KOREA FOCUS - December 2012

Table of Contents

- Korea Focus - December 2012 - TOC - Politics 1. Fallout of North Korea’s Latest Provocation 2. A Chance to Turn Conflict into Cooperation 3. Korea’s Role as U.N. Security Council Member 4. Presidential Race with Few Promises Worth Assessing 5. Overseas Vote System in Question - Economy 1. Threat of Debt Deflation 2. Lessons from U.S. House Poor Policy 3. Shared Growth and Smart Power 4. Globalization of Korean Won 5. IT Changes Healthcare Setting - Society 1. Korea Builds ‘Green Triangle’ 2. No Royal Road to Nobel Prizes in Science 3. Romanization of Korean Personal Names & Identity Issue 4. Lesson for Prosecution Reform - Culture 1. The Power of the ‘Predictable’ 2. Young Generation Bolsters Korean Cinema 3. Skilled Translators Key to Globalizing Korean Literature 4. Korea’s Cultural Heritage as Global Tourist Attractions 5. History is the Future - Essay 1. The Third Way: Creative Engagement of North Korea 2. North Korea’s Business Cycle and China’s ‘Visible Hand’ 3. National Strategic Value and Role of Jeju Naval Base - Feature 1. Korean Enterprise Successfully Unlocks Cuban Market - BookReview 1. Pythagorean Theorem Proves Dokdo Belongs to Korean Territory 2. Why the Kings of Joseon Stayed Planted at Changdeok Palace - Interview 1. Sung Kim: “South Korea-U.S. relations should not be affected by who is in the Blue House and who is in the White House.”

2. Cho Byeong-guk: “I hoped for miracles to take place more often at the lowest level.”

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- Fallout of North Korea’s Latest Provocation - A Chance to Turn Conflict into Cooperation - Korea’s Role as U.N. Security Council Member - Presidential Race with Few Promises Worth Assessing - Overseas Vote System in Question

Fallout of North Korea’s Latest Provocation

Editorial The Hankyoreh

North Korea has surprised the world with its long-range rocket launch. The [North] Korean Central News Agency reported that the country had “successfully launched the second Kwangmyongsong-3 satellite on December 12 from the West Sea satellite launch site in Cholsan County, North Pyongan province, using the carrier rocket Eunha-3.” Observers in South Korea and the United States believe that the long-range rocket successfully entered orbit. North Koreans may be celebrating, but for the rest of the international community this is an enormous provocation and a dire threat to peace.

The success of this launch means that the North Korean nuclear threat has risen to a new level.

Based on its two nuclear tests in 2006 and 2009, intelligence agencies believe the country may possess as many as 10 nuclear warheads. The North has also gradually built up its ballistic missile capabilities with five long-range launch tests since 1998. This latest development means that it could potentially strike the continental United States with a nuclear weapon. It’s terrifying to imagine the threat it would pose if the country succeeds in miniaturizing its warheads and masters the technology to return rockets into the atmosphere.

The most urgent order of business for the international community now is to prevent North Korea from combining its nuclear weapons with its long-range rocket technology. It is clear that the North will continue to step up its efforts to achieve this. We cannot rule out the possibility of a third nuclear test as well, because Pyongyang believes that is the only way to guard its regime against

external threats and increase its negotiating power using the abandonment of its weapons of mass destruction as a bargaining chip. Analysts are already foreseeing a long and arduous tug of war between North Korea resorting to its brinkmanship and the international community trying to defuse it.

It is clear that stronger international sanctions to check North Korea’s nuclear capabilities are on the way. The United Nations Security Council held an emergency meeting on December 12 to discuss this possibility. But there is clear limitation to the pressure that sanctions can apply in view of the North’s closed economy. This is especially true when Beijing is not actively cooperating. If the international community’s sanctions are to have any effect at all, the countries involved need to step up their diplomatic efforts to bring China on board. In particular, they should note that the new administration under Xi Jinping has been more open than past governments in expressing its displeasure at Pyongyang’s intransigence.

More importantly, a solution needs to be sought through negotiation rather than sanctions and hardline policy alone. The fundamental reason North Korea tests its nuclear weapons and rockets is to guarantee the stability and survival of its regime. A comprehensive solution that involves some give-and-take measures is not out of the question. What’s important is to catch the mouse (North Korea’s nuclear capabilities), regardless of which cat is used ― the black cat (sanctions) or the white cat (negotiation). An eclectic approach that mixes toughness with moderation is needed.

[ December 13, 1212 ]

www.koreafocus.or.kr

A Chance to Turn Conflict into Cooperation

Shin Bong-kil Secretary-General Trilateral Cooperation Secretariat

It has been about a year since the Trilateral Cooperation Secretariat opened in Seoul under the banner of peace and co-prosperity in Northeast Asia. Unfortunately, however, bilateral relations between Korea and Japan and between China and Japan are now at their worst level since they normalized diplomatic relations.

The three countries have rapidly changed in terms of national strength and status. One is quickly rising as a member of the Group of Two (G-2), while posing a challenge to the international order; another nation feels its hitherto dominant position threatened by this rising neighbor; and the third country, a newly emerging power, is continuing to enhance its global prestige.

As in personal relationships, tremendous friction erupts between nations when such changes occur and acrimony gives rise to a nationalistic reaction. A.F.K. Organski (1923-1998), a renowned professor of international politics, once said that in such cases, the probability of conflict or war is high.

Fortunately, Korea, China and Japan have built extensive trilateral relationships in political, economic and cultural sectors over the past decade. Ministerial conferences in 18 fields, including foreign ministers’ meetings, are held annually, in addition to two summits.

Ten of the trilateral conferences involve economic issues: trade, finance, logistic services, information and communications, customs tariffs, patents, science and technology, agriculture, and water resources. And cooperation is under way in about 100 areas, such as free trade deals, environment, energy, and aviation. This kind of cooperation is absent in the Korea-U.S. alliance or the trilateral links between Korea, the United States and Japan.

The Trilateral Cooperation Secretariat, jointly set up by the three countries in September last year, is a permanent agency playing a key role in all trilateral forums including summits, trade talks and meetings on foreign relations.

Recently, I visited Washington, D.C. to exchange views on the Northeast Asian situation with concerned people at the Center for Strategic and International Studies, the Brookings Institution, and the Heritage Foundation. All of them expressed a keen interest in moves in Northeast Asia toward cooperation and integration, including the launch of the Trilateral Cooperation Secretariat. I also felt they were concerned about Seoul, Beijing and Tokyo strengthening cooperative networks of their own. In other words, I found that the United States was paying attention to the trilateral cooperation mechanism as an important entity.

It is now time for the three countries to make the most of this mechanism. They should come together to discuss how to resolve the chronic bilateral disputes over territory and historical issues, and reconcile.

France and Germany, two key members of the EU, reached historic reconciliation in a meeting between French President Charles de Gaulle and West German Chancellor Konrad Adenauer in July 1962, although they were arch-enemies who had fought four major wars over two centuries.

Korea will assume chairmanship of the trilateral summit next year. Its geopolitical location is ideal for mediating disputes between China and Japan, who are traditional rivals, with no historical debt to either one. Korea will be able to play a vital role in forging historic reconciliation and opening a new era. The three Northeast Asian nations are no longer a regional grouping; they are now under international spotlight.

Crisis is an opportunity, they say. This is the reason Seoul, Beijing and Tokyo can turn their current conflicts into an opportunity to open a new era of cooperation.

[Dong-a Ilbo, October 8, 2012]

www.koreafocus.or.kr

Korea’s Role as U.N. Security Council Member

Lee Shin-hwa Professor of Political Science Korea University

As the League of Nations, established following the end of World War I for the purpose of safeguarding global peace and security, had failed to prevent yet another war, the United Nations formed the Security Council and endowed it with a powerful mandate to authorize military action toward those responsible for threatening peace. However, it was difficult for the member nations to agree on what warrants such intervention. Consequently, the resolutions or proclamations they adopted failed to have a real effect.

Nevertheless, the Security Council voted for a resolution mobilizing the U.N. forces to fight in the 1950 Korean War, adopted sanctions against North Korea following its second nuclear test in 2009, and authorized air strikes on Libya in 2011. The Security Council is, in short, the most powerful unit within the United Nations, and Korea, in 15 years, will once again serve as a non-permanent member that will vote for binding decisions involving significant international issues.

Serving as a Security Council member, along with Ban Ki-moon’s election as the U.N. secretary general, will go down as a significant achievement that publicly reflects Korea’s escalated global status and heralds the country’s golden years in U.N. diplomacy. It is most fortunate that Korea will once again be given a chance to avidly voice its opinions on the constantly changing geopolitical issues of Northeast Asia, where territorial disputes, historical issues, prevalence of nationalistic

tendencies, and the political power transition in major countries are among the diverse international issues gripping the region.

Until now, we have had to struggle for global recognition on peninsular issues, such as the North Korean nuclear arsenal, for we were forced to convey our thoughts and opinions from the sidelines.

We now have gained the ticket inside the conference rooms. This in itself will serve as sharper deterrence toward North Korea. But authority and responsibility is always a double-edged sword.

The larger our voice has become, the bigger our responsibility to undertake global obligations, such as shouldering U.N. assessments and stepping up the dispatch of personnel for peacekeeping operations.

The government, now that Korea has become a non-permanent member again, is reportedly devising plans for dramatically increasing both the budget and personnel for its Security Council team at the U.N. headquarters in New York in order to successfully carry out its duties. Korea is also hurrying to pay in full its share of assessments to U.N. organizations that address the more pressing issues. When considering that a country’s leverage within the world body grows in proportion to its financial contributions, all these plans are welcome.

Further, in order to gain a long-term vision for resolving global issues, pan-government efforts are necessary to attain the leadership, expertise and driving force for setting up specific policy alternatives. Korea, in particular, will become the council chair in February next year, meaning it will be fortunate enough to hold the position twice during its two-year tenure as a non-permanent member.

The chairmanship is assumed in rotation among all of the 15 permanent and non-permanent member nations each month. The nation must capitalize on this opportunity to develop and push an agenda that we can lead and follow up with a sharper diplomatic competence to ultimately establish a national identity capable of putting Korea on the map.

Among pressing global issues such as security, climate change, energy, transnational crimes, health and human rights crises, we must find a field we can excel in. The one thing we must keep in mind during this pursuit is that we would be obligated to take the diplomatic burden in voicing our opinion on all issues dealt at the Security Council. We must therefore map out our policy and diplomatic approach for responding to the more delicate issues — for instance, when our ally the United States stands opposed to other nations — after giving them much thought.

Fixed perceptions of Korea’s political preferences, such as that it always takes sides with Washington, will undoubtedly weaken our foothold in a global community that is so complexly and organically entwined as it currently is. Our main concern, therefore, lies in what kind of policy balance we should pursue between the U.S.-Korea alliance and the strategic partnership we maintain with China. These concerns naturally branch out to include what kind of global status we should pursue as a midsized nation, and how we would be able to expand our diplomatic horizons.

This is precisely why we want the next president of Korea to be a leader who can offer a clear vision for shaping significant policies on foreign affairs and security.

[Maeil Business Newspaper, October 22, 2012]

www.koreafocus.or.kr

Presidential Race with Few Promises Worth Assessing

Kim Sang-heon Professor, Graduate School of Public Administration Seoul National University

Information sectors in our society are remaining idle with the presidential election just around the corner. Newspaper and broadcasting companies formed panels to review the campaign promises of candidates but have squandered their time and failed to release results when expected. They have lost momentum before embarking on their job in earnest.

An old proverb says, “Manners come from affluence.” “Affluence,” in this case, is likened to “a glut of policy commitments” that candidates churn out in elections, believing that voters can be mesmerized by their campaign promises. Nonetheless, in the run-up to the December presidential election, voters practically have little knowledge about the policy stances of candidates.

As if by general agreement, all of the candidates are unanimously focusing on one single issue ― welfare ― making many “pork-barrel” promises like cutting university tuition fees in half or implementing free child-care. No matter who will win, he or she will have to implement policies within the limits of state budget. But the candidates single-heartedly claim how many big-budget programs they can implement, regardless of the size of the budget available. Simply put, they are all boasting about being a big spender in whatever circumstances.

The candidates, therefore, don’t look sincere. They appear to be singularly preoccupied with who

can make the flashiest promises or absorbed in his or her own concerns. For example, the ruling Saenuri Party candidate is busy cleaning up the mess left by a series of corruption scandals and inhouse friction. It’s doubtful how happy the people could be with the chief of Saenuri’s “committee on the people’s happiness” frowning all the time.

Meanwhile, the main opposition Democratic United Party has made many promises, mostly focused on promoting welfare, putting restraints on corporate activities, or reviving defunct government agencies, but it is hard to find substantial details under the sugar coating. It’s difficult to expect this party to develop any forward-looking policies. Obviously, the party is desperate to regain power under any circumstances by persuading a third candidate, a popular independent, to produce a single opposition candidate, if possible at all ― hopefully on its own terms.

In the face of public screening of his credentials, the independent candidate, who was catapulted to the political forefront after supporting a Seoul mayoral candidate last year, doesn’t seem to be ready to sit down and develop policies in a cool-headed way, either. He may claim he has already put forth his policy promises through recent public forums he attended. But the prevailing view is that he only made sugar-coated statements instead of viable policies.

Everybody is aware of the difficulties our country is facing. Some people liken the current situation to the turn of the 20th century when big powers were competing with each other over a chance to take control of Korea. None of the mounting problems ― diplomacy, economic growth, job creation, the quality of life, and the widening income gap ― seems easy. The more hardship we face, the more carefully we should think and review policies.

We cannot afford to keep pitying ourselves, lamenting what would be the use of any policies in this seemingly hopeless situation? I feel gloomy for fear that this election would again flood with detestable jargon like “mudslinging,” “political collusion” and “tables turned at the last minute.” It may be already too late. Yet, the candidates should articulate their policy ideas, whether wellfounded or empty, as well as their visions and ideas on how to fund the proposed policy projects and what effects they would bring. Then, at least, they will not be branded as dishonorable politicians who ended up leading the people to misfortune after promising to take responsibility for their happiness.

[JoongAng Ilbo, October 19, 2012]

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Overseas Vote System in Question

Editorial The Seoul Shinmun

Korean citizens living abroad have the right to vote in the December presidential election, but doubts are mounting over the effectiveness of overseas balloting because only a small proportion of those eligible have expressed their willingness to vote. According to the National Election Commission, some 223,000 overseas Koreans, or a mere 10.01 percent of the 2.23 million eligible electorates, have registered as voters at Korean diplomatic missions.

Although the voter registration rate is nearly two times more than for the April general elections, when only 5.6 percent of the eligible registered, the figure still stands dismally low. The parliamentary elections marked the first time overseas voting was put into practice. Based on the voter turnout in April, one may expect that less than a half of those registered, or a little more than 100,000, will actually cast a ballot in the presidential election.

The National Election Commission has set aside 26.5 billion won to handle overseas ballots in the presidential election. The expenditure includes the cost of dispatching 55 election officials around the world. In terms of budgeting, a domestic vote would cost 10,000 won in operational expenses but a ballot from an overseas Korean will cost an estimated 300,000 won, an exorbitant comparison to the dismay of the public.

The merit of a system allowing Koreans living abroad to cast ballots in major national elections of

their home country is something that should not be devalued by simply comparing operational costs. However, it needs to be pointed out that out of the total registered voters, those who can be categorized as permanent residents in their host countries numbered only about 43,000. The vast majority of the remaining 80 percent are transients such as students, diplomats, business people and travelers. The transients are technically absentee voters who can exercise their suffrage in other easier ways. Hence, the huge spending of taxpayers’ money on dubious overseas voting is liable to invite public criticism.

In addition, there is likelihood that depending on the outcome of the presidential polls, large Korean communities in major countries may suffer factional feuds, as often experienced in the past even without an overseas voting system. For all that, it is unconstitutional to deny Korean expatriates the right to vote as manifested by a 2007 ruling of the Constitutional Court, which enfranchised overseas compatriots with permanent residency status in foreign countries.

Therefore, instead of disputing the excessive expenses, practical remedial measures should be meted out to raise the cost-effectiveness of overseas balloting. To be taken into account in this regard is the inconveniences and inefficiencies in casting a ballot abroad. A recent survey conducted by a Seoul university disclosed that most Korean expatriates in the United States complained of the expenses and time needed to travel, often driving for hours, to the nearest Korean embassy or consulate twice ― once for registration and another time to cast ballots ― while those in China cited language barriers and cumbersome voting processes. Many potential voters in Japan attributed their cool response to voting to a lack of information about candidates and the burden of making travels.

Despite the complaints, a majority of overseas respondents expressed great expectations that voting from overseas would help enhance their sense of identity as Korean citizens. Political quarters as well as the National Election Commission are again called on to take realistic and effective steps to make voting easier for overseas compatriots. The remedial steps should include the simplification of registration process and increase of polling sites taking advantage of online and mail services.

[October 24, 2012]

www.koreafocus.or.kr

- Threat of Debt Deflation - Lessons from U.S. House Poor Policy - Shared Growth and Smart Power - Globalization of Korean Won - IT Changes Healthcare Setting

Threat of Debt Deflation

Kim Kyung-soo Professor of Economics Sungkyunkwan University

The Korean economy appears to be undergoing debt deflation, which is characterized by excessive household debts and falling house prices. Households are struggling to reduce their debt load to avoid becoming the latest casualty amid the rising household credit risk. This process of adjustment can be painful but should not be avoided despite the risk that prolonged deleveraging could exact a heavy toll on the Korean economy, which is under pressure from weak global economic conditions.

In fact, the household balance sheets are showing improvement. According to a report released by Statistics Korea in August, inflation-adjusted real household monthly income rose 3.7 percent in the second quarter from a year earlier. Although overall spending on necessities such as food, clothing and housing increased, the average propensity to consume, or the ratio of total consumption to total income, fell 2.3 percentage points from a year ago. In particular, consumption among those in the upper 40-60 percent income bracket, which represents the middle class, decreased. This enabled savings to outpace expenditures.

The mass media has speculated that restrained consumer sentiment kept consumption in check.

Then, why has consumer confidence weakened so much? This writer believes that debt deflation is a primary cause.

Real estate currently constitutes about 80 percent of Korean households’ total assets. Thus, the ongoing drop in home prices is eroding the net worth of household assets while their debt load remains unchanged. As of August, household loans provided by depository institutions totaled 650 trillion won (US$596 billion), more than half of the nation’s gross domestic product in 2011. Of the total, 460 trillion won was borrowed from banks.

A decline in the value of a person’s assets triggers the so-called “reverse wealth effect,” which decreases the propensity to spend. In April, the International Monetary Fund conducted an empirical analysis on member countries of the Organization for Economic Cooperation and Development that have experienced debt deflation in the aftermath of the global economic crisis. The IMF analysis concluded that falling house prices combined with excessive household debts tended to prompt a fourfold increase in the reverse wealth effect.

But the curbed household spending in Korea despite rising income cannot be entirely blamed on the weak housing market and reverse wealth effect. Households simply are using extra cash to pay down their debt instead of shopping. Forecasters of the world economy are not optimistic about global conditions improving for the Korean economy in the near future. If they are correct, the downside risk of debt deflation to the economy is now its biggest challenge.

Commercial banks are devising or implementing various measures to prevent house-backed loans that account for two-thirds of their household loans from turning sour. Government measures to help the so-called “house poor,” who are financially strapped due to heavy mortgage debt, may cause a moral hazard. But refraining from any assistance could greatly heighten the risk. Some trial and error seems inevitable until proper solutions are drawn.

The government needs to build a policy framework that can reduce household debts to appropriate levels and minimize relevant side effects. Macroeconomic policy should be managed in a way that will rein in falling housing prices and employment and reduce loan interest burdens of households.

At the same time, microeconomic policy measures are also needed to prevent an excessive expansion of household debt.

[Maeil Business Newspaper, October 17, 2012]

www.koreafocus.or.kr

Lessons from U.S. House Poor Policy

Kim Heung-soo President Construction and Economy Research Institute of Korea

A string of policy measures have been announced to help the house poor, a term that refers to those who must pay so much on their mortgage that they have little left for other financial obligations.

They took out high mortgages during the housing bubble but are now struggling to service their debt amid sinking housing prices. Proposed support measures for the house poor include “sale and lease back” and “trust and lease back.” But progress has been slow due to sporadic discussions. It may be difficult to reach market or social consensus so the measures remain untested.

What is useful in this situation is a case analysis. Take a look at the United States. After the global financial crisis erupted, the U.S. housing market plummeted. Housing prices plunged by more than 30 percent, igniting a surge in home foreclosures. This year, the U.S. real estate market has shown signs of recovery; home prices and sales are headed upward. One of the reasons is because the U.S. government has provided extensive mortgage support. Even part of the loan principal was forgiven.

In the U.S. housing finance market, a homeowner is entitled to immunity over mortgage loans if he or she agrees to give up the property. In addition, property buyers can usually borrow more than 90 percent of the value of the home. Let’s suppose that a person buys a house by borrowing 90 percent of the purchase price and the home price falls 30 percent. If the homeowner gives up the property, the bank suffers a 20 percent loss. Should the lender take over the house from the owner and rents

it, the loss would be reduced by the amount of the rent. As far as the bank is concerned, it is more advantageous to rent the home back to its former owner. The lender may also extend the mortgage loan and recover as much money as possible, even writing off part of the principal, rather than sustain a 20 percent loss.

The U.S. government is extending large sums of money to both homeowners and banks as an incentive to adjust private sector loans. In addition, the Obama administration has drafted several programs to meet various demands from consumers, including those who are jobless or those who hold subordinated loans. It also is backing consulting services and mortgage relief plans and other services in order to help financially struggling homeowners. Such moves suggest that the administration believes an escape from the phase of market slump is beneficial to all concerned parties, including the market, homeowners and the government.

In Korea, bank loans typically match up to 60 percent of the value of the home. Even if the house price falls 30 percent, the lender’s outlay is still recovered. From the standpoint of banks, it is more advantageous to eliminate their loan risks through an auction. Even if a problematic home is bought by its creditor bank and rented out, it is difficult to expect that the former homeowner who defaulted on interest payments would faithfully pay the monthly rent. That’s why sale and lease back and other policy measures meant to support the house poor cannot be easily adopted by individual banks.

What is necessary is the government’s role as a control tower, or a massive infusion of funds.

Unlike the United States, which depends on the market to function rationally, we should take a more careful approach with government support. Our mortgage relief policy should be focused on supporting the elderly and the vulnerable classes who face bleak prospects on future income, instead of being utilized as a general solution.

The government should help those with income above a certain level restructure their mortgage by revising the lending terms and other methods so they can service their debt on their own. Banks should also be ready to share the risk of bad loans as part of their social responsibility, rather than resorting to extreme measures and canceling loans to eliminate risk. The lenders should assist the house poor, as part of their efforts to secure new customers and future growth.

Of course, there is a controversy over the U.S. mortgage relief plan. Nevertheless, the U.S. government has maintained a policy of greatly expanding the number of beneficiaries. That’s

probably because a value judgment and social consensus over the fairness and efficiency of the state support program has been reached. In Korea, too, we wish politicians will take the lead in producing a social consensus over how to support the house poor, improving stability and sustainability of home-related loans and rescuing financially struggling households from the debt trap.

[Maeil Business Newspaper, October 9, 2012]

www.koreafocus.or.kr

Shared Growth and Smart Power

Yoo Jang-hee Chairman National Commission for Corporate Partnership

A new corporate culture is spreading these days. Real-time communication through social networking websites is allowing society to easily distinguish between good and bad corporations.

This is spurring rapid changes in the business environment, with corporations adopting a new paradigm shrouded in smart power. Smart power, referring to a combination of hard power and soft power, is a term coined by U.S. foreign policy and security experts. Put simply, it means those who seek companions and partner states in a considerate manner are the wise and victorious people armed with genuine power.

Until the latter half of the 1980s, corporate value was defined in terms of inputs such as capital, labor and technology. It was an era of hard power. At that time, the top priority was maximizing profit through competitive pricing. In the 1990s, when globalization proceeded thanks to the rapid development of information and communication technology, the era of soft power arrived, driven by knowledge, talent, network and other invisible assets. That era now appears to have passed and the world is entering the era of smart power. Its aim is to garner market admiration by merging hard and soft power.

In the past, the value-added chain was formed in a linear fashion. That has given way to emotional and multilateral circumstances, raising the need for smart power. One example of smart power is the

creation of shared value. Moving one step beyond their social responsibility, enterprises are asked to meet the needs of the times and share the value of simultaneous growth with the society.

Concrete action plans that conform to the era of smart power can be found in shared growth. We’re now living in a period of change in which even world-class conglomerates cannot survive if they rely entirely upon an independent value-added chain. The competitiveness of a company depends on how it can efficiently function with small and midsize parts suppliers and subcontractors. We have seen a world-class mobile phone maker shunned by society and shaken to its roots after ignoring its partner companies.

In this era of smart power and changing corporate ecology, enterprises should not only secure technologies but also embrace the virtues of innovation and cooperation in order to remain globally competitive. On the basis of such efforts, the business enterprises can earn trust and sympathy from society. In the past, conglomerates maintained their retail price competitiveness by forcing their parts suppliers to lower prices. The conglomerates also managed to secure price competitiveness through unfair transactions with their parts suppliers and subcontractors. But those practices are no longer viable.

Large conglomerates are now waging a campaign to upgrade their brand awareness and corporate image. Complying with the needs of the times, they must draw a big picture of shared growth on the basis of trust and cooperation with their partner companies instead of a linear value structure and food chain hierarchy. Today, the shared growth is an urgent task that conglomerates cannot overlook or sidestep.

However, in order to achieve genuine shared growth, small and medium-sized enterprises (SMEs) also are being asked to change their attitudes. SMEs should no longer simply wait for concessions from conglomerates. Instead, they should grow into competent and competitive smart partners. In other words, SMEs have to improve their international competitiveness through constant technological development and ceaseless innovations and grow into global enterprises. If sustained, these efforts will help create a new paradigm in which SMEs grow into strong mid-tier enterprises and then conglomerates.

[Seoul Economic Daily, October 22, 2012]

www.koreafocus.or.kr

Globalization of Korean Won

Lee Seung-ho Research fellow Korea Capital Market Institute

In recent years, there has been growing interest in the globalization of the Korean won. What changes are expected in the Korean economy if the Korean won is widely used in international transactions? It will certainly be an interesting new experience if foreign goods and services can be bought with our own currency.

The internationalization of a nation’s currency usually means that it is freely used both at home and abroad. Moreover, an internationalized currency such as the U.S. dollar or the Japanese yen can be used as the settlement currency in the host country’s trade transactions and in various offshore financial transactions as well. Foreign banks deal with deposits of the country’s currency, while foreigners can freely borrow and invest the money. In short, the currency’s basic roles as a medium of exchange and storage of value are expanded beyond the country’s borders.

