Korea Focus March 2015 by The Korea Foundation

Table of Contents - Korea Focus - March 2015 - Politics 1. Violence Intolerable for Any Ideological Cause 2. Korea-Japan Relations Must Break Free of the Shackles of the Past 3. Reform of 'Indiscriminate Welfare' Comes before Tax Hike Debate 4. Korea’s Public Diplomacy Needs Better Coordination and Strategies 5. Unbelievable Stories about Presidential Funeral Flowers

- Economy 1. Economic Democratization of Two Presidents 2. Winning the Hearts and Minds of Chinese People 3. From ‘Incomplete Life’ to ‘Complete Life’ 4. Another Protest from Salaried Employees

- Society 1. Child Abuse at Daycare Centers Requires Gender Perspective 2. Retirement Tsunami of the 386 Generation 3. Society that No Longer Needs Patriots

- Culture 1. Royal Palace Kitchen Restored after 100 Years 2. Legoland or Gojoseon Land? 3. Conflict Creeps into the Busan International Film Festival 4. Retro Fever Sweeps Young Generation 5. Zero Budget for Art Works at Cheong Wa Dae

- Essays 1. Economic Effect of the Reunification of the Korean Peninsula 2. Trends in Economic Happiness and Policy Implications

- Features 1. Neighbors Help Siblings from North Korea Enter Seoul National University 2. ‘Seals Embody a Person’s Fate’

- Book Reviews 1. Destruction of Humanity in North Korea More Serious than Food Shortage

2. Life Seen through the Studies of Joseon

- Interview 1. Kim Soon-kwon: “I was Cheated Out of Payment for Fertilizer and Used by the Politicians.”

- COPYRIGHT

- Violence Intolerable for Any Ideological Cause

- Korea-Japan Relations Must Break Free of the Shackles of the Past

- Reform of 'Indiscriminate Welfare' Comes before Tax Hike Debate

- Korea’s Public Diplomacy Needs Better Coordination and Strategies

- Unbelievable Stories about Presidential Funeral Flowers

Violence Intolerable for Any Ideological Cause

U.S. Ambassador to South Korea Mark Lippert waves as he leaves Severance Hospital in Seoul, after a five-day stay following surgery for knife wounds inflicted by a lone assailant.

Editorial The Seoul Shinmun

The attack on U.S. Ambassador Mark Lippert in the very heart of Seoul yesterday (March 5, 2015) once again reminds us of the distress caused by the territorial and social division on the Korean peninsula. Police will attempt to expose all the details surrounding the incident. Yet, it is obvious that ideological animosity fomented by 70 years of division has been raised to a new level, whether it was part of a conspiracy or the act of a lone representative of a radical group. Kim Ki-jong, who was arrested at the scene of the attack, claims to be the leader of a group called “Our Land Dokdo Islands.” He told police that he staged the attack because he opposed the “war game” that Korean and U.S. forces are currently conducting. Echoing North Korea`s claim, he blamed the annual Key Resolve/Foal Eagle military exercise for derailing Lunar New Year reunions of families who are separated in the North and South. Kim`s Internet blog “Sinchon Urimadang” contains quotations from North Korean propaganda such as: “The Sollal (Lunar New Year`s Day) reunion of separated families was foiled by the joint exercise”; “(The South Korean regime) remains silent on Japan`s claim of collective self-defense while accepting an indefinite postponement of (the return to Korea of) the U.S. wartime operational control”; and “The Korean peninsula is again frozen because of the Key Resolve/Foal Eagle Exercise.” 6

There also is the assertion that every problem between the two Koreas, including the implementation of the South-North agreements on June 15, 2000, will be resolved if and when Seoul lifts its economic sanctions imposed on the North following the sinking of the Navy`s patrol craft Cheonan in 2010. There is nothing new about progressive activists calling for an end to the joint South Korea-U.S. military exercise and the lifting of the sanctions on the North. It is not correct to accuse anyone with such demands of being subservient to the Pyongyang regime. But there is a vast difference between demanding such soft approaches toward the North and attacking a foreign envoy. The crime was a blow to the country`s image. We failed to protect a foreign diplomat as required by the 1961 Vienna Convention on Diplomatic Relations. Washington and Seoul quickly vowed that they would make sure that the attack does not adversely affect their alliance. But it will be hard to heal the emotional shock Americans must have had when watching news footage of their ambassador bleeding profusely from the knife wound to his face. Growing antiAmericanism among Koreans already is intensifying U.S. calls for Korea to share more of the financial burden of stationing U.S. forces here. Hence, Seoul is worried that it will have less latitude in its future relations with Washington. Among Koreans, the incident may possibly deepen the ideological divide between conservative and liberal/progressive groups. Harsher clashes may erupt between those who call for tougher control on pro-North Korean elements and those who oppose wholesale branding and punishment of “North-subservient” activism, which may frustrate efforts to revive dialogue with North Korea. All this will only help Pyongyang achieve its goal of splitting South Korean society. It is important for the public to calmly watch law enforcement authorities bring to light every detail about the incident. [March 6, 2015]

