Korea Focus 2014 09

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Table of Contents

- Korea Focus - October 2014

- TOC

- Politics 1. Korea Must Develop a Proactive Eurasia Strategy 2. President Too Removed from the Public 3. What’s the Use of Local Constituencies? 4. Principles in Sustaining Korea-Japan Ties 5. Hopes and Limits in Seoul-Beijing Relations

- Economy 1. To Avoid a Protracted Japan-style Slump 2. What is Missing at Samsung Electronics 3. Seizure of Farmland vs. Food Security 4. Shared Growth in the Tofu Industry 5. Turning Seoul into a Top Tourist Destination

- Society 1. What Korean Religious Leaders Should Learn from Pope Francis 2. Why North Korea Regime Fears Choco Pie 3. Military Soccer, German Soccer, and Korean Soccer 4. Kopinos, Children of Shameful Korean Men 5. Avoid Burnout 6. Spatial Gap between Rich and Poor

- Culture 1. North Korea’s Beautiful Cheerleaders 2. Korean Media’s Coverage of Middle East Affairs 3. Defector Literature and Preparation for Unification 4. ‘Forest of Wisdom’ or ‘Paper Graveyard’?

- Essays 1. Korea’s Rich People Analysis on 2014 Statistics 2. Geography of Jobs in Korea Regional Characteristics and Implications 3. Korean Musical Industry Splendors and Woes

- Features 1. B&B Business Beckons Young Koreans 2. Storytelling is the Key to Tourist Development of Neighborhood Alleys

- Book Reviews 1. Mountains are Archetypal Space of Life to Koreans 2. ‘CSI Agent Report’ of Late Joseon Period

- Interview 1. Jean Chung “I want my photos to bring about small changes in the world.” 2. Chyung Mi-sook “Peng Liyuan was not just glamorous, but a devoted wife.”

- COPYRIGHT

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- Korea Must Develop a Proactive Eurasia Strategy

- President Too Removed from the Public

- What’s the Use of Local Constituencies?

- Principles in Sustaining Korea-Japan Ties

- Hopes and Limits in Seoul-Beijing Relations

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Korea Must Develop a Proactive Eurasia Strategy

Kim Sung-han

Director, Ilmin International Relations Institute

Professor, Graduate School of International Relations

Korea University

Eurasia is a vast expanse that stretches from Western Europe to the Korean peninsula, encompassing

Central Asia, Russia and East Asia. The political and economic importance of this landmass is re-

flected in its history of hegemonic powers, including the Roman, Ottoman and Mongolian empires to

name just a few.

Up to the end of the Cold War, Eurasia was an abstract concept. It became a reality with the breakup

of the Soviet Union and its communist bloc in Eastern Europe. The downfall opened the way for East

Asia to forge connections throughout Europe. For a small, energy-deprived country like Korea, a

Eurasia with vast lands and abundant natural resources is extremely attractive.

As the victor in the Cold War, the United States became the landlord of Eurasia and led the expansion

of the Western European-based North Atlantic Treaty Organization (NATO) into Eastern Europe. The

aspiration to include Ukraine and Central Europe led former U.S. National Security Advisor Zbig-

niew Brzezinski to issue a warning. In his 1997 book “The Grand Chessboard,” Brzezinski argued

that the core of America’s strategy in Eurasia was “to do everything possible to prevent China, Russia

and Iran from forming a bloc that can challenge the United States.” This called for prudent behavior.

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The September 11 terrorist attacks on the United States demanded its decisiveness rather than pru-

dence in Eurasia. Suddenly, America adopted a strategy of entering directly into the heart of what in

the past had been referred to as “the Soviet Union’s front yard” (America In) while at the same time

holding back the revival of Russia (Russia Down) and preventing the entry of China (China Out).

America established military bases in the Central Asian countries of Uzbekistan and Kyrgyzstan, and

intervened militarily in Afghanistan and Iraq in order to defeat the forces of terrorism and reorder the

Middle East.

However, U.S. strategic leadership in the heart of Eurasia has rapidly deteriorated over the past decade

as a result of the quagmires in Afghanistan and Iraq. During that time, Russia has become strong

enough to recover its influence in its former republics, while an energy-thirsty China has stretched

out its hand in Central Asia and the Middle East.

As a result, in 2011 the United States shifted its geopolitical focus to East Asia by declaring a “Re-

balance to Asia,” thereby giving the distinct impression that it was taking one foot out of the heart of

Eurasia. Of course, this does not mean the current situation in Central Asia should be characterized

as a strategic reversal with “America Out; Russia Up; China In.”

The 28 members of NATO, which includes the former Soviet Bloc countries of Central and Eastern

Europe, already have strong ties under the leadership of the United States. At the same time, Russia

has shown the ability to wield its power as the Ukraine crisis has unfolded, but the U.S.-led sanctions

being imposed against Russia are causing headaches. China’s influence in Central Asia and the Mid-

dle East is weak compared to that of the United States and Russia. However, the United States’ ability

to set the rules of the game in Central Asia is waning. And just as Brzezinski warned, China, Russia

and Iran are taking steps to break down the U.S.-led order in Eurasia.

Given the “Great Game” that is unfolding in Eurasia, when we stop and look carefully at the geopo-

litical characteristics of the competition between the great powers, Korea must get in the game. Rather

than taking security steps toward a continent where firm rules have not been established, Korea should

adopt a more pragmatic approach and expand its economic reach.

In addition, we must step up our efforts to convince North Korea to get on the right side of history. It

is time to open a path that connects the Korean peninsula to Eurasia. At the same time, South Korea

needs to broaden its strategic perspective by tightening the link between its Eurasian continental in-

terests and its maritime aspirations.

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When we view Eurasia only in continental terms, we only see an interconnection of Korea, Mongolia,

Central Asia, Russia and Europe. However, our viewpoint changes when we include the waters that

lap up against the eastern flank of Eurasia, namely the Pacific and Indian oceans. In a word, we can

get closer to Eurasia’s maritime powers.

If Seoul has a “Eurasia Initiative,” it must also have an “Asia-Pacific Initiative.” We must take con-

crete steps to draw our closest ally, the United States, as well as Japan, Southeast Asia, Australia and

India, to help them develop stronger relations with Eurasia and promote greater regional cooperation.

Korea must offer proposals that provide solutions to the problems facing both the continental powers

of China and Russia as well as the maritime powers of the United States, Japan, Australia and Indo-

nesia.

This can lead to seeking strategies for facilitating development cooperation to promote regional pros-

perity through utilizing the oceans more effectively and securing access to sustainable energy. Even

Europeans recognize that the world’s focal point has shifted from the Atlantic to the Pacific Ocean.

We must do everything possible to realize the dream of integrating a unified Korea with Eurasia. But

given this understanding of the situation, the most pressing task of Korean diplomats is to draw the

connection between our national interest and the effort to expand Korea’s presence beyond Northeast

Asia and into the broader Asia-Pacific Region.

[Chosun Ilbo, August 25, 2014]

www.koreafocus.or.kr

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President Too Removed from the Public

Kang Won-taek

Professor of Political Science

Seoul National University

“Crisis? What Crisis?” asked British Prime Minister James Callaghan upon returning from an inter-

national summit, implying reporters were exaggerating the national confusion and inconvenience

caused by a series of strikes by public union workers during the winter of 1978-79.

The next day, the Labour Party leader’s words were plastered across The Sun. Still resonating today,

the banner headline famously summed up the gap between Callaghan’s happy-go-lucky perception

of the so-called “winter of discontent” in Britain and that of most of its citizens. A few months later,

Callaghan was ousted in general elections by the Conservative Party led by Margaret Thatcher.

In a recent straw poll, the majority of respondents disapproved of President Park Geun-hye's perfor-

mance and expressed relatively higher approvals for the ruling Saenuri Party’s handling of state af-

fairs. This was probably because of her bungled cabinet nominations, including prime minister, which

forced her to retain the incumbent who was waiting to be replaced after submitting his resignation. It

manifested public alienation toward Park’s response to recent events.

In short, many people doubt that Park has a clear understanding of the widespread public shock from

the Sewol ferry disaster in April, or that she really considers the current situation a crisis, despite the

tears she shed during a live broadcast of her address, in which she apologized for her administration’s

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handling of the disaster.

The ferry sinking was so shocking and frustrating that it now serves as the dividing point in our social

development. We have achieved economic growth and installed democracy, but the disaster has

forced us to be circumspect and taught us that the status quo must be discarded to ensure a better life.

Our way of racing ahead without looking around has run its course. So has giving top priority to

efficiency and growth. Moreover, it will be no longer possible for the government to control all social

affairs or arbitrarily initiate changes as it did in the past.

The disaster implores our society to adopt a new direction. It is not an easy question. And it behooves

none other than the president to try to find an answer.

The president’s thinking is usually interpreted through her choice of cabinet ministers and her per-

sonally enunciated vision. But it has been hard for the public to see the president deep in agony of

trying to understand the seriousness of the current situation and find answers to such a hard question.

Park’s promise to “reform” the country to make it safer seems to be her answer. But she did not

specify what she really meant by “reform” and the direction she will lead the nation. Our society is

now bigger and more diverse than before. Can the president, or the government which has already

exposed its limitations in the wake of the ferry disaster, conduct a reform campaign alone? I doubt it.

Therefore, Park’s “reform” rings hollow. So, her way of managing state affairs seems little different

from that of Callaghan. As the drop in her approval ratings suggests, many people believe that Park

has failed to understand the current situation or has been nonchalant. This is probably because she

has been trapped in a confined space.

If she relies on views and suggestions given by a handful of close aides instead of meeting many

people and hearing a variety of views, the level of her understanding public opinion will naturally be

low. The current situation is also a crisis for Park herself. She seems to be in urgent need of managing

state affairs in a more open way for the sake of conducting the “politics of empathy.”

[JoongAng Ilbo, July 7, 2014]



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What’s the Use of Local Constituencies?

Sonn Ho-chul

Professor of Political Science

Sogang University

The most important concern in personnel management of political parties is nomination of election

candidates. While there is widespread scorn over the Park administration’s repeated failures in key

nominations, even more frustrating for us is the ongoing party selections for the July 30 parliamentary

by-elections.

As far as the ruling Saenuri Party is concerned, let’s say it is in bed with the government. The problem

is that the main opposition New Politics Alliance for Democracy, which has spearheaded criticism of

the government’s nominees for senior posts and claimed to be the guardian of democracy, is no less

inept. This implies that there is no better alternative. The NPAD’s nominations for by-elections speak

volumes. Could it do better suddenly if it took power?

The latest nominations of by-election candidates confirmed that having an affiliation with electoral

districts is no longer important. Saenuri attempted to name former Gyeonggi provincial governor Kim

Moon-soo as its candidate for the Dongjak district in Seoul, in which he has no background. It’s sheer

nonsense. After Kim declined the offer, the ruling party picked former lawmaker Na Kyung-won

whose local constituency had been the Jung district in Seoul.

Not to be outdone, the NPAD nominated a hopeful in Gwangju for Seoul’s Dongjak district and a

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former governor of South Gyeongsang Province for Gimpo in Gyeonggi Province. As if it did not

matter wherever he ran for any election in Gyeonggi Province, its former governor, Sohn Hak-kyu,

moved from Gwangmyeong to Bundang, and then to Suwon to run as an NPAD candidate.

Is this the so-called “new politics” advocated by NPAD co-chairman Ahn Cheol-soo ― first nomi-

nating candidates for any districts and then having them move to meet residency requirements? This

is the same opposition party that has criticized cabinet nominees for having changed their addresses

illegally. Indeed, Ahn himself entered politics last year by winning a by-election in a Seoul district

where he had no background, after incumbent lawmaker Roh Hoe-chan lost his parliamentary seat

due to his involvement in the disclosure of corruption in the Samsung Group. It was as if he was

waiting for a chance and pounced on a vacated seat.

Parliamentary elections are not the only problem. In local elections, a university professor in Seoul

abruptly changed his address to Gyeonggi Province, ran for superintendent of education there and

won. Therefore, a man with no background in Gyeonggi will be responsible for its school system. It’s

ridiculous.

In the past, parties gave priority to the regional background of would-be candidates. But that has

ended. The system of local constituencies has been maintained, despite various ill effects like region-

alism, because candidates from local constituencies can handle their own regional issues well. But it

would be better to scrap this system, if parties persist in favoring outsiders.

As an alternative, we would be better off with a parliamentary election system that is national or

purely proportional. Under such a system, all of the 300 lawmakers could be elected on a nationwide

basis, so they would represent the Republic of Korea, instead of a specific district, ending ruinous

regionalism. Or, those who want to run for public offices should be made to live in their regions for

a mandatory period of at least two years.

Another problem is top-down “strategic” nominations, a longtime subject of criticism by the media.

Even if the nominations are purely motivated, they are still problematic in that they are undemocratic,

closed-door undertakings by a handful of party leaders. It deprives local residents of a voice in the

process. Of course, there is no guarantee that the selection of candidates by the electorate or party’s

rank and file is a better alternative. A bottom-up selection process would likely produce worse candi-

dates under our current circumstances.

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Still, why should we conduct elections and practice democracy, if parties continue arbitrary strategic

nominations of candidates like in the latest cases? Do we conduct the presidential elections because

there is a guarantee that voters will elect the right person? Should we have a system in which political

leaders form a committee to select a president on the grounds that voters are not capable of choosing

the right one?

Strategic nomination represents an arrogant and dangerous manner of proclaiming, “We’ve decided

among ourselves because local party members and residents are stupid and lack the ability to choose

their own election candidates.” We should have trust in the people and their choice, unless we are

going to abandon elections and democracy.

[Kyunghyang Shinmun, July 14, 2014]



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Principles in Sustaining Korea-Japan Ties

Park Cheol-hee

Professor, Graduate School of International Studies


The Seoul Lotte Hotel’s late cancellation of a Japanese Embassy function marking the 60th anniver-

sary of the establishment of the Japanese Self-Defense Forces on July 10 eloquently reflects a facet

of the Korean people’s anti-Japanese sentiments. It was aligned with the shared view of President

Park Geun-hye and her Chinese counterpart, Xi Jinping. During Xi’s state visit to Seoul a week ear-

lier, the two presidents expressed their concerns about Japan’s flawed perception of history and its

stepped-up moves to ameliorate relations with North Korea and to implement collective self-defense

rights.

Before that exchange over lunch, President Xi delivered a speech at Seoul National University in

which he stressed the need for building a joint Sino-Korean front against Japan, citing several histor-

ical instances of bilateral collaboration to fight Japanese military ventures, such as the Hideyoshi

invasions of Korea in the 16th century and the Sino-Japanese War in the 19th century. He also pro-

posed that Seoul and Beijing jointly commemorate the 70th anniversary of imperial Japan’s defeat in

World War II next year.

Still, the Chinese leader skipped inconvenient historical facts such as the 17th century Manchu inva-

sions of Korea which plundered the country and Chinese troops fighting alongside North Koreans

during the Korean War, leading to prolonged territorial division.

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South Korea’s worst foreign policy choice would be to turn against its traditional ally, the United

States, and keep antagonistic relations with Japan, while pursuing security cooperation with China.

Such a possibility, however remote, is worrisome because some relevant signs can be traced. As long

as South Korea remains locked in confrontation against North Korea and sandwiched between the

regional powers, China and Japan, Seoul’s national security interests are bound to be tethered to the

United States.

Although multifaceted cooperation with China is needed, South Korea should not rely on Beijing for

its paramount task of national security until it achieves a durable unification with North Korea. Seoul

has to maintain close cooperative relations with Japan, another U.S. ally, with which it shares such

vital values as democracy and free market capitalism.

The following are three principles requisite for Seoul to sustain meaningful cooperative relations with

Tokyo, without being ridden by emotional sentiments and prejudices.

First, South Korea should conduct “balanced” diplomacy toward China and Japan. Attempts stem-

ming from its displeasure and siding with Beijing to have Japan realize its mistakes would be detri-

mental to Korea-Japan relations. South Korea would be seen as a China supporter, prompting soli-

darity of Japanese rightists. Therefore, while maintaining amicable relations with China, South Korea

ought to restore a balance in its diplomacy by promoting dialogue and cooperation with Japan to a

normal level.

Second, Seoul needs to discard “non-strategic patience” in order to build up “strategic trust.” It is a

non-strategic option for Seoul to waste time in simply waiting for Tokyo’s return to the “right track”

on the assumption that the Shinzo Abe cabinet has deviated from normal neighborhood diplomacy.

Whether you like it or not, Abe has a strong chance of staying in office until 2018. Instead of branding

him as an abnormal political figure, Seoul should have meaningful dialogue and negotiations with

him to restore mutual trust. There are a good number of pragmatic strategists among Abe’s confidants.

Third, South Korea has to shift to a sensible diplomatic approach to Japan. For some time now, both

Korea and Japan have witnessed rather excessive outbursts of emotional public sentiment. Although

riding against the flow of public opinion might create risky political burden, an insightful political

leader should not be swayed by public sentiment. Political leadership equipped with the ability to

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resist retrogressive moves underscored by public sentiment would restore sensibility to bilateral rela-

tions, drawing applause from the public.

What should be done? Needed first and foremost is the wisdom to separate history from current issues.

The “comfort women” question, for instance, is relevant to Korea’s moral integrity and is an interna-

tional human rights issue that calls for Japan’s decisive redress that would nullify the Abe cabinet’s

regressive perception. It is desirable to prepare medium and long-term measures and put them into

action to resolve pending issues separately, instead of bundling them together.

In the security arrangement, South Korea must not oppose the United States and Japan. The issue of

Japan’s collective self-defense rights can be settled with the assurance of a principle that bars Japanese

forces on the Korean peninsula without Seoul’s prior request or consent. An outright objection to

Japan’s rights by South Korea may only create misunderstanding. If the settlement of diplomatic and

security issues is difficult, the door needs to be opened to promote functional cooperation in such

fields as environmental protection, energy, investment, tourism, education and cultural exchanges

before dealing with touchy questions.

For this purpose, effective channels of political dialogue have to be set up. If a full summit is difficult

to arrange in the near future, informal meetings on the sidelines of U.N. and other international con-

ferences can be capitalized on. Instead of merely exchanging compliments, such occasions must be

utilized for candid talks so as to develop mutual trust.

Korea and Japan will observe the 50th anniversary of diplomatic normalization next year. If they fail

to resolve the pending issues this year and continue antagonistic mudslinging, the government may

face a biting diplomatic fiasco along with a high possibility of pent-up backlash against shortcomings

of the 1965 treaty on basic relations. Thus, for South Korea, diplomacy toward Japan poses not only

a critical question of foreign policy but also a burdensome chore that requires hardheaded pragmatic

judgment transcending emotional sentiments.

[Chosun Ilbo, July 14, 2014]



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Hopes and Limits in Seoul-Beijing Relations

Oh Nam-seok and Jeong Cheol-sun

Staff Reporters

The Munhwa Ilbo

The summit held between President Park Geun-hye and her Chinese counterpart Xi Jinping on July

3 is considered a display of bilateral “hopes and limits” in mercurial Northeast Asia. The two leaders

agreed on building a mature strategic, cooperative partnership; early conclusion of a consular treaty;

the conclusion this year of a bilateral free trade agreement; and a direct won-yuan trading system. But

they differed on how to deal with nuclear threats from North Korea and Japan’s lurch to the right.

On July 4, Cheong Wa Dae and the government explained, “The two leaders also had an intensive

discussion, which is not covered by the joint statement and its addendum, and shared their perceptions

of various issues.” We, however, believe that Seoul and Beijing have now stalled at a certain level,

though politics are warmer and economic relations remain hot.

After all, this reflects the dilemma of both South Korea, which is trying to hold hands with China

while staying in the trilateral framework of cooperation with Washington and Tokyo, and China which

is attempting to get closer to Seoul while keeping its bilateral alliance with Pyongyang.

♦ Limits: Paradoxically, the two leaders revealed their limits over how to respond to nuclear threats

from the North and Japan’s tilt to the right, the issues that attracted the keenest attention during their

summit. In the process of fine-tuning the wording of the joint statement, Seoul reportedly demanded

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that the statement include a concrete expression like “denuclearization of North Korea” or “opposi-

tion to North Korea’s fourth nuclear test,” instead of a general phrase such as “denuclearization of

the Korean peninsula.” But they compromised to say that “both sides resolutely oppose nuclear weap-

ons development on the Korean peninsula.”

In a way, Xi put pressure on the North by visiting Seoul before Pyongyang and not accepting a visit

to Beijing by North Korean leader Kim Jong-un. But he refused to use the joint statement to explicitly

push Pyongyang to the edge.

In a telephone interview on July 4, Lee Tae-hwan, director of the Center for Chinese Studies at the

Sejong Institute, said, “By inserting the phrase ‘opposition to nuclear weapons development on the

Korean peninsula,’ China succeeded in avoiding irritating the North.” After all, China respected an

earlier expression on the North Korean nuclear issue, he added.

