korea ranked 133rd in labor

market flexibility.

For instance, the average annual salary of Hyundai Motor employees is said to be 100 million won,

but the Hyundai workers go on strike nearly every year. Moreover, the Hyundai management cannot

make independent decisions about reassigning union workers among assembly lines. Therefore, the

labor hours per vehicle (HPV) for Hyundai Motor’s main domestic plant in Ulsan stands at 31.3 hours,

compared with 14.6 hours for Hyundai Motor Manufacturing Alabama and 19.5 hours for Beijing

Hyundai Motor.

Politicians, the Korean Confederation of Trade Unions, the more militant of the nation’s two labor

umbrella groups, and other organizations are all preoccupied with protecting labor unions and creating

labor-related regulations. How can we expect our labor productivity to improve under such

circumstances?

Lastly, the labor productivity data creates a good opportunity for self-reflection by our politicians and

general public. It offers reminders for suitable economic and welfare policies.

Korea still lingers near the bottom of OECD rankings on national income and labor productivity. Last

year, Korea’s per capita national income stood at $22,590, which amounted to merely 60 percent of

the OECD average of $37,488. The per capita national income of the United States, Japan and

advanced European countries is more than twice that of Korea. It surely is deplorable that Koreans

are demanding “OECD-level” welfare benefits simply because their country is a member of the

organization.

[ Munhwa Ilbo, November 4, 2013 ]

www.koreafocus.or.kr

Conglomerates’ Recruitment Exams

Lee Chul-ho

Editorial Writer

The JoongAng Ilbo

Samsung Group’s recruitment exam ― the Samsung Aptitude Test (SSAT) ― is known among local

job seekers as Samsung “suneung,” comparing it to Korea’s highly competitive annual college

entrance exam. The employment exam administered by Hyundai Motor Group ― Hyundai Motor

Group Aptitude Test (HMAT) ― is dubbed Hyundai Motor “gosi,” or the automaker’s version of the

senior civil service exam.

The SSAT is given to about 180,000 job seekers annually regardless of their educational background;

Samsung hires approximately 9,000 of them.

Hyundai Motor drastically reduces the number of job candidates by examining their personal

histories. Candidates must pass two rounds of tests as well as an interview. Not surprisingly, local job

seekers are very disgruntled. Some applicants say that they have to buy workbooks and attend special

courses at private institutes, while others complain that the questions on conglomerates’ recruitment

exams are too difficult.

Apparently yielding to the pressure from job seekers, Samsung has vowed to overhaul its recruitment

system. The group’s exam questions are prepared by the top scorers in the previous year. In other

words, its new employees are selected by those who will work with them for the longest time.

Samsung’s recruitment criteria differ depending on the social atmosphere. This year, 35 percent of its

successful applicants will come from provincial universities, with another 5 percent coming from

low-income households.

Conglomerate chairmen’s intentions are also reflected in employment entrance exams. After Hyundai

Motor Chairman Chung Mong-koo stressed the importance of historical perspectives, the automaker

asked its job candidates to write about the historical figure they respect the most in its latest

recruitment exam. In a unique Korean practice, the two conglomerates also offer bonus points to the

children of their long-serving executives and staff members.

Nevertheless, this writer is in favor of the current recruitment exam system of domestic

conglomerates. The corporate entrance exam is in line with the Korean people’s latent yearning for

“equality of opportunities” and “reversal of fortune.” Such a yearning is deeply rooted in Korean

society. Of course, the complaints by job seekers can be somewhat understood. But let’s compare our

system to that of the United States.

Corporate efficiency is the top consideration in the U.S. recruitment system. A look at

“workingUS.com,” the website of Korean students staying in the United States, seems to indicate that

the American job market is in deep doldrums. Nearly half of recent graduates of the prestigious

Princeton University remain unemployed. The employment situation is good in technology but the

job market is virtually frozen for graduates of liberal arts. The number of applicants for law schools

has been reduced by half.

The hiring process of U.S. companies is simple. They believe that the best time for firing employees

is before hiring new employees. Google and Apple select only 2 to 5 percent of their job candidates

through document screening before conducting a phone interview, which screens out four out of five

applicants. Those who pass go through two to six rounds of on-site interviews, in which they are

usually grilled by their potential superiors and colleagues for three to four hours.

Some people say that American employers don’t take job candidates’ personal connections and

credentials into consideration. But that’s not true. Job candidates recommended by current employees

can often skip the whole process and reach the final interview stage. In some cases, more than half of

new job openings are filled without employment notices. That’s why U.S. college students are

struggling to widen their personal connections and secure internships.

Job interviews at American companies are nerve-wrecking. Microsoft interviewers are known for

storming out of the room when their interviewees fall short of expectations. They seem to believe that

stopping interviews helps both sides save time and money. In addition, U.S. enterprises generally

prefer experienced workers to new college graduates. They believe that the former are less risky and

more profitable. General Electric requires 90 percent of its job openings be filled with people who

have worked for more than five years.

Korean job seekers may react negatively to the U.S. hiring practices, saying that candidates are treated

inhumanely and large conglomerates steal high-quality human resources from smaller companies. Of

course, it is questionable how long Samsung Group and Hyundai Motor can maintain their current

recruitment system. Evolution is inevitable for the sake of survival.

Harvard University professor Tony Wagner said, “What you know matters far less than what you can

do with what you know.” If Korean job seekers fail to catch up with the new global trends, they may

lose jobs at Samsung Group and Hyundai Motor to their competitors from China and India. New York

Times columnist Thomas Friedman said that the time for “searching for a job” has passed and the

young people will have to “invent a job.” It is time for our job seekers to change their attitude. It is

hoped that the long lines of applicants for SSAT and HMAT will vanish as soon as possible.

[ November 4, 2013 ]

www.koreafocus.or.kr

Safeguard the Fiscal Soundness

Kang Bong-kyun

Advisor, JB Bank

Former Minister of Economy and Finance

The Korean economy has expanded by less than 3 percent annually over the past six years, suggesting

that it has fallen in a low-growth trap. Jobs are scarce for young people, tax revenues have remained

stagnant and the national debt has jumped. But that did not stop presidential candidates last year from

promising universal welfare benefits.

After winning the election, President Park Geun-hye finalized a list of welfare pledges but has

struggled to raise the necessary funds without raising taxes, hurting her image as a politician who

fulfills promises. Economic conditions have not improved and failed to provide enough tax revenue

or to give a clear outlook on future tax collections.

The government eventually allocated 17.3 trillion won (US$16.42 billion) in supplementary budget

this year for welfare. In addition, the government’s 2014 budget bill submitted to the National

Assembly calls for increasing national debt by 35 trillion won. Nevertheless, the opposition parties

have increased pressure on the Park administration to fully implement the president’s election

promises and repeatedly urged higher taxes on the wealthy.

Let’s look at economic situations around the world. Fiscal soundness is a serious problem in the

United States. Japan’s government debt as a percentage of its gross domestic product reaches 250

percent, one of the world’s highest levels. The heavy public debt deters the nation’s effort to escape

from a low-growth trap. In Europe, efforts are still underway to overcome debt crises. That’s because

it is difficult to scale down welfare benefits, while it’s much more difficult to raise taxes.

Political populism is undermining fiscal prudence being sought in advanced economies. They have

shifted to systemic approaches by strengthening their fiscal rules. The same should be done in Korea

to overcome low growth and to reduce the risk of widening the government’s deficit due to higher

welfare spending.

First, the government should systematically seek to achieve a balanced budget every year. If the

nation’s economic expansion falls below its potential growth rate, the government should make

investments amounting to less than 3 percent of the gross domestic product. That would be similar to

what Britain and Eurozone countries are doing.

Second, the National Assembly should set the ceiling for national debt during a presidential term and

achieve the goal without fail. The parliament should require the president to minimize deficit

spending that is done to stimulate the economy. The system will be similar to the U.S. federal debt

ceiling. At present, a new Korean administration presents its five-year fiscal plan to the National

Assembly. Parliamentary deliberation and approval of the plan will improve the system.

Third, the government should introduce the principle of PAYGO (pay-as-you-go), which refers to

spending currently available funds rather than borrowing against future income. Additional tax

revenues should be secured in proportion to additional expenditures.

Fourth, the debt ceiling of all social insurance programs and public funds, including the National

Pension Fund, National Health Insurance and Unemployment Insurance, which are managed

separately from government budget, should be subject to parliamentary approval. All factors of future

growth in national debt should be regulated by the National Assembly in advance.

Fifth, the National Assembly should set a debt ceiling for public enterprises and conduct relevant

oversight. It is now evident that many state-run companies were ineffectively managed during the

Lee Myung-bak administration and drove up the national debt.

If the National Assembly finalizes these rules by the end of June 2014, the Park administration will

have clear coordinates for sound fiscal management, including the budget for 2015, the third year of

its term. The administration and the parliament will be able to compile and screen the annual budget

bill in a broader framework, while the public will be able to alleviate its concern and uneasiness about

more welfare populism in the coming election years.

Korea is a small open economy that can be directly affected by any crisis in the global economy. We

painfully realized this during the 1997 Asian currency crisis and the 2008 global financial crisis.

Korea was able to overcome the two crises due to its fiscal soundness. It can be said that fiscal

soundness is one of the Korean economy’s main pillars, along with economic growth and welfare

expansion.

[ Korea Economic Daily, November 20, 2013 ]

www.koreafocus.or.kr

[DEBATE] Fewer Work Hours

[PRO] Ahn Jo-yup

Senior Research Fellow

Korea Labor Institute

[CON] Kim Dong-one

Dean, Graduate School of Labor Studies

Professor, Business School

Korea University

Koreans work the most hours among the members of the Organization for Economic Cooperation and

Development (OECD). The ruling and opposition parties are pushing to revise the Labor Standards

Act to reduce the statutory workweek to 52 hours from the current 68 hours. This would be done by

reclassifying holiday work as overtime. The pace of reducing work hours and the positive and

negative consequences are among the key concerns of industrial circles and labor advocates.

[PRO] Let’s Promote Work-Life Balance

The Labor Standards Act limits the maximum weekly working hours to 52 hours, which include the

40-hour statutory workweek and the 12-hour overtime. But chronic holiday work, which is excluded

from overtime provisions, adds more hours, upsetting work-life balance.

Under its labor policy vision, dubbed the “70 Percent Employment Roadmap,” the Park Geun-hye

government has included the reform of working hours and methods among its four major policy

objectives. To that end, the government is pushing to reduce long working hours, generate and expand

quality part-time jobs, and introduce flexible working hours.

As part of an effort to address the long work hours, the government aims to cut the annual working

hours from the current 2,116 hours to less than 1,900 hours by gradually reducing excessive overtime

and holiday work. The policy objectives, if accomplished, will switch Korea from a workaholic

society, where all workers work 40.1 hours every week of the year, to a society of work-life balance,

where all workers work 40 hours per week and enjoy four to five weeks of vacation and holidays.

One of the concrete measures to achieve work-life balance is to incorporate holiday work into

overtime limits and establish the basic principle of limiting the maximum weekly working hours to

52. In a bid to minimize burdens on industrial sites, however, the authorities may consider a gradual

reduction of work hours and allow exceptions to the overtime limits. Nevertheless, such exceptions

should be temporary and subject to sunset regulation to protect the basic principles of the revision.

According to a survey by the Ministry of Employment and Labor last year, 13 percent of local

employees work more than 52 hours per week, with another 5 percent topping 60 hours. The poll also

found that 72 percent of workers who work on holidays belong to the manufacturing industry, while

69 percent of workers who work long hours without sufficient compensation for holiday work, belong

to the service sector.

If holiday work is incorporated into overtime and the number of overtime hours is limited to 12 hours

per week, the weekly working hours of about 620,000 employees, including those in the major

manufacturing businesses, would fall by 15 percent to 52 hours from the current 61 hours.

The inclusion of holiday work into overtime is expected to produce similar effects regardless of

company size. But the actual effects will differ widely, depending on the way it is implemented. As

seen in the case of Hyundai Motor, financially healthy conglomerates will be able to maintain output

without cutting wages in return for shorter working hours by increasing facility investments and labor

productivity.

In contrast, small and medium-sized enterprises (SMEs) that struggle with capital and labor shortages

may have to lower wages of current employees and may encounter difficulties in hiring new

employees. As a result, SMEs will suffer from rising costs and be forced to raise their supply prices.

The best way to solve these problems is to encourage reasonable business relations between large and

small companies, and improvement of productivity of subcontractors through active technology

support. Such efforts will help promote sound ecology in the manufacturing sector by getting rid of

its backward practices, including unilateral price cuts.

The five-day workweek has been gradually introduced in the nation over the past decade, while the

share of part-time jobs has increased in the job market. Thus, the average working hours fell from 50

hours per week in 2002 to 44.5 hours in 2012. The number of working hours will continue to decline

in the future. It is time to end the vicious cycle of excessive work, low labor productivity and low

wages, and create a culture of work-life balance.

[CON] Bargaining Should Come First

Long working hours in Korea cause many side effects, such as heavy stress, overwork and other

health problems. But any hasty move to reduce the nation’s maximum working hours, if implemented

without sufficient preparations, would likely trigger a flood of labor-management disputes over wage

compensation.

The proposed reduction in working hours should be pushed in parallel with social consensus on

productivity bargaining between labor and management. Korea, together with Mexico, has the longest

working hours among OECD members. As of 2012, Koreans worked 2,092 hours annually, compared

with the OECD average of 1,776 hours. People in the Netherlands, Norway and Germany worked

less than 1,500 hours a year.

Harmful effects from long working hours have been well known for a long time. Excessive work

increases stress, causes health problems, destroys the work-life balance and produces other negative

side effects. Overwork is said to even bring down the nation’s marriage and birth rates, as newly

employed young people can hardly find time to indulge in regular dating.

Notably, inefficiency is widespread, as long as junior workers remain at work under pressure from

their superiors despite not having anything left to do. Such inefficiency lowers the per hour labor

productivity and undermines corporate competitiveness. Still, if fewer work hours are implemented

without sufficient preparations, it could spark serious labor-management disputes at a large number

of workplaces.

In the past, the Economic and Social Development Commission, formerly named the Korea Tripartite

Commission, agreed in principle to reduce the maximum working hours but failed to make actual

progress due to differences over how to compensate for pay cuts when working hours are lowered.

Employers say that personnel expenses should be reduced in proportion to cuts in working hours. But

labor wants employers to absorb lost output, saying that workers cannot make ends meet if their

salaries are cut. Both sides are fiercely at odds.

The best way to meet the interests of both management and labor is to improve productivity. In other

words, labor and management should cooperate to upgrade the unit productivity of products and

services. The reduction of working hours should be pushed in parallel with management-labor

bargaining over productivity levels in order to make sure that the regulatory revision is smoothly

accommodated by all workplaces.

In addition, corporate financial capabilities should be taken into consideration, if both the reduction

of working hours and the compensation for pay cuts are to be achieved. Accordingly, a phased

introduction of shorter working hours should be considered, depending on corporate size. In other

words, large conglomerates should first slash work hours and SMEs should gradually follow suit.

[ Seoul Economic Daily, November 15, 2013 ]

www.koreafocus.or.kr

- Solution for Fine Dust: Turn Crisis into Opportunity

- [DEBATE] Bill on Addiction to Online Games

- Koreans Who Left for Germany 50 Years Ago

- Permit Marriage between ‘Some Man’ and ‘Some Woman’

- ‘Silent Screams’ over Twilight Childcare

Solution for Fine Dust: Turn Crisis into Opportunity

Jeon Eui-chan

Dean of the Graduate School

Professor, Department of Environment and Energy, Sejong University;

President, Korean Society of Climate Change Research

At last, the issue of fine dust is looming high over the political arena. As a matter of fact, the issue is

nothing new. “Special Measures against Air Pollution in Metropolitan Areas,” which took effect in

2005, are focusing on fine dust. To reduce its amount, the government also introduced such systems

as the Total Air-Pollutant Load Management System and the Tradable Pollution Permits Scheme. In

Seoul, all intra-city buses, which number over 7,000, have been replaced by natural gas vehicles and

tens of thousands of diesel cars have been installed with pollution reduction devices.

Thanks to these efforts, Seoul could see its fine dust, which had been 70 to 80 micrograms per cubic

meter in the mid-1990s, cut to 41 micrograms per cubic meter as of 2012. With the quality of air

showing signs of improving slightly, some people made a fuss about it as if they could watch the

Milky Way while others hastily concluded that they had air as clean as that on Jeju Island.

The fine dust level in Seoul is still two to three times higher than that in Tokyo or New York. Despite

that, the issue of air pollution hasn’t attracted enough public attention until recently and related

budgets often have been cut in half. As if sounding the alarm for such a practice, hazy smog covered

the sky of Seoul recently and fine dust was mainly blamed.

There was also a report warning that fine dust could harm fetuses and cause premature births. When

fine dust enters the blood circulation system, it can increase the risk of getting lung cancer, the report

said. Such damage is possible only after an exposure to high concentrations of fine dust for a

prolonged period of time. Fortunately, the current level is not that high. At this juncture, the

government needs to offer an exact explanation about the situation, based on objective and scientific

data.

Recently, the presidential office announced a comprehensive set of measures to tackle the problem,

which include closer cooperation between Korea, China and Japan, and an early implementation of

fine dust warning system. Overall, they are properly targeted. Since the issue of fine dust is nothing

new, the solution should also be more fundamental. Taking this momentum, we should first determine

exactly how much fine dust blows in from China. Then, no efforts should be spared to support the

research on (fine dust’s) long-distance transportation, jointly conducted by Korea, China and Japan,

so that the research project could come up with a feasible answer.

For China, greatly suffering from an extremely high density of fine dust, we should offer help to

control the generation of fine dust by using our experience and advanced technology. There is a saying

which goes, “When things are tough, go back to the beginning.” On this occasion, we should ask

ourselves some basic questions: Is related research and information enough? Is the system and

administration to manage fine dust efficient? Is there any more system or measure needed to solve

the problem?