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Korea-Japan Relations Must Break Free of the Shackles of the Past

Saenuri Party leader Kim Moo-sung (second from right) and Japanese Ambassador Koro Bessho (second from left) attend a cultural exhibition marking a half century of Korea-Japan diplomatic ties in Seoul, on March 3.

Park Cheol-hee Professor, Graduate School of International Studies Director, Institute for Japanese Studies, Seoul National University

This year marks the 50th anniversary of the normalization of Korea-Japan relations. It would be great if this could be the first year of a new era of bilateral cooperation, but the reality is that we have been preoccupied with the “comfort women” issue ― Japan`s enslavement of Korean women during World War II. The difference of opinion between the two governments has led to an impasse. Prime Minister Shinzo Abe has stated, “I will follow in the footsteps of my predecessors. My heart aches when I think of the suffering of the elderly women that is beyond comprehension. But we must not politicize the issue.” According to Abe, only by having a “dialogue without preconditions” and adopting an “exit strategy” can we hope to resolve this issue. We cannot be sure that a half-baked summit meeting would be successful. We do not want a repeat of the December 2011 summit in Kyoto when President Lee Myung-bak pressed the comfort women issue with Prime Minister Yoshihiko Noda. President Park Geun-hye has insisted that it is vital for the Japanese government 8

change its position to make a sincere apology and adopt good faith measures. In fact, demanding that Japan make concessions is closer to a precondition or an “entry strategy.” One side wants to solve thorny bilateral issues at the outset while the other wants to tackle them at the end of dialogue. The approaches are contradictory. With little progress in negotiations between Seoul and Tokyo, both countries are competing to slander each other in the court of international public opinion. Does that mean the two sides` positions do not share any common ground? Concerned officials in Seoul and Tokyo are aware that they cannot move forward by avoiding the comfort women issue. They know that leaving it unresolved creates a huge burden. Considering that only 53 of the victims remain alive and that the average age of these women is 89, it is evident that there is not much time left to help them recover their honor and dignity. This is almost the last chance to resolve the problem. Nevertheless, the reason this issue remains unresolved is because it has become so politicized that no one can easily touch it. There is an on-going dialogue at the director-general level, but it is questionable if it can lead to resolution of the issue. Moreover, it is unclear whether President Park and Prime Minister Abe are committed to trying to resolve the issue. There is a high probability that any potential agreement would be held hostage to Japan`s rightist civic groups and Korean groups supporting the victims. Viewing each other as enemies, neither side is likely to budge even an inch. Without a back channel route for the two leaders to have a candid exchange of views, the chances of a last-minute breakthrough are not high. Some people in both countries seem to think that the current state of “virtual separation” is not entirely bad. They suggest that rather than needlessly picking at an old scab, the two governments may simply maintain the status quo, even though they find it awkward to continue to remain estranged. Others assert that it is more realistic to normalize relations without a summit instead of unreasonably pushing for a summit that would have a high possibility of failing. This essentially means that while it is not the ideal choice, it is the best

they can do given the circumstances. However, the chances are very slim for Korea and Japan to have normal relations with such a vexing core issue like the comfort women put aside. Discarding the shackles of the past in exchange for a more forward-looking agenda focused on bilateral cooperation is not Mission Impossible. First and foremost, both sides must positively assess their past efforts to resolve the comfort women issue. Only then will success be in sight. Both Seoul and Tokyo need to make a good faith effort to take responsibility and provide compensation where it is needed. A mere “shrugging off the past” will prove to be inadequate. Both sides need common wisdom to guide them into the future. In their speeches at the United Nations, Prime Minister Abe and President Park have both talked about the importance of protecting women and children during wartime. If they truly embrace this thinking and put it into practice, the two countries can develop a joint initiative worthy of the world`s respect. Then, if the two sides are ready to improve their bilateral ties and jointly respond to regional and even global challenges, there is no reason they cannot achieve a breakthrough in their strained relations. Ultimately, the key is for the political leaders of both countries to decide to make this happen. [Chosun Ilbo, January 26, 2015]

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Reform of 'Indiscriminate Welfare' Comes before Tax Hike Debate

Senior citizens have soup with sliced rice cake, a traditional New Year's on February 12.

