KOREA FOCUS - July 2012

Table of Contents

Korea Focus - July 2012 - TOC - Politics 1. Impact of Pyongyang’s Claim of Nuclear Power 2. Presidential Aspirants Need Global Perspectives 3. Redefinition of Korea's Progressivism 4. Crucial Court Ruling on Japan's Conscription of Forcible Labor 5. First Step to Korea-China-Japan Economic Integration - Economy 1.Solutions to Deepening Household Debt Crisis 2. Welfare and Tax Increase 3. Time to Overcome Growth Complex 4. Kaesong’s Growth into Global Region 5. Mixed Feelings after ADB Meeting - Society 1. Rise in One-person Households Demands Major Changes in Welfare Policies 2. Korean Constitutional Court Leads Asian Constitutionalism 3. Koreans Outside the National Borders 4. Aged Houses versus Young Towns 5. Affection between Mentors and Disciples beyond Time and Space - Culture 1. K-pop’s Power and Challenge Witnessed in Colombia 2. Korean Cultural Renaissance 3. Notable Changes in the Trend of Japanese Tourists 4. The Fall of Online Bookstores 5. A Look Back at 30 Years of the Internet in Korea - Essay

1. Social Changes in North Korea 2008-2011: Interviews with Defectors 2. The Rise of China and Korea’s Military Strategic Choices 3. Outplacement Support: Solution to Job Insecurity of Older People - Feature 1. The Moon Sung-lim Story: Escape from DPRK and Life in the South - BookReview 1. Women of Joseon Embraced Sexual Independence in Patriarchal Society - Interview 1. Kang Dong-suk: “The show is on, and my job is that of a veteran showman.”

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- Impact of Pyongyang’s Claim of Nuclear Power - Presidential Aspirants Need Global Perspectives - Redefinition of Korea’s Progressivism - Crucial Court Ruling on Japan’s Conscription of Forcible Labor - First Step to Korea-China-Japan Economic Integration

Impact of Pyongyang’s Claim of Nuclear Power

Koh Yu-hwan Professor of North Korean Studies Dongguk University

After North Korea’s latest long-range ballistic rocket blew up minutes after its launch in April, many observers said that the possibility of a third nuclear test by the North had become stronger. However, Pyongyang discounted the speculation, saying that was a gimmick instigated by the United States in an attempt to force a confrontation with North Korea and declaring no intention of a nuclear test for the time being. A spokesman of the North’s Foreign Ministry said on May 22 that because the rocket launch was peaceful, ostensibly to put a satellite into orbit for scientific and technological purposes, no “military measures” such as a nuclear test were ever planned.

While the denial of an imminent nuclear test was fortunate, North Korea soon created a new source of concern as it proclaimed itself a nuclear power in the

preamble of its newly amended constitution, which praises the achievements of the late paramount leader, Kim Jong-il. No other country has used its constitution to declare itself a nuclear state.

The pronouncement was apparently inevitable for the power transition to Kim Jong-il’s youngest son, Jong-un. The revised preamble, which justifies the hereditary succession, eulogizes the “three revolutionary legacies” of the Kim Jong-il era: achievements in nuclear development and space exploration, industrial revolution in the new century and enhancement of victorious national spirit. In expounding on the nuclear progress, the revised constitution credits the late leader with his superb guidance in making North Korea a nuclear power.

The proclamation as such has invited widespread concerns that another obstacle is now in place, further undermining the prospects for a resolution of the North Korean nuclear issue. First of all, the exposition of nuclear possession can be taken as an expression of intent not to abandon nuclear arms.

Internally, a primary purpose of Pyongyang’s nuclear proclamation must have been to soothe uneasiness among North Koreans following the death of Kim Jong-il last December. Its aim was seemingly to instill confidence in the new political order and regime by propagating the North’s international prestige as a nuclear power. In all, Pyongyang maneuvered to exhibit at home and abroad its nuclear deterrence capability and intent of not easily giving up its nuclear ambitions. Another conceivable message is that the North wants to conclude its protracted negotiations with Washington on nuclear issues, with the focus on a peace treaty and normal diplomatic relations with Washington.

While North Korea may qualify as a “de facto nuclear power” with a record of

two nuclear tests, the international community, including South Korea and the United States, has refused to formally recognize such a status. Upon the revelation of the North’s constitutional amendment in late May, a spokesman of the U.S. Department of State made it clear that Washington’s long-standing policy does not recognize North Korea as a nuclear state. The South Korean government also refused to accede to the North’s claim of being a nuclear power.

Recognition of North Korea as a nuclear state would mean a virtual collapse of the Nuclear Non-Proliferation Treaty (NPT) regime, which does not classify the North as a nuclear weapon state. The North’s nuclear possession also trespasses on U.S. President Barack Obama’s initiative for a “nuclear-free world.” Yet another concern is the probability that recognition of North Korea as a nuclear state would spark a feverish nuclear arms race in Northeast Asia.

Because it has attained the coveted status as a nuclear armed state and proclaimed itself a “strong and prosperous nation” in April on the occasion of the centennial anniversary of the birth of its state founder, Kim Il-sung, North Korea does not seem to be in dire need of an additional nuclear test. Notable in this respect is a June 5 commentary of the Chosun Shinbo, the organ of the pro-Pyongyang General Federation of Korean Residents in Japan, which stressed that North Korea, as a nuclear power, is drawing up a “grand-scale policy of peace diplomacy to change the outmoded order of the (Northeast Asian) region.”

The newspaper, published in Tokyo as a mouthpiece of Pyongyang, also asserted that “grounds have been prepared for the United States to be engaged in dialogue again (with North Korea) without concerns about ‘additional provocations’ such as a nuclear test.” The commentary can be regarded as an expression of the North’s wishes to resume talks with Washington, based on

their bilateral accord on February 29, which would have led to U.S. food aid in exchange for the North freezing its missile development. The rocket launch in April put the accord on hold.

With Pyongyang exercising restraint and welcoming renewed high-level talks with Washington, which could lead to the amelioration of bilateral relations and resumption of six-party denuclearization talks, momentum seems to be gaining to reduce tensions on the peninsula and shift to dialogue and negotiations. In the North’s hereditary regime, the founding father Kim Ilsung’s lifetime instruction for a “nuclear-free Korean peninsula” should serve as a dictum that supersedes constitutional provisions. Once peace talks are fully under way, Pyongyang may be engaged in realistic negotiations with little regard to the reference of nuclear power in the preamble of its newly amended constitution.

[Hankook Ilbo, June 6, 2012]

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Presidential Aspirants Need Global Perspectives

Kang Chun-suk Editor-in-Chief The Chosun Ilbo

“World” and “globe” are words that I have not heard presidential hopefuls in our country utter for quite some time. Of course, they would argue otherwise, claiming that they have said those words at least scores of times. But my concern is how seriously they use the words in addressing national issues in the context of the global situation and worldwide problems. If there have been any presidential wannabes who earnestly discussed far-reaching visions and measures the nation should take to cope with the complex situation and trends of the world, I would ask them to raise their hands and come forward. And if the world is too grand in scale, those who instead have employed such terms as “Asia” or even “Northeast Asia” may also raise their hands.

This is the bleak political landscape of the Republic of Korea, which is

scheduled to hold a crucial presidential election in several months. It really displays a foolhardy political culture that lacks sound insights. The Korean economy is 96.7 percent dependent on external trade and 49.7 percent on exports. The country has to import 100 percent of not only its fossil fuels, including oil and gas, but also iron ores and other major raw materials. If the imports are halted, the Korean economy would have to surrender. Most of the imported raw materials are turned into goods for overseas markets. If exports are blocked, the economy would surely stumble. Because an absolute majority of wage earners is engaged in export-related occupations and businesses, downturns in the world economy directly affect the livelihoods of Korean workers in general.

Despite these hard realities, the nation’s presidential aspirants ― be they conservatives or progressives, and old or young ― are all engrossed in criticizing something and drawing distinctions from rivals. They unanimously trumpet building a welfare state, though in varying degrees, as if it is unrelated to the nation’s economic condition, which is critically dependent on global economic developments.

Earthquakes and volcanic activities mostly occur along the edges of tectonic plates, such as the Pacific Plate and the South American Plate that often collide to create tremors. Similarly, international disputes and wars flare up along the edges of “political plates.” The Korean peninsula is situated at a location straddling the newly emerging “China Plate” and the century-old “America Plate,” which create one of several vulnerable boundaries around the world.

That is, peace and war on the peninsula are bound to be influenced by whether Sino-U.S. relations are cooperative or at odds.

Nonetheless, I have yet to learn that any of our self-styled presidential contenders are earnestly committed to charting the future security of the

Republic of Korea that sits upon a belt of potential political quakes. No one can predict precisely when North Korea, a state handed down from Kim Ilsung to his son Kim Jong-il and then again to his son Kim Jong-un as if it was family property, would fall on the shoulders of a South Korean president as a critical burden to be resolved. Except for the moldy hardcore elements within the progressive parties in South Korea, nobody believes North Korea will remain among the world nations for any meaningful period of time. The nation needs two or three folds of tightly-knit cooperative systems among Northeast Asian countries whether it seeks an orderly dismantling of North Korea or minimal damage from its sudden collapse. Nonetheless, I haven’t found a trace of agony in the face of any of our would-be presidents.

The international ratings agency Fitch downgraded its assessment of Japan’s sovereign credit from “AA” to “A+” on May 22, citing the growing risks from the country’s public debt ratio. Japan’s downgrade to the same level as Korea, China and Taiwan for the first time in history reminds us of the mutability of the rise and fall of hegemonic powers in Asia over the past century.

It was in 1979 that “Japan as Number One: Lessons for America,” an analysis of Japan’s development into one of the world’s most effective industrial powers, written by Professor Ezra Vogel of Harvard University, became a bestseller. In 1989, a group of MIT professors, including Michael L. Dertouzos, published “Made in America: Regaining the Productive Edge,” was another eye-opening bestseller influencing public discussion on changes needed to improve America’s industrial productivity.

At the dawn of 1990, however, Japan’s stock market nosedived to usher in a prolonged slump and books propounding quite opposite theories began to sweep bookshops across the world. Among notable books of the new stream were “Can Japan Compete?” authored by Michael E. Porter, another Harvard

professor, and published in 2000, and “Japan on the Road to Collapse: Where Is It Headed for?” by renowned Japanese journalist Takashi Tachibana in 2006.

Rounding up the ups and downs was “The Logic of Japanese Politics: Leaders, Institutions and the Limits of Change” by Professor Gerald L. Curtis of Columbia University, who presented a superb analytical overview of Japanese politics.

If you keep your eyes closed while riding on a speedy train, you cannot tell how fast the train runs is running. The swiftly passing views outside the window would play the role of a speed indicator and help you guess the speed.

Watching the outside world carefully to fathom international changes and thus cultivate global perspectives is essential in figuring out an optimal speed and direction with which the Republic of Korea should thread its way through the global environment. Anyone who aspires to become the country’s top leader should keep his eyes on developments in the world and present to the electorate his views on how the nation must steer its course in the rapidly changing world.

[May 26, 2012]

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Redefinition of Korea’s Progressivism

Im Hyug-baeg Professor of Political Science Dean, Graduate School of Policy Studies Korea University

The latest conflict within the United Progressive Party (UPP) reminded me of what Professor Adam Przeworski of New York University opined. He said that a progressive political struggle is a fight inside a workers’ party over how to define itself before challenging a conservative party. An answer to the question of defining progressive parties in South Korea lies in this brief bon mot, I believe.

In the late 19th century, German social democrats attempted to realize “democratic socialism through electoral participation” or “participatory socialism,” not revolutionary socialism, believing in the authentic Marxist theory of class polarization that “it is a matter of time for all but a handful of

exploiters to become proletarians.” Although it became the winner in general elections, the Social Democratic Party (SPD) of Germany failed to gain an absolute majority to form a government on its own. The SPD’s rosy dream was shattered as the proportion of workers fell after World War I. Faced with the danger of permanent election failures, an ideological conflict erupted within the SPD over “who is the working class?” An answer to the SPD’s “Machtergreifung” (seizure of power) came from its Godesberg Manifesto of 1959.

As a way to seize power, the manifesto envisioned building a party for wage earners, not an orthodox party for the working class, and becoming a majority party by recruiting intellectuals, white-collar workers, the middle class, housewives, retirees, and even students, who “work with their head,” as its members. The SPD finally won elections and took power by advocating American-style platforms and policies that attracted consumers, taxpayers, citizens, and the “people,” instead of propaganda policies, such as nationalization, which only appealed to the working class. It also discarded Marxism and communism, accepted capitalism, and recognized the NATO. South Korean progressives have attempted to enter mainstream politics as they were allowed to found political parties after the country became a democracy.

But no progressives were elected to the National Assembly until 2004. Even then, the victory was not the result of their party reform. Rather, it owed to a new election system that allowed voters to cast two ballots ― one for candidates and the other for parties. The progressive politicians continued to face election failures because they failed to establish their own identity before grappling with mainstream conservative parties. Of course, they waged an internal struggle over their ideological disposition. A typical case was the debate between advocates of national liberation movement (NL faction) and those of people’s democracy (PD faction). But South Korea’s progressive

movement took the anachronistic path of Stalinism.

Moreover, after a fierce struggle over ideological line, the NL faction became the mainstream group supporting North Korea, demanding the withdrawal of U.S. forces from South Korea and an end to the Seoul-Washington alliance, and refusing to sing the national anthem. As a result, an anomalous ideological dichotomy was born, whereby support or opposition of North Korea, instead of labor or capital, became the litmus test for identifying progressives (jinbo) and conservatives (bosu). South Korea’s progressives thus invited ideological offensives from conservative politicians, who labeled them as North Korea followers (jongbuk) or pro-North Korean (chinbuk) forces. This led the progressive parties to suffer a crushing defeat in general elections in 2008, with their power bases dwindling significantly as they were rejected by their own traditional supporters, such as workers, the poor and less privileged, and intellectuals.

The latest chaos inside the UPP has triggered fears that South Korea’s progressive party movement could collapse. But just as a bird flies with both wings, representative democracy can properly function only when the leftright political spectrum remains in equilibrium. Accordingly, only when the progressive parties remain significant parliamentary forces can the quality of South Korean democracy be improved.

The “save the progressive party” campaign currently under way aims to revamp the entire progressive camp. But the progressives cannot survive the ongoing fiasco, no matter how hard they try to reform their party or create a new party and overhaul their camp by forming an emergency council and ousting controversial members. In order to resuscitate their camp, the progressives should first try to redefine their ideological position before attempting to retrofit their parties. If they continue to regard North Korea as

their role model at a time when the regime based on Kim Il-sung’s juche ideology has carried out a third-generation dynastic transition, they are no more than anachronistic leftist reactionaries.

While they claim their party is a democratic party for workers, the progressives have been mostly preoccupied with the unification movement, paying attention only to the aristocratic unionists at conglomerates, but not to the tough lives of non-regular workers, low-income earners and jobless people.

“Progressive politics disregarding labor” is not progressive at all. By the same token, the unrealistic progressivism advocated by the PD faction, which opposes supporters of the juche ideology while rejecting capitalism in this era of globalization, is not progressive, either.

South Korean progressives have clung to their own definition of “progressivism” as anti-Americanism, anti-capitalism, anti-dictatorship, and liberation of the nation and people, which they adopted during the period of pro-democracy movement in the 1980s. They should have redefined themselves during the post-Cold War era of globalization, when the nation achieved democratization. As a result, no progressive party has been successful in elections. The progressives of this country have failed to learn from how Western social democrats tried to organize “people,” or voters, instead of classes, and redefined their parties as parties for wage earners, or people, rather than parties for the working class, in order to win elections.

In his book “Elements of the Philosophy of Right,” Georg W. F. Hegel states, “What is rational is real and what is real is rational.” No progressivism that is defined as a crude, radical and unrealistic ideology can take root among the masses. A progressive party armed only with genuine progressivism that is based on the realistic interests of the people can enter parliament and dream of taking power.

[Dong-a Ilbo, May 24, 2012]

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Crucial Court Ruling on Japan’s Conscription of Forcible Labor

Editorial The Hankyoreh

The Supreme Court on May 24 passed an epochal ruling that Japanese companies are responsible for compensating Korean citizens who were conscripted by imperial Japan for labor during the colonial period, overturning lower courts’ decisions in a lawsuit for recovery of damages. This is a very meaningful ruling not only legally but also historically and politically. We welcome it. Though too late, it is still good for the victims and their descendants to lessen their mortifications even a little. The judicial branch deserves positive acclaim for its efforts to make a series of rational judgments on past wrongs.

In August last year, the Constitutional Court ruled that the government’s failure to help “comfort women,” the victims of imperial Japan’s mobilization

of military sex slaves during World War II, exercise their right to compensation violates the spirit of the Constitution. The Korean labor conscriptees filed a claim for damages with a Japanese district court, but their claim was dismissed eventually by the Japanese Supreme Court. Back in Korea, their claim was also rejected by the Busan District Court and the Busan High Court consecutively on the grounds that the statute of limitations had expired, mirroring the Japanese courts’ decisions.

But the Supreme Court of Korea said it cannot support the Japanese courts’ decisions because they run counter to the fundamental values of the Korean Constitution, which regards imperial Japa’s compulsory conscription of Korean citizens for labor as illegal. Considering that Japan’s occupation of the Korean peninsula was illegal from a constitutional standpoint, the Supreme Court contended that it cannot support the Japanese courts’ views that imperial Japan’s application of its national general mobilization law and national conscription law to Korean citizens was valid.

It is no exaggeration to say that this is a great ruling that deserves its place in the history of constitutionalism as it properly invokes the spirit of the Constitution, the highest law of the country. In regards to the statute of limitations that prevented the lower courts from making the right decisions, the Supreme Court concluded that no statute of limitations has expired in view of the fact that imperial Japan’s act was against the “principle of good faith” as in the cases of torture under the past authoritarian governments.

From a political viewpoint, the Supreme Court’s ruling is an alarm bell in the Korean government, which has virtually turned a blind eye to the issues of comfort women and labor conscriptees from the colonial era on the pretext of the “Treaty on Basic Relations between Japan and the Republic of Korea,” which the Park Chung-hee regime signed in 1965. Seoul has in fact paid no

heed to Tokyo’s contention that all Korean citizens’ claims for damages have expired under this treaty.

The Korean government should take to heart the significance of the Supreme Court’s ruling in support of individual citizens’ claims for damages, which came on the heels of the Constitutional Court’s verdict that stressed the government’s constitutional responsibility for fulfilling its obligations concerning the shameful past history. The government should note that, apart from lawsuits filed by civilians, it remains responsible for holding the Japanese government accountable for political and historical wrongdoings committed by imperial Japan in the past.

The Supreme Court’s ruling, which reaffirmed the constitutional spirit denying Japan’s colonial rule, carries historical significance in view of the indiscreet attempts by some rightist forces in the country, including the “new rightists,” to distort history by beautifying the colonial period. Historically, the Korean government’s failure to liquidate the legacy of Japanese colonialism has imposed a heavy burden on the people, which is exemplified by the miserable lives of the labor conscriptees and comfort women. In various respects, the latest court ruling is awakening the people to this reality and asking the government to fulfill its duties.

[May 25, 2012]

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First Step to Korea-China-Japan Economic Integration

News Commentary The Yonhap News

Seoul, Tokyo and Beijing signed an investment guarantee agreement on May 13. They also agreed to begin trilateral free trade negotiations within this year.

President Lee Myung-bak, Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda reached the agreement during the fifth trilateral summit held in Beijing. The signing of the investment guarantee agreement, the first step toward regional economic integration, is considered a major achievement of the summit. It also carries considerable historical significance as the first economic agreement concluded by the three Northeast Asian neighbors.

What makes the agreement more notable is that a legal and systemic foundation has been laid for investment guarantees. Especially, the agreement will be of great help to South Korean companies’ investment activities in

China, as it specifies fair and impartial treatment, adequate protection and safety guarantees for investments. The agreement will take effect after each country undergoes its own domestic procedures, including parliamentary ratification. We expect it will promote mutual investments and trade among the three countries.

In another meaningful endeavor, the three leaders reached an accord to kick off trilateral free trade talks this year. To this end, they agreed to embark on domestic procedures and working-level talks soon. The three countries completed joint research on the feasibility of a trilateral free trade agreement (FTA), with the participation of their industrial, governmental and academic sectors, in December last year.

It is said the joint research was finished a year ahead of schedule. Accordingly, the latest summit could provide momentum for launching full-fledged talks.

As Seoul had earlier announced its plan to embark on bilateral FTA talks with Beijing separately, the start of trilateral negotiations would be the icing on the cake. Added to its free trade deals already in effect with the European Union, the United States and several other countries, a three-way FTA with China and Japan would push Korea closer to becoming an “FTA hub.”

South Korea, China and Japan account for one-fifth of the world population and the global GDP, and one-sixth of the global trade volume. They are that much dynamic and their potential is boundless. This is why many people are saying that the three countries’ pursuit of an economic integration through more exchanges and cooperation will contribute to overcoming the global economic crisis. In this regard, we hope that the three countries will conclude a trilateral FTA as soon as possible.

It was natural that the three leaders also discussed the situation on the Korean

peninsula during their latest summit. They highly estimated the U.N. Security Council’s prompt adoption of a strong-toned chairman’s statement on the North’s launch of a long-range rocket and reportedly agreed not to tolerate another nuclear test or a fresh provocation by Pyongyang. In a joint press conference wrapping up the summit, Lee said, “Now is the time to seek more effective ways to deter North Korea’s provocations.” He said he therefore had proposed that the three countries cooperate more closely for this purpose.

Premier Wen reportedly said in response that it is most important to make allout efforts to reduce tension on the Korean peninsula. Peace on the peninsula is a precondition for expanded economic exchanges and an ultimate economic integration among the three countries. In this regard, cooperation among the three countries is needed more than ever before to deter North Korean provocations and reduce tension on the peninsula.

The three countries have held annual summit talks since 2008. They opened a cooperative secretariat in Seoul last year. At their summit held in Jeju in 2010, they adopted the “Trilateral Cooperation Vision 2020” for long-term cooperative action. The sixth summit is scheduled to be held in Korea next year. We expect the annual trilateral summit meetings to take root as a useful forum to produce more substantive and concrete results for peace on the Korean peninsula and prosperity in Northeast Asia.