Currency internationalization also provides many long-term benefits to the national economy.

Foreign exchange risk and transaction expenses can be reduced as enterprises and other economic players engage in trade and transactions in their own country’s currency. Moreover, financial products denominated in the country’s currency can be traded abroad, contributing to the development of its financial industry. In particular, the nation’s dependence on foreign capital is reduced, as it is easier to raise foreign capital with its own currency. Even the chances of a sudden

mass exodus of foreign capital triggering an economic crisis would be mitigated.

Korea marks the 20th anniversary of capital market opening this year. But despite the steady market liberalization and efforts to liberalize the foreign exchange and capital sector over the years, the Korean won has a long way to go before it can be a global hard currency.

Only 1 to 2 percent of the nation’s export and import deals are settled in won. The fundamental reason for the slow progress is because the Korean currency has failed to secure sufficient international trust in terms of the basic criteria for internationalization, including the scale of trade and economy, advancement of financial markets and stability in currency value.

The qualitative development of Korea’s financial and capital markets is relatively inadequate in view of the size of its trade and gross domestic product. Due to its high degree of market opening and dependence on external markets, in particular, the nation, if hit by internal and external shocks, is vulnerable to sudden capital inflows and outflows and higher volatility in the foreign exchange and financial markets. As a result, the stability and reliability of the value of the Korean won remains below international standards.

Considering the internal and external circumstances currently faced by Korea, however, it is not desirable to launch an all-out drive for currency globalization in a short period of time. Even if the remaining procedural regulations in the Foreign Exchange Transaction Act are eliminated, overseas demand for the Korean won is unlikely to surge immediately.

Any short-term side effects anticipated in the process of pushing for the internationalization of the won should not be taken lightly. Above all, it is very likely that foreign exchange volatility will rise due to speculative attacks. Foreigners could easily raise funds in the currency and use them in various speculative transactions for short-term profits. It is notable that Australia, one of the successful cases of currency internationalization, suffered side effects, including increased foreign exchange volatility, over several years after it adopted regulatory changes in 1983.

A more realistic path to internationalize the won would be to gradually increase its use in trade transactions. It would be a good idea to take advantage of won-yuan currency swaps in trade settlements with China, which is actively pushing for the internationalization of its currency. If the won is increasingly used abroad and the related systems are overhauled, its internationalization can be naturally achieved together with the rising status of the Korean economy.

[Dong-a Ilbo, October 17, 2012]

www.koreafocus.or.kr

IT Changes Healthcare Setting

Eric Van Oppens CPO Head and Country President Novartis Korea Ltd.

One of the features of Koreans that attracted my attention was their deep interest in and response to information technology (IT). Koreans seem to have a deep regard for new technologies and they have an outstanding ability to use them. This fascinated me. The reason is that IT is expected to make a substantial contribution to the medical field when it is combined with bio-medical technology.

We can take rapidly advancing bio-imaging as an example. It meshes IT and biotechnology enabling bio-imaging technology to be used in various ways to develop new drugs. They include discovering and tracing biomarkers for reaction to drugs and taking high definition pictures of cells by using PET (positron emission tomography), scanner and MRI (magnetic resonance imaging), among other methods.

Another case of IT application in medicine is seen in the medical systems of some African countries. For example, government and private medical service organizations in Tanzania adopted the “life-saving text message� program, which allows them to identify and manage an inventory of malaria treatments by using mobile and electronic map technologies.

Once a week, rural health facilities report their malaria treatment supply, providing the central

medical authorities the means to identify exactly where to send resupplies. This program helped medical service organizations solve the chronic drug shortages in regional health facilities. Thanks to this program, many people were saved by improving accessibility to medicines for malaria, which are essential in rural regions in Africa. After achieving success in Tanzania, this program has been expanded to Ghana and Kenya.

Symbiotic relations between healthcare technology and IT contribute to promoting healthy life of more people. We will witness faster advancement in clinical setting in the future. It is a great pleasure for me to meet with such innovative moments.

[Maeil Business Newspaper, October 18, 2012]

www.koreafocus.or.kr

- Korea Builds ‘Green Triangle’ - No Royal Road to Nobel Prizes in Science - Romanization of Korean Personal Names & Identity Issue - Lesson for Prosecution Reform

Korea Builds ‘Green Triangle’

Jang Seong-ho Professor of Politics Pai Chai University

Songdo, a coastal town west of Seoul, has been selected to be the headquarters of the secretariat of the United Nations’ Green Climate Fund (GCF), often called the “World Bank of the environmental sector,” greatly enhancing Korea’s international stature. It represents an occasion for double “green style” celebrations following the official launching of the Global Green Growth Institute (GGGI).

The GGGI was established in Seoul in June 2010 to support eco-friendly growth in emerging economies and develop a green growth model. It is derived from President Lee Myung-bak’s 2008 National Liberation Day speech in which he proposed a low-carbon, green growth agenda for national development. The government explained that an agenda that includes concern for developing countries and climate change at the same time is highly effective in upgrading our international prestige and realizing business opportunities.

Now an international agency, the GGGI includes 16 member states, including Denmark, the UK and Korea. It has attracted global attention by suggesting a new paradigm that seeks to replace today’s wasteful economic model powered by fossil fuels with an economic system that combines with environmental issues for the coexistence of humankind. To this end, the GGGI has plotted a new direction of integrating the environment and growth, as well as boosting Korea’s international stature as a stronghold of green growth.

With aims to spread green growth models and support emerging countries’ eco-friendly growth, the GGGI is a think tank to devise tailor-made green-growth plans for each country and region. For example, it is currently carrying out a project of preserving forest and preventing desolation in Kalimantan Province of Indonesia. In Cambodia, it is also pushing ahead with a project to establish solar cookers in cooperation with the Cambodian government. Projects to spread green growth models were undertaken in three countries in 2010 and they have been expanded to a total of 24 projects in 17 countries.

In spite of having limited natural resources, Korea has achieved enviable economic growth and development over the past century by fostering human resources through education, and international trade and exchanges. For Korea, GGGI has a great significance as it is the first international organization in which Korea played a leading role in its creation and has proposed a new paradigm of growth that is bearing fruit.

The role of GGGI has attracted keen interest as some countries fiercely competed to host the GCF Secretariat, in which 194 signatory states of the United Nations Framework Convention on Climate Change (UNFCC) are participating. With the interest in environmental issues growing, the world is paying increasing attention on the status upgrading and a new role of the GGGI in sharing diverse growth models while serving as a bridge builder between the developing and developed countries.

Starting in 2013, the GCF aims to raise US$100 billion (about 110 trillion won) in funds annually with its impact expected to surpass that of the IMF in the future. The hosting of the GCF secretariat will bring a 381.2 billion won windfall for the Korean economy. Korea will firmly establish itself as a leader on the environmental front by building a so-called “green triangle,” in which GGGI, GCF and the Green Technology Center (GTC) are effectively coordinated.

I hope Korea will make use of this occasion to gain new momentum for national development and greater unity among its people, not to mention emerging as the Mecca for sustainable world economy.

[Seoul Shinmun, October 22, 2012]

www.koreafocus.or.kr

No Royal Road to Nobel Prizes in Science

Kim Seung-hwan Professor of Physics Pohang University of Science and Technology

“Déjà vu” refers to the strong sensation that an event or experience currently occurring has happened before. Public interest sparked by media attention to the Nobel Prize season suddenly vanishes like a mirage. The déjà vu that happened last year, the year before yesteryear, or 20 years ago in this country like an annual event concerns the Nobel prizes in science.

The Nobel Prize season ended last week and the shame we feel deepened as Japan added to its Nobel science prizes for a total of 16 while Korea remained at zero. What hurts us more is that Japan’s Shinya Yamanaka, a Kyoto University professor, became this year’s Nobel laureate in physiology of medicine for discovering induced pluripotent stem cells. This is because Korea has lost its competitive edge in the stem cell area after the disgraceful scandal of stem cell expert Hwang Woo-suk.

Now, with the winners of this year’s Nobel prizes in science announced, many people are heard regretting and scolding again over Korea’s repeated failure. Others again question whether Korea will ever be successful and thus end this recurring déjà vu. Before asking such a wishful question, however, we should look back at our reality cool-headedly.

At this very moment, many young researchers at universities and private research institutes find it

difficult to fully devote themselves to challenging and innovative research amid discrimination against natural science and engineering majors and their uncertain future. Researchers at statefunded institutes also suffer from sagging morale as their research environment is marred by discouraging practices such as bureaucratic inefficiency, excessive emphasis on short-term, targetoriented projects and increase in non-regular employment.

Under these circumstances, it is urgent for us to stop longing for Nobel prizes in science while also pressuring researchers for short-term results and evaluating their achievement on a quantitative basis. A recent survey by the Korean Federation of Science and Technology Societies clearly indicates the deep frustration felt by local scientists: As many as 70 percent of the respondents said they “want to leave Korea if given an opportunity to work in an advanced country.”

In terms of scientific competitiveness, Japan is at least dozens of years ahead of Korea. Japan established the Institute of Physical and Chemical Research (RIKEN), a large natural sciences research institute modeled after the Max Planck Institutes of Germany, 95 years ago. RIKEN and the Max Planck Institutes are the benchmarking models of Korea’s Institute for Basic Science, founded last year.

Japan has maintained its pride and strength as a powerhouse of basic science since Hideki Yukawa won the Nobel Prize in Physics, becoming its first Nobel laureate 73 years ago. Japan’s competitiveness for Nobel prizes in science derives from its tradition and culture of understanding the value and nature of basic science, trusting and supporting grassroots scientists, and waiting patiently. With scores of scientists “anxiously waiting for a phone call when the Nobel season approaches each year,” Japan certainly has a broad base in basic science with a number of potential Nobel science prize winners to continue its celebrations for many years ahead.

There is no doubt that a Nobel Prize cannot be earned overnight. Korea has at last set about to expand its base for basic science by founding the Institute for Basic Science as part of an international science business belt as well as increasing support for basic science research at the grassroots level. But Korea has a very short history in supporting basic scientific research. Apart from continuing to increase the support for basic scientific research at the state level, there is no royal road to winning the Nobel prizes in science.

However, it would be useful to take this opportunity to review Korea’s research environment for basic science overall and push for a shift toward a more creative paradigm. Especially, the

government should seek ways to encourage young scientists to tackle challenging research topics, while erecting a tightly knit safety net to give them another chance when they fail. It is also important to trust researchers engaged in field research and make necessary investments to help them concentrate on basic research, rather than harshly demanding short-term, visible results.

It is undeniable that our unique “hurry up” culture and imitation-oriented, chasing-type R&D investment have been the driving engine behind the nation’s rapid economic growth and success story. However, if Korea is to shake off its impatient ambition for a Noble prize in an academic discipline and meet the demand of the times to leap into the ranks of advanced countries amid the global economic crisis and uncertainty about the future, we must accelerate our effort to improve research and development based on basic science toward achieving creativity and innovation. Then, the gate to a Noble prize in science will open for Korean researchers someday.

When asked in a congressional testimony whether creating a particle accelerator would contribute to defending the United States, Robert Wilson, the founding director of the Fermi National Laboratory (Fermilab) replied: “It has nothing to do directly with defending our country, except to make it worth defending.” Is Korea a country worth defending for its researchers and people?

[Chosun Ilbo, October 18, 2012]

www.koreafocus.or.kr

Romanization of Korean Personal Names & Identity Issue

Robert Fouser Professor of Korean Language Education Seoul National University

While serving as a professor at Kyoto University in Japan, I learned the interesting word “kaisei.” It meant the “year grade” of a student, a synonym to “nensei,” which was used at universities in all other regions around Japan, including the University of Tokyo. I wondered why only Kyoto University used a different word. I found out through inquiry that the university used the expression to emphasize its students’ experience, rather than period, of study. I thought Kyoto University had some backbone as it tried to maintain its identity and express it through language.

Now, four years after returning to Korea, I think frequently of the importance of expressing identity through language. Unfortunately, Korean universities tend to ignore their identity under the pretext of respecting American standards, which makes it difficult for them to develop a unique school culture of their own. Not only the universities but also Korean society at large is in a similar situation. The entire nation appears to follow some hypothetical “global standards,” while at the regional level the “Gangnam style” is the norm.

The same holds true for the use of language. One thing that keeps frustrating me all the time is the Romanized personal names of Koreans, especially the order of family name and given name. On the back side of their business cards, most Koreans have their Romanized names written in the Western style with the given name coming first and the family name last. For example, Hong Gil-dong is

written as “Gil-dong Hong” or “Kil-dong Hong.”

I believe the order of family name and given name is an important issue from the viewpoint of identity. Saying one’s family name first and given name next is part of the unique culture of Koreans. Chinese and Japanese also say their names in the same order. I hope Koreans maintain this order when they write their names in English, like “Hong Gildong” or “Hong Gil-dong.”

When I ask them why they follow the “English style,” most Koreans reply, “It’s because foreigners may not know the Korean style.” Can this really be the reason for dumping one’s identity? If Koreans write their names in the Korean style, foreigners will learn about and understand their identity. Imagine an American writes his name in the Korean style. For example, my name would look quite awkward if it is written as “Fouser Robert.” I would feel my identity has been compromised. Sometimes I come across Koreans who call me “Mr. Robert,” which I simply give a pass or gently correct.

Some Koreans put a comma after their family names when keeping the original order of family name first and given name last, which I think is unnecessary as well. There is no need to create a new concept that does not exist in the Korean language. The idea also derives from the preconception that “foreigners may not know the Korean style.” I think this is also tantamount to giving up one’s identity.

Debate on identity in Korea is based on nationalism in many cases, hindering wholesome discussion. The Korean dictionary defines nationalism as “an ideology that considers the independence and unity of the nation to be the most important.” It is basically seen as a political notion. However, identity refers to “the same essential or generic character in different entities.”

The identity of the Koreans is the “Korean character” inherent in the hearts and minds of Koreans, and expressed in their everyday habits. Numerous “small habits” form the entities called Koreans.

Abandon these habits, the nation will vanish.

It is very important to maintain your indigenous identity amid the powerful tide of “global standardization” sweeping across the world. The seemingly small effort to preserve your linguistic identity like the order of family name and given name is very valuable. Each country in Northeast Asia has a distinctive identity, which has not been standardized and therefore is unique and attractive. On Hangeul Day today, I want to ask Koreans not to abandon their identity in daily use of language ― just like an unbending bamboo plant.

[Dong-a Ilbo, October 9, 2012]

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Lesson for Prosecution Reform

Park Chan-un Professor of Law Hanyang University Law School

Presidential candidates across party lines are presenting measures to reform the prosecution. Park Geun-hye of the ruling Saenuri Party has proposed to introduce a permanent independent counsel system, and Moon Jae-in of the opposition Democratic United Party and independent Ahn Cheolsoo have called for a separate agency to investigate corruption involving high-ranking government officials. The common objective of these proposals is to hold the all-powerful prosecutors in check by altering their exclusive power to issue indictments.

As expected, the prosecution is fiercely resisting the reform proposals by presidential candidates.

Top prosecutors sternly denounce the proposals as “attempts to incapacitate and dissolve the prosecuting authority.” Watching the situation from far away in Sweden, I couldn’t feel more frustrated as the prosecution leadership is overreacting with an incredible obsession to protect their organization. They even turn a deaf ear to an appeal for reform by a former head of the Central Investigation Department at the Prosecutor-General’s Office.

Let’s say, as asserted by prosecutors themselves, justice is carried out in 99.9 percent of cases. But what is the use when the prosecutors are so loudly denounced for failing to fulfill their obligations in the remainder of 0.1 percent of cases, with their credibility hitting rock bottom? Therefore, the proposed prosecution reform aims to find better ways for the prosecutors to exercise their authority

in the 0.1 percent of cases.

With the public feeling their patience is wearing out, it is now high time to reform the nation’s prosecution. And this time round the reform should mean introducing a fundamental solution, instead of a stop-gap, partial repair. The prosecution’s monopoly of indictment power is far from the golden standard. The systems for criminal investigation and indictment of suspects differ from country to country depending on their circumstances.

There is no absolute goodness in the world. The prosecution has resisted the proposals for a permanent independent counsel or an investigation agency exclusively dealing with corruption of high-ranking government officials, condemning them as “unprecedented institutions in world history.” To me this rebuttal sounds like nothing but a childish complaint.

Let’s take Sweden as an example. This northern European country is widely known for a very high degree of integrity. According to the 2010 data of the Transparency International (TI), Sweden placed third in the global rankings of state integrity. Soon after arriving in Sweden, I was surprised to find most government officials working in offices with transparent glass windows. It means public servants in this country are allowed to keep no secret concerning their duties. This is an amazing difference.

Every country’s cultural and historical institutions have their own background. As a researcher of government systems, I could see that the Swedish people have built a society where the state power can be divided among different institutions so they can hold each other in check. The prosecution is no exception. Public prosecutors have a nationwide organization, which handles ordinary offenses.

But they have several special counsels that are unfamiliar to us.

The most powerful prosecuting authority in Sweden is the Parliamentary Ombudsmen (Justitieombusmannen), which is far more powerful and prestigious than the Anti-Corruption and Civil Rights Commission, the Swedish counterpart of the Korean organization with the same name.

The primary task of the ombudsmen is to monitor and investigate government corruption. Unlawful acts are punished, but when serious criminal offenses are uncovered, the ombudsmen take up the role of a special prosecutor to conduct an investigation and exercise the prosecuting authority.

There are two special counsels within the Swedish government. One is the Chancellor of Justice (Justitiekanslern), with a history over 300 years, who is primarily responsible for overseeing the

government but also deals with crimes related to the freedom of speech and expression. The other is the Economic Crime Authority (Ekobrottsmyndigheten), established in the 1890s. Public prosecutors and police officers work together to investigate and prosecute specific economic criminals.

As such, in addition to the public prosecutors similar to ours, Sweden also has several special prosecutors conducting investigations and taking cases to court, while holding each other in check.

This is the systemic factor that helps Sweden maintain a high degree of integrity and accountability.

It is worthy to note that all of the top 10 countries with high levels of integrity in TI surveys are parliamentary democracies with efficient systems of checks and balances among branches of government. Here lies a potent lesson that we should learn: The principle of checks and balances should be the foremost priority in prosecution reform. This is all the more urgently needed in a country with a presidential system like Korea, where power is concentrated in the president. It means guaranteeing the authority of public prosecutors with minimum supplementary diffusion of power.

I firmly believe that through such reform the prosecution will be able to regain credibility and our society become more transparent. I believe the candidate who has the ability to strongly push for reform should become our next president.

[Kyunghyang Shinmun, October 22, 2012]

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- The Power of the ‘Predictable’ - Young Generation Bolsters Korean Cinema - Skilled Translators Key to Globalizing Korean Literature - Korea’s Cultural Heritage as Global Tourist Attractions - History is the Future

The Power of the ‘Predictable’

Lee Dae-hyun Editorial Writer The Hankook Ilbo

The story itself is largely predictable. Director Choo Chang-min himself described his film as “too easy and predictable.” Change the time period and background a little bit, and one will instantly see how much the story resembles Mark Twain’s “The Prince and the Pauper” and Japanese director Akira Kurosawa’s “Shadow Warrior.” In the former, the prince and the beggar were born on the very same day and they look identical. In the latter, a petty criminal impersonates a dying warlord.

In “Masquerade,” the Joseon king is under constant threat of assassination. When the king becomes unconscious, Ha-seon ― a lowly clown ― is called in to stand in for the king. Regardless of the time and place, stories of this type share a common feature: they have extreme characters. For instance, a person at the lowest rank in society ascends to the highest position overnight. A king is replaced by a beggar, or a clown, and a feudal lord by a thief. The greater the gap in their status, the bigger the viewer’s vicarious satisfaction and a sense of catharsis.

Anyone can imagine becoming a king or a handsome actor. No matter how fleeting or unrealistic, there is a human desire to live another person’s life. In “Shadow Warrior,” a young brother brings in a criminal to impersonate his warlord brother to conceal his death. Likewise, Ha-seon in “Masquerade” is picked by the head of the royal secretariat in an effort to avert a revolt in the court.

The ulterior motive is highly political: The stand-in is asked to act so natural that he can thoroughly deceive everyone. If his real identity is disclosed, the consequences would be lethal. Not only the stand-in but all those who are implicated in the conspiracy might not be saved from execution. It is their common fate. Things can also go awry when the stand-in forgets his real status. All in all, this is a deadly gambit.

The film is amusing and thrilling, though depicting a desperate situation involving different fates.

The central character, pushed into an unfamiliar setting, makes incredible mistakes, which evoke laughter. A turning point comes when Ha-seon’s fake role takes a strange, unrealistic turn. In the capacity of the king, he enacts a reform land tax law, admonishes the arrogance of the nobility and bureaucrats, and helps needy people through benevolent rule. He grants the wishes of a young court maid trying to meet her long-lost mother and pardons the queen consort’s elder brother falsely accused of treason.

The bogus king’s revolt against the palace norms begins from his heart as he looks into the suffering of the people before all others and indiscriminately cares for each and every person. People are amazed. Not only the ordinary people but the head of the royal secretariat, security guards and even the queen, who know he is not the real king, are all moved by his rule and behavior.

The movie technically belongs to the genre of period drama, but it has nothing to do with historical facts. The story derived from the writer’s imagination that stretched out of 15 days of blank pages in the annals of King Gwanghaegun (r. 1608-1623), who was ousted for tyranny and misrule. Weaving a wild story from the missing pages, the movie obviously seeks to portray a leader of true virtues.

What a genuinely respectable leader needs is not academic knowledge or high intelligence but the wisdom and benevolence possessed by the pauper acting as the king, the dead warlord’s impersonator, or the lowly clown in the king’s robe, who communicates with people and share their pains. Of course, this message is far from new.

Surprisingly, nearly 10 million movie-goers have been enthralled by this all too obvious story.

There is no doubt that Lee Byung-hun’s impressive performance in a double role as the king and the clown is a key factor behind the movie’s commercial success. But the feat owes more to the power of the “predictable” elements embedded in the film.

In the cultural and artistic jargon, the word “predictable” has two connotations. First, it means “conventionalism” which is packaged as generality narrow in scope and lacking in originality.

Second, it refers to “archetype,” a unique cultural expression of universal human experience discovered from concrete reality.

Unlike clumsy mimics of clichés, archetypes guide us to rediscover our human nature, that is, justice, courage, love, family, friendship, sharing and consideration for others, compassion and forgiveness, and community spirit, which are all too obviously precious and irreplaceable human values. No story under the sun is entirely new. The same goes for this movie. In portraying humanity with delicate and unique historical imagination, it carves out an archetype and strikes a chord with viewers.

A great leader is not a spectacular hero, but an individual who cherishes the values that we all believe are too obviously precious. This makes man truly human and strikes a chord in others. I hope that all of our presidential candidates watch the movie which has tugged at the heartstrings of 10 million people to find the value and power of things that are “predictable.” This is tantamount to finding out where the essence and power of culture lies.

[October 17, 2012]

www.koreafocus.or.kr

Young Generation Bolsters Korean Cinema

Hwang Yeong-mee Film Critic and Professor Sookmyung Women’s University

A well-made and successfully promoted Korean film sells 10 million tickets these days, a remarkable feat considering the nation’s population size. But opinions vary as to whether Korean films will continue to thrive in the future. What seems certain is that the young generation holds the key. Today’s young people, dubbed the “video generation,” as well as those in their 30s and 40s are well accustomed to the multiplex cinema culture. They watch a popular film and then have a dinner or go shopping, a typical spending pattern among these generations.

People no longer read books as they did. In view of the dwindling book sales, it may be said that an average youngster rarely reads a single book but watches at least a couple of movies a month.

Examples abound. This year alone, “The Thieves” sold more than 10 million tickets while six other Korean movies surpassed four million in ticket sales: “Dancing Queen” (4.02 million), “Nameless Gangster: Rules of Time” (4.68 million), “All About My Wife” (4.58 million), “Architecture 101” (4.1 million), “Deranged” (4.45 million), and “The Grand Heist” (4 million). And “Masquerade” has sold over 8.4 million tickets, thus far.

All this clearly indicates that an absolute majority of 50 million South Koreans enjoy watching movies. Film festivals create scenes attesting to even greater fervor. For example, the tickets for the opening movie of the 17th Busan International Film Festival sold out in 1 minute and 34 seconds.

At this biggest film festival in Asia, other films were no less popular with their Internet ticket sales barely available. Many of the seats were filled up right after online reservations began to be accepted. Even those who reserved tickets on the Internet had to queue up early because latecomers who failed to pick up their tickets before the film started could not enter the theater.

Not only the general audience but celebrity guests also found it hard to secure tickets. The seats for invited guests were limited in the first place. For weekend screenings, in particular, many had to rush to the theaters to buy a reservation ticket, but only to find none of them available. On-site ticket purchase was extremely hard, too, because many film buffs began forming lines on the previous day, sleeping outside on cardboard.

It is amazing that so many young Koreans gladly become “homeless for a day� to buy movie tickets. I recently witnessed similar battles for on-site ticket purchase at the Berlin International Film Festival. Numerous young people from around the world formed long lines before ticketing booths, sleeping on arcade floors in cold weather. Their passion for cinema will not easily subside.

Back in Busan, the Haeundae beach was often jam-packed with huge crowds who gathered to attend film-related events or meet up with actors and filmmakers. Among these crowds were many foreigners, including Chinese who took advantage of their long autumn holiday season in their country to visit the Busan International Film Festival, as well as Japanese tourists who flocked there to see hallyu stars. Given the strong passion for movies among young people, the predominant position of cinema will very likely remain off-limits to other cultural genres in the future.

What matters is not quantity but quality, however. For a cultural sector to prosper in a sustainable manner, it needs a steady influx of talented people. Under the Japanese occupation in the early part of the 20th century, many Korean intellectuals devoted themselves to literature primarily because they found most other professions inaccessible to them, which eventually contributed to the high recognition that is still enjoyed by Korean literature of the colonial period. In Korea today, many young people aspire for careers not only as actors and directors but to pursue other professions in the film industry, beyond simply enjoying movies as amateur film buffs. These young people brighten the future of Korean cinema.

[Segye Ilbo, October 13, 2012]

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Skilled Translators Key to Globalizing Korean Literature

Kim Tae-hun Staff Reporter The Segye Ilbo

Two Asian authors, Mo Yan of China and Haruki Murakami of Japan, were the two frontrunners competing for the 2012 Nobel Prize in Literature. As the Chinese in the end rejoiced in becoming his country’s first winner of the prestigious award, the Korean literary community had to watch the festivity with bitterness. Even though a Korean film has grabbed the best award at the Venice Film Festival and a K-pop song has almost reached to the top of Billboard music charts, Korean literature may still have a long way to go to claim worldwide recognition and appreciation.