China’s attempt to hold a joint celebration next year to mark the 70th anniversary of the end of World

War II was also thwarted. Chinese media reported that, during his tête-à-tête with Park, Xi said, “Next

year marks the 70th anniversary of the victory of the anti-fascist war, the victory of China’s war

against Japan, and the liberation of the Korean peninsula from the Japanese colonial rule. We can

hold a joint celebration.” But Park reportedly did not answer. The joint statement did not include any

explicit view about Japan’s move to the right, either. Instead, the addendum included a plan on “joint

research about the imperial Japanese Army’s wartime mobilization of sex slaves.”

“Phrases about Japan’s lurch to the right and a joint celebration would have been a burden to Seoul,

just as the expression ‘denuclearization of North Korea’ involves pressure on Beijing,” Kim Heung-

kyu, a professor of political science at Ajou University, said. “I think both two sides showed flexibil-

ity.”

♦ Achievements and Progress: In the joint statement, the two countries added the expression “mature”

to the phrase of “strategic, cooperative partnership.” Then they elaborated on four concepts of the

bilateral partnership: realize joint development; contribute to regional peace; promote development

of Asia; and pursue prosperity of the world. They clarified their intentions to upgrade and substantiate

bilateral ties through the joint statement.

The two nations also reached a concrete agreement on further enhancing their already “hot relations”

in the economic sector. They set a concrete “end-of-the-year” deadline for a bilateral FTA, for which

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they are in the second stage of negotiations. They agreed on building financial infrastructure, includ-

ing direct won-yuan trading. They also agreed to resume negotiations on the delineation of maritime

boundaries, which have been suspended since 2009, next year.

“In a situation where the annual bilateral trade volume is nearing US$300 billion, the agreement on

speeding up FTA talks and building a direct won-yuan trading system is big progress,” Lee said.

♦ Stalemate and Ambiguity: The two countries shared understanding of the need to resume the six-

party nuclear disarmament talks to resolve the North Korean nuclear issue, but still failed to find a

clear solution. Xi remained ambiguous by concurring with Park’s “Dresden Declaration” on her vi-

sion of Korean unification, but not explicitly supporting it. During their talks, Park explained about

her Dresden speech, but Xi simply said in reply, “I positively estimate the efforts that South Korea

has made to improve inter-Korean relations.” This was included in the joint statement.

“Though the joint statement doesn’t mention the Dresden Declaration, it includes all of its key com-

ponents,” a Seoul government official said. “It carries significance in that we have obtained China’s

support to Park’s vision in the form of a document for the first time, despite Pyongyang’s opposition

to her declaration.”

[Munhwa Ilbo, July 4, 2014]



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- To Avoid a Protracted Japan-style Slump

- What is Missing at Samsung Electronics

- Seizure of Farmland vs. Food Security

- Shared Growth in the Tofu Industry

- Turning Seoul into a Top Tourist Destination

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To Avoid a Protracted Japan-style Slump

Lee Doo-won

Professor, School of Economics

Yonsei University

The nation’s news media, comparing the Korean economy with the Japanese economy, are urging the

government to boost domestic demand, as Japanese Prime Minister Shinzo Abe has been doing with

his “three arrows” of fiscal stimulus, monetary easing and structural reforms.

While agreeing on the need to strengthen domestic demand, I do not believe the 2014 Korean econ-

omy has many similarities to the 2014 Japanese economy. Korea is not in a protracted slump like

Japan. Nor is it mired in the kind of deflation trap that the Abenomics strives to overcome.

The Korean economy is similar to the Japanese economy when it entered its long-term slump in the

early and mid-1990s. At the time, Japan’s property and stock markets plunged, tipping the economy

into a slowdown. The Japanese government sought to overcome the hardship by boosting exports

rather than domestic demand. Many corporations, buffeted by the high yen and high labor cost, moved

operations abroad.

In the belief that the slump was a normal cyclical phase, the Bank of Japan chose to make gradual

interest cuts, and did so belatedly, instead of making a preemptive deep cut. It was fiscal policy alone

that was tasked with boosting the sagging economy. Worse still, Japan’s backward financial institu-

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tions misdirected funds by propping up so-called “zombie companies,” allowing them to avert struc-

tural reforms, sale or shutdown.

What Korea needs to seriously think about is how to avoid repeating what happened in Japan. The

first thing it needs to do is normalize the property market and, by doing so, help prices rebound. In

Japan, a fall in asset prices set in motion a vicious circle of economic contraction, deflation, slow

income growth and tepid domestic spending.

The next thing Korea needs to do is a proper mix of fiscal and monetary policies to combat the coun-

try’s economic slump. Japan, which failed in this regard, attempted in vain to speed up recovery

through massive fiscal spending on more than 10 occasions. The government’s spending sprees only

swelled national debt to an astronomical amount. They failed to incite long-term gains.

The third task for Korea is to promote corporate restructuring and modernize the financial industry.

Japan wasted too much time in shuttering corporations and financial institutions that had no compet-

itive advantage and wasted funds.

It is true that corporate restructuring is proceeding at a faster clip in Korea now than in Japan in the

1990s. But channeling funds into productive areas will still be delayed until after the financial sector

is modernized.

Finally, to prevent an exodus of corporations from Korea, the government needs to improve the en-

vironment for investment by pushing for deregulation and making the labor market more flexible.

Since the outset of this year, President Park Geun-hye’s administration has been promoting deregula-

tion. Its impact has yet to be seen.

Korea has a long way to go before its labor market becomes flexible, with the ordinary wage rule and

the extension of retirement pushing up the labor cost.

The government needs to accomplish the aforementioned four tasks in cooperation with the political

community. If these tasks are not accomplished at an early date, it will undoubtedly accelerate a

corporate exodus. Then there will be no guarantee that Korea will be spared the misfortune of falling

into a long-term slump as Japan did.


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What is Missing at Samsung Electronics

Yoo Jin-pyung

Mobile Editor

The Maeil Business Newspaper

Jeff Bezos, founder and chief executive officer of Amazon, once asked an audience to identify the

most important accomplishment of his company during the past 20 years. He waited a while before

he himself gave an answer, which was somewhat corny. He said it was winning the trust of customers.

Then he identified two requisites to the process: “do hard things well,” and “repeat them.” Although

his explanation was banal, there was something fresh about it.

In introducing the Fire Phone, Amazon’s first smartphone, in June, he said customers begin to watch

when a company has done a difficult and innovative task 1,000 times or repeated it 10,000 times.

News media had conflicting reviews of the phone. One called it a smartphone equipped with the most

innovative 3D technology. Another said it was anything but a game changer.

The phone, scheduled to be released in the United States on July 25, is equipped with four infrared

cameras, which allows users to watch 3D images without wearing glasses. It also automatically rec-

ognizes text, music and objects, and shows a way to buy them at Amazon’s online store. Although its

hardware may be below a Samsung smartphone, Amazon makes a unique attempt to utilize its data-

base on 200 million customers.

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Shortly after the Fire Phone was unveiled, Samsung Electronics announced that its second quarter

operating income fell below 8 trillion won, shocking industry analysts.

The decline was due to higher marketing expenditures to deal with bloated inventory caused by an

onrush of low-end Chinese phones. Analysts say Samsung will be able to get a short-term boost from

its Galaxy Note 4s and wearable devices. But what will happen next year and thereafter?

Google has a 90 percent share of the computer searches and an 80 percent share of the mobile oper-

ating system market in the world. It is also expanding rapidly into the smartwatch, smartglass, driv-

erless car, satellite feeds, artificial intelligence, drones and other business areas. Facebook is walking

on a legal tightrope to tap into the information it has on more than 1 billion users and utilize its mobile

business.

What the two companies have in common is their target, which is software, not hardware. Both of

them also attempt to glean the daily routines of people around the world but their hidden desires are

to strengthen their advertisements.

Samsung Electronics is often referred to as an aircraft carrier that can turn suddenly.

On one hand, the company has a wide spectrum of basic technologies concerning core chipsets, flex-

ible displays, smarthomes and the Internet of Things, or IoT. Another strength is its close contacts

with mobile carriers and content providers worldwide, which enables fast catch-up to rivals when

needed.

On the other hand, Samsung Electronics has little information on Galaxy phone users worldwide.

Furthermore, it is not easy for the company to quickly build a platform to obtain such information.

That is why experts suggest the company fill operational gaps through large-scale mergers and acqui-

sitions.

Google, which pledged last year to spend 30.8 trillion won on acquiring non-U.S. corporations, is

raising its share prices through frequent M&As and selloffs, and projecting its image as a company

reshaping itself for the future.

During the past 30 years, Cisco Systems has taken over more than 170 businesses. It says more than

25

90 percent of the acquisitions proved to be successful. Each of them had 75 or fewer people on its

payroll, with engineers accounting for 75 percent or more of the staff.

Only seven of the companies that Samsung has acquired during the past 10 years have survived as its

affiliates.

Now information technology experts say Samsung needs to consider acquiring companies such as

Tesla, a U.S.-based electric carmaker, or large shares of targeted company stocks. They say such

acquisitions will give Samsung access to battery and electronic car equipment technologies and in-

surance and travel businesses. Samsung, they say, will also be able to get access to information on

customers and their use of mobile devices.

The Samsung way should include M&As as a key component. It needs to be a player to be reckoned

with in the world’s M&A market.

[July 21, 2014]



26

Seizure of Farmland vs. Food Security

Kim Han-ho

Professor of International Trade and Development


Surges in grain prices and the 2008 global financial crisis have encouraged cross-border land deals in

pursuit of either food security or a high return on investments. According to Land Matrix, a global

land monitoring initiative, there have been 960 cases of international land transactions since 2000

involving 36 million hectares, 3.5 times the size of South Korea. Farmland accounted for 75 percent

of the land.

Most notable of late is an upsurge in Chinese participation. Chinese funds have been used to secure

land in Africa, Eastern Europe, Central Asia, Southeast Asia and other parts of the world. Experts say

this reflects the pursuit of food security by the Chinese government, which has $4 trillion in its foreign

exchange reserves, and a high return on investments by the Chinese private sector.

Also participating are the United Arab Emirates, Saudi Arabia and other Middle East countries. All

of them have scarce agricultural resources and are armed with huge sovereign wealth funds, thanks

to oil sales.

Korea, together with Japan, is on the watch list. Both have a shortage of agricultural resources and

heavily rely on imported food and grains. Under these circumstances, corporations increasingly en-

gage in land trades in anticipation of a high return on their investments. Moreover, grain prices are

27

on the rise.

In anticipation of a rise in food self-reliance, the Korean government assists corporations attempting

to invest in overseas agriculture when they are conducting feasibility studies. Land Matrix provides

information on about 30 cases of transactions involving Korean companies, which cover a total of 1

million hectares of land.

There are opposing views on the land rush. One of them is that the transactions are nothing but the

seizure of farmland from residents in developing countries, where the land deals are concentrated.

This increasingly heard claim is put forward by human rights and environmental activist groups and

other nongovernmental organizations. They say the influx of funds destroys the traditional system of

farming in developing countries, which is the basis of survival for many of its people.

They also maintain that foreign investments, which are usually accompanied by workforces from

abroad, deprive local residents of their work and threaten the food security of host countries because

much of the food production is exported. The situation, they say, is further exacerbated when foreign

capital colludes with a corrupt government.

The United Nations and the World Bank acknowledge such concerns but also note that the flow of

foreign capital helps raise productivity in a developing country by building new infrastructure and

introducing new cultivation techniques. This makes more food available, contributing to world food

security.

Meanwhile, investors focus on host governments and their policies. They are concerned that the host

governments may take measures that they have not anticipated, such as an export ban.

As shown, various stakeholders have their own agendas, mainly because of an asymmetry of rights

and responsibilities between investors and host governments. An organization is needed to balance

and oversee rights and responsibilities.

Of course, the Food and Agriculture Organization of the United Nations has international guidelines

on investments with regard to food security. But the guidelines are not binding, so an enforcement

agency is needed.

28

The World Trade Organization could perform the role. The WTO Agriculture Committee already

administers rules on agricultural trade and can impose sanctions on offenders. Food security-related

foreign investments in agriculture cannot be segregated from trade issues.

As such, the WTO could be empowered. It is worthwhile for Korea, China, Japan and Middle East

countries to ally themselves in pushing for the WTO’s role in connection with foreign investments in

agriculture.

[Seoul Shinmun, July 11, 2014]



29

Shared Growth in the Tofu Industry

Lee Suk-ha

Professor, Department of Plant Science


Tofu began to be made as far back as China’s Han Dynasty (206 B.C.–A.D. 220) and has long been

a major source of protein for Koreans, who call it dubu. The soft and mild food contributes to bone

and muscle growth and brain development, and helps slow down the aging process. It is now the focal

point of a battle between government control and free-market principles.

In one of its attempts to encourage shared business growth and opportunity, the government in No-

vember 2011 designated tofu making as “an industry suitable for small- and medium-sized enterprises

(SMEs).” It imposed a three-year ban on investments and expansion into tofu making by large cor-

porations and conglomerates. The ban has helped SME tofu makers, but it also has lowered demand

by large producers for domestic soybeans, which in turn has hurt local soybean farmers.

The ban is scheduled to end in November but can be extended if large companies and SMEs reach an

agreement. Soybean farmers are excluded from the discussion and would surely oppose an extension.

After three years of the tofu designation, it is necessary to review its aim, procedure and outcome to

determine who have benefited and who have not.

30

The National Commission for Corporate Partnership and the Small and Medium Business Admin-

istration claim that local soybean growers find it difficult to sell their produce because they overpro-

duce soybeans under misguided demand and supply guidance by the Ministry of Agriculture, Food

and Rural Affairs, not because of designating tofu making an industry for SMEs.

Annual soybean production hovers around 130,000 tons. Last year, however, the good weather raised

production 20.3 percent to 154,000 tons. The bumper harvest was one of the reasons why the soybean

price fell.

But it should be noted that purchases by large corporations has fallen steadily year-on-year since the

ban went into effect ― from 14,200 tons in 2011 to 13,200 tons in 2012, 12,600 tons in 2013, and

further to 11,600 tons this year. The decline has occurred regardless of output and prices. That bolsters

the soybean farmers and the agriculture ministry’s argument for an end to the ban because it is retard-

ing demand.

I propose two-tier tofu making ahead of a November decision on the designation, which I believe will

make the industry more robust and competitive. It is wrong to keep the industry in a non-competition

prison.

Allow large corporations to make tofu with local soybeans. Although the domestic soybeans are 3.5

to 4 times as expensive as imports, consumers still demand the premium-priced brands. This fact

should not be ignored. Large corporations should be given an opportunity to improve quality, increase

output and explore new markets so that they share growth with domestic soybean producers.

SMEs, which rely on cheaper imports for tofu production, are also called on to improve quality and

explore new markets for tofu consumed by low-income households. If necessary, the government

may assist the SMEs by using one of its tariff tools ― the tariff-rate quota ― so that they can be

assured of steady supplies low-priced soybeans.

The collapse of local soybean production will hinder the ability of domestic importers to get better

deals with foreign sellers, which will hurt both large corporations and SMEs. For a more active do-

mestic tofu industry, large corporations, SMEs and soybean growers will have to find a way beneficial

to all of them.

[Hankook Ilbo, July 15, 2014]

31



32

Turning Seoul into a Top Tourist Destination

Han Sang-wan

Chief Economist

Hyundai Research Institute

“Bugsy” is a 1991 American film about gangster Benjamin “Bugsy” Siegel, who was a driving force

in turning Las Vegas into a gambling capital.

Siegel overspent on his casino hotel and his venture flopped initially in January 1947, upsetting his

mob bosses. He was slain months later but his dream of Las Vegas becoming a top tourist destination

in the world eventually came true.

Today, the desert city is actually more of a hotspot for entertainment, shopping and dining than it is

for gambling. The Las Vegas casinos play host to world-renowned entertainers and offer luxury shop-

ping, gourmet restaurants and night clubs. Business conventions and boxing matches for world cham-

pionships also are regular features.

In 2011 alone, Las Vegas drew 368 million visitors. They stayed for 3.7 days on average. Obviously,

the economic health of the city’s population of 600,000 depends on tourism. The average household

income is $62,335, just under the U.S. average of $62,982. The population of 2 million people in

surrounding Clark County has a similar level of income. In other words, a population equal to one-

fourth of Seoul’s lives off tourism.

33

Korea is an export powerhouse. Samsung Electronics dominates global sales of semiconductors and

mobile phones. The Hyundai Motor Group is working toward 10 million vehicles, which would make

it the No. 4 auto producer in the world. Global pacesetters also are found among some of the mid-

size Korean companies. The total business activity has pushed Korea’s trade volume to $1 trillion a

year.

Yet, manufacturing sector employment has been stagnant for many years. Nowadays, simply main-

taining the current level of manufacturing jobs would be considered good enough. Then, to have real

job growth, new industries must be developed.

A solution would be to elevate the tourist industry in Seoul to a level comparable to Las Vegas, which

would lead to hundreds of thousands of new jobs. The capital city already has the basic infrastructure

to achieve the effort.

About 60 percent of all tours are short distance trips. Southeast Asia is the top tourist destination for

Koreans. Likewise, Seoul is a key destination for tourists from Southeast Asia. The region’s middle-

class population is projected to expand to 2.3 billion by 2020, which should sustain strong demand

for travel services.

In terms of sightseeing and entertainment, Seoul is behind many places in the world. There are no

natural wonders or especially scenic vistas nearby for Seoul to become a starting point.

Thus, it is necessary to provide man-made tourist attractions and entertainment. For instance, digital

windowpanes could be installed along the thoroughfare from Gwanghwamun to Jongno 2-ga so they

can display scenes from the mega-hit TV miniseries “Dae Jang Geum” (a.k.a. “Jewel in the Palace”)

and performances of Psy or Girls’ Generation during the nighttime.

It will be also possible to have singers perform in the plaza in front of the Sejong Center for the

Performing Arts. Or the Dongdaemun Design Plaza can be turned into a digital hallyu (Korean Wave)

plaza.

But it is difficult to convince the private sector to commit to such projects because a profitable return

on the large investments would not be guaranteed. Therefore, the central government or the Seoul

metropolitan government will have to provide the financing.

34

Seoul can remake itself into one of the most attractive tourist destinations in the world, as Las Vegas

did. It is more of a matter concerning what dream Seoul has for its future.

[Herald Business, July 10, 2014]



35

- What Korean Religious Leaders Should Learn from Pope Francis

- Why North Korea Regime Fears Choco Pie

- Military Soccer, German Soccer, and Korean Soccer

- Kopinos, Children of Shameful Korean Men

- Avoid Burnout

- Spatial Gap between Rich and Poor

36

What Korean Religious Leaders Should Learn from Pope Francis

Yoon Pyung-joong

Professor of Political Philosophy

Hanshin University

Pope Francis’ visit to Korea has provided a valuable opportunity to look around the Korean society

which abounds with wounded people and national dilemmas. Pope Francis is loved and respected

beyond religious and racial barriers. This is not because he is the pope but he is a leader who embodies

his religious teachings.

In the entire history of Christianity spanning two millennia, he is the first Pope Francis. None of the

265 popes before him had chosen the name Francis. The reason is obvious. The Vatican is a mighty

power with the pope sitting on a lofty throne. Hence the name of St. Francis of Assisi (1182-1226),

the “patron saint of the poor,” did not become such a powerful figure.

Pope Francis differentiates himself right here. He is keenly aware that the Catholic Church will be

able to survive only when the spirit of St. Francis, who practiced spirituality based on love and pov-

erty, is revived. This is nothing short of a thunderbolt to all of Korea’s religious communities that

now stand on the edge of a precipice.

Words are not all that the pope is giving us. The history of religions overflows with promises of

determination and good words. But few put them into practice. The strength of Pope Francis comes

from simple practices in his daily life. Even before becoming the pope, Father Bergoglio always stood

37

on the side of the poor and weak in his homeland, Argentina. Upon being elected the pope, he re-

formed the Vatican Bank, a notorious hotbed of corruption, and excommunicated Mafia members

from the church.

However, the pope stays away from liberation theology, which justifies violence under the pretext of

realizing justice. He believes that any attempt at social reform by the church lacking spirituality is a

political struggle, not religious behavior. The pope emphasizes justice and equity, but identifies those

virtues with love and gentleness. The self-righteous clergymen in Korea, who shout justice with angry

faces and obstinate voices, involving themselves in political struggle too often, ought to ponder

whether justice without love is true justice.

To both St. Francis and Pope Francis, love and peace are the essential elements of faith. Therefore,

the pope works ahead of anyone to bring reconciliation between religions, races and classes. He even

respects people with different religions and non-believers’ ways of life. He stays at a single-room

guest house, sharing simple common meals, instead of the official residence of the pope in Vatican

City. Also, while visiting Korea, at his request he is using a small Korean car with minimum security.