[May 13, 2012]

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- Solutions to Deepening Household Debt Crisis - Welfare and Tax Increase - Time to Overcome Growth Complex - Kaesong’s Growth into Global Region - Mixed Feelings after ADB Meeting

Solutions to Household Debt Crisis

Kim Jung-sik Professor of Economics Yonsei University

The Bank of Korea recently began to warn about swelling household debt and its negative consequences on the Korean economy, namely the burden of servicing the debt and reduced domestic spending. The central bank also notes that the debt situation is worsening as the peril of another external shock to the economy looms larger.

The nation’s household debt, including credit card spending, reached 913 trillion won (US$777 billion) at the end of last year, up 8 percent from 2010.

Furthermore, tightened bank reviews of loan applicants’ credit worthiness have forced more and more households to turn to other types of financial institutions, which have comparatively high interest rates and are eager to lend. In particular, there has been a steep rise in “survival loans,” borrowing

simply to meet daily living expenses. This has been especially noticeable among low-income families.

To reduce the chances of the household debt load turning into a crisis, urgent measures are needed. First, we should create more job opportunities. The rise in survival loans is due to the scarcity of jobs. In the wake of the foreign exchange crisis in the late 1990s, the private sector restructured and a high number of layoffs ensued. The effect was declining corporate debt and rising household debt. Thereafter, Korean manufacturers relocated to China to take advantage of cheaper labor, further constraining the job market and exacerbating household debt.

Accordingly, we have to revitalize the manufacturing sector and upgrade the level of science and technology to create more stable jobs. The government should make particular efforts to increase manufacturing jobs by enhancing the competitiveness of small- and medium-sized enterprises, which account for more than 85 percent of the employment in Korea.

Secondly, a more reliable pension system should be swiftly built. Retirees without pension income have no choice but to sink deeper into debt to eke out a living. This has already been proven by a steep rise in loans taken out by households whose heads recently retired in their 50s. At present, only a select group of people, including civil servants, teachers and professional soldiers, can secure enough pension income to have a chance of retiring in comfort. As population aging proceeds, elderly people’s need for pension income grows steadily. But the system is still unprepared to satisfy everyone’s demands adequately. Workers concerned about life after retirement call for excessive wage hikes through their labor unions in order to secure funds for retirement.

Likewise, merchants mark up prices to increase their savings potential. These moves will eventually create a vicious cycle of a wage price spiral, weakening

the competitiveness of our industrial sectors and contributing to the decrease in job opportunities. Thus the government should swiftly build a more reliable pension system to ensure that household debt won’t grow anymore.

Lastly, the government should stabilize real estate prices and cautiously assess the possible impact of sudden collection of household loans. In the past, an increase in household debt was caused by rising real estate prices. As domestic property prices fall these days, however, the primary asset of most households is decreasing, heightening the possibility of soured household loans.

Household debt should be reduced but its abrupt withdrawal can be risky. Our household debt problem is structural and its volume cannot be easily reduced in a short period of time. Policymakers should be careful not to raise interest rates too sharply or push for a rapid withdrawal of household loans. If lending rates rise or loans are withdrawn from households under the present circumstances, household loans could turn sour on a large scale, triggering a fresh financial crisis.

Yet, without government countermeasures, household debt will further increase as population aging proceeds. Policymakers should first address the fundamental causes of the increase in household debt and encourage its gradual reduction. By doing so, they can prevent the failure of financial institutions, an economic crisis and adverse effects of household debt.

[Dong-a Ilbo, April 25, 2012]

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Welfare and Tax Increase

Ahn Kook-shin President of Chung-Ang University

The ruling Saenuri Party won the largest number of seats in the National Assembly in the April 11 general election. It is fortunate from the economic perspective. The situation could have been different if the main opposition party had won. Emboldened by public endorsement of its campaign promises on free welfare benefits, the opposition camp could have conjured up more reckless populist pledges. After a lull, the rival parties are expected to clash again over welfare policies in the run-up to the December 19 presidential election. On this occasion, we need to carefully examine our welfare system and search for national consensus.

At the outset of the discussion, we should acknowledge that the welfarerelated viewpoints of the conservative and liberal camps are both exceedingly lopsided. The conservative forces frantically insist that a string of populist

welfare programs would eventually plunge Korea into a sovereign debt crisis like the current turmoil in southern European countries. Is it true? Korea’s per capita welfare spending is considerably lower than that of Western advanced countries at the time when their per capita national income reached US$20,000. To be sure, our welfare system has been far from matching the nation’s phenomenal economic growth.

The rising outcry for welfare benefits can be seen as a reaction to the disparity between welfare and economic power. We have to face up to the reality. The swelling demand for social spending can be somewhat justified in view of the development stages of advanced countries. Also, the Korean economy has more room to increase spending on social welfare services in the short run.

Without acknowledging the two facts, it is meaningless to debate welfare.

It is useless for the opponents of increased welfare spending to argue that the share of welfare spending in Korea will eventually surpass that of advanced countries in the long term, considering the nation’s falling birthrate and rapid population aging. It is irresponsible to avoid short-term tasks to take care of long-term ones. Besides, politicians and ordinary citizens prioritize short-term tasks over long-term ones. Greater efforts to build more reliable social safety nets are needed if the nation is to respond effectively and have welfare programs that are commensurate with its level of per capita income.

There is one more thing for the conservatives to remember. Conservative forces, including the conservative media, tend to oppose any tax increase. In the end, however, the resources needed to build more effective social safety nets should be raised through the collection of more taxes. It is necessary to make efforts to eliminate inefficient fiscal expenditures, crack down on tax evasion and reduce a variety of tax exemptions. But such efforts won’t be enough to build strong social safety nets and improve income distribution.

No doubt lower taxes accommodate consumption and investments. Lured by such positive prospects, the Lee Myung-bak administration has been trimming taxes since it took office. But the eventual effects depend on the actual size of tax cuts and overall economic environment. The effects these days are blunted by the global economy, which is dotted with many uncertainties. If the same logic is applied, the negative effects of any tax increases could be insignificant. Korea’s tax burden ratio stood at 20.5 percent as of 2009, far lower than the OECD average of 26.5 percent. Thus it is unreasonable to contend that tax increase could undermine our economy’s growth potential.

It would be even better if our nation’s privileged class voluntarily campaigns for higher taxes and embarks on donation activities, as some of their counterparts did recently in the United States, Britain and France. A proverb goes something like this: “One good turn deserves another.” If the conservatives practice noblesse oblige with a broader perspective, they can have the moral authority to persuade the liberals on the welfare issue.

A plethora of free universal welfare programs proposed by opposition parties could ruin the Korean economy in the long run, as was the case with southern European countries. The proposal to provide even high-income people with free school lunches, free childcare, half-price college tuitions, old age pension and other exceptional welfare benefits is a bad idea that can create moral hazard. Moreover, such a proposal cannot be feasible in the long run. There should be a clear limit to populism.

Social conflict appears to be increasing, because conservatives with vested interests stick to their biased views whereas the less privileged liberals put up blind resistance. Those with vested interests constitute the greatest beneficiaries of free market economy. Our ancestors emphasized moderation and putting yourself in someone else’s shoes. Now is the time to emulate the virtues of our ancestors.

[Seoul Economic Daily, April 25, 2012]

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Time to Overcome Growth Complex

Choi Won-mog Professor of Law Ewha Womans University

Readers of the Principles of Economics may agree that economic development in the global era can be attributed to higher domestic economic efficiency based on imports and consumption. In Korea, however, only the importance of exports has been emphasized when it comes to free trade agreements (FTAs).

In the 1970s and 1980s, the nation’s military regimes managed to garner political legitimacy by achieving robust economic growth through exportdriven policies. The combination of higher exports and lower imports led people to believe that the military regimes were good at economic strategy at the least.

The political democratization in the 1990s, however, opened a new era, in which economic growth is not enough to guarantee political legitimacy. How

the government meets the pent-up demands for welfare and human rights protection in a balanced way is now the most important criterion. Amid these changes, the incumbent administration has drawn criticism for creating market conditions

favorable

to

exporting

companies

affiliated

with

large

conglomerates, or chaebol, while adding damage to comparatively less advantaged industries.

Many people tend to equate FTAs with the government and chaebol, and antiFTA activism with anti-government movement and the working class. Such an atmosphere paved the way for groundless rumors about U.S. beef imports and mad cow disease and unfounded claims about the so-called toxic clauses of the Korea-U.S. FTA. Activists shouting anti-free trade and anti-chaebol slogans have thus emerged as heroes. In 2008, the fledgling Lee Myung-bak administration’s bid to resume U.S. beef imports to help ratify the Korea-U.S. free trade deal fell prey to fierce candlelight protests. The recent wave of populist policies appealing to the working class can also be classified as having anti-free trade tendencies.

Korea’s postwar economic policies are credited with generating rapid economic growth and job creation and thereby enriching the lives of working people. Though consumers are the biggest beneficiaries of economic openness, they have fallen for exaggerated claims about the risks of imported goods and calls for protecting domestic industries. Declarations drawn up by local producer groups to criticize imported agricultural products and publicize the potential risks of U.S. beef imports have always carried the endorsement of local consumer groups.

Above all, the government needs to overcome the so-called “growth complex paradigm,” which calls for boosting economic growth through export promotion policies. The government should instead emphasize that market

opening will increase consumer supplies and savings and help reduce production costs thanks to cheaper raw materials. A tripartite alliance between the government, exporting companies and consumers should be encouraged.

Then, more efforts should go toward garnering broad public support for sustained market opening.

A Korea-China free trade deal, if realized, is expected to cause tremendous damage to our agro-fisheries and light industries. A high level of market opening can hardly be expected under the Korea-China FTA as long as we adhere to the producer-oriented paradigm, in which profits of exporting companies and losses of import substitution industries are simply calculated on a plus-minus basis. A new paradigm should be embraced to highlight huge consumer benefits and improvements in economic efficiency. The significance and effects of the Korea-China FTA should be assessed under the new paradigm.

For that purpose, the government should actively attempt to better inform the ordinary consumers about the benefits of an open market. It will also have to overhaul the domestic distribution structure for imported goods to ensure that FTA tariff reductions and eliminations lead to lower consumer prices.

Following the opening of the nation’s legal service market, renowned foreign law firms should be led to competitively open branch offices in Korea and provide quality legal services to our enterprises and other consumers. For that purpose, the government has to offer convenience to foreign law firms and their local clients. Parents eager to send their young children abroad to learn foreign languages should be led to realize that the opening of the education service market is the only solution to all their problems. By doing so, the government should lead consumers to call for wider market opening.

Uncertainties for market opening are escalating in Korea, due to confrontation between the conservatives and liberals and a fierce debate on the pros and cons of FTAs. Under these circumstances, market opening can hardly move forward without the support of consumers. The government has to establish a new FTA paradigm to help promote consumer movement, a key state policy task that cannot be delayed any longer.

[Maeil Business Newspaper, May 30, 2012]

www.koreafocus.or.kr

Kaesong’s Growth into Global Region

Lee Il-young Professor of Economics Hanshin University

Two years have passed after the Lee Myung-bak administration imposed sanctions on North Korea on May 24, 2010 for sinking South Korea’s navy vessel Cheonan. After a team of international experts concluded that a North Korean torpedo sank the ship, killing its 46 crew members, on March 26 that year, Seoul banned all inter-Korean trade and South Korean investments in the North and forbid trips by South Koreans to the North, excluding the Kaesong (Gaeseong) Industrial Complex. Under the so-called May 24 sanctions, South Korea also prohibited North Korean vessels from using its shipping channels.

Inter-Korean relations have since remained icy.

The sanctions have received mixed reviews. Some people say that North Korea has suffered greatly, while others say that South Korean enterprises

have sustained much more damage. Both opinions seem to contain nuggets of truth. In other words, it can be said that both Koreas are suffering damage.

In sharp relief against this ambiguous setting is Kaesong. The sanctions demonstrated the vulnerability of inter-Korean agreements and consultations, and weakened confidence in the possibility of an inter-Korean union. On the other hand, Kaesong has weathered the storm to attain significant growth and solidify its status as a “global region” that can withstand cross-border conflicts.

Construction of the Kaesong Industrial Complex began in 2003, as part of inter-Korean economic cooperation projects. South Korea opened the sprawling factory park in this North Korean border town in 2004, a symbolic move that combined its capital and technology with the North’s inexpensive labor amid the tide of reconciliation after the first inter-Korean summit in 2000.

In fact, the Kaesong region’s economic potential is deep-rooted. It cannot be denied that Kaesong’s ongoing revival is linked to its rich history of commerce. During the Joseon Dynasty (1392-1910), the Kaesong region openly pursued commercial profits despite the government’s tight restrictions on commercial activity. From the early Joseon period, merchants were the central force in the population of Kaesong and the region’s financial system was based on a monetized economy. In the late Joseon period, Kaesong merchants became the nation’s most representative merchants. Their activities covered the agricultural, financial and manufacturing sectors as well as all commercial areas. They operated in marketplaces across the country and were involved in maritime trade on a nationwide scale.

In the late 17th century, when Joseon’s trade with China’s Qing Dynasty and

Japan began to prosper, Kaesong merchants became international traders, along with merchants from Euiju and Dongnae. Kaesong merchants invested in production, employing capital accumulated from domestic and overseas trade. They cultivated white and red ginseng and further advanced into mining.

Since the early 1990s, most countries have liberalized overseas investments and encouraged inbound investments as well. In most cases, overseas direct investments in primary products have decreased while direct investments in manufacturing have increased. As manufacturers’ operations expanded beyond the national borders, the transactions of intermediate products have increased and multinational corporations have assumed a much more important role in emerging economies’ manufacturing exports. The development of the Kaesong region is the result of North Korea’s pursuit of foreign investment in its manufacturing sector overlapping with South Korea’s global expansion of production networks.

In North Korea, despite integration of the state and enterprises and suppression of markets, globalization is in motion. It is a process of changing from stateled activity to inter-regional activities, interaction and networking. As such, the Kaesong region is now attaining some degree of independence from the governments of South and North Korea. The region’s growth is based on global production and distribution, convertible money, information and resources, rather than a state-directed growth model.

Within the Kaesong region, networking organizations have been formed. The general task of a transitional economy is to make its hierarchical economic organizations more flexible and efficient. The political and economic organizations formed in the Kaesong region are developing and tilting toward non-hierarchical structures. Different types of networks have emerged between South Korean companies operating in the cross-border industrial park,

between manufacturers and employment agencies, and between manufacturers and the two Koreas’ government agencies.

In the Kaesong area, even government organizations cannot always operate under the principle of hierarchy. Instead, various behavioral subjects tend to intervene in the form of networking. South Korea’s government organization here is called the Kaesong Industrial District Management Committee. The Ministry of Unification, the Ministry of Strategy and Finance, the Ministry of Knowledge Economy and other government agencies are involved in the committee. North Korea’s government organization here is named the Central Special Development Guidance Bureau.

In Kaesong, globalization and localization have simultaneously proceeded, complementing each other. The increases in inter-regional and intra-regional networks should probably mean that the era, in which the two divided Koreas have exercised unlimited and exclusive public power over their respective territories, is waning. From now on, North Korea’s Sinuiju and Rason will follow the path of Kaesong. A new Korean peninsula economy is in the offing.

[Kyunghyang Daily News, May 30, 2012]

www.koreafocus.or.kr

Mixed Feelings after ADB Meeting

Yun Chang-hyun Professor of Business Administration University of Seoul; President of the Korea Institute of Finance

The Asian Development Bank (ADB) concluded the 45th Annual Meeting of its Board of Governors in Manila, the Philippines, on May 5 after over 4,000 delegates, including finance ministers, central bankers and private sector representatives, discussed a broad range of issues linked to steady growth.

A number of seminars and conferences also took place on the sidelines of the ADB meeting, setting the stage for various discussions. In his opening speech, ADB President Haruhiko Kuroda presented three principles of future growth in Asian economies: inclusive growth, green growth and knowledge-based growth. Interestingly, inclusive growth, which basically means broad-based growth, shared growth and pro-poor growth, was chosen as the No. 1

principle.

Considerable importance was attached to the concept of financial inclusion, which calls for delivering financial services at affordable costs to vast sections of disadvantaged and low-income segments of society. In the Philippines, for example, only 25 percent of the population has a bank account, prompting experts to raise the need for the spread of mobile banking services. If the number of mobile phone users is much bigger than that of bank account holders, the spread of cell-phone banking services is expected to create considerable positive effects. Many participants in the meeting said that the circumstances would be greatly improved, if at least remittance services are reliably available.

The remarks made me think about other countries overflowing with financial services. Various views were also expressed on the middle income trap. There are two stages in the process of national development; low-income countries grow into middle-income countries, which seek to join the ranks of advanced countries. Experts say the second stage is comparatively more difficult.

A low-income country can develop into a middle-income country by successfully mobilizing and utilizing production factors, including capital and labor. But a leap into the ranks of advanced countries requires strategic reform in economic software, including advancement in research and development as well as various social institutions. The second stage can be utterly daunting. If the strategies for knowledge-based growth mentioned by Mr. Kuroda are not efficiently implemented, developing countries could be trapped in the middleincome ranks.

Another key topic at the meeting was bolstering the region’s financial safety nets. Korea, China and Japan agreed to expand investments in one another’s

sovereign bonds, sharing views on the need for a framework for trilateral sovereign bond investment, in a move to maintain stability in their financial markets. ASEAN Plus Three countries agreed to a doubling of the Chiang Mai Initiative

Multilateralization

(CMIM),

a

regional

financial

stability

arrangement, from US$120 billion to $240 billion. CMIM evolved from the Chiang Mai Initiative, the first regional scheme for currency swap launched by the ASEAN Plus Three countries in May 2000. Thus the amount of emergency liquidity available for regional countries in times of economic crisis will be doubled.

In addition, crisis prevention programs will now be applied to countries that have not been hit by crisis but show signs of crisis. The ADB’s crisis prevention programs are expected to be implemented more swiftly and efficiently than similar programs of the International Monetary Fund (IMF) and can be used for various purposes. The ADB’s decision to adopt a “New Roadmap Plus” for the Asian Bond Markets Initiative was also a remarkable accomplishment.

Another interesting fact is that criticism mounted against the IMF. At a seminar held on the last day of the meeting, several participants expressed regrets at the IMF’s measures taken during the Asian financial crisis in the late 1990s and emphasized the need to establish an Asian Monetary Fund.

Problems have been found with the economic restructuring methods promoted by advanced countries, as many of them have recently been hit by financial and fiscal crises. Paradoxically, Asian countries encouraged by the struggle of crisis-affected advanced countries are rejecting the order of the past and searching for a new alternative. These developments freshly remind us that there is no permanent winner in global economic competition.

As financial experts from Asian countries briskly exchanged views on a long

list of topics, such as inclusion, financial safety nets, middle income trap and anti-IMF criticism, I suddenly came to reflect on Korea’s current circumstances. Today, many countries worldwide are striving to make a new leap forward and survive through various international cooperation frameworks. But it is questionable whether we have such a desperate aspiration. It is also doubtful whether we have a true “grand plan” that fits our current situation.

We are still lacking in inclusion and safety nets. It is feared that we, like a frog in a well, may be complacent with what we have achieved so far. I’m worried if we are losing the will to escape from the trap and make a new leap forward.

Evaluation towards Korea was affirmative but I felt a little heavy-hearted.

[Korea Economic Daily, May 11, 2012]

www.koreafocus.or.kr

- Rise in One-person Households Demands Major Changes in Welfare Policies - Korean Constitutional Court Leads Asian Constitutionalism - Koreans Outside the National Borders - Aged Houses versus Young Towns - Affection between Mentors and Disciples beyond Time and Space

Rise in One-person Households Demands Major Changes in Welfare Policies

Cho Young-tae Professor of Demography School of Public Health Seoul National University

Households with only one or two people have become prevalent and the trend will increase in the years ahead, according to a recent Statistics Korea report.

This will upend the traditional norm of at least three persons or a couple with one or two children.

Some people will say families are dissolving in this country. Others will say the demographic change is a natural progression of social order in the postindustrial era. In any case, it seems certain that smaller households constitute a megatrend that will alter the foundations of our society, including economy, culture and human relations.

The structures and systems of Korean society have traditionally revolved around households composed of at least two generations. Smaller households mean changing functions and roles of families. As households grow smaller, families will be unable to keep up with their traditional functions of reproduction (childbirth) and child care, mutual caring among family members, and support for the elderly.

These issues definitely fall under welfare, and as with the April 11 general election, universal welfare policies are expected to be a major issue across party lines in the December 19 presidential election.

It is doubtful, however, whether the numerous welfare policy ideas churned out by both the conservative and liberal politicians reflect the shrinking size of households. It may be no exaggeration that welfare policies that do not address this megatrend have little chance of being sustainable. Therefore, it is hoped that in the run-up to the presidential election, the heated welfare debate will include the following two issues.

First, the welfare debate should highlight the health of young people in their 20s and 30s. These age groups will head the small households now and in the future. It has been proven by many researchers that people who live alone are more prone to physical and mental health problems than those who live with their families and that the vulnerability becomes more serious with age. A sharp increase in the number of young people who remain single suggests that the nation’s public health will likely deteriorate. Hence, the welfare debate of politicians should include measures to improve the health of single young people.

Secondly, the re-education of middle-aged people is crucial to extend their

work life. The nation’s low birth rate will shrink the future generations and undermine the traditional role of families in mutual caring. Society will have to care for the elderly but it is all too clear that the universal welfare policies currently under debate will be unable to function properly. Therefore, extended participation in labor force by the middle-aged people is imperative. To that end, they should be able to continue working regardless of age. Re-education of this age group should therefore be seen as a welfare issue.

Korean society is already undergoing changes in the composition of families and households. It is earnestly hoped that politicians will draw up welfare policies reflecting this megatrend instead of policies based on today’s population and household types.

[Munhwa Ilbo, May 14, 2012]

www.koreafocus.or.kr

Korean Constitutional Court Leads Asian Constitutionalism

Chong Jong-sup Professor of Constitutional Law School of Law, Seoul National University

From the struggles to end dictatorships in Libya and Syria to the efforts to secure the procedural and popular legitimacy of constitutional reform in Egypt and Bahrain, the “Arab Spring” has come to a screeching halt, with a soft landing not in sight yet. Recently, jurists from around the world gathered together in a Middle Eastern desert city to discuss constitutional development and freedom in the Arab world. As a participant, I emphatically stressed that they have a lot to learn from Korea. Korea’s experience through its process of writing a new constitution in 1987 and achieving a soft landing in the realization of democracy and constitutionalism is worth sharing with the world.

The

Constitutional

Court

played

a

significant

role

in

achieving

democratization in Korea. By declaring the legislation and unlawful execution of power by law-enforcement authorities that infringed upon human rights as “unconstitutional,” the nation eradicated authoritarian elements and abuse of power peacefully within the framework of the Constitution. All this was possible because there was the Constitutional Court that was firmly determined to install constitutionalism.