Editorial The Chosun Ilbo

The recent controversy over tax adjustments for income earned in 2014 was caused by politicians and the government attempting to raise welfare benefits without tax hikes. During the 2012 presidential election campaign, both the ruling and opposition parties competitively spewed out rosy promises of welfare support while promising voters their tax burden would not be heavier. Immediately after she took office, President Park Geun-hye emphatically told her senior secretaries at Cheong Wa Dae not to discuss any tax increases, saying, "Don't make any plan to collect any taxes from people to raise funds to fulfill my campaign promises." The government has drawn up an action plan to increase revenue without tax hikes. It envisions raising 18 trillion won by cutting the number of tax exemptions or breaks, 27 trillion won by legalizing the underground economy and 84 trillion won by restructuring fiscal spending. The plan seemed to suggest Park's campaign promises could be fulfilled without tax hikes. But the government's plan has hardly been put into action over the past two years. For example, the government pledged to slash a total of 8.7 trillion won from social overhead capital, manufacturing, agriculture, and forestry in 2014 and 2015, but ended up with a budget increase of 4.9 trillion won. The government 11

was unable to cut the budgets of some sectors, as it drastically increased fiscal spending to boost the economy, and faced strong resistance from concerned parties. Higher tax revenue through the legalization of the underground economy has been absent. So has progress in reducing tax exemptions or breaks due to strong objection from their beneficiaries. On the contrary, most of the welfare promises have been fulfilled after partial adjustments. Every person over 65 is now entitled to a basic monthly pension payment of up to 200,000 won. In addition, the government has worked out a series of welfare programs, including free daycare services for children up to 5 years old, free school meals for primary and secondary school pupils, and halfprice tuition for college students. The size of the budget for these programs has nearly doubled from 14 trillion won in 2012 to 27 trillion won this year. In short, the government's spending has ballooned as scheduled but its fundraising plan has proved untenable. The program to give free classes to children from low-income families has petered out due to lack of funds and the plan to upgrade school buildings has been delayed. The budgets for other welfare and public security programs that are in dire need of government support are being scuttled. Local municipalities and offices of education are facing a default crisis in the second half of every year. It is like an annual event because they can't afford to bear the burden of expanding free welfare programs. In addition, the government's plan to collect tax revenues has hit a snag as a result of economic recession. The government fell short of 8.5 trillion won in tax revenues in 2013 and 11.1 trillion won last year. Indeed, it is realistically impossible to raise funds for the explosively increasing welfare programs. To make up for tax revenue shortage, the government is brainstorming all kinds of ideas, including raising cigarette, residency and automobile taxes. After all, this has ignited accusations of "dirty tricks to increase taxes." Hence the heated dispute over the new year-end tax adjustments. There is another side effect of the unprepared welfare expansion. The free daycare services allowed full-time housewives to entrust their children to daycare facilities. Initially, there was a widespread confusion because of a shortage of such facilities. Eventually, daycare centers suddenly sprang up everywhere as the

government eased requirements for daycare teachers to fill the void. But this has, in turn, led to a series of child abuse cases. Politicians and the government have come up only with stopgap measures and made things worse whenever such cases occur, without reviewing their vows of "welfare without tax hikes." When wage earners seethed with complaints about the year-end tax adjustments, the Saenuri Party and the government promised to expand tax credits retroactively. As for daycare problems, the ruling party and the government promised to give housewives more childcare stipends if they take care of their children at home. This means that the ruling camp and the government are going backward as they cut tax revenue, but increase spending, despite being unable to cope with the heavier burden from the suddenly expanded welfare programs. If they keep implementing such policies to pander to voters, the nation will inevitably face a financial crisis like Greece and Italy. If it is not easy to reduce tax exemptions or breaks, the government should curb welfare spending first. It is possible to save almost 3 trillion won this year simply by cutting the number of beneficiaries of the basic pension payouts from the current 70 percent to 50 percent based on the degree of financial health of recipients. The nation needs customized welfare to assist only needy people, instead of universal or indiscriminate welfare to benefit rich and poor alike. To this end, Park should explain the financial situation for welfare benefits to the nation and seek everyone`s understanding about the need for welfare reform. She should also sincerely apologize for failing to fulfill her campaign promises. She should honestly admit that taxpayers will have to bear a heavier burden, given that welfare spending will increase sharply because of the country's population aging process, the fastest in the world. On the other hand, People should wake up from the illusion of welfare expansion without tax hikes. It is high time for people to accept the fact that it is hard to enjoy benefits without bearing the cost. [January 26, 2015]