This is a result of thorough self-reflection on the history of the Vatican, in which the popes competed

with emperors and kings for secular power and then built another tower of power to reign over the

world. Pope Francis contrasts starkly with Korean religious leaders, who have built up fortresses of

religious power to rule like kings, far from descending to lower places. What guided St. Francis of

Assisi throughout his life was the divine revelation from Jesus Christ, who asked him to “rebuild my

house which, as you see, is falling into ruins.” The kingdom of God for love and peace was falling

apart within the medieval church, which was at the pinnacle of its power.

Korean religious circles, which have continuously expanded, are now also imploding. While religions

are deviating far from their calling to purify the world, secular people voice concern about corruption

of religions and their followers. Only religious leaders remain blind to this fact. Religions are declin-

ing in Korea today because clergymen and believers have failed to prove their faiths through their

lives. Religious people in Korea, who enthusiastically welcome the pope, should answer the question

if they are ready to resurrect the “kingdom of Jesus Christ (Buddha/Allah) which has fallen to ruins”

through their own lives.

St. Francis was the son of a wealthy merchant but after his spiritual conversion, he carried valuable

objects from his house and distributed them to poor people. His father was enraged and filed for legal

38

proceedings against Francis to deprive him of all his inheritance. Then, in public, Francis laid aside

all garments he had received from his father, even his underwear. Thus, he pledged that he would

leave his earthly father and follow his Heavenly Father.

St. Francis practiced non-possession and love throughout his life and lived as a friend of the poor.

Even when he was dying at age 44, he refused all the formalities and insisted on facing his death on

the bare ground. He lowered himself as much as possible.

Korean religious leaders should first pay their income taxes before they try to teach the world. They

should immediately stop building castle-like churches and return the wealth they have accumulated

within their sects to society and underprivileged people. Religious leaders should be ashamed of liv-

ing in clover. People adore Pope Francis so much because he loves people wholeheartedly. All reli-

gious faiths should be proven through the lives of believers.




39

Why North Korea Regime Fears Choco Pie

Andrei Lankov

Professor, School of International and Area Studies

Kookmin University

North Korean authorities recently called on South Korean enterprises at the Kaesong (Gaeseong)

Industrial Complex to stop distributing “an item which destroys the ideological well-being of our

workers.” The “dangerous” item in question was Choco Pie, which had been handed out to North

Korean workers as snacks.

The ban on Choco Pie was not an overreaction. It was imposed in accordance with the Kim Jong-un

regime’s new political line. Although the North Korean regime is contemplating moderate reforms, it

also is tightening its grip again on the closed-door policy, which showed signs of easing during the

Kim Jong-il era.

Until Kim Jong-un’s inauguration as supreme leader, the border security was relatively loose, so it

was possible for North Korean residents to cross into China illegally for economic or political reasons.

However, under the new regime, the crackdown on illegal border crossings toughened and only those

who can afford a large bribe can escape.

Consequently, defectors to China have decreased dramatically. North Korean defectors, who have

settled in the South since 2011, have also plummeted to only a half of those reported at the end of

Kim Jong-il’s reign. These days, the North Korean State Security Department is thoroughly ferreting

40

out people who are making illegal international phone calls in border areas. It was also illegal to make

a phone call to South Korea by using Chinese cell phones during the Kim Jong-il era, but now the

policy is much more strictly enforced.

Moreover, this year, North Korea revised Article 60 of the Criminal Law, which deals with acts of

conspiracy to overthrow the state, and made unpermitted overseas phone calls subject to severe pun-

ishment. Crackdowns on DVDs of South Korean dramas and foreign movies also have been rein-

forced. Recent reports have it that a Pyongyang resident was caught secretly watching a South Korean

movie and sent into exile.

In light of these circumstances, I believe, the North Korean leadership under Kim Jong-un is better

than his father’s regime in pinpointing any major threat to its survival. As such, there is no factor that

affects the North Korean strategy as much as the enormous income gap between the two Koreas.

The per capita income gap between North and South Korea ranges from 15 times to 40 times. No

neighboring countries anywhere else in the world have such a wide income difference. Furthermore,

South and North Korea are not two different countries that merely share a border. They possess the

same ethnic group and have similar languages and cultures.

Since the national division, the North Korean political elite has emphasized the legitimacy of their

regime by arguing that they possess a “scientific” ideology which enables them to achieve faster

modernization and economic prosperity than South Korea. However, with the South successfully

transforming from an underdeveloped agrarian society into an industrialized country, North Korean

residents can’t help but doubt and harbor animosity toward their ruling elite and ideology.

Fearing that this sentiment might spread, the North Korean regime can’t enforce reform and open-

door policies like China. Ordinary Chinese people are aware that Japan and the United States are

well-off but they think this has little do with the legitimacy of China’s Communist Party regime be-

cause they are foreign countries with different ethnic groups and histories. However, South Korea is

different. It is not a foreign country to North Koreans.

For this very reason, the North Korean regime decided against fully embracing reform and open-door

policies, which would inevitably let North Korean residents get a fuller view of affluent lives in South

Korea and other countries.

41

Still, the regime realizes such policies would help revive the North’s dying economy. These days,

there are signs that the Kim Jong-un regime is taking measured steps toward an economic reform.

Through the June 28 measures, they are implementing a new agricultural management system cen-

tering on farming households, as well as a full-fledged independent accounting system in the indus-

trial sector and a special economic zone system in the trade sector. But while seeking these changes,

the Kim Jong-un regime has begun to reinforce the closed-door policy, which had eased somewhat

during the rule of Kim Jong-il.

This is not a contradiction. North Korea can implement reforms without fear of the regime being

threatened if it maintains surveillance to perpetuate its international isolation. The political elite in

Pyongyang is aware that economic growth is desirable, but also feels it is more reasonable to place

more weight on sustaining the regime than economy.

This policy, however, involves limits that are hard to overcome. Under the current circumstances,

international exchange is the only way for North Korea to achieve fast economic growth. The North

Korean regime holds out the hope that it will be able to block the spread of knowledge about South

Korea or other countries’ daily lives and cultures while accepting “risk-free” technological knowledge

or investment. However, such a policy negatively affects economic growth.

It is not possible to completely block the spread of “dangerous knowledge.” Nevertheless, Kim Jong-

un and his aides have few options. It is a regrettable reality of North Korea that it can maintain security

only when the public remains ignorant of life and culture in other countries. From this point of view,

Choco Pie, which represents South Korea’s consumption culture, is indeed a dangerous snack.

[Dong-A Ilbo, July 11, 2014]



42

Military Soccer, German Soccer, and Korean Soccer

Kim Chung-woon

Cultural Psychologist

Director, Institute for Various Problems

I woke up very early in the morning for a month because of the World Cup football tournament.

Frankly speaking, I don’t like football. I lost my interest more than 30 years ago during my service

with the Army. It was not solely because of the absurd system of putting seniors on offense and juniors

on defense.

At that time, I was a very special player, a “hidden card” that was used when my team was losing. As

soon as I was ordered into the game, I had to kick the most senior member of the rival team in the

shin and cause a brawl that would end the game. There was no other soldier who could perform the

mission better than me.

I have not played football since I was discharged from the Army. But the 2014 World Cup games

were very interesting. The final scenes of the victorious Germans were especially great. I am not

talking about their play.

First, I was fascinated by their chancellor, Angela Merkel, embracing each and every player of the

team when they walked up the steps to center podium to receive the trophy. She was from East Ger-

many, where she worked at a research institute that had nothing to do with politics. She joined civic

43

movements during the transition to German unification, after which she entered politics with the con-

servative Christian Democratic Union.

In fact, Merkel was a sort of “face saver” for East Germans who were generally discouraged about

their future. But she displayed excellent leadership in the central political stage to become the head

of government in 2005. She has won elections three times and now in her 10th year in office, she is

respected across party lines.

If Korea is unified, would it be possible that a woman in her early 50s who was born and raised in

North Korea to be elected as president and remain in office for 10 years?

Just as interesting were the diverse features of German players. There were blacks and some had

names that did not sound like German. As I checked the list, I found about half were naturalized or

the descendants of immigrants, who included Oezil naturalized from Turkey, Podolsky and Klose

from Poland, Khedira from Tunisia and Boateng from Ghana.

These players were not even singing the German national anthem at the start of the final match. I

could not understand it easily. Having lived in Germany for more than 10 years, I know the depth of

prejudice that ordinary Germans have toward foreigners, particularly Poles, Turks and Africans.

German soccer fans are known for their vulgar racist words and acts. Still, a half of the national soccer

squad was from countries that sent the largest numbers of illegal workers to Germany. I was deeply

moved by the victory ceremony of Germany. The children of immigrants, who must be targets of

prejudice, were so happily embracing the woman chancellor from East Germany.

There I saw football, the most conservative and collective kind of sport, overcoming the ghost of the

ugliest product in human history, Nazism. At least, German football is becoming a culturally signifi-

cant activity rejecting collectivist distortion.

How can we interpret the action of Korean football fans on the day when the Korean national team

returned from Brazil after a winless World Cup outing. They went to the airport in early morning to

hurl curses at the crestfallen young players. Apart from the young members, let’s think of manager

Hong Myung-bo. He had time and again turned down requests to take over the national team, assert-

ing that he was wholly unprepared, but we insisted that “You are the only hope.”

44

Regrettably, the Korean team had subpar performances in all three of its first-round matches. Still,

Hong did not deserve the curses upon returning home. Some even angrily pointed out that he bought

a plot of land during the training period for the World Cup and appeared in jeans at the press confer-

ence where he announced his resignation. If I were Hong, I would have gone mad.

Russian cultural psychologist Lev Vygotsky defined culture as activity mediated by signs and sym-

bols. “Natural behavior” as a direct and instant reaction to stimulation does not change for tens of

thousands of years. It may help the survival of human beings but does not lead to advancement into

“higher cognitive processes.” On the other hand, activities mediated by signs and symbols provide

the meaning of life for members of the community. People are happy when they share the meaning

of life, so they need culture outside the question of survival.

Culture, the activity guided by signs and symbols, started when people carved grooves into a tree to

denote the number of deer they hunted and used their cognitive ability to remember the number.

Through individuals’ practical reasoning, communication, which refers to the sharing of meaning, is

possible and the values of the community are maintained. This is the core of Vygotsky’s “Tatigkeit-

stheorie,” the theory of activity.

The community cannot be sustained when its members instantly react with anger to what they con-

sider unpleasant or undesirable. Then the mood of the entire community quickly sours. If one is really

worried about the community he or she belongs to, one should refrain from spitting out words of

indignation if things go wrong. Let us neither “RT (retwit)” swearing disguised as sound criticism,

nor click “yes” on them thoughtlessly.

Facebook, Inc. is clandestinely studying massive emotional contagion. When something is so unbear-

able, we should stop and review it with our own reason before passing it on to others, if we are to

sustain our community. That’s the way to live together.

The community is not something to be abandoned like the football game in my Army camp. In today’s

Korean society, football is not the only example of collective flaws. I am telling you from my expe-

rience as “an ace player” who was instrumental in nullifying a match whenever it went wrong.

[Chosun Ilbo, July 18, 2014]



45

Kopinos, Children of Shameful Korean Men

Lee Hyeon-sook

Director

ECPAT Korea TACTEEN

A Philippine delegate to the 2005 international conference of ECPAT (End Child Prostitution, Child

Pornography and Trafficking of Children for Sexual Purposes) called for a thorough investigation of

the “Kopino,” abandoned children who were fathered by Koreans visiting the Philippines. According

to the delegate, Korean students date Philippine women while in the Philippines, but they sever con-

tact with the women when they return to Korea after finishing their studies or when the women get

pregnant.

Investigations in 2006 and 2011 produced alarming findings about Kopino (a portmanteau of Korean

and Filipino) children. Angeles is a city in the Philippines, where a massive cluster of brothels are

located; the place is frequented by men from all over the world, including Korean men. While most

other foreigners visit this place quietly and individually in search of sex partners, Korean men are

often seen in groups and drunk. Some of them wouldn’t dare to visit such a place alone.

What is more disturbing is that many Korean men look for young women with no sexual experience

regardless of the cost. To meet such demand, poor young Philippine girls are being drawn into the

scheme. Thus, Kopinos are the result of child trafficking to meet sex tourism demands, child prosti-

tution and disdain for birth control measures.

46

Child trafficking by Koreans is taking place in many countries, such as Nepal, Cambodia and Indo-

nesia, as well as the Philippines. It has not been highlighted as a major social issue in those countries

simply because they have fewer visitors than the Philippines.

Japan experienced a similar problem and its response is noteworthy. In 1993, the Japanese govern-

ment organized a support group of lawyers to help “Japino” children find their biological fathers, of

whom they only had known names and telephone numbers, and provided subsistence support for their

Filipino single mothers. In addition, those who wished were granted Japanese citizenship and oppor-

tunities for education.

Thanks to a mandate for Japanese enterprises to hire Japino children preferentially, hundreds of sec-

ond-generation Filipino-Japanese children are moving to Japan or finding jobs at local Japanese com-

panies each year.

In Korea, a Kopino child recently won a lawsuit to confirm his biological father for the first time. The

ruling is likely to sound the alarm for irresponsible men and lay the foundation for a system to protect

Kopino children’s basic rights such as the right to birth registration, childhood care and education.

Taking this as momentum, I hope the government will open counseling service for these children and

simplify the procedures to assist them to find their biological fathers and provide them with support

for livelihood and education.

Neglecting Kopino children violates the U.N. Convention on the Rights of the Child. The convention

stipulates, “State parties shall ensure a child such protection and care as it is necessary for his or her

well-being, taking into account the rights and duties of his or her parents, legal guardians or other

individuals legally responsible for him or her, and, to this end, shall take all appropriate legislative

and administrative measures.” The convention also provides that a child has “the right to know and

be cared for by his or her parents.”

Of course, overseas sex tours should be eradicated to prevent all these problems. Trafficking of chil-

dren for prostitution perpetrated abroad is punishable under Korean law, but few offenders have been

punished. To root out child trafficking for sex tourism, the government should strengthen international

cooperation in investigating and arresting offenders, as well as tracking down and closing Internet

sites for human trafficking and punishing those who are responsible. Online service providers should

also assist the government by immediately reporting relevant information when discovered.

47

At the same time, it is also important to educate the public that overseas child sex tourism is a criminal

act subject to Korean law. It should be made known clearly that sex trafficking is not a personal choice

but a human rights violation. Overseas tourists could be provided such information through text mes-

sages or other means so they will understand they can be punished at home for sex trafficking done

overseas.

[Dong-A Ilbo, July 7, 2014]



48

Avoid Burnout

Hong Gi-bin

Director

Global Political Economy Institute

There is one thing that surprises me whenever I give lectures or hold discussions with middle-aged

and elderly people about preparing for old age. I find most of them view the issue from a consumer’s

perspective. That is, they ask, “How much money do I have to save to be able to secure the spending

power I would need until death?” It is difficult to find people who regard it from a producer’s stand-

point by asking, “How can I maintain and increase my ability to be productive in society until I die?”

The latter is a much more important question than the former. The average duration of employment

for Koreans, especially those in the middle income class, has been reduced to about 20 years. The so-

called “forever a section chief,” which used to be a typical working-class character in TV dramas

until the 1980s, disappeared long ago. Those who landed a job in a large conglomerate at 28 must

leave the company before they turn 50, if they have not become executives.

They still have to continue their economic activity in one way or another for at least a dozen more

years and their income will likely be lower. This is why those in their 30s and 40s feel anxious.

In Korea, where the social security system is far too inadequate and the effect of income redistribution

by the state is nearly non-existent, everybody has to think about personal care. Therefore, a great

majority of Koreans live under a herculean burden of “mission impossible,” which means during

49

those 20 years they must earn enough income to pay for their children’s education and other living

costs, plus save for retirement.

During the Korean War, the battles intensified to produce higher casualties while ceasefire negotia-

tions were under way. Likewise, Koreans in their 40s, as they feel their “sunset time” is approaching,

forget about their physical and mental health in the “battlefield” to earn even a little more.

As a result, they are “burned out.” I’m sorry to use English, but I can’t find a more apt Korean ex-

pression for a being completely depleted physically, mentally and spiritually due to endless and ex-

cessive labor. From the perspective of capital, this is truly efficient because it can suck up the labor

power accumulated over nearly 30 years and spit out in just 20 years. However, the lives of those

people are miserable.

First, how many of those people accomplish “mission impossible” by exhausting their body and

mind? But the much more fundamental and serious problem is that the “burned out” individuals may

never be able to regain their productive capacity or ability to develop it, the essential energy to sustain

themselves.

It is very hard to tell whether it is a blessing or curse, but our average life expectancy is nearing a

hundred years. Given the gradually shrinking period of regular employment, we can, and should, have

more than one career during our life, hence the popular phrase “a life of double cropping.” However,

would this be possible for “burned out” people? For double cropping, it is necessary to plant some

crops in the spring and some more in the summer or autumn so the soil will not be drained of vitality

all at once.

Are the Koreans in the prime of their working lives ever given the opportunity and circumstances to

discover their productive capacities and develop them on their own? Too often, their bodies suffer

from overwork, drinking, insufficient exercise and imbalanced diets. It is hard to even dream about

having a hobby or cultivating an interest in a certain subject and field, given the amount of time and

money available as well as the state of mind.

For most people, it is impossible to accumulate enough savings to live without working from the age

of 50 until 100. Instead, it is much more realistic not to exhaust one’s productive capacity and main-

tain it for later stages of one’s life. For this, we should avoid burnout. You may think that you should

work harder to earn more while you can. But you should not sacrifice your body, mind and vitality in

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the pursuit. Life is long and your productive capacity is the fire of life that should keep burning for a

long time.




51

Spatial Gap between Rich and Poor

Oh Chang-min

Business Editor

The Kyunghyang Shinmun

The emotional and spatial chasm between the rich and the poor is becoming increasingly obvious.

Our society is making it ever more difficult for rich people to understand and sympathize with poor

people and vice versa.

In a baseball stadium, for example, rich and poor people used to mingle and cheer together. There

were special seats separated from regular seats, but still they all shared the same dry chicken wings

and beer in a paper cup. When it rained, they all got wet. However, this is not the case anymore. Rich

people watch the game enjoying a buffet in air-conditioned stadium boxes that are equipped with a

refrigerator and sofa. They create an independent space amid the public to have their own private

party.

Schools are also different now. In the past, children from rich and poor families studied together in

the same classroom. Due to the educational equalization policy, children of the owners of conglom-

erates like Samsung and Shinsegae went to “ordinary” high schools as everybody else did. Classmates

called them by first name. While Samsung Vice Chairman Lee Jae-yong was a student at Seoul Na-

tional University, his schoolmates paid a condolence visit when his grandfather, Lee Byung-chul, the

founder of Samsung Group, died.

52

These days, rich people educate their children abroad or send them to international schools in Korea.

Children from rich and poor families have no chance to be friends. As the housing price gap between

north and south of the Han River in Seoul is further widening, the rich and the poor cannot but be

segregated. At one of the middle schools in Gangnam (south of the Han River) area, half of a class

has lived abroad for more than six months.

At one high school in Gangbuk (north of the Han River) area, 30 percent of entire students are from

broken families. A yawning gap between social classes means increasingly difficult lives for the poor.

This is because there is less investment in public services. In a recent report titled “Inequality is Bad

for the Poor,” the World Bank noted that inequality impedes investment in public goods, which neg-

atively influences the development of poor people.

Professor Michael Sandel of Harvard University, who is famous for his book “Justice: What’s the

Right Thing to Do?” said in his other book “What Money Can’t Buy: The Moral Limits of Markets,”

that the gap between rich and poor is widening at an unprecedented pace in many countries, and the

wealthy class is gradually separating their lives from the public sector and public service.

For example, rich people don’t have much interest in building public swimming pools because they

have their private pools. They don’t care much about public transportation either, because they own

chauffeur-driven cars. They don’t really know how serious it is to prohibit metropolitan buses running

between Seoul and its suburbs from boarding more passengers than the number of seats. Rich people

have their own family doctor and expensive private insurance policies, so they naturally don’t have

much interest in building more hospitals or reforming the medical insurance system.

Eventually, rich people are passive about expanding public services. They don’t feel a need not be-

cause they are evil but because they rarely have a chance to use those public facilities or services.

Moreover, since they don’t use those services, they don’t like taxpayer money to be spent on them.

The reason why public order, the best public service, is a mess in countries like the Philippines is

related to inequality. The Philippines has the world’s highest level of gap between rich and poor. One

percent of the country’s population holds 90 percent of its land, and within that elite group, 15 families

own most of the land. On the other hand, poor people earning less than two dollars a day amount to

54 percent of the total population. Rich people in the Philippines mostly move around with their

personal body guards. They don’t really need the police. The public order provided by the government

can rather be an inconvenience for them because it can restrict their freedom.