Experts say that the globalization of Korean literature requires, above all else, a pool of proficient translators. Second, they say, it is necessary to take a selective approach to concentrate on the translation of a few top-notch authors instead of being egalitarian to introduce a broader range of writers abroad. Third, many also believe that the uniqueness and originality of Korean literary content should be effectively highlighted.

The critical importance of translating quality literary works into different languages has been underscored following the announcement of Nobel literature awards every year. If a writer is to have a truly “global” acclaim, his or her works should be translated into at least 20 languages. In this sense, Korea has few “global” authors.

Yeom Hyeon-suk, a senior editor at Munhak Dongne [Literary Community] Publishing Corp., calls for the nurturing of capable translators in order to effectively introduce Korean literary works to global readership. “Shin Kyung-sook’s novel has received favorable reviews abroad, and films based on Korean literary works enjoy international popularity. It means that the cross-cultural resonance of Korean literary content is no less than those of Chinese or Japanese writers,” she says.

“The problem is that Korea’s quality literary works remain largely unknown to global audience.

Therefore, the priority should be the nurturing of a large pool of capable translators so that Korean novels can be translated into English, French, German, and Swedish, among other languages.”

Currently, the Literature Translation Institute of Korea under the Ministry of Culture, Sports and Tourism is trying to fulfill the need. The problem is that this government-funded institute has failed to focus on the works of a few first-rate authors due to the notion that it has to fairly cover various writers. “The institute has faced criticism so often for translating multiple works of the same author.

The president of the institute has been even summoned to the National Assembly to give explanations for lawmakers why the institute has favored certain writers,” says Chair Professor Kwon Young-min at Dankook University.

He continued, “Egalitarianism has no place in the realm of the arts, especially literature. Each author has a different world and every author’s works demonstrate clearly different levels of artistic refinement. Let’s say the institute is to translate 200 pieces a year. They should concentrate on some 10 to 20 pieces each by a few prominent authors instead of translating one novel each by 200 writers showing varying levels of quality.”

Additionally, striking a good balance between universality and Korean originality is vitally important for the successful introduction of Korean literary works abroad. The once popular notion that “what is most Korean is most universal” has given way to the recent belief that “one has to pursue universality instead of Korean uniqueness in order to draw sympathy from people around the world.” While opinions may vary, however, many still believe that literary depiction of Korea’s cultural and traditional uniqueness is the key to global appreciation of Korean literature.

“The two Chinese-born Nobel literature laureates, Mo Yan and Gao Xingjian (who was a French national at the time he won the prize in 2000), extensively employ Chinese traditions in their writings. Even though the recent cross-cultural trend of universalism seems to have become an important element in gaining global popularity, the literary value of traditional and cultural uniqueness should not be underestimated,” says Hong Seok-pyo, a professor of Chinese literature at Ewha Womans University. “Imitating Western literature in the name of literary universalism would merely end up producing copycats. We need to develop creative dimensions in smart ways.”

[October 17, 2012]

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Korea’s Cultural Heritage as Global Tourist Attractions

Choi Myeong-hee Mayor of Gangneung

Frank Gehry, the world-renowned architect who designed the Guggenheim Museum in Spain, recently visited Jongmyo Shrine. This was his second visit to Jongmyo after the first one in 1994, when he also visited Korea for the first time. At that time, the architect said that he did not know Korea had such beautiful architecture, and he wondered why Korea had not shown off this great cultural asset to the world. The deep impression he had then probably led him to take the opportunity this time to look at the shrine once again.

Korea’s cultural heritage, which often leaves such profound impressions on foreigners, doesn’t seem to receive the proper recognition it deserves at home. This year, it is expected that well over 11 million foreign tourists will visit Korea. The overseas craze for Korean pop culture, or hallyu, prompted by TV dramas and K-pop, has greatly contributed to attracting a growing number of foreign tourists. In addition, the explosive popularity of Psy’s recent hit “Gangnam Style” has been a good opportunity to promote Korea in many countries around the globe.

However, now is the time that we should expand the Korean Wave from the current boundary limited to popular culture to the broader realm of cultural heritage, which is permeated with our indigenous history and tradition. To do this, the tourism industry needs to discard its simplistic paradigm focused on providing resources for dining, drinking and having momentary enjoyments, and transform it to increase opportunities for foreign visitors to experience and learn about Korea’s

ancient history and traditional culture.

For example, when Queen Elizabeth II of the United Kingdom visited Korea several years ago, she was invited to a traditional village in Andong, and her visit to the village, where descendants of the ancient Korean aristocracy have maintained their age-old lifestyle. The invitation helped propagate awareness of Korean culture throughout the world.

The Dano Festival of Gangneung was designated as one of UNESCO’s Masterpieces of Oral and Intangible Heritage of Humanity in 2005. As Gangwon Province’s notable cultural heritage, the Dano Festival, held in the coastal city of Gangneung on the fifth day of the fifth lunar month every year, has become an event not just for local residents but for tourists who stream in from all over the country. The festival, which has continued as a regional celebration for roughly a millennium, could be developed into a program for foreign tourists.

At the 2012 ICCN World Intangible Heritage Festival, scheduled to be held in Gangneung on November 19-29, UNESCO-registered traditional performances representing 23 countries, including Italy’s Sicilian Puppet Theater, Argentina’s tango, and Korea’s Gangneung Gwanno Mask Dance Drama (included in the historical repertoire of the Dano Festival), will be showcased together.

The ICCN (Inter-city Intangible Cultural Cooperation Network) is an international organization launched in 2008 with the cooperation of various cities around the world for the purpose of preserving and developing the world’s intangible cultural heritage. It is the first international body created under the initiative of Korea’s local government, with Gangneung taking responsibility as its representative and secretariat. The task of creating a systematic inventory of the world’s intangible cultural heritage has not been easy because it involves mobilizing professional human resources with the limited budget of a local government.

The ICCN festival is not just an event to introduce traditional Korean culture to foreign tourists, but is also an opportunity to prepare and publicize the 2018 Winter Olympics in Pyeongchang.

Spreading Korea’s popular culture widely in the world is meaningful indeed, but the foundation for the Korean Wave will become wider and stronger if Korea’s intangible cultural contents are transformed into tourism resources, especially the ones recognized by UNESCO, such as the Dano Festival of Gangneung.

The cultural prowess thus gained will also elevate Korea’s prestige in the world. To carry out this task, we need to unearth and raise awareness of our intangible cultural contents. In this sense, this year’s ICCN festival in Gangneung will be a full-fledged flare signaling the start of the “Korean Wave 2.0,” making Korea’s intangible cultural heritage widely known throughout the world.

[Seoul Shinmun, October 17, 2012]

www.koreafocus.or.kr

History is the Future

Jeong Jin-hong Editorial Writer The JoongAng Ilbo

A hundred years ago, a 25-year-old youth from a lost nation set out to find ruins of the ancient Barhae Kingdom in what is today the Russian city of Ussuriysk. His name was Jang Do-bin (18881963, pen name Sanun). At the time, he worked for the Gweoneop Sinmun, the daily newspaper he and other Korean independent activists founded while in exile in Vladivostok. He contributed articles and occasionally acted as editor-in-chief on behalf of Shin Chae-ho (pen name Danjae) while Shin was convalescing in bed.

Sanun’s first meeting with Danjae traces back to 1908, a chaotic time when the Joseon Dynasty was crumbling. In that year, the then 21-year-old Sanun worked as an editorial writer for the Daehan Maeil Shinbo newspaper, assisting the 29-year-old Danjae, who was its editor-in-chief. Seeing his country heading for ruin, Sanun concluded that to revive the spirit of independence among Koreans, he had to concentrate on researching national history, especially ancient history. This must have been partly due to Danjae’s influence.

While his mentor Danjae was more interested in the Gojoseon (Old Joseon), Buyeo and Goguryeo periods, Sanun focused more on the history of the Barhae kingdom. “An Investigation of Barhae” (Barhae go), written in 1784 by Yu Deuk-gong, a Northern Faction scholar during the reign of Joseon’s King Jeongjo, was an epochal work,. It elucidated for the first time in history that Barhae

was a kingdom of the Korean people that formed a part the North and South States Period together with the Silla Kingdom, retained the customs of the ancient Korean kingdom of Buyeo and was the legitimate successor of the Goguryeo Kingdom, established on Goguryeo’s old territory.

But Yu Deuk-gong never stepped on the soil occupied by Barhae. It would be Sanun’s work to find its ruins 128 years later. In his quest to discover the remains of the ancient kingdom, Sanun did not rely only on documentary sources; he went out to its presumed territory himself.

Precisely a half century ago, Sanun’s essay “The End of the Joseon Dynasty under Dark Clouds” was featured under the section entitled “The Past Years of Their 20s” in the April 1962 issue of World of Thought (Sasanggye), which was an influential magazine among contemporary intellectuals. Sanun, at age 75 and one year before his death, recalled in this essay after nearly half a century why and where he traveled to find Barhae’s ruins.

Sanun was dedicated to his historical studies with keen insight into the turn of events that was leading up to the collapse of his nation: the Korean military had been disbanded, its diplomatic rights were deprived and finally Korea was annexed by Japan. In addition, he participated in the New People’s Association (Sinminhoe), initiated by Ahn Chang-ho (pen name Dosan) and joined by other independence activists, such as Yang Gi-tak, Yi Gap, Yi Dong-hwi, Park Eun-sik, Yi Dongnyeong, Yi Hoe-yeong, Yi Seung-hun, and Kim Gu. Moreover, as the dean of Oseong School, he committed himself to training future patriots.

In 1912, however, Sanun went into exile to Vladivostok after the school was forcibly closed by the Japanese Government-General. He thought that the Korean people should restore their bold spirit and robust minds to recover their sovereignty. With this awareness, he wandered around Primorsky Krai in Russia to find the traces of Barhae, which the contemporary Chinese nicknamed “the prosperous nation to the east of the sea (haedong seongguk).” Refusing to confine his historical quest to the incomplete southern history of Silla, he roused the northern state of Barhae from its long slumber. Koreans today, however, are completely oblivious to the passionate pursuit of this 25year-old youth who roamed over the wilderness in Primorsky Krai all by himself one hundred years ago.

On October 15, Vladimir Kurilov, vice president of Far Eastern National University in Vladivostok, Russia, asserted that “the first state in Primorsky Krai was Barhae” in his address given at the Jang Do-bin Memorial Hall in the university’s Center for Korean Studies. As soon as I heard this

statement, a shiver ran through my body and my eyes brimmed with tears. Just as the island of Dokdo is not Japanese territory, Barhae has never been a part of Chinese history. And this forgotten root of Koreans was discovered by the young Sanun, who turned his eyes to the ancient Korean state when nobody cared.

Leaving the memorial hall, I stood in front of the bronze bust of Sanun, which is said to have been cast by melting weapons of the old Russian navy. There, I told myself, “Sanun’s quest to find Barhae’s remains one hundred years ago must not have been entirely for his yearning for the land lost a thousand years ago. Rather, he must have wished to show directions to us in the future.”

A thousand years ago, Korea failed to be united and was divided into the North and South, the former being Barhae and the latter Silla. A hundred years ago, furthermore, it even lost its sovereignty as an independent nation. Nevertheless, people like Sanun strived to rekindle the small but meaningful flame of its history in hopes of reviving their ruined country, and that is why we have today and tomorrow. Indeed, history is the living future.

[October 20, 2012]

www.koreafocus.or.kr

- The Third Way: Creative Engagement of North Korea - North Korea’s Business Cycle and China’s ‘Visible Hand’ - National Strategic Value and Role of Jeju Naval Base

The Third Way: Creative Engagement of North Korea Woo Seong-ji Associate Professor College of International Relations Kyung Hee University

I. Introduction The existence of North Korea as a state and the international conflict caused by its nuclear programs poses a major threat to Northeast Asia and its pursuit of peace and prosperity. In the post-Cold War environment, the region has seen many gradual changes. The Barack Obama administration in the United States has opted for soft power approaches in international relations instead of superpower unilateralism. The Lee Myung-bak government has sought to strengthen South Korea’s alliance with the United States and shift from the previous administration’s appeasement toward the North.

North Korea began the process of hereditary succession when Kim Jong-il became ill in the summer of 2008 and after he died in December 2011, the Kim Jong-un reign started earlier than expected.

The new North Korean regime and the international order around the Korean peninsula now face a major test. Inter-Korean relations, which hit bottom with the North’s sinking of the Cheonan patrol craft and artillery attack on Yeonpyeong Island in 2010, are in search of a fresh break. Now many ask if the Kim Jong-un regime can make a soft landing and if it is desirable. And there is the big question of how the South should formulate its North Korea policies to navigate the post-Kim Jongil era.

The new North Korean leadership faces hard choices and difficulties in keeping its state intact and ending its isolation and backwardness. The neighboring nations are exploring ways to persuade Pyongyang to coexist and pursue common prosperity. However, there is a wide gap between what they prescribe and what the North expects.

This study examines the solution, or “consensus” of Seoul, Washington and Beijing on the North Korean problem. To expect any degree of success, Seoul must take into account many considerations ranging from the national identity of the North and the South’s previous North Korea policies to a practical way to bring a change to the North.

This paper will review the characteristics of North Korea policies in the Kim Dae-jung, Roh Moo-

hyun and Lee Myung-bak administrations before analyzing the North’s state system and presenting a new concept of engagement policy toward the North.

II. The Nature of Seoul’s North Korea Policies During the Cold War, South Korea focused on containing the North’s ambitions for geopolitical expansion and defending itself. Since the end of the Cold War and Pyongyang’s adoption of a “military-first” policy in the 1990s, Seoul has dealt with the North in two ways. The Kim Dae-jung and Roh Moo-hyun administrations emphasized engagement through various incentives, but the current Lee Myung-bak government has adhered to a hard line, withholding concessions to punish the North for military provocations. The policies of Kim’s “government of the people” and Roh’s “participatory government” were tied to the progressive ideology of liberal leftists, and the policies of Lee’s “pragmatist government” are based on backing by conservative rightists. Thus, a “SouthSouth conflict” has appeared and efforts to bridge the two paradigms have made little progress.

1. North Korea Policies of Kim Dae-jung and Roh Moo-hyun Administrations

The reconciliation and cooperation policy under President Kim Dae-jung and the peace and prosperity policy of President Roh Moo-hyun were virtually identical. Roh succeeded Kim’s North Korea policies in both form and substance and both presidents had summit talks with Kim Jong-il during their tenure. In June 2000, Kim Dae-jung became the first South Korean president to visit Pyongyang. His summit with Kim Jong-il, the top leader with the title of Chairman of the National Defense Commission, produced the June 15 Joint Declaration. The two leaders agreed that the South and the North 1) will resolve the unification question “independently through the joint efforts of the Korean people,” 2) promote unification recognizing that there is a common element between Seoul’s concept of confederation and Pyongyang’s loose form of federation, and 3) make efforts to achieve balanced development of the national economy through economic cooperation projects.

Kim Dae-jung thus initiated his move to change North Korea through exchanges and cooperation under what was called the “Sunshine Policy.”

Roh Moo-hyun was troubled by Pyongyang’s nuclear test in 2006. Nevertheless, he went to Pyongyang for a summit near the end of his term. In his joint declaration with Kim Jong-il in October 2007, the two agreed that the South and the North will 1) make positive efforts to realize agreements in the South-North Joint Declaration of June 15, 2000, 2) shift the relations between the two Koreas to mutual respect and trust, 3) reduce military tension, 4) cooperate in practicing the

February 13, 2007 agreements in the six-party denuclearization talks, 5) expand and develop interKorean economic cooperation projects and establish a “peaceful cooperation zone” in the West (Yellow) Sea, 6) develop exchanges and cooperation in the social and cultural areas, 7) cooperate in inter-Korean humanitarian projects, and 8) make common efforts for mutual interest in international arenas.

The nature and direction of the South Korea-U.S. alliance provoked endless arguments during Roh’s participatory government. Roh’s desire for a “balancing role” between the United States and China invited strong criticism from conservatives. In fact, the security and foreign policy staff in the Roh administration tried to identify both positive and negative roles of the United States in Korea’s modern history and had high expectations of China in regional and global politics. In other words, the participatory government was closest to the “distance the U.S., approach China” idea among Korea’s recent administrations.

The common tenets of North Korea policies in the Kim and Roh administrations were “bringing changes to Pyongyang” and “negotiating on the nuclear question.” They believed that North Korea had no other choice but to change and in fact had already started the process. They also felt the transformation would escalate through exchanges with the South and improved relations with other countries concerned.

The collapse of the socialist bloc and the North’s severe economic difficulties in the 1990s forced the Pyongyang regime to relax its rigid centralized economic system. It allowed private enterprises and expanded incentives through such experiments as the unit management system (1996), independent accounting (1997) and inter-enterprise materials exchanges (2002). The July 1, 2002 economic measures set up new rules on prices, wages and currency exchange rates and in March 2003, limited price flexibility was installed at farmers’ markets reorganized into general markets.

The Mount Kumgang (Geumgang) resort and the Kaesong (Gaeseong) Industrial Complex were opened as special economic zones for cooperation with the South in October and November of 2002, respectively. The North also conducted lengthy discussions about “seed theory,” “new theory of independent revival” and “instant take-off theory” as it pushed for economic innovations.

The Kim and Roh administrations regarded these moves as signs of permanent economic reform.

The Ministry of Unification said in a report in April 2004 that North Korea was “in a stage of reform for economic improvements while maintaining the existing system.” It interpreted Pyongyang’s moves as staged changes rather than conflict between the official ideology and

practical measures to deal with realities. According to the ministry’s optimistic view, the process was irreversible and fundamental changes in all areas would follow. Background material produced by the Korea Institute for National Unification in 2007 had a prologue titled “North Korea, a changing organism” and an epilogue, “Participating in the changes, not just observing them.” The intervening chapters were headlined, “North Korea is changing, though a little slowly,” “North Korea is in economic reform,” and “Inter-Korean cooperation vital for the North’s changes.”

The second tenet of negotiations for denuclearization was based on the belief that the North Korean nuclear programs resulted from the still intact Cold War structure in Northeast Asia and that Pyongyang would give them up when its security concerns were lifted and received economic rewards. South Korean strategists believed that Pyongyang wanted a compromise but opportunities were lost when George W. Bush became the U.S. president and the so-called “neo-con” figures in his administration undermined negotiations with hard-line policies. President Roh attributed the North Korean nuclear question to the security dilemma between Washington and Pyongyang and sought to institutionalize a peace structure on the Korean peninsula. He advocated that his administration’s peace and prosperity policy would eventually create a benign cycle between interKorean economic cooperation and the resolution of the nuclear question.

Ten years of positive North Korea policies produced significant results. Exchange of personnel increased and the volume of economic cooperation grew rapidly. With broader communication, inter-Korean tension was relieved partially, but it did not mean the arrival of genuine, sustainable reconciliation and cooperation. North Korea continued development of nuclear arms and the security threats on the peninsula were not diminished. The military-first politics introduced economic steps disregarding market operations of the July 1, 2002 measures. Inter-Korean dialogue continued on different levels, but the North wanted to control the speed and timing of communication. Instead of being catalysts for changes in the North, economic cooperation projects helped consolidate the North Korean ruling system.

Foreign aid may help reduce the need for reform. The receiving state could neglect improving its economic system and even turn foreign aid over to the military. The Sunshine Policy was based on the belief that deepening dependence and expanded exchanges and cooperation would spur SouthNorth integration and co-prosperity. Increased cooperation and exchanges, however, did not lead to the establishment of political trust and reduction of military tension. The Sunshine Policy improved the ties between the two Koreas but it was indiscriminate. It offered rewards to the North regardless of what it did to the South. In that kind of arrangement, the recipient country could lose the

motivation to change, take advantage of the giver’s goodwill or be tempted to do something detrimental to extract more concessions.

2. North Korea Policy of the Lee Myung-bak Administration

The Lee administration, under the vision of a mature global state, has pursued a peaceful, denuclearized Korean peninsula, increase in humanitarian cooperation, a solid strategic alliance with the United States, international cooperation on green energy and advanced military capabilities. President Lee’s North Korea policy started with a critical review of the policies of the Kim Dae-jung and Roh Moo-hyun administrations, labeling them as unduly ideological and valueoriented. His policy emphasized national consensus and harmony between inter-Korean cooperation and international cooperation. President Lee’s self-styled “pragmatist government” set out four principles on inter-Korean cooperation: progress in the North Korean denuclearization negotiations, economic feasibility, fiscal capability in the South, and national consensus.

Lee’s policymakers believe that North Korea will be eliminated from the international order of peace and prosperity if it fails to join the globalized world. They are far more confident about the eventuality of North Korea’s change than policymakers of previous administrations who had deliberately refrained from mentioning reform or opening to avoid antagonizing the North Koreans.

The Lee administration felt that inter-Korean programs have developed in quantity but not in quality, and is seeking to use not only carrots but the stick in trying to bring changes to North Korea. It has refrained from simultaneously pursuing denuclearization and economic cooperation.

Instead, it has made the former a precondition for the latter, linking politics and economic aid. No advance gift but reward after action only. It meant a shift from diffuse reciprocity to specific reciprocity.

In the beginning, President Lee’s policy toward North Korea amounted to benign neglect but he toughened his position after Pyongyang’s second nuclear test in 2009. North Korea responded with a hard-line stance, escalating provocations against the South with further missile tests, the sinking of the Cheonan patrol vessel and artillery attack on Yeonpyeong Island as it weathered Kim Jongil’s illness and accelerated succession preparations. Seoul referred the North Korean attacks to the U.N. Security Council and conducted large-scale naval exercises with U.S. forces in the West Sea. The South resumed psychological warfare on the North, suspended all inter-Korean economic cooperation projects except for the Kaesong Industrial Complex, banned North Korean ships’ passage through waters contiguous to South Korean coasts, prohibited South Korean citizens’ trip to

the North, and halted all forms of aid to the North except for purely humanitarian programs. No contact of any kind has been made between the South Korean government and the new Kim Jongun regime.

Critics blame President Lee’s conservative policies for the current freeze in inter-Korean relations.

They say the Lee administration has put international issues above national questions. In fact, the current administration has not abandoned engagement but simply lacks interest in how to engage the North and even questions why it should. The administration has made little effort to recognize and coexist with the North, practically lacking interest in engagement, although it has pronounced hopes for coexistence. Its obsession to differentiate itself from the Kim Dae-jung and Roh Moohyun administrations deprives it of flexibility in approaching the North. The Lee administration’s hard-line stance against Pyongyang has only escalated tension. Practically no progress has been achieved on denuclearization, promoting economic reform and openness in the North, and realizing qualitative improvement in overall ties with the North.

III. The Nature of the Present North Korean Regime There are diverse views on the nature of the North Korean regime. Scholars call it totalitarianism, corporatism, neo-socialist corporatism, or institutional pluralism. North Korea emerged after the end of World War II as a socialist state based on Stalinism. Anti-Japanese partisans who had operated in Manchuria held the reins. They tried to communize the whole Korean peninsula through armed aggression, but failed. Their monolithic ruling system strengthened their control over people by using pre-modern Confucian ideology, which underscores patriarchal authority and loyalty to the state. The Democratic People’s Republic of Korea grew as an authoritarian dictatorship combining Stalinism and traditional public norms, and developed into a totalitarian state through the indoctrination of people in the theory of “Juche,” or self-reliance, purges of dissenters, and isolation from the outside world, taking advantage of the hardening of the Cold War structure.

Hence, a “fortress state” appeared in the northern half of the Korean peninsula and a “voyager state” in the southern half. While the Republic of Korea in the South is externally-oriented and venturesome, the isolated DPRK is totally obsessed with the security of the regime. The voyager state favors personal, intellectual and material communication and exchanges with the outside world, pursuing externally-oriented economic development strategy, usually as a seafaring nation.

The fortress state is continent-oriented, devoted solely to regime security, independence, selfdefense and self-supporting capabilities. The voyager state on the Korean peninsula has built an

economy based on exports and globalization while the fortress state has focused on Juche, survival and military-first ideology. North Korea’s affinity to continental states and South Korea’s intimacy with maritime states intensified antagonism on the peninsula.

The fortress state in the North which passed through the Stalinist system (from 1948), yuil (monolithic) system (from 1972) and the songun (military first) system (from 1998) is now about to witness the birth of a new ruling system. The identity of the new system is still obscure and no one is sure if it can execute a soft landing. After the inception of a Soviet-style government in Pyongyang in September 1948 with a one-party dictatorship and planned economy as the basic governing system, Kim Il-sung’s partisan group consolidated power, eliminating home-grown communists and former exiles in China and Russia. After military hard-liners and the Kapsan faction were purged in the late 1960s, the Kim Il-sung personality cult and Juche ideology swept North Korea and Kim Jong-il was groomed as heir to his father. The new constitution of 1972 completed the construction of a new monolithic leadership. National energy was poured into eliminating internal enemies and complete physical and mental mobilization of residents to build an ideal totalitarian state.

The 1998 system emerged to cope with the collapse of the Soviet bloc and extreme economic adversity, dubbed the “March of Tribulation.” The National Defense Commission became the supreme ruling body that controls the nationwide organizations of the party and military. The military-first system is now charged with the vital task of nuclear armament. While the planned economy system is maintained, the livelihoods of most North Koreans depend on markets, where they have access to outside information.

The new North Korean leadership has yet to adopt economic reform and openness, raising questions as to whether Kim Jong-un can solidify his power and, if so, whether he will become the second military-first flag bearer or a reformist supreme leader devoted to economic development and improving the people’s livelihoods. Whatever course he takes, the future of Kim Jong-un will depend on the unity of the ruling elite in the short term, but eventually his ability to ensure the people’s livelihoods. Unless the North adopts reform and openness, it will become increasingly backward and remain an obstacle to exchanges and cooperation in Northeast Asia.

North Korea today shows the symptoms of totalitarianism in its last stage, brewing the danger of a crisis from popular movements for freedom and democracy as was the case of all authoritarian regimes. A crisis in North Korea could involve an explosion, implosion or a combination of the two.

North Korea’s geopolitical position and strategic value make an explosion the least possible. In other words, the conditions of the 21st century in Northeast Asia keep the North from becoming a second Iraq or a second Libya. Kim Jong-il’s military-first system constantly threatened the security of surrounding nations with the development of long-range missiles, suppression of human rights, repeated nuclear tests and ceaseless display of a militaristic attitude. Yet the Western powers have not showed any sign of considering direct use of military force against Pyongyang except for the reported planning of the Clinton administration in the United States to strike the North’s nuclear facilities in Yongbyon during the early 1990s. North Korea is believed to be making clandestine dealings with Iran, Syria and Myanmar, drawing suspicion of nuclear proliferation. Developments on the Korean peninsula in recent years have proved that an attack on North Korea would be extremely difficult, if not entirely impossible.