The latest smog in Seoul, which occurred ahead of the inauguration of the “National Air Pollution

Control Center” and the implementation of the second “Special Measures against Air Pollution in

Metropolitan Areas” scheduled for 2015, is a heaven-sent opportunity. A crisis can also be an

opportunity. Let’s try to export our advanced technology of reducing the generation of air pollutants

to China and thus improve the quality of our air, too. We already possess world-class technology for

nonstop monitoring of urban air pollution and a system for measuring and managing the amount of

air pollutants from chimneys across the country.

China undoubtedly prefers a joint investment and is reluctant about opening up its market, but if we

could export more of our eco-technology to China, we would be able to help expedite solution to

China’s air pollution and also minimize its impact on Korea. The diesel particulate filter device, power

plant desulfurization equipment and the volatile organic compound control system for painting

equipment are some of the outstanding eco-technologies that we can export at any time.

I wish that we will also be able to develop the energy efficiency technology that can decrease the

quantity of air pollutants and greenhouse gases at the same time, the greenhouse gas reduction

technology and the technology for energy recovery from waste, creating opportunities to enter China’s

gigantic market. By responding to the issue of fine dust aggressively, the government should also

enhance the people’s right to a clean and healthy environment and happiness.

[ JoongAng Ilbo, December 17, 2013 ]

www.koreafocus.or.kr

[DEBATE] Bill on Addiction to Online Games

[PRO] Ki Seon-wan

Clinical Professor

Department of Psychiatry, Incheon St. Mary’s Hospital

Catholic University of Korea

[CON] Lyou Chul-gyun

Professor and Director

Digital Storytelling R&D Center

Ewha Woman’s University

The disagreement over a bill that would address addiction to online games is intensifying. The gist of the legislation

initiated by Rep. Shin Eui-jin of the ruling Saenuri Party is to treat game addiction the same as alcohol abuse, drug use

and gambling. Some argue that the bill is needed to protect the well-being of juveniles, while others claim it ignores the

fact that online games are part of the modern culture.

[PRO] Addiction to Online Gaming Requires Systematic Control and Treatment

The bill on the prevention, control and treatment of addiction is basically aimed at fighting various

types of addiction. It is not a bill designed to regulate the online game industry, as some may claim.

It is true that the bill contains some clauses that could restrict access to online games to prevent

addiction. But it is still possible to regulate the production and distribution of games by enforcing

existing laws, including control over the promotion of the online game industry.

But regulations or punishment alone cannot solve the problem concerning addiction. The nation needs

a comprehensive system for treatment and rehabilitation, based on a public health and welfare model

that transcends conventional regulations and control. The proposed bill serves that purpose.

In advanced nations, considerable funding, manpower and resources are allocated to combat harmful

addictions. But professional manpower and facilities are insufficient in Korea. Worse still, resources

and regulations are spread among various administrative offices, and measures to be taken to deal

with addiction are limited to administrative regulations. The central government needs to coordinate

its agencies to form a comprehensive structure to attend to addiction-related issues.

Addiction to gaming is covered by the bill because it can generate similar behavior that is found

among addicted gamblers. Addiction to gambling is not a term referring to a passion for games or an

immersion into them. It refers to a neurological change in behavior. Addiction worsens if one is made

to have high expectations for a reward whose acquisition has a low probability.

As is the case with substance abusers, gaming addicts cannot voluntarily stop playing games. They

experience irresistible cravings for it and exhibit withdrawal symptoms if they cannot play. Their

social skills also deteriorate.

Consider a wine expert and an alcoholic. Both have alcohol on hand constantly. But the former drinks

for pleasure while the latter drinks compulsively and needs professional treatment. An addict

experiences a change in his brain function, be it a result from his biological susceptibility or a socio-

cultural trigger. Once he is afflicted with such a change, he can hardly stop his addiction by himself.

The bill is not aimed at limiting the rights of the majority of people who play for pleasure. Regulating

individual freedom of choice is not its purpose. It is designed to assist addicts and to ease the pain

and burden of their families. It is misleading to claim the law is placing gaming and harmful drugs in

the same category. Addiction to gaming is included in the bill because it has neurochemical and

clinical symptoms similar to those seen among drug addicts. Moreover, similar psychosocial

treatment techniques are used for both of them.

Korea is at the forefront of the information and technology industry and the online game industry. It

needs to take preemptive action against harm that may accompany new technologies. Games that do

not lead to clinical addiction would be precluded from the bill’s regulations. Addiction to drinking

and gambling causes astronomical social and economic costs. Prevention and treatment are needed

to ensure the mental health of the future generations.

Addiction can pose serious health and social problems for Korean society as it has in advanced

nations. Korea needs to enact a basic law that goes beyond regulation to include prevention, treatment,

rehabilitation and management of addiction.

[CON] Games Not as Addictive as Alcohol or Drug

Sweden has an online game player who goes by the name of Kungen. He is worshiped by 13.4 million

“World of Warcraft” gamers from all over the world. He led his group in a raid against one dungeon

after another and was the world’s first player to complete 22 missions.

Whenever a new patch or version of the game is introduced, he launches an online crusade, drawing

4 million people around the world to watch him play. In real life, he works at the fast food chain

Burger King and was promoted to branch manager after being selected Employee of the Month for

17 consecutive months.

Those who are not familiar with online games such as World of Warcraft may think Kungen is an

addict, who is so obsessed with playing that he cannot possibly lead a normal social life and thus

should be subject to regulations.

There are 50,000 addicts of online games who require treatment, according to a report from the

National Assembly. They represent a mere 0.25 percent of the 20 million gamers in Korea. The others,

99.75 percent of the total, go on with their ordinary lives, as Kungen does.

With a revolution proceeding in the age of digital information, online games have turned into a crucial

and influential cultural mode of expression. Seven billion people in the world nowadays communicate

and play with each other on the Internet.

Online games have incorporated and applied the expressive forms and styles of novels, plays, movies,

documentaries and musicals. Their aesthetic taste has now reached a poetic level. They now do not

merely inspire and stir the brain. They also gratify emotions and aesthetic appetites.

The recently proposed bill places online gaming on par with gambling and drinking, and is aimed at

establishing a state-run agency to control this addiction. The bill is problematic for four reasons.

First, the bill trespasses on the principle of equality that requires a comparison in similarities of

qualities and features. Gaming is different from alcohol, drug and gambling that have anti-social and

criminal associations.

Second, the bill violates the principle of clarity demanded of specific targets. In targeting “Internet

games and other media contents,” the bill defines all cultural domains as potentially addictive and

dangerous.

Third, the bill does not uphold the principle of proportionality, or excess prohibition, which requires

an objective causal relationship between gaming and its alleged harm. There is no objective proof

that gaming causes addiction or has addictive potential. The U.S. Supreme Court in June 2011 upheld

a federal appeals court decision to throw out California’s ban on the sale or rental of violent video

games to minors.

Fourth, the bill duplicates regulations. Those addicts who require psychiatric treatment urgently, or

0.25 percent of the total number of gamers, can be dealt with under the youth protection law and the

law on the prevention of excessive indulgence in games. Social problems brought about by the mass

media cannot be solved through legal means. We have seen numerous laws aimed to contain and ban

violence and sensationalism on television being thrown out.

These problems can be best addressed through a better understanding of social and mass media, and

through a parent-child dialogue, in addition to other communicative efforts. I would like to call on

the advocates of the bill to exercise sensible judgment on the fledging cultural media.

(Professor Lyou Chul-gyun is also a novelist who goes by the name of Lee In-hwa.)

[ JoongAng Ilbo, November 16, 2013 ]

www.koreafocus.or.kr

Koreans Who Left for Germany 50 Years Ago

Kwon Soon-hwal

Editorial Writer

The Dong-A Ilbo

On December 21, 1963, 123 Koreans left Gimpo Airport. They were the first batch of Korean miners

sent to the then West Germany. On the same flight were Lee Chang-je, an official from the Economic

Planning Board, whose mission was to safely escort the miners to Germany, and Roh Sang-woo, a

Dong-A Ilbo correspondent.

These days, a Korean euphemism, roughly translated into mine staffers, or gwangwon, are frequently

used for them. But gwangbu, the conventional Korean word for mine workers, should better evoke

the emotion that prevailed at the time.

By 1977, 7,900 miners and 11,100 nurses had been sent to Germany, a country they had known little

about. They included graduates and dropouts of prestigious Korean universities. It still pangs us to

hear that they even smeared their hands with coal to pass as coal miners in order to earn money

abroad.

At the time, Korea was a country whose per capita income was at the bottom among 120 or so

countries. College graduates, though high in status, could not land jobs, as there were few

corporations hiring them. Being born in a poor country forced those with a high level of education to

volunteer to work in 1,000-meter-deep coal pits and clean corpses at hospitals in a faraway country.

No matter how much talent or education they had, people couldn’t be treated properly. It is the same

these days.

The miners and nurses were the first large groups of Koreans who went abroad to make money after

the nation was liberated from Japanese colonial rule in 1945. Their remittances were to the Korean

economy what a shower was to the scorched land during a drought. An association of former miners

dispatched to Germany said in their white paper, published in 2009, that they were the first that took

the “shovelful of foreign exchange.”

Then they were followed by soldiers who fought in the Vietnam War and workers who toiled in the

Middle East; their remittances also made great contributions to promoting economic development in

the nation. Korea’s per capita income, which hovered around $80 in the early 1960s, surpassed the

$1,000 mark in 1978. Annual exports that had remained below $100 million broke through the $10

billion level in 1977, the final year when labor was dispatched to Germany.

Based on the achievements made in the 1960s and 1970s, Korea is now on the threshold of joining

the ranks of advanced nations. Except for such small states as Singapore, Korea is virtually the first

nation to attain such economic success since gaining independence at the end of World War II.

Korea has indeed experienced political ups and downs. But viewed from a long historical perspective,

what the nation has achieved during the past half century is nearly unprecedented, a record it can

surely be proud of. Those Koreans who worked in Germany, Vietnam and the Middle East when

Korea went through industrialization are now in their 50s, 60s and 70s. Those who have lived through

the nation’s modern history, starting from a least-developed economy to developing and developed

stages, think deeply about the nation as well as themselves.

They did help the nation achieve the goal of industrialization and democratization and prevent it from

regressing to leftism. Even those who are belittling Korea’s achievements will find it difficult to deny

their contributions. I would like to call those in their 50s or older “a great generation.”

Next month marks the 50th anniversary of the first dispatch of Korean miners to Germany. On this

occasion, the succeeding generations are urged to reflect on the blood, sweat and tears these people

have shed during the past half century to stop poverty from being handed over to them. On the

anniversary, either President Park Geun-hye or Prime Minister Chung Hong-won will do well to

evaluate the day’s historical significance and appreciate their contribution.

Times have changed. Yet, I believe the kind of determination that our people, government and

corporations demonstrated at the time to pull the nation out of poverty is still useful in pulling itself

out of the current low-growth trap while toeing the threshold to an advanced nation.

[ November 16, 2013 ]

www.koreafocus.or.kr

Permit Marriage between ‘Some Man’ and ‘Some Woman’

Jung Ji-eun

Arts Education Team Manager

Incheon Foundation for Arts and Culture

Grass-eating man (choshik-nam), wizard (mabeopsa), man incapable of love (yeonmot-nam)/woman

incapable of love (yeonmot-nyeo), dried seafood girl (geoneomul-nyeo)… these are popular slangs in

Korea these days, all referring to young men and women who can’t find dates. Taking a look around,

one can easily find out that Casanova has long gone.

“As people around you go on a date one by one, you may think that someday you will get one, too.

But no, you will not,” goes a story from the radio, gaining broad sympathy. As more and more young

men and women conclude that they will not be able to find a date by themselves after all, some are

even turning to private tutoring. Private institutes teaching about romance are sprouting up and

specialists dubbed as “pickup artists” are also emerging with a promise of helping to produce

“masters” in courtship.

With reality TV shows to help singles find dates gaining popularity, tourism companies are offering

package bus tours to arrange blind dates between men and women. On college campuses, special

lectures on romance and marriage are attracting large audiences. On TV, an episode about two young

men who can’t find dates in the popular comedy show, “Gag Concert,” was a runaway hit. And in

publishing, a novel titled “Marriage License,” depicting a futuristic scenario about people required to

obtain licenses to get married after completing a 384-hour course at marriage schools, attracted

readers.

In Korea, where “remaining single” itself makes a topic for counseling, romance is emerging as a

kind of essential credential of individuals when they reach a certain age. They say these days that one

needs eight major qualifications to get a job: a good education, good academic grades, high TOEIC

scores, overseas language training, certificates, volunteer experience, internship and awards. But,

with the way things are going now, I am worried that one needs yet another qualification ― “at least

three romantic relationships, each of which lasted for more than a year.”

Now, we need other people’s judgment and interpretation even for our romance, which is basically a

very private matter. “Some man” (some-nam)” and “some woman” (some-nyeo), frequently used

these days, are words newly coined to describe a person with whom one keeps in contact with

favorable impression but has yet to begin dating. Through this process of finding “something

worthwhile” about a person, one decides whether to start a romantic relationship.

For those who don’t have enough money and time, confidence is needed about whether they could

get something worthwhile in return. So, pushing and pulling (delicate psychological warfare waged

between man and woman) and managing what they call a fishing ground (staying in touch with many

persons of the opposite sex at the same time as if you intend to date them) are considered essential

steps to prevent rash action.

Since they have to weigh each other, even small actions can be objects for interpretation, and

whenever this happens, masters of romance are called upon. “I am sending this text message not

because I have nothing else to do or that I am bored to death. I am subtly displaying my intention that

I am doing this because I’ve been thinking about you. I am sending my refreshing smile to you, as

you may be weary.” This is a quote from a novel, but lovers these days seem to attach a particular

meaning even to a small and simple emoticon (^^) and present all kinds of interpretations and

explanations.

Taking a brief moment before sending a reply is considered a basic technique, because if you send a

reply right away whenever you get a text message, you could be viewed as an easy touch. Such being

the case, the best confession any man and woman can make to their partner these days is, “If you

have time, please like me.” Fortunately (?), this is not a problem limited to Korea. In Japan, the

government has introduced the “Marriage Supporter” system to cope with the latest trend of avoiding

marriage among young people.

In Korea, according to a survey conducted by the Ministry of Health and Welfare, the majority of

young people, both male and female, pointed out employment instability and a lack of money as top

reasons for avoiding marriage. Especially, 40.4 percent of single men responded that they have not

married because of economic problems. Now, marriage is not an issue only for single men in rural

areas but also for single men with non-regular jobs.

A single man confesses, “I feel daunted all the time. So, even when I meet a good woman, I ask

myself ‘How could a person like me dare…?’ and I just give up. Now I feel as if my few remaining

cells for romance are all dead.”

I can say for sure that love is no longer for everyone. Definitely, this is not the era when anyone can

eventually own a house after starting a married life in a single room. So, getting married itself could

be a reckless act of jumping into a totally unknown and unstable future, instead of taking the first step

toward a better future. Yet, Korean society doesn’t care at all about these circumstances and is busy

meddling in young people’s lives by saying, “Now, you’ve reached the age to get married.”

If you really want to encourage young people to get married, why don’t you display your outstanding

ability of butting in to ease their concerns about securing a stable job and a home to live in, above all

else? Then, “some man” and “some woman” will become brave enough to upgrade their relationship

into a romantic one, love each other as much as they want and finally get married to happily live

together.

[ Dong-A Ilbo, November 5, 2013 ]

www.koreafocus.or.kr

‘Silent Screams’ over Twilight Childcare

Park Yong-joo

President

Korea Labor Force Development Institute for the Aged

The person who brought up the genius artist and scientist Leonardo da Vinci was none other than his

grandmother. Born out of wedlock, young Leonardo was ostracized by his peers and suffered from

social phobia and depression. He gradually gave up on everything beforehand and became extremely

passive. To his neighbors, he was “a dumb kid who is strange and careless.”

How could such a boy come to display genius in diverse fields and leave his huge mark in history? It

was the “boundless love and trust” of his grandmother who helped him overcome the shoddy

treatment he received and stand on his own feet. His grandmother used to whisper to him, “You can

do anything.” Until the day she died, she didn’t skip even a single day to give her grandson this “word

of trust.” Her education nurtured a great man, clearly demonstrating the strength of “alternate-

generation education.”

Alternate-generation education characterized the role of traditional Korean families in children’s

education: grandparents shared their rich experience and wisdom with their grandchildren. They were

less anxious about the children’s outcomes than their parents and led them to the right direction with

unconditional encouragement. In fact, according to a research by North Carolina State University,

children who are in intimate terms with their grandparents do well at school and show high degrees

of achievement in society when they have grown up. This is the power of alternate-generation

education.

Statistics say that 5.1 million Korean households are double-income families. That has led to “twilight

childcare,” where grandparents raise children on behalf of their parents who are busy working for a

living.

According to the data of the Ministry of Health and Welfare, about half of Korean double-income

families are leaving their children to the care of grandparents. As a result, TV entertainment programs

deal with the theme of grandparents’ childcare and books on childcare top the bestseller lists for

people aged 60 and over. These examples demonstrate that twilight childcare is not the story of a few

specific families but a widespread trend.

The problem is that these grandparents didn’t volunteer to take the responsibility. Twilight childcare

is one of the most practical alternatives for parents, given the lack of childcare facilities. How many

grandparents, knowing the situation very well, can refuse? They realize there is no other realistic

choice, but they still feel a tremendous amount of pressure about taking over the responsibility.

At a crossroads between retirement leisure and twilight childcare, people in their 60s and 70s let out

a “silent scream of pain.” Finally, relieved of raising their own children, they have to take over their

grandchildren. These cases account for about 50 percent of all double-income families in Korea.

The “unavoidable twilight childcare” often deteriorates the quality of elderly people’s retirement.

According to a survey by the Korean Women’s Development Institute in 2012, these grandparents

spend an average of nearly nine hours a day taking care of their grandchildren.

Childcare is strenuous even for young people. Then, how hard would it be for the seniors whose

physical strength is slipping day by day? Since they are engaged in childcare for long hours, they

increasingly suffer from various illnesses such as slipped disc, sleep disorder and depression. On top

of stress from childcare, they are getting heartaches due to conflicts with their children over different

parenting styles.