53

The cause of this gap between classes is income polarization. With worsening polarization, Korean

society is also showing the signs of retreating from investing in public services. The election pledges

of President Park Geun-hye, such as paying basic pension and cutting university tuition in half, have

been either significantly reduced in scale or delayed in implementation.

The nation’s public education system, which was the envy of other countries, is being weakened as

private education is booming. The problem is that polarization has been getting even worse after the

1997 Asian currency crisis and the 2008 global financial crisis. Even the newly appointed deputy

prime minster for economy and finance, Choi Kyung-hwan, an advocate of growth, had to mention

distribution. The fundamental solution is to fairly distribute the fruits of economic growth, but there

should also be efforts for social integration by narrowing the physical distance between rich and poor

at such places as sports stadiums and schools.

[July 20, 2014]



54

- North Korea’s Beautiful Cheerleaders

- Korean Media’s Coverage of Middle East Affairs

- Defector Literature and Preparation for Unification

- ‘Forest of Wisdom’ or ‘Paper Graveyard’?

55

North Korea’s Beautiful Cheerleaders

Eom Ju-yeop

Sports Editor

The Munhwa Ilbo

Working-level contact is under way between North and South Korea to determine the conditions for

the North to send its athletes and cheerleaders to the 17th Asian Games in Incheon. Like previous

working-level meetings, the talks have stalled with the North taking issue with the South’s attitude.

But Kim Jong-un has repeatedly stressed the North’s participation, so its athletes and cheerleaders

will likely be sent after the verbal tug-of war.

Many South Koreans are paying keen attention to the probable arrival of the North’s young beautiful

cheerleaders. North Korea dispatched its cheering squads for the 2002 Asian Games in Busan, the

2003 Summer Universiade in Daegu and the 2005 Asian Athletics Championships in Incheon.

Although I am looking forward to the North’s cheering squad, I am actually more worried than glad.

It is because of my memories. Readers may also remember the “North Korean women syndrome.”

Indeed, whenever the North’s cheerleaders visited, considerable tension erupted. The situation was

particularly worrisome in 2003.

I cannot forget the so-called “banner incident.” A busload of North Korean cheerleaders broke into a

tearful frenzy when they found a rain-soaked banner that had a picture of their leader Kim Jong-il

meeting the visiting South Korean President Kim Dae-jung in 2000.

56

The banner had been hung on the street by citizens of Yecheon to welcome the cheerleaders. But they

jumped out of the bus to pull it down. They carefully folded it up and carried it away with them.

Seeing such a wide cultural gap with the Northerners shocked many South Koreans.

I had another eerie experience later. In September 2008, I visited Pyongyang with a delegation of the

Korean Sharing Movement. The visit drew a lot of media attention as we were the first South Koreans

to visit the North amid heightened tension after the death of a South Korean tourist in the Mt. Kum-

gang resort two months earlier.

We were not allowed to move around alone, of course, and were under constant surveillance by our

guards. Wherever we went, there were always slogans like “The Supreme Leader and Comrade (Kim

Il-sung) Lives with Us Forever.” Turning on the TV in the hotel, I would even find the host of a

farming program praising the “supreme leader” for teaching when rice seeds should be sown. Weather

forecasts also began with Miryong on Mt. Paektu, where Kim Jong-il is known to have been born.

Later in our visit, we were listening to a tour guide in the memorial hall attached to the house where

Kim Il-sung was born. Suddenly, a guard fiercely pushed the sides of several people in our group.

Then he scolded us, saying, “Don’t lean on the wall.”

I immediately felt threatened. I couldn’t understand how they could treat us, a civilian group visiting

to help our brethren, so rudely. For me the cultural difference was almost nightmarish. I felt the warm

feeling I had received from novelist Hwang Suk-young’s travel account about North Korea, titled

“There Lived People,” receding in my heart.

Meeting people whose minds remain closed will only lead to a deeper sense of difference. It would

be greatly disappointing if the North Koreans’ unpredictable behavior at the Asian Games ends up

fanning ideological conflict among South Koreans again.

On the other hand, our previous experiences in dealing with North Koreans may be useful in foresee-

ing certain aspects of their behavior. We will just have to remain faithful to international practices

and rules of the games throughout working-level negotiations. Then we should welcome the North

Korean athletes and cheerleaders coolly and collectedly, as participants of the games.

[July 22, 2014]

57



58

Korean Media’s Coverage of Middle East Affairs

Lee Bong-soo

Dean, Graduate School of Journalism

Semyung University

Albert Einstein the physician, Ludwig Wittgenstein the philosopher and Leonard Bernstein the con-

ductor ― what is common among them? They all were Jews and their names ended in the German

word stein, which means “stone” in English. Behind the frequent use of the suffix “stein” in Jewish

names is the piteous history of the group.

For the 20 centuries of diaspora, the Jews were treated mostly as second-class citizens who were not

permitted to have family names. A German feudal lord decided to allow Jews to have surnames, but

on condition that they use a word meaning a natural object like stein or stern (star), hence many

Jewish surnames end with “stein” or “stern.” Similarly, in ancient Korea lowly people were given

vulgar-sounding names such as Dolsoe, Gapdori and Madangsoe, all including words meaning

“stone” or “iron.”

The Jews’ solidarity grew stronger under various forms of persecution. But now, Israelis are perse-

cuting Palestinians as severely as the Nazi Germany treated them.

Israeli bombardment on Gaza Strip between July 8 and 17 left 230 Palestinians dead and 1,700 in-

jured. Three-fourths of the fatalities were children and old people. One Israeli died and four were

injured in the meantime. This cannot be called a war between states. It is the Israeli version of “ethnic

59

cleansing” reminding us of the Nazi genocide of Jews. Further dismaying is that the global commu-

nity and most international media are obviously condoning the Israeli atrocity, but also finding fault

with both sides.

Robert Fisk of The Independent, one of the top experts on Middle East affairs, deplored that the world

was now watching the “replay” of what had happened between the Israelis and Palestinians over the

past decades. “Why doesn’t the media ever mention the lack of progress in the Middle East? No one

reminds us that today’s carnage on both sides is an obscene replay,” Fisk’s July 13 column said.

The media is less enthusiastic about reporting the cause of the conflict and horrible tragedies than it

is in explaining the weapons and operational tactics of the two sides. As the media only updates the

rapidly rising number of casualties, peace is becoming more and more remote.

A permanent settlement of peace is impossible as long as the outside world finds both sides at fault

for the tit-for-tat revenge over the killing of young civilians. The current crisis was caused by the

Israelis’ construction of settlements in the Palestinian territory. The United Nations and the Oslo Ac-

cords have declared the settlement illegal and an International Court of Justice ruling has ordered

their removal. But the Israeli government is completely ignoring them.

Korean news agency Newsis and some broadcasters call the situation a David versus Goliath fight,

but they are wrong. David delivered a decisive blow to Goliath’s head, but the Hamas rockets have

proved ineffective. The Israeli air defense intercepts most of them. Owen Jones of The Guardian

compares the situation to former boxing champion Mike Tyson beating a new-born baby.

However, the mainstream U.S. media outlets generally take sides with Israel over Palestinians. The

New York Times published an editorial on July 8 denouncing both sides for starting the bloodshed

following the kidnapping and murder of Israeli and Palestinian youths. But the newspaper did not

make any editorial comment until today (July 17) about the merciless Israeli airstrikes. Its silence is

unusual as we have often been surprised by its expression of concerns about even trifling matters in

foreign countries.

The Wall Street Journal, now owned by Rupert Murdoch, published an article on the performance of

Hamas’ rockets with graphics on its front page, exposing its pro-Israel stance. The Jews have con-

trolled the major media outlets of the world and helped create an international political environment

favorable to Israel. The New York Times, Washington Post and Los Angeles Times were established

60

with Jewish capital and their editorial staffs include many Jews.

In the broadcasting media, the legendary Barbara Walters of ABC, Larry King of CNN and Katie

Couric of ABC and YahooNews have handled world affairs as news program anchors or talk show

hosts. Among major news agencies, the Associated Press and UPI of the United States and Reuters

of Britain were founded with Jewish money, so it is obvious which side they would take in their news

coverage and commentaries.

In Hollywood, such major companies as Warner Brothers, Paramount, Columbia, Universal, 20th

Century Fox and MGM were all established with Jewish capital, which explains the production of

movies recalling the plights of the Jewish people, including “Holocaust” and “Schindler’s List.” Ste-

phen Spielberg who directed “Schindler’s List” is a Jew. These Hollywood movies have helped pro-

mote a global atmosphere condoning Israel’s many war crimes.

It can be another mistake of racist interpretation to conclude hastily that people of Jewish origin all

take pro-Israel views. Noam Chomsky and Howard Zinn are among prominent Jewish-American in-

tellectuals who have acrimoniously criticized collusion between the United States and Israel and their

invasion of foreign countries. However, it is true that American journalism is not free from Jewish

influence on the nation’s political, financial and media circles.

When we consider the U.S. media’s pro-Israel tendency, the Korean media is feared to be seriously

biased on the Middle East affairs. The primary problem is the lopsided reliance on American sources

and materials by the Korean media for its coverage of the Middle East.

Arab media Al-Jazeera and Al-Arabia make seemingly balanced reports on the conflict through their

English broadcasts, but the Korean media shows extreme imbalance in quoting them compared to

their use of the Western media. The Times of Israel is known to be making fairly objective reporting

but the Korean media rarely quotes it. Most Korean media companies do not post correspondents in

the Middle East.

The Chosun Ilbo is the only Korean newspaper that has placed a correspondent in the war zone. But

the reporter is isolated, lacking the help of local sources. The Hankyoreh and Kyunghyang newspa-

pers have overseas correspondents only in Washington, Beijing and Tokyo, but none in the Middle

East and Europe. Hence they are likely to rely heavily on the U.S. media.

61

If these two newspapers are to be more faithful to their liberal ideals, it would be a more reasonable

choice to assign reporters to the eventful Middle East rather than keeping correspondents in relatively

expensive Tokyo which produces much less news. Japan can be covered sufficiently from Seoul by

journalists with certain expertise on the neighboring country. We see major Western news organiza-

tions cover both Korea and Japan with a single correspondent positioned mostly in Tokyo.

Then there is the question of producing Middle East specialists. The Kyunghyang Shinmun is releas-

ing relatively more news items on the Israel-Palestine conflict, pointedly using the word “massacre”

instead of the Western media terminology of “all-out war” or “exchange of fire.”

It was also noteworthy that Kyunghyang portrayed the life in Gaza Strip based on the U.N. Human

Rights Center report and prominently carried an article that revealed the Israeli Iron Dome missile

defense system was built with U.S. technology and aid from the Obama administration. This was the

result of extensive monitoring of international media reports, which allowed the reporter covering the

conflict to have a balanced viewpoint.

Editorials on the conflict appeared only in Kyunghyang, Hankyoreh and Hankook, with Kyunghyang

making the inadvertent mistake of saying, “if the situation develops into an all-out war….” There are

people who question the effect Korean newspapers would have if their editorials commented on the

conflict.

Nevertheless, Israel would be deeply concerned about a schism developing in the global media envi-

ronment. A boycott of the Jewish capital on unfavorable world opinion can be more harmful than

Palestinian resistance, so Israeli overseas missions and intelligence agents must be nervously watch-

ing public sentiment in foreign societies. The JoongAng Ilbo report on July 12 about “90 percent

intercepting ratio of Iron Dome against Hamas rockets” shows the wrong pattern of war reporting.

Such articles admiring the high performance of new weapons are often seen in the websites of arms

mania.

Negligence not only of the current Gaza Strip attack but international affairs in general is a chronic

malady of the Korean media. There are few international news stories and they are placed deep inside

newspapers. It is in contrast to British papers which divide news into national and international sec-

tions and give considerable weight to the latter every day. France’s Le Monde, with the word “world”

in its name, devotes much of the front page to international news, which also appears immediately

after the general news section.

62

Korean newspapers devote so much space to domestic politics and big events like the World Cup

soccer that they have little space left for international affairs. They so kindly report which politician

had dinner with whom and follow up on the nomination of candidates for a by-election in the Dong-

jak-B district of Seoul for nearly a month. And they abandon the poor Palestinian civilians dying

under bombardments. The Criminal Code provides punishment of those who assist the criminal acts

of others.




63

Defector Literature and Preparation for Unification

Choi Dong-ho

Professor Emeritus

Korea University

President Park Geun-hye’s speech about national unification in Dresden, Germany, in March this

year, has triggered debate on the so-called “unification windfall” and led to the July 16 launch of the

Presidential Committee for Unification Preparation. But it remains to be seen how much the high-

level panel headed by the president will contribute to the unification of the two Koreas.

It surely will be useful to calculate the political and economic gains and losses expected from national

reunification amid the turbulent geopolitical situation in Northeast Asia. But reunification pursued

without cultural and human understanding and communication between the two sides could be the

beginning of yet another conflict.

Korean literature has attempted to bridge the division over the past 70 years. It can be placed in three

categories: literature by writers who fled to the south to escape the communist rule in the north before

or during the Korean War (1950-1953); literature about national division, which gained momentum

during the 1970s under the influence of advocates of “people’s literature”; and literature about unifi-

cation, which began to sprout from literature about division during the 1990s.

Literature by the first generation of North Korean refugees was led by such famous novelists as

Hwang Sun-won, Sunwoo Hwi, Choi In-hun and Lee Ho-cheol, and poets, including Ku Sang, Park

64

Nam-su and Kim Gyu-dong. Literature on national division was spearheaded by critics advocating

people’s literature such as Paik Nak-chung, Yim Hun-young, Yum Mu-woong and Koo Jung-seo.

More writers who supported the ethnic homogeneity of North and South Korean people, such as Ko

Un, Hong Sung-won, Hwang Suk-young, Jo Jung-rae and Ahn Do-hyun, joined the movement.

What is noteworthy is that the inter-Korean joint communiqué of July 4, 1972 provided the platform

for discussions about literature on national division. Then it further evolved into debate on literature

about unification for independence, peace and national unity, on the occasion of the first inter-Korean

summit talks in 2000. The joint declaration on June 15, 2000, by leaders of South and North Korea

encouraged literary figures from the two sides to discuss publishing a magazine titled “Unification

Literature.” But it wasn’t easy to turn their enthusiasm into action.

The current transitional stage calls for an effort to define “defector literature” and approach it from

the perspective of literary history. Literature about recent North Korean defectors should be different

from literature of the first generation of North Korean refugees who settled down in the South from

the late 1940s to the early 1950s.

Above all, recent defectors were all born in North Korea and grew up under its ideological system.

While the early post-war literature was led by the first-generation refugees who were born and grew

up before national division, “division literature” was initiated by leaders of people’s literature from

the viewpoint of social criticism. In this regard, defector literature should be the realm of writers who

have firsthand experience of the North Korean system.

What calls for our attention here is the premise that defector literature should not only concern defec-

tors’ lives in the North but also deal with their experience in adapting themselves to the South’s market

economy system. Their future-oriented views have greater potential to contribute to Korean literature

than their criticism of the North’s system.

Even if the two Koreas are unified, conflict and confrontation will continue for a significant period

of time due to systemic, cultural and economic differences between North and South Korea. The

experience of post-unification Germany has much to learn from, but we may also recall the conflicts

on the Korean peninsula that followed the unification of the Three Kingdoms under Silla’s initiative

in the seventh century.

After unifying the peninsula by subjugating the rival states Baekje and Goguryo, Silla had to defeat

65

their remnant forces and expel the allied forces of Tang China. This is the reason why Silla’s Buddhist

monk Wonhyo had to preach his famous theory of “harmonization of disputes” (hwajaeng) at Gaeam

Temple in Byeonsan and delivered an outdoor sermon in Gimje, both in the old territory of Baekje.

We find ourselves in a very similar situation in Northeast Asia today. It was nearly a century after

unification that Silla achieved cultural flowering. We may encounter numerous unexpected trials and

challenges on our path toward unification. In spite of all foreseeable difficulties, it is our unavoidable

calling to achieve unification, if we think of the bright future of a unified Korea. I cannot help em-

phasizing once again the importance of defector literature in preparing for unification.

[Seoul Shinmun, July 21, 2014]



66

‘Forest of Wisdom’ or ‘Paper Graveyard’?

Han Ki-ho

Director

Korean Publishing Marketing Research Institute

On June 25, a public broadcasting television program, called “Walk in the Forest of Wisdom: A Gen-

uine Library Encourages Reading,” was linked on Facebook by someone who asked, “Then, is the

library that I am working for a fake?”

Forest of Wisdom opened on June 19 in Paju Book City, a newly built complex for the publishing

industry on the northern outskirts of Seoul. Its operator calls the library “a new concept inspiring

creative imagination, which a booklover can visit any time to read books.” Detractors call the library

part of an artificial venture of the so-called “book city,” which lacks basic infrastructure for urban

living.

The three major components of a library are facilities, resources (books) and personnel. Is it fair to

install huge shelves in a building, display books, and then call it a library? Resources should be stored

in a database so that anyone can find what they want easily. However, the Forest of Wisdom has never

attempted to compile a database. Finding a book may require a ladder because the books are stacked

up as high as 8 meters.

The 200,000 books on display were all donated. Except for those from dozens of individual scholars,

all exhibited books are from companies in the city. The organizer says that the library aims to store 1

million books. The library also includes a coffee shop and hotel. The hotel’s exterior is decorated with

67

books, offering a wonderful photo zone.

Visitors cannot borrow a book. They say the library is open 24 hours, but only a limited space is

accessible at night. An industry insider said, “If you visit the book café, you will find the books are

largely decorative objects and nobody opens a book. This place, where the books are mere ornaments,

is nothing but the largest coffee shop in the country.”

Book reviewer Byeon Jeong-su has taunted the Paju Book City, saying: “Without regard to whether

it is reminiscent of the vanity of ‘doenjangnyeo’ (soybean paste girl) who is obsessed with luxury

goods, skipping meals to save money, or the extravaganza of a pompous and self-serving upstart who

brags his own riches without shame, with neighbors struggling in poverty, it symbolizes the desolate

bare face of the Korean publishing industry.

“The brazenness to build dozens of buildings, looking as if they have just come out from a catalogue

of an architectural exhibition, on a wild plain without providing any urban infrastructure such as

transportation, housing, health care, child care and recreational facilities, and to insist on calling it a

city reminds me of a famous quote from the novel ‘The Little Prince,’ which goes, ‘You’re beautiful,

but you’re empty.’”

As Byeon pointed out, the Paju Book City is still and silent at night. Many of the buildings are empty.

It is heard that as some publishing companies which leased offices in the same building rushed to

open book cafés, competition among the tenants has intensified, often leading to a dispute. It is a pity

that publishing companies are competing over not the quality of books, but the quality of coffee.

Since this publishing town was not designed for living from the beginning, writers and translators,

who are not publishing company employees, are reluctant to visit it.

It is hard to get creative imagination there. Forest of Wisdom has management personnel called “book

recommenders,” not librarians. Book recommenders are temporary volunteers who are paid transpor-

tation fare and lunch money only. Those who planned this facility are mostly publishers of the hu-

manities and social science books. Have they been publishing such books solely to make money?

Let’s say it will do no harm to have a facility like this around. Nevertheless, pouring money from

state coffers amounting to 700 million won into such an establishment cannot be justified, because it

is criticized as a “graveyard of books” or “cinerarium of books” or even “paper graveyard.” Even

worse, it has been reported that an additional 500 million won will be invested into the establishment,

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encouraged by rave reviews from the local media, excluding the Kyunghyang Shinmun, which were

all overwhelmed by its scale and image.

Currently, the nation’s publishing market faces the worst crisis ever. At a time like this, state budget

should be funneled into the infrastructure that can provide essential help for the publishing industry

to open up new possibilities. For example, in order to promote the production of e-books, a core

publishing genre in the future, a variety of fonts fitting into the digital space should be developed and

the digital rights management (DRM) system should be streamlined. This does not cost a lot of money.

But the Ministry of Culture, Sports and Tourism has declined support, citing lack of funds.

When individual publishers apply for grants for e-book production, the ministry doles out money to

them as if feeding chickens. But they are trying to provide financial support to the Forest of Wisdom

at all costs. It is a typical example of state budget squandered for demonstrative purposes.

Byeon Jeong-su continues his sarcastic criticism: “This landmark symbolically representing Korea’s

publishing industry is amazingly similar to the books that are leading the nation’s current publishing

trend. Those books look so cool when put on bookshelves or carried around, but you feel uncomfort-

able when you sit down to read them. They are for decoration, rather than for reading; they are beau-

tiful, but empty. We now have another sensational landmark ― a “paper graveyard” christened the

“Forest of Wisdom.”