An implosion involving disputes over power succession, division of the ruling elite and anarchical collision of the various components of the nation and society is more likely. South Korea and other neighboring countries should prepare themselves to cope with any scenarios emanating from North Korea’s absurdities.

On the other hand, the outside world also should be ready for the continuation of the status quo. It will need to consider the best way to engage the North to change it from within and from the outside. The South needs to devise an approach that will accommodate gradual changes and take the initiative in every stage of unification. Of course, resolving the North Korea question will be difficult, costly and time-consuming, but a strategy of ignoring and abandoning North Korea is not recommendable. The problem of the Korean peninsula should be tackled by Koreans with strategic wisdom and consistency. South Korea needs to be in the center of engagement with North Korea.

IV. Creative Engagement: New Approach to North Korea The goal of engagement on the Korean peninsula is to achieve peaceful coexistence and relations of mutual dependence between the two Koreas so that the foundation for reunification is established.

Engagement is obviously a better choice than appeasement, repulsion, containment or an all-out drive for reunification. Unification as the final, long-term goal will be realized when the political, economic and social systems of the North and South converge through engagement.

The new engagement should start from correcting and improving on the policy mistakes during the Cold War period and those in more recent years. Unilateral concessions to the North and embracing

it unequivocally were ineffective in spurring changes. The new “Seoul consensus” does not need to totally deny the past efforts but it must adjust for the new realities on and around the Korean peninsula.

1. Vision and Principles

The neo-engagement policy to combine the merits of North Korea policies of past administrations will henceforth be called “creative engagement” in this study. The creative engagement pursues peace, prosperity and integration of East Asia, which will lend itself to the reunification of the Korean nation. To achieve peace and prosperity in East Asia, the region needs to establish common security, economic and cultural communities. The reunification of Korea will be a natural result of this integration. On the other hand, Korean unification will further integrate East Asia in a benign cycle of national and regional changes.

To become the key player in regional integration and reunification of the peninsula, South Korea should secure political, economic and cultural powers that can sustain the role. With the region consisting of nations practicing democracy and a market economy and those involving authoritarian and socialist elements, South Korea would have to promote cooperation and integration of the differing systems and ideologies. While maintaining our values, we would need to respect the differences in systems and enhance mutual understanding through exchanges and dialogues. To this end, South Korea will have to marshal its capabilities, systems and norms.

Also, to lead the formation of regional peace and prosperity, South Korea should first uphold a clear value concept and national identity for a unified Korea. Such a vision could include “non-nuclear peaceful state,” “open, bridge state,” “democratic welfare state,” and “leading innovative state.”

Unified Korea will respect the spirit of the Non-proliferation Treaty (NPT) and use the nuclear energy to realize peace and prosperity in the East Asian region. As a bridge between continental and maritime states, it will seek to turn the entire region into an open society through active exchanges with neighbors. Unified Korea, enjoying freedom, human rights and democracy, also will emphasize increasing happiness and welfare of the citizens of the region. Finally, the united peninsula will maintain its legacy as a key player in ideological, technological and systemic innovations.

Creative engagement will be the compass in advancing toward peace and non-proliferation, openness, democracy and welfare, and innovation. Its first principle is open thinking and flexibility.

Creativity is to be gained not from negativism, rejection, hate or opposition but from affirmation, integration, understanding and acceptance. Creative engagement should start from Korean conservatives and liberals learning from each other. There should be efforts to find commonalities between the conservatives’ adherence to state interests and the liberals’ emphasis on (Korean) national interests. Creative engagement should be armed with flexibility of thoughts and attitudes defying ideological preconception. The past and present of North Korea should be sternly judged but all possibilities should be considered about its future, the course and speed of change and its final destination. Adroit navigation is necessary with realism and idealism harmonized in the vision and practices.

The second principle of creative engagement is being proactive. South Korea should take the initiative to stimulate interaction and invite the international community to participate spontaneously. However, the South should not mete out rewards to the North for concessions.

Instead, it should constantly knock at the doors of the North to induce spontaneous changes. Our positive approach will derive from our pride and confidence in having simultaneously achieved democracy and market economy. We should be armed with the sense of mission to convey our freedom, vitality and prosperity to the North in addition to our overwhelmingly stronger economic power.

Third, creative engagement should be a strategic action. Ideologically-oriented North Korea policies in the past resulted in the two alternating extremes of containment and appeasement. Unprincipled embracement of the North or inflexible antagonism only causes division of domestic opinions.

Strategic engagement is concerned with searching for common factors in the interests of the Republic of (South) Korea and the interests of the whole Korean nation and makes careful choices in the speed, method and strength of engagement in response to North Korean moves. Under creative engagement, Seoul will approach the North Korea question with an open mind, always looking for the possibility of regime evolution. The strategic approach will deal with the North Korea question with full understanding of its current conditions and the speed and direction of its changes. Also considered will be changing external conditions, the maturity of the South’s capabilities and the weight and significance of the North Korea question in the entire national agenda of the South. Creative engagement aims to achieve reunification based on democracy, market economy and humanism, through agreement between the two halves after gradual change of the North.

We can imagine four possible courses for North Korea: 1) continuation of the military-first policy,

which means no change, 2) a change of national orientation of its own style, 3) reform and openness, and 4) collapse of the state. The most likely sequence is 2)>3)>1)>4), but the desired order is 3)>2)>4)>1). The core of South Korea’s policy on the North should be persuading it to take the second course and then the third while being prepared for the consequences of the first and fourth courses. This can be called the “quadruple strategy.”

The fourth principle of creative engagement is co-evolution, which involves changes within and without North Korea. North Korea will change when both internal and external situations change simultaneously. When the “Pyongyang consensus” for the North’s own change meets the “Seoul consensus” for global change to create the “Korean peninsula consensus,” there can be a package of solutions to the broad Korea question. A co-evolution is the product of simultaneous changes of both units and structure. It has been applied to the fortress state of North Korea and the inter-Korean confrontation under the Cold War structure. The co-evolution in this part of the world should be changing both North Korea as the key actor and the Cold War structure in Northeast Asia. (Ha Young-sun, Cho Dong-ho: 2010)

Fifth, creative engagement requires a complex methodology. The North Korea policies of the Kim Dae-jung and Roh Moo-hyun administrations were strongly flavored with liberalism. They were more preoccupied with the positive functions of market and mutual economic dependence of the two sides. Little attention was given to spreading democracy. The pragmatic Lee Myung-bak government has taken a more realistic approach. It has employed a combination of carrot and stick, emphasized military deterrence and strengthened relations with the United States.

Northeast Asia is a complex and compound political and economic sphere, and to understand the international order in the region, one needs to employ the diverse paradigms of realism, liberalism and constructivism. Exclusive application of one concept will risk myopic understanding of the complex situation. A realistic vision could neglect the effects of logistics, capital movement, information and communication, cultural exchange and human resources to form interdependent networks. But the romantic idea that increasing commercial exchanges will lead to political and military confidence should also be discouraged. An arms race in the name of preventing war cannot promote the creation of a security community for cooperation and mutual survival.

Creative engagement should emphasize constructive engagement to change the identity of North Korea. It should be an effort to bring the nature of the North Korean regime to the standards and norms of the international community. Aware that it takes time, we should make step-by-step

approaches to reduce the possibility of a backlash from the North’s power elite.

2. Practical Tasks

To realize the vision of creative engagement, the following steps should be taken: First, the military-first policy should be changed to economy-first or people-first policies. Seoul’s diplomatic efforts need to be adjusted to focus on creating external conditions conducive to encouraging Pyongyang to establish its own economic revival strategies. Considering the rigidity of the North’s current military-first system, an intermediate goal of emulating the Chinese and Vietnamese reform process is desirable. In cautious approaches, aid in the areas of humanitarian care, health and energy support should first be extended to help stabilize the economy in the North.

The scope of assistance could then be expanded to the areas of education, technology and infrastructure. The next steps would be reform and openness, conversion to the market economy and the North’s entry into the global economic system. Cooperation and exchanges should cover not only economic spheres but social and cultural sectors as well, which will be the route of passing the values of democracy and human rights. Human rights should be the first priority in future dialogues with the North.

Second is the task to establish social consensus in the South regarding North Korea policies.

Reviewing the experiences of the past administrations, one realizes the importance of nationwide support and encouragement in successfully carrying out any policy measures on North Korea. Each administration faced serious criticism and resistance over its policies on inter-Korean relations as public opinions were divided regarding objectives and methodologies. The so-called “South-South conflict” over North Korea policies has been the major cause of political dispute in South Korea.

The civil society, especially NGOs working for the humanitarian relief and freedom of North Korean people, should be given due support regardless of North Korean reaction. To ensure consistency of policies, essential principles should not be affected by changes of government.

The third task is building permanent peace on the Korean peninsula. Peaceful coexistence is the intermediate goal of creative engagement. Historically, totalitarian communist states and liberal democratic states coexisted through mutual recognition. This recognition was not positive support or praise of the other side but was passive tolerance. Peaceful coexistence between the South and the North should take the form of well-intentioned competition, which will expedite national integration and unification.

Trust should be the main theme of the relations between the South and the North during the period of coexistence. The more trust built between their authorities and people, the easier it will be for reunification. To build trust, the process of reconciliation will be needed. To achieve genuine reconciliation to establish the foundation for peace, actions should be taken to end the state of armistice that resulted from the Korean War as well as to reconcile and spiritually integrate the peoples of the two Koreas. What should follow the end of the armistice regime and inter-Korean reconciliation are efforts to stabilize the peace regime through international arrangements on the bilateral, limited multilateral and multilateral levels, which will eventually create a complex and multilayered security governance system in East Asia. The European Union (EU), the North Atlantic Treaty Organization (NATO) and the Organization for Security and Cooperation in Europe (OSCE) will be the model for the “Concert of East Asia” including unified Korea.

The processes of North Korea’s change, resolution of the North Korean nuclear question, establishment of a peace regime on the Korean peninsula and the construction of a new security order in East Asia will progress simultaneously. In order to resolve the North’s nuclear problem, the regional security cooperation system should be able to provide measures that will alleviate Pyongyang’s security concerns. Relations between the two halves of the Korean peninsula will then evolve into peaceful, prosperous and humanitarian coexistence. In this stage, the two actors will not threat each other with the power of arms. They will seek economic gains through commercial trade and make joint efforts to guarantee a decent living for their people.

Fourth, the change of North Korea should be promoted though cooperation with concerned nations.

This process of co-engagement or multilateral engagement is already in place with the six-party talks on the North Korean nuclear question. For the success of multilateral engagement, the process should involve both Koreas and South Korea should be the bridge for the rest of participants. It is necessary to identify common factors in the respective North Korea policies of the United States, China and Russia, and to connect them with South Korea’s policy. The South needs to produce a unification program that can win the endorsement and support of the surrounding nations. As North Korea changes, normalization of its relations with the United States and Japan could be promoted with the latter easing their economic sanctions on the North and expanding cooperation and exchanges.

Fifth, Seoul should conduct wise diplomacy between rising China and the United States to create an international environment favorable to gradual integration with North Korea. The advent of

reconfigured Sino-U.S. relations poses a great challenge to Seoul’s unification diplomacy. The basic strategy will be to reinforce cooperative relations with China on the basis of a strong alliance with the United States. There is prediction that Sino-U.S. relations are bound to crumble and Asian states, including South Korea, will have to balance their interests with China while maintaining alliance with the United States. But the rise of China will not be a new threat and Sino-U.S. relations will not necessarily become as hostile as the past Soviet-U.S. relations. For some time, cooperation and conflict will alternate between the United States and China until they establish a new arrangement befitting their national powers.

If the two superpowers compete with each other to gain hegemony in East Asia, South Korea’s value as a partner will rise. Seoul then could play the role of communicator between the two so they could serve positively for the peace and prosperity in East Asia. There should be debates on the changing nature of the Korea-U.S. alliance and the function of the U.S. forces in Korea before and after Korean unification. And there should also be consideration on security benefits China will gain from the unification of the Korean peninsula. While the Korea-U.S. alliance is strengthened, traditional friendship between Korea and China based on geographical proximity, historical ties and cultural affinity should continue to expand. The triangular cooperation between Korea, the United States and Japan should be supplemented by cooperation between Korea, China and Japan.

Sixth, creative engagement should build a network between the two Koreas and the surrounding nations. The fundamental problem involving North Korea is its self-imposed isolation, which has caused its backwardness and hampered exchanges and cooperation between neighboring nations.

The Demilitarized Zone bisecting the Korean peninsula makes South Korea a virtual island. The peninsula has been deprived of the role of connecting the maritime and continental powers. When North Korea ends its isolation, it can become a bridge and the entire peninsula will be a transit point for logistics, communications, trade, investment, delivery of energy and cultural exchanges between the Eurasia continent and the rest of the world. Projects to connect a trans-Korean railroad to transChina and trans-Siberian railways and to open highways penetrating the Korean peninsula and the continent should be expedited as they could accelerate the change of North Korea. If Pyongyang becomes interested in earning large sums of rents and taxes by taking advantage of its strategic location, it will be the first sign of change in the isolated country.

V. Conclusion This study is aimed at helping establish a new North Korea policy on the basis of past experiences

of successive South Korean governments. As we look back, past practices were excessively politicized and failed to ensure reasonable handling under the pressure of ideological and partisan interests. Now is the time to seek a third way, correcting mistakes of the past, succeeding meritorious policies and adding new elements to reflect changing circumstances.

Common elements that can be endorsed by both conservative and progressive members of society should be explored. Policies thus formulated with the backing of national consensus should be pushed consistently regardless of the change of administrations. Political groups should refrain from defining opposing forces’ North Korea policies as totally unreasonable and therefore unacceptable.

They should cooperate to establish strategies purely to promote inter-Korean exchanges and cooperation that will eventually lead to reunification. Policies should be drawn up with faith in the righteous course of history and compassion in helping improve the welfare of the North Koreans.

No sophisticated policies on North Korea, even with any unselfish help of neighboring states, can be guaranteed of success without the change of the North itself. North Korea will have a future only when the new power group makes a strategic decision out of a historic sense of mission to serve their people and revive the economy. The rise of China can improve the North Korean situation as the wealthy and strong ally will be able to deter unfavorable external influences on the North and more so if Deng Xiaoping-style reform and openness is accepted by Pyongyang. The present China should be North Korea’s model for the future. The transition of power after Kim Jong-il’s death and the rise of the young leader, Kim Jong-un, could perhaps be the last chance for resurrecting North Korea.

[Journal of International and Area Studies, Vol. 21, No. 2, Summer 2012, published by the Institute of International Affairs, Seoul National University]

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North Korea’s Business Cycle and China’s ‘Visible Hand’

Cha Moon-seok Professor of North Korean Studies Education Center for Unification Ministry of Unification

I. Introduction: Meaning of ‘Business Cycle’ in North Korea This paper attempts to distill the complex and multiple dynamics of North Korea’s political economy into a simple model. Starting from the mid-1990s, a period of widespread famine and economic turmoil called the “March of Tribulation,” the trajectory of the North Korean political economy is traced to identify business cycles in the impoverished socialist state and examine the attendant motives, operations, dynamics and characteristics.

The term “business cycle” in this paper is used metaphorically to indicate a trend or direction rather than in the conventional way, which would clash with the fact that the North has a planned economy. Specifically, the economy that emerged in the 1990s to fill spaces normally occupied by the planned economy is examined. The newly-emerged economy has functioned like a market economy but cannot be categorized as such. It is an odd type of transitory economy structured around the privileged economy that absorbs floating surpluses (money, goods and various other objects of value) through a market in both theoretical and practical terms.

The fundamentals of the North’s business cycle are typically political and external. That is, it moves in accordance to repeated political planning and attempts to control markets periodically, and it tends to slow down when it lacks inputs from external sources, chiefly China.

The contents and purposes of this paper are as follows. First, it will use the term “business cycle” to define the movements of economy in the specific social formation of North Korea. The “cycle” here means the repetition of specific situations. Second, it divides a business cycle into bottom, midpoint and peak, and analyzes each phase, focusing especially on the crises that formed the bottom. It also examines the characteristics that North Korea’s political economy has shown repeatedly in each bottom. Third, it attempts to illustrate China’s role and function, which are crucial to North Korea’s business cycle, comparing China’s role to a “visible hand” dictating North Korea’s business cycle from the outside.

Also, there is discussion of “byproducts” gained in the process of pursuing the primary aims of the paper, most importantly outsiders’ speculation about North Korea reforming and opening up despite Pyongyang’s strong denials and objections every time such conjecture is raised. In fact, there has been heated debate outside of North Korea over the nature of the measures for economic improvement announced by the North’s leadership more or less repeatedly (on July 1, 2002 and June 28, 2012), when their economy faced a dead-end. This article may provide the basis for scrutinizing such debates.

II. North Korea’s Social Formation and ‘Business Cycle’ To identify a repetitive cycle in the North Korean economy, it is necessary, above all else, to discuss the North’s social formation, which supplies the energy for its business cycles. The discussion of North Korea’s social formation naturally relates to the producers and users of surpluses.

North Korea’s business cycles occur in an economy that has no material production or reproduction.

To be sure, the basis for the production of goods is weak or nonexistent. Accordingly, products from the outside are needed. Such inflows of products take various forms, such as external trade (import) or economic aid and cooperation. Furthermore, the lack of internal production gives the inputs a decisive role in North Korea’s economy and its business cycle. There is no doubt that, without external assistance, the economy would grind to a halt. As such, China is the most important source, functioning as the cornerstone in the North’s business cycle.

The absence of meaningful domestic production has dissolved the economy into a simple process of “money→goods→money→goods” at an accelerating rate. This has aroused the desire to profit from reselling foreign imports. And this process is dominated by the privileged economy, where all surpluses converge.

Surpluses are produced and enjoyed inside the North Korean economy through a plundering system led by the military. The system emerged when Pyongyang introduced its “military-first policy” to manage the economic crisis in 1994 and has since shaped the North Korean economy’s characteristics, structure, dynamics and mechanism.

The surpluses have been acquired mainly in three ways. First, various mines, such as iron mines and gold mines, fishing rights in the East and West Sea, and land have been sold or leased to China.

Second, the government develops tourist sites, including Mt. Kumgang (Geumgang) area, and opens them to foreigners to earn foreign exchange. Third, workers are mobilized to be dispatched abroad or for domestic projects.

As of the end of 2011, a total of 30,000 to 40,000 North Korean workers were estimated to have been exported to about 40 countries, earning approximately US$100 million in hard currency a year.

Kim Jong-un reportedly instructed early this year to “dispatch as many earners of foreign exchange as possible without worrying about possible defection by a few of them.” If the number of overseas workers can be increased to about 120,000, the North’s foreign exchange income will reach $300 million to $400 million. Meanwhile, workers are mobilized for specific domestic projects as well.

One example is the mobilization of workers for the nation’s underground economy, which the state manages and controls to monopolize surpluses produced thereby.

Overall, the military seems to have a hand in 70 percent of the surpluses produced by the North Korean economy and turned into the vested interests. The military has conducted and controlled illegal arms exports by running its own trading company with overseas branches. Between Kim Ilsung’s death in 1994 and now, the military is seen to have taken profits through various foreign exchange earning projects and enormous military outlays (including regular defense budgets). It is known that the General Staff Department (GSD) of the (North) Korean People’s Army has been in charge of all foreign exchange earning projects conducted by the military. The GSD, allocated defense budget through the Ministry of the People’s Armed Forces, spends it on weapons development and overseas arms sales business, operating the funds independently after sending a portion of the proceeds to the Workers’ Party and the Cabinet.

A crisis occurs when the plundering system seeks new sources of pillage or when attempts are made to change the system’s structure. The North Korean leadership may attempt some qualitative changes but it is all but impossible to discard the system and completely alter the economy. In short, the North’s leaders think they can avoid conducting a system makeover by just changing the principal agent and methods of plundering.

The main agent of plundering could have been changed from the first-generation military of the 1990s to the second-generation military of the 2000s and further to the new military of the present day, as well as from the military to the party, from the party to the military, or from the military to the cabinet. As of September 2012, the mainstream analysis is that the principal agent has changed from the military to the party and the cabinet.

Such a change has caused North Korea’s economy to start a new business cycle because a shift in the agent of plundering usually entails changes in political planning (e.g., measures for economic improvement and normalization), which serves as the engine that sets a business cycle in motion. To sum up, the business cycle of North Korea’s economy moves under the influence of the internal political planning that accompanies changes in plundering agents on the one hand, and the engine of external economic aid on the other.

III. Business Fluctuations and Cycles Business fluctuations in the North tend to move in phases of 3-4 years or five years. The expression of “five years toward the left and five years toward the right in North Korea” used by the mass media describes the business cycle in the North.

Moreover, business cycle in North Korea sometimes moves in tandem with other cycles, probably because they affect the scale and scope of the North’s business activity. The accompanying cycles concern foreign exchange earnings, nuclear stalemate and market oppression as well as the appearance or disappearance of political elite groups. Particularly, the close correlation with the cycle of market oppression may be attributable to a change in principal agents of plundering, which leads to a new clampdown.

1. Period of Business Cycle: Bottom, Midpoint and Peak, and their Characteristics This section will divide North Korea’s business cycle roughly into bottom, midpoint and peak. A bottom is equivalent to a crisis, a midpoint is halfway between recovery and expansion or between decline and contraction, and a peak refers to an invigorated economy. When each phase repeats itself once, it is called a cycle, in other words, a span from bottom to bottom, or from peak to peak.

■ Bottom This signifies a crisis such as the “March of Tribulation” that started around 1994-95. This article regards the period around the second nuclear crisis in 2002, the first nuclear test in 2006, the second nuclear test in 2009 and the period after April 2012 as crises.

At the bottom, North Korea implements specific strategy and action plans. In the past, North Korea’s leadership (top leader) devised an action strategy aimed at obtaining external aid.

Generally, this involved persuading China. The North Korean leader usually visited China with a large entourage and created an atmosphere that suggested a willingness to reform and open up.

Outside of North Korea, mainstream South Korean and U.S. experts talked about “North Korea’s change” and “Pyongyang’s reform and openness.” They expected the North to take steps toward reform and openness and pressured their governments to provide support to facilitate the perceived policy shift.

■ Midpoint (Aspect A) A midpoint signifies the North Korean economy has bottomed out and is passing the halfway point between recovery and expansion. At this point, the aforementioned strategy carried out by the North Korean leadership during the “bottom” has succeeded to a certain extent.

Accordingly, North Korea’s economy begins to show signs of recovery thanks to the external aid.

At this time, the North Korean leadership also implements various economic stimulus measures

(projects of the privileged economy and political idolization) by using external aid and internally plundered capital, through which they tend to expand investment until the business cycle peaks.

Meanwhile, foreign experts largely tend to focus on the reinvigorated economy and reject the conservatives’ theory of “regime collapse” in the North.

■ Peak Thanks to various stimulus steps by its leadership and external aid, the economy reaches its apex.

This is a period when the markets are so reinvigorated that they lead the domestic business cycle.

■ Midpoint (Aspect B) This signifies the North Korean economy has passed the peak and is passing the halfway point between the decline and contraction phases (Aspect B: peak→midpoint→bottom). At this point, the aforementioned strategy to move from “bottom” to “peak” has tended to be scrapped.

Subsequently, the markets are dealt heavy blows. Also, a group of political elites are criticized and purged for accumulating wealth and surpluses through markets, and a new elite group takes the lead in the business cycle. The latter largely attempts to make the system move again by normalizing the planned economy and emphasizing socialist principles. The economy continues to contract until the state coffers dry up and fall to another crisis, by which time North Korea has shown an inclination to launch missiles or prepare for nuclear tests. The moment Pyongyang pushes ahead with a missile launch or nuclear test, it invites economic sanctions from abroad, throwing the economy back to the “bottom” or “crisis.” And this leads to the completion of a business cycle, from bottom to bottom, or from crisis to crisis.

2. Bottoms and Crises: 2002, 2006, 2009 and 2012

Now this paper will examine a business cycle of North Korea, which started from the bottom to move toward a midpoint (Phase A) and the peak, and toward another midpoint (Phase B) and returned to the bottom, by applying it to the economic situations in the North since the 1990s. It will first look at the economic growth rates from 1990 to 2011, and express the trend in a business cycle curve. The curve has been overly simplified to express the bottom, midpoint and peak on the basis of such a trend, ignoring relative figures and degrees of fluctuation in each cycle (bottom, midpoint and peak). For example, the actual figures of peaks in the first, second and third business cycles should be different, but they were simplified into a model.

If the business cycles of North Korea since the 2000s are turned into a model, it would look like <Figure 3>, and show the following characteristics.

First, it shows four bottoms, in 2002, 2006, 2009 and 2012. Second, it may be a coincidence, but business fluctuations are evident every three to four years. Third, nuclear cycles caused by the North Korean nuclear crisis correspond to business cycles. That is, the bottoms coincide with the second North Korean nuclear crisis in 2002, the North’s first nuclear test in 2006, second nuclear test in 2009 and its declaration of becoming a nuclear power in 2012. The most visible trend related to the nuclear cycles has been the drastic reduction or disappearance of foreign economic aid to North Korea as a result of these nuclear crises or tests, and particularly the critical damage caused

by China’s suspension of economic support for the North.

In this part, China’s influence on North Korea’s business cycles is intentionally bypassed. It will be discussed in Chapter IV.

1) Bottom of 2002 Many researchers have mistakenly believed that 2002 was the peak of a business cycle, probably because North Korea adopted a package of measures on July 1, 2002 to improve its economic management. Actually, the July 1 move was the North’s another political scheme to get out of the bottom and a strategy to break through dismal fiscal situations. Accordingly, it can be summed up that the year 2002 was the bottom of the first business cycle of the 2000s, and the July 1 measures should not be regarded as an attempt at reform but a strategy to pass the bottom of an economic crisis.

Unlike the general assessment, North Korea implemented a policy to curb farmers’ markets for a year after it announced improvement measures for economic management on July 1, 2002. The North’s leadership conducted an overhaul of its planned economy and raised consumer prices and workers’ nominal wages dozens of times while the markets were shut down, forcing all workers to come back to state-run workplaces. But such coercive measures eventually failed and the North Korean authorities had to backtrack to open “general markets” in 2003 in place of the farmers’ markets.

Aided in part by the July 1, 2002 measures to recover fiscal health on the one hand and marketfriendly steps such as the opening of the general markets in 2003 on the other, North Korea’s business cycle moved toward recovery and expansion (1A). Such a situation continued until the cycle reached Peak 1, which largely coincided with the 2003-2005 period.

In 2005, North Korea withdrew from the pro-market policy and the conservative swing of its policy-making became more visible. North Korea’s business cycle began to decline and contract (1B). The situation continued until 2006 when North Korea conducted its first nuclear test.

2) Bottom of 2006 In October 2006, North Korea conducted a nuclear test despite strong opposition from neighboring countries, including China. The U.N. Security Council adopted Resolution 1718, and major countries entered into sanctions against Pyongyang in earnest. This pushed down the North Korean

economy’s business cycle to a bottom in 2006.