We can no longer turn a blind eye to this increasingly dominant situation that forces so many elderly

people to tacitly put off their own happiness for twilight childcare. At work, I meet many elderly

people who are preparing for their retirement. At times, I feel deeply moved by their relentless passion

for life. Some express strong desires for volunteer service activities while others pick up studies to

realize the unfulfilled dreams of their youth. They are all making the best possible choices for their

happiness in later days.

It is time that social consideration and attention are desperately needed to address this issue, so that

twilight childcare can be one of the options that seniors can willingly take to make their lives happier

and more worthwhile.

[ Hankook Ilbo, November 20, 2013 ]

www.koreafocus.or.kr

- UNESCO’s Bankruptcy Crisis and Korea’s Role

- Making Kimchi and Sharing Love

- The National Museum of Modern and Contemporary Art in Seoul

- Cheers to Speed Skater Lee Sang-hwa

- Webtoons: A Driving Force behind Creative Economy

UNESCO’s Bankruptcy Crisis and Korea’s Role

Jeon Seung-hoon

Paris Correspondent

The Dong-A Ilbo

In the lobby of the UNESCO headquarters in Paris, a copy of the fourth-grade textbook “Nature,”

donated by U.N. Secretary-General Ban Ki-moon, is on display. A special remark is imprinted in the

back cover of this book, which on its front cover has a picture of two children staring at the stars

through a telescope: “This book has been printed at an exclusive printing shop of the National

Textbook Corporation, which was newly set up with a printing machine donated by the UNESCO

and the United Nations Korean Reconstruction Agency (UNKRA).”

After the Republic of Korea was established in 1948, it tried to join the United Nations. The attempt,

however, was blocked by the Soviet Union, a permanent member of the U.N. Security Council. On

June 14, 1950, UNESCO became the first U.N. organization to admit Korea. But the joy was short-

lived. Eleven days later, the Korean War broke out.

On September 16, 1954, the dedication ceremony of the printing shop of Mungyo Bookstore (the

predecessor of the National Textbook Corp.) took place in Daebang-dong, Dongjak-gu, and Seoul. At

a time when Koreans were barely managing to maintain their livelihoods, UNESCO provided printing

facilities and paper to print 30,000 textbooks annually. Six decades later when a boy who had studied

with those textbooks became the United Nations Secretary General and visited UNESCO, its staff

members were also deeply moved.

Now this U.N. agency faces a bankruptcy crisis. A tense atmosphere is shrouding the 37th session of

the UNESCO General Conference, being held at the Paris headquarters until November 20. The

financial crisis was touched off after UNESCO admitted Palestine as a member in October 2010. The

United States, a close ally of Israel, withdrew its annual contribution estimated at $80 million on the

grounds of its law that denies funding for any U.N. agency that accepts Palestine as a member.

The United States’ contribution had covered nearly a quarter of UNESCO’s overall annual budget.

The agency’s shortfall for next year’s budget is estimated at $146 million. The number of the

headquarter staff members which reached around 2,000 has been reduced to about 1,700. Currently

applications are received for early retirement to lay off 285 more employees. Some conferences

required for the World Heritage Convention have not been held due to lack of funds.

The United States and Israel have lost their right to vote at this year’s session of the General

Conference because they failed to pay their membership fees for more than two years. Several

programs, including the Holocaust education which was supported by the United States, construction

assistance for Iraq’s water facilities, development of a tsunami warning system and education on non-

violent conflict resolution in Africa, were suspended.

Even within the United States, some lament that their country, despite its proclaimed “smart power”

policy, has been reduced to a paper tiger at the UNESCO, which oversees education, culture, science

and communication. The legislation, which was aimed at discouraging Palestine from gaining

recognition in the international community, is dragging down the United States.

A brisk competition is under way to take over the void left by the superpower. China, a member of

the G2, has come forward. China’s vice education minister was elected the president of the General

Conference (with a two-year term) for the first time at the latest session. China has offered tens of

millions of dollars for such programs as teacher training for Africa, apart from its regular

contributions. BRIC countries such as Russia, Brazil and India are also expanding influence by

hosting various meetings and providing special funding.

The Korean National Commission for UNESCO will mark its 60th anniversary next year. UNESCO’s

current crisis offers Korea another opportunity to contribute to the global community. Korea’s aid is

seen from a different perspective among underdeveloped countries. It is because, beyond money,

Korea gives them the confidence that they also can “stand on their own feet.” The experience and

knowhow that Koreans achieved by reading books in a war-scarred country is not something that

anybody can give.

[ November 11, 2013 ]

www.koreafocus.or.kr

Making Kimchi and Sharing Love

Kim Soon-ja

Kimchi Association of Korea

Not long ago, trucks full of cabbages used to drive into cities and piles of cabbages were stacked at

the entrance to alleys in residential areas around this time of the year. When preparing kimchi, the

spicy pickled vegetable dish, neighboring housewives used to sit around to stuff pickled cabbages

with prepared condiments. Men put the freshly made kimchi into pottery jars, sealed them tightly,

wrapped them with straw and buried them in the yard.

Eating kimchi reminds me of these scenes and I am grateful for the hard work my mother did. As the

economy has grown, however, many Koreans eat bread instead of rice and accordingly, side dishes

have changed, too. Moreover, as an increasing number of housewives have come to be engaged in

various activities outside their homes, many households tend to skip the burdensome chore of making

kimchi.

As life becomes ever busier, a simple diet is preferred. It is deplorable that such a trend reduces the

opportunities for the whole family to sit around to enjoy a meal together. It still is undeniable that

kimchi benefits our body more than any other food. Recently, the slow food movement has gained

momentum amid a growing preference for natural food and the rising awareness about the harmful

effects of processed foods. Cumbersome and inefficient as it may be, kimchi is a perfect healthy food

choice in terms of restoring the roots of our time-honored dietary tradition.

Kimchi making is an invaluable cultural legacy that we should hand down to future generations. In

this regard, it is exciting news that kimjang, the time-old practice of making and storing kimchi for

the winter, is sure to be placed on the UNESCO’s Representative List of Intangible Cultural Heritage

of Humanity. [Editor’s Note: UNESCO’s Intergovernmental Committee for the Safeguarding of the

Intangible Cultural Heritage agreed on the inscription at its eighth session, held in Baku, Azerbaijan,

on December 5.]

As a result of my lifelong dedication to developing and promoting kimchi, I opened the Kimchi

Theme Park in Bucheon, Gyeonggi Province, in March 2012. It is offering an opportunity to have

firsthand experience in making kimchi to all visitors ranging from kindergartners, elementary and

secondary school students, and foreigners. After having hands-on experience in making kimchi, even

young students who did not like kimchi come to appreciate its real taste, understand our traditional

diet and return home satisfied.

The Kimchi Association of Korea is running an educational program to foster professional manpower

equipped with a competitive edge in the kimchi market. As an “industrial field professor,” I frequently

visit rural middle schools and high schools to share my experience of overcoming past hardships to

become a kimchi master. I am also sparing no effort to hand over my knowledge on making kimchi

to as many people as possible to increase the number of apprentices who are willing to learn kimchi-

making skills.

I am doing all these things because I love kimchi, but I also believe that it is my mission to help keep

the kimchi culture alive in our everyday life and share my talent. Our economy is going through hard

times. I suggest that we look around ourselves to see if there are persons who are in more difficult

situations than us. Anybody has one or two talents and sharing them with others will help us pull

through these hard times early. When preparing kimchi for the winter, our ancestors helped one

another through exchange of labor, which was an integral aspect of Korean culture.

[ JoongAng Ilbo, November 15, 2013 ]

www.koreafocus.or.kr

The National Museum of Modern and Contemporary Art in Seoul

Kang Su-mi

Art Critic; Professor of Art Theory

Dongduk Women’s University

The Korean art community is highly expectant. In 2009 the government boldly committed a hefty

budget to open the Seoul branch of the National Museum of Modern and Contemporary Art. There

was an inauguration ceremony on November 12 ushering in a new age. As the celebratory tunes carry

far in huge festivities, both Korean and world-renowned overseas artists’ works are on display for the

opening exhibition. As many guests crowd around much-talked-about parties, art experts from home

and abroad as well as journalists, citizens and tourists are flocking to the museum.

There are incessant mentions of the venue on Twitter, Facebook and blogs. When surfing the Internet,

you are surprised to come across relevant information already uploaded on tourist attraction sites and

job search sites. This explains the excitement coming from Korean art circles. Artists are looking

forward to an opportunity to display and perhaps collect great pieces of artwork in a premier museum;

art merchants to new sources of revenue and opportunities; art majors to more quality jobs; and art

fanatics to additional leisurely and luxurious occasions to appreciate art.

The National Museum of Modern and Contemporary Art started out in Gyeongbok Palace in 1969,

moved to the east pavilion of the Seokjojeon in Deoksu Palace 1973, and it finally earned its own

place in Gwacheon, south of Seoul, in 1986. Although it was the only national museum that

represented modern Korean art, the location was not fitting. On weekends and picnic seasons, a huge

crowd would go to the nearby amusement park. Suddenly deciding to visit the museum seemed quite

a foolish thing to do.

Aside from these physical constraints, the museum was criticized for not living up to its name. Even

though it had 26 years of history in exhibition planning, art collecting, education and administration,

it fell short of conveying national and world art history and providing a creative vision. At least

history taught its lesson and now the museum has grown so that many people have high expectations

of it now. People demand to see real changes taking place in the Korean art scene.

Construction of the Seoul branch cost 246 billion won. The complex has three floors both above and

below ground, totaling 52,000 square meters in floor space. It has eight galleries and a multi-project

hall, theater, library and amenities. The sheer size has changed the look and feel of the Samcheong-

dong neighborhood. In that sense, the special opening exhibition planned as a chance to proclaim its

vision and to provide a festivity that people can enjoy should be evaluated comprehensively in a fair

manner.

Lip service will not do, nor will banal journalism dotted with sensationalism trying to provoke

suspicion from the general public. The press should not simply recite facts and figures issued in the

museum’s press release, nor should it blindly praise foreign museums while criticizing the policy

directions and exhibition plans of local museums.

The Seoul branch, along with the Gwacheon and Deoksu Palace branches, as well as the art collection

archive and preservation center to be built in Cheongju, are responsible for changing the paradigm of

Korean art. Culture politics must be at play. It can merge and cross over between Korean and non-

Korean, contemporary and modern, individuals and groups, artworks created on-site and collections,

and different genres and areas. How do the five special exhibitions measure up in that regard?

On one hand, the NMMCA Seoul invited curators, artists, architects, engineers, astronomers,

ecologists and other outside members to plan the opening event, and it provided an excellent

beginning for the museum to leapfrog into becoming a world-class museum or a cultural platform.

However, in contrast to the museum’s open and yet integrated façade exuding authority, an exhibition

given under the theme of “Connecting_Unfolding” seems fragmented due to conflicts of interest, and

“Zeitgeist Korea” shows the confusion, not the spirit, of the times. This is the current address of where

the museum’s cultural politics lie.

[ Hankook Ilbo, November 22, 2013 ]

www.koreafocus.or.kr

Cheers to Speed Skater Lee Sang-hwa

Oh Pung-yeon

Editorial Writer

The Financial News

I like people because each person has a unique fragrance, and I like to write about them. All of my

six essay collections are about people. There may be one hero or many in each story, but I rarely use

their real names. I used real names for only a handful of people even though they are dead. Former

presidents Kim Dae-jung and Roh Moo-hyun, Stephen Cardinal Kim Sou-hwan, and novelist Park

Wan-suh are the exceptions.

I avoid using real names because I do not want to insult them in any way. But you can guess who the

people are from the context. Some people call me and ask, “Did you by any chance write about me?”

and I tell them, “Yes, I did. I am sorry I should have asked for your permission beforehand.” No one

has been offended, however. In fact they encourage me by telling me that it is an honor for them to

appear in my essays. It is because of these people that I can type away at my desk every day, and I

cannot thank them enough.

Lee Sang-hwa, Park Tae-hwan, Kim Yuna. They are our sons and daughters who inspire us. They

make us proud, and all the more proud considering that their sports ― speed skating, swimming and

figure skating ― were not popular in the beginning and they started with virtually nothing. I see Lee

and Park on the podium ready to receive their medals. They wear their gold around their neck standing

slightly shorter than the other medalists, but height is not an issue for them. Kim is also a spectacular

athlete. She has done her part as a civilian diplomat as well as a sportsperson. I am really proud of

them.

Speed skater Lee Sang-hwa broke the world record in women’s 500 meter event on two consecutive

days. It is difficult to set even one world record. This accomplishment is all the more valuable because

one millisecond can make a difference in her event. Lee does justice to her nickname, “Speed Queen.”

She was unrivaled at the second race of the Speed Skating World Cup in Salt Lake City, Utah. Lee

was simply on top; she had only herself to compete against.

I felt proud of her standing on the podium to receive her medal, and I am sure many others did, too.

In January this year, she set the world record at 36.80 seconds and replaced it with her own records

in four consecutive races. There are only four skaters who have broken world records more than four

times in the women’s 500 meter. Catriona Le May Doan of Canada is a seven-time world record

holder, and Bonnie Blair of the United States and Christina Luding-Rothenberger of Germany four

each. Lee is the only Asian. Also it is only Le May Doan and Lee who broke their own records to set

new world records more than three times in a row.

Lee is rewriting history as she skates. Her winning streak seems to know no end because she is still

growing. Until last year, the world record in this event was held by Yu Jing of China at 36.94. She

was the first female skater to break the 37-second barrier. Lee further reduced the record to 36 and

30-something seconds. In the first race, she skated 36.57, setting a new world record, and in the

second race, she came in at 36.36 seconds. At this rate it will not be long before she hits 35 seconds.

All eyes are on her.

Lee’s achievements did not just happen. She has balanced physical, technical and mental capacity.

Lee shed 5 kilograms before the racing season to maximize her physical condition. But she retained

her lower body, maintaining her ability to finish strongly. We cannot overlook her heart of steel, either.

She would not be here if it were not for her strong mental ability. I am sorry the spotlight shining on

Lee is not as bright as she deserves. Let us cheer for Lee so that she may make yet another great leap.

[ November 22, 2013 ]

www.koreafocus.or.kr

Webtoons: A Driving Force behind Creative Economy

Yu Tae-yeol

Director

KT Economic Research Institute Digieco

Go-Stop, a Korean card game also known as Godori, has become a national pastime since the

introduction of hwatu from Japan during the 19th century. Hwatu is the name of the cards that are

used and literally means “battle of the flowers” in Korean. Go-Stop is a new card game that has

evolved from the original Japanese hanafuda, meaning “flower cards,” and regions and age groups

in Korea have different rules for playing it.

To avoid arguments, players need to agree on the rules before starting to play. There is another

example of a card game derived from hwatu: Animal Go-Stop, which has recently become popular in

Korea. As an online card game, Go-Stop has been re-exported to Japan. The evolution of Go-Stop is

a typical example of how Koreans possess the creativity to generate new values by recreating the

original.

Another manifestation of this creativity is the “webtoon,” an online animated cartoon. It is an example

of new cultural content created by combining a cartoon with the digital environment in Korea. If there

is manga in Japan and the birthplace of cartoons and “graphic novels” is the United States, the mecca

of pop culture, then there is the webtoon in Korea.

Webtoons have continued to evolve from cartoons made available online to “smartoons,” which

maximize the multimedia effect. As a result, Korea’s webtoon market, which emerged 10 years ago,

is expected to total 150 billion won (approximately US$135 million) this year and 300 billion won in

2015. However, the industrial value of webtoons is much bigger than the numbers.

Webtoon portals, which were the initial incubators of webtoons, are playing a key role in creating a

stable production environment, which includes a system for evaluating creations. Some portals, in

order to offer proper rewards to webtoon artists, have a per-visit fee system. Previously, webtoonists

received a fixed fee per episode.

Moreover, incubation programs designed to foster rookie writers are vibrantly run, widening the

gateway to becoming a webtoon artist. Consequently, the number of webtoon artists has jumped to

around 500 from only 80 when comic books were the main medium. Among these webtoon artists,

the number of those who have become star writers has currently reached as many as 150. With the

rising number of webtoonists enriching the content, their audience has steadily swelled, thus creating

a virtuous circle in the market.

Webtoons vary in genre, ranging from narratives and portrayals of everyday lives to a “cookingtoon.”

As business companies have recently paid attention to the webtoon market, brand webtoons have

started to emerge: the “Infinite Power” of Samsung, the “God of Annual Salary” of Hanhwa, “Majo

& Sady” of Intel, etc. In addition, webtoons are recreated in various cultural media such as films,

books and plays, generating tie-in products including stationery and office supplies.

The success story of Korean webtoons does not stop at the border. Korean webtoons have garnered

the international spotlight, becoming a core element of the Korean Wave, or hallyu, along with TV

drama series and online games. It has been reported that discussions about selling overseas

distribution rights for around 30 webtoons took place at the Frankfurt International Book Fair in

Germany last October.

Some webtoons provide language services in English and Japanese to gain a foothold in foreign

markets. Webtoon portals such as Tapas Media have been launched as a new webtoon platform for

international followers. Korean webtoons have changed the industry dynamics and created new

markets at home by combining two very different industries: cartoons and information,

communications and technology (ICT).

In this sense, the success of Korean webtoons is a typical example of showing the right direction that

should be taken by the creative economy envisioned by the Korean government. Korea will be able

to foster content industry into which ICT is incorporated by effectively improving something that

already exists, capitalizing on the widespread love of digital devices and the world’s highest level of

mobile broadband connectivity.

Making something out of nothing is not the only way of creation. As shown in the cases of Go-Stop

and webtoons, creating something better by combining what has already been established will provide

more opportunities to generate new value. Therefore, the opportunity to develop the nation through

creative economy also lies in maximizing what we already have.