69

- Korea’s Rich People: Analysis on 2014 Statistics

- Geography of Jobs in Korea: Regional Characteristics and Implications

- Korean Musical Industry: Splendors and Woes

70

Korea’s Rich People: Analysis on 2014 Statistics

Noh Hyun-gon

Senior Research Fellow, KB Research, KB Financial Group

Kim Hee-kyu

Research Fellow, KB Research, KB Financial Group

Kim Yei-goo

Research Fellow, KB Research, KB Financial Group

I. Korea’s Rich People: Who Are They?

At the end of 2013, about 167,000 Koreans had financial assets worth 1 billion won or more, approx-

imately 2.5 percent more than 2012. Some 47 percent of wealthy individuals live in Seoul, but the

growth rate of this population in the capital city was slightly below the national average last year.

That reflected a sharp, overall slowdown in 2013 after steadily rising the previous several years.

The wealth of rich Koreans is tied primarily to real estate. In terms of value, however, their financial

assets have gained since 2012 while their property has declined. Despite the slump, they continue to

view real estate as the preferred way to accumulate more wealth.

1. Scale of wealth

There is no absolute standard definition of a “rich person” or “high net-worth individual (HNWI).”

Globally, however, it is common to define the HNWI as an individual who has investable assets worth

US$1 million or more.

This paper defines Korea’s rich people as “individuals who have financial assets worth 1 billion won

or more,” and examines their income, consumption and social awareness. The Lorenz Curve for in-

dividual financial assets was used to estimate the number of rich individuals, and basic data was

gathered from the “2014 Survey on Korean HNWIs’ Investment Behavior.”

The number of rich people in Korea has been steadily increasing. The exceptions have been 2008,

when the global financial crisis struck, and 2013. The approximately 2.5 percent growth rate last year

was a huge drop from the 2012 growth rate of 14.8 percent. The 2013 slowdown was due to a myriad

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of factors, including low interest rates, real estate market sluggishness, range-bound stock markets,

weak domestic demand, and lower returns on investment. The aggregate total of financial assets held

by rich Koreans was estimated at 369 trillion won (an average of 2.21 billion won per individual),

indicating that the top 0.33 percent of the Korean population held 14 percent of the household wealth.

By region, the wealthy were concentrated in the most populated areas. Seoul, the largest city and

financial and political hub, had about 79,000 rich people, or 47.3 percent of the national total.

Gyeonggi Province, the most populous province, which surrounds Seoul, had 32,000 (19.3 percent)

and Busan, the second-largest city, had 13,000 (7.6 percent). In terms of the year-on-year growth rate,

however, both Seoul and Busan lingered at 1 percent, far lower than the national average of 2.5 per-

cent. Ulsan, home of Hyundai Motor Corp. as well as a global-level shipyard and oil refinery, rec-

orded the highest increase rate of 9.5 percent. In the proportion of rich people against the total popu-

lation, Seoul also topped with 0.78 percent, followed by Busan with 0.36 percent, Daegu with 0.30

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percent and Gyeonggi Province with 0.26 percent.

Although the wealth is concentrated, within the locales, specific areas have seen slight pullbacks. In

Seoul, the three Gangnam districts (Gangman-gu, Seocho-gu and Songpa-gu) had about 30,000 rich

people, or 37.5 percent of the total, followed by Yangcheon, Yeongdeungpo and Yongsan districts. In

Gyeonggi Province, Seongnam had the largest number of rich people with about 6,000, followed by

Yongin, Goyang and Suwon. The share of the three Gangnam districts in Seoul’s total number of rich

people fell from 39.2 percent in 2009 to 37.5 percent in 2013, and the comparable ratio of Seongnam,

Yongin and Goyang in Gyeonggi Province also slid from 45.2 percent to 44.0 percent over the same

period.

2. Asset-forming Process and Asset Structures

As in other countries, “land” was the key to asset formation in Korea before industrialization. As

urban development continued, however, “real estate” (houses and buildings) became an important

medium of attaining wealth, along with corporate management, individual businesses, professional

jobs and financial investment. As time passed, inter-generational transfers of wealth through inher-

itance and gift have accelerated.

The foremost (No. 1) method by which Korea’s rich people have accumulated their current assets was

“business management” (32.5 percent) and “real estate investment” (25.8 percent), while “parents’

gift and inheritance” (25.0 percent) also exerted great influence.

The asset-accumulating methods varied by age group. Today’s oldest rich Koreans were economically

active in the 1970s and 1980s, and increased their assets mainly through the real estate boom of those

decades. But the rich individuals who are aged 40 and under have gained their wealth largely through

corporate employment as their careers coincided with greater business diversity and economic ex-

pansion in Korea.

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In 2013, the average rich Korean’s total assets (about 4.4 billion won in median value) consisted of

54.1 percent in real estate holdings (houses, non-residential buildings, commercial buildings, land,

etc.), 39.6 percent in financial assets, and 6.3 percent in other assets (artworks, memberships, etc.).

The previous year, real estate holdings and financial assets accounted for 55.4 percent and 38.0 per-

cent, respectively.

A falling real estate proportion and rising share in financial assets has been conspicuous since 2012,

when the real estate market contracted decisively. But the reduced real estate share has been due to

falling prices rather than to investment adjustments.

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Those with the largest portfolios had the highest share of their assets tied to real estate. Among the

age groups, there was not much difference in asset composition when their total assets were similar.

3. Awareness of Wealth and Target Amounts

When asked how much wealth an individual should possess to be regarded as rich, about 65 percent

of the survey respondents said “10 billion won or more” and 16.3 percent said “30 billion won or

more.” Asked whether they regard themselves as rich, 78 percent of respondents said “no.”

The median value of current assets held by rich Koreans was 4.4 billion won, and the median value

of their target assets was 7 billion won. Forty percent targeted 5 billion won to 10 billion won, and

20.3 percent targeted less than 5 billion won. The size of the individual financial goals was in propor-

tion to the amount of assets currently held.

As for the ways to reach their financial goals, a large portion of respondents opted for “business

management” or “real estate investment,” similar to the ways they already had accumulated wealth.

Of the two ways, two out of three respondents said real estate was the more desirable option. A con-

siderable portion of respondents said they would seek the help of asset managers, or directly invest

in stocks and funds, as supplementary means of increasing assets.

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II. Investment Behavior and Prospects

Real estate investments account for 54.9 percent of real estate assets held by Korea’s rich people.

Cash holdings, savings and installment savings, which together account for 47.9 percent of total fi-

nancial assets, have swelled further this year. The larger the size of total assets, the higher the share

of investment real estate against total real estate assets as well as that of risky financial assets against

total financial assets.

Among the rich people in Seoul and Gyeonggi Province, more of them saw their real estate values

decline rather than increase in the past year. Although the real estate market still topped the lists of

both promising investment targets and asset management concerns, the expectation for return on in-

vestment has tempered markedly. Therefore, interests in financial investment, both in local and over-

seas markets, will likely rise.

Rich Koreans have a firm understanding of financial products and are strongly confident about their

investing ability. Still, their confidence is less than before amid the constant economic uncertainty

and financial market volatility of recent years, and they are seeking professional advice more.

1. Asset Portfolios

As for real estate holdings, 44.6 percent consists of residential houses/apartments/officetels (studio

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apartments), 23.0 percent of non-residential/commercial buildings, 17.3 percent of investment hous-

ing/apartments/officetels, and 14.6 percent of land. Investment real estate accounts for 54.9 percent

of total real estate assets.

As the size of total assets grows, the share of investment real estate also rises. The proportion of

investment real estate amounts to 44.4 percent among people with total assets worth less than 5 billion

won, but the comparable share is 65.3 percent among those with total assets valued at 5 billion won

to 10 billion won, and 74.6 percent among those with total assets valued at 10 billion won or more.

Also, as the size of assets expands, the share of investment in non-residential and commercial build-

ings rises.

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As for structures, the top preference among rich Koreans is commercial buildings at 62.0 percent,

followed by apartments (42.3 percent), and officetels (24.3 percent). Those in Seoul and Gyeonggi

Province prefer investing in apartments (47.4 percent) and officetels (27.6 percent) more than their

provincial counterparts (26.0 percent and 13.7 percent, respectively), while rich people in the prov-

inces gravitate more strongly (71.2 percent) to commercial buildings compared to their Seoul coun-

terparts (59.1 percent).

The annual average rate of return on real estate investments is 5.6 percent, down from 6.3 percent last

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year, and the expected rate of return also fell to 8.1 percent on average this year from 9.1 percent last

year. The rate of return on real estate investments differed by region. The three affluent Gangnam

districts of Seoul led with 6.3 percent, followed by other districts of the capital with 6.0 percent,

Gyeonggi Province and Incheon city with 5.6 percent, and other provinces with 4.7 percent. The

expected rate of return was also higher among rich people in Seoul and Gyeonggi Province ― 8.4

percent compared to 7.0 percent in other regions.

In the current low interest rate environment, rich people who are leasing apartments and officetels

prefer monthly rent to large lump-sum deposits, which typically are used to buy fixed-income prod-

ucts. Even those who are leasing properties on a large deposit basis tend to shift to monthly rent.

Ninety-one percent of the survey respondents said they were aware of the government’s plan to in-

crease the tax on housing rental. In response, 42.8 percent of respondents said they would increase

the monthly rents or key deposits, while 38.6 percent said they won’t.

In terms of the behavior and awareness concerning real estate investment, the share of rich people

who have made indirect investments through real estate investment trust companies (REITs) and real

estate funds was only 6.8 percent, and 51.5 percent of those who have no experience with indirect

investing expressed no desire to do so. Even among those who have made indirect investments, 85

percent did so in real estate financial products.

Affecting such decisions most was indirect real estate investment’s rate of return. Among those who

plan to invest indirectly, 41 percent preferred REITs and 32 percent chose investment funds, but the

overall share itself was quite low at 26.8 percent.

In terms of financial assets, cash, savings and installment saving plans took up the largest share with

47.9 percent, followed by investment/savings insurance policies (18.0 percent), stocks (13.5 percent),

and mutual funds (11.5 percent). Portfolios also differed in relation to total assets: the larger the port-

folio size, the lower the proportion of savings and installment savings, and the higher the share in

stocks and bonds. This trend seems to reflect an investment formula in which people invest certain

amounts of money in safe financial instruments and the surplus in riskier options.

By region, rich people in Seoul and Gyeonggi Province show a higher proportion of investment into

such riskier instruments as stocks, funds and ELS/ETF/trusts, while provincial rich people tend to

invest in savings and investment/savings insurance policies.

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Comparing this year’s financial portfolios with those of last year, the share of financial investment in

relatively low-risk instruments, such as cash, savings, investment/savings-type insurances, increased,

while that of high-risk products, including stocks, funds, ELS/ETF/trusts, declined. This pattern has

been in place since 2012, and is more conspicuous among those with the biggest portfolios. Hit by

the volatility in the global economy, delayed recovery of the domestic economy, real estate market

slump, and the domestic stock market’s prolonged flatness, rich individuals seemed to be staying on

the sidelines in preparation for future investment opportunities and buying long-term savings insur-

ance policies for tax-shelter purposes.

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As many as 71.8 percent of Korea’s rich people hold fund products, of which domestic stock funds

account for 53.3 percent, followed by domestic balanced funds with 31.5 percent, foreign stock funds

with 24.3 percent, and domestic bond funds with 22.0 percent. As a whole, they tend to prefer stock

funds to bond funds, and domestic funds to foreign funds, showing little difference from the tenden-

cies of the non-rich in fund buying.

Among debt instruments, the rich people focused on national and public bonds, corporate debentures

and financial bonds. The Brazilian government’s bonds enjoyed popularity briefly in Korea, but less

than 5 percent of rich people are estimated to hold foreign bonds.

2. Changes in Asset Portfolios and Future Prospects

Although the uncertainty of global economy has eased to a large extent since the 2008 financial crisis,

changes have continuously occurred in the global asset management markets. Central bank policies

around the world, including the tapering of the U.S. Federal Reserve’s bond buying, or quantitative

easing, Japan’s economic stimulus efforts and geopolitical issues such as the Ukrainian conflict have

kept financial markets on edge.

Korea’s rich people, too, are presumed to have experienced significant changes and difficulties in

their asset management not only because of the global economic uncertainty and volatility in financial

markets but because of the domestic problems, such as delayed economic recovery, prolonged real

estate slump, low interest rates and range-bound stock market.

In overall changes in financial assets, the proportion of rich people who saw their financial assets

increase in the past year (42.3 percent) was 26.8 percentage points higher than those whose assets

declined (15.5 percent). Also, the portion of those who intend to add to their financial assets (45.8

percent) was 39.0 percentage points more than those who plan cutbacks (6.8 percent). However, the

high proportions of rich Koreans who have frozen their investing at the previous year’s level (42.3

percent) or will do so in the future (47.5 percent) indicate dampened expectations and confidence.

In terms of experiences and intentions to make changes in financial assets by region, rich people in

the Seoul metropolitan area showed more positive attitudes than those in provinces on both counts.

The regional differences expose similar trends to last year’s, which is attributable to their more con-

servative investing and their investment behavior in the past year.

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The increases or decreases in their financial assets over the past year were due more to the differences

in rates of return (60.9 percent, increases; 87.1 percent, decreases) than to further investing by indi-

viduals (39.1 percent) or pullbacks (12.9 percent).

In terms of the changes in real estate assets, rich people in the Seoul metropolitan area saw their real

estate assets decrease in the past year, but among their provincial counterparts, the share of people

whose real estate assets increased (35 percent) was 30 percentage points higher than that of people

whose real estate assets decreased (5 percent). In Seoul, the shares of rich people whose real estate

assets increased and decreased were similar to 2013, but the share of those whose assets decreased

was 12 percentage points higher than that of those whose assets increased this year. In the case of

Gyeonggi Province and Incheon city, the gap between the two shares slightly narrowed from 31.6

percent last year to 26.0 percent this year.

In future intentions to invest in real estate, too, the share of people who will maintain the current

investment level overwhelmed that of those who will increase or decrease investment, suggesting

their wait-and-see attitudes will highly likely continue in the real estate market for the time being.

Meanwhile, among the rich people who saw their real estate assets decrease in the past year, the share

of those who suffered from losses caused by fall in real estate values (94.2 percent) far surpassed

those who intentionally reduced their real estate assets (5.8 percent) through disposal or gift giving.

As for people who increased their real estate assets, 32.1 percent made additional purchases.

The growth of savings and installment savings is the most noticeable change in portfolios. The share

of rich people whose savings and installment savings increased in the past year was 31.5 percentage

points higher than those who suffered a decline. Moreover, many survey respondents said they plan

to increase their positions in savings and installment savings. The strong desire despite the record-

low interest rate reflects the dearth of other appealing investment options and the inclination to stay

in safe liquid assets such as cash and money market funds while they wait for brighter investment

opportunities.

Although rich Koreans did not completely avoid real estate speculation such as non-residential/com-

mercial buildings, their share sharply shrank from the previous year (increase rate – decrease rate =

32.2 percentage points). Meanwhile, the intentions to invest in gold and jewelry remained strong this

year, as they did last year.

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In terms of the best long-term investment, domestic real estate remained the top choice of the survey

respondents at 28 percent, followed by domestic stocks (14.3 percent). However, the share of re-

spondents who cited domestic real estate fell slightly (4.5 percentage points), and those who pointed

to overseas real estate also dropped from 11.8 percent to 5.3 percent.

Perceptions varied by region. Rich people in metropolitan Seoul are more optimistic toward stocks

and mutual funds and overseas investment, while province-based rich people tilted heavily toward

domestic real estate. This means there are differences in market outlooks among rich people depend-

ing on their current asset structures, investment inclinations and accessibility to investment targets.

In terms of risk-reward perception, overseas investment ranked low while domestic real estate and

savings instruments were high. This can be interpreted as preference for more stable and familiar

investment targets although their expected rates of return may be somewhat lower.

3. Matters of Concern for Asset Management

The foremost (No. 1) concern of Korea’s rich people is information on real estate investment cited by

23.3 percent, followed by asset portfolio adjustment (18.3 percent) and tax-saving information on

wage/business/financial income (13.8 percent). This can be seen as reflecting the high proportion that

real estate assets take in their wealth as well as their asset-accumulating process and changes in the

tax code.

Considering that 32.5 percent of the respondents cited real estate investment information as their

foremost concern last year, however, interest in real estate sharply fell this year while attention to

asset portfolio adjustment rose steeply. This reflects deepening worries about portfolio performance

amid the global and domestic headwinds. The proportion of respondents who prioritized information

on avoiding or saving gift and inheritance taxes was low, but those who chose tax shelter information

as the top two concerns was relatively high, suggesting their concern about not only the current asset

investment but also in inter-generational transfer of wealth.

Their main concerns also varied by asset size: interest in information on financial investment such as

funds/stocks/savings were higher among rich people with relatively small assets, while those with

relatively larger assets showed greater interest in the information on family business inheritance, sav-

ing gift and inheritance taxes, and overseas investment. Particularly, in making investment decisions,

one in every four respondents regarded tax shelters and other tax-related benefits as more important

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than profitability or safety.

In their outlook for domestic real estate over the next year, 48.8 percent of respondents said it would

be similar to current conditions. The proportion of those who expected a slight improvement exceeded

the slightly-or-much-worse camp, 29.8 percent to 20.8 percent. While cautious optimism was evident,

the share of positive outlooks fell and that of negative outlooks increased over last year.

As for the most favored real estate, the top choice was commercial buildings followed by land and

apartments, particularly those in “silver towns” in view of Korea’s rapid populating aging. Investment

outlook on officetels was better than that on apartments until early last year, but sharply fell recently

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in some regions because high inventory has depressed rental rates.

Since domestic stock markets have been stuck in range-bound trading in the past few years, interest

in overseas markets has risen gradually. The proportion of people who have intentions to make direct

investment abroad was 27.3 percent, but among those with total assets worth 10 billion won or more,

it went up to 49.2 percent.

By region, rich people in the Seoul metropolitan area were more inclined to invest abroad than their

provincial counterparts. Emerging economies in Asia, including China, India and Vietnam, drew the

greatest interest. As for the ways to invest, real estate came first with 37.6 percent, followed by stocks

with 24.8 percent, bonds with 20.2 percent, and offshore business operations with 17.4 percent. Those

who showed interest in real estate investment amounted to 56.7 percent last year.

Even as the returns on low-risk assets such as savings and installment savings accounts have nearly

hit rock bottom, Korea’s rich people have placed safety ahead of gains. The share of people who said

they would “maintain the current risk levels and returns” (58.8 percent) or “reduce both risks and

prospective returns” (28.8 percent) were higher than those who would “try to enhance prospective

returns by braving risks” (12.5 percent). However, the share of people who would take on risks in

search of higher returns increased from last year’s 6.4 percent, while those who would reduce risks

fell from 37.3 percent, reflecting the gradually increasing need to address lackluster portfolios.

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4. Perception and Use of Financial Institutions

Rich Koreans deal with 8.1 financial institutions on average (2.9 banks, 1.6 securities firms, 2.8 in-

surance companies, 0.7 post office/savings bank/mutual savings and loan (S&L) institutions, and 0.1

investment consulting firm). The larger their total assets the higher the number of banks they deal

with.

On average, the wealthy individuals keep 42 percent of their financial assets at banks, 25 percent at

brokerages, and 23 percent at underwriters. Compared with last year, the proportion of deposits at

banks and insurance companies increased, while those at savings bank/community S&L institutions

fell. By region, the share of deposits at banks and insurance firms was relatively lower among the

rich people in the Seoul metropolitan area than among their provincial counterparts, while they de-

posit relatively larger amounts at securities companies and investment consulting firms.

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Asked what type of financial institutions they want to deal with in the future, the share of people who

would increase transactions with banks (30.5 percent) was 13.8 percentage points higher than those

who would reduce their dealings (16.8 percent). Preference for banks fell slightly from last year but

proved to be common among rich people regardless of their asset sizes, even going up among those

with larger assets. However, the preference for savings banks and community S&L institutions has

waned considerably because of lingering concerns about their poor management and low interest

rates. The respondents also showed high intentions to increase transactions with insurance companies,

especially among those who have relatively lower asset value. The general preference for banks and

insurers is another reflection of flight to safety.

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As a whole, a high proportion of rich people expressed intentions to reduce dealings with securities

firms but those with assets worth 10 billion won or more showed an intent, albeit not very strong, to

increase transactions with brokerages. Such a trend, shown by some respondents last year, may reflect

rising intentions to increase investment in risky assets among super-HNWIs, but most respondents

showed negative attitudes toward dealing with brokerages.

Generally speaking, Korea’s rich people have a good understanding of financial products and strong

confidence in their investment ability. As many as 42.0 percent of respondents said “yes” to the state-

ment that “I trust my ability and intuition instead of relying on experts’ opinions,” while 23.0 percent

replied “no,” a sharp increase compared with last year’s 12.9 percent. The latter apparently reflects

their weakened self-confidence amid persistent fragile conditions in the economy and financial mar-

kets.