Around 2006, North Korea implemented a series of strong conservative policies. It was a sharp break away from a policy that included independent profit, material stimulation, independent business management and the use of commodity currencies, a trend which had dominated the reclusive country from 2000 to 2005. Starting in 2007, a group led by Jang Song-thaek took the lead in implementing the conservative policies, determining the direction of business cycle. In April of that year, Pak Pong-ju and his group, who had led the business cycle since 2002, fell from power.

The following month, a strong social campaign against non-socialist forces started under the pretext of clearing away the “fatigue of journey” caused by the market economy experiments.

In October 2007, Jang was promoted to head of the Administration Department of the Workers’ Party, emerging as the new principal agent in the plundering system during the second business cycle. And North Korea further strengthened its suppression of markets. An instruction of the Party Central Committee to party organizations throughout the country said, “Let’s be armed with correct understanding of the market to block un-socialist behaviors.”

However, an unusual event happened when the business cycle moved from the bottom of 2006 toward Peak 2: the two Koreas held their second summit in October 2007. In Pyongyang new officials were responsible for handling economic and other cooperative projects with South Korea.

Nevertheless, the second summit helped push North Korea’s business cycle into the recovery and expansionary phase (2A). Another decisive factor was the restoration of ties with China, which had been strained since the first nuclear test, and the consequent resumption of China’s economic aid.

North Korea’s business cycle seemed to reach Peak 2 around late 2007 to early 2008. The change of political power in South Korea in 2008 meant the appearance of a government that would no longer provide unconditional humanitarian aid to the North. Worse yet, a series of accidents followed, creating a situation in which the North could hardly expect economic help from the South, such as North Korean soldiers’ fatal shooting of a South Korean tourist, and resultant suspension of tour projects to Mt. Kumgang and Kaesong (Gaeseong).

In the latter half of 2008, Chairman Kim Jong-il suffered a stroke and South Korea suspended economic aid, stoking political tension that drove the business cycle into decline and contraction (2B). The situation continued until the cycle headed toward the third bottom, and North Korea picked Kim Jong-un as the successor in 2009, followed by a series of events aimed at proving his capacity as the next leader, such as another missile launch and nuclear test.

3) Bottom of 2009 In May 2009, North Korea pushed ahead with its second nuclear test in defiance of considerable efforts at dissuasion by surrounding countries, and further proclaimed itself a nuclear state. The international community adopted the U.N. resolution Resolution 1874 and imposed sanctions against Pyongyang. In the early part of this phase, China actively took part in the sanctions, punishing and pressurizing North Korea with unusual intensity. The North’s economy fell to a level not seen since Kim Il-sung’s death in 1994 and hit the bottom in 2009, the third in its business cycle since 2002.

In the wake of each nuclear crisis and test, the focus of concern was on how to denuclearize North Korea. In May 2009 when the North conducted its second nuclear test, however, there was a headon collision between the North, which proclaimed itself a nuclear power, and five other parties of the six-nation denuclearization talks that would not recognize it, deepening the despair in the isolationist regime.

Within North Korea, the regime’s “predatory intervention” into the economy sharply strengthened to pull down the domestic productivity and dry up the sources of plundering. Nevertheless, the North Korean leadership found itself in desperate need to significantly expand fiscal spending to

finance the development of the weapons of mass destruction, including missiles and nuclear bombs.

The currency reform in November 2009 came against this backdrop, reflecting the crisis within the North Korean economy. But this further aggravated the economy. Moreover, the leadership drastically enhanced suppression of private markets.

There were two major occasions, however, on which North Korea moved toward recovery and expansion, or the 3A phase. The first occasion was China’s economic aid. Beijing put its monthslong drive to denuclearize North Korea and accompanying economic sanctions on hold. It tacked toward stabilizing its communist ally and pushed ahead with economic cooperation with renewed intensity, i.e., implementing the Chang-Ji-Tu (Changchun-Jilin-Tumen) development plan. The second occasion was Pyongyang’s massive economic stimulus to attain its goal of building a “strong and prosperous country” by 2012. During the 3A phase, North Korea took a series of expansionary steps such as the groundbreaking for Huichon hydro power station and construction of 100,000 homes in the capital city. This lifted the economy to Peak 3.

During this phase, two viewpoints about North Korea emerged. Those who rejected the “regime collapse” theory gained ground, encouraged by the construction boom in Pyongyang. On the other hand, worsening economic conditions in the rest of North Korea intensified calls for more aid.

The fundamental reason for the North Korean economy’s passage of Peak 3 and its regression (3B)

was the accumulated effects of the punitive steps taken by the South Korean government on May 24, 2010, as well as corresponding sanctions by the international community, including the United States. The May 24 measure threw North Korea’s economy into a serious shortage of hard currency, which in turn deepened its instability, as shown by the destabilized livelihoods of North Korean residents amid soaring inflation and sharp weakening of the North Korean currency in (black) markets during the latter half of 2011. The situation drove North Korea’s economy to depend almost entirely on trade with China, pushing the share of China up to 70 percent of the total external trade as of November 2011.

Worse yet, as the 2012 deadline neared for declaring a strong and prosperous country, Pyongyang began to overspend the domestic resources on related events, going beyond economic stimulus toward drying up of resources. Such overspending and waste climaxed amid a series of pivotal events ― the death of Kim Jong-il in December 2011, the rise of Kim Jong-un, and the centenary of the birth of Kim Il-sung in April 2012. Finally, North Korea’s economy hit another bottom in 2012.

4) Bottom of 2012 In 2012, North Korea’s economy is seen to be eroding even further because of the waste of resources on various political events, and is nearing a crisis level. The unstable external environment and the internal urgency to maintain the regime also is rattling the economy.

■ Internal Environment Major internal elements include the sudden death of Kim Jong-il and hasty appearance of the Kim Jong-un regime, a possible crack in the ruling elite (party-cabinet vs. military), accumulated exhaustion of the manufacturing sector since the “March of Tribulation” and cumulative expansion of recurring crises, the failure to proclaim a strong and prosperous country, and mounting popular complaints.

All of this notwithstanding, the North Korean leadership amended the constitution by convening the Supreme People’s Assembly and anointed the nation as a nuclear power. The declaration, although mainly aimed at addressing the domestic political problems, is certain to make it even more difficult to resolve the North Korean nuclear issue. From the viewpoint of North Korea’s business cycle, it also means a complete stoppage of external aid.

■ External Environment Major countries have halted their economic aid for North Korea since Pyongyang declared itself a

nuclear power. Particularly, China is seen to have temporarily suspended its annual supply of 100,000 tons of rice, 500,000 tons of crude oil and cash aid of $20 million in the wake of Pyongyang’s long-range missile test and declaration of nuclear power status in April.

North Korea had poured huge amounts of resources into political events until April, and as a result, its economy plunged into crisis in May. The current level of crisis is believed to be as serious as the 2009 bottom, which can hardly be overcome by the present North Korean leadership. As was the case with the 2009 bottom, the North will hardly be able to overcome the ongoing crisis situation without “intervening” help from the outside, especially China.

In broad terms, the bottom of 2012 developed in an environment very similar to the early 1990s, following the World Festival of Youth and Students in Pyongyang in 1989, when North Korea entered into the “March of Tribulation” period. In other words, it can be said North Korea is now going into crisis mode. Pyongyang has wasted a colossal amount of resources on its proclamation of a strong and prosperous country and the 100th anniversary of Kim Il-sung’s birth (“Day of the Sun”). It also has spent lavishly on improving the functions of its nuclear bombs and other weapons of mass destruction. Worse still, North Korea’s missile launch and declaration of its nuclear power status in April have invited economic sanctions from the international community. The shortage of foreign exchange has led to bleeding exports to China, which in turn has resulted in a notable drop in the domestic production capacity. Food shortage is spreading even further due to the disastrous

drought in spring and floods in summer.

The North Korean leadership, however, is seen to be implementing a strategy to leave the “bottom of 2012” behind, pass the recovery and expansionary phase (4A) and move toward Peak 4. A series of recent phenomena have triggered talks outside of North Korea about changes going on in the reclusive country. Among them are the oust of Ri Yong-ho, the army chief of the general staff, the freewheeling style of Kim Jong-un and Ri Sol-ju, a stage performance featuring Walt Disney characters, the so-called “June 28 guidelines,” and Jang Song-thaek’s high-profile visit to China.

Now some North Korea watchers abroad have concluded that Pyongyang has given up its militaryfirst politics or started to experiment with reforms and opening-up by learning from China’s experience. This in turn is encouraging calls for aid to North Korea to help facilitate change and reform.

In a statement (on July 29, 2012), however, North Korea’s Committee for the Peaceful Unification of the Fatherland said, “If foreigners expect us to make ‘policy change’ or move toward ‘reform and openness,’ it would be nothing but a silly and stupid daydream like wishing the sun will rise from the west.” Accordingly, the June 28 guidelines and other North Korean measures of recent days should be seen as a shift in focus on projects (from nuclear and military sectors to economy and popular livelihood). It is premature to expect or conclude that the North will embark on reform and openness. It may simply be yet another repetition of the North Korean economy’s business cycle (more precisely, the fourth), and the reappearance of the theories of “changes in North Korea” and “reform and openness,” produced outside the country whenever the cycle bottoms out.

IV. Business Cycle and China’s ‘Visible Hand’ This section attempts to deal with the third goal of this article ― examining China’s role and functions, which have served as a crucial engine of the North Korean economy’s business cycle. As mentioned in the introduction, China’s function is compared to a “visible hand.” This is because China’s aid for North Korea, while it is explicit, is not market-based (if the aid was market-based, it should be an “invisible hand”).

A look into the history of relations between North Korea and China as well as that of the dynamics of the North Korean system shows that China’s assistance has been a crucial lifeline for the North Korean regime. China is at the helm of business cycles in North Korea. It has controlled the highs and lows (peak, midpoint and bottom) as well as the periods of strength and weakness (the levels of

peaks and bottoms).

When North Korea’s business cycle hits a bottom, its leaders usually make a visit to China. The trips have generated strong signals of their willingness to carry out “Chinese-style reform and opening-up” among foreigners, giving rise to expectations for “changes in North Korea.” Such an effect often is heightened by North Korean leaders’ praise for the strategy and outcome of China’s reform and opening-up. Moreover, the visits have coincided, if roughly, with instructions for systemic improvement at home.

1. Purpose of China’s ‘Visible Hand’

China needs to be prepared to cope, as swiftly and flexibly as possible, with any crisis in North Korea that may arise during the transition of power to Kim Jung-un solidifying his leadership as his father’s successor. Keeping the North Korean regime stable and intact is valuable to Beijing’s strategic interests in short, medium and long terms. In 2007, when concerns were mounting about Kim Jong-il’s health, China’s Academy of Military Science reportedly set up a research team for crisis management on the Korean peninsula.

Currently, China is concerned about the uncertainty surrounding the Kim Jong-un regime and is trying to stabilize it with steady material support. There are views that China is trying to avoid a situation that would put it in a disadvantageous position such as the collapse of the North Korean regime or South Korea’s unification of the Korean peninsula by absorbing the North.

Although China supported the U.N.’s position against North Korea’s launch of a long-range missile in April 2012, it did not agree on imposing sanctions against the North. This position is largely consistent with its previous stances on the North’s nuclear-related issues. In fact, China denounced North Korea for its two nuclear tests but opted for a “minimalist approach” toward putting the Security Council resolutions 1718 and 1874 into action.

Instead, China has continued to provide material assistance to North Korea out of concerns about the possible collapse of its regime and the consequent emergence of a hostile military alliance between South Korea and the United States as well as the influx of North Korean refugees into Chinese territory.

China’s response to Kim Jong-il’s death on December 19, 2011, revealed its desires with respect to

the situation on the Korean peninsula. At the time, China convened various emergency meetings within the Communist Party and the State Council. They first paid condolences and then made practical preparations, militarily and diplomatically. At the same time, a military unit in Shenyang which is responsible for security in China’s northeastern provinces as well as along the Sino-Korean border went into 24-hour emergency alert, with Beijing dispatching four more AWACS aircraft to the region. Also, the Chinese government supplemented the Public Security Bureau in Dandong facing Sinuiju with Special Forces and put it on an emergency stand-by. This could be translated as an expression of Beijing’s determination to prevent intervention by the U.S.-South Korean allied forces.

It is hard to sum up China-North Korea relations in a few words. However, considering the gap in national power, North Korea’s usefulness for China and the isolation of the North Korean regime from the rest of the world, there are views that Beijing and Pyongyang maintain an alliance of asymmetrical interdependence. According to these arguments, despite its deepening economic reliance on China, Pyongyang’s political and military dependence on Beijing is actually insignificant because of their mutual strategic distrust. China’s influence discussed in the following sections will be limited to the economic area, with the focus on its impact on the business cycle of North Korea’s economy and the political and economic meaning of China visits by North Korean leaders.

2. North Korea’s Business Cycle and China’s Economic Aid

1) Bottom of 2002 Chairman Kim Jong-il visited China in 2000 for the first time since 1983, when, as heir apparent to his father, he traveled to Beijing to confer with Deng Xiaoping. Kim stayed in China from May 20 to 30, 2000. Before the bottom of 2002 clearly materialized and before the North’s announcement of its July 1, 2002 measures for economic management, Kim visited China again from January 15 to February 1, 2001. Particularly, he visited the sites of China’s reform and opening-up and praised them, using the expression “cataclysmic changes.” The visit became a qualitative inflection point, which was very important for the business cycle of North Korea in the 21st century.

During his visit to Shanghai, Kim also said, “Enormous changes now taking place in China prove the Chinese Communist Party’s policy of reform and openness was right.” It was a remark that could be construed as Kim’s desire for similar reform and openness in North Korea. Also, the comment left room for Kim and his North Korea to recast reform and openness, as it had the nuance

of apologizing for the “revisionism” label that he placed on reform and openness in 1983.

Moreover, Jiang Zemin’s visit to North Korea in September 2001 backed up such interpretation.

During the bottom of 2002, North Korea unveiled the July 1 measures and soon reform and openness became the conventional view of where the nation was headed. Chairman Kim’s praise for “cataclysmic changes” in China and “July 1 measures” created effects that mutually reinforced to buttress the calls for providing support for North Korea. From the standpoint of North Korea’s leadership, the overseas aid helped secure the material basis to pass through the 2002 bottom.

Distracted by the onrush of foreign aid and the July 1 measures, however, some important developments were largely dismissed. They included North Korea’s acknowledgement of nuclear development in October 2002, the resultant second nuclear crisis and strained relations with China following Beijing’s refusal to develop Sinuiju as a special economic zone. As a matter of fact, China turned off the spigot of oil pipelines toward North Korea in 2003 under the pretext of repairs when Pyongyang revealed its highly-enriched uranium (HEU) program. The closure of oil pipelines forced North Korea’s industry to suffer from serious aftereffects for more than a year. However, encouraged by South Korea’s extensive aid and humanitarian support from the United States, North Korea sided with Washington in the trilateral meeting in Beijing in April 2002 and the six-party talks in August that year, further aggravating its relations with China. Kim Jong-il even refused to meet China’s Deputy Prime Minister Hui Liangyu, who visited Pyongyang as a special envoy of President Hu Jintao.

The acrimony between North Korea and China began to subside when Kim Jong-il visited China on April 19-21, 2004. China provided large amounts of crude oil to North Korea. In the wake of Kim’s visit, crude oil worth $44.97 million was shipped to North Korea in May alone. In March 2005, North Korean Prime Minister Pak Pongju visited Beijing, followed by President Hu’s visit to Pyongyang in October of the same year, to smooth out the bilateral relationship.

2) Bottom of 2006 Kim Jong-il visited China again from January 10 to 18, 2006, under tight secrecy. He visited the Three Gorges Dam in Wuhan as well as high-tech industrial complexes and container ports in Guangzhou and Shenzhen. Later the revelation of his visit led to arguments that it signaled major changes in North Korea.

Nine months later, however, North Korea went ahead with its first nuclear test in October 2006.

China’s leadership went into an internal debate over North Korea’s nuclear issue, but it was not as serious as the discourse after the North’s second nuclear test in 2009. Nor did China express its strategic position on the matter in 2006.

This notwithstanding, a spokesman of China’s foreign ministry said, “China and North Korea are not allies,” sending a warning that Beijing would not help Pyongyang unconditionally.

Consequently, China made clear that it supported Resolution 1718 adopted by the U.N. Security Council. It was an unprecedented incident in the history of China-North Korea relations in that Beijing approved international sanctions on North Korea for the first time. And then China joined economic sanctions against North Korea. North Korea’s business cycle bottomed out in 2006, proving once again that the North’s business cycle coincides with its nuclear cycle.

Ironically enough, China made more positive efforts than North Korea afterwards to revive the North’s economy. Qian Qichen, a member of China’s State Council, called on Kim Jong-il with the hope to extract a promise that the North would not conduct a second nuclear test and that it would return to the six-party talks. Hence the China-North Korea relations shifted to a phase of dialogue, and with the visits to North Korea by Foreign Minister Yang Jiechi in 2007 and Politburo member Liu Yunshan in 2008, Beijing resumed economic aid to Pyongyang. This meant China played an immense role in shifting North Korea’s business cycle from the 2006 bottom to the 2A phase (Refer to <Figure 5>). In addition, inter-Korean relations, which had been strained since the first nuclear test, began to be eased on the occasion of the second summit in October 2007, reinvigorating South Korea’s economic aid to the North. Consequently, the business cycle of the North Korean economy accelerated its entry into the 2A phase.

But the South-North relations in 2008 did not allow the North’s business cycle remain in 2A and Peak 2. After a South Korean tourist was fatally shot near Mt. Kumgang by North Korean troops, Seoul stopped sending tourists to the mountain resort and the Kaesong Industrial Complex across the border, and severed almost all economic aid to North Korea, contributing to the cycle’s shift to the 2B phase. After this, the business cycle mainly headed toward the 2009 bottom.

3) Bottom of 2009 North Korea’s second nuclear test, conducted in 2009, led to the worse crisis in the country’s business cycle. The focus of concern during the first North Korean nuclear crisis as well as the North’s first nuclear test was on denuclearization. The crisis after the second test was graver because North Korea declared itself a nuclear power, which was intolerable to the other five

countries in the six-party talks. The international community imposed economic sanctions on North Korea by adopting Resolution 1874 at the U.N. Security Council. China also agreed to the resolution and imposed strong sanctions at an early stage.

As the North Korean regime began to show obvious signs of instability after July 2009, however, China’s leadership convened an emergency meeting of the Foreign Affairs Leadership Group (FALG) of the Communist Party’s Central Committee and adopted a bold “strategy to stabilize North Korea.” In other words, Beijing made a grand shift in its North Korea policy in 2009.

On July 15, 2009, Dai Bingguo, a state councilor and director of the general office of FALG, visited North Korea to discuss the six-party talks and the North’s denuclearization. North Korea, noting that denuclearization was a deathbed instruction of Kim Il-sung, replied it would stick to the instruction. In October of that year, Prime Minister Wen Jiabao visited Pyongyang and agreed to enhance the traditionally friendly relations between the two nations by boosting bilateral economic and cultural cooperation and continuing high-level visits. As a result, the two nations reaffirmed their friendship as “blood allies,” with Beijing officially declaring that the development of ChinaNorth Korea relations is the “unwavering policy of China’s party and government.”

In 2009, China attempted to resume economic cooperation with North Korea by launching the Chang-Ji-Tu development project connecting Changchun, Jilin and Tumen in northeastern provinces, called the “Jang-Gil-Do” development project by the North. China believed that instability in North Korea would harm its national interests far more than the nuclear issue. The project was part of Beijing’s attempt to prevent a systemic breakdown in its neighbor. Pyongyang also considered it was necessary to cooperate with China to avert a serious crisis and to ameliorate international concerns about stability of the Kim Jong-il regime.

Most of all, the North needed to find a breakthrough to get out of its economic difficulties through economic cooperation with China and introduction of foreign capital. On February 11, 2010, Wang Jiarui, director of the International Department of the Central Committee of China’s Communist Party, visited Kim Jong-il to deliver a personal letter of Hu Jintao; Wang’s North Korean counterpart, Kim Yong-il soon reciprocated by visiting Hu to deliver Kim’s personal letter.

Accordingly, the North Korean economy’s business cycle passed the 2009 bottom and entered into the 3A phase. What solidified the phase further was Kim Jong-il’s visit to China’s special economic zones on May 3-6, 2010. The special zone for economic and technological development in Dalian,

Liaoning Province, and the new industrial district in Binhai on the outskirts of Tianjin were closely related with the development of both Sinuiju along the Sino-Korean border and the northeastern port city of Rason. During this period, in particular, North Korea and China came closer to each other. While South Korea took the May 24 measure of severing all economic exchanges with North Korea, China embraced the North in accordance with its strategy to stabilize its ally.

On August 29, 2010, Kim Jong-il and Hu Jintao held a summit talk in Changchun, for which Hu flew over to the northeastern city, demonstrating the intimacy between the two countries. At the summit, Kim said, “It is our historic task to hand over the baton of North Korea-China friendship to our descendants amid the complicated international situation.” Thus he tried to reaffirm China’s support for power succession to his son, Kim Jong-un.

As South Korea’s May 24 measure and the international community’s economic sanctions on North Korea began to show accumulated effects in 2011, the North’s business cycle shifted to the 3B phase. North Korea’s economy increasingly suffered from the shortage of hard currency, with its dependence on China continuing to intensify. On May 21-25, 2011, Chairman Kim visited Mudangjiang, a Sino-Russian border city in Heilongjiang Province, which has many historical battlefields where Kim Il-sung is said to have waged his heroic anti-Japanese campaigns. Kim’s intention was to emphasize the traditional blood alliance between North Korea and China and consolidate the internal unity of his people by capitalizing on his father’s stature. Kim also acted as if North Korea had some intentions to shift to the Chinese-style development model by visiting China’s biggest car factory.

At the time, however, North Korea was in a hurry to complete construction projects in the run-up to its proclamation of a strong and prosperous country. In the latter half of 2011, the North Korean leadership needed huge amounts of cash to undertake a series of projects, including the construction of 100,000 homes in Pyongyang, electricity production at Huichon Power Station, celebration of the 100th anniversary of Kim Il-sung’s birth, and stable and smooth power transfer to Kim Jong-un.

Actually, Pyongyang began to pour enormous sums into construction and various political events.

After Kim Jong-il died in December 2011, North Korea’s leadership needed even more money for idolizing the late leader and stabilizing the Kim Jong-un regime. Until April 2012, the North Korean leadership poured an enormous amount of capital into the aforementioned projects. In addition, the North’s test-firing of a long-range missile in April caused Beijing to stop its economic aid to Pyongyang, and the North’s declaration of its status as a nuclear power strained relationship

between the two countries. This accelerated the downward slide of the North Korean economy’s business cycle to its 2012 bottom.

4) Bottom of 2012 Although China took positive actions to help stabilize the North Korean system after the advent of the Kim Jong-un regime, the relationship between the two nations remained very uncomfortable in 2012. North Korea ignored China’s “warning” against its long-range missile launch in April, and seized three Chinese fishing vessels along with 29 fishermen operating in the West Sea in May. In July and August, however, China appeared to have decided to continue its support out of concern about the regime’s possible collapse. Around the same time, Jang Song-thaek visited China leading a large delegation on August 13-18, and met Hu Jintao and Wen Jiabao. Jang’s China visit, along with the June 28 guidelines, reignited international speculation about North Korea’s change and reform.

Going forward, the key question is whether China’s economic aid will continue or not, and, if the aid continues, whether it will increase or decrease. The North Korean economy’s business cycle will depend heavily on how much support Beijing is ready to provide for Pyongyang to prevent instability. If China’s support expands, North Korea’s economy and its overall system are more likely to restore stability. If it declines, stops, or is put on hold, one cannot rule out the possibility that the North Korean economy will descend so steeply as to recall the “March of Tribulation.”

After the death of Kim Jong-il, China reportedly decided to provide 500,000 tons of rice and 250,000 tons of crude oil by April 2012. These are seen to be the only resources that helped to stabilize the Kim Jong-un regime. It was rather unusual for China to publicize the content of its aid to North Korea in detail. The assistance was decided at a meeting of China’s top leaders chaired by President Hu Jintao around December 20, 2011. Food aid was scheduled to continue until the centenary of Kim Il-sung’s birth in April, and a certain amount of crude oil seems to have already been shipped through pipelines. China must have recognized the new regime’s need for more food to secure the legitimacy of its succession and create a celebratory atmosphere to elicit North Koreans’ loyalty.

Meanwhile, it was learned that China has provided the North with commodities worth $20 million (23.18 billion won), as requested by the latter, in addition to 100,000 tons of rice and 500,000 tons of crude oil each year. It was a kind of “regular aid,” which Beijing has offered aside from special grants made in emergency situations in North Korea or when Chinese leaders visited Pyongyang.

In 2012, however, Beijing seems to have sent only 10,000 tons of food as of mid-June, out of the 100,000 tons scheduled to be provided as part of the regular yearly grants. Although 2012 has symbolic significance as the first year of the Kim Jong-un regime and North Korea suffered from drought damages in addition to the annual spring season austerity, China temporarily stopped its customary provision of food aid. This seems to be a retaliatory move against the North’s launch of a long-range missile in defiance of Beijing’s strong objections.

In order to get past the 2012 bottom, North Korea has recently made strenuous efforts to restore relations with China and win as much aid as possible from Beijing. It is said the North Korean government has repeatedly instructed all administrative units and state enterprises to refrain from making any moves or remarks that can hurt relations with China. “The party has repeatedly stressed the need to avoid doing things that can adversely affect the Korea-China relationship. The party was right in deciding to refrain from making moves and remarks that can trigger disputes with China at a time when the country is in a difficult situation due to droughts and food shortages,” the Workers’ Party was quoted as saying.

Moreover, there have been ceaseless rumors about Kim Jong-un’s visit to China before the end of this year. There is rampant speculation about when Kim would make his visit. Those who predicted his visit during September probably thought the North’s leadership would want to solve urgent economic problems and secure the regime’s stabilization before the power transition in China, while those who preferred November expected Kim to visit China after Hu Jintao steps down and Xi Jinping officially takes over the party’s helm as China’s new leader. Kim’s visit to China would have an outsized impact not only on the North Korean economy’s business cycle but also on the stability of the entire regime.

V. Conclusion In this paper, we have seen how the North Korean economy moves in a business cycle. We could find a model amid the seemingly chaotic movement of the North Korean economy over time. We could vaguely confirm that the North’s business cycle, albeit undergoing somewhat bizarre processes and hardships, has a unique, repeating rhythm and that it would not be easy for the North Korean regime to jump out of this model after 2012, as it could not before 2012 (North Korean system’s inertia to maintain the status quo and China’s influence), and therefore both of the two extreme theories predicting “North Korea’s collapse” and “North Korea’s change,” respectively,

reflect quite subjective convictions.