[ Digital Times, November 21, 2013 ]

www.koreafocus.or.kr

- North Korea’s ‘New Economic Management System’: Main Features and Problems

- Korea, Koreans and Korean Products as Seen by Foreigners

- Recent Trends in Capital Spending and Policy Implications

- South Koreans’ Increasing Awareness of the Need for Unification

North Korea’s ‘New Economic Management System’: Main Features

and Problems

Park Hyeong-jung

Senior Research Fellow

Korea Institute for National Unification

I. Introduction

Since the installation of Kim Jong-un as its supreme leader two years ago, North Korea (Democratic

People’s Republic of Korea) has been rearranging its state and party systems. One important change

is the way its economy is handled. Officially called the “Economic Management System in Our

Style,” the new approach is often called the “June 28 Measures” among South Korean observers in

reference to the policy adoption in June 2012.

This study describes the basic concept of the New Economic Management System and looks into

how it is being implemented. Chapter II identifies the new system from the viewpoint of socialist

economic reform. Chapter III introduces the core practices of the new system as explained in North

Korea’s official documents. Chapter IV observes how the new system has been applied as suggested

by Radio Free Asia reports. Chapter V summarizes the above contents and offers an assessment of

the situation.

II. Change in Socialist Paradigm

The first question is how the New Economic Management System fits a socialist economy. A simple

breakdown of a socialist economic system has four categories: 1) communist rule + central planning

+ state ownership of production means; 2) communist rule + decentralized reform + state ownership

of production means; 3) communist rule + coexistence of market and planned economies + state

ownership of production means; and 4) communist rule + market economy + privatization of

production means.

In China, the years between 1984 and 1992 are associated with Category 3. It was called a socialist

commodity economy. And the period from 1992 to the present falls into Category 4, as a socialist

market economy. In North Korea, the economic management system up to the end of the 1980s was

in Category 1. Its economy under the July 1, 2002 measures may be identified with Category 2. The

New Economic Management System brings the North to Category 3.

A “socialist commodity economy” reduces or abolishes control of state-owned enterprises and

eventually develops into the coexistence of state plans and markets, or a market economy. This

requires an overhaul of a nation’s entire economic management system. As state directives are

reduced, the bureaucracy needs to shrink and the state’s role in the national economy has to change.

The role of markets needs to be expanded with official recognition. This change should be

accompanied by political and economic opening up.

The four categories can be compared with the four stages of human development ― infancy,

childhood, youthhood and adulthood. Individuals share certain characteristics at each stage of

development but have a life of their own. Likewise, socialist economies experience common stages

of reform in different forms; some succeed in achieving economic development and improvement of

people’s lives while others fail. Reform does not necessarily bring about economic advancement.

III. Main Features

The core concept of the New Economic Management System is, according to the Choson Sinbo, the

North Korean-edited newspaper published for pro-Pyongyang Korean residents in Japan,

relinquishing the power of management from the state to factory enterprises and farms. “Whereas in

the past enterprises had just to carry out the production plans handed down from the state, the new

measure has allowed enterprises to make production contracts with various clients based on their own

decisions while implementing state plans as well,” an article in the newspaper’s May 10, 2012 edition

said.

In practice, the state continues to own the means of production and appoints the heads of state-owned

enterprises but the enterprises are allowed to decide how they fulfill the state’s production targets and

meet market needs, taking responsibility for the results of management.

This constitutes a major change from “socialist planned economy” to “unplanned socialist economy,”

or the beginning of an unplanned economy. North Korea gives the impression that it is trying to ease

the impact of the change by using ideological expressions. The Choson Sinbo article said, for

example: “Since last year, some factories, enterprises and collective farms have been engaged in

independent and creative management as a pilot program under the guidance of the Cabinet.” It also

said: “The appropriate (economic) units are studying ways to produce personnel to fulfill their

responsibilities and perform their missions as the master of production and management.”

IV. Implementation

We have limited information about the New Economic Management System, on how it was conceived

and implemented, and what it has achieved so far. We have to rely mainly on media reports from

various outlets, the Radio Free Asia being the most quoted. There is the possibility that inaccurate

and insufficient information is used in reaching conclusions, as this study assembled and analyzed

reports from diverse sources. Even with inconsistencies among individual reports, however, we can

still grasp an overview of North Korea’s current economic management system.

1. Main Features in the Initial Period

On the day of Kim Jong-il’s funeral, Kim Jong-un reportedly asked high-ranking officials to prepare

a “new economic management method.” The Cabinet was ordered to form a group “to prepare an

improved method of economic management.” The small group headed by Deputy Premier Ro Du-

chol considered three ways of agricultural reform, in particular. One was to allow collective farms to

make independent decisions on production and distribution without changing the structure of farms.

The second was to divide each collective farm into five to six sub-units and give them management

autonomy. The third was to fully liberalize individual farming as China did. Through these

preparations, North Korea issued a directive, titled “On establishing a new economic management

system in our own style” on June 28, 2012. Implementation of the new system was to start on October

1.

Lectures to explain the New Economic Management System to workers and farmers were held across

the country in early July and again in early August. The lectures revealed that:

- The state will not hand down items for production or other details to factory enterprises.

- Factory enterprises will make their own production plans, including prices, sales procedures and

distribution of profits.

- Production facilities, raw materials, fuel and power will be secured through transactions with other

enterprises, mines and power stations, without state intervention.

- Individuals cannot establish factory enterprises; their officials will be appointed and dismissed by

the Workers’ Party as before.

- Enterprises should feed their own workers by adequately making and selling products in accordance

with their respective capabilities. Officials who are unable to do so are to be fired.

Each province was to operate “direct supply centers” where enterprises would freely purchase raw

materials and other necessities. This was to ensure North Korean authorities have at least limited

control over production activities. Even coal and electric power should be procured directly with cash

or checks. Food also will be sold freely at the supply centers. Enterprises were obliged to pay 30

percent of their profits to the state to share the cost for the operation of such public facilities as schools

and hospitals.

The state rationing system was targeted for closure but the state planned to strengthen its control of

markets to stabilize prices. Teachers, healthcare personnel, party cadres and bureaucrats were obliged

to buy food at “food supply centers.” These food outlets, which mean rice markets, will serve as

places where state food management agencies, collective farms and individual producers can freely

sell their products to consumers. Wounded veterans, social security beneficiaries and pensioners can

buy food at discount prices.

As of November 1, 2012, food rationing for military personnel, members of law enforcement

organizations and general administration officials was to end but they were to receive salary to help

them pay for meals. Prices were set by the state ― 4,000 won for 1 kg of rice and 2,000 won for 1 kg

of corn ― and markets can sell items designated by the state. Sale of foreign goods and the use of

vending trucks were prohibited.

For members of independent accounting enterprises, wages were to be paid in cash and there will be

no partial payment in food. But units that remained under state control were allowed food rations.

Salaries were raised sharply but the increase was not enough to completely cover high prices of

commodities ― from 2,000 won to 12,000 won, for example, in the case of a factory in Onsong,

North Hamgyong Province, which was barely enough to buy 2 kilos of rice as rice price there rose to

5,000 won per kilo. About 10 percent of all enterprises in terms of production, which employ some

20 percent of total workers, are operated in the independent accounting system.

In the agricultural sector, the New Economic Management System was introduced in October 2012.

First, the distribution formula was changed to 70 percent of the total harvest to the state and 30 percent

to farmers. Previously, the state collected a set amount regardless of the year’s harvest; under the new

system, farmers are to get more when the harvest is bountiful and less when it falls short, as

distribution will be based on the five-year average harvest from each farm. Second, “sub-units” were

recognized at collective farms with each having two to six members. This means that family-based

farm operation is possible. In a two-family sub-unit, they can divide their allotted land for separate

cultivation.

In healthcare, hospital pharmacies were to be closed, which meant an end to free medicine. Patients

would have to buy drugs at regular pharmacies. Only in cases involving serious diseases, hospitals

will give free treatment. In education, the end of free schooling was scheduled.

There were reports that a new agency would start supervising and controlling the implementation of

the New Economic Management System in early November 2012. According to the reports, this

agency were to be composed of economic, financial and law enforcement experts to work

independently without interference from any powerful organizations, reporting directly to the

National Defense Commission. The central party secretariat recruited able people aged around 40,

who would be trained in Pyongyang before being assigned to areas where they have no regional

connection.

Two additional measures were taken for the new system. One was the farmland rearrangement project,

which in essence was removing farmhouses scattered in twos and threes near collective farms.

Farmhouses were relocated to a new housing compound away from farms and the sites of the old

houses were turned into farmland. The other was firmer discipline of collective farm members.

Directives were delivered to collective farms to subject absent farmers to “labor punishment.”

Security personnel moved about in farms to check those who were not working.

After the New Economic Management System was announced, measures were taken for the renewal

of control in the areas of public security, education and healthcare. New directives on “protection of

secrets” and “more effective visual surveillance” were delivered through governing networks for

stronger internal discipline. In Ryanggang Province, DVDs, computers and mobile phones were

inspected and residents were forced to write confessions about their transgressions. Officials were

specially instructed to crack down on bribes to get work disability excuses and surveys were made to

provide incentives for families with three or more children.

2. Difficulties

When briefings began in early July for party administrative officials, new worries spread over

possible inflation and other difficulties. They apparently recalled the failed economic measures of

July 1, 2002 and the currency reform debacle in 2009. North Korean authorities stressed that the New

Economic Management System was not a step toward a general economic opening. Nevertheless, the

price of rice jumped and demand for Chinese currency rose in the black market. On July 6, in

Hamhung city, the price of Chinese rice shot up from 3,600 won to 6,000 won per kilogram and back

alley markets in major cities were paralyzed.

There was a heated debate about the New Economic Management System when provincial party

chiefs and senior Cabinet officials gathered for the celebration of Kim Jong-un’s installation as the

supreme leader. They recognized the necessity of a new system, but the provincial party chiefs argued

that its implementation should be delayed until after autumn harvest.

Rounds of lectures on the New Economic Management System started again on August 6. On August

8, the exchange rate with Chinese currency rose from 840 North Korean won to 950 won against the

renminbi and commodity prices continued to go up throughout the month. As of the end of August,

the rice price in Hyesan, Ryanggang Province, passed 7,000 won per kilo, compared to 5,000 won at

the beginning of the month.

Beginning in late July to August, experimental measures were taken at farms and manufacturing sites.

Inspection teams were dispatched to factory enterprises in the provinces to check production facilities

and select pilot factories to implement the new system. In Ryanggang Province, the Hyesan Footwear

Factory, Hyesan Cosmetics Factory and Hyesan Textile Factory were chosen to prepare for full

application of the new system from the beginning of 2013. Insolvent enterprises were designated for

shutdown or merger with other factories.

Three or four collective farms were selected from each province. In late July, one collective farm each

in Taehungdan, Kim Hyung Jik and Kim Jong Suk counties in Ryanggang Province were presented

with seeds of improved species, fertilizer and weed cutters as a state investment with a promise of

allotting 30 percent of crops to farmers.

Though pushed for full implementation from October, the New Economic Management System

exposed drawbacks during the short experimental period. The outcomes at pilot project enterprises in

Rason, Chongjin and Pyongyang were disastrous. Planners had expected the new system would yield

enough profits to pay salaries of 350-400 yuan in Chinese currency, or 100,000-150,000 won in North

Korean money. What they actually paid ranged from 30,000 won to 60,000 won, a bare subsistence

level.

The planned salary system in the public sector had to be postponed due to the general scarcity of food

resources. In the agricultural sector, the 7:3 split between the state and farmers was found to be

impossible at the experimental farms because of production shortfall. At farms in Ryanggang

Province, potato production fell to 15 tons per hectare, less than half of the targeted 40 tons, due to

bad weather and fertilizer shortage. Powerful state organizations directly collected produce from

collective farms to pay salaries with potatoes, leaving little for the survival of farmers.

From the early 2013, the ill effects of the new system became more evident. Most provincial

enterprises had little work to do and therefore were unable to raise wages as required under the new

system. Food rationing was cut to a half while salaries were raised only marginally. Enterprises in the

provinces were asked to establish plans for survival with improvement of technologies and

exploration of resources. Their managers were told to feed workers without relying on the state.

3. Political Repercussions to Farm Sub-units

The sub-unit system was installed at collective farms at the beginning of January 2013. An average

of 70 percent of the farms in each county was affected. Exceptions were made at “No. 8 farms,” which

produce food for party officials, state-operated farms belonging to the Public Security Bureau, farms

under the direct control of the Ministry of the People’s Armed Forces and special seed farms in cities

and counties. Some major military units also operated their own farms.

The sub-unit concept appeared to be a hybrid of two extremes. One is forming a family-based

production unit that would be self-managing and share crops with the state under a 3:7 ratio.

Collective farms are virtually abolished in this concept. The other extreme is maintaining the

bureaucratic system of collective farms, only dividing them into small sub-units and setting the new

distribution ratio of 3:7. In implementing the sub-unit system, there must have been certain ambiguity

in defining the new formula between the two extremes, and from the start, the new system could

probably have taken varying forms in different regions. Reports revealed that collective farms were

bewildered in the absence of clear directives, resulting in the idling of farm workforce.

We can surmise that the concept of sub-unit transitioned over time from close to the first extreme to

the second extreme. The original idea was focused on stimulating farmers’ desire for higher

production, but that meant a weaker bureaucracy, less control over farmers and risk to the food

security of special state organizations. We can imagine there was considerable resistance from the

bureaucracy, which led to variations in implementing the system among locales.

A collective farm has about 100 households with 200 farmhands. Additionally, each collective farm

requires 40 to 50 people who include the secretary of the basic party unit, and cadre members of the

Socialist Youth Workers’ League, the Farm Workers’ Union and the Women’s League. Many of these

overhead personnel will have to leave when collective farms are divided into family sub-units. Thus,

there will be less state control over farmers. If officers of collective farms are elected directly by

farmers, they may always act in favor of farmers and residents may long for the election system in

capitalist societies. It was also feared that farmers could misreport their harvest in order to have more

to sell in the open market.

Skeptics about the sub-unit system questioned whether family-based farms could maintain the same

level of productivity as when collective farms received student assistance during the busiest months

as well as large amounts of organic fertilizer. Even under the new system, farmers should continue to

provide pork and rice for the military. They also will remain under the heavy burden of repaying the

state for farm machinery, fertilizer and seeds.

Late in January 2013, state authorities prohibited farmers from cultivating small patches of land on

mountains and limited the size of vegetable gardens to 10 pyeong (33 square meters) from the

previous limit of 30 pyeong, turning over the returned land to collective farms. This was to steer the

farmers’ energy toward collective farm cultivation. For even the permitted 10 pyeong of vegetable

garden, farmers were asked to pay 50 won for each pyeong. An average North Korean farm household

cultivates about 1,500 pyeong of land. About a month later, these restrictive measures were lifted and

farmers were told to pay 30 percent of the grain harvested from their privately-held land to the state.

4. Manufacturing Sector after March 2013

The New Economic Management System was broadly put into practice in the industrial sector

beginning in March 2013, although it was not officially announced. Manufacturers should have

received March production plans from authorities by February 25. Instead, the authorities met with

workers to emphasize that they had to begin feeding themselves by self-managing their output. But

the situation was not much different from the past because factories remained idle due to a lack of

raw materials, power and operating capital.

The news of the impending implementation of the New Economic Management System affected the

back alley markets across the country. But the authorities soon announced the “state of wartime

mobilization” on February 28. It was followed by “No. 1 state of combat” to blunt any shock the

economic step would have on the North Korean public.

In April, the state ordered enterprises to raise wages to reflect price increases. A 10-fold salary

increase was offered plus bonuses for large profits. As enterprises, such as cement plants, were

permitted to dispose of surplus production beyond state plans, the salaries of some workers rose in

multiples of 10 times, news reports said. The Department Store No. 1 and Potonggang Department

Store in Pyongyang established their own procurement and sales plans to increase profits by selling

items directly imported from China. All of these developments raised worries about inflation. And

the hefty pay raises in fact had little effect on improving the lives of North Koreans as a new salary

amounting to 20,000 won was worth only 3 kilos of rice. There still were no conclusive words from

the authorities on how the rationing system would change under the new system.

The Choson Sinbo published an interview with Kim Ki-chol, deputy head of the Cabinet Secretariat,

and Ri Yong-min, a deputy department head at the National Planning Committee, on May 10. In their

comments about the new economic management methods, they said that Kim Jong-un gave solutions

to economic problems on several occasions this year and handed out assignments to experts and

scholars. “We have held consultation and discussion sessions with research organizations and

economic officials… and most of the program is still in the stage of research,” they said. The two

officials admitted that problems concerning production plans, price adjustment and money circulation

had emerged and there was the need for new legislation.

5. Confusion after July 2013

From July, there were occasional reports indicating a retreat from the new system in both the

agricultural and manufacturing sectors. Concerning the sub-unit system, reports said that political

alarm bells were ringing at collective farms. Worries were raised that when sub-units were formed

nationwide on the basis of families, farmers would neglect organizational activities and would not

pay attention to managers and party secretaries. Local officials pressured collective farms to forego

the new management system. Reports had it that collective farms in Hoeryong and Onsong in North

Hamgyong Province and Unhung, Kapsan and Samsu in Ryanggang Province were recalling land

that had been distributed to farm members. Family-based sub-units were being replaced with bigger

ones with 20 to 30 members.

It was also observed that North Korean authorities were experiencing difficulties in trying to fulfill

the promised 7:3 crop-sharing ratio between the state and individual farmers. What happened in the

first year of 2012 was the state’s collection of crops by over 90 percent to secure food for the military

and other purposes. In Ryanggang Province, state instructions kept changing from the initial 5:5 ratio

between the state and farmers in January to 7:3 at the end of September and then back to the direct

rationing system in October.

In the industrial sector, the worst problem was the lack of resources to resume production with or

without the new system. The state failed to provide energy, raw materials and other necessary

resources, and Chinese investment did not grow even with the change of system because of persistent

high risks. Enterprises were unable to pay salaries to workers, who would not come to their idled

workplaces. It was learned that enterprises were sending notices to employees that introduction of the

New Economic Management System was being withheld pending fulfillment of necessary conditions.