The Constitutional Court of Korea has emerged as an icon of constitutionalism and democracy in Asia by declaring numerous conventional practices as unconstitutional on the basis of its strong willpower and refined theories.

Hence, as many people admit, Korea’s constitutional adjudicative system has now become the nation’s only export item in the global political market, with its quality internationally verified.

As a result, transition countries in Eastern Europe and less developed countries in Asia have begun studying and adopting the Korean constitutional jurisdiction system in earnest. Currently, Korea is consolidating its status as the model country of constitutional jurisdiction in Asia, sharing its experience with neighboring countries and offering necessary assistance. Thanks to such international recognition, Korea hosted an international symposium of chief justices of constitutional courts in 2008. And on May 20-24, Seoul will be the venue for the inaugural congress of the Asian Association of Constitutional Courts and Equivalent Institutions (AACC).

The necessity for such a regional forum was first discussed at the annual conference of Asian constitutional court judges in 2005. As a permanent regional consultative body with 10 member nations and chaired by Korea, the AACC is expected to make a great contribution to creating a constitutional adjudicative system befitting the Asian history, culture and value of life, comparable to the Conference of European Constitutional Courts and the

Ibero-American Conference of Constitutional Justices. The current AACC member countries include Thailand, Mongolia, the Philippines, Indonesia, Malaysia, Uzbekistan, Russia, Tajikistan, Turkey and Korea.

Now that constitutionalism and democracy are issues of global concern, constitutional jurisdiction is being discussed in the global context. While experiences of different nations are shared to achieve common development cooperatively, no individual country can assert its indigenous position. The AACC inaugural congress will be attended by 10 observer countries including India, Kazakhstan and Singapore, as well as 10 guest nations, including Bhutan, China, Japan and Myanmar, attesting to the global nature of constitutional adjudication.

The Constitutional Court of Korea bears a responsibility to contribute to the successful democratization and constitutionalism of underdeveloped countries.

Korea’s successful democratization will have greater significance when it contributes to democracy and constitutional rule in nations around the world.

In this regard, Korea needs to develop programs to educate and share its experience with constitutional jurists from less developed nations, contribute to the institutionalization of constitutional rule in other Asian countries by developing a pioneering agenda for Asian constitutionalism and provide international forums for European and Latin American constitutional jurists through the Constitutional Research Institute, toward the vision of becoming a global mecca for the rule of law and constitutionalism.

[Chosun Ilbo, May 19, 2012]

www.koreafocus.or.kr

Koreans Outside the National Borders

Kim Jang-hyun Professor of Communication Studies University of Hawaii

Through the book “Byeon Wol-ryong, a Lost Genius Painter,� I recently learned about a painter who was born to Korean parents in 1916 in a barren region of Primorsky Krai in the Russian Far East. He grew up in poverty and when his family was deported to Central Asia, he parted ways and left to realize his dream to become a painter, carrying a little money that his neighbors had collected for him.

Against all odds, Byeon gained fame as a prominent painter and professor at the prestigious Ilya Repin Leningrad Institute for Painting, Sculpture and Architecture. Byeon maintained his ethnic identity until his death in 1990. He honed his Korean language skills, which he acquired as a youth in an ethnic Korean community, where everyone was poor but cared about one another

warmheartedly. While serving as a visiting professor at the Pyongyang University of Fine Arts for about a year at the invitation of the North Korean government, he was offered the position of dean.

However, his life was destined to be overtaken by war and national division during the Cold War. He could securely settle down in neither Russia nor North Korea. As Kim Il-sung purged figures from Russia and China, Byeon was never allowed to set foot on North Korean soil again. Nor was he ever able to visit South Korea.

Byeon was not alone in dying after missing his ancestral homeland from a faraway land all his life. There are far more people like him than imagined in the Korean diaspora around the world. Amid the tumult of wars and economic difficulties of the 20th century, legions of Koreans were driven out of the country in search of new opportunities abroad. They have thus turned the virgin lands in Central Asia into fertile farmland, created miracles on Mexican plantations, and maintained their unique ethnic culture and pride on mainland China.

The problem is that stories of these people have not been properly remembered and documented. A good example of our insensitivity and indifference is that the life of the great painter Byeon Wol-ryong has barely begun drawing our attention more than two decades after his death. From time to time I have felt a pang in my heart at the sight of tombstones bearing Korean surnames like Lee, Park and Kim in public cemeteries in Hawaii. What were their lives like? What brought them here from certain Korean towns or villages? Where are their descendants now? And what are they doing?

Those who retain their Korean family names should be considered relatively luckier. In a society where children traditionally inherit their father’s surname

only, it becomes practically impossible to determine whether an individual is of Korean descent when his/her father is not Korean. After three or four more generations, Korean immigrants are likely to lose their ethnic identity, not to mention their native language.

The life of Donald C.W. Kim (Kim Chang-won), a bona fide leader of the Korean immigrant society in Hawaii, clearly shows that it no longer matters whether one resides inside or outside the national borders. His father was among the first group of Korean immigrants who arrived in Hawaii in 1903.

He moved back to Korea in 1927, and his son was born the next year. After graduating from university in Korea in 1952, Donald C.W. Kim went to Hawaii where his father was staying. Born sincere and hard-working, Kim earned fame as a successful entrepreneur. Up to this point, his life may seem little different from those of other “successful immigrants.”

Kim, however, has distinguished himself by performing unprecedented roles to imbue other Korean immigrants with greater pride in their ethnic identity and history. He has served as chair of the Board of Regents of the University of Hawaii

and

initiated

a

number

of

significant

projects,

including

commemoration of the centenary of Korean immigration, while making huge donations to various universities in Korea. Nobody could deny his contribution to the Korean culture and community simply because he lives and works outside of Korean territory.

Korea is quickly turning into a multicultural society. The urgent task today is redefining who a “Korean” is and who the “Korean people” are. Biological features such as skin color or physical appearance may no longer be major determinants of nationality in the future. Rather, it may hinge on how much an individual contributes to our culture.

Regardless of the place of residence, individuals who are contributing to their regional or national community, or the entire global community, should be duly recognized and publicized as a respectable Korean. To ensure there would be no more “forgotten� Koreans like Byeong Wol-ryong, the nation has to remember the achievements of those who work hard to preserve Korean culture and traditions and at the same time contribute to human society, no matter where they are.

[Hankook Ilbo, May 24, 2012]

www.koreafocus.or.kr

Aged Houses versus Young Towns

Lee Pil-ryul Professor of History of Science Korea National Open University

Some time ago, I drove by Gupabal in northern Seoul. My memory of the place is mostly of Hanyang Housing Estate, where small houses stood side by side, all of them in similar scale and each displaying its own character.

Hundreds of those single-story houses have disappeared, giving way to a brand new town of high-rise apartments.

Like most other collective housing complexes across Korea, the Hanyang Housing Estate was created under a government plan. The project was primarily intended to show off the South’s housing environment to North Korean delegations visiting Seoul for inter-Korean conferences in the early 1970s. At the time, the Park Chung-hee regime obviously tried to boast of the South’s economic condition by replacing shabby old houses with new houses

that had orange or blue tile roofs.

In spite of such dubious intentions, the housing estate gradually turned into a cozy and homely neighborhood, which was rarely found in the capital area.

The houses that had looked somewhat awkward though fresh at first obtained familiar and amiable appearances, with their yards and fences harmonizing with one another as if by design. In 1999, it won the first “Beautiful Neighborhood� award given by the Seoul Metropolitan Government.

The Hanyang Housing Estate was picked as a candidate site for urban renewal in the 2000s when President Lee Myung-bak was serving as the mayor of Seoul. The majority of residents opposed the decision, protesting in various ways over a long time. They did not merely protest but tried to find ways to create a better neighborhood. Many showed an interest in building an energy self-sufficient town and I gave them a lecture on the potential of energy conversion. I even discussed the idea with some residents over bowls of noodle dish, but they eventually gave up their beloved homes and left the neighborhood, yielding to the pressure of the Seoul city government, which applied both carrots and sticks.

The transformation process of Hanyang Housing Estate into an apartment complex clearly demonstrates how indifferent we, and the then Seoul mayor, were to the significance of the weight of time. Keeping history alive does not merely involve designating ancient things as cultural assets and preserving and exhibiting them. History can be imbued with greater significance and become part of our lives only when we can witness and feel it being created along with the flow of time in our everyday life.

However, the mayor of Seoul as well as the majority of citizens couldn’t afford to harbor such an idea, relishing the flow of time, as they had all become too

familiar with destroying and bulldozing anything that was somewhat old to replace them with brand new things. They probably thought the single-story houses lying flat on the ground looked ugly and craved for the money that would come from filling the estate with shiny 30-story apartment buildings.

Things have now changed completely after only five or six years. The urban redevelopment projects, dubbed the “new town” projects, have turned into formidable headaches. With a growing number of people aspiring to own a house with a yard, country-style houses are cropping up here and there in the suburbs of Seoul these days. Regrettably, however, most of these houses seem to have little chance of acquiring a unique appearance over time, not to mention looking unfamiliar.

Traditional Korean houses or Western-style red brick houses tend to get a vintage look as time passes. Wood gradually becomes darker and bricks look increasingly natural. In contrast, the new houses in the suburbs of Seoul are decorated with imitation lumber or anti-tarnishing coatings. They are purported to keep a fresh new look as long as possible. They are not far removed from the concept of “new town” projects, which call for demolishing old buildings and sprucing up the estates with new apartment buildings.

There are numerous wooden houses at the foot of the Alps in Austria. Few of these houses have ever been painted, each keeping its own indigenous character, regardless of old or new. These houses create a natural ambience of village. In a properly tended village, one can not only run into young children but also find elderly people who have endured the weight of time. The same is true of houses. A village worthy of its name should have houses that have withstood time as well as houses that have yet to be tainted. Therefore, the new town built after tearing down Hanyang Housing Estate will be unable to evolve into a village.

[Kyunghyang Daily News, May 10, 2012]

www.koreafocus.or.kr

Affection between Mentors and Disciples beyond Time and Space

Kim Byeong-il President of Korean Studies Advancement Center Dosan Academy

In mid-May, hundreds of Confucian scholars attended an academic lecture held at the Korean Studies Advancement Center in Andong, North Gyeongsang Province. The lecture was organized by Dounhoe, or the “Society of Descendants of Master Togye’s Disciples at Dosan,” one of the most prominent extant groups of Confucian scholars. Dounhoe was organized by descendants of the students of Yi Hwang (pen name Toegye) in 2001, on the occasion of the 500th anniversary of the great sage’s birth. Some say the name “Doun” was drawn from Dosan Academy, a Confucian institute for advanced learning, which was established by Yi’s disciples in his honor; and Nongun Jeongsa, a dormitory for his students.

An official student registration of the 16th-century sage philosopher has 309 individuals. They include many important scholars from all parts of the country, including Seoul, Gyeonggi and Honam regions. Dounhoe inherits much of the time-honored traditions handed down among followers of the Togye School. Mun Jae-gu, a native of Jangheung, South Jeolla Province, the current head of the society, is a descent of Mun Wi-se (pen name Pungam).

Among other leading members are descendants of prominent scholars from the southwestern Honam region, such as Gi Dae-seung (pen name Gobong) from Gwangju and Bak Gwang-cheon (pen name Jukcheon) from Boseong.

Descendents of the scholars who were based in the western South Gyeongsang region and under the influence of Nammyeong School are also participating in the society.

Exchanges among descendants of individual disciples are also brisk. For example, Baeguhoe, a society of descendents of Master Gobong, and Chongjukhoe of descendents of Master Jukcheon, along with Cheongsuhoe of descendants of Master Toegye in Daegu, take turns in organizing exchange events to build up friendship. Beyond region as well as time, they are preserving a centuries-old tradition of paying respect to a great teacher and appreciating his virtues, a practice rarely seen in our days.

Teacher’s Day has just passed. But we again failed to observe the day properly.

In particular, teachers are in even deeper trouble these days amid a surge in school violence. A Teacher’s Day survey conducted by the Korean Federation of Teachers’ Associations posed the question, “What’s the first association that pops up in your mind at hearing the word ‘Teacher’s Day?’” The largest number of teachers, or 33.7 percent of respondents, cited “burden” to the question. It was followed by “students” (32.5 percent) and “a feeling of being rewarded and proud” (19.7 percent).

What has made today’s teacher-student relationship so different from the mentor-disciple relationship of 450 years ago? The biggest difference seems to lie in the affection between teachers and students. Toegye focused on guiding his students to build a good character rather than pass the public service examinations or become a man of knowledge. In teaching his students, he always put action before words and he never treated subordinates disrespectfully. The example highlighting his personality is his widely-known debate on the “four beginnings and seven feelings” (sadan chiljeong) with Gobong, which lasted eight years.

At the time, Toegye was 58 years old and serving as rector of Seonggyungwan, the National Confucian Academy, a position equivalent to today’s president of Seoul National University. Gobong, at 32, was an up-and-coming scholar who had just passed the state civil service examination. In spite of differences in their age and social position, Toegye extended Gobong every courtesy throughout their debate, treating him as a fellow scholar. In describing himself to Gobong, he used his first name Hwang, humbling himself, while courteously referring to Gobong as “Lord” (gong). Toegye also heartily revised his own views twice by accepting his junior’s viewpoints that he deemed reasonable.

Moved by Toegye’s incessant self-humbling attitude, Gobong voluntarily offered to treat him as his mentor. This is how Gobong was placed on the roster of Togye’s disciples later. Forming the moral platform of Dounhoe is the essence of the virtue that “the more you are humble yourself the more respect you will gain,” which is far easier said than done.

The aforementioned survey found that teachers want most to hear their students say, “I respect you.” “Respect” is not a virtue automatically generated in any vertical relationship between individuals. It is a spontaneous feeling that

comes from the heart of a junior when a senior performs his part properly. The existence of Dounhoe, which keeps alive the remarkable human bondage between a mentor and his disciples dating back 450 years, exemplifies such a relationship. Extending my heartfelt appreciation to teachers who are fighting uphill battles, I dare ask them to pay heed to my humble suggestion.

[Seoul Shinmun, May 24, 2012]

www.koreafocus.or.kr

- K-pop’s Power and Challenge Witnessed in Colombia - Korean Cultural Renaissance - Notable Changes in the Trend of Japanese Tourists - The Fall of Online Bookstores - A Look Back at 30 Years of the Internet in Korea

K-pop’s Power and Challenge Witnessed in Colombia

Hong Sang-pyo President Korea Creative Content Agency

Will the tide of K-pop, the key content of “new hallyu,” surge beyond Asia to reach Latin America? To help spur the new hallyu boom, what should be done?

I recently traveled to Colombia to watch the first-ever performance by a popular South Korean music group in Latin America, a chance that would give a hint at the potential of K-pop as well as its challenges.

The group was the seven-member U-Kiss, which was booked to give a special performance at the region’s biggest pop concert, “Evento 40 Principales.”

From the group’s arrival at the airport to its performance, U-Kiss fans displayed enthusiastic support. For example, some 300 local fans crowded the El Dorado International Airport, holding photos of U-Kiss members and banners bearing their names in Korean. It was late at night, but they followed

the group to its hotel, chanting its hit songs together. Whenever they came across Koreans, they would offer to take a photo together.

U-Kiss held a press conference and fan meeting the next day, drawing even more passionate response. Some 1,000 fans flocked to the venue and patiently waited in heavy rain. They sang the group’s songs together, some even dancing, in joyful and leisurely manners.

The response to the group’s performance was simply beyond expectations.

More than 3,000 fans attended the show, occupying the front seats to fully enjoy the first-ever performance by a popular South Korean music group in Latin America. Other members of the audience also expressed positive views, saying, “They sing better than expected,” “They dance so charismatically,” or “They all look so handsome!”

All this made me convinced that K-pop will be successful in Latin America.

K-pop’s strength as the primary attraction in the fresh wave of hallyu lies in the idol groups’ prominent musical talents, appearances, and dance and fashion styles. In particular, Korean idol groups can surely claim to be “distinctive merchandise” in Latin America, where there have been few pop music groups singing and dancing in such perfect harmony and synchronization.

As the U.S. weekly newsmagazine Time has pointed out, digital media such as YouTube helped spread the popularity of K-pop far and wide. By introducing a Korean pop music group through YouTube before its overseas debut, costly marketing in the traditional media can be bypassed. At the same time, Korean agencies work closely with local distributors for a thorough localization, training the musicians in basic necessary skills, including foreign language ability, as part of customization efforts for the local markets.

In spite of these success factors, there are numerous roadblocks to overcome in order to get K-pop to spread continuously. In view of the dominant views among local experts that “most K-pop fans are immature teenagers,” K-pop genres should be more diversified with other aspects of Korean culture incorporated in ways to secure a more solid fan base. We also should pay heed to the view that K-pop is overly commercialized, a darker side of the Korean pop culture craze due to corporate sponsorship of overseas K-pop performances.

Accordingly, Korea Creative Content Agency plans to help K-pop diversify its genres, support overseas concerts, and sponsor international projects related to K-pop in order to stem anti-hallyu sentiment in a proactive way. The power of hallyu represented by K-pop is enormous. The popularity of K-pop is fueling interests in Korea, creating more value added in various fields, including tourism, fashion and food.

It is widely acknowledged that “Nobody” by Wonder Girls and “Gee” by Girls’ Generation have enormously boosted Korea’s image and brand value in the international community ― a feat that hundreds of our diplomats could not have accomplished. This is the power of culture. If properly approached, South Korea would be able to join the ranks of advanced countries that export culture as well as commercial products. The doors of opportunity remain open. The government and the private sector should collaborate with cool heads.

[Maeil Business Newspaper, May 28, 2012]

www.koreafocus.or.kr

Korean Cultural Renaissance

Kim Il-soo Korean Ambassador to Israel

“Nanta” recently hit Israel when it was performed as part of the commemorative events for the 50th anniversary of diplomatic relations between South Korea and Israel. As hallyu has yet to reach a significant portion of people in this country, I was worried about the audience response while preparing three shows of the non-verbal stage production: two at a 1,200-seat venue in Tel Aviv and one at a 500-seat theater in Jerusalem.

The result was amazing with all of the three shows sold out. The audience responded enthusiastically, many saying the shows were “unforgettable” and they were “surprised at Korea’s artistic originality.” Watching the famous show for the first time myself, I was deeply impressed by the artistic appeal of our performing arts.

It has long been argued that “soft power” is one of the key barometers of a nation’s influence. Rather than earning the recognition of their prestige by evoking fear through military and economic supremacy, nations in our era are urged to attract others by demonstrating cultural charm.

They say culture flows like water. A culture that is classy and fun flows down naturally. The concept of “soft power” was first perceived by the United States, which boasts of the strongest “hard power.” It goes without saying that “soft power” is important for every nation but it is particularly far more important for middle-tier nations like South Korea, whose hard power potential is inherently limited.

While serving in the United Kingdom, I vividly experienced the potential of “creative industries.” The U.K. earns nearly 10 percent of its gross domestic product (GDP) from idea-oriented industries, including musicals, dramas, fashion, entertainment planning and advertising. Economic benefits aside, Britain enjoys enormous privileges through its cultural power represented by creative industries. The housing prices in London are sky-high largely because people all over the world want to live there. Behind such popularity lies an exciting, high-class culture.

The reputation of London and New York as the global financial and consulting hubs is due to top-class professionals in these knowledge-based industries living in the cities, and one of the reasons they flock to these cities is because of their wonderful cultural infrastructure. In other words, culture is not only the driving engine of creative industries but also the essential factor that lures human resources of high value-added service industries.

Song Seung-hwan, CEO of PMC Production and producer of “Nanta,” who accompanied the performing group, gave an encouraging remark. He said

South Korea stages more than 100 homegrown musicals per year, a number roughly equivalent to that of Britain. It means our young artists are endeavoring with an explosive amount of creative energy to break away from the customary practice of paying hefty sums of royalty to stage foreign originals. Thus they continue to make progress to attain higher standards, displaying greater potential of soft power. I hope that Korea’s cultural renaissance will become a major trend of our time to enrich the life of people around the world.

[Maeil Business Newspaper, May 24, 2012]

www.koreafocus.or.kr

Notable Changes in the Trend of Japanese Tourists

Shin Sang-yong Director of the Osaka Office Korea Tourism Organization

Japan’s status as Korea’s top tourism source market was threatened in the aftermath of the earthquake in March 2011, which coincided with the surge in the number of Chinese tourists visiting Korea. However, Japan is making a comeback. During the Japanese holiday from April 28 to May 6, Korea was the most favorite overseas destination for Japanese tourists. And, in March alone, some 360,000 Japanese tourists visited Korea, the highest ever. Given this upward trend it won’t be long before Korea receives 10,000 Japanese visitors daily, with the annual tally easily exceeding last year’s total at 3.29 million.

Remarkable changes have been noticed not only in the number but in the demographics and tourism patterns of the visitors. On top of the middle-aged

women who visit Korea in flocks to show their devotion to Korean TV dramas, a growing number of younger women are arriving as tourists. The younger generation in Japan was not particularly interested in overseas travel for the past 10 years or so. Fascinated with K-pop, they are now suddenly displaying a strong interest in tour packages that offer them a taste of Korean life that is as real as can be. It no longer feels strange to come across Japanese tourists in unconventional places, such as small remote cities or narrow alleys of Seoul, lying outside the airport or the downtown Myeong-dong area.

Tour packages popular among the younger Japanese are quite interesting. Let’s take for example the “Seoul Lady on Her Day Off” package. The itinerary includes brunch in the chic neighborhood of Jeongja-dong in Bundang, a satellite town south of Seoul, shopping, make-up class in hallyu style, and clubbing in the Hongdae district. This reflects the Japanese women’s aspiration to experience firsthand what it feels like to live in Korea as a young Korean woman.

Another package is titled “K-pop Cover Dance.” To cater to the taste of the Kpop fans, the travel agency collaborates with a non-verbal performance company to have their customers learn the latest dance moves from a professional instructor. Starting this year, dance became part of Japanese middle schools’ regular curriculum, and this product will probably appeal to Japanese youngsters and even to families with a child attending school. In fact, at the Korean Travel Fair held on March 15 in Osaka, cover dance drew the largest crowds.

Then, there is the “Indulgence in B-grade Gourmet” for those who want to eat, feel and see like the ordinary Korean. The tourists are taken to the restaurants that are frequented by the locals. It was launched in Seoul and quickly spread to Busan, much to the delight of the holiday-goers. There is even a program

for trying out the university cafeterias, leaving many Koreans wondering whether there is an end to the types of products that people will come up with to satisfy the curiosity of the Japanese who want to get to know Korea and Koreans better.