Accordingly, those who believe North Korea recently attempted to make qualitative moves to break away from the existing “system” or fundamentally reform it, as well as those who think they have detected such signals, have yet to grasp the North Korean economy’s business cycle, which repeats itself according to a certain pattern.

This study also examined why the debate continues about changes in North Korea, including reform and opening-up, outside of the isolated state, despite strong denials and objections by its leadership.

By elucidating how North Korea has overcome crisis situations and what role China has played in the process, this paper has revealed certain limitations inherent in not only the theory of “regime collapse” but also that of “change and reform.”

As of September 2012, North Korea is in a serious bottom of its business cycle. Actually, taking an unknown course of reform and openness could further worsen the already dire situation. In this regard, it would still be quite rash to talk about North Korea’s change on the basis of its “June 28 guidelines,” the exact content of which has yet to be known.

Also, in view of the characteristics of its social formation, reform and opening-up can be a very perilous choice for North Korea. In North Korea, where the ruling elite monopolizes surpluses through a plundering system, change and reform will clash with the interests of the upper echelon in its social structure (a collusive structure of elites) in the short, medium and long run. Paradoxically, China’s resources allow North Korea to avoid change and reform. This is all the more ironic, considering that China has often expressed its intention to induce the North into its own model of reform and openness. Within China, this is called the “economic reform diplomacy.”

In addition, this study shed light on the “cognitive circuits” among South Korean experts that perceive North Korean leaders’ visits to China as signals of reform and openness. A case in point was their perception of Kim Jong-il’s praise of the Chinese-style reform and openness, which he called “cataclysmic changes,” during his tour of Shanghai.

In this respect, we looked into the “timing” of the North Korean leadership’s visits to China with extra caution in Part IV. We found that North Korean leaders’ China visits generally took place immediately before or after business cycle bottoms, and that around the time of their visits the North tended to issue instructions, such as “July 1 measures,” “June 28 guidelines” and

“Hwanggumpyong project.” These events have stoked speculations about impending reform and opening-up in North Korea, which are based on optical illusions, or benign assumptions. This is the reason we need to look at the timing of these events in line with the North Korean economy’s business cycle.

[KDI Review of the North Korean Economy, September 2012, published by the Korea Development Institute]

www.koreafocus.or.kr

National Strategic Value and Role of Jeju Naval Base

Kim Kang-nyeong President Institute of Global Harmony

I. Introduction Lying at the center of Northeast Asia, the Korean peninsula has long been a strategic intersection where continental powers trying to advance to the ocean and maritime powers heading toward the continent have collided. About 87 percent of the peninsula’s border is its coastline. The rest is land borders with China and Russia that lead to the Amnok (Yalu) and Duman (Tumen) rivers. For South Korea, the geopolitical and geographic contours deny overland routes to the Eurasian continent because they go across the Military Demarcation Line and through North Korea. Hence, South Korea is not much different than an island country and as such, the importance of sea power cannot be overrated.

Depending on the strength or weakness of a nation’s naval power, the sea can act as an obstacle or an open avenue for invaders. Similarly, the length of a nation’s coastline can give invaders many entry points and pose dire disadvantages to defenders. In Korea’s 5,000-year history, there have been more than 930 foreign invasions, more than 490 of them seaborne. This starkly illustrates the vulnerability created by a long coastline. In particular, the French invasion in 1866 (Byeongin yangyo), the American invasion in 1871 (Sinmi yangyo), the invasion by Japan’s navy vessel Unyo in 1875, the Sino-Japanese War in 1894, and the Russo-Japanese War in 1904-1905 were all naval wars in the latter era of the Joseon Dynasty before the nation fell under colonial occupation in 1910.

South Korea has coped with its geographic disadvantage by increasing maritime trade and constantly enhancing national security. It is the world’s seventh largest trading country with its annual trade volume reaching US$1 trillion as of 2011, its shipbuilding industry ranks at the top in the world, and its comprehensive maritime power 12th. South Korea is now one of the world’s top 10 economic powers and it is no exaggeration to say that its sea power helped make it possible.

In today’s world, sea power is becoming more and more important in relation to: 1) maintaining trade for national survival and prosperity; 2) developing and protecting marine resources; and 3) transporting supplies in wartime. These reasons are prompting Korea’s neighbors to strengthen their

maritime presence to meet the increasing need to develop marine resources and to defend against threats on the seas. Thus, it is imperative that South Korea continue to build its naval power.

On March 7, 2012, blasting work began on Jeju Island to prepare for the construction of a port that will serve as a gateway to an upgraded naval force and the Pacific Age. About a month earlier, on the fourth anniversary of his inauguration, President Lee Myung-bak declared that construction of the navy base was “the right decision for the sake of the nation’s future, economic development and security.” The base is targeted for completion in 2015.

The southern waters around Jeju Island are critical in economic terms. Practically all of the nation's maritime commercial traffic uses its shipping lanes and more than 230 kinds of natural resources including natural gas as well as the Ieodo Ocean Research Station are nearby. A naval presence is needed to not only protect the sea lanes and resources but also to be on hand for territorial disputes over islands. To be sure, the possibility of confrontations at sea is growing steadily as neighboring countries seek to extend their jurisdiction and bolster their naval power.

Mindful that swift initial action is crucial to winning naval confrontations, the Roh Moo-hyun administration decided in June 2007 to construct the a naval base on Jeju Island. In September 2008, the Lee Myung-bak administration approved a civilian-military complex port on the southernmost island, which will house warships and also dock cruise ships.

A regional development plan involving the port will provide 1.08 trillion won (approximately US$920 million) to Jeju Island over the next 10 years. Part of the funding will come from the private sector. When completed the port is expected to contribute to income growth, job creation and a better living environment for local residents by boosting the island’s tourism industry, as well as strengthen national security. The regional economic effect of a naval base already has been seen around the bases in Busan and Donghae.

The Jeju naval facility will span 496,000 square meters. Yet, it will be barely 6 percent of the size of the Port of Yokosuka in Japan. Considering that the shipping routes going through waters south of Jeju Island will become more important as a lane to the Arctic, where many merchant ships will soon cross as a result of the melting polar cap, the base needs to be expanded and complemented in the future.

This paper highlights the need to strengthen the naval power of Korea and analyzes the strategic

value and role of the Jeju naval base. Pros and cons of its construction will also be examined. There will be an analysis on maritime security threats such as increasing military power of neighboring countries, supranational threats, and causes of maritime disputes.

II. Increasing Possibilities of Maritime Disputes in Northeast Asia The arrival of the Asia-Pacific era is magnifying the importance of Northeast Asia. The region is the nexus of the most vibrant economic activity in the world with a multiplying number of multilateral cooperation agreements and exchanges. Yet the possibilities of maritime conflicts in the region are also rising. Unstable factors include security threats to shipping lanes, territorial disputes and an escalating race for naval superiority. In particular, Korea is at loggerheads with China and Japan about sovereignty over continental shelves, exclusive economic zones (EEZs), and Dokdo island.

Some of the issues already have led to overt action.

Korea and its neighbors have a long history of vacillating between conflict and cooperation.

Disputes over maritime boundaries and demarcation have long records. They are mainly related to major coastal resources such as sea routes, fisheries industry, and mineral resources of the ocean. As the need for the regional countries to secure resources and strategic outposts increases, history is repeating itself; competition over small islands and borderline demarcation is intensifying.

The region has three outstanding territorial disputes: Dokdo (Takeshima) claimed by Korea and Japan, the Four Northern Islands (South Kuril Islands) claimed by Japan and Russia, and the Senkaku Islands (Diaoyu Islands) claimed by Japan and China, respectively. Korea, Japan, China, Russia and Taiwan maintain conflicting positions about these islands.

The sea routes on Korean waters inevitably pass through the seas around the Four Northern Islands, Senkaku Islands, Taiwan Strait and Spratly Islands. These are notorious global hotspots due to the historical conflicts between the countries involved, military key points, and massive reserves of seabed resources.

The ongoing disputes about maritime borders in the region have been on the table since the United Nations Law of the Sea took effect in 1994. Thereafter, Korea, China and Japan established their own EEZs, igniting disagreements about how maritime boundaries should be drawn, i.e., setting straight territorial baselines.

Korea and Japan are negotiating on an agreement on their EEZ boundaries. But China’s declaration in 1996 on setting straight EEZ boundaries was quite dogmatic, violating the U.N. Convention on the Law of the Sea. This is expected to spark serious conflicts between Korea and China over boundary demarcations. As for the Dokdo issue, the new Korea-Japan Fisheries Agreement is unfavorable to Korea, and has strengthened Japan’s claim. Thus, the dispute between Korea and Japan remains a knotty issue.

Korea’s marine territory is roughly classified into territorial waters, the exclusive economic zone and deep sea mining areas. Territorial waters refer to the sea stretching 22 kilometers from land or islands, reserving the same sovereign right as territory. Korea has territorial waters of 250,000 square kilometers, which is bigger than the size of the Korean peninsula (221,000 square kilometers). The EEZ extends 370 kilometers (200 nautical miles) from land or islands. Korea’s EEZ covers 447,000 square kilometers, which is about four times the size of South Korea. Korea owns the rights for deep sea resources exploration and development in the waters of ClarionClipperton, covering about 150,000 square kilometers, near Hawaii.

Korea has seven mining areas on the continental shelves in its surrounding waters (one in the East Sea and three each in the West and South Seas). In addition, the Ulleung Basin in the East Sea was designated Korea’s eighth mine lot in 2006. Since the 1970s, more than 40 boreholes have been drilled on the continental shelves to explore undersea resources and those in the East Sea have produced natural gas since 2004. The West Sea and the sea south of Jeju Island have two seemingly rich oil fields each. The East Sea appears to have massive reserves of natural gas hydrate which is drawing much attention as a clean fuel of the future.

The rich marine resources in the sea south of Jeju Island, combined with invaluable sea lanes, make the waters the most strategically important maritime area for Korea, and are already stoking tensions with China and Japan. All three countries are contending for the right to develop the “seven mining areas,” which span around 80,000 square kilometers between the sea south of Jeju Island and Japan’s Kyushu region. These areas are projected to have 7.2 billion tons of natural gas and 10 billion to 100 billion barrels of crude oil. The governments of Korea and Japan initially agreed in 1974 to jointly develop these areas. However, Japan’s objection stopped the development and the areas have been left unattended for 38 years. Recently, China is vigilantly seeking an opportunity to develop the areas.

As for the EEZ, the maritime security environment is not at all favorable to Korea. First, the East

Sea and the West Sea are narrow with their farthest point from land at 649 and 834 kilometers, respectively. Considering that the United Nations Law of the Sea stipulates that the EEZ extends 370 kilometers from land, Korea’s maritime jurisdiction can’t help but significantly overlap with the areas claimed by Japan and China. Therefore, the possibility of maritime disputes cannot be ruled out.

Ieodo, a reef on Korea’s continental shelf, has received heightened attention recently from surrounding countries, especially China. Ieodo is 149 kilometers from Marado of Korea, 276 kilometers from Torishima of Japan, and 247 kilometers from Tungdao of China. According to the international law of the sea, an “uninhabited island or reef belongs to the nearest habited island.”

Ieodo definitely belongs to Korea. Based on an equidistant curve that starts from Korea’s Marado and China’s Sheshan Island, Ieodo is about 139 kilometers closer to Korea than China. So even without the demarcation of sea boundaries, Korea evidently owns the islet. This is why Korea built an ocean research station at Ieodo in 2003, effectively taking control of the islet.

Nevertheless, China, which has been raising objections to the construction and operation of the Ieodo Ocean Research Station, is bluntly displaying its desire for the islet. Since 2006, China has been provoking a quarrel, claiming jurisdiction over the islet, which they call Suyanjiao. China asserts Ieodo is in Chinese territorial waters and within its EEZ.

China has been sending ocean patrol boats to Ieodo since 2010 and aggressively publicizing their surveillance activity in its state-run media. When a Korean ship was salvaging a sunken vessel in mid-July 2011 in the sea south of Marado, near Ieodo, China dispatched a naval ship to warn the Korean crew that they were inside China’s EEZ and demanded they leave. In December 2011, China declared that it would send its largest surveillance ship, a 3,000-ton vessel that can carry helicopters, to patrol waters off Ieodo and even Gageo Reef.

As neighboring countries claim islands and compete more fiercely to secure marine resources such as crude oil and natural gas, protecting our maritime sovereignty will become more and more important. China’s provocation on jurisdiction over Ieodo illustrates why the Jeju naval base is an issue that involves national sovereignty beyond security or ideological arguments. If a confrontation occurs around Ieodo before the Jeju base is completed, it would take longer for Korean naval vessels to reach the scene than those from China or Japan.

III. Construction of Jeju Naval Base and Debate on Pros and Cons

1. Progress on the Project

The need to build a naval base on Jeju Island was first raised during the Kim Young-sam administration, at the 156th meeting of the Joint Chiefs of Staff in December 1993. In July 2002 during the Kim Dae-jung administration, the Ministry of National Defense and the Navy tried to begin building a base on Jeju Island but objections from local residents halted the project. On January 27, 2005, President Roh Moo-hyun declared Jeju as the “Island of World Peace” and became the nation’s first head of the state to officially apologize about the brutal suppression of a civil revolt by the Army and police in 1948, known as the April 3 Jeju Uprising. Then discussion about the project resumed in earnest as the National Assembly Budget Settlement Committee passed a budget for the project.

Amid heated arguments for and against the project, the base was initially planned to be built in the Hwasun area near the “Alddreu” airfield, which Japan used as an advance air base to attack China during the colonial period. However, in a survey of Jeju residents on May 14, 2007, Gangjeong Village was chosen and the Ministry of National Defense officially announced the selection the next month. More than 10 presentations were held to explain the project for residents of the island. Also, from August to December 2007, an inspection team of 158 people including residents of Gangjeong Village made field trips to some civilian-military complex ports overseas as well as to domestic naval bases and marine parks to confirm that the construction of the Jeju base would not cause any environmental problems and would vitalize the tourism industry and economy of the region.

At the 4th Jeju Peace Forum on June 22, 2007, President Roh said, “The nation and peace cannot be maintained without armament, and we need strong naval power to protect Jeju Island in case an armed conflict occurs on the sea off the island.” He also said, “Peace can be maintained only when you have the power to protect it. There can never be peace without security. Jeju naval base is necessary for our national security.” The next month, Prime Minister Lee Hae-chan visited Jeju and told reporters, “There is a wrong view that the Jeju naval base is related to the U.S. military or the U.S. missile defense system. It is absurd to say that there shouldn’t be a military base in Jeju because it’s the Island of World Peace.”

The national policy coordination meeting, held on September 11, 2008, decided the construction of a civilian-military complex port on Jeju Island would be a national project encompassing not only a naval base but facilities to accommodate visiting cruise ships as well as regional development

programs.

After a contract was concluded on the port construction work in January 2010, some residents opposing the project demanded a procedure to reselect the location, which was accepted. In August 2010, the transfer registration of land ownership for the project site was completed, and even compensation was finished in December of the same year. In April 2011, an extra session of the National Assembly passed a revised bill of the Jeju Special Law to provide the legal basis for regional development programs. While implementing the project, the entire process including the payment of compensation for land and approval of public water reclamation fully abided by legal and administrative procedures. There was also a ruling in favor of the legitimacy of procedures in a related lawsuit.

The naval base will include a 1,950-meter-long pier, where more than 20 navy ships including the Aegis destroyers can be anchored, a 1,110-meter-long pier which can moor two 150,000-ton class cruise ships, joint civilian-military facilities and a marine park.

2. Pros and Cons for Jeju Naval Base

1) Pros The rationale for approving the construction of the naval base pivots on three major points. First, there is no peace without security. As Flavius Vegetius Renatus, a strategist of the Roman Empire, said, “If you want peace, prepare for war,” peace and security are like two sides of the same coin.

That means it is possible to protect the peace for the whole nation including Jeju, the “Island of World Peace,” only when we have the power to protect it. Peace without the guarantee of security is fiction, and security that cannot ensure peace is just a waste. It is good that Jeju is admired as an “island of peace,” but it is more important to realize that peace on Jeju alone does not guarantee the security of Korea. As such, for the sake of the nation, a naval base should be built anywhere in the country, if necessary.

Second, Jeju naval base is an ideal bridgehead for advancing to the ocean and an outpost for defending our maritime sovereignty. For Korea, surrounded by the sea on three sides, the Jeju base is not optional; it is a necessity. In other words, Jeju naval base is a perfect choice for defending the nation’s maritime security, a modern version of Cheonghae Garrison [A military base and trade hub on Wando island, built in 828 by General Jang Bo-go, which made Unified Silla a kingdom of maritime trade.] Jeju’s southern waters and sea routes handle nearly 100 percent of Korea’s export

and import commercial traffic and more than 400,000 tons of oil every day. They are like a lifeline for Korean economy.

Third, Jeju naval base is a perfect home port for a task group to quickly respond to maritime security threats, such as reinforcement of naval forces and territorial disputes over islands in Northeast Asia. One task group deployed to Jeju Island can support the three existing fleets in the East, West and South Seas and intercept enemy naval reinforcements. As a result, Korea can increase its capability to protect its sea routes as well as swiftly and effectively respond to possible confrontations over maritime jurisdiction with North Korea and other surrounding powers, which may occur around the Korean peninsula.

Most of all, Jeju naval base will be an excellent location to deter provocation by North Korea. Most of the North’s recent provocations have occurred at sea. The Jeju base will be the best locale to support South Korean naval forces preparing for operations against threats from North Korea in the East Sea as well as the West Sea. In order to overcome its inferior combat power in the East and West Seas, North Korea attempts roundabout troop enforcement via the ocean, utilizing its many submarines. For South Korea, the long distance between the current three fleet bases (Donghae, Pyeongtaek and Busan) undermines logistics support and operation capabilities. Thus, it is necessary to have a base to quickly respond to North Korean submarines on the open sea and coastal waters. In other words, Jeju naval base is definitely necessary not only to protect international sea routes, which are the lifeline of the nation, but also to defend against North Korean attacks on the West, South and East Seas.

The ROK Navy has geographical advantage over the North Korean navy in that its forces in the seas surrounding the country on three sides are flexibly connected. The North Korean naval forces are divided to the East and West Seas, which makes joint operations difficult. The Navy’s Maritime Task Flotilla Seven to be based at Jeju will be able to deploy its vessels swiftly to the Northern Limit Line (NLL), Dokdo, Ieodo, and even to Somalia when necessary to deter North Korea as well as perform operations on the ocean. Without a pier facility for large vessels on Jeju Island, the Navy has to dispatch ships from the Jinhae base for rescue or other operations in the sea near the island, diminishing the effectiveness of emergency response.

Currently, if an emergency naval deployment to Ieodo is needed, it takes about 25 hours (based on 10 knots per hour) for warships from the Jinhae and Busan bases to arrive at the island. However, warships dispatched from China’s naval base in Shanghai and Japan’s naval base in Sasebo can

reach the island in 18 and 21 hours, respectively. An ROK navy base in southern Jeju Island, some 300 kilometers southwest of Jinhae and Busan, will be able to deploy its ships to Ieodo in just 8 hours and 30 minutes.

Located in the South Sea, Jeju Island is a passage that connects the East Sea and the West Sea. This means that the island is an entry point to anywhere along the Korean coastline. This geographical feature is one of the reasons why half of the ships heading toward Korea pass by Jeju Island. The island also is the starting point for Korea’s critical southbound sea lanes that bear oil shipments to the energy-poor nation.

2) Cons The persistent objection to a naval base on Jeju Island seems to be partly related to the island’s history. When the Mongolians invaded Korea in the 13th century during the Goryeo Dynasty, they completely suppressed the Three Elite Patrols (Sambyeolcho), who mounted their last resistance on Jeju Island, and placed the island under its direct control to use it as an outpost to invade Japan. For 240 years, from late Goryeo until the era of King Myeongjong of the Joseon Dynasty, Japanese pirates invaded Jeju Island more than 30 times. In 1934 during the colonial period, the Japanese built the Alddreu Airfield on Jeju for bombing raids on China. At the final stage of World War II, over 80 military outposts were set up in caves all over the island to prepare for possible landing of U.S. forces.

During the Jeju Uprising of April 3, 1948, communist guerrillas tried to interrupt the nation’s first general elections slated for May 10 of that year. The military, police and anticommunist groups responded by burning down large swaths of Jeju in brutal suppression that took the lives of around 30,000 people, nearly 10 percent of the island’s population, and left more than 90,000 people homeless. In this respect, the local residents may understandably be repulsed by the idea of a military installation on their island. It is therefore no coincidence that Jeju was named the “Island of World Peace” in 2005 in accordance with the “Special Act on Jeju Free International City.”

Even considering this historical and emotional background, however, the arguments of those who oppose the construction of Jeju naval base still lack validity in many respects. The naval base construction has long been delayed due to various misunderstandings and controversies. In particular, the opponents’ views are mostly based on arbitrary and conspiratorial suspicion, opposition for opposition’s sake and the black-or-white fallacy that the military is an obstacle to peace, rather than logic and rational thinking based on truth. The opponents are obviously

advocating “peace for foreign powers,” instead of “peace for Korea.” It seems to be the kind of peace that depends on the mercy of other countries. It is not a true peace, so cannot last long. The opponents’ arguments are illegitimate due to the following reasons.

First, they insist that a military base does not fit the image of Jeju, because peace should mean demilitarization. It is very clear that this notion has many fallacies, aside from the fact that the island already has the Jeju Defense Command, one of the ROK Navy’s three regional defense commands along with those in Mokpo and Incheon. Some coastal combat ships, including high speed fleets, are already based on the island. The Jeju International Airport also has maritime patrol aircraft (P-3C Orion) and one air fleet that owns Super Lynx antisubmarine helicopters. The Jeju naval base would simply be an extension of these installations.

The argument that the naval base would besmirch Jeju’s Island of World Peace image would need to meet two criteria to be valid. First, the naval buildup is launched despite no possibility of maritime disputes with neighboring countries, and second, the buildup may provoke conflicts because it would give South Korea a decisive naval superiority in the region. Both of these scenarios are far from reality.

According to the website “Island of World Peace ― Jeju” (http://peace.jeju.kr) run by the office for the promotion of Jeju Free International City of Jeju Special Self-Governing Province, Jeju aims for “positive peace in the sense that basic human needs are met and justice is maintained, beyond negative peace of no war.” This means that the concept of “Island of Peace” that Jeju claims to stand for is not eclipsed by the notion that peace equals demilitarization. Do you want to keep silent for the sake of Jeju’s image while facing warships from Japan and China coveting Korea’s territorial waters and marine resources? Or, do you want to have a significant number of cutting-edge fleets deployed at Jeju to warn against any Chinese or Japanese attempt to provoke a maritime confrontation? The answer is obvious.

Second, the opponents claim that Jeju naval base will be used by the United States to maintain its maritime supremacy in East Asia by introducing its missile defense (MD) system, among other strategic devices, which will make Jeju involved in the vortex of U.S.-China conflicts. However, the Jeju base has nothing to do with the MD, and the South Korean government has maintained its consistent position that Korea has no plan to participate in the missile defense. Furthermore, the Jeju base is intended to serve the national security of Korea, not the convenience of the United States.

The U.S. Navy will likely find the Jeju base lacking in value as its strategic outpost. First, Jeju Island is not suitable for deploying an Aegis air defense destroyer tasked to shoot down Chinese or North Korean missiles headed for the United States. Even if the U.S. Navy needs to mobilize aircraft carriers to prevent China from invading Taiwan, the existing U.S. bases in Okinawa would be more useful. While the distance from Okinawa to Taiwan is about 611 kilometers, Jeju Island and Taiwan are 1,038 kilometers apart.

Third, some people argue that Jeju Island, especially naval ships stationed on the island, will be a target of attack. But it’s not right to say that only Jeju would be attacked, or even be the first target of foreign aggression. Other naval bases at Donghae, Incheon, Mokpo, Pyeongtaek and Busan would also be under threat. Busan, in particular, has a large operations base covering some 530,000 square meters, which was completed in 2006, as well as the Naval Operations Command.

Moreover, at an early stage of war, the attack target priority will be air bases and air defense systems. Also, the enemy might directly target Seoul and major industrial facilities in order to paralyze the overall functions of our society.

Jeju has a long history of suffering foreign aggression and occupation because island lacked the ability to defend itself. A naval base would definitely be needed for the defense of Jeju itself. It should not be likened to the Mongolian or Japanese military facilities built on the island in the past.

Underneath the view linking the Jeju naval base with the U.S. MD system is an anti-American sentiment attempting to take advantage of the fact that the April 3 Jeju Uprising of 1948 occurred under the U.S. military occupation after Korea’s liberation from Japanese rule. Citing Article IV of the ROK-U.S. Mutual Defense Treaty, which stipulates that “the Republic of Korea grants, and the United States of America accepts, the right to dispose United States land, air and sea forces in and about the territory of the Republic of Korea as determined by mutual agreement,” the opponents claim that the U.S. Seventh Fleet will use the Jeju base as an outpost and stopover site, drawing Korea into the competition for regional hegemony between the United States and China, and thereby jeopardizing Korea’s security. But this is an anachronistic claim lacking validity.

Fourth, there are concerns that a naval base would hinder tourism, a vital component of the regional economy. This is based on the notion that a military base is an unpleasant facility, which clearly contradicts reality. Hawaii is the headquarters of the U.S. Pacific Command and Guam houses U.S. Navy and Air Force facilities. But both islands are among the world’s most popular tourist

destinations. Some naval ports such as Sydney in Australia, Singapore, and Naples in Italy have also emerged as global landmarks. The annual Naval Port Festival in Jinhae, where the Naval Operations Command was located for a long time, is another case in point.

Some people argue the Jeju naval base would deter Chinese tourists who might think the base is part the U.S. missile defense system against China. Then, they must consider whether China respects the opinions of Korean tourists when it distorts the history of the Goguryeo Dynasty through the Northeast Project and claims its sovereignty over Mount Baekdu and Ieodo. How about Japan? Does it make any concessions on Dokdo and historical issues out of concern that Koreans would lose their interest in visiting Japan?

If the U.S. Navy ships happen to call at the Jeju base in the future, their visits would most likely be for friendly or sightseeing purposes, annual Korea-U.S. joint exercises, or temporary stopovers for emergency repair work. Not only the U.S. Navy ships but combat vessels of China, Japan and Russia will also enter the Jeju base for similar purposes. Moreover, the Jeju base will hardly have enough space for the newest warships of the ROK Navy. It is a long-cherished project of our navy, which had been planned far ahead of the U.S. MD system. It is simply preposterous to assert that the base is intended for use by the U.S. Navy.