V. Summary and Assessment

The objective of the New Economic Management System in North Korea is the building of an

“unplanned socialist economy,” or something similar to the “socialist commodity economy” China

implemented between 1984 and 1992. Agricultural, industrial and financial measures that North

Korea is trying to introduce along with the installation and expansion of special development zones

under the New Economic Management System are mutually connected and therefore need to be

simultaneously implemented.

North Korea has the conceptual blueprints for each economic measure and its leadership includes

individuals who are interested in promoting the areas where they are specialized. However, the

country apparently lacks the capabilities to create the proper economic and political conditions for

these measures. Against this backdrop, production increase and overall economic growth cannot be

expected and confusion would intensify.

North Korea had not made sufficient preparations economically and politically before the

introduction of the New Economic Management System. Introduction of new measures inevitably

affects the interests of those who had been active under the old system. Transitional imbalance may

arise in the process of putting the new system into practice. Reserve resources are necessary to address

such problems.

The sub-unit management system in the agricultural sector showed how the reform effort can be

stymied. This new system spurs independent efforts of farmers and stimulates their motivation for

production increase but it invited the resistance of agricultural bureaucrats. When the state and

farmers begin to share products by a ratio of 7:3 instead of the previous ratio of 9:1, imbalance will

emerge somewhere in the distribution of farm products. Reserve resources are necessary for such a

sudden change. The same is expected of the industrial management system. Factory enterprises were

given autonomous operation rights but the new system did not result in production increase. Reserve

resources are needed here, too.

The new policy under the Kim Jong-un rule lacked consistency and often exposed zigzagging

directions. Officials responsible for the implementation of the new policy were unable to win over

dissenters and failed to secure reserve resources needed to overcome the material imbalance in the

transition period.

Eventually, the management reform at factory enterprises and experiments with sub-units in farming

areas were virtually abandoned. The sub-unit management failed because of resistance from

agricultural bureaucrats, the authorities’ unease about relaxation of peasant control and uncertainty

about the food security for the privileged class. The sub-unit management system most seriously

threatened the stockpiling of food grain for the military and the power elite. It is certain that the

military was the biggest opponent to the new agricultural management system.

The New Economic Management System accompanied policies that reduced the privileged role of

the military in the economy. Similar problems were certainly exposed in the reform of industrial and

financial management, such as non-cooperation from the privileged group, concerns about loosening

control of workers and managers, and lack of guarantees for special interests.

Yet, the sub-unit management in farms and increased autonomy of factory enterprises were not

entirely meaningless. Interestingly, some in North Korea’s leadership believed that the sub-unit

system with incentives to individual farmers was necessary despite many problems attached to the

farmers’ self-interests. Although it was not successfully implemented, it did help farmers gain more

independence from state control.

The unavoidable trend of changes in the North calls for systemic reforms like the sub-unit

management just as youths grow up to become adults and then to the middle age. The problem is how

to operate the changed system to achieve production increase. To be successful, those in the North

Korean leadership who advocate the New Economic Management System should be able to

politically suppress those opposing it or win them over economically by assuring them of the

distribution of surplus. What has happened to date shows that the new system has failed to make

much progress in that direction.

Concerning the projects of building special economic development zones, similar problems have been

detected. The Workers’ Party Central Committee decided in a plenary meeting in March 2013 to take

measures to diversify foreign trade, develop new tourist zones, and build special economic zones

suitable for the specific conditions of each province. The Economic Zones Development Act was

enacted in May and, as of October 2013, each province is boosting efforts to attract foreign investment

and create new economic development zones.

The concept of special economic development zone can be defined as conforming to the “unplanned

socialist economy” or the “socialist commodity economy.” But the success of special economic zones

needs the three steps that were required to tackle the problems faced by the sub-unit farm management

and the autonomous operations of factory enterprises as observed above.

[ KDI Review of the North Korean Economy, October 2013,

published by the Korea Development Institute ]

www.koreafocus.or.kr

Korea, Koreans and Korean Products as Seen by Foreigners

Cho Sang-hyun

Research Fellow, Institute for International Trade

Korea International Trade Association

Hong Seong-tae

Professor of Management

Hanyang University

I. Outlines of Survey

1. Purpose of Survey

The purpose of this survey was to gather international views of Korea and its exports. Both foreigners

residing in and outside of Korea were questioned. The survey is expected to help the government and

business officials identify the images of Korea, Korean businesses and the main exports that may

need to be developed further.

The survey is also aimed at understanding the effects the Korean Wave, or hallyu, and other social

and cultural factors have had on Korea’s national image. More specifically, it will be helpful in

understanding how hallyu can help improve the image of Korea and its exports.

This survey is also intended to discover Korea’s image and its indigenous values, and secure the links

between them and the nation’s export industries. Through these efforts, government ministries and

businesses will be able to identify ways to establish premium images for “Korea brand” and “Korean

brand.”

The survey will likely help arrive at policy implications for developing and spreading a new slogan

for national brand, by linking culture to economy and trade.

2. Survey Methods and Outlines

□ Survey Methods

• Exploratory survey: February to March 2013

• FGI (Focus Group Interview) survey: March 2013

• Opinion polls: April to May 2013

□ Sample Selection

This survey did not follow the usual classification of international respondents according to

continents. It divided the world into five groups according to their characteristics.

□ Outlines of Opinion Polls

3. Respondents and their Characteristics

□ Respondents: 1,160 persons from 38 countries

□ Characteristics of Respondents

II. Results of Opinion Polls

1. Overall Evaluation of Korea

□ Tourism

(1) The best city in Asia to shop

Respondents cited Hong Kong (31.2 percent), Seoul (27.7 percent) and Tokyo (15.3 percent) as the

three best cities.

By the region from which the respondents come, foreigners living or staying in Korea cited Seoul

(40.4 percent) and Hong Kong (26.1 percent), while those who live abroad cited Hong Kong (32.3

percent) and Seoul (25.0 percent). Also, the more the foreigners knew about Korea (38.3 percent) and

the more experiences they had about Korean products and cultural contents (47.2 percent), the higher

the ratio of those who picked Seoul ahead of other cities, in relative terms.

Besides, the ratio of respondents who chose Seoul was higher among foreigners who are living or

staying in Korea (40.4 percent) or those planning to visit Korea within a year (46.8 percent).

(2) The city foreigners want to visit most in Asia

The cities foreigners want to visit the most were Seoul (28.6 percent), Tokyo (24.2 percent) and Hong

Kong (16.5 percent)

Notably, Asians chose Seoul (43.6 percent), while Westerners preferred Tokyo (31.6 percent).

Foreigners who use Korean products frequently preferred Seoul (36.9 percent), while those who do

not preferred Tokyo (31.8 percent).

By the characteristics of respondents, those from advanced countries (Group I and II) predominantly

preferred Tokyo, and Group III also preferred Tokyo (29.2 percent). Those who preferred Seoul

mainly belonged to Group IV (Low Income/Decolonized) and Group V (China).

(3) Places foreigners want to visit in Seoul

In Seoul, the places foreigners want to visit most were Gyeongbok Palace (24.7 percent), Myeong-

dong (15.2 percent), and the area surrounding Hongik University (14.7 percent). The largest number

of respondents preferred royal palaces, while Myeong-dong and the vicinity of Hongik University

were selected because foreigners can buy cosmetics at low prices in the former, while the latter is a

popular hangout for young people.

Respondents from all countries except for China preferred royal palaces.

□ Koreans

(1) Three words that best describe Koreans’ strengths

Foreigners gave the highest points to the “hard-working” spirit of Koreans (21.5 percent). Such a

trend was more prevalent among respondents from advanced countries, and the second most dominant

response in Group III (High Income/Decolonized) was “competitiveness” while those from China

were wary of “patriotism” of Koreans.

(2) Three words that best describe Koreans’ weaknesses

The respondents most frequently pointed out that Koreans are “stressed,” followed by self-revering,

unsociable and hot-tempered. In general they regarded Koreans as hard-working people with stressful

lives.

Responses varied distinctly among the groups.

- Group I (High Income/Old Continent) pointed out “unsociable” (17.2 percent) most frequently,

presumably showing sensitive responses to Korea’s exclusive culture.

- Group II (High Income/New Continent) mostly pointed out “stressed” (18.8 percent), reflecting

their own social atmosphere that regards individuals’ freedom highly.

- Asians from Group III (High Income/Decolonized) and Group V (China) most frequently regarded

Koreans as “self-revering” (20.7 percent).

(3) Preferred types of Asian women

The respondents’ favorite types of women were Koreans (39.8 percent), Japanese (22.1 percent) and

Chinese (16.6 percent).

Westerners preferred Korean and Japanese women almost equally, but Asians predominantly

preferred Korean women.

(4) Preferred types of Asian men

Preferred types of Asian men were in the order of Koreans (40.4 percent), Japanese (18.2 percent)

and Chinese (14.3 percent).

Respondents from both the West and the East highly preferred Korean men in terms of appearance.

The preference was especially conspicuous among Asians.

□ Korean Society

(1) Three words that best describe Korean society’s strengths

Major strengths of Korean society were seen as good service (16.4 percent), strong unity (15.4

percent) and dynamism (13.5 percent). Westerners cited “unity,” while Asians picked “good

services.”

(2) Three words that best describe Korean society’s weaknesses

Major weaknesses of Korean society were excessive competition (30.2 percent), superiority complex

in ethnic and cultural identity (27.5 percent), and overdrive pace (20.2 percent). Westerners

mentioned “excessive competition” as the biggest weakness while Asians cited “superiority complex

in Korean identity.” Arabs pointed to “overdrive pace” as the biggest weakness.

□ Korean Culture

(1) Cultural icons that symbolize Korea

As cultural icons that symbolize Korea, respondents cited kimchi (25.9 percent), taekwondo (15.7

percent) and movies (14.6 percent).

Group I (High Income/Old Continent) selected taekwondo while Group II (High Income/New

Continent) picked both kimchi and taekwondo. Group III (High Income/Decolonized) and Group V

(China) predominantly chose kimchi, while people from advanced counties gave high points to the

taegeuk (Supreme Ultimate) emblem, too.

(2) Most favorite Korean food

The most favorite Korean foods were kimchi (21.8 percent) and galbi, or beef ribs (19.1 percent).

Those who picked “Don’t know” amounted to 18.2 percent. In addition to kimchi that best represents

Korea’s food culture, galbi and bulgogi (marinated and grilled beef), the respondents also chose

bibimbap (rice mixed with vegetables and beef). However, foreigners’ awareness of Korean food was

quite low.

Outside of Group V (China) and Group II (High Income/New Continent), “don’t know” recorded

high response ratios. Overall, Westerners preferred galbi and Asians liked kimchi most.

(3) Overall assessment of Korean food

The most frequent descriptions of Korean food were spicy (43.1 percent), healthy (23.4 percent) and

light (14.4 percent). As a whole, most foreigners think Korean food is “spicy and pungent,” as well

as “healthy” because kimchi is fermented food.

The perception that Korean food is “spicy” was most widespread in Group II (High Income/New

Continent), while Group V (China) replied Korean food is “light” compared with theirs.

(4) Level of preference for K-pop

The opinion about K-pop was “like” (35.3 percent), “so-so” (32.1 percent) and “dislike” (8.1 percent)

Group IV (Low Income/Decolonized) and Group V (China) showed the highest preference for K-

pop. Group II (High Income/New Continent) had the lowest regard.

(5) Assessment of K-pop

The assessment of K-pop were “talented” (23.8 percent), “don’t know” (23.2 percent) and “pretty”

(14.5 percent).

Aside from Group V (China), the response of “don’t know” was prevalent, and especially so in Group

II (High Income/New Continent). In advanced countries (Group I and II), the response of “artificial”

showed the second-highest ratio, indicating they have some resistance to synchronized performances.

(6) Entertainment contents helpful for building positive images of Korea

Entertainment contents that can help Korea most in building positive images in the international

community were in the order of TV dramas (36.2 percent), music (17.5 percent) and movies (14.1

percent).

Korea’s TV dramas are somewhat kitschy but popular, and enjoy overwhelmingly positive feelings

in Asia. On the other hand, Korean movies enjoy high regard in the West as “avant-garde,” although

they are a little difficult for Westerners to understand because of cultural differences.

In Asia, including Group V (China), Korean TV dramas are enjoying overwhelming popularity. On

the other hand, Group II (High Income/ New Continent) showed a high frequency of “uninterested.”

(7) What Korean dramas mainly portray

As to what Korean dramas portray most often, romanticism was the most cited at 29.2 percent,

followed by “don’t know” (20.4 percent) and “high standard of living” (15.4 percent). In Asia,

“romanticism” was high, while the largest share of respondents from advanced countries said they

“don’t know.”

Group IV (Low Income/Decolonized) and Group V (China) showed high response rates of “romantic

life.” Group I (High Income/Old Continent) tended to avoid replying they “don’t know,” while Group

II (High Income/New Continent) replied that they “don’t know” with little reluctance.

□ Knowledge about Korea

(1) Korea’s Olympic performances

Asked about Korea’s overall rankings in the Olympic Games, the biggest share of respondents made

correct replies of “among the top 10” (34.8 percent).

Group IV (Low Income/Decolonized) correctly answered most often, while Group I (High

Income/Old Continent) and Group V (China) often replied “11-20th place.” With the exception of

China, most Asian countries had correct knowledge about Korea’s performances in Olympics, and

Arabic countries also made comparatively correct replies.

(2) Kim Jong-un’s nationality

Asked about the nationality of Kim Jong-un, first chairman of North Korea’s National Defense

Commission, more than seven out of every 10 respondents correctly answered that he is North Korean

(77.2 percent).

Group II (High Income/New Continent) and Group V (China) showed the highest correct responses

with 80 percent or more. On the other hand, the correct responses of Group III (High

Income/Decolonized) and Group IV (Low Income/Decolonized) were relatively lower, and especially

so among low-income Asian countries.

2. Characteristics of Korean Society and Businesses

□ Social Characteristics

(1) Things in which Koreans may take pride

Foreigners think Koreans can take pride in their recent economic development (31.7 percent), K-pop

entertainers (16.6 percent) and academic fervor (13.6 percent).

Group I (High Income/Old Continent) and Group IV (Low Income/Decolonized) rated “economic

development” most highly, while Group II (High Income/New Continent) appreciated “5,000 years

of history” along with economic growth.

(2) How do you define Korea in a word?

Asked to define Korea in a few words, respondents associated it with such descriptions as “rapidly

grown” (31.2 percent), “long history” (21.9 percent) and “awesome” (12.1 percent).

Most groups cited “rapidly grown” as the biggest characteristic, but Group II (High Income/New

Continent) focused on “long history.” Also, a large percentage of respondents in Group V (China)

summarized Korea as an “awesome country.”

(3) Which slogan best describes Korea?

Asked to pick a slogan that best describes Korea, respondents selected in the order of “Korea, Moving

Forward (23.8 percent), “Korea, Country of High-Tech” (20.8 percent) and “Awesome Korea” (13.1

percent).

In advanced countries, “Korea, Moving Forward” showed the highest response ratio, but Group III

(High Income/Decolonized) and Group IV (Low Income/Decolonized) tended to associate Korea

with “high-tech products.” Also, Group V (China) selected “Awesome Korea” in a large share.

□ Characteristics of Businesses

(1) Ranking of countries associated with best-quality products

In the ranking of Asian countries that reminds respondents of best-quality products, Japan ranked

highest with 43.1 percent, followed by Korea (21.8 percent).

Group III (High Income/Decolonized) showed the highest preference for Japanese products, while

Group V (China) rated Korean products most highly.

(2) Things that come to mind first when thinking of ‘today’s Korea’

For things that represent Korea today, the nation seems to have built up a strong image as an IT

powerhouse. Respondents mentioned high-tech (26.4 percent), Samsung (26.0 percent) and strength

in IT sector (12.3 percent).

Group II (High Income/New Continent) and Group IV (Low Income/Decolonized) rated “high-tech”

highly, while Group III (High Income/Decolonized) made the highest assessment of “Samsung.”

(3) General views on Korean products

Asked for their general assessment of Korean products, the majority said they are “good” (73.2

percent). Korea seems to have built up a strong image as an IT powerhouse among foreigners across

the world.

Group II (High Income/New Continent) and Group IV (Low Income/Decolonized) rated “high-tech”

highly, while Group III (High Income/Decolonized) made the highest assessment of “Samsung.”

(4) Feelings about Made-in-Korea products

As to how they feel about Made-in-Korea products, respondents cited high-tech (5.60 points), good

design (5.24 points), reliable (5.15 points) and high quality (5.11 points). Between foreigners living

or staying in Korea and those living abroad, there were wide gaps in how they view Korean products’

quality and reliability, which was evidenced in most categories, including high tech (5.92 vs. 5.53),

good design (5.49 vs. 5.19) and reliable (5.50 vs. 5.07).

In all regions, assessment of high-tech showed the largest percentage, but there were considerable

negative opinions, too, not only in advanced countries but also in Group III (High

Income/Decolonized) nations.

Looking at items that received more than 6 points (based on the seven-point scale) in the awareness

of Made-in-Korea products, “high-tech” recorded the most (60.7 percent), followed by good design,

which ticked just above 50 percent (50.9 percent).

Made-in-Korea products received relatively higher ratings in such categories as high-tech, good

design, product reliability and quality, but low ratings in categories like original product (30.5

percent) and expensive (20.1 percent).

(5) Products associated with ‘Made-in-Korea’

Products that are associated with “Made-in-Korea” were mobile phones (29.1 percent), home

electronics (28.4 percent), automobiles (22.7 percent) and cosmetics (14.5 percent). Foreigners’

awareness levels were high in consumer products that are easily branded.

Cell phones have built a strong image associated with ‘Made-in-Korea’ products in all regions, while

home electronics have established solid images in Group II (High Income/New Continent) and Group

III (High Income/Decolonized). In comparison, cosmetics have left impressive images in Group V

(China).

(6) Brand names associated with Korean companies

Among brand names foreigners associate with Korean companies, Samsung marked the highest level

of awareness (83.4 percent), followed by Hyundai (67.2 percent), LG (57.2 percent) and Daewoo

(47.2 percent).

Samsung and Hyundai are well known in most regions, and Group V (China) showed the highest

awareness level of Korean companies thanks to its geographical proximity to Korea.