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Korea’s Public Diplomacy Needs Better Coordination and Strategies

Award winners at a Korean-Vietnamese speech contest appear on stage at an opera hours in Da Nang, central Vietnam, in this file photo dated February 23, 2014.

Lee Sook-jong Professor, Department of Public Administration Graduate School of Governance, Sungkyunkwan University

I attended two consecutive international conferences on issues related to the Korean peninsula at the end of last year in Washington, D.C. The conferences were supported by the Korean government and happened to be organized by the same think tank in Washington. With a seminar held a few days later, which was jointly organized by a private Korean foundation and another leading think tank, there were three Korea-related meetings in a single week. Due to the scarcity of Korea experts in the United States, many of the panelists came from Korea and were invited to all three meetings. I wondered what the U.S. public thought about seeing nearly the same panelists at each meeting and hearing the same remarks. When and what international conferences are held is unknown among private and government agencies. The United States is not an exception; Korea experts have found that similar conditions occur in China and Germany, where Korea-related meetings are often held. Have these meetings, which require a lot of money and time, had a positive effect on the public in those countries? Traditional diplomacy is inter-governmental diplomacy, while public diplomacy is practiced through a government to create favorable opinions in overseas

communities. Originally, public diplomacy was used by advanced countries that were in ideological competition with the communist bloc during the Cold War era. In addition to the superpowers, middle powers have also been actively involved in public diplomacy. This is because the way diplomacy is conducted has changed amid democratization, digitization and globalization since the Cold War ended. The democratization of countries has made public opinion increasingly important. That has made it difficult for governments to simply push ahead with diplomacy not approved by the public. Accordingly, governments have begun to consider not only the governments of allied countries but also their public as the target of their diplomatic efforts. Furthermore, a society that is exposed to international issues and information through the Internet becomes informed enough to raise a voice on international diplomatic issues. Therefore, governments are actively introducing digital mediabased people`s diplomacy to communicate with a foreign public. In international relations, soft power, a country`s ability to persuade and win favorable public opinion has become as important as hard power, the military and economic prowess of a state. This current trend has made public diplomacy an increasingly significant area getting more and more resources. For example, affluent countries operate cultural centers in major cities all over the world to introduce their culture to host countries while teaching their own language and history. Cultural diplomacy is the basis of public diplomacy because culture serves as a foundation of international understanding. Recently, however, public diplomacy has been strategically used as a means to win international public support on key diplomatic policies and to create favorable public opinion on certain issues. In other words, the need for strategic public diplomacy has come to the fore. The Ministry of Foreign Affairs and the Ministry of Culture, Sports and Tourism are in charge of Korea`s public diplomacy. The Korean cultural centers affiliated with the Ministry of Culture and the Arirang TV, which provides multi-language broadcasting services, undertake tasks related to the cultural domain. On the other hand, the Korea Foundation, a Foreign Ministry-affiliated organization, is