Also reflecting the eroded self-confidence is the much greater need to consult with experts in real

estate and tax issues as well as seek asset management advice and services compared to last year.

Besides, the wealthy Koreans prefer to make transactions on a face-to-face basis rather than online.

III. Income and Consumption, and Social Awareness

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The income of rich households is six times higher than that of ordinary households on average, while

their average monthly expenditure is only four times that of the latter. The proportion of spending on

their children’s education to total expenditure has declined among rich households. However, the

monthly educational expense of rich households with school-age children amounted to 3.29 million

won on average, or 28.1 percent of their total spending, showing they still are investing vigorously in

expensive education programs.

The majority of rich Koreans think that economic growth is more important than welfare, but the

proportion of respondents who had this view fell 12 percentage points from last year. The share of

rich people who expect high social mobility in their children’s generation also sharply dropped from

last year.

The rich people’s rate of participation in social contribution stood at 44.3 percent, up from last year

and slightly higher than 42.5 percent of ordinary-income people. As to reasons why they do not par-

ticipate in social contribution, a larger share of rich people than last year cited their distrust of phil-

anthropic organizations and lack of related policies, including tax benefits.

1. Income and Expenditure

In 2013, Korea’s private (real) consumption expenditure amounted to 681 trillion won, or 49.3 percent

of its (real) gross domestic product, constituting a significant part of the nation’s economic growth.

The nation’s income growth rate and consumption growth rate had shown similar curves until 2011,

but the subsequent drop in household spending has since forced the consumption growth rate to hover

below the income growth rate. In the case of high-income brackets, in particular, the consumption

expenditure has steadily shown a negative growth despite their sufficient capacity to spend. There-

fore, it is time for the rich people to change their attitude toward consumption, which lends itself to a

virtuous cycle of higher output demand, increased hiring, household income growth, and more do-

mestic demand.

The annual income of rich households amounted to 310 million won on average (200 million won in

median value), as seen in their responses to the “2014 Survey on Korean HNWIs’ Investment Behav-

ior,” hovering far above the average yearly income of 50 million won for ordinary-income urban

households (all households with two or more members) according to Statistics Korea’s “Household

Trend Survey” in 2013. Particularly, the annual average income of the upper group in financial assets

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(3 billion won or more) reached 430 million won, far higher than that of the lower group (financial

assets of less than 3 billion won), which remained at 270 million won.

In 2013, the nation’s household income growth rate stood at 2.1 percent, the lowest since 2009, and

the growth rate of household consumption expenditure was a mere 0.9 percent, the lowest since 2004,

when the government began to compile related data. The stagnant growth in both the income and

spending of Korean households affects not only small self-employed business owners but rich people

who operate large businesses. Among rich people who run businesses of their own, only 22.1 percent

said their sales increased in 2013 compared with 2012, while 25.6 percent said their sales fell.

In the case of self-employed businesses, in particular, 27.0 percent of respondents said their sales fell

from 2012, an increase of 11.6 percentage points over the previous year. But the share of corporate

businesses whose annual sales decreased fell 2.2 percentage points, indicating that sluggish consump-

tion expenditure affected small-scale self-employed businesses more severely.

Ordinary-income households and rich households clearly differ in their income composition. Among

ordinary households, the portion of earned income, including wage and business income, reached

87.1 percent, while that of property income, such as real estate, interest and dividend income, was 0.5

percent. Among rich households, 35.5 percent of their earned income came from property sources.

Nonetheless, the portion of earned income in rich households’ total income has steadily risen to 57.3

percent, while that of property income fell 1.8 percentage points from the previous year.

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Also, the portion of property income in the income of rich people with total assets worth 10 billion

won or more amounted to 49.3 percent, far higher than the comparable share of 28.8 percent among

rich people with total assets of less than 5 billion won. That means the larger their assets are the higher

the share of property income rises, indicating richer people can generate income from more diverse

sources through their assets.

In consumption, rich households’ monthly spending amounted to 10.22 million won (9 million won

in median value) on average, about 4.1 times higher than 2.51 million won of ordinary households,

in 2013. However, rich households’ average monthly spending fell 340,000 won from the previous

year, in tandem with year-on-year decrease of average monthly consumption in the top-10 percent

group of ordinary households. Also, the average monthly consumption of rich people with financial

assets worth 3 billion won or more was 12.01 million won, higher than 9.71 million won of people

with financial assets of less than 3 billion won, but the spending gap between the two groups narrowed

from the previous year.

Among rich households, spending on garment/accessories and leisure/hobby accounted for 18.4 per-

cent and 16.2 percent, respectively, of total expenditure. These are compared with the comparable

ratios of 6.8 percent and 5.6 percent among ordinary households.

Although the share of spending on their children’s education fell in wealthy households, it still ac-

counted for a substantial amount. Their average monthly spending on education amounted to 3.29

million won, or 28.1 percent of total consumption expenditure. Also, the share of education spending

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among the upper income group (with yearly income of 300 million won or more) reached 19.3 per-

cent, far higher than 12.7 percent among the lower group (with yearly income of less than 150 million

won). This means rich households with sufficient capacity to spend are actively investing in their

children’s education by providing them with expensive private tutoring or sending them to study

abroad.

Rich households’ average net monthly income (average monthly income – average monthly spending)

stood at 15.17 million won, about nine times higher than ordinary households. The average propensity

to consume has been on a continuous decline in Korea, from 80.6 percent in 2000 to 73.5 percent in

2013, resulting in the slump of domestic demand, and that of the top-10 percent income bracket

showed a particularly sharp drop from 66.1 percent to 58.6 percent over the cited period. Rich house-

holds’ average propensity to consume stood at only 50.0 percent, meaning they spend only half of

their disposable income. A relevant research shows that if the high-income bracket spends an addi-

tional 10 percent of their disposable income, it would create 170,000 new jobs and increase GDP by

7.2 trillion won on annual average.

Also, the average net monthly income of the top 20-percent households among the rich people

amounted to 43.79 million won, more than 11 times the bottom 20-percent households.

2. Awareness of Social Issues and Social Contribution

Asked which has more important value, “growth” or “welfare,” 55.8 percent of the rich Koreans chose

growth. However, that was 12 percentage points less than last year. By age, the share of reply that

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welfare is more important was 40.8 percent in the under-40 group, 40.2 percent in the 50s, and 50.7

percent in the over-60 group, pointing to higher awareness of welfare among aged people.

Currently, there is a widespread debate between supporters of “universal welfare” and “selective wel-

fare.” Among rich people, 60.8 percent of respondents said they preferred selective welfare, up from

last year and similar to the views of non-wealthy. But, unlike the non-wealthy, the share of rich re-

spondents who favored selective welfare did not go up with their age.

On social and economic upward mobility, a critical factor in maintaining social dynamism, both rich

parents and their children said there are high chances of social mobility in Korea, in stark contrast to

the views of ordinary people. Particularly, 49.3 percent of rich people replied that moving up the

social ladder is possible in their own generation depending on individuals’ efforts, while only 28.2

percent of ordinary people made a similar reply. In the case of rich people, however, the share of

respondents who foresee a high possibility of social mobility in their children’s generation fell 10.9

percentage points from last year to 46.8 percent.

The portion of rich Koreans who participated in social contribution activities during the past year

increased to 44.3 percent from 40.6 percent. As to the method of contribution, cash donations topped

with 79.7 percent, followed by donations in kind, such as goods and food, with 41.8 percent. Com-

pared with last year, the proportion of donations in kind increased, while those of cash contributions,

personal service activities and participation in year-end charitable events fell.

93

Among organizations through which the rich people participated in social contribution, religious or-

ganizations showed the highest share with 59.9 percent, followed by welfare groups for senior citizens

(25.4 percent), infants and children (22.0 percent), and general social welfare agencies (18.1 percent).

It is a notable characteristic of philanthropic activities in Korea that religious organizations play im-

portant roles. Also, philanthropic activities through general social welfare agencies, welfare groups

for disabled persons and international bodies have decreased, while those through educational insti-

tutions and foundations, children-related welfare bodies and political organizations have increased.

Individual contributions surged from 5.4 trillion won in 2006 to 7.7 trillion won in 2012, accounting

for 65.3 percent of total contributions. But the share of individual contributions against GDP remained

at a mere 0.59 percent in 2012, far lower than the United States and the United Kingdom. The share

of Korea’s rich people who are taking part in contribution activities stood at 35.3 percent, higher than

32.4 percent among ordinary-income people, but slightly lower than 36.2 percent last year. The yearly

amount of contribution by rich people was 14.73 million won (8 million won in median value) on

average.

Contributions through religious organizations sharply dropped to 9.99 million won this year, while

those through other organizations increased to 10.17 million won, exceeding contributions through

religious groups for the first time. In the case of rich people who contributed through both religious

and non-religious organizations, the proportions of money donated were 59 percent and 41 percent,

respectively.

Among the reasons why Korea’s rich people do not participate in social contribution activities, “I

don’t feel like doing so voluntarily” still took up the largest share of 50.7 percent, followed by their

distrust in concerned organizations with 23.8 percent. Particularly, the share of respondents who said

they were distrustful of such organizations sharply increased from last year. It is far higher than the

8.2 percent among ordinary-income people. This suggests Korea’s rich people are showing increas-

ingly less trust in charity organizations.

The share of respondents who cited the lack of relevant policy measures, such as tax breaks for social

contributors, also increased. As a rising number of rich people regard tax benefits as the most im-

portant factor in asset management and investment decisions, they perceive tax-related issues as very

important in their charitable activities as well. Accordingly, to encourage the rich Koreans to contrib-

ute to charitable causes, it will be necessary to improve the credibility of charity organizations and

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provide systemic incentives such as charitable trusts and tax benefits for those who use their personal

assets for the common good of society.

[KB Research Report, July 2014, published by

KB Research, KB Financial Group]



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Geography of Jobs in Korea: Regional Characteristics and Implica-

tions

Kim Dong-yul

Chief, Division of Policy Studies


Kim Min-jung

Research Fellow, Division of Policy Studies


I. Revitalization of Local Economies

Since its introduction 20 years ago, the local autonomy system has breathed new life into the economy

outside of the capital area (Seoul, Incheon and Gyeonggi Province). A 2013 survey found that living

conditions and life satisfaction have improved and business sentiment has been relatively positive

outside the capital belt. This in turn has helped support a reversal in population movement. In 2012,

non-capital areas had a net loss of 6,900 people, a 29-fold decline from 209,591 people in 2002,

though it was partly due to the influx into Sejong, where several central government agencies have

relocated.

The gross regional domestic product (GRDP) of non-capital areas has gradually increased since 2003,

with their growth rates exceeding that of the Seoul metropolitan area. The share of non-capital areas

in the total GDP reached 52.9 percent in 2012, compared with 50.6 percent in 2002. The capital area’s

compound annual growth rate (CAGR) of GRDP during this period has been 5.3 percent, compared

with 6.3 percent of non-capital areas.

The economic robustness has lent itself to the real estate market as well. Transaction-based price

indices of apartments have climbed much higher in non-capital areas with the number of unsold apart-

ments falling much more steeply than in metropolitan Seoul.

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The number of households returning to farming or retiring to the countryside has been on a constant

upward slope, contributing to the local economies. Those households totaled 11,220 in 2012, a two-

fold increase in just two years from 5,405 in 2010. The number of household members that moved

into rural areas more than doubled from 9,597 to 19,657 during the two-year period.

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This study examines changes in the geographic distribution of labor in 2007 to 2012 and identifies

the characteristics and trends in the “five plus two” economic regions. Attention is given to employ-

ment growth and qualitative changes in jobs as well as employment concentration in the Seoul met-

ropolitan area. The analysis is based on five categories: region, industry, size, employment status, and

type of organization. The micro data of the “Census on Business Establishments” by the Statistics

Korea was used.

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II. Regional Trends of Change and Characteristics of Jobs 1. Quantitative Criteria

1) Job Growth Rate

An analysis of job trends based on Korea Statistics’ “Census on Business Establishments” shows the

number of businesses increased by 340,000 nationwide, or 10.4 percent (2.0 percent in CAGR), in

the 2007-2012 period, while 2.63 million people were newly employed, a 16.5 percent rise (3.1 per-

cent in CAGR).

The Chungcheong region, which includes metropolitan Daejeon and North and South Chungcheong

provinces and is adjacent to the Seoul metropolitan area, led in the annual increase of business estab-

lishments (2.51 percent). It was followed by the capital area (2.27 percent) and Jeju (2.17 percent).

In terms of the annual growth rate of employees as well, Chungcheong placed first (4.16 percent),

followed by Jeju (3.39 percent) and the Seoul metropolitan region (3.12 percent).

The Seoul metropolitan region took up the largest share of available jobs (50.9 percent). In spite of a

slight increase, the Chungcheong region had the biggest increase in the share of jobs. The share of

workers in the region rose from 9.6 percent in 2007 to 10.1 percent in 2012, while the share of busi-

ness establishments grew from 9.9 percent to 10.1 percent. Chungcheong is viewed as a beneficiary

of development restrictions in the capital area. Jeju is benefiting from a steady surge of Chinese tour-

ists.

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2) Jobs for Women

The proportion of women in total workers ticked up from 40.9 percent in 2007 to 41.9 percent in

2012. By region, Jeju had the highest share of female workers at 47.2 percent and Gangwon came

next with 44.3 percent, as of 2012. This can be attributed to the flourishing tourism-related service

industries, including the hospitality industry, in both regions.

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Honam also had a higher share of female workers than the national average, owing to its thriving

service industry. Major metropolitan cities such as Daegu, Busan, Seoul and Daejeon, had higher

ratios of female workers, also due to prosperous service industries. On the other hand, Ulsan, an auto

and heavy chemical hub, was found to have the lowest share of women workers at 35.7 percent.

In terms of the proportion of female CEOs, Jeju came first with 43.2 percent, followed by Gangwon

with 42.9 percent and Dongnam with 41.2 percent. This is because Jeju and Gangwon regions have

relatively more active hospitality and wholesale and retail industries. Dongnam had an unexpectedly

higher proportion of female CEOs though the region’s economy depends on male-dominated heavy

and chemical industries.

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2. Qualitative Criteria

1) High-paying Industry Jobs

High-paying industry jobs were mostly concentrated in the capital area. These high salary jobs are in

finance, insurance, information and communication, utilities, professional scientific and technical

services, and educational services. The capital area’s share of these high-paying jobs in the nationwide

total increased from 56.9 percent in 2007 to 58.9 percent in 2012, owing to a 2.6 percent increase to

51.3 percent of the firms in those industries in the capital area.

During this period, the share of high-paying jobs in the nation slightly rose from 8.7 percent to 9.2

percent in terms of the number of business establishments, and from 18.9 percent to 19.1 percent in

terms of the number of workers, respectively.

Among the economic regions, the Seoul metropolitan region held the highest share of high-paying

jobs with 22.1 percent, slightly higher than the nationwide average of 19.1 percent and significantly

higher than Dongnam (14.7 percent) and Daegyeong (15.6 percent) regions. Utility service workers

are largely concentrated in Seoul, Gyeonggi and North Gyeonsang areas. Seoul and Daejeon had a

substantially higher share of professional manpower in scientific and technical services compared to

other areas. These two metropolitan cities also held more jobs in the finance and insurance industries.

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Seoul, Daejeon and Gyeonggi areas were also found to have higher portions of information and com-

munication technology service workers.

2) Creative Industry Jobs

Creative industries involve advertising, architecture, arts, handicrafts, fashion, publishing, software,

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video and audio, entertainment, research and development, and information and communication tech-

nology equipment.

As of 2012, more than two-thirds, or 67.2 percent, of the nation’s creative industry jobs were clustered

in the Seoul metropolitan region. The concentration ratio continued to intensify from 63.5 percent in

2007. Seoul took the lion’s share with 33.8 percent of creative jobs available across the country, and

Gyeonggi Province came next with 29.8 percent, followed by North Gyeongsang Province with 5.4

percent.

In terms of the intra-regional proportion of creative industry jobs, the Seoul metropolitan region

ranked top with 11.6 percent, higher than the nationwide average of 8.7 percent. Creative industry

jobs accounted for 5.2 percent in Jeju, 4.5 percent in Dongnam, 4.4 percent in Honam and 4.0 percent

in Gangwon. The share of creative industry jobs against total occupations was 12.1 percent and 11.9

percent in Seoul and Gyeonggi Province, respectively. They were followed by Daejeon with 9.8 per-

cent and North Gyeongsang Province with 9.0 percent.

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3) Conglomerate Jobs

As of 2012, Seoul and Gyeonggi Province had 58.2 percent of jobs at large companies with 300

employees or more, a further rise from 56.6 percent in 2007. Dongnam region, which includes Busan,

Ulsan and South Gyeongsang Province, had the second-highest portion of 14.6 percent, which

showed a 1.8 percentage point drop from 16.4 percent in 2007. Meanwhile, Seoul metropolitan,

Chungcheong and Jeju regions saw increases in their share of conglomerate jobs nationwide, while

Dongnam and Daegyeong regions witnessed decreases.

The national proportion of conglomerate workers increased to 13.9 percent from 12.8 during the same

period, while that of those working for companies with four employees or less dropped from 30.6

percent to 28.5 percent. In terms of the intra-regional share of conglomerate jobs, the capital area

came first with 15.9 percent, followed by Chungcheong with 14 percent. By city and province, Seoul

ranked top again with 21.4 percent, and next came Ulsan (20.3 percent), Daejeon (15.4 percent) and

South Chungcheong (14.7 percent).

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4) Full-time Jobs

As of 2012, 52.4 percent of full-time jobs were clustered in the capital area, a slight drop from 52.6

percent five years earlier. The Dongnam and Chungheong regions followed with 15.8 percent and

10.3 percent, respectively.

The share of full-time jobs in total employment rose from 61.8 percent to 62.4 percent during this

period. The heavy and chemical industries of Ulsan helped give it the highest share of full-time work-

ers at 68.2 percent, followed by Seoul (66.5 percent) and South Chungcheong Province (65.3 percent),

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both above the national average of 62.4 percent. Jeju and Gangwon trailed far behind with 53.8 per-

cent and 52.9 percent, respectively.

5) Self-employed Jobs

The proportion of small business owner-operators in the national labor market dropped from 22.4

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percent in 2007 to 20 percent in 2012, attesting to the vulnerability of self-employment and the sub-

sequent restructuring process. Gangwon Province showed the highest ratio of self-employed jobs

(26.8 percent), followed by Jeju Province (25.1 percent), Daegu Metropolitan City (24.9 percent),

South Jeolla Province (23.7 percent) and North Jeolla Province (23.6 percent), all exceeding the na-

tional average of 20 percent.

6) Corporate Jobs

Among the five types of organization (privately-held enterprise, corporation, non-business organiza-

tion, non-corporate organization, and state or local autonomous bodies), 55.1 percent of corporate

jobs were clustered in the Seoul metropolitan region in 2012, a slight drop from 55.5 percent in 2007.

By economic region, metropolitan Seoul (47.2 percent) and Chungcheong (42.1 percent) were the

only regions that had higher shares of corporate jobs than the national average of 43.3 percent. By

city and province, Ulsan (52 percent), Seoul (51.3 percent), South Chungcheong (44.7 percent) and

Gyeonggi (43.9 percent) exceeded the national average.

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III. Summary and Implications During 2007-2012, the Chungcheong region had the highest job growth rate, and the Jeju, Honam

and Seoul metropolitan regions exceeded the national average. Seoul metropolitan region’s shares

of workers and business establishments against the nationwide total increased from 50.8 percent to

50.9 percent and from 46.8 percent to 47.4 percent, respectively.

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Jobs in high-paying and creative industries and big companies, which are superior in quality and

popularity, were most heavily concentrated in the Seoul metropolitan region, increasing steadily.

Seoul metropolitan and Chuncheong regions had relatively better employment conditions. By city

and province, Seoul, Daejeon and Ulsan metropolitan cities and Gyeonggi Province provided better

jobs.

Seoul and Daejeon offered more jobs in high-paying industries, including finance, insurance, and

professional scientific and technical services, with the share of the capital showing a steady upward

curve. Seoul and Gyeonggi ranked highest in the share of creative industry jobs, with the capital

city’s ratio continuing to rise. Seoul and Ulsan showed overwhelmingly higher ratios in big com-

pany and full-time jobs. In the meantime, Gangwon, Jeju and Daegu were high in the ratio of self-

employed jobs.

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In view of an excessive concentration of jobs, both quantitative and qualitative, in the Seoul metro-

politan area, multifaceted efforts toward a more balanced national development will have to be

made continuously. In their efforts toward job creation, economic regions should consider both

qualitative and quantitative aspects. Persistent efforts are needed to create preferred quality jobs,

particularly in high-paying and creative industries, and large businesses. To that end, efforts to cre-

ate quality jobs in non-capital areas must continue, such as attracting headquarters of large corpora-

tions and creating high value-added, multi-service complexes. By using the free economic zones

located in each region, domestic and foreign companies may cooperate to build high-tech industrial

complexes and ease regulations.