3. General Views of Respondents

(1) Preference for Korea

Asked whether they have favorable images of Korea, 68.4 percent of the respondents said they “liked”

Korea, 24.4 percent said “so-so,” and 5.0 percent said they “disliked” Korea. The response ratio of

“like” was high in Group IV (Low Income/Decolonized) and Group V (China).

(2) Awareness of Korean Products

As to the awareness of Korean products, 68.2 percent showed high awareness, while 22.7 percent

revealed an average level of awareness.

(3) Awareness of Korea’s Capital City

As many as 88.8 percent of the respondents said they know Korea’s capital is Seoul.

(4) Experiences of Visiting Korea and Length of Stay

As for visiting Korea, 42.7 percent of the respondents said they had. Among them, 41.2 percent stayed

10 days or less, 16.8 percent between 11 days and two months, and 13.7 percent three years or longer.

(5) Plans to Visit Korea

As to whether they have plans to visit Korea, 46.7 percent said “yes,” 35.8 percent said “no,” and

17.5 percent said they are currently living or staying in Korea.

(6) Experiences of Overseas Travel

Asked whether they have traveled abroad, 55.6 percent said “no,” while 44.3 percent said “yes.”

Among those who have experiences of overseas travel, the number of countries they have visited

were 6 to 10 countries and 3 to 5 countries (25.7 percent respectively), 1 or 2 countries (23.5 percent)

and 11 to 20 countries (18.1 percent).

III. Conclusion and Policy Implications

1. Images of Korea, Koreans and Korean Products

□ Korea is an awesome country that has achieved rapid development.

Korea has images of a country that is “awesome,” with a “long history” that has included “rapid

development.” Based on these favorable perceptions, good services and strong national unity stand

out as Korea’s major strengths, but the nation has weaknesses, too, such as being overly competitive

and proud of Korean identity.

Korea’s economic growth has become a role model for low-income, decolonized countries. It is a

benchmarking model for low-income, decolonized countries, and has emerged as the nation they want

to visit.

□ Koreans are hard-working people, but are rather stressed out and have too much self-respect.

The image that best represents Koreans is “hard-working, and they also give friendly impressions as

well as being stressed-out and self-revering people. High-income countries in the old continent

pointed out Korean’ unsociable traits, while high-income, decolonized countries and China said

Koreans have too much self-respect.

□ Made-in-Korea products are high-tech goods, and Korea’s most representative product and

company are mobile phones and Samsung.

Made-in-Korea products have built an image of “high-tech” items, and mobile phones and the

Samsung Group have emerged as the products and the business corporation that best represent Korea,

respectively. Samsung has established such a high brand image that most foreigners do not simply

regard it as a large Korean business group but identifies it with Korea itself. People in high-income

countries on the new continent and high-income, decolonized countries have high awareness of

Korean-made home electronics, while Chinese tend to perceive cosmetics as Korea’s representative

products.

2. Policy Implications

□ Analysis of minute differences in survey results among different regions, and development of issues

for improvement

Korea has accomplished rapid economic development and emerged as a benchmarking model for

low-income decolonized countries, but the nation has some negative images, too. Koreans’ emphasis

on a single-race nation has led to the image of an unsociable people (especially among high-income

countries on the old continent), while China and other Asian countries regard Koreans as self-revering

people.

It is necessary to reduce psychological barriers toward Korea among people in China and other Asian

countries as well as less-developed countries in other regions. With other Asian countries, including

China, and less-developed nations fixed on the superiority complex of Koreans in their ethnic and

cultural identity, the nation will need to make efforts to ameliorate these feelings to build a more

positive image.

□ Analysis of the characteristics of survey results in China and establishment of strategy on how to

make the most of it

Responses from Chinese show some unique characteristics. Chinese tend to perceive Koreans as a

patriotic and self-revering people who are proud of their national identity. Compared with people in

other regions, Chinese predominantly regard Korea as an exciting country, and perceive Korean

products as more fashionable than high-tech, as proven by their selection of cosmetics as products

that best represent Korea.

□ Building a new concept of national brand and exploring ways of linking it to export industries and

products

It is necessary to establish a new concept of national brand that can replace “Dynamic Korea” and

work out a strategy to enhance the nation’s image in the global community. Korea’s rapid economic

growth has resulted from its hard-working national character, which, however, involves some

negative images as an unsociable, stressed-out and self-revering people. Therefore, it is necessary to

draw up an image-rebuilding strategy.

Korea will need to find how to secure a “Korea Premium” by applying a new concept of national

brand to its export industries and products. The nation has to chart out the routes through which its

new image strategy can create positive images for Made-in-Korea products.

□ Drawing up plans to enhance interactions between the nation brand and corporate/product brands

Korea needs to set up strategies to produce synergic effects between the high-tech image inherent in

“Korea brand” and positive corporate brand images. Also necessary is a strategy to maximize the

synergic effects between the image of Korean products as high-tech goods and the positive corporate

images of business groups that represent Korea, including Samsung and Hyundai.

[ Trade Focus, Vol. 12, No. 58, October 2013,

published by the Institute for International Trade,

Korea International Trade Association ]

www.koreafocus.or.kr

Recent Trends in Capital Spending and Policy Implications

Park Joo-young

Senior Manager, Research Department

Korea Development Bank

I. Capital Spending Trends

□ Capital Spending Keeps Downward Trend

Capital spending by the private sector has been in a slump since 2011, with the exception of a brief

rebound last year. Investment in plants and equipment by the electricity and electronic sectors, which

account for half of the nation’s corporate spending, rose in the first quarter of 2012 but was not

sustained.

• Capital expenditure by electricity and electronic firms (%): △ 12.1 (2012/1Q) → △ 7.1 (2Q)

→△ 11.2 (3Q)

Investment into transportation equipment also has remained in the doldrums since the second half of

2010.

Uncertainty abroad has slowed exports, curbing domestic corporations’ appetite for capital spending.

Exports, which led the economic expansion with double-digit growth rates in 2010 and 2011, declined

in 2012.

• Export growth rate (on customs clearance basis, %): 28.3 (2010) → 19.0 (2011) → △ 1.3 (2012)

The Bank of Korea’s business survey index (BSI) on capital spending has lingered below 100,

reflecting the downturn. Exporters showed particular weakness in the survey. According to the Korea

Finance Corp. survey on domestic businesses’ capital spending plans, exporters curtailed their capital

expenditures by 2.3 percent in 2012, compared with the 0.1-percent drop recorded by companies

focusing on domestic demands.

Even before the recent slump, domestic capital investment has had to compete with overseas direct

investment by corporations. Since 2005, manufacturers have increasingly gone offshore in search of

cheaper labor. Meanwhile, foreign direct investment in Korea has been lackluster since 2004, offering

no offsetting input.

□ Slow Demand and Economic Uncertainty

The low capital spending is mainly attributable to tepid demand both at home and abroad as well as

economic uncertainly. Lack of cash reserves or financing difficulties have not been barriers to larger

companies’ ability to invest in plants and equipment. But small and medium-size enterprises (SMEs)

are facing financial constraints. About 18 percent of SMEs cited the shortage of internal funds and

difficulties in financing from outer sources as the reasons for sluggish capital expenditure, while 15

percent of large enterprises made similar replies.

II. Characteristics of Changes in Capital Spending

□ Weakening Influence of Capital Spending

Quantitative evidence points to the waning influence of capital spending on GDP growth since the

latter half of 1997, just before the Asian currency crisis hit Korea. In the pre-crisis period (between

the first quarter of 1990 and the fourth quarter of 1997), the average regression coefficient stood at

0.1, but the ratio fell to an average of 0.05 in the post-crisis period (between the first quarter of 1998

and the third quarter of 2012).

The reduced influence of capital spending in the 2000s was due mainly to the adjustment of

overinvestment in the 1990s and increase in overseas direct investment. Korean companies’ overseas

direct investment reached $44.49 billion in 2011, a seven-fold increase from $6.37 billion in 2001.

Also, the influence of capital spending has drastically changed since the mid-2000s, causing the

domestic economy to destabilize. As capital spending concentrated on the IT industry, the volatility

of investment deepened. The IT industry has high volatility, in part because its technological

development is rapid and because the demand for IT products sensitively responds to economic

cycles.

□ Waning Function of Capital Spending

An analysis based on the Granger causality test showed that capital spending in the 2000s went in

parallel with business cycles or came even later than business cycles. In the 1990s, capital

expenditures were made ahead of business cycles; higher capital expenditure improved GDP, which

led to more capital spending to create a virtuous cycle.

In the 2000s, however, industrial players focused more on their bottom line and capital spending

became much less of an economic bellwether. Businesses increasingly tended to make capital

spending only when they felt the economy was on the rise. With the European fiscal crises prolonging

economic sluggishness around the world, corporations have chosen to maintain and repair the existing

plants and equipment rather than invest in replacements or to expand facilities.

□ Sluggish Export Drags Down Capital Spending

Since the 2008 global financial crisis, the correlation between exports and capital spending has been

strengthened, and the sluggish foreign shipments led to a setback in plant and equipment investments.

As exports accounted for an increasingly larger share of the national economy, the correlation

between exports and capital spending also rose.

• Exports/GDP: 31.5% (1990s) → 41.6% (2002) → 56.2% (2011) → 54.8% (first three quarters of

2012)

According to a correlation analysis based on time series, the relationship between exports and capital

spending strengthened after the global financial crisis (between the fourth quarter of 2008 and the

third quarter of 2012) more than it did before the crisis (between the first quarter of 2000 and the third

quarter of 2008).

Since the global financial crisis, capital spending’s sensitivity to exports has risen. The exports’

regression coefficient stood at an average of 0.8 in the pre-crisis period (between the first quarter of

2000 and the third quarter of 2008), but the comparable figures rose to an average of 1.0 in the later

period (between the fourth quarter of 2008 and the third quarter of 2012).

As the correlation between capital spending and exports has strengthened, a recovery in exports

probably will exert greater influence on the reinvigoration of capital spending than before.

III. Possibility of Continuing Doldrums in Capital Spending

□ Capital Spending Falls Short of Optimal Levels

Since 2001, capital spending has fallen short of reaching optimal levels. As the result of making an

analysis by assuming the long-term balance equation, the capital spending gap was found to have

remained negative since 2001.

Capital expenditure recovered in the wake of the global financial crisis to reduce the scope of

underinvestment against GDP, but the latter has re-expanded recently. A large-scale capital spending

was made in 2010, but the growth has since slowed down amid increasing uncertainty because of the

prolonged fiscal crises in Europe and other factors.

The recovery of demand will very likely be slow both at home and abroad, causing concerns about a

prolonged slump in capital spending. Despite the improvement in investment conditions such as a

low interest rate policy and smooth cash flows, the shrunken demand and cautious corporate

sentiment will likely restrain capital spending.

□ Weakened Pressure to Adjust Capital Spending

A visible pickup in capital spending is difficult to expect in most industrial sectors that are struggling

with the economic slump and idled facilities. In the first three quarters of 2012, pressure to adjust

capital spending led to a rebound in the automotive and oil refining industries, but overall spending

for the year was weaker than 2011.

In the shipbuilding, semiconductor, machinery, electronic parts and telecommunication equipment

industries, pressure to adjust capital spending has turned negative.

A considerable number of industries, including automobiles, steel, machinery and semiconductors,

are likely to cut down on their capital spending. Only a limited number of industries, such as

food/beverages, metal working and oil refining, plan to boost capital spending.

□ Underinvestment Feared to Continue through 2013

Domestic capital spending in 2013 is assumed to be slightly better than last year thanks to relatively

less fiscal turmoil in Europe and better export growth, but it will still likely fall short of optimal levels.

According to a capital spending survey conducted by Korea Finance Corp., non-manufacturing

industries’ capital expenditure is estimated to rise 3.6 percent, but that of the manufacturing sector is

expected to fall 5.2 percent. The pressure to adjust the manufacturing industries’ capital spending,

which had gradually declined since 2010, turned negative in 2012 and has since remained there.

The economic uncertainties at home and abroad are likely to dampen businesses’ investment mindset.

Despite a rebound in exports resulting from major economies’ gradual recovery, any visible recovery

of capital spending is hard to expect because of the aggravated investor sentiment and ramped-up

productivity from current facilities.

Although the investment environment is improving in terms of cost due to the low interest rate and

strong currency, most domestic businesses remain cautious about capital spending. While exports are

believed to be increasing in 2013, owing to the slow but steady recovery of global economy, the

rebound will be limited by the prolonged strength of the Korean won as well as the aftereffects of

fiscal crises.

By industry, IT products such as semiconductors and LCDs are assumed to take the lead in export

growth, but there are fears that steel and shipbuilding will remain bogged down.

Sluggish capital spending slows down economic recovery in the short term, and hinders the

accumulation of capital in the long term, causing the nation’s growth potential to weaken.

IV. Countermeasures

The government should try to dissolve economic uncertainty and improve the investment

environment to help domestic businesses become more confident of investing. In the short run, it

needs to encourage the private sector’s investment by expanding public-sector investment. The

government needs to create effective demand by expanding public-sector investment within the extent

of not aggravating fiscal health, thereby triggering investment by the private sector.

By maintaining the consistency of economic policies, the government should also try to create an

environment conducive to reinvigorating corporate investment in the medium to long run. Korean

companies are currently expanding their overseas investments, so the government must create an

environment in which the domestic businesses give investment priority to their home country. It

should improve the investment environment at home by developing manpower in science and

engineering, reducing logistics cost and easing regulations on corporate activities.

At the same time, the government should seek to improve the structure of capital expenditure

currently concentrated in large businesses and IT industry. Capital spending concentrated in

electricity and electronic industries is likely to hurt economic stability, as these sectors are sensitive

to the demands for IT products laden with high volatility. The intensifying concentration of capital

spending on large businesses also has widened polarization in capital expenditure.

Although capital spending by small- and medium-sized enterprises is very likely to slow down due

to the economic sluggishness, the government will need to identify SMEs with high growth potential

and focus its financial support on them. Capital spending by SMEs tends to shrink not only because

of economic cycles but because of insufficient capital. If the government extends funding for SMEs

that have temporary liquidity shortages or worsening profitability, it will help to enhance the growth

potential of national economy, too.

By helping to improve conditions for SMEs to raise funds from direct financing sources, the

government will be able to enhance their access to the direct financing market so that they can use it

more frequently as a funding source.

[ KDB Research Report, February 2013,

published by Korea Development Bank ]

www.koreafocus.or.kr

South Koreans’ Increasing Awareness of the Need for Unification

Lee Yong-hwa

Senior Researcher, Hyundai Research Institute

Hong Soon-jick

Senior Research Fellow, Hyundai Research Institute

I. Overview

Despite a slowdown in public debate on unification amid the ongoing tense relations between South

and North Korea, it is a task that must be completed for the Korean nation to restore its identity in the

global community.

Unification will also help South Korea realize its growth potential and North Korea recover its

economy. In the South, it will contribute significantly to creating new engines of growth by boosting

domestic business, easing the problems of low birth rate and population aging, implementing a

complementary readjustment of production and industrial structure, and fostering a Northeast Asian

hub. In the North, unification will help alleviate chronic shortages of food, energy and hard currency.

In her inaugural address, March 1 Independence Movement Day speech, and remarks at the

Unification Ministry earlier this year, President Park Geun-hye stressed the need to lay the

groundwork for opening a “happy period of unification” through trust building on the Korean

peninsula. For this, the government renamed the Inter-Korean Cooperation Fund Act the “Inter-

Korean Cooperation and Unification Fund Act.”

Meanwhile, the government is establishing a cooperative network of domestic and overseas think

tanks concerned about Korean unification and North Korean affairs, and developing educational

content to raise the public’s awareness of unification.

The Hyundai Research Institute surveyed South Koreans’ views on unification from October 23 to

November 4, 2013. Telephone interviews were done with 814 ordinary citizens aged 19 or more, and

questionnaires were sent to 105 experts. The experts included researchers and professors specializing

in unification, foreign affairs and national security, and the heads of businesses operating at the inter-

Korean Kaesong Industrial Complex. The maximum sampling error was estimated to be plus or minus

3.08 percent at a 95 percent confidence level.

II. Survey Results

1. Perceptions of Unification

The poll showed that South Koreans are tired of hearing government statements about the benefits of

unification, results of research on unification at home and abroad, and the prolonged tense relations

between the two Koreas. However, most ordinary citizens and all experts recognized the need for

unification, with experts showing a much higher ratio of approval than ordinary citizens.

The percentage of affirmative responses increased about 5 percentage points, compared with a similar

poll in 2012. The younger the respondents, the lower the belief that unification is needed (66.8 percent

among those in their 20s, 74.9 percent among those in their 30s, 84.6 percent among those in their

40s, and 84.2 percent among those in their 50s and older).

Both ordinary citizens and experts had a positive view of the benefits of unification. Asked if they

believed unification would be in the national interest, the majority of ordinary citizens and an absolute

majority of experts answered affirmatively. The ratio of affirmative responses increased in both

groups, compared with a similar survey in 2011.

Among the ordinary citizens, relatively high ratios of affirmative responses were made by men (76.5

percent), those in their 40s (74.4), white-collar workers (73.3) and progressives (74.3).

2. Type and Timing of Unification

Most respondents preferred a complete political and economic unity, while predicting it will take

more than 11 years to achieve unification in such a manner.

• Type of Unification: Compared to previous years, both ordinary citizens and experts took a “positive

view of unification,” envisioning “complete unification.” The largest proportions of both groups

advocated “a completely unified nation” in political and economic terms.

Especially, the proportion of ordinary citizens who preferred a “positive view of unification,”

envisioning “complete unification of the nation,” consistently increased, while that of those who held

a “passive view of unification,” envisaging “free travel between the two Koreas” or “status quo

maintenance,” decreased. The proportion of experts who preferred a “positive view of unification,”

envisioning “complete unification of the nation,” rose, while that of those who held a “passive view

of unification,” envisaging “one country, two systems,” declined.