This trend has a huge implication. Japan is still the No. 1 source market for Korean tourism. And the latest Japanese tourism trend could also be applied to other markets rather than being confined to Japanese visitors only. In other words, the change in the Japanese tourists’ behavior may show us the future direction of Korean tourism industry.

In order to upgrade the quality of Korean tourism in this up-market period, there are urgent matters that need to be addressed. We need to decentralize the tourism market so that not all the inbound visitors are concentrated in the Seoul metropolitan area. We have to turn every nook and cranny of the country into a viable tourism product to fulfill the needs of Japanese tourists whose tastes are becoming more diversified and individualized. This is why it is important to employ creative marketing and idea generation using SNS and numerous new media channels in addition to traditional marketing outlets.

In Namba, the center for shopping, dining and entertainment in Osaka, young Japanese men are seen queuing in front of street shops to get a taste of the town’s latest sensation, hotteok, or Korean honey-filled pancake. We need to be mindful that all of them are potential visitors to Korea, and soon enough we will have 10 million visitors going back and forth between Korea and Japan each year. We need to properly understand the Japanese tourism trend to be able to lead our tourism industry in the world beyond Asia.

[Seoul Shinmun, May 29, 2012]

www.koreafocus.or.kr

The Fall of Online Bookstores

Uh Soo-woong Arts & Culture Reporter The Chosun Ilbo

I moved into a new house for the first time in eight years. I’m sure the biggest nuisance for a culture reporter who wants to move must be books, which was true at least in my case. I made up my mind to dispose of a substantial portion of my books that filled my book shelves and stood in high stacks in every corner of my room. It was not an easy task, however, not only because of the layers of dust that had settled on their covers, but because of the memories that came to life as I leafed through them one by one.

While doing so, I came across the first book that I had bought upon entering college some 20 years ago. In those days, I usually borrowed books from libraries rather than buy them because I was living on a tight budget that barely covered my basic daily expenses. When I did consider buying a book, I

went to a bookstore to browse through it and spent even more time wondering if it was a good idea to buy the book before I finally opened my wallet.

Anyway, the old book survived the cleanup along with the memories attached to it.

Recently, I had an opportunity to converse with Kim Heung-sik, president of Seohae Munjip, a publishing company specialized in classics in the humanities. Our general topic was the struggling publishing industry, but we neither talked about the decreasing sales of books, nor did we lament the disappearance of independent bookstores. Rather, we discussed the recession faced by online bookstores, which, only a while ago, seemed to dominate the publishing and distribution market.

Kim pointed out that Internet booksellers would suffer negative growth in sales this year, and even worse the variety of books sold would plummet.

Suppose an online bookstore sold 100 volumes and 40 kinds of books a day last year. Even if it sold 100 volumes this year, the books sold would probably be from no more than 20 or so genres.

The reader would buy a book in either of the two methods: They may browse around an offline store, skimming through the actual book to see if they would like it or not; or, they may rely on recommendations. Currently, book sales are in crisis in both cases. As for the former case, the number of offline bookstores nationwide has decreased to one-third of the number in 1989, Kim noted.

When he established his publishing house that year, most books in the humanities had an initial print run of 1,500-2,000 copies. Today only 600-800 are printed. This is not just because these books do not sell, but because there is not enough space to exhibit or display them, Kim said.

As offline bookstores have been largely replaced by online ones, even readers

who rely on recommendations for their purchase of books have reduced access to information because the homepages of online bookstores tend to feature books that do not necessarily cater to the expectations of general readers. The web pages with the highest visibility are allotted to books from the publishing companies that offer promotion events or pay advertisement fees to the booksellers.

In the early days of Internet bookstores, their front pages were filled with books reviewed favorably by newspapers or those recommended by independent critics. However, as their profit structure has weakened over time, they have become more inclined to pursuing more profit than selling good books, thereby losing trust from their customers, too.

A while ago, the Internet bookstore Aladdin opened their offline stores in Jongno and Sinchon to sell used books. Some people criticize the venture, saying the bookseller may expand the sale of discount books, which will eventually affect the online market as well. On my part, however, I’d like to welcome Aladdin’s advance into offline marketing in that readers will have more opportunity to see and touch actual books before buying them. We tend to put more heart into reading books that we have personally chosen and paid for, and those books will stay with us longer, enriching our minds. Hooray for substance!

[May 16, 2012]

www.koreafocus.or.kr

A Look Back at 30 Years of the Internet in Korea

Shin Sang-chul Research Commissioner National IT Industry Promotion Agency

This year marks the 30th year since the Internet was introduced to Korea. So far, the growth of Korea into one of global IT powers has been accomplished through the combined effort of the industry, academia, research and government as well as a series of significant national events. The propagation of the Internet in Korea can be compared to the import of cotton hundreds of years ago, which changed Korean clothing from hemp to cotton. Just as the import of cotton seeds is regarded as the start of the use of cotton in the country, the first event marking the beginning of the Internet is considered to be the construction of the first mail server and the delivery of the first e-mail.

However, it is not certain when exactly this occurred.

People who participated in the laying out of the first Internet infrastructure

searched their memory and most agree that it was a day in May 30 years ago.

To commemorate this day, related agencies and institutions have prepared for commemorative public events to be held this month. However, the preparation was never easy because there were few remaining records and documents concerning the development of the Internet in this country, and the few that are available can hardly be verified. Handicapped with a lack of photos, files or research papers, the coordinators of the events had to largely depend on the vague memories of the early contributors to the Internet in Korea Recently, one of my friends gave me a book that he wrote. Since I knew he liked writing, I thought it might be a collection of essays or a book on his specialty area. Quite unexpectedly, it was a book recording the 30 years that he had spent working for his company. He had collected every possible piece of evidence, from his identification slip for the employment test to the latest appointment certificate, as well as photographs taken in major company events, words engraved on the appreciation plaque presented to one of his colleagues leaving the company, and his notebooks in which he had written down details of daily business activities. All of these items were assembled in a book to create a record of his long years dedicated to a single company.

However, he also spoke of the difficulties involving the act of recording the past.

For good record-keeping practices, the following three factors should be considered: what method is employed to keep a certain record, how long it can be preserved, and how objectively it is presented. Now that we have realized the comprehensive loss of past records and data, we should establish principles or systems to assist in the management of documents and other material, with these three factors in mind.

First, as for the method of keeping records, an endless flow of empirical data is

being accumulated today to be referred to in the future, which is possible due to the development of a variety of related technologies, including advanced computer data storage, as opposed to photographic films, as well as userfriendly cameras, hand-writing, touch screens in many digital apparatus, and security features available in various formats. In terms of the accumulation of records today, there are so many sources floating on the Web and images being recorded by CCTVs all over the nation as well as black boxes in automobiles.

One hundred years from now, it may be even possible to recreate a video clip entitled, “a scene on the path along the stone walls of Deoksu Palace at 5 p.m. on a day in May, 2012.�

Secondly, however, the matter of safe storage of all those sources is not to be overlooked. A U.S. weekly magazine featured an interesting report on electronic record-keeping, which pointed out that contrary to general assumptions digital data have become inaccessible faster than paper materials.

For example, data stored in magnetic tapes, data cartridges and floppy disks, which were widely used only decades ago, are inaccessible because their readers are no long available.

Some countries have attempted to enact a law stipulating that important national records should be kept on paper because paper records tend to last longer than electronic data. However, it seems to be a preposterous idea to store exponentially increasing digital materials by printing them all on paper.

Another problem with electronic record-keeping involves the possibility of deleting an important file in a few seconds. As a preemptive measure, electronic data should be copied into the latest data storage equipment on a regular basis, just as the people of the Joseon period would give important books an airing to preserve them as long as possible.

Third, objectivity is one of the most important qualities that provide

authenticity to historical records. The recent project to look back on the 30 years of the Internet in Korea has been a meaningful opportunity to collect and verify important material. Records that cannot be properly recognized are nothing but garbage. They should be rigorously verified and accredited based on facts. To prevent recorded materials from being counterfeited or falsified, it may be necessary to introduce digital copyright management, such as DRM. The upcoming 30th anniversary events will serve as a milestone in the Internet history of Korea, in that they not only celebrate Korea’s success in the global IT industry but also provide a valuable opportunity to collect, sort and store relevant material for future reference. This meaningful recollection of the past will offer today’s Internet users a springboard for further development in the next 30 years. Historically, Korea boasted of having an advanced recordkeeping culture. Succeeding this brilliant legacy, we should keep faithful records of our times and hand them down to the posterity.

[Digital Times, May 24, 2012]

www.koreafocus.or.kr

- Social Changes in North Korea 2008-2011: Interviews with Defectors - The Rise of China and Korea’s Military Strategic Choices - Outplacement Support: Solution to Job Insecurity of Older People

Social Changes in North Korea 2008-2011: Interviews with Defectors Kim Phlilo (Kim Byeong-ro) Research Fellow Institute for Peace and Unification Studies Seoul National University

I. Purpose and Method of Study 1. Purpose of Study The death of Chairman Kim Jong-il in December 2011 was a turning point for North Korean society. The North is enjoying relative stability and any serious problems are unlikely for the time being. To be sure, the power succession to Kim’s third son, Jong-un, was extensively promoted when the health of the elder Kim began to deteriorate, and China is expected to continue its support for its communist ally. But when economic conditions and social changes are considered, it is difficult to be optimistic.

Amid persistent hunger and food shortages, there have always been latent demands for change to ensure survival and the increase in the number of mobile phone users to more than 1 million is changing information gathering and culture in North Korea fundamentally. If the situation ripens, one cannot rule out the possibility that a wind of change, such as the “Jasmine Revolution� that swept the Middle East and North Africa in early 2010, will land on North Korea, too.

Most post-Cold War studies of North Korea have been based largely on scattered statements from defectors. This methodology, forced by the lack of

reliable statistics and empirical data from the North Korean government, has gained prominence. It is a welcome departure by the academic community, which usually had depended on intelligence reports and official texts. Still, many regard this approach as inferior to methodologies of other academic branches. In this regard, the experiences and thoughts of North Korean defectors should be collected in more systematic and comprehensive ways to enhance the scientific precision and objectivity of North Korean studies.

This paper empirically analyzes and assesses social changes in North Korea in 2008-2011, by using the surveys of defectors conducted by the Institute for Peace and Unification Studies of Seoul National University. The time period was when North Korea prepared for its power succession. It coincided with the tenure of the Lee Myung-bak administration in South Korea, providing the advantage of interpreting the social changes in North Korea by linking them to the South Korean government’s North Korea policy.

2. Method of Study The data used in this paper is derived from oral surveys done for the “Study on the Unification Consciousness of North Koreans (Defectors)” by the Institute for Peace and Unification Studies of Seoul National University. Interviews were conducted in July 2008 and October 2009, at Hanawon, the governmentrun institution that educates defectors to help them better adjust to life in South Korea. The government barred a third survey at Hanawon in 2010 so interviews instead were conducted with the institution’s graduates between April and June in 2011. The 2011 survey involved some of the most recent defectors from North Korea. Thus, it reflects conditions in the North more accurately than the earlier surveys. Furthermore, the 2011 respondents had spent little time in third countries before arriving in South Korea.

There are limitations to the analysis of these surveys. The 2008 and 2009 survey pool was dictated by the year the defectors entered Hanawon, but the 2011 survey involved those who had left the North after January 2010.

Accordingly, the characteristics of the surveys differ so caution is needed when interpreting the surveys. However, the significance of the surveys should not be underestimated; they are no doubt useful for assessing social changes in North Korea.

This study uses only the parts of the surveys that relate to North Korea’s social conditions. (Other questions concerned the defectors’ views on unification and the South Korean government’s North Korea policy, their perception of South Korea, situations in North Korea, and their adjustment to life in South Korea.)

The 2011 survey was designed to offer comparison with the 2008 and 2009 surveys in order to create a foundation for the surveys to be used as basic data for academic study and policy research.

This study analyzes social changes in North Korea by dividing them into four major areas: 1) private economic activity and living standards; 2) information circulation and cultural changes; 3) social controls; and 4) political consciousness.

Private economic activity and living standards is the most immediate issue in North Korean society, and is the part most directly affected by domestic reform measures, such as free markets. Information circulation and culture is a conceptual area that concerns changes in the ideology and awareness of North Koreans, which is related with opening up the North Korean system. Social control is a physical and moral mechanism for suppression and persuasion to maintain and manage social order in North Korean society. Lastly, political consciousness refers to North Korean people’s levels of critical views of their system, or the people’s will to defend it, an area that exerts decisive influence

on the sustainability of North Korea’s political system.

II. Review of Previous Studies and Analysis of the Data Used 1. Review of Previous Studies Typical examples of research on North Korean society through surveys of defectors can be found in work done at the Korea Institute for National Unification (KINU). Beginning with the research by Kim Byeong-ro and Kim Seong-cheol as well as the publication of “White Paper on North Korea’s Human Rights,” KINU’s researchers have been promoting empirical studies in various areas such as North Korea’s human rights situation, economy, society, military and politics on the basis of refugee surveys since the 1990s.

Kim Byeong-ro surveyed eight defectors and analyzed North Koreans’ internationalization of juche (self-reliance) ideology, in terms of their philosophy, collectivism, views on leadership and political consciousness based on North Korean-style socialism. Kim Seong-cheol surveyed 29 defectors for a study of the level of crisis in the North Korean system and its durability in terms of ideology, elitism, economy, social control and external relations.

His research led to similar work by Jeon Hyeon-jun and others a decade later, who, based on interview surveys of 261 defectors, evaluated durability and changes in the North Korean system in 1996-2005 through an analysis of different social segments. The “White Paper on North Korean Human Rights,” which has been updated annually since its first publication in 1996, based on interviews with 20 defectors every year, documents in detail the examples of human rights violations in North Korea by subjects.

Cho Jeong-ah and others conducted two separate in-depth interviews with 41 and 54 defectors, respectively, to analyze various aspects of North Koreans’ daily lives, their consciousness and identity. The study was meaningful because, while the previous studies focused on aberrant aspects of North Koreans’ consciousness, it stressed microcosmic and internal mechanisms in which individuals form such consciousness within a social structure.

Kim Su-im and others used in-depth interview surveys of 41 defectors, conducted between 2009 and 2010, to analyze the quality of life in North Korea. They gathered the opinions of different classes, age groups and genders on basic necessities of life, education and health care. Lee Geum-sun and Jeon Hyeon-jun expanded the scale of interviewing to 1,083 people to analyze human rights violations in 21 sub-categories, such as torture, beating and sexual violence.

Encouraged by the outcome of defector surveys, Lee Kyo-deok, Jeong Kyuseop and Lee Gi-dong focused on a specific group of 200 soldiers-turneddefectors to study disciplines in the North Korean army, while Jeong Yeongtae and others assessed the latest situations of the Workers’ Party, public security agencies, military and workers’ organizations. These studies of specific groups found that although problems are increasing within these organizations, including embezzlement and misappropriation, loyalty and morale remain high, retaining 80-90 percent of their revolutionary character.

Another group that has used defector surveys to analyze North Korean society is comprised of economists and sociologists, who rely heavily on empirical data and strict statistical analysis. Studies by various researchers ― such as Yang Mun-su, Lee Yeong-hun, Lee Seung-hun and Hong Du-seung, Kim Byeong-yeon and Song Dong-ho, and Kim Byeong-yeon and Yang Mun-su ―

analyzed market reforms and increase in private economic activity as well as subsequent changes in income structure. On the whole, wage income and business income had a ratio of 1:9, and the share of income from informal sources was much higher (70-75 percent) compared to other socialist countries. This structure had existed even before the economic management measures of July 1, 2002, and hasn’t changed much.

Among foreign research papers that analyzed the North Korean society based on defector surveys, the most noticeable one was co-authored by Stephan Haggard and Marcus Noland. This study, based on surveys of 300 defectors conducted in November 2009, analyzed how free markets brought about changes in the consciousness of North Korean population. he study found that despite the rising corruption, irregularity and influence of free markets, there was little possibility that the North Korean regime would collapse anytime soon.

In most of the aforementioned research, interview subjects were selected according to the scope of the respective studies. Although they have their own merits in providing useful data and information about North Korean situation, the studies are basically limited to fragmentary analyses at a specific time.

Their criteria of comparison were often unclear and lacked objective judgment.

In this regard, this study attempted to make a comprehensive evaluation of various aspects of North Korea, including economy, culture, society and politics. Also, it contains the contents of surveys conducted from 2008 to 2011, offering a time-series analysis of yearly changes, though confined to a short period of time. The direction and scale of changes in North Korean society could be evaluated by grasping periodical changes and trends rather than a cross-sectional analysis of the situation at a specific point of time.

2. Demographic and Sociological Background of Respondents Women accounted for 84 percent, 71 percent and 65 percent of the survey participants in 2008, 2009 and 2011, respectively, as shown in <Table 1>. This mirrors the fact that women made up 78.2 percent and 77.2 percent of North Korean defectors who arrived in the South in 2008 and 2009, respectively. Of course, the percentages are far from the North Korean demographic structure in which women accounts for only 51.3 percent of the total population.

However, if the percentage of males is intentionally raised to reflect the Northâ&#x20AC;&#x2122;s gender distribution, the results could become biased.

Defectors in their 20s accounted for 28.4 percent of the total surveyed, compared with those in the 30s (37.8 percent), 40s (19.6 percent) and 50s or older (5.4 percent) in 2008, showing slight differences from the entire defector population. That is, although the sampling has a similarity with the age structure of defectors in which those in their 30s comprise 41.6 percent, followed by the 40s (27.8 percent), 20s (22.2 percent) and 50s (8.4 percent), there are slight differences in each age group. However, the sampling should be seen as valid, as the 20- and 30-somethings account for the biggest portion, just as in the entire defector group.

As for educational level, 77.7 percent of respondents graduated from high school, followed by vocational schools (8.9 percent) and colleges (7.8 percent). Some 43 percent of the respondents in 2011 graduated from vocational schools or higher, more than double their peers in the 2008 and 2009 groups, suggesting an increasing number of highly educated North Koreans are defecting. Among all the North Korean defectors who have resettled in the South, 75.4 percent graduated high schools, followed by vocational school graduates at 14.6 percent and college graduates at 10.0 percent, which is comparable to the sampling groups for this study. It also is close to the average education levels of North Koreans.

By vocation, the share of manual workers made up 45 percent and 46 percent of the total in 2008 and 2009, respectively, and despite a decline to 30 percent in 2011, still took up the largest portion. Farmers accounted for 8-9 percent, while office workers took up 7 percent, 5 percent and 13 percent in 2008, 2009 and 2011, respectively, and intellectuals-professionals amounted to 4 percent, 6 percent and 8 percent, respectively.

By region, as seen in <Table 1>, respondents who hailed from North Hamgyong Province accounted for most of those surveyed. In the 2008 and 2009 surveys, those from North Hamgyong made up 61.2 percent and 69.7 percent, followed by South Hamgyong Provinceâ&#x20AC;&#x2122;s 10.1 percent and 8.6 percent, and Yanggang Provinceâ&#x20AC;&#x2122;s 9.8 percent and 6.0 percent. This is very similar to the composition of entire defectors, in which North Hamgyong accounts for 69.1 percent, followed by South Hamgyong with 9.1 percent, Yanggang with 5.7 percent and Pyongyang with 4.7 percent, attesting that people from provinces bordering China take up dominant portions.

A slight difference was found in the 2011 survey, however. There was little change in that North Hamgyong residents took up the biggest portion of 52.6

percent, but those from Yanggang also sharply rose to 36.0 percent. This was probably because the 2011 samples consisted mainly of latest arrivals. The sampling by region shows the biggest gap with the North Korean population, failing to reflect their demographic composition. Most conspicuously, North Hamgyong makes up 60-70 percent of defectors while the province has a mere 10 percent of the country’s population.

As the purpose of this study is to correctly assess the current conditions of North Korean society, the timing of the respondents’ departure from the North is important. It would have been most desirable if all of the respondents had left North Korea less than a year before the survey. In the 2008 and 2009 surveys based on group interviews at Hanawon, however, the respondents were selected not by the time of their departure from the North but their arrival in the South. In both surveys, only about half of the respondents had left North Korea less than five years earlier. Therefore, their descriptions of North Korea could be somewhat different from today’s situation. Fortunately, all of the respondents in 2011 had directly entered into the South without passing through third countries, so their statements should be seen to reflect the recent situation in the North most closely.

In view of the notable demographic differences in gender composition and places of origin from the general population back home, the respondents’ depictions of North Korean society should be carefully analyzed, taking into account the extent of possible errors. This is a fundamental problem inherent in research based on the defector population, which requires gradual improvement. Despite these problems and limitations, however, defector surveys are undoubtedly useful in grasping conditions in North Korea.

Although the sampling’s representativeness and accuracy fall somewhat short of being satisfactory, it has sufficient analytical value in that the responses in different years show a constant pattern. If the responses in different categories

are comparatively analyzed by taking into account the dataâ&#x20AC;&#x2122;s characteristics as well as the continuity and change of underlying factors, it will be possible to obtain meaningful results for academic research and policy decisions.

III. Private Economic Activity and Living Standard 1. North Korean Residentsâ&#x20AC;&#x2122; Private Economic Activity As food shortage aggravates and a market economy progresses, North Koreans increasingly tend to maintain their livelihoods through private economic activity, not relying on wages and state rationing. Kim Byeong-yeon concluded that informal income accounted for 70-80 percent of North Koreansâ&#x20AC;&#x2122; total income in 1996-2003. In this study, as seen in <Table 2>, about 40-50 percent of those surveyed did not answer a similar question, making it difficult to determine the share of informal income. Among the respondents who answered in 2011, 60.5 percent had an informal income, far higher than comparable figures of 31.1 percent in 2008 and 30.2 percent in 2009.

To figure out the share of informal income, the survey asked the defectors whether they had business experience. The portion of those who answered positively increased from 56.8 percent (2008) to 66.7 percent (2009) and to 69.3 percent (2011). Considering that most of the respondents were manual laborers, farmers, office workers and professionals, chances are high that business was their second job and the major source of informal income. As <Table 3> shows, the share of defectors with business experience has been increasing in the past four years, indicating private economic activity has gradually expanded in North Korea.