Finally, some worry that the naval base construction will harm the surrounding environment and increase crime. Yet, it is widely acknowledged that naval ports maintain a cleaner environment than civilian ports around the country. This is because the Navy has long been implementing preventive measures against environmental pollution. It should be also noted that, according to a 2006 survey, Gyeryong, South Chungcheong Province, where the headquarters of the ROK Army, Navy and Air Force are located, had the lowest crime rate among all Korean cities.

IV. National Strategic Value and Role of the Base Alfred T. Mahan (1840-1914), a U.S. Navy officer, strategist and historian, emphasized the importance of naval power and the role of bases, saying, “A navy exists to protect seaborne trade and there is an inseparable relationship between sea lanes and bases.” Historically, naval power has accomplished its purposes through its mere “presence.” This was demonstrated when the U.S. Navy dispatched its aircraft carriers to South Korea’s East and West Seas after North Korea blew up the South’s naval ship Cheonan on March 26, 2010, effectively easing tension in the region. The Jeju base purports to protect the nation’s sea lanes, which are its lifelines, and guard its maritime

sovereignty and marine resources.

The Jeju base will be the home of the ROK Navy’s Maritime Task Flotilla Seven, which was created on February 1, 2010 as part of an integrated rapid response deployment. The Jeju fleet will include more than 10 large ships, including the King Sejong the Great class Aegis destroyers, as well as aircraft, submarines and supply ships, equipped with strategic flexibility to conduct independent operations for a considerable period of time. The fleet is essential for responding to various crises on sea lanes such as terrorism, piracy and international armed conflict. The Jeju base will be the mother port so the mobile flotilla can easily monitor and protect the southern waters and sea lanes. The strategic value and role of Jeju base can be summed up as follows:

First, it can ensure safe navigation through the sea lanes south of Jeju Island. As of 2011, Korean economy’s dependence on foreign trade is 82 percent, much higher than that of the United States (19 percent), Japan (22 percent) and China (45 percent). Korea needs to import all of its crude oil demand, 97 percent of which is for energy use, and more than 70 percent of its food supply.

Since the sea of Jeju adjoins the Strait of Malacca, which connects the Indian Ocean and the Pacific Ocean, the Korean economy will inevitably be grounded if pirates block the Strait of Malacca. In such an emergency, the task group at the Jeju base can respond quickly. The sea lanes off the coast also must be protected to win a war as they would be a primary route for reinforcements and logistical support. In short, the Jeju naval base would be an invaluable asset in guaranteeing the security of sea lanes in peace and wartime.

Second, the naval base is necessary to protect the abundant maritime natural resources in the sea south of Jeju Island. They iinclude 7.2-9.0 billion tons of natural gas and 10-100 billion barrels of crude oil, which will be enough for Korea to consume over 230 to 280 years and 20 to 200 years, respectively. Due to these abundant marine resources, there is a high possibility of maritime disputes with China and Japan in this area. Therefore, constant surveillance and protection is necessary.

Korea’s maritime jurisdiction covers 48,117 square kilometers (south of the Military Demarcation Line) based on territorial waters stretching 22 kilometers from the coastal baseline, 345,000 square kilometers of continental shelves with economic value, and 447,000 square kilometers of EEZ. The aggregate size surpasses the Korean peninsula. Korea currently has eight mining sites (two in the East Sea and three each in the West and South Seas) on the continental shelves in these surrounding

seas.

Korea and Japan agreed in 1974 to jointly develop the continental shelves in the southern waters of Jeju. Due to Japan’s objections, however, the joint development plan was suspended and the continental shelves have been left unattended.

Third, the southern waters of Jeju urgently require protection as they are like borderless front yards of Korea, China and Japan. The recent moves to extend maritime jurisdiction and the naval arms race among the neighboring countries, constructing aircraft carriers and submarines, heightens the need for Korea to take preemptive measures.

With its geographical advantage allowing swift reaction in times of emergency, Jeju naval base will be a stronghold for frontline defense to facilitate stable management of the southern sea area. As the base is located at a geopolitical choke point enabling simultaneous response to the threats of North Korea and other neighboring countries in the most efficient and economic manner, it will be useful for coping with maritime conflicts involving territorial claims on islands and demarcation of EEZs and continental shelves.

Before its deployment of the Cheonghae Anti-piracy Unit to the coast of Somalia, Korea had totally depended on allies such as the United States and coastal countries for protection of its sea lanes.

The Cheonghae Unit, founded in 2009, has been safeguarding Korea’s sea lanes but it is not yet strong enough to protect Korean ships against supranational threats. As the home port for a mobile task flotilla, which differs from fleets organized mainly for coastal operations, the Jeju base will be equipped with the capability to perform operations on the ocean to protect the sea lanes that start from the south of Jeju and lead to the Strait of Malacca. The presence of the base also will help preempt conflicts. The base construction already is applying psychological pressure on neighboring countries.

Fourth, Jeju naval base enables immediate action for national interest when necessary as the hub of naval operations and the home port of a mobile task flotilla. Victory in today’s maritime warfare depends on fleet mobility and speed of deployment. As such, initial action is highly important.

The Jeju base will be like a midfielder in soccer, capable of both offense and defense. This means the ships at this base will help deter North Korean provocation in peace time and contribute to securing maritime superiority in wartime.

The geographical location of Jeju naval base will be useful for blocking infiltration of North Korean submarines (submergence vehicles) and commando units via the East and West Seas as well as protecting the nationâ&#x20AC;&#x2122;s major seaports and shipping lanes. No less importantly, the Jeju-based carrier task force will help augment South Koreaâ&#x20AC;&#x2122;s naval power, which is significantly inferior to that of China and Japan.

The naval bases currently in operation in Donghae, Pyeongtaek and Mokpo have difficulties accommodating mobile flotillas, because of their inadequate water depth and pier size. Presently, the Maritime Task Flotilla Seven is divided between Jinhae and Busan, which makes it difficult to perform its routine mission due to logistical constraints on training and maintaining combat readiness. The bases in Donghae, Pyeongtaek, Mokpo and Busan are assigned to protect their respective zones. The Jinhae base performs maintenance work, logistic support, and education and training for the entire ROK Navy. The mobile task flotilla at Jeju, consisting of Aegis destroyers, submarines and support ships, will represent the core strength of the ROK Navy.

Fifth, the new civilian-military complex port is forecast to exert significant economic effects by anchoring cruise ships as well as warships. There is even anticipation that the naval base will create momentum for Jeju Island to dominate the cruise industry of Asia in the future. If cruise ships are anchored at this port, shopping and sightseeing will increase tourist consumption and earnings from money change service, and the port itself will also have direct revenue from port entry and departure fees, docking fees, and others. Additional effects are expected from services related to ship operation and purchases of fuel, food and other supplies.

There is even a research data that the value added of each passenger of a cruise ship is equivalent to one container of a cargo ship. The entry of a 5,000 TEU class cargo ship, which can carry 5,000 containers, brings about a total of 1 billion won (approximately US$910,000) worth of value added for the port, or about 200,000 won per container. The value added per passenger would be a similar amount from a cruise ship with 2,500 people on board; they would create an estimated 500 million won worth of value added.

When completed, Jeju naval base will vitalize the regional tourism industry together with a cruise port and marine park. With development of waterfronts combined with Olle trails nearby, the area will become a huge park. The possibility of attracting tourists will become even higher when the regional community makes its own efforts to build a park or marina to moor and store yachts and

cruise ships and create a marine park near the base making use of warships out of commission.

There is also an analysis that a significant portion of the naval base project cost will directly contribute to the regional economy. The total expenditure may change as the project is currently ongoing, but based on a 977.6 billion won projection, about 40 percent, or 380 billion won, will benefit the regional economy, according to a research study.

If somebody asks if Jeju Island, a blessed tourist haven, can coexist with a naval base, the answer is yes it can. Globally famous tourist cities such as Honolulu and San Diego, U.S. military bases in Yokosuka and Guam, Sydney of Australia, Toulon of France, Portsmouth of the UK, and Changi of Singapore all have a naval base ready to cope with various disasters including marine accidents.

The scenic military ports are opened to the general public, attracting throngs of tourists every year.

These cases show that a naval base can contribute to the economic vitality of the local community, far from harming its tourist image.

Economic contributions from naval bases have already been proven in Koreaâ&#x20AC;&#x2122;s existing bases. The Busan naval base had an estimated 202.2 billion won economic effect on the local economy plus 77.5 billion won of value added in 2010 alone. By creating economic value amounting to a total of 279.7 billion won, the naval base made a significant contribution to the regional economy. The Donghae base also created 220.7 billion won of economic value for the region during 2009, making a huge contribution to the regional economy.

Taken all together, the construction of Jeju naval base in Gangjeong Village is, instead of being evil as asserted by the opponents, rather a blessing to the residents of the region and will serve as a springboard to prosperity and wealth for the nation. The Jeju base will become South Koreaâ&#x20AC;&#x2122;s strategic stronghold to contain the strengthening naval threat of North Korea and other neighboring countries and at the same time, a bridgehead for the nationâ&#x20AC;&#x2122;s advancement to the ocean. Also, the naval base will help Jeju Island turn into a global tourist hotspot. When completed, the civilianmilitary complex port is expected to become a vital tourism resource playing a significant role in the regional economic development by increasing income, creating jobs and improving living conditions for the local residents, as well as contributing to national security.

Cheonghae Garrison, which was built by Jang Bo-go, a general during ninth-century Unified Silla, made his country a kingdom of maritime trade. The Naval Headquarters of the Three Provinces during the Joseon Dynasty, located on Hansan Island and led by Admiral Yi Sun-sin, saved the

nation from Japanese invasions in the 16th century. Now the new naval base on Jeju Island will protect the nation’s maritime sovereignty and will be its starting point for advancement toward a great maritime power.

V. Conclusion Successful utilization of its seas has underscored South Korea’s remarkable economic development despite prolonged territorial division and military confrontation with North Korea. The importance of seas in the 21st century is growing further not only as a treasure trove of natural resources but also as an expressway for foreign trade.

The growing awareness in the importance of seas is ever intensifying international competition over maritime rights and interests. South Korea also faces many ocean-related challenges involving its security and prosperity.

First, South Korea should protect its seas against North Korea’s provocation and threats of other neighboring countries. The nation also has various tasks at hand, such as confirming jurisdiction over its exclusive economic zone, protecting vital sea lanes, and participating in peacekeeping and sea rescue activities as a responsible member of the international community. Various countries including China and Japan continue to strengthen their naval power to secure safe shipping routes and prepare for possible maritime confrontations in East Asia, considering maritime security is directly connected to their national security and prosperity.

The importance of maritime security is growing increasingly higher amid North Korea’s provocation, naval power reinforcement of neighboring countries, especially China and Japan which are both keen on building a blue-water navy, threats on sea lanes by pirates, and the rising need for development and protection of marine resources. This is the time when the ROK Navy should further strengthen its role and competence in protecting territorial waters, securing national interests, maintaining maritime order and protecting marine development, participating in peacekeeping activities, and eradicating pirates. In proportion to the surging threats on maritime security and the nation’s growing economic power, the Navy needs to augment its capability by building a new base.

Geographically and militarily, Jeju Island is South Korea’s vital strategic point to protect and manage its southern waters. The sea lanes south of Jeju are tantamount to the nation’s lifeline as

they are critical transport routes for its industrial logistics, which directly affects the nation’s economy. As a gateway for advancing to the ocean, the southern waters around Jeju Island are absolutely important to the national economy. Jeju naval base, a civilian-military complex port, has significant implications as a foothold to protect the nation’s maritime sovereignty as well as its rights and interests.

Maritime conflicts in today’s world depend heavily on swift initial actions. Jeju naval base, located a midpoint of the waters surrounding the Korean peninsula, will be enormously efficient in fleet deployment in an emergency state. Also as the hub of the ROK Navy, the Jeju base can easily disperse the combat power if ports are blockaded. As it can protect the southern waters and quickly respond to an emergency, the Jeju base is expected to play a pivotal role as a strong fortification for the nation’s maritime security. It will serve as South Korea’s bridgehead for advancing into the ocean, an outpost to protect its maritime sovereignty on the waters surrounding the peninsula in an emergency, and a guardian of peace in preparation for potential disputes.

Construction of the Jeju naval base is finally under way after five years of heated debates over pros and cons. It is time for joint military and civilian efforts and cooperation to build a sturdy base to enhance the nation’s security and a world-class tourism port. The work should be done fast to compensate for a long delay.

“Security is like oxygen” and “costs for national defense are like insurance payments,” they say.

National security can be likened to “the roots of a tree and the frame of a human body.” A nation’s security should be enhanced in proportion to its power and external threats.

The ROK Navy should become a top-class force to enhance the nation’s stature and protect national interest as well as the lives and assets of its people anywhere in the world. Construction of Jeju naval base should never become an object of zero-sum political arguments or delayed any longer.

To cope with the naval power reinforcements of neighboring countries in Northeast Asia, supranational maritime security threats, and maritime conflicts in East Asia, South Korea should never allow any negligence in preparing its short, medium and long-term security measures.

Selected References

ROK Navy, A Glimpse at Naval Operations for Everyone, 2011; Navy, 2012; Gangjeong Vision 2015: Gangjeong Village Envisioned Together, 2012.

ROK Navy Headquarters, “Understanding Jeju Naval Base: Why is It Necessary?” http://www.navy.mil.kr/sub_guide/jeju_about.jsp?menu=2 &smenu=2 (search date: April 8, 2012).

Ministry of National Defense, Defense White Paper 2010; National Defense Focus, May 2007.

Jeong Seong-yeop, “Building Jeju Naval Base is Protecting the Sovereignty of Future Korea,” Defense Media Agency, Military Journal, March 2007.

Kang Hyo-baek, “Maritime Boundaries Delimitation Issue between Korea and China: With Focus on Ieodo,” Northeast Asia Association of Korea, Korean Collection of Treatises on Northeast Asia, Vol. 50, 2009.

Kim Byeong-ryun, “Significance of Jeju Hwasun Port and Naval Strategic Maneuvering Fleet: Forward Base to Protect Maritime Lifeline,” Ministry of National Defense, National Defense News, May 2005.

Kim Jae-yeop, “Jeju Naval Base is Reconstruction of Cheonghae Garrison,” ROK Navy Headquarters, The Navy, November-December 2011.

Kim Kang-nyeong, “A Blue-water Navy and Construction of Jeju Civilian-military Complex Tourism Port,” ROK Navy Headquarters, The Navy, March-April 2012.

Lee Choon-geun, “Construction of Jeju Naval Base and National Security,” Korea Institute for Maritime

Strategy,

presentation

at

the

Morning

Forum

on

September

22,

2011,

http://www.allinkorea.net/sub_read.html?uid=23003 (search date: April 7, 2012).

Lee Sang-hyun, “Why Do We Need Jeju Naval Base?” Sejong Review, No. 85, May 2007.

Seo Sang-moon, “Ieodo is Included in China’s Maritime Operational Control” What is the Problem with our Response?” Military World, April 2012.

[Defense Policy Study, No. 96, Summer 2012, published by the Korea Institute for Defense Analysis]

www.koreafocus.or.kr

- Korean Enterprise Successfully Unlocks Cuban Market

Korean Enterprise Successfully Unlocks Cuban Market

Kang Seong-cheol Staff Reporter Yonhap News

“Now is the best time to enter the Cuban market before the closed economy embarks on full-scale opening,” says Kim Dong-woo, chairman and chief executive of Ampelos Enterprise Group. Kim first set foot in the Republic of Cuba 17 years ago to sell Korean eyeglass frames.

South Korea and Cuba do not have official diplomatic relations and the business potential of the communist state is largely unknown to most ordinary Korean manufacturers and trading firms.

Selling medical equipment, power generators and renewable energy facilities, Ampelos Group earns US$30 million in annual sales. As the first Korean company operating in Cuba, Ampelos builds upon years-long trust with the Cuban government, Kim says.

In an interview with Yonhap News Agency, Kim, 50, urged Korean companies not to miss out the investment and sales opportunities in Cuba. Since the Caribbean nation’s long-time political leader Fidel Castro, 86, ceded the presidency of the Council of State of Cuba to his brother Raul in 2008, the government has implemented reforms to revive the nation’s backward economy. That has ignited a rush of foreign investment into Cuba, especially from China. However, Korean companies have not been very active in the newly emerging Cuban market, lamented Kim. “Credit-based transaction is a common business practice in Cuba. Even national enterprises buy

things on trust,” he says. “With payments delayed by a year, Ampelos took a big risk of going into bankruptcy because of a liquidity shortage. The company remained patient and continued to work on trust-building. Instead of seeking short-term profits, we continued to provide strong after-sales service and maintenance to win the confidence of the Cuban government.”

In 2006 Ampelos combined with Hyundai Heavy Industries to outbid Japanese and German companies to equip an electric power plant in Cuba. Hyundai contracted for power generators worth $850 million and Ampelos supplied components.

“In that year President Fidel Castro invited me for a face-to-face meeting at his office. He made a personal request to me, emphasizing the importance of the power plant project as the nation’s economic priority. He also complimented Korean products for being a big help in relieving power shortage problems,” Kim recalls.

The project was a success: the power generators satisfied 30 percent of the nation’s electricity demand. To celebrate the success, the Cuban government printed the images of Hyundai’s power generating facilities on 10 diez pesos banknotes in 2007 (10 diez pesos is approximately 17 U.S. dollars), along with a catch phrase “Energy Revolution.”

Ampelos is becoming a global enterprise. In addition to the solid Cuban business, it has been advancing into Panama, Nicaragua, Ecuador, Venezuela, Dominican Republic, Bolivia, Brazil, Colombia, Peru and back South Korea.

Kim immigrated to Paraguay in 1978 at age 14. He recovered his Korean citizenship in 1991 and the next year, he entered Sogang University in Seoul to study business administration. As a college student, he acquired hands-on business experiences working as interpreter, and upon his graduation in 1996 he established his own trading firm targeting Latin American countries.

“In order to run business in Cuba, you need to get rid of prejudices about the country,” Kim emphasizes. “Contrary to the less-than-positive perception about Cuba stemming from the country’s thorny diplomatic issues with the U.S. and friendly ties with North Korea, the country exerts significant influence over its neighbors. Cuba is a highly respected country in Central and South America,” Kim says.

Thanks to universal education illiteracy is almost nonexistent in Cuba, while the country also boasts

the highest level of medical skills in the region. When natural disasters occur in neighboring states, Cuba is the first to dispatch medical personnel. To ameliorate the poor medical environment in Latin American countries, the Cuban government also offers scholarship programs to foreign medical students. After their studies in Cuba, these medical students return to their home countries.

Kim has been active in promoting cultural ties between South Korea and Cuba. For the past seven years, he has invited the Daejeon Opera Company to Havana in January annually to perform with the National Opera Company of Cuba. He also has given financial assistance to Cuban artists to exhibit their works in Korea and supported Korean photographersâ&#x20AC;&#x2122; exhibitions in Cuba. Recently Kim assisted the launch of Korean language programs at the University of Havana to increase Cuban young peopleâ&#x20AC;&#x2122;s cultural awareness about Korea.

[October 15, 2012]

www.koreafocus.or.kr

- Pythagorean Theorem Proves Dokdo Belongs to Korean Territory - Why the Kings of Joseon Stayed Planted at Changdeok Palace

Pythagorean Theorem Proves Dokdo Belongs to Korean Territory

Jeon Byeong-geun Staff Reporter The Chosun Ilbo

“Truth about Dokdo”

By Jeong Tae-man, Chosun News Press, 260 pages, 15,000 won “Japan’s Border Problems”

By Ukeru Magosaki, Translated by Yang Gi-ho, Medici Media, 244 pages, 12,500 won “Truth about Dokdo” reveals the lies and ungrounded conjectures by Japan while “Japan’s Border Problems” explains Japan’s ignorance and misunderstanding. The first book was written by a retired National Tax Service official who began to research the Dokdo controversy after he left work in 2009. The second book was written by a former Foreign Ministry official who retired from teaching at Japan’s National Defense Academy and began searching for answers to the territorial dispute.

The former is Korean and the latter is Japanese; both warn that Japan is seriously mistaken about the territorial issue.

■ Argument Proven with Pythagorean Theorem

Jeong Tae-man wanted to know why the Japanese claim Dokdo is their land. When he began writing his book, he put himself in their shoes, but after five years of research he found their claim was groundless. And he backs up his conclusion with three arguments. First, an ordinance issued by Daijokan, the highest council of state in the early Meiji government, confirmed that Dokdo was the territory of Joseon. The Meiji government wondered what it should do with Ulleungdo and Dokdo when it conducted a national cadastral survey, and after a long deliberation the Ministry of Home Affairs declared the two islands didn’t belong to Japanese territory. Daijokan agreed with the ministry’s decision and sent the notice to Shimane Prefecture.

The 1877 document was titled, “Matsushima and another island (meaning Ulleungdo and Dokdo) situated in the Sea of Japan do not lie within Japanese territory.” Nevertheless, the Japanese government sent a notice to Shimane Prefecture in 1905, saying that “Dokdo, an isle belonging to no one, would be included in Japan’s territory.” This contradicted the official document of the Meiji government 28 years earlier. The ordinance was unknown until a Kyoto University professor revealed its existence in 1987. The Japanese Ministry of Foreign Affairs remains silent about the document to this day.

The book also scrutinizes three Dokdo-related treaties concluded after Korea’s liberation from Japanese rule. With its independence Korea regained Dokdo which had been illegally subordinated to Shimane Prefecture of Japan. However, the 1951 Treaty of Peace with Japan, popularly known as the San Francisco Peace Treaty, created trouble. At the time, amid the Cold War confrontation with the Soviet Union, the U.S. policy toward Japan took a sharp turn to engagement and as a result, the

treaty handled Japan’s territory in an ambiguous manner.

Article 2 of the treaty reads, “Japan recognizing the independence of Korea, renounces all right, title and claim to Korea, including the islands of Quelpart (Jeju Island), Port Hamilton (Geomun Island) and Dagelet (Ulleung Island).” Dokdo is not mentioned anywhere, and that is the reason Japan claims they were not obligated to return the island to Korea. However, the author asserts that Jeju, Geomun and Ulleung islands were cited simply as a few examples among approximately 3,000 islands off the Korean peninsula and that all the public documents related to Korea, Japan and Allied nations are interpreted to mean Dokdo is Korean territory.

Readers will be stunned with the last chapter of the book. To rebut the Japanese Dokdo expert Kawakami Kenzo’s statement, “Dokdo is not visible from 130 meters above sea level on Ulleungdo,” the author brings up trigonometric functions and the Pythagorean Theorem. His conclusion: “You can see Dokdo from Ulleungdo if you just go up 86 meters above sea level, but from Oki Islands you have to travel out 106 kilometers on boat to be able to see Dokdo.” One may say the book offers all there is to know about the dispute surrounding Dokdo.

■ Territorial Claim Relies on U.S.-Japan Security Treaty

When asked whose land Dokdo is, about 70 percent of the Japanese reply it is neutral territory, 20 percent say it is Japanese land, and 10 percent agree with Korea’s sovereignty over the island. In contrast, 90 percent of the Japanese believe that the Senkaku Islands are Japanese territory. Ukeru Magosaki corrects their misconceptions with a grain of historical truth. The Senkaku Islands became Japanese territory only after 1872, on the grounds of “occupation of terra nullis.” However, there is an overwhelming amount of historical evidence that they belong to China.

A more serious problem is that Japan engages in territorial disputes with an optimistic outlook based on its ill-advised belief that the U.S.-Japan Security Treaty will help get their way. Magosaki dashes this “illusion” as well. He argues that although U.S. Secretary of State Hillary Clinton has said that the Senkaku Islands fall under the jurisdiction of the bilateral security treaty, it is not certain whether the United States will intervene in a military conflict. This is because Washington has the basic principle of not taking a position on sovereignty issues.

The author asks for cool-headed objectivity. “If tension between China and Japan can benefit its global strategy, the U.S. will ask Japan to take a hard-line stance against China. But if the U.S. finds

itself getting entangled in a military conflict between the two countries, it will surely pull out of the mess.”

The same goes with Dokdo. The U.S. Board on Geographic Names refers to Dokdo as Liancourt Rocks belonging to Korea. In July 2008, the board defined Dokdo as “a region that does not belong to any nation,” but in the face of Korea’s strong protest, the classification was revised with personal intervention of President Bush. At the time Japan’s chief cabinet secretary reacted benignly, saying, “There is no need to overreact.” But the author points out that he made a “historic mistake.”

A peaceful resolution is the only remaining option. The author asks readers to remember how Germany handed over Alsace-Lorraine, about 70 percent the size of Kyushu, to France after the end of Second World War, and ultimately became a leader in the EU. ■ A Must-Read for Japan’s Leaders

At the root of the territorial disputes surrounding both Senkaku and Dokdo are the dark shadows of Japan’s imperial past. Japan opened its doors to modernization through military force and justified its territorial infringement and aggression on the basis of “occupation of no man’s land.” Historical facts were concealed and manipulated as Japan wielded its superior power, if briefly, over its neighbors.

The two books shed light on the hidden and distorted truths meticulously and cool-headedly. The gross reality disguised in the name of dispute seems to emerge from the abyss of history. It occurs to me that these books should be read, before anybody else, by the leaders of Japan and then by their people.

[October 13, 2012]

www.koreafocus.or.kr

Why the Kings of Joseon Stayed Planted at Changdeok Palace

Roh Hyung-suk Staff Reporter The JoongAng Ilbo

“Palaces Narrate Tales about Joseon”

By Cho Jae-mo, Art Books, 264 pages, 17,000 won

All over the world, palaces as abodes of the powerful royalty have been the greatest works of architecture representing their times. However, the royal palaces of the Joseon Dynasty were exceptional in many ways. Apart from the main palace, Gyeongbokgung, Joseon built five secondary palaces called Changdeokgung, Changgyeonggung, Gyeonghuigung, Deoksugung and Ingyeonggung. Changdeok Palace, built by the third ruler, Taejong, was used as the king’s residence for the longest time, while Yeongjo, Jeongjo and Gojong practically stayed planted in Gyeonghui Palace, Changgyeong Palace and Deoksu Palace, respectively.

While most East Asian palaces followed the architectural protocol of Chinese palaces, where main pavilions were laid out along a north-south axis in horizontal symmetry, no other palaces in Joseon than Gyeongbok Palace respected this rule. The royal household of Joseon stressed the spatial order based on Confucian rites and ceremonies. Then, why did the spatial arrangements in royal palaces show liberal tendencies of deviating from the norm?

Professor Cho Jae-mo of the Department of Architecture at Kyungpook National University has

studied how the spatial layout in palaces changed with time by reviewing old literature written about the Joseon architectural system. In his book, “Palaces Narrate Tales about Joseon,” Professor Cho gives a straightforward answer.