• Timing of Unification: Almost no experts believed that unification is impossible. But about 20

percent of ordinary citizens did. The majority of both ordinary citizens and experts predicted that it

will take more than 11 years to achieve unification. Experts tended to expect unification will require

more time than ordinary citizens.

Among the ordinary citizens, relatively high ratios of men (58.5 percent), those in their 30s (65.6)

and students (74.1) picked ”more than 11 years.”

3. Cost of Unification

A larger percentage of people, especially ordinary citizens, showed positive attitudes toward bearing

unification costs. In case of ordinary citizens, the proportion of respondents who would bear “less

than 10,000

won a year” decreased, while that of those who would bear “more than 110,000 won a year” increased

by 12.0 percentage points, compared to 2010. Especially, the proportions of citizens who “don’t want”

to pay any amount and who would bear only “10,000 won a year” has decreased to 51.9 percent in

2013 from 72.1 percent in 2010.

Nonetheless, the percentage of ordinary citizens who were willing to pay a large amount (more than

110,000 won a year) stood at 15.2 percent, still far lower than 66.7 percent of experts. Among the

experts, the percentage of respondents who were willing to bear “more than 110,000 won a year,”

decreased to 43.1 percent in 2011 (after North Korea's shelling Yeonpyeong Island on November 23,

2010), down 31.3 percentage points from 74.4 percent in 2010 (before the shelling). But it rose to

66.7 percent in 2013.

This suggests that the experts were keenly aware of the need to make preparations for unification,

regardless of the tension in inter-Korean relations.

4. Influence of Foreign Countries

Respondents who held a positive view of China and a negative view of the United States and Japan

notably increased. The proportion of respondents who held a positive view of China increased

significantly, while that of those who took a negative view of the country dropped drastically.

Proportions of both ordinary citizens and experts who considered China the second most influential

country after the United States that will help Korea’s unification increased significantly. (The

proportion of ordinary citizens increased 8.9 percentage points and that of experts 16.4 percentage

points in 2013, compared to 2012.) The percentage of experts who held a positive view of the United

States dropped 16.7 percentage points, and those who took a negative view rose 15.4 percentage

points.

In particular, the percentage of ordinary citizens who took a negative view of Japan more than

doubled. This suggests that diplomatic friction between Korea and Japan over the territorial issue

surrounding Dokdo island and the latter’s distortion of history has had negative effects on general

citizens.

III. HRI Peace Index for the Fourth Quarter of 2013

The Hyundai Research Institute Peace Index for the third quarter shows that inter-Korean relations

“remained tense” despite the reopening of the Kaesong Industrial Complex. The expectations index

for the fourth quarter fell slightly due to North Korea’s indefinite postponement of reunions of

families separated by the Korean War.

• HRI Peace Index: The HRI Peace Index stood at 33.9 for the third quarter, showing that inter-Korean

relations still “remained tense.” The index was 30.8 during the second quarter in the wake of the

suspension of the Kaesong Industrial Complex, but slightly rose to 33.9 after the joint industrial park

reopened, up 3.1 points quarter-on-quarter.

• Expectations Index for the Fourth Quarter: The HRI Peace Index in the fourth quarter had another

slight quarter-on-quarter drop. But it seems likely that the current state of “coexistence of cooperation

and confrontation” will continue. The expectations index for the fourth quarter of 2013 stood at 44.1,

down 2.6 points from the third quarter. But the situation is slightly less gloomy than when the

operations of the Kaesong industrial park were suspended.

The downward spiral was curbed by North Korea’s recent announcements of economic reform

policies and moves by surrounding countries to resume the six-party nuclear disarmament talks. But

experts seemed to have been influenced negatively by the lack of proactive efforts that could improve

inter-Korean relations, including resumption of family reunions and easing of restrictions on travel,

communications and customs for the Kaesong industrial park.

• Review: With the reopening of the Kaesong industrial park as momentum, both the expert review

index and the quantitative analysis index rose slightly. But the quantitative analysis index for 2013

turned out to be lower than in previous years.

1) Expert Review Index (32.8 in the second quarter → 36.7 in the third quarter, 2013)

In a survey of 105 experts, a large proportion of respondents took a slightly favorable view of inter-

Korean relations than in the previous quarter. The expert review index for the third quarter rose by

3.9 points to 36.7, hitting a two-year high since the third quarter of 2011.

This suggests that the experts were influenced positively by the reopening of the Kaesong industrial

park and North Korea’s recent announcement of a “new economic policy” focusing on developing

special economic zones to open up doors to the outside and lure more foreign investment.

2) Quantitative Analysis Index (28.8 in the second quarter → 31.0 in the third quarter, 2013)

The quantitative analysis index rose, showing that there was some improvement in the inter-Korean

relations. A slight increase in the quantitative analysis index for the third quarter was attributed to a

significant rise in political and military “event indices,” despite a drastic reduction in inter-Korean

economic cooperation in the wake of the suspension of the Kaesong industrial park.

But the quantitative analysis index for the third quarter of 2013 was lower than those after North

Korea’s sinking of the Navy corvette Cheonan (34.4), shelling of Yeonpyeong Island (34.5), and

third nuclear test (39.9).

① Event Index (29.9 in the second quarter → 46.5 in the third quarter, 2013)

The event index stood at 46.5 in the third quarter, up 16.6 points from the second quarter, showing

that there was a significant improvement in inter-Korean political and military relations. This

suggests that positive influence was brought about by the efforts of both sides to normalize the

Kaesong industrial park, North Korea’s enactment of the economic development zone law aimed at

expanding special economic zones, and a North Korean female soccer team’s visit to South Korea

to participate in the EAFF Women’s East Asian Cup for the first time in eight years.

② Exchange Index (27.7 in the second quarter → 15.4 in the third quarter, 2013)

The exchange index reached 15.4 in the third quarter, down 12.3 points quarter-on-quarter, hitting a

record low since 2010. The large drop was attributed to a significant reduction in trade volumes

between the two Koreas to the first quarter level in the wake of the suspension of the Kaesong

industrial park. ($220 million in the second quarter → $52 million in the third quarter)

• Analysis by Political Inclination: Regardless of their political inclination, experts took a more

positive view of inter-Korean relations in the third quarter than in the previous quarter. This level of

evaluation will likely be maintained, despite a slight drop in the index.

The expert review indices for the third quarter by political inclination were 35.0 for conservatives,

39.5 for moderates and 35.1 for progressives, respectively, up 3.0, 2.4 and 7.0 points quarter-on-

quarter, showing a somewhat positive trend. Experts perceived a slight improvement in the current

inter-Korean relations compared to the previous quarter, with progressive experts holding a more

favorable view.

As for the prospect for the fourth quarter, the conservative expert index dropped rather sharply,

while the moderate and progressive expert indices remained stagnant or fell slightly. The

conservative experts’ expectations index for the next quarter dropped by 8.4 points to 41.5, a little

lower than the moderate and progressive expert indices (47.2 and 42.5).

This suggests that despite the reopening of the Kaesong industrial park, the restrictions on travel,

communications and customs have not been eased yet and there even was no attempt to start talks

on resuming family reunions.

[Appendix 1] Outline of the HRI Peace Index

The HRI Peace Index refers to a quantitative indicator of the level of peace on the Korean

peninsula, centering on inter-Korean relations. It is a comprehensive indicator based on both

subjective and objective analyses, consisting of the “expert review index” and the “quantitative

analysis index.”

The expert review index is based on a quarterly survey of experts. It also measures the

“expectations index” based on outlooks for the next quarter. The quantitative analysis index consists

of the “event index” in the political and military sectors and the “exchange index” in the social,

cultural and humanitarian sectors.

The index is measured on a scale of 0 to 100, with 50 being the mean value. The figure 0 means a

state of war between the two Koreas, while 100 indicates the most peaceful situation.

[Appendix 2] Major Exchange Index Variables

[Appendix 3] Poll of Experts on Inter-Korean Relations

□ Outline

- Period: 13 days from October 23 to November 4, 2013

- Method: A questionnaire survey

- Targets: A total of 105 experts on unification, foreign affairs and national security, including

researchers, professors and CEOs of businesses operating at the Kaesong Industrial Complex

- Sampling error: A maximum sampling error of plus or minus 3.08 percent at a 95 percent confidence

level

□ Questionnaire

1. Political and Military Relations

2. Economic Relations

3. Social, Cultural and Humanitarian Relations

[ VIP Report, No. 538, November 18, 2013,

published by Hyundai Research Institute ]

www.koreafocus.or.kr

- Google to Promote Hangeul

Google to Promote Hangeul

Chae Min-gi

Staff Reporter

The Chosun Ilbo

“The Korean script is one of the key reasons why Korea’s digital technology has done so well,” said

Google Executive Chairman Eric Schmidt, 58, at a press conference held at the National Hangeul

Museum in Yongsan-gu, Seoul, on October 30. The museum is scheduled to open in 2014. The

Google boss promised that his company will be part of the effort to spread Hangeul and Korean

culture worldwide via the company’s online services.

“Hangeul is one of the world’s most intuitive alphabets,” Schmidt said. “What amazed me is the fact

that as far back as 600 years ago the ruling class in Korea made it easier to organize information by

systematizing the language and letters used by ordinary people.”

Google and the Korean Ministry of Culture, Sports and Tourism reached an agreement in 2011 to

jointly foster culture and the content industry. The two parties announced their new plan as well as

the outcomes of their joint projects over the past two years at the press conference.

Schmidt continued, “It is a pleasure for me to participate in making Korean culture accessible to the

rest of the world. I have learned how to do the ‘Gangnam Style’ horse dance. A lot of people who

didn’t know anything about Korea until they started to like K-pop want to know more about where it

comes from. We can assume that if only 1 percent of those who enjoyed ‘Gangnam Style’ really come

to think about learning about Korea, it would equal 18 million people.”

As part of its plans to spread Korean culture in the global community, Google will cooperate with the

National Hangeul Museum to create content for future exhibitions at the museum in the compound

of the National Museum of Korea. The global tech giant plans to help the development of a web-

based program to teach the basic principles of the Korean writing system. It will also support the

development of Hangeul-learning educational facilities targeting foreigners.

The cooperation agreement includes a plan to promote Korean culture through the Google Cultural

Institute, which digitizes data about the world’s cultural heritages for online availability around the

world. The institute features the Google Art Project, which provides online access to artworks from

partner museums around the world, and Historic Moments, which exhibits photos and videos related

to significant moments in human history.

The Korean Art Museum Association and the National Museum of Korea are involved in the Art

Project, providing artifacts for the online services. Starting from October 30, the Google Art Project

introduces 4,000 pieces of artwork provided by the Korea Database Agency. Historic Moments will

also expand the coverage to feature the history of Korean film, hanok, traditional Korean housing,

and hanbok, traditional clothing.

“Anyone who has interest in Korean culture can visit this online museum,” Schmidt said. During the

press conference, Chairman Schmidt and Culture, Sports and Tourism Minister Yoo Jin-ryong wrote

a few words in Hangeul on hanji, traditional handmade Korean paper. Minister Yoo wrote “Hangeul”

and Chairman Schmidt wrote “Love.”

That same afternoon, Schmidt attended the “Big Tent” event, a global conference organized by

Google at Platoon Kunsthalle in Seoul. At the conference he recalled his visit to North Korea in

January. He said that Internet access is very limited throughout North Korea. “North Koreans are not

allowed to use the Internet without somebody else watching them, if at all. They should be allowed

to get access to the Internet,” he said

As for ways to promote Korean culture, the Google boss suggested, “First, as many cultural contents

should be secured as possible. I hope the Korean government will try to foster an environment where

individuals are inspired to be creative, rather than regulate online content.”

[ October 31, 2013 ]

www.koreafocus.or.kr

- Why Do Koreans Say ‘Keep Working Hard’?

- Poems by 50 North Korean Poets and Criticism

Why Do Koreans Say ‘Keep Working Hard’?

Park Hun-sang

Staff Reporter

The Dong-A Ilbo

“Who Are Koreans?”

By Kim Mun-jo et al., 21st Century Books, 564 pages, 28,000 won

With the words “I am so busy” practically hanging out of their mouths, Koreans are known as

workaholics. According to Professor Yu Seung-ho of the Department of Visual Culture at Kangwon

National University, a workaholic is someone who feels obligated by something or someone to

undertake certain work, not necessarily someone who voluntarily decides to work on something. The

state of “being addicted to work” may seem affirmative because you are engaged in something, but

“addiction by work” may destroy your body and mind.

The expression “sugo haseyo,” which literally means “keep working hard,” used by colleagues is

unique to the Korean language. In a similar situation, people in English-speaking countries would

say, “Take it easy.” In Korea, when you say “nolgo itne,” which means “not working hard,” it is meant

sarcastically. If you want to take it easy, you have to do it when others are not watching.

It seems there is some truth to the analysis that Korea is a society where overworking is encouraged.

It seems almost like a cliché to bring up the OECD statistics, which show Korea with the highest

number of work hours annually but with labor productivity lower than many others. Professor Yu

summarizes the seriousness in two sentences.

“Many men suffer from impotence or premature ejaculation, but few men commit suicide because of

it. However, when a man is economically incapable, he oftentimes feels socially alienated. Due to

feelings of disappointment and frustration toward oneself, he may become depressed or commit

suicide.”

The Social Mental Health Institute of Samsung Medical Center has studied the identity of Koreans

since 2005, and it planned to publish a book on the research. Professor Kim Mun-jo of the Department

of Sociology at Korea University served as chief editor and advisors from various fields selected 38

themes and professors who were best qualified to write about them. The writing was done in layman

terms for the general public, and each theme is no longer than 5 to 10 pages.

The book provides answers to the questions asked by contemporary Koreans. To the question of

“Until when should parents be responsible for their children?” Professor Hwang Mae-hyang of the

Department of Education at Kyeongin National University of Education pointed out that traditional

and contemporary values have been mixed creating confusion among parents. The working mother

does not require her children do household chores, so a daughter feels no need to hurry into marriage

because it is easier for her to have her mother cook and clean for her. The father who is regarded as a

money-earning machine is anxious because he is afraid he might become a failed father as soon as he

loses his source of income.

Professor Kim Gye-hyeon of the Department of Education at Seoul National University said that

Koreans prefer civil service as an occupation, and commented: “The children are the players, not the

parents. Players take into account the advice given by the coach or the caddy, but at the end it is up

to them, especially when they are playing sports called profession, to which they dedicate their whole

life.”

The finished mosaic of 38 themes shows the true Korean self. Professor Emeritus Lee Ho-young of

Ajou University’s School of Medicine said that Koreans feel no shame. In the traditional Confucian

society of Korea, shame was considered to underlie every thought and action of man. However, in

present times, shame is put on the backburner because it only gets in the way of people who have to

succeed no matter what the cost. Adults and children alike know no shame. Adults have no qualms

about doing embarrassing things so long as they can climb up the ladder to success, and children grow

up as unhealthy narcissists because they are never told no.

Professor Kim Mun-jo drew three axes in the “Map of the Various Heart” and plotted Korean at the

intersection. 1) “Birds of a feather” ― relationships matter; 2) “Speed” ― only now matters; 3) “More

is beautiful” ― constant need for compensation. In sum, people who are close want to lead a blissful

life together. Wishing for the supreme good is forever on the minds of the Koreans.

The book deals with almost all topics, including power, empathy, regional sentiment, childbirth,

marriage, death, work, religion, private education, happiness, lookism, etc. Recent statistics, live

examples, insightful analysis and criticism add to the fun reading. Reading the book feels like looking

at one’s reflection in the mirror. You acknowledge familiar features staring back at you, but sometimes

you tilt your head to the side wondering if it is really you. But if you look hard enough, there is a brief

moment in which you can recognize the Korean identity as clear as ice.

[ November 9, 2013 ]

www.koreafocus.or.kr

Poems by 50 North Korean Poets and Criticism

Choi Jae-bong

Staff Reporter

The Hankyoreh

“Study of North Korean Poetry” (Volumes 1-6)

By Lee Sang-suk et al., Somyong Publishing Co., Each volume 42,000-89,000 won

“Traces of detached observation still remain in this piece that we used to sense in his earlier works.

However, the poet is breaking out of his previous shell of the introverted thinker and expanding his

realistic penetration into reality. Nonetheless, poet Ri Yong-ak (1914-1971) was not able to enter the

world of the socialistic realist writer until 1945 when Korea was liberated from the Japanese colonial

rule.”

Such was the criticism provided by North Korean critic Kim U-chol on poet Ri’s trademark poem

“Old House,” published in 1938. We can see that the critic drew a line between critical realism and

socialist realism, and positioned the poem in the early stage of Ri’s literary life where he still had

some growing up to do.

The works of 50 well-known North Korean poets and critical reviews of them have been collected

and published. They include Paek Sok, Ri Yong-ak and Pak Pal-yang, who lived in North Korea or

who had defected and are now dead. Surviving North Korean poets such as Tong Gi-chun, O Se-yong

and Ryom Hyong-mi are also included. The six-volume book (each volume is about 1,000 pages long)

was written and edited by North Korean literature experts, including Professor Lee Sang-suk of the

College of Global Humanities at Gachon University.

The first two volumes include the poems and criticism. The middle two contain significant critical

articles about North Korean poetry as well as documents such as the platform of the General

Federation of Korean Literature and Arts Unions, regulations of the Korean Writers’ Alliance, and

“Times and Artistic Perspectives” from Kim Jong-il’s “Theory of Juche Literature.” Volume 5 is

composed of writings about North Korea’s history of prose, and the last volume contains dissertations

written by the researchers who participated in the project.

In her article, titled “North Korean Writers and the Korean Writers’ Alliance,” in Volume 6, North

Korean defector poet Choi Jin-i wrote that North Korean writers are suffering much in political

shackles. She mentioned that politics controlling literature and solely enjoying the benefits of

literature is killing literature altogether.

[ November 11, 2013 ]

www.koreafocus.or.kr

- Chung Kyung-wha: ‘When I laid down the bow, the sound came to me.’

Chung Kyung-wha: ‘When I laid down the bow, the sound came to

me.’