To the question of â&#x20AC;&#x153;How many North Koreans do you think are engaged in running stores and other personal business at markets?â&#x20AC;? the largest number of respondents said more than 90 percent or about 80 percent, followed by 70 percent and 60 percent. However, when these percentages were added to those who said that more than 50 percent of North Korean residents are engaged in private economic activity, the combined shares fell from 89.2 percent (2008) to 84.7 percent (2009) and to 82.1 percent (2011). In contrast, those who replied that less than 50 percent are engaged in business and other private economic activity increased from 9.1 percent (2008) to 13.0 percent (2009) and to 16.1

percent (2011). These tallies imply that private economic activity has somehow become increasingly difficult.

We will explain about such a phenomenon in the following passage but it seems to be closely related with the expansion of lower-income groups and income polarization. In 2008, the largest number of respondents, or 30.7 percent, replied the share of private economic activity would be 80 percent, and in 2011, 32.1 percent of surveyed said it would be more than 90 percent.

Considering that the replies of more than 90 percent sharply increased from 28.3 percent in 2008 to 32.1 percent in 2011, the number of North Korean residents engaged in business and other private economic activity is obviously increasing among certain groups and classes. As seen earlier, however, an increasing number of respondents observed private economic activity has declined as a whole and those who underestimated the portion of such activity

increased in number, suggesting that private economic activity didn’t seem to increase as rapidly as had been expected.

The reason for such ambivalent appraisal about private economic activity appears to be related to North Korea’s effort to restore a planned economic system to become “a strong and prosperous nation” and to set up the Kim Jong-un regime. While some North Koreans remain fully engaged in private business and continue to accumulate wealth, others experience increasing difficulties in private economic activity as the authorities tighten controls on free markets. There is a possibility that the vested interest structure of private economic activity is being partially threatened, as Pyongyang steps up crackdowns and controls on markets in an attempt to restore centralized economic planning.

2. Polarization of Living Standards The polarization of North Koreans’ lives refers to a phenomenon, in which income extremes are increasing. As seen in <Table 2>, the number of respondents whose formal wages were 100 won or less increased from 22.0 percent in 2008 to 23.2 percent in 2009 and to 38.6 percent in 2011. In 2011, as many as 26.3 percent said they had received no formal wages. Compared with 2008 and 2009, people belonging to the low-income bracket showed an increase in 2011. On the other hand, those who made 10,000 won or more, which stood at less than 2 percent of respondents in 2008-2009, soared to 8.8 percent in 2011. All this shows income polarization has deepened in the past two or three years.

The aggravated income polarization in 2011 forced us to look more closely into the 2011 survey. <Table 5> shows the formal and informal income of respondents in 2011. Although most of the respondents earned 1,000 won or

less in formal wages, as many as seven individuals earned up to 100,000 won a month, and three others made more than 100,000 won. In the informal income category, the gap widened further. Those who made 10,000 won or more through informal means amounted to 14.2 percent and 18.9 percent in 2008 and 2009, respectively, but the proportion drastically rose to 43.0 percent in 2011. Of the total, those who made 10,000-100,000 won accounted for 20.2 percent, followed by those earning 100,000-500,000 won with 15.8 percent, those earning 500,000-1 million won with 3.5 percent, and those earning more than 1 million won also with 3.5 percent. This suggests a markedly higher reliance on informal income in 2011 compared with the 2008-2009 period, which widened the income gap even further.

Meanwhile, there was also a considerable gap between necessary living expenses and actual income. As seen in <Table 5>, only 25 percent of respondents earned 100,000 won or more through formal and informal means, while 51.8 percent said they needed more than 100,000 won for living

expenses. To the question of “How much did you think you should earn a month to lead a satisfactory life while residing in North Korea?” 31.5 percent said “100,000 won or less,” followed by those who said “200,000-300,000 won” (26.3 percent), “500,000-1 million won” (23.7 percent) and “more than 1 million won” (1.8 percent), indicating more than half, or 51.8 percent, said they needed more than 100,000 won. This shows North Koreans’ real income falls far short of meeting minimum living expenses.

The survey included a question that revealed income polarization among North Koreans since the period of “March of Tribulation.” To measure the difference, it asked “While residing in North Korea, how much did you think the living standards of residents had changed since the turn of the 2000s, in comparison to the period preceding the March of Tribulation?” As seen in <Table 6>, replies to this question divided almost evenly between those who thought living standards had “aggravated” (49.1 percent) and those who thought they had “improved” (50.9 percent). This underscores the deepening gap in personal wealth as well as income polarization.

The steep income polarization among different social classes has also been pointed out in a recent lecture for senior members of the Central Chapter of the Workers’ Party. The lecturer, Chang Yong-sun, asserted that while a number of people have found it difficult to make ends meet since the March of Tribulation, a cash-laden group of millionaires and billionaires has also emerged, resulting in a serious crack in national unity. His remark reaffirmed the serious aggravation of income polarization in the North Korean society since the acute famine in the mid-1990s.

The intensifying income polarization is probably due to the fact that private economic activity now occupies a certain portion of North Koreaâ&#x20AC;&#x2122;s economic structure, which has exacerbated inequality. This can also be confirmed through the study of Kim Byeong-yeon and Yang Mun-su, which estimated the share of businesses run by individuals under state consignment accounted for 20 percent of the manufacturing sector, 50 percent of the services sector and 40 percent of foreign trade. Private businesses on commission seem to have existed for the past several years without much change, and if the North Korean authorities had stepped up crackdowns on new entrants to tighten central control in a bid to restore planned economy, the existing private activity could have deepened income inequality.

The cross-tabulation of income polarization by age and education points to a certain trend. That is, the number of respondents who said living standards have improved was relatively larger among those in their 20s-40s, but smaller among the 50s-60s group. The share of positive responses was 57.8 percent, 56.6 percent and 62.5 percent among the 20s, 30s and 40s, while it remained lower at 33.3 percent and 25 percent in the 50s and 60s groups, respectively. In

terms of educational background, the percentage of those experiencing improved living standards was higher among those with more education.

Seventy-five percent of college graduates said their living standards have turned for the better, followed by 54 percent of vocational school graduates and 46 percent of high school graduates.

The trend in which income levels are climbing among the youngest and most educated has become increasingly noticeable. This shows that in the 15 years since the March of Tribulation, the gap in living standards among different generations and classes has only widened. Particularly, this implies that in the North, too, those who benefit by making the most of private economic space, such as running stores and operating their own business, are more likely to be the young and highly educated.

Such an analysis provides an important implication with respect to the conflicting assertions in South Korea about the food shortages in the North.

Conservatives, citing the observation of recent visitors to North Korea who saw overall improvement in North Korean economy, such as markedly increased vigor and more vehicles, oppose economic aid to the North. On the other hand, the progressives, citing reports of the United Nations and other international agencies as well as NGOs at home and abroad, insist that the North Korean food shortage has deepened and call for economic assistance for the North. Although these assessments appear to be contradictory, they can both prove to be valid, considering the ever-widening income gap and exacerbating economic polarization in North Korea.

IV. Information Circulation and Cultural Changes 1. Increase in Population Movement

Population movement constitutes a vital criterion in gauging changes in the North Korean system. This is because the North Korean government restricts the geographical movement of its residents between cities, counties and provinces. The increase in residents’ mobility in the North Korean society, therefore, provides a useful clue to changes that are occurring within the closed regime. As seen in <Figure 1>, as to the question of “Have you been to other regions (counties, cities, provinces or foreign countries)?” the share of respondents who replied “yes, frequently” increased from 17.2 percent (2008) to 19.8 percent (2009) and to 24.8 percent (2011), while those who replied “no, hardly” decreased from 44.1 percent (2008) to 36 percent (2009) and then slightly increased to 37.2 percent (2011).

The main reason for the increased mobility of residents seems to be the need for finding food. A growing number of North Koreans are traveling to their family members and relatives in other regions of the country to obtain food from them, and the government is even encouraging people to visit their kin

living abroad, mostly in China. In 2011, a total of 152,300 North Koreans visited China, a 31 percent increase from 2010. More and more North Korean visitors to China are overstaying their allowed visa period, not returning home for several months or even a year, causing friction with the State Security Department. North Koreaâ&#x20AC;&#x2122;s floating population provides opportunities to disseminate information and is also serving as a channel to spread foreign culture.

Population mobility is most brisk among those in their 30s (33.3 percent) and 40s (31.2 percent), while least frequent among those in their 20s (18 percent) and 60s (16.6 percent). However, <Figure 1> shows a peculiar phenomenon, in which the number of defectors in their 20s continued to rise from 28.4 percent (2008) to 30.0 percent (2009) and to 34.2 percent (2011), and those over 50 also increased. The phenomenon reflects a trend marked by simultaneous increases of defectors in their 20s and over 50 years old.

The high residential mobility among those in their 30s and 40s could be attributed to the fact that they are the most economically active age groups in North Korea, who are better positioned to travel to other regions either for formal or informal purposes. As noted in the section on private economic activity, the positive replies on living standards were most common among the 40-somethings, followed by those in their 30s and 20s, suggesting a high probability of connection between resident mobility and private economic activity.

2. Spread of South Korean Popular Culture and Information Circulation As seen in <Figure 2>, the spread of hallyu, or the Korean Wave, and information dissemination are rapidly progressing in North Korea. Some 60-70 percent of respondents said yes to the question, â&#x20AC;&#x153;While residing in North

Korea, have you been exposed to South Korean broadcasts, films, dramas and songs (music)?” The percentage increased from 64.7 percent in 2008 to 77.7 percent in 2011. Particularly, those who had “frequent contacts” nearly doubled ― 25.4 percent in 2008 to 44.6 percent in 2011 ― while those who had “no contacts” at all fell from 35.3 percent to 22.3 percent.

As expected, those in their 20s and 30s were most frequently exposed to South Korean culture. The 30-somethings topped this category with 60 percent, followed by the 20s (47.3 percent), 40s (37.5 percent), 50s (33.3 percent) and 60s (25 percent). By educational level, college graduates (75 percent) and vocational school graduates (66.6 percent) had far more contacts than high school graduates (32 percent), indicating the younger and the more educated, the greater the curiosity about South Korean culture and the more frequent their chances for exposure. In this regard, it would be worth watching whether the increased contacts with hallyu among the younger generations will become a catalyst to changes in the North Korean society.

With respect to the information circulation in North Korea, the survey asked whether the defectors have had access to North Korean news since they left their country. <Table 7> shows about 70 percent of respondents heard news about North Korea after they escaped the country. As noted by various reports, North Korean news was mostly conveyed through personal visits in the past, but recently cell phones have become a popular medium for sharing news.

The number of mobile phones being used in North Korea topped 1 million as of February 2012, a little more than three years after mobile communications opened in the country in December 2008. When the Chinese cell phones illegally used by North Korean defectors are considered, information must be disseminated at an increasingly rapid speed. The proportion of defectors who have relatives in South Korea has risen from 30 percent in 2008 to 40 percent in 2009 and then to 56 percent in 2011, suggesting the expanding access to South Korean culture.

Contrary to the trend toward increased information dissemination, however, North Koreansâ&#x20AC;&#x2122; awareness of South Koreaâ&#x20AC;&#x2122;s humanitarian aid to the North was seen to be diminishing. Asked how much the North Korean people know about

the rice and fertilizer aid from the South, the proportion of respondents who said “they know about it” fell 14.2 percentage points, from 78.8 percent (2008) to 72.0 percent (2009) and to 64.6 percent (2011). But this seems more attributable to the actual declines in the South’s economic assistance rather than the interruption of information circulation.

In other words, up to 80 percent of North Koreans knew about South Korea’s economic assistance when aid was actively offered, but the percentage dropped to 65 percent when the South suspended its assistance. This means that only through increased people-to-people contacts and material exchanges between the two Koreas can South Korean popular culture and information spread more vigorously across North Korean society.

3. Expansion of Individualistic Values As shown in <Figure 3>, collective values are weakening in North Korean society as it increasingly pursues individualism. The share of respondents who put community ahead of individuals fell from 26.7 percent in 2008 to 20.4 percent in 2009 and to 17.8 percent in 2011. On the other hand, those who put individuals ahead of community climbed from 73.3 percent to 79.6 percent and then to 82.2 percent. The surveys thus confirmed a gradual shift to individualistic values.

Collectivism stressed under the socialist system is losing its justification, with a growing number of residents resorting to personal businesses for survival amid worsening economic difficulties, and residents’ mobility and information circulation become increasingly widespread. Individualism is especially noticeable among the relatively younger age groups of the 20s (89.7 percent), 30s (82.7 percent) and 40s (87.5 percent). These age groups spontaneously adjust to a private market environment, receive information from the outside

and while watching South Korean dramas and movies, change their thoughts and value systems faster than others.

V. Social Controls 1. Regime Criticism on the Rise <Figure 4> shows a notable increase in North Korean residents’ criticism of their government in recent years. To the question of “While residing in North Korea, how serious did you think the people’s critical activities (graffiti, leaflets, etc.) against their leaders and government were?” positive replies such as “very much” and “somewhat” increased from 60.2 percent in 2008 to 69.7 percent in 2011, while negative answers such as “almost not” and “not at all” declined from 39.8 percent to 30.3 percent over the period, reflecting increases in activities criticizing the government.

Increase in criticism of the government provides strong evidence of weakened social control. When asked “To what extent social controls by the state security authorities were maintained?” those who replied “well maintained” declined from 49.8 percent (2008) to 38.7 percent (2009) and to 37.2 percent (2011), while those who said “not so well maintained” rose from 50.2 percent (2008) to 61.2 percent (2009) and to 62.8 percent (2011).

2. Loosening Observance of Production Rules <Figure 5> illustrates how production rules are not properly respected at workplaces. A mere 30 percent of respondents said production rules were faithfully observed, with the other 70 percent replying their workplaces were operated abnormally, indicating production activities at workplaces are not managed normally. Irregular production activities, however, have continued over the past decade because of protracted food shortages. They have not particularly worsened in recent years. As seen in <Figure 5>, the gradual increase of respondents who said “production rules are generally observed,”

from 28 percent in 2008 to 32 percent in 2011, supports this assumption.

This phenomenon should be interpreted that irregular management of production activities has become a sort of typical practice in recent years.

According to the defectors, all worksites are expected to report their daily worker attendance to the Ministry of Public Security, which helps to keep the official worker attendance rates high. Those who engaged in their private business are still reported as being present at their workplaces, so official attendance rates are maintained at high levels while the reality can be far different.

In fact, only about 30 percent of workers appear to be actually participating in official production activities. For example, those mobilized for the â&#x20AC;&#x153;August 3 Projectâ&#x20AC;? to manufacture daily necessities may leave their workplaces to engage in private economic activities immediately after they report their attendance, or merely submit their attendance on paper. In return, men pay 30,000 won and women pay 15,000 won on average a month to their workplace. Of course, the amount varies depending on regions and workplaces. However, those who donâ&#x20AC;&#x2122;t appear at their workplaces should not be regarded as behaving completely out of control by the state-run worksites or the government. Rather, these irregular practices have taken root under a tacit endorsement of the authorities.

3. Self- and Mutual Criticism Sessions <Table 8> shows North Korean residentsâ&#x20AC;&#x2122; attendance rates at the weekly community sessions for mutual surveillance and criticism. In 2011, 34.8 percent of respondents estimated the average attendance rate at 50-70 percent, followed by 23.7 percent citing 70-90 percent, and 15.7 percent citing over 90 percent. A direct comparison with 2008 and 2009 is not possible due to the absence of data for those two years. According to the data of KINU, however, those who cited above-90 percent attendance rate accounted for 26.0 percent of respondents in 2008, 16.2 percent in 2009 and 19.5 percent in 2010, suggesting a gradual decline in the rate. Yet, it declined only 2.0 percentage points, from 19.5 percent in 2010 to 17.5 percent in 2011, and even edged up compared with 2009.

Based on the above-mentioned data, the attendance rates at weekly criticism sessions hover in the 70-80 percent range. These figures refer to actual attendance rates, which can be different from nominal rates. In North Korea, absence from these sessions is not without offering special reasons, and all absentees must send a letter to the party secretary, stating the reason for being absent and criticizing oneself and others. Although there may be differences in attendance rate by region or workplace, the weekly criticism sessions appear to be gradually losing their influence over the general population.

VI. Political Indoctrination 1. Pride in the Juche Ideology <Figure 6> shows the level of internalization of the juche ideology among North Korean residents. To the question of “Do North Koreans have pride in the juche ideology?” 60 percent said “yes,” while 40 percent said “no.” The share of positive responses stood at 63.7 percent in 2008 and fell to 54.8 percent in 2009, but rebounded to 60.6 percent in 2011. These figures

represent a drop of some 20 percentage points from 1994, when some 80 percent professed pride in the ideology. The fact that the percentage continues to remain at a certain level is apparently due to ideological education by the North Korean authorities and activities of their propaganda machine.

By age group, those in their 30s manifested the greatest pride in juche with 66.6 percent, followed by those in their 20s (63.1 percent), 40s (58.8 percent), 60s (54.5 percent) and 50s (40 percent), indicating North Koreans in their 20s to 40s are most proud of their countryâ&#x20AC;&#x2122;s ruling ideology while those in their 50s are least proud of it. This is apparently due to the intensive ideological education conducted for young students and soldiers. On the other hand, those in their 50s must have realized many problems through their daily lives and experiences in society and workplaces.

2. Approval Rating for Chairman Kim Jong-il <Figure 7> concerns a question about the loyalty of North Korean residents

toward Chairman Kim Jong-il. To the question of “How much do you think the North Korean residents support Chairman Kim Jong-il?” the share of respondents who cited “over 50 percent” continued to increase from 49.3 percent (2008) to 54.3 percent (2009) and to 55.7 percent (2011). The steady rise in the support for Kim Jong-il obviously resulted from the widespread sympathy felt by the North Korean population for their leader when his health was failing. There was a surge of sympathy in 2009, following Kim’s reappearance three months after suffering a stroke in August 2008. His visits to China in May and August 2010 also appear to have had a considerable propaganda effect.

To measure North Koreans’ critical thinking in regard to Kim Jong-il, the survey had the question, “While residing in North Korea, what did you think was the reason for the economic difficulties of the country?” The largest portion, or 26 percent, cited “the leader,” which was far higher than excessive military spending (12-19 percent) or the lack of reform and openness (12-19 percent). This implies not a few North Koreans believe their nation’s economic

hardship derived from the top leader’s protracted dictatorship.

A time-series analysis of the percentage of the respondents who found the primary reason for food shortage in their leader shows that the percentage has not changed much but maintained the 26 percent level in the past four years ― 26.1 percent in July 2008, 28.1 percent in July 2009 and 25.9 percent in June 2011 ― as shown in <Table 9>. Considering that only 8.0 percent of North Koreans cited the leader’s responsibility in a survey conducted by “Good Friends,” a non-government organization engaged in humanitarian support for North Korean residents, in December 1998, criticism of Chairman Kim soared 18 percentage points over the past decade.

Compared with a decade ago, the respondents who cited natural disasters sharply declined while those who blamed the leader and the lack of reform and openness rose, reflecting a spike in politically critical viewpoints. But the change remained insignificant, indicating it is progressing very slowly and gradually.

One noteworthy point in <Table 9> is that although the North Korean authorities blame their nationâ&#x20AC;&#x2122;s chronic food shortage on U.S. economic sanctions, the propaganda seems to have failed to dissuade residentsâ&#x20AC;&#x2122; awareness of the truth. The percentage of respondents who blamed the U.S. economic sanctions was very low at 3.9 percent in 2008, and has since shown little changes. In 1998, too, more than a decade ago from now, only a small share of North Koreans attributed their economic hardship to the U.S. sanctions, and the ratio has hardly changed, indicating the blame Pyongyang heaps on the United States does not seem to be effective and is little more than customary political rhetoric in the eyes of North Korean residents.

3. Increasing Preference for Socialist System To measure the changes in the North Korean residents’ socialist thought and ideology, the survey asked, “While residing in North Korea, which system did you prefer between socialist economy (planned economy) and capitalist economy (market economy, private ownership economy)?” As a result, it was learned that a far larger share of respondents supported a capitalist economy than a socialist economy, as seen in <Figure 8>. A closer look into the trend in the last four years, however, found a sharp increase in the opinion advocating a socialist system. The share of respondents who expressed support for socialism rose from 3.5 percent in 2008 to 3.8 percent in 2009 and then jumped to 22.3 percent in 2011, while those who preferred capitalism fell from 90.9 percent in 2008 to 86.5 percent in 2009 and drastically to 67.8 percent in 2011.

The increase in support for the socialist planned economy seems to be in part because North Korea’s economy is recovering vitality to certain extents thanks to state investments and natural resources, as well as because those who have failed to adapt to the market environment have become more inclined toward the rationing system of a socialist planned economy. The latter prefers livelihood guarantees to the competition-oriented market economy of capitalism. It may also be the counterevidence that while the market environment has aggravated since the currency reform in November 2009, the state’s planned economy has turned for the better.

The lack of progress in the North Korean residents’ critical views of the regime seems to be due to their low level of political awareness and the effect of the North Korean authorities’ propaganda and agitation. Pyongyang used the failing health of Chairman Kim Jong-il as an opportunity to win popular sympathy, in an attempt to cement unity among people through orchestrated events such as the “150-day battle” and the “90-day battle,” as well as a fireworks festival.

The regime secured support from the middle and low-income groups by implementing currency reform and other measures, while propaganda and agitation has effectively kept a lid on popular criticism. Also contributing to the weakened regime criticism among the populace was the effects of image manipulation following the formal emergence of Kim Jong-il’s youngest son as successor in September 2010 to justify a third-generation power transfer.

VII. Conclusion

This study has examined the changes in North Korean society between 2008 and 2011 in four areas: private economic activity and residents’ livelihood, information circulation and cultural changes, social controls, and political consciousness. First of all, the share of informal income was found to have increased from 30 percent to 60 percent of the total earnings of North Koreans in the last four years, but it was difficult to grasp the clear picture of income structure as many of those surveyed made no replies. The portion of people engaged in personal business has also steadily increased to about 70 percent of the total population as of 2011.

Although participation in private economic activity rose among some groups and classes, however, it was seen to be declining as a whole. This is not much different from the result of previous studies, including one by Kim Byeongyeon, which analyzed that private economic activities of North Koreans have not increased as rapidly as had been expected. Rather, one could attach some significance to this study in that it raised a critical awareness that North Koreans’ private economic activities have shrunken in the last four years.

Another notable aspect of the changes in North Korean people’s lives is the expansion of the poor classes and rapid progress of income polarization.

Whereas there is an increase in the number of people who make only minimal income or even no income, the high-income bracket that earns more than 100,000 won or 500,000 won a month is expanding at the same time.