Investment efforts should also continue to create high value-added service complexes, which will

provide research and development, education, and medical services, near the Sejong Metropolitan

Autonomous City and the regional innovation hub cities. Continued fiscal support and private in-

vestments are needed to improve the living environments in Sejong and regional innovation hubs,

thus allowing more families to move in.

Policies to increase employment demand and supply should be drawn up for different regions in

consideration of their respective circumstances, such as fostering universities at strategic locations

and creating specialized industrial complexes. By educating talented young people to serve in their

respective regions, these local universities will contribute to favorable conditions for creating pre-

ferred quality jobs.

A virtuous circle will have to be created, in which the nurturing of specialized industries suited for

regional economic conditions will lead to the additional attraction of competitive domestic and

overseas companies. Daejeon provides a good example with the Korea Advanced Institute of Sci-

ence and Technology (KAIST) and R&D complex generating significant synergic effects in creating

large numbers of high value-added service jobs.

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[Weekly Economic Review 14-28, No. 599, July 11, 2014,

published by Hyundai Research Institute]



115

Korean Musical Industry: Splendors and Woes

Son Hyo-rim & Kim Jeong-eun

Staff Reporters

The Dong-A Ilbo

The Korean musical industry is in danger of drying up. Musical Heaven, one of the more established

production companies, simultaneously cancelled two productions that were being prepared, “Sweeny

Todd” and “Daddy Long Legs,” and last month ended up in court receivership.

Recently, Seol Do-yun, president of the Korean Musical Theater Association, triggered a controversy

when he accused Interpark, a major ticket agency, of “monopolizing the ticketing market and exerting

undue influence on production companies.” Interpark refuted the claim. This article looks at some of

the problems the musical industry faces and possible solutions.

Beneath the Glamour: Staging Shows on Debt

One of last year’s big hits was the licensed production of “Rebecca.” It brought in 7 billion won

compared to production costs of 4.9 billion won. But producer EMK Musical Company only gained

a profit of 100 million won. After subtracting the actors’ salaries, theater rent, royalties and value

added tax, ticketing fees, and profits to investors, EMK was left with 300 million won.

EMK president Eom Hong-hyeon said an extra scene and changes to the set cost an additional 400

million won but only half was recognized as production costs. The company had to shoulder the other

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half, which reduced its profit to 100 million won.

Last December, the New York Times reported on the overheated musical market in Korea. Noting

that not only successful Broadway hits were being staged in Korea but the failures also, the newspaper

said that Broadway producers were offsetting losses in the U.S. market by taking 15 percent of reve-

nues in Korea as royalties as well as various other fees.

In a Dong-A Ilbo survey of 20 musical industry figures, 15 blamed an inordinate number of produc-

tions for the industry’s woes. Rising production costs and shortages of actors and staff as well as

investors and audiences also were cited.

According to Interpark, Korea had 1,544 musicals in 2008 and the number swelled to 2,500 in 2013.

However, as different productions of the same musical are counted as separate works, the actual num-

ber of musicals performed each year is around 400.

Ten years ago the figure was only about 50. Over the past 10 years the size of the musical market has

increased from 100 billion won to 300 billion won. While the market size has tripled, the number of

productions has increased eight-fold.

The expansion led to the belief that musicals are money-makers, which in turn attracted a host of new

players. EMK had great success with “Emperor Rudolf,” which generated 6.4 billion won, but its net

profit was only 60 million won. Industry figures say that if profits are so low even with successful

productions then the situation with less successful productions is quite obvious. “If this keeps going,

we’ll all end up going under together,” they say in agreement.

A Ticking Bomb, or a Bike Running Not to Fall?

The cost of producing a musical has risen by more than five-fold over the past 10 years. This is

attributed to the limited number of staff and available actors. It is known that most top actors in a big-

name production are paid more than 10 million won per performance, with Jo Seung-woo and Kim

Jun-su fetching even more.

Actors able to handle leading roles cannot realistically appear in more than three productions a year,

but they get offers for some 40 to 50, hence the bidding war and skyrocketing salaries. One producer

who requested anonymity said, “Producers compete to offer higher appearance fees, as if it was an

auction. The top 10 musical actors in Korea get paid as much as Hugh Jackman on Broadway. From

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just one production they make enough money to buy a house.”

Payroll costs for staff and actors do in fact account for some 40 percent or even 50 percent of total

production costs. As the situation worsens, the more difficult it is for a musical to be a success. If a

show is a success, the producer may earn some tens of million to hundreds of million won. But failure

may leave a debt load reaching billions of won.

“Since Musical Heaven ended up in court receivership, investors are asking, ‘Who’s next?’” said

another musical producer. The situation has reached the point where the industry is waiting for a time

bomb to explode. Yet another producer said, “Companies stage one show after another in an effort to

pay the debts for one production with profits from the next. As profits drop and investment decreases

rapidly, it’s only a matter of time before the bomb explodes.”

In Korea, a successful musical can bring a relatively high return on investment of 10 to 15 percent in

a short time. However, in many cases investors find it hard to recover their money. Production com-

panies with poor finances are often compared to a bicycle that falls the moment it stops. As they

commonly pay off debts from one production with investment money for the next, the only way to

survive is to stage shows one after another.

As only a handful of producers are debt-free, it is essential for any would-be investor to check how

heavily a company is in the red. Investor A said, “I know a case where the musical was a success but,

because the production company used the profits to pay off debts, the investor recovered less than

100 million won of a total of 500 million won invested.”

One solution is to establish a special purpose corporation (SPC) for cultural projects and make sure

investment money is used for the designated production only. But it is not that simple.

“If we suggest setting up an SPC for investment of the total production costs, many companies reject

the idea,” said investor B. In addition, more often than not it takes a long time before the accounts are

settled and the investor sees any return. Investors even joke, “A company with debts of more than 10

billion won gets to call all the shots.”

Moreover, investor C said, “Most production companies have no assets — no real estate or savings

— so even if you sue or request provisional seizure of property, there’s nothing to be gained. The

only thing to do is make sure the company keeps staging works to make the money flow.”

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Unlike movies, the revenue and rates of return are not made public so the investor has to find out as

best he can. As producers are required to look after both management and creative sides, it is often

that business sense is lacking. “Everyone knows that a large investment in the set and a bigger en-

semble will increase the quality of the production. But it is necessary to have a business mind and see

musicals as an industry that needs to make a profit,” said investor B.

There is a consensus that to promote investment in musicals, transparent accounting has to be guar-

anteed to make sure that any money invested is used only for the specified production.

Long Runs: Only Six out of 100 Shows

When the big-scale licensed musical “A Tale of Two Cities” opened in 2012, its first run lasted six

weeks and four days. The production company BOM Korea wanted a two-week extension. As a work

unfamiliar to Koreans, the show got off to a slow start but thanks to word of mouth, audience figures

climbed. But an extension was not possible because the theater was already leased for another pro-

duction

“The second run was staged the following year, but in terms of marketing and in other aspects it was

like starting all over again. It was too bad that we couldn’t have a longer first season,” said Choi

Yong-seok, head of BOM Korea. For their part, producers say it is hard to recover costs when most

musicals run less than three months. “Priscilla,” currently in its first season in Korea, has been sold

out for most of its three-month run, but it has not made enough profit to cover up-front costs. A second

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season is needed to turn a profit.

According to the Korean Musical Theater Association, 78 percent of all musicals ran less than 30

days in 2011. Shows running 31 to 90 days accounted for 16.5 percent, and those running over 90

days just 5.8 percent. Among the smaller productions, there are some that have been running for

years. “Nanta,” which premiered in 1997 and aimed at foreign tourists, is performed in its own dedi-

cated theater every day. “Washing” has been on stage since 2005 and “Finding Kim Jong-wook” since

2006.

Since 2001, only 10 big-name musicals have run longer than six months. They include “The Lion

King,” “The Phantom of the Opera,” “Wicked,” “Jekyll and Hyde” and “Aida.” Many argue that to

solve the deep-rooted problem of falling profitability, musicals with strong chances of success should

be staged for long runs to increase profits. In the Dong-A Ilbo survey, 65 percent of the respondents

saw the need for longer runs.

The difficulty of a long run lies in the nature of audiences. “Unlike Broadway and West End produc-

tions, which attract a lot of tourists, Korean musicals have to fill seats with local audiences, which

makes it difficult for a show to last more than three months,” said Yun Ho-jin, head of ACOM Inter-

national. The Korea Culture and Tourism Institute estimated the size of the musical audience at 5.3

million, as of 2010. In the same year, Broadway musicals drew more than 7.1 million foreign tourists

alone.

Another problem is the system of leasing out theater space for a limited period of time only. Ministry

of Culture, Sports and Tourism statistics show that there were 944 theaters in the country, as of 2013.

However, producers focus on a few famous theaters, such as Blue Square, LG Art Center and the

Seoul Arts Center.

“When the famous theaters open applications for leasing, the competition is fierce with 30 to 40

productions vying for space,” said Seol Do-yun, head of the Korean Musical Theater Association.

“Even if a show is popular, when the lease period expires it has to end. And an unsuccessful produc-

tion has no choice but to continue for the set period.”

For a successful show to stage an extended run, it is necessary for the failures to close quickly. As

profits are calculated on a weekly basis on Broadway and London’s West End, unpopular musicals

may close within a few weeks.

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Won Jong-won, musical critic and broadcasting and media professor at Soonchunhyang University,

says that producers should not complain about the small domestic audience base but think about ways

of attracting more people by means of lowering ticket prices and staging shows for a longer period of

time. “The musical industry needs to be restructured all over again,” he said.

Solution Rests in Industry Restructuring

From the producer’s perspective, the choice of theater can make or break a musical. Not only revenue

but audience satisfaction depends on the size of the theater, its accessibility and the stage facilities.

According to the Dong-A Ilbo survey, six musical producers’ first choice for a long-run show was the

Blue Square (Samsung Electronics Hall), which is operated by Interpark and dedicated to musicals.

Explaining its popularity, Song Seung-hwan, president of PMC Production, says that Blue Square has

more seats than any other musical theater, which means production costs can be recovered faster.

Blue Square has 1,766 seats, compared to 1,100 at LG Art Center, 1,241 at Charlotte Theater and

1,250 at Chungmu Art Hall.

A case in point is the difference in revenue earned by “Wicked” following change of theater. Accord-

ing to producer Seol & Company, when the overseas production visited Seoul, a sold-out performance

at Blue Square brought in 199 million won. The domestic licensed version of the same musical is

being staged at Charlotte Theater, which generates 125 million won for a sold-out performance. At

Blue Square, 441 more tickets can be sold for each performance.

The second most popular theater, by a small margin, was LG Art Center, chosen by five musical

producers. Its location plays a major role, being directly accessible from Yeoksam subway station on

Line 2, as do the “premium effect” derived from its reputation of staging carefully selected works,

and the sound and stage facilities. Following in popularity were Charlotte Theater and the Opera

Theater at Seoul Arts Center, while Chungmu Art Hall and D-Cube Arts Center received one vote

each.

[July 22-23, 2014]



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- B&B Business Beckons Young Koreans

- Storytelling is the Key to Tourist Development of Neighborhood Alleys

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B&B Business Beckons Young Koreans

Kim Hyo-in

Staff Reporter

The Chosun Ilbo

Song Dong-yong, 34, owns a bed & breakfast (B&B) in the Mapo District of Seoul. It is a five-room

house that includes double-decked beds and a common room with large tables. Started in 2010, the

B&B was marketed mainly through the Internet and by word of mouth and is now thriving. In the

high season, more than 80 percent of its rooms were occupied by Korean and foreign tourists.

Song is now expanding his business to a nearby three-story house with 11 rooms. He is part of a new

trend in the hospitality industry. In Korea, operating a small-scale home-stay lodging facility typically

has been considered appropriate for the middle-aged or elderly people seeking income after their

retirement. But an increasing number of young people are joining the industry in urban areas, in the

form of guest houses, home-stay facilities and B&Bs.

At these budget places, a single-person room or a twin room typically costs between 50,000 won and

90,000 won. A room for four to six people costs 20,000 won to 30,000 won per night. The prices

include breakfast.

Before Song opened his B&B, he had worked for a conglomerate for two years. “When I told my

parents that I would quit the job to start a B&B, the whole family was absolutely shocked,” he says.

“Strongly opposing my plan, they even said I would not be able to get married as a B&B owner. But

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when I saw my senior colleagues in the company working day and night and even on weekends, I

knew that it was not for me. I am very happy to meet with tourists coming from around the world,

and make money at the same while doing things I like.”

Thanks to this cohort of young B&B operators, the urban B&B industry is growing rapidly. Seoul

had 366 B&Bs at the end of 2013, practically doubling in just one year. During the first half of 2014,

another 144 places have opened to raise the total number to 480.

According to the Seoul Metropolitan Government, young owners in their 20s and 30s account for

33.5 percent of the small-scale urban lodging businesses which opened in 2013 and 2014. In terms of

age group, they have replaced the 40-something owners, who operated 31.4 percent of all the budget

lodging facilities run by individuals between 2004 and 2011. Those in their 40s now operate 20.6

percent of the facilities. Those in their 50s account for 26.5 percent, and those in their 60s or older

occupy 18.7 percent.

One of the reasons young Koreans are becoming B&B operators is their foreign language skills. Since

foreign tourists who opt for cheaper accommodations are their key clientele, foreign language skills

are a big advantage. Kim Dong-gi, 39, who started running a guest house in Seogyo-dong, Mapo

District, in January 2014, had traveled 44 countries over 15 years. “As a budget traveler using guest

houses and B&Bs myself, I wanted to set up my own guest house business. Since I speak English and

Spanish, I do not have any communication problem with foreign guests,” he says.

Young entrepreneurs are also more skillful in online marketing and promotion. Foreign tourists pri-

marily use the Internet for B&B information and usually make direct online bookings. Some 81 per-

cent of foreign guests who stayed in Seoul B&Bs said they made online bookings without the help of

tourist agencies. Kim runs his own English website and also does marketing through social network-

ing services. As many as 5,600 people have pushed the “like” button for his Facebook website and

subscribe to its news as well.

Among the 10.04 million foreign tourists who visited Korea last year, 17.7 percent stayed at individ-

ually-run small-scale budget accommodations in urban areas, a higher portion than those who stayed

at upscale hotels (13.3 percent) and tourist motels (21 percent). Eyeing to capitalize on the increasing

popularity of B&Bs among foreign visitors, some Koreans start business without proper preparations.

Seoul city authorities estimate there may be some 400 places that are in business without registration.

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A city official said, “Urban B&Bs are fast emerging as a new business opportunity for young people

in their 20s and 30s, but not all of them run a successful business. Before opening a place, it is nec-

essary to do sufficient market research and set up one’s own business plan.”

[July 11, 2014]



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Storytelling is the Key to Tourist Development of Neighborhood Alleys

Kim Hyo-in

Staff Reporter

The Chosun Ilbo

At the No. 7 exit of Sungshin Women’s University Station, a sign points tourists to Miari Fortune-

tellers’ Village. There, an alley crowded with business sign boards such as “Prophet’s House,” “Div-

ination Center” and “Master Astrologist” beckons visitors. These are the places where blind fortune-

tellers once plied their trade, beginning in the 1970s.

Until recently, the alley was an ordinary commuting path for university students. Now it is one of a

growing number of Seoul alleys that are quickly becoming valuable tourism assets. From “Tree-lined

Street” (Garosu-gil) in Sinsa-dong, Gangnam, to “Gyeongridan [Kyungridan] Street” in Itaewon,

small neighborhood alleys are enticing young clients and tourists.

Assisted by the metropolitan government of Seoul, Seongbuk District plans to promote the story of

Miari Hill. Based on the idea that ordinary Koreans used to visit the area to see fortunetellers and get

advice, re-enactment programs will be offered to visitors.

Thanks to the popular alleys, adjacent areas also are gaining business opportunities, prompting in-

tense competition among Seoul’s district offices in promoting their byways as must-sees. For in-

stance, Geumcheon and Guro, the two districts that share the Guro Industrial Complex alley, have

been competing for their own distinctive tour programs. As a result, seven tourist paths have been

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launched around the complex.

Transforming a rather ordinary neighborhood alley into a tourist attraction requires funding for ma-

terials such as maps and brochures as well as infrastructure support. Each district in Seoul is turning

to the city government for fiscal assistance. When the Seoul Metropolitan Government announced a

contest to finance tourist development projects for neighborhood alleys early this year, 10 out of the

capital’s 25 district offices submitted their entries. Each district proposed candidate alleys and after

application screening, presentations and questioning, five districts were selected.

The city government is providing 300 million won for the alleys, with 50 million won to 80 million

won earmarked for each project. A city official explains, “It takes a lot to prepare for such a proposal

but district offices are extremely keen to get the budget support to develop their area into a popular

tourist destination. Except for Gangnam and some others that are already rich in tourist appeal, other

district offices are in need of budget support to embark on such plans.”

Due to heated competition, some districts have applied two or three times before winning assistance.

Jongno District succeeded in securing the largest amount of subsidy this year, after failing last year.

With a fresh budget injection of 80 million won on top of 20 million won from its own coffers, Jongno

District is going to develop an alley of sewing factories in Changsin-dong into a tourist venue. It will

involve increasing the number of volunteer tour guides and refurbishing old sewing factories into a

street museum.

However, some skeptics question the viability of alley tourism programs because their economic ben-

efit has not been proven. To assess the impact of the projects launched last year, the city government

asked district offices to submit an evaluation report but did not require economic projections. There-

fore, applications lacked objective data on business patterns around the targeted alleys and survey

results on visitor satisfaction. Experts say such quantifiable assessments are necessary to gauge the

policy impact.

In fact, last year’s projects including “Village of Mountain Birds” in Eunpyeong District and “Village

104” in Nowon District have not been adequately promoted among Seoul citizens, let alone foreign

tourists. “After budget assistance, we conduct expert-led project assessments, but we do not survey

the effects on local economy. At this moment, we do not have a plan to carry out such a survey,” a

concerned city official said.

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[July 14, 2014]



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- Mountains are Archetypal Space of Life to Koreans

- ‘CSI Agent Report’ of Late Joseon Period

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Mountains are Archetypal Space of Life to Koreans

Choe Jae-bong

Staff Reporter

The Hankyoreh

“Humanities of Korean Mountains”

By Choe Won-seok, Hangilsa, 640 pages, 20,000 won

“Mountains surround me / Telling me to just sow seeds / Telling me to just farm the land / … /

Mountains surround me / As life wanes like the old moon / Telling me to live like the cloud / Telling

me to live like the wind” (From the poem “Mountains Surround Me” by Park Mok-wol)

The poet thinks of mountains as the basis and guardian of his life. It may be because he is fond of

mountains, but then again mountains are a common feature of Korea as 70 percent of the land is

mountainous. Gyeongsang National University Professor Choe Won-seok simply states that Korea is

a country of mountains. “In Korean society, mountains were the archetypal space of life and symbol

as well as the military, economic, social and cultural foundation,” he says.

The book is the accumulation of the author’s study of mountains over 20 years. His endeavor began

when he was writing his master’s thesis about mountains under the supervision of Professor Choe

Chang-jo, a feng shui expert, at the Department of Geography at Seoul National University. Calling

himself neither Confucian nor Buddhist but a “mountainist,” the author expounds the history, context

and future challenges regarding Koreans’ perception of mountains.

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He says Koreans have had three perceptions of mountains ― divine, dragon and man-made. In the

beginning, people equated mountains with the heavens. In the founding mythology of Old Joseon,

Hwanung, the son of Hwanin, the sun god, descended from the heavens to save mankind and arrived

at the holy tree of Taebaek Mountain. As such, the mountain was considered a medium linking the

divine being in the heavens with humans on earth, and the mountain itself was worshipped as if it

were heaven.

The mountain as an object of worship was later regarded as a dragon as people found the mountain

providing the essential environment for life. In Dili renzi xuzhi (Everything that Geomancer Should

Know), a Ming dynasty text on feng shui, mountains are described as “big and small, rising and

crouching, rebelling and obeying, hiding and emerging; hence no mountain is the same, and even

their subtle movements are all different.”

It is noteworthy how the analogy was made. Feng shui considers the location of water and the way it

runs as much important as mountains itself. “Mountains seem as if the qi [life energy] is stored inside,

and water seems as if the qi is in constant motion. Qi traveling through the mountains is condensed

in a dragon, and when the dragon faces water it lingers and spews vitality.” This is why Professor

Choe devoted a whole chapter to water.