Kim Sin-yeong

Staff Reporter

The Chosun Ilbo

♦ Queen of the Violin

The bow stopped. The audience flinched. With fire in her eyes, Korean violinist Chung Kyung-wha,

65, performing at the National Center for the Performing Arts in Beijing on October 18, glared at the

audience. The violin virtuoso had stopped mid-performance because of distracting noises in the

theater ― cell phones, footsteps and the like. This happened five seconds into her performance of

Beethoven’s Violin Sonata No. 5 “Spring.” Chung stood on stage looking sharply around the theater

for a minute before giving piano accompanist Kevin Kenner the signal to start again from the

beginning.

As I waited at her hotel for our interview, I was a little nervous for it was the morning after this

particular incident. Stopping a performance for whatever reason could not be a pleasant thing for the

artist. I was worried that she would be very much on edge. Chung has always been famous for being

a perfectionist. In fact she was often infamous. When she was young, if she wasn’t satisfied with her

playing she would go out into the hallway and bash her head against the wall or roll around on the

floor backstage.

Chung entered the lobby lounge at exactly 10 a.m. as promised. Her short hair, dyed reddish brown,

was a little messed up. When I greeted her, she flashed a smile. “You saw it, didn’t you?

Yesterday…when I stopped playing,” she said. “The atmosphere [inside the concert hall] was too

distracting and I wanted to put it right. And it worked! Ha. Ha.”

This now aging genius looked amiable and at ease. The cold, sharp and intimidating Chung Kyung-

wha of the night before who bulldozed everyone around her was not apparent. When she mentioned

her pet dogs, her eyes lit up as if she was bragging about a boyfriend. When she talked about her sons

she was just like any other doting Korean mother. She was in the middle of an Asian tour that covered

four cities in Japan, seven cities in China and four cities at home in Korea. The tour is a kind of

announcement to the world that Chung Kyung-wha is back on the stage again after a five-year absence

due to a finger injury in 2005.

Chung is Korea’s first true “world star.” She made her name known around the world back in 1967

when she shared first prize in the prestigious Leventritt Competition with Pinchas Zukerman. Over

the past 40 some years since then, she has been a star performer on the international scene.

“The time I spent away from the stage was nice and free. Look at this. I don’t think I’ll ever be able

to grow my hair long again,” she said as she rumpled her hair with her pale fingers. That time during

which she laid down the violin ― what did it give and what did it take from this woman who has

been called “a violin wizard?”

♦ ‘Ah…I was good, ferociously good.’

When we had settled in for the interview, Chung suddenly said, “I have a lot of questions I want to

ask you.” From the very first question, dealing with them proved to be rather an ordeal: “How was

the sound yesterday?” “It sounded a bit soft to me…” I answered. Chung looked surprised. “Really?

The first movement of Cesar Franck’s Violin Sonata ends suddenly with that soft sound. Did you hear

it?” “I think so,” I mumbled. “What did you think of my dress?” “How did ‘Love’s Greeting’ sound?”

“Don’t you think the Chinese audiences are the least responsive to Mozart?” … After rapidly shooting

questions at me regarding the previous night’s performance, she said, “Okay! What are your

questions?”

Q. Stopping the performance for a moment ― didn’t that bother you all night?

A. The sound of the ventilator was so loud, and everyone in the audience seemed to be fidgeting…I

couldn’t continue. I wondered “How am I going to fix this?” So as soon as I started, I dragged the

bow down and stopped all of a sudden. In the past, in the same situation I would have caused a fuss

and almost fainted from anger. But this time I just thought, “Hmm…this won’t do.” So I stopped. But

the point is that I focused on the piece again and was able to finish in a good mood. I was fine.

Q. Does this mean you’ve become mellow?

A. In the past five years when I had to take a break from playing the violin, I looked back on my life

and sorted things out in my own fashion. I believe in God, so I thought “Why is he putting me through

this ordeal?” and countless times I returned to the words of my mother (Lee Won-suk passed away in

2011) who used to say, “Calamity turns to good fortune.” In the past I was always chasing something

but afraid of losing sight of it. But when I stopped tormenting myself in that way, I found peace of

mind.

Q. How did you hurt yourself so seriously that you had to stop playing for five years?

A. In 2005, when I was preparing for a performance, the muscles in my second finger began to hurt.

I had to play so I went to the doctor’s and had a cortisone (a type of painkiller) injection, and that’s

where the trouble started. My finger didn’t hurt so I played, but that strained the muscles and they

were completely damaged. I had been under treatment for a long time for hepatitis C, and my

constitution had changed a lot. On top of that I had an injection, so my finger (muscles) gave way.

Q. You didn’t have your fingers insured?

A. Ah…I’m not interested in that sort of thing. If anyone mentioned that kind of insurance in front of

our mother, she would say, “You’re protected by God. What do you need insurance for?” I don’t

prepare for the future. I tend to take life as it comes.

The violin is played by pressing down on the strings with four fingers, minus the thumb. The second

finger plays the most important role. For a violinist, hurting the second finger on the left hand is

serious, comparable to figure skater Kim Yuna hurting her Achilles heel. “I was 57 at the time. Not

young,” Chung recalled. “I came to terms with the idea that I might never be able to play again.” With

this unexpected injury, Chung turned to teaching. Here was another life altogether, and sometimes

she took on as many as 10 students at a time at Juilliard in New York. When about three years had

passed, her second finger began to move a little. After practicing awhile, Chung made a cautious

return to the stage in 2010, playing the Brahms Concerto with the British Philharmonic Orchestra,

which came to perform in Seoul.

Before her official “comeback” on November 8 at the Seoul Arts Center this year, she appeared in

the Daegwallyeong International Music Festival and in occasional recitals big and small. From the

time she first started playing again in 2010 until now can be seen as a “warm-up” period. It seems

Chung has resolved to show in her upcoming performance that she is truly back in form. In a recent

interview, her younger brother Chung Myung-whun (artistic director of the Seoul Philharmonic

Orchestra) said, “My sister never left the stage.” When I mentioned this, however, she raised her voice

as she said, “What is he talking about? I completely retired then!”

Q. You never announced your retirement.

A. I injured my finger and was no longer able to play the violin. Did I need to make an announcement?

In my mind I had completely retired.

Q. What was it like to put down the violin for five years?

A. When I thought I would never perform again I was able to listen to my past recordings with an

empty mind. Before then I had never even looked at my albums. There were always parts that I didn’t

like. Those parts were irritating and made me flinch. But when I started teaching I found that I had to

listen to my albums. As I had hurt my finger, I was not able to demonstrate anything for my students.

So I played them my albums and taught them that way.

Q. What was it like to hear your own recordings?

A. I thought, “Wow! I was good, ferociously good.” Especially in the case of the William Walton

Concerto, I put my whole heart and soul into the performance. So when I hear it again, it’s fantastic.

At the height of talking about her past albums, Chung suddenly slumped back against the couch and

caught her breath. “I’m too tired,” she said, in English. “It’s tiring to praise my own performance.”

She then asked for a glass of water, but without drinking it she suddenly said, “OK. Next question!”

♦ ‘Life is something you should learn with your whole being.’

While her bow was down, Chung Kyung-wha lost several people close to her. Her eldest sister among

seven siblings, flutist Chung Myung-so who took the 12-year Chung Kyung-wha to study at Juilliard,

passed away in 2007, and her mother, her spiritual prop, followed in 2011. Christopher Raeburn, who

produced her albums, also died in 2007. “The people I loved and respected most passed away one

after another,” Chung said. “They say when you have a baby all you seem to notice is other nappy-

changing mothers. When you grow old, all you can see are the people who pass away.”

Q. You experienced a lot of sadness all at the same time.

A. From those deaths, I learned that life is something that you learn with your whole being. No matter

how much a smart person learns with the head, it can’t compare to the things you learn by experience.

People have to learn things by experiencing them for themselves. Music is something that comes out

of the body, so it has to be experienced and felt again and again. Of course, it would be different for

a mathematician. I think a lot about the German composer Johannes Brahms. He liked to travel and

lived among the ordinary people. His beautiful music emerged from such a life.

Chung Kyung-wha lives in Gugi-dong, Seoul, with her two dogs named Johannes after Brahms, and

Clara for Clara Schumann, the pianist and wife of Robert Schumann, whom Brahms loved all his life.

As she boasted of her dogs, Chung naturally moved onto a topic “more important than the violin ―

her two sons. In 1984 she married a British businessman. She has two sons, whose Korean names are

Jae-gon and Yu-jin (Frederick and Eugene, respectively). Her eldest son works at Citigroup and her

second son, who majored in computer science, works at Google. Both live in the United States and

Chung shuttles between her homes in Seoul and New York. “I’ve arranged to spend the year-end

season with my younger son,” she said happily.

Q. Are you disappointed that your sons are not musicians?

A. Disappointed! You don’t know how happy they are. My eldest son actually played the violin and

even entered Juilliard. But within three months he realized “This isn’t right for me” and quit. Jae-gon

has great musical talent. But his hands sweat heavily. So when he decided that he couldn’t continue

he quit without thinking twice. How unbelievably smart is that! Ha. Ha.

During the interview Chung peppered her conversation with the words “unbelievable” and “great,”

an indication of the passion with which she speaks. At the same time, she lamented her lack of stamina

these days: “I can feel the energy draining away from me.”

Q. When do you feel that your energy is failing?

A. Oh…If you were 65, you wouldn’t ask such a question! When you’re this age, you just don’t have

the same strength as you used to. Chinese newspaper articles put my age at 63. Perhaps they thought

65 was just too gruesome and cut my age down for me. When I saw the number 63 in the newspaper

I groaned before I realized what I was doing. “Ugh! Why is this old lady holding a concert?” That’s

what I would think if I were somebody else. That’s probably what the Korean audience will be

thinking when they come to my concert at the Seoul Arts Center. “Let’s see how much this old lady

can do,” they’ll be saying to themselves.

Q. Are you afraid that they’ll say you’re not as good as you used to be?

A. I’ve always said that I’ll quit when I pass my peak. I still think the same way. At first I couldn’t

imagine performing again. So I felt as if I was living in a dream. For me, this is the moment I am at

my peak. When I began performing with Kevin Kenner in 2011, I thought to myself, “At this age, can

I continue for another three years?” But already, those three years are almost over.

Q. Has Chung Kyung-wha the perfectionist, the person who would bash her head against the

wall, disappeared?

A. In the time I was resting due to my finger injury, I came to the realization that “all people are

destined to lose their way.” I regret that I didn’t keep going, even if I wasn’t sure where I was headed.

Now that I look back, all the things that I regret in life are the things that I didn’t do. The things I

backed away from for fear of making a mistake.

Q. Do geniuses lose their way too?

A. When I say “lose the way,” I don’t mean just getting lost but wandering about in search of

something. There are times when you take the wrong path and run this way and that. I can’t begin to

tell you how much I fumbled around when I was so intense on finding the right instrument. My body

couldn’t keep up with my head, so I took an overly timid attitude to life. But when I found that I

couldn’t move my hand properly I concluded, “It’s better to forge ahead even if you get lost, rather

than hesitating in pursuit of perfection.” When you can move, that is.

Q. What are you searching for now?

A. These days I love to hear the middle tone. Sounds close to the human voice. I wonder if the middle

tone isn’t the most beautiful. So I’ve taken up the viola, which produces this sound. Our mother

always said, “Be faithful to what you’re doing now and keep your eyes on the next goal.” When I

retire from playing the violin, I hope to play chamber music on the viola.

Chung then said, “Ah, there’s one thing I’d like to proclaim in this article. The acoustics in Korean

concert halls falls far behind global standards. While I am living I will strive to see a concert hall built

in Korea that anyone would be unbelievably envious of. Anyone willing to help me, please contact

me right away!”

♦ ‘When the self-punishment stopped, the sound came.’

Chung Kyung-wha started to make her proper comeback in 2011 when she took the role of artistic

director of the Daegwallyeong International Music Festival with her cellist sister Chung Myung-wha.

It was at the festival that she met her current piano accompanist Kevin Kenner, whom she calls “an

angel who fell out of the sky.” The American pianist, winner of the top prize at the International

Chopin Competition and the bronze medal at the International Tchaikovsky Competition, readily

agreed when Chung suggested they perform together, saying, “It’s an honor.” “The aspiration to work

on more chamber music pieces with Kevin is what keeps me going these days,” Chung said.

Q. Does this mean the pianist Kevin Kenner brought violinist Chung Kyung-wha back to life?

A. I’ve had great difficulty performing chamber music duets with pianists. The pianists I wanted to

work with were not generous with their time. And it’s so hard to deal with their egos. Their obstinacy!

Their egos! You have no idea until you have to deal with it. Radu Lupu, Krystian Zimerman, Stephan

Kovacevich… These great pianists gave me a tiny bit of their time and expected me to be grateful. I

am no easy character myself, so any project with these pianists never lasted very long. And then I met

Kevin. It’s only natural that I feel energized.

Q. What do you like so much about him?

A. He produces an unbelievable sound. When I first heard him play Chopin at the Daegwallyeong

festival I was astounded that a human being could produce such music. In yesterday’s concert, you

know how Cesar Franck’s first movement ends suddenly with that soft sound? Some of the great

pianists can’t do that, which irritates them. But Kevin can make the sound just disappear like that

every single time. It’s unbelievable.

Q. Does it take the ability to make small sounds to be a great musician?

A. The greatest high tone is the kind where you ask, “Where is that small sound coming from?” I first

realized this while watching Karajan conducting the Berlin Philharmonic Orchestra (in October

1982). I was sitting in the Carnegie Hall in New York to listen to Richard Strauss’s “Alpine

Symphony” when a hissing sound came from the building next door. I looked around. Then I suddenly

felt humbled. Karajan had been making that barely discernable sound from the stage. Just like

Karajan!

Q. Have you reached that level?

A. In the past I could hear that sound in my head but couldn’t produce it physically, which agonized

me. My bow shook and my heart went thump, thump… I felt as if I would faint. But when I stopped

obsessing over the sound and stopped punishing myself, that sound came to me unwittingly. You

could say my body learned how to make the right sound.

♦ ‘Pain is forgotten, making it possible to go on.’

As 11:30 a.m. drew close, Chung was reminded she had to leave for the airport. She had a concert

scheduled three days later in Shenzhen, China, and had to be on the move. “What?” she said. “Not

yet. Get my luggage and meet me in the lobby. Just leave the violin.” Then turning to me she said,

“All right, continue.”

Q. Is there anyone you envy?

A. Writers. I really envy people who write literature. If I were to be born again, I would like to be a

writer, or work in some related area. Look at Tolstoy’s “Anna Karenina,” the way each and every

character is vividly portrayed and loaded with symbolism. And Shakespeare! It’s hard to understand

how a genius capable of producing such unbelievably wonderful tragedies and comedies was born on

this earth.

Q. Who is the musician you most admire?

A. If I had to choose just one musician in the whole world, I would choose Bach. I am so grateful that

Bach’s most unbelievable masterpieces were composed for the violin. I mean Partita No. 2, Chaconne.

Q. You played Bach in memory of your parents when they passed away, didn’t you?

A. When my father died in 1980, everyone kept telling me to play something in his memory. But I

didn’t want to play in front of everyone, so I told them all to leave. And in the funeral parlor, alone

with my father, I played Bach’s “Aria on the G String.” For a long time afterwards I was unable to

play it again. Then 10 years later, back in Korea, I performed it once more. And I played the same

aria again when my mother died. What’s really amazing is that human beings forget the pain. That’s

how we keep on going.

Q. You once used the phrase “ten thousand percent effort” in describing your younger brother

Chung Myun-whun. What about yourself?

A. Me? There’s no way I can compare with him. You can interpret that as you see fit.

Q. What is your definition of art?

A. Art is… The power of art comes from intuition. It is on another plane altogether. It is the “play of

the spirit” that actually comes from an enormous amount of training.

After giving this rather inscrutable answer, Chung Kyung-wha looked at her watch. “I’m going now,”

she said, and disappeared like a spirit.

♦ The Guaneri Violin

The instrument used by Chung Kyung-wha, queen of the violin, is a 1735 Guaneri del Gesu. It is a

masterpiece previously used by violin greats Jan Kubelik and Michael Rabin, and in the musical

world is commonly called the Kubelik Guaneri. Fewer than 200 violins made by the Italian artisan

Giuseppe Guarneri in the early 18th century are known to exist around the world today. Of them, only

20 are actually used in performances.

In 1967 Chung first purchased a Stradivarius, the other prestige name in violins, and in 1973 when

she turned 25, she purchased the Guarneri, which she has used ever since. At the time of purchase the

Guarneri cost around $250,000. Chung went into debt to buy the instrument and took 10 years to pay

it off. Having spent so much on her violin she had to save money in other areas, so she only stayed in

cheap hotels and if anyone saw her she would run away saying, “I’m not Chung Kyung-wha.”

“When I was young I was attracted to a high tone instrument, and then I came to prefer a low tone,

which the Guarneri produced,” she said. “I was also attracted by Guarneri’s deep faith and character,

as betrayed by the del Gesu attached to his name.” Literally meaning “of Jesus,” del Gesu was not

only attached to Guarneri’s name, it was also engraved on his violins with a cross.

The current going price for Chung’s Guarneri violin is hard to estimate, but it is sure to have jumped

many times in value since Chung purchased it. The Guarneri purchased in England early this year by

an anonymous patron of the arts, now on exclusive lifetime loan to the American violinist Anne Akiko

Meyers, is said to have cost at least 9.8 million pounds.

[ November 2, 2013 ]

www.koreafocus.or.kr

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ISBN 979-11-5604-073-6

Publisher Yu Hyun-seok Editor Lee Kyong-hee Editorial Board

Kang Byeong-tae Chief Editorial Writer, The Hankook Ilbo Kim Hak-soon Visiting Professor, Korea University Kim Yong-jin Professor, Ajou University Hyun Jung-taik Professor, Inha University Hahm In-hee Professor, Ewha Womans University Sonn Ho-chul Professor, Seogang University Hong Chan-sik Chief Editorial Writer, The Dong-a Ilbo Choi Sung-ja Member, Cultural Heritage Committee Peter Beck Korea Represetative, Asia Foundation

ⓒ The Korea Foundation 2014 All rights reserved.