The fact that the group whose living standards has “risen higher” and those whose living standards have “fallen lower” were divided almost evenly ― 50.9 percent vs. 49.1 percent ― also reflects such a reality. Particularly, the gap in living standards keeps widening between the generations of 20s-40s and 50s-60s as well as between different social classes, accelerating the trend in which the younger generations make higher income than older ones, and those

with college and vocational school diplomas earn more than high school graduates.

In the area of information circulation and culture, it has been confirmed that the geographical mobility of residents is increasing, and the spread of South Korean cultural wave of hallyu, such as broadcasts, movies and dramas, has been progressing very rapidly in the last four years. The share of respondents who had “frequent contacts” with South Korean pop culture almost doubled from 23.3 percent in 2009 to 44.6 percent in 2011. North Koreans’ cultural contacts with the outside world, especially South Korea, are expanding so fast that about 70 percent of respondents have received news about North Korea even after defection.

Accordingly, their adherence to collective values continued to weaken from 26.7 percent to 20.4 percent and to 17.8 percent, while their attraction toward individualistic values rose from 73.3 percent to 79.6 percent and to 82.2 percent. Young groups in their 20s and 30s are leading the contacts with external information and culture, and it is necessary to watch whether their increased contacts with hallyu would serve as a catalyst that triggers changes in the North Korean society.

In the area of social controls, activities to criticize the government, through means such as graffiti and leaflets, have increased from 60.2 percent in 2008 to 69.7 percent in 2011, while the public security authorities’ social controls were seen to be easing in the last four years. There have been no major changes in the observance of production rules at workplaces over the cited period with the share of irregular operation overwhelming regular operation at a ratio of 7 to 3.

North Koreans’ attendance rate at weekly self- and mutual criticism sessions, which was included in the 2011 survey for the first time to understand their

organizational life, was seen to be declining as a whole to hover in the 70-80 percent range mainly because of the food shortage. The rate could not be compared with previous years for lack of data, however.

Lastly, in the area of political indoctrination, North Koreans were maintaining their pride in juche ideology at the 60 percent level, and the support rate for Chairman Kim Jong-il rose more than 6 percentage points after his health aggravated. Although North Koreans’ critical view of their leader has surged to 26 percent from 8 percent a decade ago, it has shown little change in the last four years to hover around 26 percent. Meanwhile, amid the accelerating income polarization, preference for capitalist economic system declined, while support for socialist system tended to rise steeply.

In conclusion, amid the high reliance on market among North Koreans, private economic activities have failed to expand but rather shrunken, while the polarization of living standards is in progress. As the control by public security authorities weakens, informatization and cultural inflow are rapidly expanding, while activities to criticize the government are increasing and collective consciousness is collapsing little by little.

However, these economic, cultural and social changes have fallen short of exerting significant influence on the political awareness of people. This is because North Korean residents’ levels of political awareness still remain low, and the North Korean authorities’ propaganda and agitation has worked effectively to prevent the people’s critical views of the regime from reaching menacing levels.

If we look ahead to the North Korean society in the next five years based on its changes during the last four years, although the growing income polarization, informatization and regime criticism may serve as factors that break up the

socialist system and thoughts, it is unlikely that political criticism will spread so broadly as to weaken the popular support for the top leader and juche ideology in any abrupt manners. On the contrary, there are possibilities that the North Korean authorities would intensify political indoctrination in their own ways through stepped-up image manipulation and propaganda and agitation activities that can pierce through the consciousness of the North Korean people.

It is worthy to note that polarization in the residents’ living standards is spreading and reproducing the unequal structure between the elite and the grassroots, which can create conflicts and cracks within the power elite. It is also necessary to take note of changes among the younger generations who have come to possess strong political awareness while enjoying economic privileges. As these younger generations have relatively higher mobility and have more frequent opportunities to have contacts with hallyu, they are more likely to have critical views of politics than other groups. In this context, it is no less important to watch carefully how the North Korean authorities cope with and justify these changes, using what logics and mobilizing what mechanisms of propaganda and agitation and popular persuasion.

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2) Theses Kwon Yeong-gyeong. “North Korean Economy in 2010: Negative Growth and Deepening Polarization of Growth.” Unified Korea (December 2011).

Park Seok-sam. “Study on North Korean Private Economy: Estimation of Private Economic Activity, Cash in Circulation and Foreign Currency in Private Possession.” Survey and Research (March 2002). Bank of Korea.

Yang Mun-su. “Formation and Development of Market in North Korea: With

Focus on Product Markets.” Study of Comparative Economy vol. 12 (2005).

Choi Dae-seok and Park Hee-jin. “Changes in North Korea as Seen in Nonsocialistic Behavioral Patterns.” Study of Unification Issues vol. 25, no. 2 (2011).

3) Other Sources Statistical Research Institute. 2011. Social trends of Korea 2010. Seoul: Statistics Korea.

Korea Institute for National Unification. White Paper on North Korea’s Human Rights (revised annually). Seoul.

2. Foreign Sources Central Bureau of Statistics. DPR Korea 2008 Population Census: National Report. CBS: Pyongyang, 2009.

Stephan Haggard and Marcus Noland (Ed). 2011. Witness to Transformation: Refugee Insights into North Korea. Washington, D.C.: Peterson Institute for International economics.

Kim, Byeong-Yeon and Song Dong-ho. “The Participation of North Korean Households in the Informal Economy: Size, Determinants, and Effect.” Seoul Journal of Economics vol. 21 (2008).

Hisashi Hirai. 2011. Succession in the North Korean Ruling System: From Kim Jong-il to Kim Jong-un. Tokyo: Iwanami Shoten Publishers.

Keisuke Fukuda. 2012. The Reality of North Korean Economic Opening under the New Regime. Tokyo: Weekly Toyo Keizai.

Editor’s Note ― This project was undertaken with the support of the Korea Research Foundation (Project No. NRF-2010-361-A00017) with funds from the Ministry of Education, Science and Technology.

[North Korean Studies Review, Vol. 1, No. 1, 2012, published by the University of North Korean Studies]

www.koreafocus.or.kr

The Rise of China and Korea’s Military Strategic Choices Park Min-hyoung Professor of Security Studies Korea National Defense University

I. Rise of China: Recognition of Threats As a nation’s overall capabilities grow in tandem with its population, economic power, military might and technological superiority, other nations feel increasingly threatened. Realistic observation sees China’s rise as a threat to the security of Northeast Asia and the global society with the possibility of its pursuit of regional hegemony. On the other hand, there is a more liberal observation that would focus on China’s contribution to the international community through its roles in the United Nations, the World Trade Organization and other international security and economic regimes. These seemingly contrasting views are either too pessimistic or optimistic, while there is a third, eclectic view.

China has many problems to overcome: a wide gap between the haves and have-nots, unemployment, corruption, an inefficient financial system due to central control, etc. Some predict that technological deficiencies, including weakness in basic sciences, will eventually decelerate economic expansion.

Despite these worries, Chinese economy grew 10.3 percent in 2010 amid the global financial crisis. Its defense budget reached US$78 billion to firmly rank second in the world. China’s rise is no longer a possibility but a reality. This paper analyzes changes in China’s military strategy with regard to its capabilities and intentions, the key factors in recognizing threats.

1. China’s Economic and Military Power: Capabilities

1) Economic Rise Starting from Deng Xiaoping’s “black cat, white cat” pronouncement in 1978, China embarked on economic reform and openness, shifting from a centralized planned economy to a market economy. Deng sent party and government officials on economic missions to the United States, Japan and major European countries, beginning in the first half of 1978, to learn Western experiences. The leader himself made visits to Japan (October 1978); Thailand, Malaysia and Singapore (November 1978); and the United States (January 1979).

China’s economic growth gained speed after it entered the WTO in 2001, recording an average growth rate of above 10 percent over the past five years.

(Table 1) As a result, its gross domestic product reached $1,340 billion as of the second quarter of 2010, edging Japan’s $1,290 billion to emerge as the second largest economy in the world.

China’s total exports in 2010 rose by 32.7 percent from the previous year with the global market share of its various products continuing to grow. Thanks largely to its enormous trade surplus with the United States, China had the world’s largest foreign exchange reserves, amounting to $2,847.3 billion, as of January 2011. Some 70 percent of its foreign exchange reserves are in U.S. dollars and about 40 percent of this amount is known to be invested in U.S.

bonds.

The economic prognosis of China after 2011 has rarely been pessimistic.

According to the “12.5 Plan” adopted at the 5th plenary meeting of the 17thterm Chinese Communist Party Central Committee, China will seek to shift from quantitative growth to qualitative expansion; pursue balanced development; deemphasize trade and promote domestic consumption; and strongly push regional development programs. The five-year goals beginning from 2011 signal Beijing’s determination to cope positively with negative side effects of economic development. Such efforts give rise to positive prospects for China’s economic future. To compensate for its technological weakness, China chose seven specific industries (Table 3) as its priority strategic development areas, for which foreign investment will be promoted and fiscal input expanded.

Through these efforts, China will continue to increase its role in the global economy and will eventually become the world’s largest economic power. The Carnegie Endowment for International Peace predicts that China will overtake the United States in 2032 to become the world’s largest economy while Goldman Sachs foresees China will be on par with the United States in terms of economic prowess in 2017.

China’s economic growth at present and in the future will raise the country’s status in political and security relations at the regional and global levels.

Beijing is already trying to be recognized as a “G2” member and treated as such in the global society.

2) Military Rise China’s key national interests in the 21st century can be defined in the following four directions: 1) guaranteeing national security and unity and achieving national economic development and prosperity; 2) defending against external aggression and protecting territorial sea and air and international borders; 3) deterring Taiwan’s independence and other separatist activities and suppressing all forms of terrorism and extremism; and 4) creating a security environment conducive to the development of national peace. China’s 2010 Defense White Paper defined the current period as China’s strategic opportunity for national progress and emphasized the awareness of its role in the new multipolar international order. It expresses China’s self-confidence as a superpower and calls for the modernization of its military power and development of science on the basis of economic growth.

China’s military policies are currently aimed at coping with the growth of Japanese military power, curbing the U.S. military influence in Asia and safeguarding its national interests in view of future security threats such as the Taiwan issue. Since the middle of the 1980s, China has cut back its military manpower by a total of 1.5 million on two occasions, and in 2005 reduced its military strength by another 200,000 men. It has established yet another plan to further reduce 300,000 troops by 2015 as the military shifts to a more technology-intensive structure. Over the past several years, China has made efforts to acquire a core strategic weapons system which includes nuclear submarines, long-range strategic weapons and aircraft carriers, already exhibiting some concrete outcomes.

In order to understand the progress of China’s military modernization and its

intentions behind such endeavors, it is necessary to review the country’s defense spending. For the past 20 years, China has increased its annual military expenditures by over 10 percent. (Table 4) In 2010, in particular, China’s defense budget hit $78 billion to reach the second place in the world in its scale after the United States. The amount is compared with Japan’s $46.9 billion and South Korea’s $27.1 billion.

China’s 2011 defense budget of $91.7 billion, accounting for 6 percent of its total national budget, represents a 12.7 percent increase over the 2010 level.

Furthermore, it is generally understood that China’s officially released defense budget figures are smaller than the actual military expenditures as they exclude many items such as the procurement of new weapons, military R&D costs and various personnel expenses. A U.S. Defense Department report on Chinese military capabilities estimates the actual defense spending at two to three times the official figures.

The phenomenal increase in China’s defense spending has raised assumptions that its military is now capable of affecting the regional balance of power.

Skeptics, however, point to the ever-present limitations, including the backward nature of China’s weapons system. They also note that the Chinese military has not had any combat experience in recent decades and lack combined operational functions. Still, China continues to address its military shortcomings on land, sea and in the air.

China’s navy is trying to improve its coastal operations capabilities by technologically advancing and readjusting its weapons system, and is endeavoring to bolster its submarine force with up-to-date anti-ship, anti-sub and anti-nuclear equipment. Surface vessels are also being reinforced with naval reconnaissance, surface-to-surface, anti-sub and anti-aircraft equipment.

The Chinese Navy has a total of 71 submarines, including three strategic nuclear-powered subs – one Xia-class sub equipped with 12 nuclear missiles and two Jin-class ones which can also carry up to 12 nuclear missiles. Among the 68 tactical submarines are six nuclear-powered subs.

China opened a new era of aircraft carriers as its first aircraft carrier, the Varyag, began sea trials near Dalian in Liaoning Province on August 10, 2011 after refitting the ship purchased from Ukraine in 1989. China plans to possess three aircraft carriers by 2020 with a view to projecting its naval operations to the Western Pacific and the Indian Ocean. In March 2011, PLA Major General Luo Yuan, who is a member of the Chinese People’s Political Consultative Conference, asserted that China’s possession of an aircraft carrier is a normal step as it symbolizes the strength of a superpower state and is necessary to protect its national interests. His remarks revealed the prevailing sentiment in the Chinese military.

The Chinese Air Force also shows steady advancement. It has the most advanced fourth-generation aircraft named SU-27SK, J-11 and SU-30MKK. More than 200 of these high-performance aircraft have been deployed at seven large military districts to cover the entire Chinese territory and respond quickly to emergencies in border areas. The J-10 fighters were combat-deployed in 2007 and J-10C, an upgraded fighter-bomber version, will be additionally produced. In stealth aircraft, China announced the successful test flight of J20, the fifth-generation stealth fighter in the world, in January 2011. The staterun CCTV reported in April the same year the test flight of a J-18, the stealth VTOL aircraft.

As of 2010, China was known to possess 1,050-1,150 ballistic missiles that have a range of up to 1,000 kilometers and was in the process of acquiring medium-range missiles of up to 3,000 kilometers. Its cruise missile arsenal

includes YJ-63, KD-88 and DH-10 types, and there are 200 to 500 DH-10s, according to a U.S. Defense Department estimate. China has combat-deployed the DF-31 ICBMs with a range of 8,000 kilometers and is known to be developing DF-31A MIRV missile and DF-41 ICBM of 12,000 km range.

Besides, China has purchased a large number of Russian-made SAMs capable of intercepting cruise missiles and is developing anti-ship ballistic missiles (ASBM) on its own.

As observed above, China is seeking to secure military power with which it can withstand and deter the United States’ military and strategic pressures by endeavoring to strengthen its high-tech combat capabilities. In doing so, China is making efforts to win cooperation from neighboring states. However, the growth of China’s military power adds uncertainties to the security environment in Northeast Asia and poses a military threat not only to the United States but to Japan, South Korea and Taiwan.

2. Change in China’s Military Strategy: Intention China’s 2010 Defense White Paper set forth four objectives: 1) protection of national sovereignty, security and national development interests; 2) maintenance of social harmony and stability; 3) acceleration of the modernization process of national defense and armed forces; and 4) maintenance of world peace and stability. Under these broad objectives, China’s military has the more direct goal of deterring Taiwan independence, securing sustained operational capabilities in the Taiwan Straits with air and naval supremacy and rapid troop landing capabilities. In addition, the Chinese military has the objectives of protecting coastal cities, sea routes and maritime sovereignty, for which it needs to improve its long-distance operational capabilities with adequate transportation and supply systems and better antiaircraft, anti-ship and anti-submarine warfare capabilities.

China’s military strategic guidelines have evolved from the “positive defense” concept of the 1950s and the early 1960s to the “new-age positive defense” concept adopted in 1993. The basis of China’s military strategy was “people’s war,” which began in the 1930s and lasted to the early 1970s. It called for fighting a war of attrition by combining unconventional guerrilla warfare and conventional war against potential U.S. or Soviet invasions. .

This defense-oriented strategy relied on the belief that an ideologically armed military can be as strong as any mighty weapons system of the enemy. It allowed offensive action only when absolute military superiority was secured with full advantage of defensive operations. In the late 1970s, the people’s war concept gave way to destroying the enemy at the border instead of luring them deep inside Chinese territory. This required a drastic military modernization with the reduction of manpower and personnel expenditures to support economic development.

However, in the early 1980s, China began to feel the need to revise the people’s war strategy because of changes in its security environment. In June 1985, Deng Xiaoping stressed that the People’s Liberation Army should prepare itself for limited local conflicts rather than a full-scale war with a superpower in view of the latter’s diminishing possibility. At that time, there was the trouble with Vietnam over the Spratly islands in the South China Sea and a new military conflict was brewing along the Indian border where India embarked on a large-scale troop deployment. Thus, the limited local war strategy was formulated to emphasize the capabilities of rapid response by ground forces, positive coastal defense by the navy, long-distance operations of the air force and the upgrading of nuclear and missile technologies.

In the early 1990s, the limited local warfare concept required the use of high

technologies, as strategists were affected by what transpired in the Gulf War. Immediately after the Gulf War, President Jiang Zemin remarked: “This war again convinced us of the importance of technology in modern warfare. We have believed that humans, not firearms, are the decisive element of victory in war, but advanced weaponry is also very important. So we shold not ignore the effect of science and technology in modern wars.” China became aware that it would have to be ready for intensive high-tech wars rather than a low-intensity conventional war.

The U.S. invasion of Iraq in 2003 further prompted China to apply yet another revision to its localized war strategy. The concept of modern information warfare had to be combined with the localized war strategy to develop a revolutionary concept of “local information war.” The 2010 Defense White Paper thus stressed the importance of developing a “new type of combat capabilities” and protecting national security interests in space and cyberspace.

This strategy presupposes that China’s future enemy would be equipped with high-tech weapons and capable of obtaining information through satellites.

The United States, Russia and Japan are in this category.

The changing military strategies clearly show that China has been growing as a leading member of the international community and as a key player in regional and global affairs. In spite of its pronounced strategic concept of “positive defense,” the military capabilities that China is currently building up indicate its intention to assume an offensive stance whenever it determines that its key interests have been infringed upon by a foreign power. This is evidenced by the fact that its navy is making great efforts to increase its oceangoing capabilities to cover the Pacific Ocean and that its air force is introducing in-flight refueling tankers necessary to extend operational range.

China, aware of its weakness in military technologies, is seeking to strengthen

cooperative relations with nations resisting the United States’ dominance in the new world order to prepare for U.S. blockade or other emergency situations.

At the same time, China is endeavoring to increase its influence on regional states. Beijing established the Shanghai Cooperative Organization (SCO) in June 2001 to promote closer relations with the five Central Asian nations and is playing leading roles in such regional cooperative bodies as the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN) Plus Three. In 2010, China conducted a “Peace Mission” exercise with ground and air forces of the Central Asian states, sending its fighters and bombers to a foreign territory for the first time.

There remain causes of conflict between Korea and China, including historical dispute over China’s “Northeast Project,” the maritime issue of overlapping exclusive economic zones and the North Korean problem, just to name a few.

Particularly problematic is the possibility of China’s intervention with its armed forces in the event of an emergency in North Korea. After Seoul and Beijing normalized diplomatic relations in 1992, they assigned military attaches to their embassies and exchanged visits of defense ministers twice in 1999 and 2000. Exchanges of military missions have since continued.

Moreover, China has been Korea’s largest trading partner since 2003.

However, the United States, Korea’s military ally, regards China as a potential threat.

As long as China and Korea maintain different political systems, China may be considered a potential military threat in view of uncertainties continuing to increase amid China’s rise as a military power and its changing military strategies. Moreover, China has a different perception on the reunification of the Korean peninsula. Beijing, regarding North Korea as a buffer zone, wants to keep the pro-Chinese Northern regime in place, preferably undertaking economic reform and openness, rather than having the Korean peninsula

reunified under South Korean terms. It therefore is inconceivable that China would establish a military partnership with South Korea, which seeks reunification of the peninsula.

When South Korea and the United States conducted a joint exercise in the West (Yellow) Sea following the sinking of the South’s patrol craft Cheonan in a North Korean torpedo attack in March 2010, China responded with a livefire exercise in the East China Sea between June 30 and July 5. This demonstrated China’s determination not to concede in any military contest for regional hegemony. In short, China’s rise can be a threat to the security of the Republic of Korea.

II. Strategic Response of the Republic of Korea 1. U.S. Response to China’s Rise The security situation in East Asia remains in uncertainty chiefly because of the fluid ties between the United States and China. China has emerged as the potential challenger to America’s political, economic and military leadership as the top superpower. China now seeks to pursue its national interests without being interfered with by the United States over the issues of trade expansion, energy security, arms reduction, North Korean nuclear problem and territorial disputes with neighboring countries. The security order in Northeast Asia will be newly formulated in accordance with the changing relations between Beijing and Washington. The current strategic flexibility of the United States is one aspect of its endeavors to check China in this region.

Washington’s relations with China involve far more complex dynamics than its ties with South Korea or Japan. During the Cold War era, U.S. relations with

the Soviet Union were confined to security problems. But the current U.S. policies toward China involve both security and economy. In trade, the United States has suffered substantial deficits with China.

The continuing trade imbalance will be a hindrance to Sino-U.S. relations because part of Washingtonâ&#x20AC;&#x2122;s effort to reduce the deficit to improve its economy is to persuade China to revalue its currency. But China, the largest holder of U.S. bonds, has been slow to react. The conflict of interests between the two countries cannot easily be resolved.

In security issues, many scholars agree that U.S. backing of Taiwan could spark a military confrontation between the United States and China.

Washington severed diplomatic ties with Taiwan when it normalized relations with Beijing in 1979, but it soon followed up with the Taiwan Relations Act, which guarantees the security of Taiwan. The U.S. Defense Department decided to sell $6,460 million worth of weapons and equipment, including Patriot missiles and Apache attack helicopters, to Taiwan on October 3, 2008 and President Obama approved it. China reacted with suspension of military exchanges with the United States on January 30, 2010. Washington has continuously opposed Chinaâ&#x20AC;&#x2122;s use of military means for its Taiwan policy and has made it clear that it would support Taiwan in the event China attacks it.

China and Taiwan have increased economic, cultural and social exchanges.

Political trust has grown between the two sides and the “three links” have been restored in postal service, transportation and trade. At the same time, however, Beijing has continued to build up its military capability to effectively deter Taiwan independence and ensure its advantage in an emergency by blunting third-party interference. A 2009 U.S. Defense Department report said China has increased its strategic nuclear, missile and electronic warfare capabilities to tip the balance of power in the Taiwan Strait. China would have air and naval supremacy in a potential conflict. Part of the buildup is 300 DF-11/15S short-range missiles targeting Taiwan, some of them to be replaced with faster medium-range missiles.

Under these circumstances, the United States is concerned about the overall modernization of China’s armed forces and particularly the strengthening of their access denial capabilities and changing balance of power in the Taiwan Strait. The U.S. National Military Strategy released in 2011 set four objectives: 1) counter violent extremism, 2) deter and defeat aggression, 3) strengthen international and regional security, and 4) shape the future force. As for the Asia-Pacific region, the strategic report assessed the build-up of military power based on economic growth as a challenge to the U.S. global leadership.