In palatial spaces, the views of architects and residents of the palace could not help but clash, the book says. The rulers had their desires and ambitions that were projected onto the palace, to which were added the relatively recent influences of Western powers beginning in the 19th century.

Together those elements created cracks in the operational norms of the royal palace, resulting in the chaotic identity expressed through an unconventional spatial layout.

The most intriguing case among the examples mentioned in the book is Changgyeong Palace, which was built next to Changdeok Palace by King Seongjong in the 15th century. When Seongjong ascended to the throne, the wives of three previous kings ― Sejo, Deokjong and Yejong ― were all alive, so he had a new palace built for the queen dowagers. When a queen dowager passed away, her residence was usually left abandoned for some time and eventually removed. Therefore, construction work continued ceaselessly around Changgyeong Palace up until the 17th-18th century, because each king had to support two or three queen dowagers.

In the latter part of the 18th century, Changgyeong Palace practically served as the main palace for King Jeongjo. He resided at the palace most of the time because it was convenient to pay homage at Gyeongmogung, the nearby memorial shrine for his late father, the ill-fated Crown Prince Sado (on the current grounds of the Seoul National University Hospital).

Gyeonghui Palace, along with Ingyeong Palace, was a large project that King Gwanghaegun masterminded to establish a new architectural model for Joseon palaces. The palace was actually King Yeongjo’s favorite residence because it was near Yuksanggung (presently to the west of Cheong Wa Dae, the presidential mansion), the memorial shrine of his late mother Lady Choe, making it convenient to pay his respects. Later, during the reign of King Gojong, it was used almost as a warehouse and was eventually removed by the Japanese during the colonial period.

There is an old saying, “It’d better be Changdeokgung if you are to live in a palace.” Why did the kings of Joseon favor this palace for so long? The author points out that the sedentary lifestyle of Koreans played a role. Koreans remove their shoes and put them back on when they enter and leave a home. Considering this daily habit, and the fact that it usually occurs at the front entrance, it must have been far easier to move from one building to another if the buildings were laid out horizontally

to each other as in Changdeok Palace, rather than in a vertical, north-south axis as in Gyeongbok Palace.

Frequent quotes from difficult ancient documents and jargons from architectural history as well as speculative interpretation of rituals make the book a difficult read. However, it is not skewed singularly to the stylistic analysis of architecture. Historical imagination tracing the desires and tastes of those who roamed around the palaces shines out here and there. The reader can catch a glimpse of the authorâ&#x20AC;&#x2122;s wisdom in tenaciously studying literature to probe into the inner character of Joseon palace architecture, how it changed amid an entanglement of desires, rituals and norms.

[October 20, 2012]

www.koreafocus.or.kr

- Sung Kim: “South Korea-U.S. relations should not be affected by who is in the Blue House and who is in the White House.”

- Cho Byeong-guk: “I hoped for miracles to take place more often at the lowest level.”

Sung Kim: “South Korea-U.S. relations should not be affected by who is in the Blue House and who is in the White House.”

Kim Young-hie Editor-at-Large The JoongAng Ilbo

Sung Kim, U.S. ambassador to Korea, met with the JoongAng Ilbo, at his residence in Jeong-dong, central Seoul, on October 10. As the first Korean-American ambassador to Seoul in the 130-year history of diplomatic relations between Korea and the United States, Ambassador Kim, 52, arrived in Seoul in November last year.

One Year as Top U.S. Envoy in Seoul

Ambassador Kim expressed his views on the Seoul-Washington alliance, the Kim Jong-un regime in Pyongyang, and the North Korean nuclear issue. He said, “What’s important as a U.S. ambassador is the very strong recognition that the relationship between South Korea and the United States is so important that it will not ― and should not ― be affected by who is in the Blue House and who is in the White House.”

Q. It will be one year next month since you arrived in Seoul. Have you settled down completely?

A. South Korea is an interesting place. It’s not easy to settle down because so many things are occurring. But I’ve built a wide network, including friends.

Q. Do you speak Korean with your family?

A. My wife speaks Korean more consistently. She speaks Korean when she talks with our daughters. But I switch between the two languages. It takes me a lot of time to read Korean newspapers.

Q. How do you feel as a very successful Korean-American serving as ambassador to the country of your ancestors?

A. It’s a huge honor. The fact that I have such great respect for South Korea and great respect for the importance of the relationship between the United States and South Korea makes that special feeling even more special.

Q. Could you share your secret for success with young people?

A. It’s natural that I become careful because young Korean-Americans see me as a role model. I’m not sure if I have the magic formula for success. I think I have been very lucky, and I think diplomacy suited my personality very well. I'd like to suggest young people think globally and have an open mind.

Q. Is your background as a Korean-American an asset or burden as U.S. ambassador?

A. It’s a great asset.

Q. I hear that you’ve met the Korean rapper Psy recently.

A. I found him very bright and talented. I was deeply impressed by his very humble attitude despite his huge success. He’s made tremendous contributions to promoting understanding and cultural exchange between South Korea and the United States.

Q. I understand that you’re actively promoting an English teacher training program.

A. I invite professional English teachers in South Korea to advise them on how to teach English better. We also have a program for arranging about 100 young Americans who have received

Fulbright scholarship grants to go to the Korean countryside, where they stay with families and teach English to primary and secondary schoolchildren for a year. The total number of English teachers and scholarship recipients amounts to as many as 2,161.

Q. Kim Jong-un looks quite different from his father Kim Jong-il and his grandfather Kim Ilsung in terms of style and behavior. Are your surprised?

A. We don’t know enough about what’s happening in North Korea. Therefore, it’s difficult to tell whether some of the things that we’re seeing in Pyongyang actually mean a serious effort and commitment to reform and change. We hope Kim Jong-un will implement economic and political reforms seriously, and concentrate more on taking care of North Korean people’s livelihood than on provocations.

Q. Kim Jong-un recently watched performances featuring Disney characters like Mickey Mouse with his wife. Do you detect any positive signs of the North trying to approach South Korea, or at least the United States?

A. There hasn’t been anything concrete from Pyongyang that would indicate a serious and sincere commitment to denuclearization and other issues of concern to the United States and South Korea.

We'll have to watch more.

Q. What would Washington’s North Korea policy be if Barack Obama is re-elected or if Mitt Romney wins?

A. Regardless of who’s in the White House, I think certain principles will continue to apply, which is that in anything related to North Korea, we will continue to consult and coordinate very closely with South Korea. We will continue to focus on denuclearization.

Q. Who will make the first move, the U.S. or the North, after the new U.S. president is inaugurated in January next year?

A. Early this year, Washington and Pyongyang forged the “February 29 agreement,” but Pyongyang broke the agreement by launching a long-range missile, making it impossible to implement the “leap day deal.” Now the ball is in the North’s court. You shouldn’t have a meeting for meeting’s sake to please the North Koreans.

Q. Is the formula for discussing denuclearization and a peace treaty simultaneously after normalizing relations with Pyongyang impossible?

A. We can’t normalize relations with North Korea, as long as it continues to pursue a nuclear program, increase its missile capabilities, and get involved in all kinds of evil deeds. North Korea should start dealing with matters of our concern before sitting down to discuss the normalization of relations.

Q. There is serious conflict between South Korea and Japan over a territorial dispute and “comfort women.” The United States is interested in trilateral security cooperation between Seoul, Washington and Tokyo. Does this mean the United States should take a mediating role between Seoul and Tokyo?

A. South Korea and Japan are both close allies and friends of the United States. We don’t take a position on the territory dispute. I think it’s for the two countries to work out. I’m not denying the importance of territorial issues. We’re encouraging both Seoul and Tokyo to get back on good terms.

Q. Has a death sentence been given to the six-party talks [on North Korea’s denuclearization]?

A. It’s the six-party talks, which means, in order for it to die, all six countries [the two Koreas, the United States, China, Japan and Russia] should agree. (laughs) No such decision has been made. It has been a viable and useful forum in discussing and addressing a very important concern, which is North Korean nuclear policy. I would not declare the talks dead. I think it is important that we resume them to produce results rather than all of us heading to Beijing for a painful and unproductive process.

Q. Do you believe the six-party talks are the only forum for dialogue [on the North Korean nuclear issue]?

A. The six-way negotiation is one of viable dialogue channels. I think bilateral talks between the two Koreas are very important and useful. Dialogue between Washington and Pyongyang will also be helpful to multilateral efforts.

Q. There was criticism that former President George W. Bush’s policy was too narrowly focused on North Korea’s nuclear development to produce results.

A. At the time, policy makers believed it would be the best policy to focus on the North’s nuclear program among three issues concerning the country, that is, its nuclear ambition, missile development and human rights. The United States needs to consult and coordinate more closely with South Korea on whether to make a more comprehensive approach or focus on the nuclear issue.

Q. Kurt Campbell, the assistant secretary of state for East Asian and Pacific affairs, has said, “Our relationship with South Korea has never been better,” calling South Korea a “linchpin.”

Is the United States willing to treat South Korea as befits an ally in next year’s negotiations on the revision of the Korea-U.S. Atomic Energy Agreement, just as you did in the recent revision of missile guidelines?

A. On any issue, we respect South Korea as a friend and an ally. The nuclear negotiations are ongoing, and we understand that this is a very important matter for Korea. We’ll continue to have serious discussions and address each other’s concerns in a mutually satisfactory manner.

Q. Seoul and Washington will have talks on the operational costs of the U.S. Forces Korea.

Will the United States, which is poised to cut defense spending, impose a heavier burden on South Korea?

A. Even though it involves money, it’s not acrimonious. It’s much more of a collegial process of looking at the cost and trying to come up with a fair division of the burden. I don’t expect that just because there’s some change in our defense budget overall there will be some dramatic effect on the process on the division of cost.

Q. From what aspect are you personally interested in the South Korean presidential election?

A. South Korean politics is always exciting and dynamic. It’s hard to predict what will happen in a vibrant democracy. What’s important as a U.S. ambassador is the very strong recognition that the relationship between South Korea and the United States is so important that it will not ― and should not ― be affected by who is in the Blue House and who is in the White House.

Q. Have you met with South Korean presidential candidates?

A. Yes, I have met two candidates, Park Geun-hye and Moon Jae-in. But I havenâ&#x20AC;&#x2122;t met candidate Ahn Cheol-soo yet.

[October 12, 2012]

www.koreafocus.or.kr

Cho Byeong-guk: “I hoped for miracles to take place more often at the lowest level.”

Kim Yun-deok Staff Reporter The Chosun Ilbo

A child pokes his black head in through the crack in the door then disappears. But soon he comes back and suddenly runs into the doctor’s arms. “Doctor!” “Jin-su, you’re here!” Because of the injections the doctor gives, there are some children who cry at the sight of her. But the tears don’t last long. This woman, who does not wear a doctor’s gown to avoid scaring the emotionally and physically scarred children she looks after, has a heart as big as a mountain and as deep as the ocean.

It’s been 50 years since she started taking care of abandoned children at Seoul Municipal Children’s Hospital and Holt Children’s Hospital. The road has been exhausting and tough but Dr. Cho Byeong-guk, 79, says she is unable to stop working because of the “small miracles” she has seen.

“I’m human, just like anyone else. Of course I thought about quitting at times. But strangely enough, whenever that thought crossed my mind things happened, things inexplicable to a scientific mind.”

Dr. Cho has been selected as one of this year’s recipients of the Bichumi Women’s Awards given by the Samsung Life Public Welfare Foundation. Though it has been 20 years since she officially retired, Dr. Cho has continued with her work due to the lack of a suitable successor. Before interviewing her at Holt Welfare Town in Ilsan, I read her autobiography “Granny Doctor Lays

Down Her Stethoscope” (Samsung Publishing Co.). I discovered the miracles inside. ● Picking up the Stethoscope Again Q. You’ve won several awards this year: the Bichumi Women’s Award, the Paradise Award, and the Order of Civil Merit, the Dongbaek Medal.

A. As a pediatrician, it’s my job to look after children. But it seems I’m being specially praised for looking after children without parents. Or perhaps it’s because I’m getting on in years. (laughs) I’m grateful, of course.

Q. I was moved by your book, “Granny Doctor Lays Down Her Stethoscope,” which you released three years ago.

A. Thank you. When I wrote the book I wondered if people would be able to imagine the situation, the suffering of the orphans and adoptees back in the 60s and 70s when the whole country was poor.

I never met Park Wan-suh (the novelist), but I heard that she cried as she read the book. It’s because we’ve lived through the same times, since she’s two years older than me.

Q. Why did you fill the book with stories of the children you’ve met over the past 50 years rather than writing an autobiography?

A. What’s there to write about my life? It’s the children’s lives that are important. I never had time to reflect on myself. I was too busy checking if the children were alive or not, and how we could make every effort to save them. I don’t know how the days passed. One baby even came with the umbilical cord still attached, wrapped in blood-stained drawers. At first we thought the butcher’s boy was delivering meat to the staff kitchen, but it turned out to be a policeman. I was astounded when I saw the blood-covered little thing, but then I saw so many of them··· The baby was a worry of course, but I was also worried about the mother. She would have run away somewhere, still bleeding.

Q. Over the past 50 years you’ve treated some 60,000 children.

A. Around 60,000 or 70,000, I don’t know. I haven’t kept count. At least 80 per day, and one time we had as many as 223 come in one day. It’s not possible to see more than 100, however. At that

point, the stethoscope hurts your ears. In 1972, there were as many as 2,300 children under the age of three as inpatients at Seoul Municipal Children’s Hospital.

Q. Is that because abandoned children have more diseases than usual?

A. It’s only natural since most of them were abandoned on the street, in the cold of winter at that.

They would have missed who knows how many meals. In an orphanage that was understaffed, it was impossible to hold the babies and feed them, like a mother would. A diaper was placed at the baby’s head and the bottle rested against it. If the baby turned its head then the bottle would fall out of its mouth. The milk would soak into the diaper and the baby would go hungry. The children were malnourished and when a virus went round··· Children grow not on milk and rice but on their mother’s loving looks and caresses.

Q. You say there were a lot of children who didn’t survive in the end.

A. That was true in the 1970s when our medicine was underdeveloped. I blamed myself for my incompetence as I looked on the poor lifeless things and wrote the death certificates. Those children, born in the unhappiest circumstances, went out of this life wrapped in a few sheets of paper··· I still pray that I won’t forget the names that I wrote on those death certificates.

Q. I hear that official records note where the child was “discovered” rather than “abandoned.”

A. The word “abandoned” is sad but the word “discovered” carries hope. It’s something we learned from the Americans. Before that we used to baldly write down “gia” (“abandoned child”). But we realized that when the children grew up and came back to find their roots they could be hurt all over again by the word. People begged us not to use the word “abandoned” anymore, so we made the change in the 1980s.

Q. You retired in 1983 but you’re still working here at Holt?

A. A new doctor came but stayed only a few months, driven away by the low pay and tough working conditions. After I retired I was preparing to go and live in Canada where my children were when I received an urgent phone call from Holt. They asked me to come back to work for them. So I went back and worked for another 15 years under the title of “former director.” Then when my

shoulder grew too bad to continue I laid down my stethoscope for good in 2008. That’s when I wrote my book. But then I got another phone call from Holt. If I wasn’t doing anything else could I come and look after disabled children at Holt Welfare Town in Ilsan, they asked. I planned to help out for four months at first but it’s already been three years now. Seems I can’t get away from this work··· (laughs) Q. Holt Welfare Town in Ilsan is a different institution from Holt Children’s Hospital where you worked previously.

A. People think of Holt Welfare Town in Ilsan just as a place that sends children overseas for adoption, but for a long time it has worked for the rehabilitation and welfare of disabled children. It started out as a facility looking after disabled children for whom adoption proved difficult. It was the dream of the founder Harry Holt to build apartments especially for the disabled. Now his daughter Molly Holt is working hard to fulfill her father’s dream. ● Crying to the Sound of the Soul

Hyeon-gun, mentally and physically disabled, was hard to handle until he became a member of “Sound of the Soul,” a choir consisting of seriously disabled residents of Holt Welfare Town.

Practices were held three times a week and on those days Hyeon-gun was always calm and tried hard to concentrate. He can’t read and can’t read a musical score but he was able to follow the beat and stay on key under the conductor’s direction. In the end, he became a soloist.

Q. In the book you describe how the audience cried when Hyeon-gun sang “You were Born to be Loved.”

A. I was wondering how Hyeong-gun, who had nothing but his singing voice, was able to console people much more learned and more advantaged than him, how he was able to bring forth such pure tears from barren hearts. God is just! (laughs)

Q. What is Hyeon-gun doing now?

A. He graduated from the Holt Special School and is now attending a junior college. He may be a technician making electronic parts now, but he is still a child who is happiest when he’s singing.

Q. I also liked the story about Yeong-su, the child who was sent to the United States for adoption and came to see you after he had become a physical therapist.

A. He wanted to treat people who did not have free use of all four limbs, like himself, especially children. Yeong-su also told me about another miracle. His wife couldn’t have babies so they adopted their first child, but three years later she became pregnant. He’s raised his two daughters so well. Do you know the two girls’ names? The first is named Molly Holt, and the second Molly Byeong-guk, after me! (laughs)

Q. You also wrote that after 50 years of working with children, you began to wonder about the meaning of “motherhood.”

A. I’ve seen mothers who abandoned babies of the same body and blood as soon as the baby was born, and I’ve seen other mothers who devote everything to a child that has not a drop of the same blood. Is the experience of pregnancy and childbirth necessary to become a mother? Maternal love grows as you hold the baby, look into the baby’s eyes, and change the baby’s nappies.

Q. You’ve seen many cases of such noble motherhood. I was surprised to learn that many of the mothers you talked about were not only to be found in countries like America or Sweden but also, in many cases, in Korea.

A. Of course. The women are not great intellects or rich people. In fact, they’re very ordinary women. But the magical power to heal a child’s heart or to make a child smile is present in everyone. ● The Magical Power of Motherhood Q. Even so, it’s not easy to decide on adoption. You have said that it is best for a disabled child to be adopted by experienced parents who have already raised one healthy child.

A. I would like to see the children adopted by people who don’t make a great fuss but treat the matter as just adding another child to the family. But it must not be forgotten that wounded hearts heal slower than wounded bodies. It takes infinite love and patience. To the child, adoptive parents are like a safe place where they can heal their sadness and a base from which they can gain the courage to go out into the world.

Q. In some cases adopted children are sent back, or even abused by their adoptive/foster parents, as in the movie “Susan Brink’s Arirang.”

A. Of course, that does happen. That’s the reason for the opposition to overseas adoption these days.

Some of the children adopted overseas ask us reproachfully why we sent them to another country.

But child abuse is often committed by a child’s real parents. The children who ask why we didn’t leave them in the orphanage rather than send them to be adopted overseas can say that because they have no memory of what the orphanage was like. I believe that having a family that can serve as mentors, role models, and a shelter for the child is much better than the orphanage, even if the family is not perfect.

Q. You wrote that when overseas adoption was banned in 1989 you felt “a sense of crisis, as if my whole life were being shaken up.”

A. The ban was soon overturned, but at the time I was deeply hurt to see my whole life’s work evaluated as the export of orphans. All we had wanted to do was to find loving parents and families for children who were sick or without homes, and since such parents were not to be found in Korea we looked for options overseas.

Q. The children continue to come back to see you, don’t they?

A. Of course. At first they come back to the orphanage they used to live in and on their records, see my name “Cho” written down as the doctor who gave them their last check-up, and come to see me.

They love it when I say things like “I touched your willy back in the days you were in nappies,” and come up to give me a hug. Children whom I treated more than five times often say, “You’re my Korean mother.”

Q. Do they hold a grudge against the parents who abandoned them?

A. They come back to Korea to find their roots, not to vent any resentment against their birth parents. Rather they pity the pain and loneliness of their mothers who had no choice but to abandon them. They want to reassure their parents, tell them not to feel guilty for what they did as everything turned out well. But the parents often find that they cannot face the child and in the end don’t show up. Nine out of 10 of the children feel that way about their birth parents. It’s good to see that.

● The War and ‘International Beggar’

Born in Pyongyang in 1933, Cho Byeong-guk graduated from the school of medicine at Yonsei University in Seoul. Her work as doctor for orphans and sick children was influenced by her family background. Her maternal grandfather, from a devout Christian family, was a philanthropist who took care of poor children who had come up to Seoul from the provinces and taught them how to read and write. Her father and mother both graduated from university with the help of missionaries and became teachers. Cho decided to become a doctor when she saw some of her younger siblings die helplessly and because of war.

“One of my siblings died of a nosebleed that would not stop and another from measles and pneumonia. I can still remember my mother closing the lid on the coffin,” Cho says. “When we were fleeing south during the war I saw a lot of suffering children. There was a baby crying as he clung to his dead mother’s back, and children lying on the railroad tracks with severed arms. That’s when I resolved, as the eldest of seven children, that I would learn how to look after my brothers and sisters if something happened to our parents, and to treat sick children.”

Q. Who gave you the name “Byeong-guk”?

A. My father was a Christian and did not discriminate between sons and daughters. So he named all his daughters using the (Chinese) character for our generation (usually reserved for sons). “Byeong” means “to shine” and “guk” means “chrysanthemum.” It’s a real boy’s name. I heard that when I was four my parents discovered I was put down on the family register as a boy, so had to have the record corrected.

Q. You say your father objected when you wanted to enter medical school.

A. He believed it was more suitable for a girl to study English literature or pharmacy. He ripped up my medical school application papers, so I secretly had a seal made with my father’s name on it and submitted the newly prepared forms. You could say I was guilty of forging an official document. (laughs) Even now I laugh to think of the interview. When I was asked why I wanted to enter medical school, I grandly declared that I wanted to lower the infant mortality rate.

Q. For your practical placement after graduation, you worked at Seoul Municipal Dongbu

Hospital, which looks after the children of the poor, and at Holt.

A. My energy overflows when I’m with children. I did volunteer work at Holt every Saturday before I was officially employed at Seoul Municipal Children’s Hospital. Looks like it was my fate.

Q. When you were working at Seoul Municipal Children’s Hospital, I hear you earned the nickname “international beggar.”

A. I was so eager to do the job well. And I worked so hard that the hospital director said he wouldn’t exchange me for 10 male doctors. To operate on and treat the children I ran here and there to gain donations from Germany, Norway, the United States and other places, and I guess that’s why I earned such a nickname··· Q. I understand your monthly wage at the Seoul Municipal Children’s Hospital was less than one million won. And when you were director of the Holt Children’s Hospital it was about three million won.

A. The children’s hospital meals were so poor that if a child was lucky to find a dried anchovy in his soup, he hid it away to eat later. At home, my children could at least have eggs with their rice.

This used to bug me, so when I got my wages each month I would buy 100 eggs and take them to the hospital.

Q. Your husband was a Yonsei University classmate, wasn’t he?

A. He was an ear and throat specialist, and was very supportive of my work. The children I looked after, because of their low intellectual capabilities, they would often swallow pins, buttons, coins, and so on. When this happened, I would rush them to Hanyang University Hospital where my husband worked, usually at around 4 p.m. when the rush of outpatients was coming to an end. We agreed that after retirement we would do volunteer work in a village that had no doctor and spend the rest of our lives there, but he left this life a bit too early.

Q. As a mother you were so busy that you never had time to check your three children’s homework. Did your children ever complain?

A. They were healthy, that was enough for me. On weekends I made time to bake for them, and on

my on-duty days I would bring the kids to the hospital. I had them feed the children as I wanted them to see what kind of work I did. None of them have become famous or anything, but they know how to help others less fortunate than themselves, they’re not imposters — I’m satisfied with that. ● The Surprise Gift of Hope How desperate the mothers’ circumstances must have been to abandon their new-born baby. How great the pain and suffering must have been for the child who, after spending ten months in the mother’s womb, is practically rushed out and then abandoned. But it’s too early to point the finger at an abandoned child. There are many people around us who, despite being orphans, have carved out their own lives with great aplomb. The life of each and every one of these people is hope blooming in low places, and a miracle··· (From “Granny Doctor Lays Down Her Stethoscope”)

Q. In your book you wrote that when there is something you really want, then God always answers that prayer.

A. When doctors recognize their own limits, that’s when they witness a miracle. An unconscious person wakes up, and a person who did not seem likely to live revives. I hoped for such miracles to take place more often at the lowest level, the place where sick and abandoned children were gathered.

Q. Do you believe in the existence of God? A. Where do you think all the innocent souls of children who die go? It’s only fair if they go to heaven and live there peacefully like the angels.

Q. Isn’t God something human beings created to comfort themselves?

A. Perhaps you could see it that way. But it’s just strange when I look back on the 80 years of my life. Why was I born in a Christian family, why did my grandfather teach poor children how to read and write and help them to marry, and why did I study medicine, despite my father’s objections which drove him to rip up my application papers? Why did God save me at that time I was almost killed in a car accident when I was working at Seoul Municipal Children’s Hospital? Looking back, I believe that these things did not happen according to my own will or because I wanted them to happen.

Q. Many people despair over economic hardship. Some even think of escaping through death.

A. When her marriage broke up, a professor’s wife took her two-year-old child and jumped in front of an oncoming train. The mother died and the child lost both legs, though it lived. It is difficult to find parents for disabled children, and I was upset by what the mother had done. But a miracle happened. A couple in America who were in the business of making prosthetics and other aids for the disabled contacted us about adopting the child. Ten years later the parents sent a photo of the child on roller skates. I was so grateful that I buried my nose in the photo and cried. When there seems not to be the slightest sliver of hope people think about death, but have they really looked properly around them? Hope comes suddenly in some corner of life, completely unexpected. How unfair it would be to miss that surprise present and give up on life.

Q. You turn eighty next year.

A. The letter from one adoptee contains this line: “It’s time to stop what you are doing now and say thank you to someone who has helped you.” This expresses how I feel exactly. If I could I would bow to the numerous nurses who have helped in all sorts of way and made it possible for me to continue this work, and all the nameless volunteer workers. When a person is about to jump to his death, the sound of someone calling out to him can make him change his mind. That’s why we all need friends and neighbors. Make sure to reach out and offer a helping hand, if there is someone close to you living in despair.

[October 20, 2012]

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Publisher Kim Woo-sang Editor Lee Kyong-hee Editorial Board Kang Byeong-tae Chief Editorial Writer, The Hankook Ilbo Kim Hak-soon Senior Writer & Columnist, The Kyunghyang Daily News Kim Yong-jin Professor, Ajou University Yun Chang-hyun Professor, University of Seoul Hahm In-hee Professor, Ewha Womans University Kim Ho-ki Professor, Yonsei University Choi Sung-ja Member, Cultural Heritage Committee Hong Chan-sik Chief Editorial Writer, The Dong-a Ilbo Robert Fouser Professor, Seoul National University Peter Beck Korea Represetative, Asia Foundation â&#x201C;&#x2019; The Korea Foundation 2012 All rights reserved