After taking advantage of the divine nature and vitality of the mountains with the image of a dragon,

people eventually began creating mountains. If a mountain was not found where it should be accord-

ing to feng shui, people heaped dirt onto the place and created a forest, or built a stone pagoda, or

erected a guardian pole, believing they would perform the role of a mountain.

Professor Choe notes, “Korea has a unique culture of creating mountain-like structures to create an

optimal environment in which man and nature can harmoniously coexist. This tradition can be utilized

as a historical and cultural resource in creating an ideal residential environment.”

A genealogical descriptive system of the mountains best represented by the 18th-century book Sang-

yeongpyo (Chart of Mountain Ranges) is seen in no other country and is considered Korea’s unique

asset and heritage. The book written in late Joseon describes the mountain ranges across Korea as one

grand ridge called Baekdu Daegan with Mt. Baekdu (Paektu) as the head and 14 branches emanating

from it. The 14 branches are divided into 13 arteries harboring rivers and streams and one main ridge

of solely mountainous territory. As to this system, the author provides an intriguing interpretation that

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it reflects the patriarchal and hierarchical social order and tribal consciousness in late Joseon.

Taking note of the fact that the famous mountains in Korea are grouped along the trunk line of Baekdu

Daegan, the author claims that this spinal ridge running through the Korean peninsula could be in-

scribed on the World Heritage List and a new school of Baekdu Daegan studies could be formed. He

has participated in the research project commissioned by the Cultural Heritage Administration to

prepare for the nomination of Mt. Jiri as a World Heritage site in 2011.

The author suggests in the book that Mt. Jiri stands a good chance of inscription in view of its value

as an outstanding “cultural landscape,” since the mountain forms a single great network of nature,

history and culture. In the epilogue titled “My Journey of Mountain Study,” he presents his personal

goals of researching the culture, customs and lifestyles of people who live around Baekdu Daegan,

as well as establishing a humanities research institute dedicated to the study of mountains.

[July 21, 2014]



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‘CSI Agent Report’ of Late Joseon Period

Kim Yun-jong

Staff Reporter

The Dong-A Ilbo

“People Are Not Afraid of the Law”

By Yu Seung-hee, Ehaksa, 285 pages, 17,000 won

“Joseon Gunman,” currently airing on Wednesday and Thursday nights, is a popular Korean TV

drama. There weren’t just gunmen in Joseon, though. There were professional forgers and con men

just like in the movie “Ocean’s Eleven.”

In 1777, the first year of King Jeongjo’s reign, three men ― Lee Ddong-yi, Lee Ddong-gae and Kim

Chi-hak ― got together in the capital city, Hanseong, today’s Seoul. They were technicians working

at the royal institute of astronomy and geography (Gwansanggam), producing water clocks, or carv-

ing wood and stone. They were in need of money because they had been caught stealing grain. After

some serious thinking, they decided to apply their skills to forging documents. They obtained an

authentic public document, cut out the royal seal, pasted it onto a piece of wood and carved out a fake

seal.

The author, who majored in history and urban humanities, stresses that crime is the key to reading

into the times. He relies on Ilseongnok (Diary of Self-Examination), which kept daily record of events

at court from 1752, the 28th year of King Yeongjo’s reign, to 1910 when Korea was annexed by

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Japan, to analyze the state of the society by looking at crimes such as murder, robbery, assault, theft

and arson.

The strength of the book lies in delineating the crime trends in late Joseon based on various statistics.

According to the book, 2,539 out of a total of 2,853 crimes analyzed, or 89 percent, were crimes of

violence. They were followed by 170 financial crimes (6 percent) and 144 social crimes (5 percent).

It is notable that 72.4 percent of financial crimes occurred in the capital city, and more than 50 percent

were forgeries. Most frequently forged documents were the posthumous citations for bestowing offi-

cial titles (chujeungcheop) and certifications for those who passed the state examinations for public

service (hongpae). They all had to do with social class.

The author interprets the phenomenon as follows. The main reason there was an increase in forgery

cases is because since the 16th century the ruling class claimed more land. The farmers who had no

land to till left for the capital city, where they strived to make ends meet through hard labor. They

formed a new social class within the capital city, where farming was banned by law. This was the

direct cause why they became urban poor and resorted to crime to survive. By class, crimes committed

by noblemen accounted for 3.2 percent, whereas those committed by commoners, slaves and servants

amounted to 85.1 percent.

What makes the book more interesting is the fact that Ilseongnok is as elaborately written as a crime

scene investigation (CSI) report. Detailed descriptions are provided including a case overview, crim-

inal’s testimony, response from bystanders, methods employed for the crime, scene of the crime, and

condition of the corpse.

Here is an example: “The victim murdered by the criminal Kim Dong-deuk in Hanseong in 1797 has

a flat face and lips sealed tight as if pecked by a crow. On his forehead is a scar 8.2 centimeters long,

2.7 centimeters wide and 1.5 centimeters deep (Korean measurement units, chon and pun, converted

to metric unit). Judging from touching and applying pressure to the scar, it seems to indicate the

criminal hit the victim with a stone between the forehead and the eyebrows.”

Criminal trends of late Joseon remind us that people don’t change. But perhaps, it was safer back then

because there were probably no psychopaths roaming around committing crimes for no reason.

[June 16, 2014]



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- Jean Chung: “I want my photos to bring about small changes in the world.”

- Chyung Mi-sook: “Peng Liyuan was not just glamorous, but a devoted wife.”

135

Jean Chung: “I want my photos to bring about small changes in the

world.”

Park Jeong-ho

Culture and Sports Editor

The JoongAng Ilbo

The small photograph here was taken in Minova, a town in the Democratic Republic of the Congo

(hereafter, Congo) in Central Africa. The woman entering the squalid building with the two children

is Masika Katsuva, who was gang raped by 12 Congolese rebels in 1998. After also losing her hus-

band, she went on to establish a private center in Minova to help other victims of sexual violence.

She is currently taking care of 19 women and 49 orphans. It is a place where the despair-filled past

and the hopeful present intersect.

Freelance photojournalist Jean Chung (Korean name Chung Eun-jin), 44, spent the past month in

Congo. It was her third visit, following trips in 2008 and 2009. The purpose of her latest visit was to

deliver the Butterfly Fund, donations raised by the Korean Council for the Women Drafted for Mili-

tary Sexual Slavery by Japan. The fund was established by the council two years ago on International

Women’s Day (March 8), honoring the wishes of former World War II sex slaves who wanted to help

similar victims of sexual violence and their children in Congo and Vietnam. It is the suffering they

had to endure as a woman that bound them together.

Chung’s photography has focused on exposing the suffering of women in war-inflicted regions in the

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Middle East, Afghanistan and Africa. She gained international recognition for her 2008 photo exhi-

bition, “Tears in the Congo,” which laid bare the sexual brutality inflicted upon women in the conflict-

ridden African country.

A follow-up exhibition of 20 photographs, titled “Tears of the Congo 2014: Unending War, Unending

Tears,” is being held at the War and Women’s Human Rights Museum in Seoul until August 15. We

met with Chung on July 16.

Q. Why is it “unending tears”?

A. I revisited northeastern Congo after five years. On the outside, things seemed to be more in order

and tidied up. Roads that had been covered with lava debris from the 2003 volcanic eruption were

paved and the buildings looked much cleaner. But the suffering of sexual violence victims has not

stopped.

Q. Tell me about the situation in Congo in more detail.

A. After the Rwandan genocide in 1994, Hutu rebel forces that escaped to neighboring Congo and

Tutsi rebels that revolted against the Hutu resorted to looting villages and sexual violence. They used

rape as a weapon to demoralize the enemy. There were 14,245 reported rape cases in 2008 alone, an

average of around 40 a day. The country was once again swept up in war in 2012 with the rise of the

M23 rebels, and the number of rape cases that had gradually decreased to 4,689 in 2011 shot up to

7,075 the following year.

Q. How severe is the damage to the women?

A. Many rape victims develop a condition that renders them incontinent. They are often abandoned

by their husbands causing these women and their children to endure further psychological trauma.

The M23 rebels and the Congo government signed a peace agreement late last year, but atrocities

against civilians have not ceased.

Q. What is there that we can do?

A. We can’t do much to resolve the conflict in these troubled regions, but we could provide support

to local non-governmental organizations or offer volunteer medical services. On my latest trip, I met

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a young Korean who was working at the U.N. and who was equipped with good linguistic skills and

a cosmopolitan outlook. I hope to see more Koreans working at international organizations.

Q. The money donated through the Butterfly Fund is one such effort to provide help.

A. We delivered a total of $2,800 (approximately 2.88 million won) to an NGO called Hope in Action,

a gathering of local rape victims, and to Heal Africa Hospital and Keshero Hospital, which provide

medical services to rape victims. The funds were used for operating expenses and to pay for the costs

of surgery and food.

Q. It’s a modest amount. Can it be of substantive help?

A. There is an English documentary titled “Seeds of Hope” that tells the story of the multiple rape

survivor Masika (the aforementioned Congolese woman). Like the title, we can plant such seeds of

hope. New York Times columnist Nicholas Kristof and his wife, Sheryl WuDunn, write in their in-

spirational book “Half the Sky” that even a little help can make a difference, and that just $100 to

$200 is all that is needed to save a woman’s life.

Q. What was the reaction when you delivered the donation?

A. U.N. Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim (Korean name

Kim Yong) visited Goma in northern Congo last May. Their photographs are on the walls of Heal

Africa Hospital. So the people there had a favorable image of Korea. I told them as I was delivering

money that was all the more valuable because it was raised by former military sex slaves in Korea,

and that Korea too had experienced colonization and civil war. They seemed surprised. They ex-

pressed hopes for continuous support and a continued partnership.

This year marks Chung’s 10th year as an independent photojournalist. She studied oriental painting

at Seoul National University and photography at New York University. After earning her master’s

degree in photojournalism from the University of Missouri, she worked as a reporter for the New

York office of Hankook Ilbo, and in 2004 became a full-time photojournalist. She is probably the

only Korean photojournalist who is active in the conflict zones around the world.

For her first major photo reportage, she flew to Gaza, the site of the Israeli-Palestinian conflict. There-

after, she resided in Afghanistan for a year to document the severity of postpartum complications

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Afghan women suffer from, which often leads to death. Since then, she has continued to cover dire

issues in many parts of the world: In 2009, she reported on the staggering number of tuberculosis

patients among the poor in Brazil; in 2011, the high maternal mortality rate in Sierra Leone; and in

2013, water shortages in the Central African Republic. Chung has also published three books in Ko-

rea: “A Photographer in Kabul” (2008), “Tears in the Congo” (2008), and “Struggle for Hope” (2010).

Q. Do you think you can change the world through photographs?

A. The world isn’t likely to change whether I do my work or not. But if I stop what I’m doing, those

who desperately need our help will be left neglected. In 2009, I held a photo exhibition at Manlihyun

Methodist Church in Seoul to raise funds for my photo reportage trip to Congo. I saw young girls

donate $1 or $2. I was deeply moved. I believed then that through my photos I could contribute, in

my own small way, to bringing about small changes in the world. I want to continue working toward

that cause.

Q. You must have been dismayed at so much violence in the world.

A. I shed a lot of tears. Thoughts of death often entered my mind. In 2011, I suffered from severe

panic disorder and depression. But now, rather than “I want to die,” I think “Even if I were to die right

now, I won’t have any regrets.” Before, I lived with the fear that I had to make it as a photojournalist

no matter what, but not anymore. Not when people, despite their deplorable conditions, offer me

words of encouragement, saying “God bless you.”

Q. Covering conflict zones has largely been a male-dominated territory.

A. Reporters must maintain a neutral stance. Being a woman has its disadvantages, but it also has

advantages. Major events in the 20th century, such as World War II, the Korean War and the Vietnam

War, were mostly documented through the eyes of white males. My main interest is not in the conflict

itself, but the people who are left in the human rights blind spot in the war’s aftermath, especially

women. Korea has a history of being ruled by a stronger power, so we are in a better position to

understand the plight of small, weak nations than Westerners.

Chung’s Female Role Models

We asked Chung who the inspirational female figures in her life were. As expected she chose two

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prominent female photojournalists.

♦ Paula Bronstein: She is my role model in photography. Although pushing 60, she still remains active

in many parts of the world. Her career spans 30 years, covering stories in places like Afghanistan and

Pakistan. I met her in Indonesia in 2004, and again in Afghanistan in 2006-2007. She never puts down

her camera, taking photos every day. I admire her passion and stamina.

♦ Annie Boulat: She is the wife of Life magazine photographer Pierre Boulat and the mother of Al-

exandra Boulat, a photojournalist and co-founder of the VII photo agency. Despite having lost her

husband and daughter, Annie continues to maintain an active career. She established the Pierre &

Alexandra Boulat Association Award in 2008 that provides an annual grant to professional photogra-

phers. I was the first recipient of the award for my project “Tears in the Congo.”

What It Takes to Be a Freelancer

Jean Chung is a freelance photojournalist who works internationally. She isn’t tied down to a job and

is free to decide her own schedule, but her work is not stable. “I would advise getting a secure per-

manent job rather than freelance. But if you are adamant about freelancing, then the most important

thing to remember is prudent money management. If you run out of money, then that’s the end,” said

Chung.

♦ Do not chase after money: Freelancers probably rank at the bottom in the capitalist labor market.

In Korea, there is no insurance coverage for freelancers. The future is uncertain as you don’t know

140

where your next paycheck will come from. So it’s better to forget about amassing a fortune or being

the breadwinner in your family. You should be satisfied with just earning a bare minimum that is

needed to take care of yourself and be willing to live frugally.

♦ Personal network is important: There are hundreds, or thousands, of people working as freelancers.

In order to survive amid such cutthroat competition, you need that competitive edge that will make

clients choose you over others. In photography, that competitive edge may come from something

other than photography, such as age, foreign language skills, interpersonal skills, even nationality.

♦ Think beyond Korea: Try to expand your sphere of thought and activity. When you turn your eyes

to the world, more opportunities will come your way. Reading foreign news articles and English

books may be an economical way to working towards that goal. Also, building a wide global personal

network through SNS, such as Facebook, is a good approach.

[ July 19, 2014 ]



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Chyung Mi-sook: “Peng Liyuan was not just glamorous, but a devoted

wife.”

Kim Yun-deok

Assistant Culture Editor

The Chosun Ilbo

“That seat with the view of the front yard and pond is where President Xi Jinping sat, and across from

him sat President Park Geun-hye looking out at the bamboo grove in the backyard,” recalls Chyung

Mi-sook, 67, the owner and director of the Korea Furniture Museum. The museum was where the

luncheon between the visiting Chinese president and his wife and President Park was held on July 4.

“President Xi commented that the ambience was warm and comfortable, like being invited to some-

one’s home. President Park said she liked the warm atmosphere of the hanok (traditional Korean

house),” said Chyung. But it seems like China’s First Lady Peng Liyuan was the one who left a strong

impression on her. “Being a famous folk singer in China, I thought she was just this glamorous

woman,” Chung explained. “But I was surprised to see her always standing a few steps behind her

husband. She was also careful with her words. When President Park suggested that she also sign the

guest book after President Xi, Ms. Peng smiled quietly and declined. She had refined manners, befit-

ting the first lady of a great power.”

The Korea Furniture Museum located in Seongbuk-dong, Seoul, became known to the public as the

venue for luncheons for foreign government guests. It is composed of 10 hanok structures, including

a palace house, nobleman’s house, storeroom and kitchen wing, and houses some 2,500 pieces of

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wooden furniture from the late Joseon Dynasty. To show that “Koreans’ lifestyle was in itself an art,”

the furniture is arranged just as it would have been during the Joseon Dynasty, displaying how they

were actually used at that time.

Even before its public opening in 2012, word of the museum quickly spread in diplomatic circles. It

was chosen as the luncheon venue for the first ladies visiting Korea for the G20 Seoul Summit in

2010. High-profile figures like Christine Lagarde, managing director of the IMF, and celebrities, such

as Martha Stewart and Brad Pitt, have visited the museum. After much persuasion, Italian luxury

brand Gucci was able to hold a special exhibition here in 2012 to commemorate its 91st anniversary.

In 2011, CNN introduced the museum as “the most beautiful museum in Seoul.”

Chyung has preferred to stay away from the limelight. This interview was her first with the media.

She came into the public eye when a photograph of her wearing a hanbok (traditional Korean clothes)

and showing President Xi and his wife around the museum appeared in local newspapers. “This was

all possible thanks to our great ancestors. I can’t really take any credit for it. The museum just hap-

pened to become a channel for promoting our culture,” she said.

Chyung’s interest in old furniture stems from her mother. Her mother was Dr. Lee Tai-young, the

nation’s first female lawyer, and her father, Chyung Yil-hyung, former minister of foreign affairs and

eight-term lawmaker. “I grew up around old furniture,” said Chyung. “During the Japanese colonial

era, my mother would get these couches and clothes chests that missionaries had thrown out, and

reuse them. That shelf which had been used to hold prepared food and dishes was my bookcase.”

Chyung began to study wooden furniture from the Joseon period in earnest when she went abroad to

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study in America, Turkey and Taiwan after graduating from the College of Arts at Ewha Womans

University. “I spent a long time abroad to escape from my parents, who were persecuted as opposition

politicians during the Yushin (Revitalizing Reform) regime in the 1970s,” Chyung explained. “For-

eign friends would ask me. How do Koreans live? I was at a loss for words. Korea was a country that

had invented the Hangeul and the movable metal type, and yet I couldn’t tell them anything about

Koreans’ way of life. I returned to Korea and roamed the antique streets of Insa-dong, and began to

study about the history of Korean furniture, and Asian housing and furniture culture.”

Maybe that’s why. She was more excited about meeting President Park than President Xi and his wife.

“I don’t harbor any resentment,” she said. “I’m not on the side of the ruling party or the opposition.

I’m just a citizen of the Republic of Korea. The president shares her fate with the people, so I should

do all I can to support her. It seemed a pity to see our president standing next to President Xi and his

wife with no one by her side”

It was Chyung’s father-in-law who advised her to open the museum. When the antique furniture she

had been collecting since the 1960s amounted to over 2,000 pieces, it became difficult to manage. So

she consulted her father-in-law about donating the collection to Seoul city, but he said, “Why don’t

you build a museum?” and gave her the land in Seongbuk-dong. Her in-laws are descendants of Sim

Sang-eung, who was the minister of personnel during the reign of Cheoljong (r. 1849-1863), the 25th

king of Joseon. Seongnagwon (Royal Garden), which was once used as a secondary palace by Prince

Uichin (1877-1955), also known as Yi Gang, was originally Sim’s villa. It was designated Scenic Site

No. 35 in 2008. Seongnagwon embodies the essence of traditional Korean gardens, and has drawn

keen attention from the International Federation of Landscape Architects.

The museum was completed 15 years after the ground-breaking. Chyung supervised the entire process

from moving the traditional houses in Bukchon that were being pulled down due to redevelopment

to the museum site, to minute details, such as planting flowers and grass,

“The museum is my answer to the question ‘How do people in Korea live?’ that my foreign friends

used to ask,” Chyung said. “In a country with a land mass that is smaller than a single U.S. state, there

are around 70 different regional styles of furniture, such as the Tongyeong style, Namwon style and

Jeonju style. It’s a huge cultural asset. Small villages separated by a mountain or river developed their

own individual style. And this is just concerning furniture. If we preserve the 1,000 or so hyanggyo

(Confucian public schools), seowon (private Confucian academies) and clan head families’ houses

that still remain, and manage to have them inscribed on the UNESCO World Heritage List, it will

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only be a matter of time before Korea becomes a great power in culture and tourism.”

“My wish is for Seongbuk-dong to become a culture street like the Smithsonian,” Chyung said and

ended on an amusing note. “I am both grateful and sorry to my husband. He has lived all these years

with a woman who’s been infatuated with the old. On top of that, he’s been pouring in money every

month to make up for the huge deficit. That’s why he has me under his thumb. My mother worked

her whole life for equal rights between men and women, but that’s not the case in my house.” (laughs)

[June 14, 2014]



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COPYRIGHT

Korea Focus is a monthly webzine (www.koreafocus.or.kr), featuring commentaries and essays on Korean politics, economy, society

and culture, as well as relevant international issues. The articles are selected from leading Korean newspapers, magazines, journals and

academic papers from prestigious forums.

The content is the property of the Korea Foundation and is protected by copyright and other intellectual property laws. If it is needed

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ISBN 979-11-5604-094-1

Publisher Yu Hyun-seok Editor Lee Kyong-hee Editorial Board

Shim Ji-yeon Professor, Kyungnam University Lee Ha-won Director, TV Chosun 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 Kim Gyun-mi Deputy Editor, The Seoul Shinmun Kim Hoo-ran Senior Journalist, The Korea Herald Peter Beck Korea Represetative, Asia Foundation Jocelyn Clark Professor, Paichai University

ⓒ The Korea Foundation 2014 All rights reserved.


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