This assessment, apparently focused on China’s economic and military rise, indicates that the U.S. strategic emphasis is shifting from global anti-terrorism to countering the new challenges in Asia.

The United States and China will compete for energy as well. In 2008, the United States said an energy shortage is the new threat to its security. China also considers securing energy resources as the most pressing task for continued economic development. China, which up until the 1990s was one of the major crude oil exporting countries, has become the second largest oil

importer in the world. Beijing has maintained friendly terms with Iran, which supplies 13 percent of its energy demand, while Washington has condemned Tehran as one of the “axis of evil,” defining its nuclear program as a threat to its security.

U.S. pressures on Iran to abandon nuclear development have had little effect due to China’s non-cooperation. During their summit in January 2011, President Obama asked Chinese President Hu Jintao to join in the U.S.initiated sanctions against Iran but received a lukewarm response. They only agreed to pursue a diplomatic solution in due time. Other issues such as Chinese human rights, Taiwan, Tibet and yuan revaluation were raised but no substantial outcome was produced. Bilateral relations between Washington and Beijing remain bleak, with these long-standing issues increasing the possibility of confrontation.

China, as it pursues economic development as the top national goal, would want to avoid a direct clash with the United States. The fact is that China’s economic and military rise has yet to bring the nation to the level of directly challenging the United States. In naval power alone, the United States is stronger than all nations ranked second through the 14th combined, and 11 of these 13 powers are allies or partners of the United States. In terms of science and technology, the very foundation of military power, the United States spends 40 percent of the world’s total R&D expenditures, accounts for 38 percent of patented new technology by the OECD, 37 percent of OECD researchers, 35 percent of global publications, 49 percent of science and technology quotations, and 70 percent of all Nobel Prize winners. Yet, in the long run, China’s modernized armed forces will be a useful means to expand its regional and global outreach as it moves to establish a bipolar world order.

Aware of the potential threats from China’s rise, the United States has

strenuously sought transparency in Chinese military modernization and has tried to induce China into contributing to regional and international security.

For its part, the United States is not easing efforts to maintain its overwhelming military superiority despite budget cutbacks. The quadrennial U.S. Defense Review issued in 2010 provided a series of initiatives, including development of combined air-sea combat concept, expansion of long-range strike

capabilities,

development

of

undersea

operations

capabilities,

improvement of U.S. forces’ forward base infrastructure restoration, guarantee of access to space assets, stronger C4ISR, destruction of enemy combat systems, and strengthening of quick reaction capabilities of overseas deployed forces.

2. ROK’s Strategy for Military Response The U.S.-China relations are a vital factor for Korea’s military strategy. When Sino-U.S. ties remain cooperative, the Korea-Sino relations will likely be cooperative and vice versa. A general war between the United States and China is unlikely under the international relations of the 21st century. U.S. President Barack Obama, at the 2011 summit, said Washington welcomed the rise of China to a strong, prosperous and successful state and his Chinese counterpart recognized the role and status of the United States in Asia and the Pacific.

The two countries, as they are both aware that neither party can claim an exclusive global leadership, will have to maintain the basic strategy of bilateral engagement amid mutual restraint. But China is rapidly increasing its capability to deny access to the Taiwan Strait, threatening the U.S. naval presence around the vital strategic point as well as its military alliances in Asia. South Korea’s military strategy should therefore be explored in both directions of the U.S.-China relations.

1) Deterrence Strategy The military tries to deter war and, when deterrence fails, conducts war effectively to protect the people and their property. Deterrence is the key in military strategy. It forces the adversary not to take any action knowing that its foe has the ability to inflict unacceptable damage. Deterrence can be applied not only to the enemy but to a friendly entity. Success of this strategy depends on intention and capabilities. Even a weaker nation can successfully exercise deterrence if it has enough firepower.

There are diverse arguments concerning the adequate level of Korea’s military power. Some assert that further buildup of military power in the South would hamper the development of inter-Korean relations. However, North Korea remains the most serious threat to South Korea’s security as shown by the sinking of the Cheonan and artillery attack on Yeonpyeong Island. North Korea’s asymmetrical military power can inflict enormous damage to the South. At the same time, China’s military rise poses potential threat to the Republic of Korea and the nation needs to continue efforts to modernize its armed forces into a scientific and advanced military.

The Republic of Korea has done a lot to build up its military strength with the primary purpose of deterring North Korean threats. But it remains doubtful if the nation has sufficient deterrence against Chinese threats. Especially when South Korea takes over wartime operational control from the United States in 2015, deterrence will be vitally important. Deterrence is necessary but the nation cannot make unlimited investment to acquire enough power to deter China in terms of total force, due to economic limitations. In this regard, Singapore’s “poisonous shrimp” strategy may be instructive. A nation with a small territory cannot totally neutralize an attack from a powerful adversary but it still can convince the aggressor that it will have to suffer enormous damage to achieve victory.

In the 21st century, no nation can impose its will on another nation with military power alone. The United States and China with their close interdependence and shared weakness are seen to move toward strategic cooperation in the new world order. However, as international relations always fluctuate, Koreaâ&#x20AC;&#x2122;s strong independent military power will give the nation greater freedom to formulate strategies and broader political and diplomatic latitude in the international arena.

From a purely military standpoint, nuclear arms will provide the best conceivable deterrence, but it cannot be a reasonable option, considering the foreseeable

political

and diplomatic impact

under the

increasingly

interdependent international environment of today. International condemnation and sanctions the nation would have to face for possessing nuclear arms will be eventually detrimental to national security.

Therefore, the primary area of interest for the Korean military will have to be the development of strategic missiles. Under a bilateral agreement with the United States, South Korea can develop ballistic missiles with a range of up to 300 kilometers and cruise missiles with the payload weight of no more than 500 kilograms. The limitation seriously compromises South Koreaâ&#x20AC;&#x2122;s deterrence against North Korean threats as it deprives the South of the capability to inflict any significant damage to the enemy in the event of war. It is vitally important that South Korea increases the range and destructive power of its strategic missiles through the revision of its missile agreement with the United States.

Besides, continued efforts should be made to secure air and naval superiority.

The nation needs to supplement its naval fleets with more Aegis cruisers, submarines and anti-sub aircraft. The Navy has 10 submarines of 1,200-1,800

ton class, which are too inferior compared to China’s submarine fleet of 68 units, including nuclear-powered ones. As for the Air Force, it needs to acquire and deploy more F-15Ks, the most powerful fighters in Northeast Asia, along with early warning aircraft and in-flight refueling tankers. The ground forces need to be modernized with slimmer organization and reinforcement of divisions and brigades with better hardware, which would allow them to maneuver better. These measures would increase deterrence power in peacetime and strike capabilities when deterrence failed.

It is desirable that the ROK’s military buildup will be conducted in ways to not instigate concerns among neighboring countries. Productive military ties with neighbors are as important as the alliance with the United States. The United States will favorably assess the ROK’s military buildup as it needs a stronger alliance partner to check China’s rise more effectively. However, China and Japan will have different views and caution is needed to avoid unnecessary friction.

In seeking to raise its deterrence capabilities, it is desirable that our military will reduce its dependence on the U.S. forces. The Korea-U.S. military alliance will likely continue, but the Korean military should be prepared for the new system to be in place after the complete turnover of operational control from the United States in 2015. The Korean military will be in full control of all operations, with the USFK playing the supportive role. Our military should now try to drastically improve its “soft power,” including the ability to draft strategies and operational plans independently.

2) Indirect Approaches: Military Diplomacy Since the normalization of diplomatic relations, Korea and China have continued to develop their bilateral ties in diverse areas. But contacts between their armed forces have been sluggish. If military ties between nations can be

improved through the three stages of “exchange, cooperation and alliance,” the comparable relations between Korea and China should be seen to remain at the level of exchange. The summit between Lee Myung-bak and Hu Jintao in May 2008 elevated Korea-China relations to a “strategic cooperative partnership.”

China is Korea’s largest trading partner, registering the largest volume of trade surplus and receiving the biggest Korean investment as a single nation.

In view of these relations, Korea needs to explore ways to increase trust and cooperation between the two militaries as part of indirect approaches in parallel with its deterrence strategy. Military alliance with China may be hard to imagine at present, considering the close ties between China and North Korea and the U.S. view of China as a potential threat to its security. The difference in political systems between the two countries and China’s complicated position concerning Korean unification makes an alliance unrealistic. Practical cooperation is the most that can be expected for the time being.

The Republic of Korea should gradually expand the scope of military cooperation with China with a high degree of flexibility. Certain emphasis should be given to military diplomacy. Through participation in international security cooperation arrangements, Korean officials can engage with the Chinese on diplomatic and defense missions.

When a new challenger appears to cause competition and conflict in an international order long dominated by a leading power, most of weaker third countries cannot but seek amicable relations with both the challenger and the challenged. In the current international relations in Northeast Asia, KoreaChina and Korea-U.S. relations do not constitute a “zero sum game” but should be seen as a potential “win-win game.” Korea needs to promote its value as China’s trading and military cooperation partner, arranging regular

dialogue between military officers and ensuring transparency in their respective military buildup. Not only generals but rank-and-file officers and cadets of military academies should be included in exchange programs so long-term personal relations can be established, producing many pro-Korea sympathizers. Joint training for anti-terrorism or other security programs can also help consolidate ties. As relations advance, a non-aggression pact may be sought in the future.

At the same time, as it pursues indirect diplomatic approaches, Korea should not neglect efforts to strengthen the alliance with the United States and should also actively participate in multilateral security arrangements in the region.

The Korea-U.S. military alliance has not only served as effective deterrence against North Korean threats but also contributed significantly to the regional peace and stability. The bilateral alliance will play the biggest role in an emergency in North Korea, but it should avoid being seen as a predesigned arrangement to contain China. The nature of the alliance has to be clarified to avoid confusion in the event of a clash between the United States and China.

In the meantime, Koreaâ&#x20AC;&#x2122;s steady and active role in building a permanent peace regime in Northeast Asia is most desired. A security consultative body embracing all countries of the region will be of great value as seen in Europe.

Creating an East Asian version of the OSCE (Organization for Security and Cooperation in Europe) would not be easy given the territorial disputes and historical controversies among neighboring countries as well as other problems involving the necessary resources including money and manpower.

But nations should recognize the necessity of operating a multilateral security cooperation organization for the stabilization of peace in the region.

III. Conclusion

China’s vast territory, huge population, enormous economic power and international status as a permanent member of the U.N. Security Council make “Chimerica” sound rather natural to denote balance between the two countries as leaders of the 21st century world. With its favorite slogan, “Tao guang yang hui” (hiding brightness, nourishing obscurity), China has manifested that it would not seek hegemony in the new world order. But more stress is being given these days to “You suo zuo wei” (doing something worthwhile).

As China’s rise has become a reality, Korea has to establish a security strategy at the national level, recognizing that the nation has come under China’s military influence due to geographical proximity. On the strength of its economic growth, China has continued to increase its defense budget year after year, pushing for the scientific modernization of its military and adopting a “positive defense” strategy, with the flexibility of shifting to offensive stance whenever necessary. Considering the ongoing territorial and historical controversies and Beijing’s relations with North Korea, China’s rise poses a military threat to South Korea.

In order to protect its sovereignty and keep its place in the international community, Korea needs to establish a most realistic and future-oriented national security strategy to cope with China’s rise and its perceived military threat. This paper has proposed deterrence and cooperation for future relations with China. Korea has to pursue these seemingly contradictory approaches to secure its survival and peace on the peninsula.

We cannot but recognize the huge gap with China in terms of national strength and military capabilities, and this is the reason the nation needs to establish an effective deterrence strategy to cope with China’s rise while strengthening the military alliance with the United States. It is also crucial for Korea to apply

diplomatic approaches to China and at the same time promote exchanges and cooperation with the Chinese military.

What is important here is not a conceptual strategy but a strategic pursuit of practical goals. To increase its deterrence power, Korea should enhance its missile capabilities through the revision of its missile agreement with the United States to lift the current limitations, expansion of the operational scope of its air and naval forces and development of high-tech equipment for ground forces. To promote military cooperation with China, it is necessary to undertake mutual exchange programs for not only senior officers but also junior officers and cadets to pave the way for long-term friendship between future leaders.

[The Korean Journal of International Studies, Vol. 52, No. 1, 2012, published by the Korean Association of International Studies]

www.koreafocus.or.kr

Outplacement Support: Solution to Job Insecurity of Older People Tae Won-you Research Fellow Samsung Economic Research Institute

I. Importance of Outplacement Assistance Transitioning to another job is a lengthy process particularly for older workers.

It takes someone in their 20s about 5.7 months to find another job. For those in their 40s, it takes 6.3 months and those in their 50s, 8.8 months.

Accordingly, those in their 40s and 50s, who stayed at home â&#x20AC;&#x153;taking a breakâ&#x20AC;? even though they were neither ill nor disabled, rose from 368,000 in 2004 to 482,000 in 2008 and 571,000 in 2011 because they could not find a new job.

These jobless individuals often feel insecure due to reduced income. This leads to less spending on such items as child education and general consumption.

For the government, their unemployment crimps tax revenue and raises welfare expenditures, squeezing the national budget.

As Korea embarks on an era of rapid aging, creating jobs is the best solution for the middle-aged and older elderly, rather than continuously expanding social welfare nets, which will cost huge sums of money. Support is needed for the older job hunters so they can continue to earn an income. Thus, it is increasingly important to provide them with outplacement services to minimize the transition period between jobs.

II. Outplacement Service: Current Situation and Problems 1. Inadequate Utilization of the Support System Outplacement service is underutilized. According to a Korea Development Institute (KDI) survey, out of 6,166 new employees, only 63 persons (1 percent) used public outplacement agencies while more than the majority (56.4 percent) relied on personal networking. Those who used private agencies represented a meager 2.6 percent. Such a low utilization draws a striking comparison with that of the United Kingdom, Germany and Sweden, where the rate ranges between 40 percent and 70 percent. Inadequate staffing and low level of professionalism at Koreaâ&#x20AC;&#x2122;s public agencies offering weak job consulting services are mainly to blame.

The nationâ&#x20AC;&#x2122;s seven private outplacement agencies operate on a small scale and do not appeal to either companies or job seekers. About 44 percent of their employees are freelancers or work on a contract basis. This means that not only the working conditions are unstable for the consultants but they are also unable to broaden their expertise and accumulate know-how, resulting in limited and inefficient services. Each agency provides services to only about 236 people annually. Their combined total revenue is only 5.4 billion won.

2. Unprepared Job Seekers Besides inadequate services available, most job seekers are not sufficiently prepared for job transition. Korea is one of the most rapidly aging societies in the world. However, the majority of older workers fail to plan for a job change, even though the mandatory retirement age at most companies is 5557. Currently, 68.1 percent of new job seekers in their 40s and 69.2 percent of those in their 50s begin the process of changing jobs without thinking or planning ahead. According to an Internet survey, the most cited reasons for failing to regain employment were “a lack of effort and preparation” and “overestimating oneself.”

Outplacement assistance at companies does not plug the service deficiency.

The 1997 Asian currency crisis and the 2008 global financial crisis highlighted the need for corporate outplacement services when companies restructure or downsize. However, services are typically provided on a temporary basis to minimize friction with labor unions or the general public ahead of large-scale employment adjustments. Only Samsung, POSCO, Korea Telecom and a handful of other large companies have in-house outplacement service centers.

According to a survey of human resources personnel at 82 companies in Korea, only 19.8 percent said they have permanent outplacement centers.

III. Three Major Tasks for Effective Outplacement Service

For older workers to regain employment, they should change their mindset to thoroughly prepare themselves for job transition, while companies need to develop permanent outplacement service and the government has to shift to a demand-oriented outplacement support system.

1. Individuals In this era of centenarians, individuals need to perceive a career change as an â&#x20AC;&#x153;ordinary occurrenceâ&#x20AC;? rather than a failure or defeat in life. With more flexibility in labor market, changing jobs and reemployment are becoming increasingly common and those who leave a job change their career an average of 4.1 times. Korea is now in an era of fluid human resources with an average of 178,000 people per month, or 2.14 million people per year, switching jobs.

Those middle-aged and older workers who want to find a new job need to compromise on their expectation. In order to have a more flexible mindset about a career change, they have to get out of the boundary of their previous title or benefits. Most middle-aged and older workers tend to identify themselves with their positions at work, thinking, â&#x20AC;&#x153;I used to be somebody in the past.â&#x20AC;? Reemployment is very difficult for them unless they ditch this kind of notion.

Individuals can shed their vague fear of a career change through regular check on their worth (market value) and preparation. In this era of lifelong career, a workerâ&#x20AC;&#x2122;s worth means the average value of not only the current annual salary but also the expected annual salary that can be earned outside of labor market upon changing career. In an aging society, middle-aged and older workers need to frequently evaluate their personal worth, even considering their expected annual income if they open their own business, and should make thorough preparations to raise their value to potential employers.

2. Companies Companies should provide life design education for employees aged 45 or older so that they can prepare for their future based on their work history. The possibility of a successful job change is low for people who do not constantly prepare themselves. Life planning instruction enables people aged 45 and over to be ready for departure from their current job, raising the possibility of a successful job change.

Japanese firms offer life planning sessions to help their employees to prepare themselves for the remaining time at their job and life after retirement. For example, Tokyo Gas has its employees aged 50 and 55 attend its “Life Design Seminar,” which provides information on social insurances and retirement funds. Canon holds “New Creative Life Seminar” for its employees twice when they turn 55 and 59. Employees thus gain useful information on job change and starting a new business as well as health and wealth management and children’s education.

Private companies run their own â&#x20AC;&#x153;outplacement centerâ&#x20AC;? to provide permanent support for outplacement. Companies above a certain size (5,000 or more employees) need their own outplacement center staffed by dedicated personnel to help their middle-aged and older employees change their jobs when such a need arises. Companies should improve the success rate of the career change and business startups of their employees by providing customized service that reflects corporate and individual characteristics, such as counseling/retraining,

reemployment arrangements, support for business startups, information service, etc.

3. Government The government should first increase the workforce for reemployment counseling to a level comparable to those of industrialized countries. The economically active population per employee of public employment service providers stands at 400-5,000 in industrialized countries while it amounts to 8,000 in Korea. The expenditure on public employment service (PES) compared to GDP averaged 0.16 percent for OECD member countries while the comparable figure for Korea is 0.02 percent, one eighth of the average OECD level. The government needs to improve the the nationâ&#x20AC;&#x2122;s employment support service capability by increasing the number of job counselors to the level of Japan (about 5,500 people per counselor).

It is necessary to introduce a customized “job designer” system to improve the level of public outplacement service. Under this system, when a worker becomes unemployed, his/her company contacts an employment support center, which inquires what the individual needs and whether he/she intends to find a new job, and then designates a “job designer,” who will actively help the job seeker. Jobless people are most scared of the feeling that nobody cares about them and the anxiety that they have to plan their future by themselves.

A job designer provides not only reemployment counseling and outplacement support but also consulting on developing a new career for the job seeker by leveraging his/her work experience. Currently, some 178,000 people are seeking jobs every month. This means some 1,800 new jobs can be created by designating one job designer per 100 job seekers.

It is necessary to clearly identify the roles and areas of activity for private and public outplacement service providers and to establish a system of organic cooperation among the agencies. By constructing an information network connecting these institutes, an effective system to coordinate the supply and demand of service can be created while promoting win-win growth. In the mid and long term, private outplacement service will have to focus on corporatebased specialized service, while public outplacement service focuses on general service.

Outplacement service agencies should be evaluated annually with more support provided to the high achievers. There needs to be a standard for assessing their service as well as a joint training program to advance the capability of professional consultants. There should also be more support and marketing efforts such as creating an annual â&#x20AC;&#x153;Best Outplacement Companyâ&#x20AC;? award and publicizing the winner in the media, especially major daily newspapers.

References

Park Sang-chul et al. (2009). Study on Successful Outplacement and Reemployment. Korea Employment Information Service.

Kim Young-cheol (2011). “Estimated Dependency on Human Network in Job Searching.” KDI Policy Forum, Vol. 243.

Jeong In-soo (2008). “Need to Advance Employment Support Service.”

Quarterly Employment Issue, 1(3). 1-6.

Korea Employment Information Service. Employment Insurance DB. Park Ga-yeol, Kim Jae-ho and Jang Seo-young (2009). Study on Outplacement Support for Middle-aged and Older Workers. Korea Employment Information Service.

[SERI Management Notes, No. 147, April 26, 2012, published by the Samsung Economic Research Institute]

www.koreafocus.or.kr

- The Moon Sung-lim Story: Escape from DPRK and Life in the South

The Moon Sung-lim Story: Escape from DPRK and Life in the South

Kwak Min-yeong Staff Reporter The Dong-a Ilbo

“Hello there, big sister. Do you remember how you worked so hard to put food on our table and make ends meet? Once, when you were selling copper, you broke your finger on a heavy piece that had fallen. If only you had received proper medical treatment then, I’m sure your finger would have recovered. My heart aches when I think how such a small accident turned into a huge scar on you. When we meet here in South Korea, I want to fix that finger for you. So if you ever happen to see this broadcast, please try to get in touch. Whatever you do, wherever you are, stay healthy. If we all work hard, I am sure we will be able to meet some day. I love you.”

This was a video message aired on Channel A’s “We’re on Our Way to See

You” on April 29, sent from North Korean Moon Sung-lim (Mun Seong-rim), 28, to her third eldest sister, who became separated from her in China. Moon carried a first-aid kit with her on the popular TV program, saying she hoped to treat her sister when they met. “We’re on Our Way to See You” focuses on separated families of the North and South. Guests are asked to bring items that symbolize their life and future hopes to be stowed away in a time capsule until after reunification. Starting last month, more North Korean women defectors have been cast for a talk show on the program.

It’s unprecedented, in the world and certainly in Korea, for people in the diaspora to appear as regular guests on entertainment television. Until now, North Korean defectors have usually been portrayed in the media as needy and underprivileged. “We’re on Our Way to See You” tries to reverse the stereotype and bring out the true colors of these people. As such, some guests have shown off flashy dance moves while others have boldly flirted with male guests on the show.

The foreign press is now thirsting for more on the program and the guests. On May 15, a reporter from French daily Le Monde dropped by the Channel A studios at Dong-a Media Center in Jongno, downtown Seoul, to hear more about the program’s objectives and the current status of the show. On May 24, the Los Angeles Times and Japan’s NHK were scheduled to visit.

The defector cast of this program is limited to about 15 per show. Among them, Moon cut a stunning figure during her first time on the show due to the extremity of her plight, shocking even for other defectors. Viewers have subsequently been asking Channel A to bring Moon back, and footage of Moon has gone viral on the Internet. We caught up with her on May 19 at Dong-a Media Center.

Expert Escapee Keeps Eluding the Chinese Police “I posted my story on the program website, asking to go on air because I thought it would be a good opportunity for my sisters to see me and help us reunite,” Moon said during the interview. “I am worried and sad because while I have the luxury of using good things and getting an education, I don’t know how my sisters are faring. I haven’t received any contact yet but I haven’t lost hope.”

Moon was born in Chongjin, North Hamgyong Province. Her entire family was torn apart when she turned 14. It was when Moon, with her father and two of her sisters, crossed the border to China to visit her eldest sister, who had married there. Moon’s mother had passed away five years earlier from hepatocirrhosis.

Moon never got to see her eldest sister. But the worst was yet to come. A day after their arrival, her second eldest sister was abducted by human traffickers.

A few days later, her last remaining sister also disappeared. Moon and her father failed to receive any clear answers from anybody regarding their whereabouts. The situation was beyond incredible. The Moons had nowhere to turn to since they were illegal visitors and did not understand Chinese.

Moon’s eldest sister at the time was 20. Her next eldest sister was 18, the third 16, and she was 14. “We were a ripe target for the human traffickers who were looking for young women,” Moon said.

In his desperation, Moon’s father began working as a messenger for the Chinese, shuttling back and forth between China and his home country to run errands. But when he refused orders to lure North Korean women to China, he

was beaten to near death. Moon was forced to watch helplessly.

“Afterwards, he was captured and taken to a labor camp when he was in North Korea on another errand. I heard he died sometime later from a stomach problem that was left untreated. That’s all I know. I have no idea exactly when he passed away or where his body is since there’s no gravestone.”

Over the short course of a year, Moon had lost her entire family. At the age of 15, she was utterly alone in the world. She temporarily found a place to stay with the help of a South Korean missionary but afterwards continued to live the life of a fugitive. “I was caught by the Chinese police four times. Twice I gave them the slip during the arrest and once I was released with the help of a South Korean church. The last time I was captured, they deported me back to North Korea. I broke out of the labor camp they put me in and tried to cross the Tuman (Tumen) River but it was too deep. The residents soon turned me in and I was eventually taken to a labor training camp. The beatings were unbearable there. I couldn’t straighten my back for a second because as soon as I did, the beatings would come. I ran again. This time, I crossed the river.”

Moon’s plight finally ended when she set foot in South Korea in 2002. She was 18 years old.

Reunion after Decade-long Separation In 2009, Moon heard that her second eldest sister had defected to South Korea.

They were reconnected by telephone but both cried too hard to speak as it was the first time they were in touch in 11 years. The second time, they pulled themselves together and talked about all that had happened to them since they were separated.

“My sister told me that the night we arrived in China, some Chinese people came and took her in a cab to force her to marry a Chinese man. She immediately ran away. Afterwards, she worked all sorts of odd jobs, including baby-sitting for ethnic Koreans and selling merchandise, before she was caught by the Chinese police and repatriated. She defected after completing an eight-month term at a labor training camp.”

Moon’s sister is now working as a welder in Busan. Hers is a story that resets the boundaries of incredibility. Thus, the South Korean panelists and hosts of “We’re on Our Way to See You” shed profuse tears, usually ending up more distraught than their North Korean guests.

The stories go on. One guest told of how she was sold off to human traffickers after drinking from a drugged beverage while on a trip to China. Another confessed that she continues to buy clothes and shoes on the birthday of a son she left behind in North Korea when he was just six years old. It’s been 13 years now since she crossed over. Another guest talked of living four years in the mountains, while another claimed to have been a “street child” who scavenged the market for leftovers in order not to starve.

The stories are tragic and intense, but the storytellers tell them with remarkable poise. Their voices may tremble a bit and there are pauses in between, but they struggle to appear strong and composed, swallowing away their tears.

“We try to become apathetic towards our pasts because, after all, it’s all in the past. It just hurts more if you keep thinking it hurts. There is not one among us who has not undergone some sort of terrible plight or another. I am comforted and soothed when I am on the air with these people. Often when I hear of fates

that are harsher than mine, I think to myself that I was better off.”

Hoping to Give Back by Joining Public Service It took Moon a year and a half to pass a series of qualification exams to graduate from elementary, middle and high school. In 2005, she was able to enroll at Yonsei University as a foreigner to study public administration. She says less than 10 defectors enroll at Yonsei each year. One year there was only one defector. Nevertheless, some college students view the system as discouraging and discriminative. Hence, the jokes they make about defecting from North Korea being a surefire way of attaining admission to a good school.

“What they are saying is not completely untrue. I feel apologetic because for us, once we achieve the required grade point average, we’re eligible for tuition support and other privileges. I know that student loans are a huge problem these days, and that many students have to work hard to repay their debt once they are out in the real world. I have no savings, but nor do I have any debt.

The help and support I received gave me an education, and I am grateful that I have the opportunity to learn even more if I try.”

According to Unification Ministry statistics, a total of 23,568 North Koreans have defected to the South as of April this year. In 2009, the annual inflow peaked at 2,914. It declined slightly to 2,401 in 2010, but is again on the rise.

Upon entry each defector is eligible to receive a resettlement subsidy of 6 million won. Up to 24.4 million won more is supplied for vocational training and work-related support. Those in need of extra assistance due to illness or other reasons receive up to another 15.4 million won. In addition, homes, jobs and education are provided.

Moon worked for a year at the planning department of an IT company after graduation but is now studying to join the civil service. Her dream is to work at Seoul City Hall. Among her defector peers, some are working in the country’s largest companies.

“It’s been slightly over a decade since this massive exodus of defectors started.

A new generation of defectors is forming, a generation of people who have received proper South Korean education and moving on to start life in earnest.

When they build the right foundation, there will come a day when we can make substantial contributions to the South Korean society. When I look at all the support I’ve received through this program alone, I feel that I am already being accepted as a legitimate member of society here. My dream is to one day become a role model for young North Korean defectors and give lectures to them on how to build their new lives here by telling my story, of how I achieved my goals. So please, keep watching and rooting for me.”

[May 21, 2012]

www.koreafocus.or.kr

- Women of Joseon Embraced Sexual Independence in Patriarchal Society

Women

of

Joseon

Embraced

Sexual

Independence in

Patriarchal Society

Kim Young-beon Staff Reporter The Munhwa Ilbo

â&#x20AC;&#x153;History of Joseon Women Seen through Paintingsâ&#x20AC;?

By Kang Myung-gwan, Humanist, 396 pages, 23,000 won Were the sexual desires of women constantly suppressed by a predominantly patriarchal hierarchy during the Joseon Dynasty? The answer is both yes and no.

Yes, in the sense that it was natural for society to try and stifle women and their sexuality under Neo-Confucianism, the strict ethical philosophy that ruled Joseon. As the subordinate gender of society, women were forced to obey the will of their fathers prior to marriage, that of their husbands after

marriage, and eventually that of their sons following the death of their spouse.

Despite the duress, however, women refused to completely suppress their desires. Searching for control and identity, they steadily trudged onwards to slowly evolve into more independent individuals. The book tells this tale of remarkable progress in terms of art.

One notable painting discussed in the book is by Shin Yun-bok (style name Hyewon), a famous Joseon artist known for his genre pictures. In the painting titled “Leisurely Entertainment in the Rear Garden,” a courtyard of a powerful aristocratic family of Seoul is depicted, complete with a pond abloom with lotus flowers, a two-level stone flower bed and an intricately built stone wall beyond it. The silken robes and wide-brimmed hats donned by the men suggest the host is a man of wealth and power.

Accompanying the men are three gisaeng (traditional female entertainers) who are playing the geomungo (six-string zither) to entertain their patrons. A bareheaded man who is presumed to be the host is groping one of the girls on his lap. The painting shows precisely how the Joseon men, with their noble status, overpowered the women of lower status to take advantage of their artistic talent and sexuality.

Another painting by the same artist, titled “An Autumn Outing,” tells a completely opposite story. It’s a bleak and windy day. A young man and a woman are meeting outside. The woman is seated in a roofless sedan chair, enjoying a cigarette in the arid autumn air. The woman is obviously in control; in her, the artist depicts an unvarnished image of the Joseon female who is in charge of her own pleasure.

A painting of similar sentiment is “A Rendezvous in the Moonlight,” where the artist portrays a woman’s unmasked sexual desire for a man. The woman,

wearing a long veil around her head and shoulders, is out in the middle of the night to meet a beau. Her attire suggests that she belongs to a noble household, who is supposed to worry about her reputation. Nevertheless, she is proactive enough to arrange a secret meeting with a young man in the wee hours of the night.

The author focuses on the women portrayed in Joseon period works of art to shed light on the ruling ideology and social order. Accordingly, the lusting eyes of the upper-class men that shroud the women like a veil are readily detected in the 150 or so paintings introduced in the book. The writer also seeks to reinstate the real women of Joseon, who come to life after the veil has been lifted.

The author writes that “Joseon’s Confucian patriarchal system sought to deprive women of their independence, but it could not rob them of the sexual identity and desire that make human beings human.” The paintings from the later years of the dynasty are proof of this point, he adds.

[May 4, 2012]

www.koreafocus.or.kr

- Kang Dong-suk: “The show is on, and my job is that of a veteran showman.”

Kang Dong-suk: “The show is on, and my job is that of a veteran showman.”

Choi Bo-shik Senior Reporter The Chosun Ilbo

“In my inaugural address [as chairman of the Organizing Committee of the Expo 2012 Yeosu Korea], I told my staff that I am the chief showman. A movie that receives excellent critical reviews for its literary and aesthetic perfection does not mean anything if it stops drawing audiences after a week.

The box office revenue tells everything.”

Kang Dong-suk, 74, is a legendary figure among construction industry insiders and relevant government officials. He is known for his exceptional work ethic and charismatic leadership. While overseeing the construction of Incheon International Airport, one of the nation’s milestone infrastructure projects, he lived in a makeshift office set up inside a shipping container, watching around

the clock for any mistake, no matter how small, and encouraging and inspiring his staff and employees to make their best effort.

I heard a lot about this man but my first impression of him when we met was rather surprising. Instead of being a tall, prominent figure, he is a gentleman of a modest build, working in a humble prefabricated office.

Q. You are a charismatic leader always feared and admired among your employees. For the Yeosu Expo, however, you called yourself a showman.

What do you mean by likening the global exposition to the entertainment business?

A. I am meticulous but I am not inflexible. Above all, an expo should be fun to attract many people, especially when the event takes place in this southern city, far from the capital. Therefore, the Yeosu Expo strives to offer visitors the best value for money â&#x20AC;&#x2022; with much to see, to taste, and to enjoy.

Q. Isnâ&#x20AC;&#x2122;t the Yeosu Expo primarily about exhibiting marine activities and technical developments and future vision?

A. That is what is required as the basic element to any world expos. What we are aiming for is more than that â&#x20AC;&#x2022; it is to make the Yeosu Expo the best fun experience ever. It was in 2009 that I received a phone call from the minister of land, transport and maritime affairs. When the minister asked me to chair the Yeosu organizing committee, I could not give it much thought before accepting. I was behind the wheel, so I could not ask for details about the event. Later, when I studied the detailed plan, I became concerned about a few things.

Q. What were those concerns?

A. The expo was to run from May 12 to August 12. It was a grave mistake.

The whole month of July is rainy season in Korea. Who would come all the way down to Yeosu in heavy rain? I embarked on a wide-ranging amendment to the initial plan. The staff would not budge at first, worrying that they might be subject to government inspection later for changing the initially endorsed plan. To prevent bureaucratic red tape from further delaying the process, I had to insist on implementing changes to the plan. I told them that I would be the one who would take responsibility for everything, and urged them to execute the changes since time was running out fast.

Q. What were the major changes from the original project?

A. The key point was to brace for a long rainy season. To attract visitors against the odds of the bad weather, the expo needs to be incredibly interesting.

Q. I would say that few people would stand the rain no matter how intriguing your attractions are.

A. To cope with rain, we set a coastal floating stage on the Yeosu beach that is large enough to accommodate 1,000 people. We invited popular indie bands from the Hongik University area in Seoul. By doing so, it effectively sets the scene for young people to play, dance and enjoy their night away with the cool music they love. The dazzling spotlight will illuminate the ocean stage at night and the word will spread among young people, who would find it an extraordinary opportunity to have fantastic clubbing nights on the beach. In this way, getting drenched under heavy rain would be perceived as an additional fun element for them. K-pop singers and music groups are scheduled to perform at least twice a week. Instead of spending 300 million

won (approximately US$ 270,000) to organize a performance of popular Kpop artists on our own, we actively engaged with large corporations for sponsorship. The stage is there for their use free of charge and they only have to pay the artists. Thanks to active collaboration with corporate sponsors, an entrance ticket of 33,000 won ($30) provides access to exhibition halls, live music performances and the aquarium.

Q. Do you have experts to assist your decisions?

A. These are basically my ideas. I think only about the expo around the clock.

They say that heaven helps those who help themselves. We have also put into operation a â&#x20AC;&#x153;wait-freeâ&#x20AC;? system in order to avoid the long queues for entrance.

For those who happen to queue up to enter exhibition halls, side events such as magic shows will be presented in the entrance area to make the wait more enjoyable, raising their expectations for the exhibition itself. Visitors would not be left bored at any moment.

Q. How are you aware of indie bands and K-pop craze?

A. I have been reading newspapers every day since I was a middle school student. When I find any interesting ideas, I make notes, collect the articles and keep records of them. Those materials amount to several volumes already.

(He shows his scrapbooks.) All my ideas come from these. I am also fond of reciting poems. In my weekly meetings with staff members here, I ask them to bring their own favorite poems and we take turns reading them at the end of each session.

Q. You served in the Transportation Ministry for three decades. Your conservative hairstyle reminds me of a typical Korean bureaucrat. Did you think you would stand out in the ministry in some ways?

A. Not at all. But I did have something different from others; all my former bosses wanted to have me around for business meetings that involved drinks.

They must have thought I was a good-mannered chap or something. I would always do my best in whatever assignment or mission given me, including my role in the dinners with a boss. Well, I might say I am quite an affable person to people around me.

Even before I asked about it, he started to share stories of his younger years. “I dropped out of Kyunghee University as a freshman. My family was in a very difficult situation financially and I was not in good health. I suffered from tuberculosis for thee years. My family is from the Jeolla region. But all my bosses were from the Gyeongsang region. Even though people from the two regions are known to be antagonistic toward each other, my bosses gave me the greatest support and opportunities. I was put in charge of the prestigious Planning and Management Department of the Transportation Ministry, serving six ministers consecutively, over five years and four months.

Q. A newly appointed minister tends to replace the head of the Planning and Management Department with his or her closest aide. What do you think were the reasons for their longstanding trust in you?

A. Whenever I welcomed a new minister, I told him, “I have been in this post for too long. Would you allow me to transfer to···” and as soon as I would say that, the new minister would ask me in return, “So it means that you don’t want to work with me?” That question was the way they expressed their confidence in me. I left the ministry as the head of the Maritime Affairs and Port Office in my mid-50s. I was called in to assume the job of constructing Incheon International Airport while I was working for a small public enterprise under the ministry.

Q. It was rumored that you declined the offer at first.

A. It was then Minister of Construction and Transportation Oh Myung who made the offer. I declined a few times, saying that I did not have any related experience or knowledge ― I was not an expert either in construction or in air transportation. Minister Oh came back to me again after a month to persuade me. It was a huge challenge ― a 5.6 trillion won (approximately $5 billion) project in which many stakeholders were involved. Even though I was sure that I would not compromise my principles of fairness and transparency in carrying out the mandate, I was concerned about the huge external pressures that would inevitably await me along with the job. For some, apparently, the Incheon Airport was one of the most “lucrative” construction projects ever done in Korea.

Q. You literally lived in a shipping container for two years, orchestrating the whole construction process day and night. Did you feel the need to show an example of work ethic and personal conviction to your employees?

A. I met my hwangap (60th birthday) in the prefabricated accommodation. I tried to encourage and drive each employee to strive to do their very best for their job. Seriously, some even thought I was almost going crazy with my huge passion for the project.

Q. In other words, it means that your staff met a very difficult boss, whose demands and expectations could not be easily satisfied.

A. Indeed, it was tough for them at first. However, they gradually changed and started to enjoy their work. If any organization has a problem, the

responsibility falls upon its leader, not the members. It is either the leader has set a wrong target or he is not honest about his job. I always told my staff, “As long as you do not receive money from anyone lobbying for certain interests, I will take full responsibility for any outcome of the job you carry out.” It was a gigantic construction project, with the size of a subcontract amounting to some dozen billion won.

Q. Given the sheer size, your description of it as “the most lucrative business project” in the nation’s history does not seem to be an exaggeration.

A. If any of my staff members ever accepted bribes from bidders, I would also have to step down in disgrace. I told them, “You may meet constructors over a modest dinner or a few drinks. You should reject gifts at least three times. If you feel the gift was less than 500,000 won ($450), then you may receive it.

Otherwise, you will be in trouble.”

Q. Your principles were quite realistic considering the conventional practices in the construction industry.

A. Companies that bribe public officials invariably report to the inspection authorities. There’s no exception in that. Whenever the chief of the Incheon District Public Prosecutors’ Office was newly appointed, he would look into the details of the deals involving the airport, trying to seize a major case.

However, none of our employees was indicted on bribery charges.

Q. You mean you never received any requests for favors while serving in the government?

A. How could I be completely free from the ever-present business lobbying? I

just received relatively fewer requests.

Q. Then, why were you so adamant about rejecting “all” lobbying from any sources involved with the airport construction?

A. I always bore in mind that any slight mishandling of my mandate would mean irrecoverable damage to the person who recommended me for the position. I thought I should not cause any trouble to him by betraying his trust in me.

A. It must have been quite challenging to adhere to your principles against all odds.

Q. I was appointed to the Incheon project during the Kim Young-sam government. Shortly after the Kim Dae-jung administration was inaugurated, the president of the Korea Tourism Organization proposed a meeting with me.

I said I was too busy to visit his office in Seoul and he should come to Incheon if he had anything to discuss with me. Before meeting him, I braced for any requests for favors from him. He brought me a bottle of good whisky and asked me to allow his organization to open stores in the airport. I rejected his request, saying that fairness in the bidding process should be respected.

Shortly afterwards I received another phone call from then Culture Minister Park Ji-won, asking me to help out the Korea Tourism Organization’s bid to secure sales space at the airport. When Park was later promoted to the presidential chief of staff, he would talk about this anecdote to his colleagues, saying that I had the guts to say “no” to the minister in charge making an official request. It helped to extend my service across two consecutive presidencies.

Kang dedicated seven years and seven months to building the airport and

kicking off its operation. Subsequently he was appointed as minister of construction and transportation by the Roh Moo-hyun government. President Lee Myung-bak called him in again to orchestrate the Yeosu Expo, for which he has been working extremely hard. The key words of his vision for the success of the expo are “box office performance.”

“When we visit festivals or local touristic events, it is usually hard to find good restaurants,” he said. “The pleasure of enjoying great food is a critical element in any festivities. So we looked for the best restaurants in seolleongtang (ox bone soup and rice), jjajangmyeon (Chinese black noodles) and bibmbap (rice mixed with vegetables, beef shreds and chili sauce) to invite them to operate at the expo sites. Each restaurant is allowed to sell only its own specialty to speed up the customer turnover. Our staff members tasted samples of their dishes before giving them the operating license and negotiating on prices. Under the condition that they would not need to pay their rent, restaurants offer their dishes at lower prices. For instance, a famous jjajangmyeon restaurant in Seoul agreed to charge only 5,000 won, instead of its usual 7,000 won per order.”

Q. Does it mean that you gave up rent revenues? The initial budget estimate includes 11.5 billion won ($10 million) from rent.

A. Instead of exempting them from rental fees, we agreed to split operating profits at a negotiated ratio. It was an idea to ensure that the best quality food would be served at the Yeosu Expo. When Lotte Confectionery was allowed to sell their ice creams at the expo sites, we asked them to market only their 10 top-selling products at a 30 percent discount.

Q. Should the chairman be concerned about even ice creams?

A. I think only about the expo day and night. What I also find very important is restrooms for exhibition halls. I replaced movable toilets with prefabricated ones to ensure that more sanitary and pleasant units are available. There must be enough toilets because queuing up for toilets is an irritating experience for visitors. When I found that only one restroom was provided for an exhibition hall accommodating 500 people, I decided to expand the restroom space by removing an office.

Q. Where do these ideas come from?

A. Event organizers are used to taking the perspective of a service provider, not that of a user. The expo site needs to reflect the practical needs of customers and facility users. I learned from my own errors while I was in charge of the construction of Incheon Airport.

Q. What was the gravest mistake that you remember from the Incheon project?

A. It was when we were in the final check-up process before the opening. In order to ensure smooth baggage flow, we simulated the handling of maximum capacity. The airport authorities bought 15,000 suitcases of various sizes and hired people to play the role of passengers for 50,000 won per head. Some technical errors occurred during the mock test and newspaper reports expressed concerns whether the newly opening airport would be capable of properly handling the baggage flow. However, when the airport went into operation, the luggage flow remained at some 30 percent of the maximum capacity. We were too obsessed with satisfying the computer model of maximum capacity instead of being realistic about the actual needs.

Q. Have you published a book on your experience as the commander of

the historic construction project?

A. I planned to publish a book on the 10th anniversary of the opening of Incheon International Airport, which happens to be this year. As I am fully occupied with the Yeosu Expo, I am not in the position to write a book now. I still keep all the materials that would be needed to write a memoir, including those concerning my learning process through many trials and errors. I want to leave a good record of those experiences.

Q. It is amazing that you remain in good health at your age to carry out your high-profile public duties.

A. I do not have much stamina but concentrating on my work helps me stay well. I can only do one thing at a time. I cannot even eat and read newspaper at the same time. As always, I concentrate and focus on my job at every moment.

Q. What are your plans after the expo ends in August?

A. Yeosu is the last piece of my working career. I feel extremely lucky for all the opportunities I have had to serve the nation throughout my life. Sometimes I think God favors me too much by offering me so many good opportunities while other people also deserve them and could have done good jobs, too. But when it comes to the principles of fairness and transparency in decision making and work process, I am confident that at least in that sense I am second to none.

[May 7, 2012]

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