responsible for supporting Korean studies and research on policies related to Korea. The King Sejong Institute Foundation that has supported programs designed to disseminate Hangeul across the world and the Korean Food Foundation in charge of the globalization of Korean food have been created as affiliates to the Ministry of Strategy and Finance, and the Ministry of Agriculture, Food and Rural Affairs, respectively. In particular, the Ministry of Foreign Affairs has made public diplomacy the main axis of diplomatic policies, creating the Public Diplomacy Division in the Cultural Affairs Bureau, and has recently launched popular participation-based public diplomacy programs. As the need for people`s diplomacy has been steadily rising, relevant programs implemented by government agencies have also been increasing. However, there are two problems here. One is the absence of a “control tower” institution so there is little information sharing and policy coordination among governmental agencies. For example, reunification of the two Koreas is an important policy agenda of the incumbent administration, but there has been little coordination and cooperation between the Ministry of Foreign Affairs and the Ministry of Unification to effectively address unification issues in the international community. As for cultural diplomacy, the Ministry of Foreign Affairs and the Ministry of Culture, Sports and Tourism have been carrying forward independent projects rather than working together. As a result, some of the projects of the two ministries have overlapped. The other problem is the absence of strategic public diplomacy. As hallyu, or the Korean Wave, spreads around the globe, the share of cultural contents in people`s diplomacy has increased. However, no progress has been made in the development of strategic public diplomacy. Eliminating public opinion leaders` doubt in the United States that South Korea seems to be allied with China and alleviating the alarming surge of Japanese hostility toward Korea are the two most pressing tasks Korea`s public diplomacy has to address strategically. The Ministry of Foreign Affairs has secured a budget of 17.8 billion won (approximately $16.18 million) for public diplomacy; hopefully, strategic public diplomacy will actively unfold this year. If we want to obtain fruitful outcomes in public diplomacy, an effective promotion system has to be established and strategic public diplomacy programs need to be developed.

Â [Dong-a Ilbo, January 13, 2015]

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Unbelievable Stories about Presidential Funeral Flowers

Condolence flowers from Park Geun-hye are seen beside the funeral altar of Park Young-ok, wife of former Prime Minister Kim Jong-pil, at Asan Hospital in Seoul, on February 22.

Yang Sang-hoon Chief Editorial Writer The Chosun Ilbo

President Park Geun-hye's approval rating will not hit a real bottom as some of her predecessors experienced. The biggest reason many people withdraw their support for the president is corruption of presidential family members or aides. In a public statement, Park warned her only brother, Ji-man, to "stop being stupid and come to his senses." Under these circumstances, it seems nobody would dare try to bribe him in hopes of a favor. Park Ji-man is a rich man. He said that he would lead a "quiet life." In fact, he has no other choice. A story about three presidential secretaries working for Park has been circulating in recent days. What if anyone of them turns out to be corrupt? Then Park's approval rating would plummet to around 20 percent, which is where some past presidents ended up. The three presidential secretaries in question are under public scrutiny. In the past, some presidential secretaries violated the law in the waning months of a presidency and went to jail once their president`s term ended. Park`s three secretaries must be aware of such history. Her approval rating probably will not hit the bottom, but it will not rebound to previous levels. A former chief of a local municipality, who is a member of the ruling Saenuri Party, once said, "Park will likely end up as the worst president in history." Asked

why, he said, "She has wasted the golden early half of her presidency, while achieving nothing. Nobody expected her to be this bad." Park's problem has nothing to do with what her close aides have done. The truth is that she has no answer to the question, "What have you done?" In the people's eyes, there have been ceaseless power struggles within the government, which is doing nothing. People will not readily change their perception before Park has achieved something tangible, regardless of the dismissal of her three aides. Park won the presidential election by advocating high moral values like fidelity and honesty. She has neither experience nor a career with which she can make policy achievements on her own. She has trodden a life path different from others. During the last presidential election, many people said, “We`re worried that Park might win, but we`re also worried that she might not.” In hindsight, they were really clairvoyant. Park seems to be obsessed with a belief that she should take care of everything herself. In one case, a family member of a former senior official died but Park did not send funeral flowers contrary to common practice. Some people notified Cheong Wa Dae officials of the funeral, believing that Park did not know about it. Presidential funeral flowers finally were sent but it was too late. Curious people tried to find out what happened, and reached their own conclusion that presidential funeral flowers are subject to Park's approval. I hardly believed this story. But some time later, I heard about another similar story. A senior presidential secretary once called another person who also had a death in his family. The senior secretary said, "We'll send you presidential funeral flowers." But no such flowers arrived. Curious about it, the person asked the senior secretary later what had happened. The senior secretary merely said in reply, "I'm sorry. I'm not in a position to approve anything about presidential funeral flowers." If even funeral flowers are subject to the president`s approval, it is not difficult to imagine the situations surrounding other matters. Park reads all kinds of personnel documents. Naturally, this leads to piles of such documents stacked up on her desk, thereby delaying personnel matters indefinitely. Any officials, whose names are on a report Park reads first, will be

promoted or transferred first. Taking personnel documents from the bottom of piles and putting them on top is a big deal. If the president does what ministers, bureau chiefs, or section chiefs do, loopholes are inevitable. A vivid example is that Park has botched some important ministerial appointments although she reads every personnel document herself. The moment they are elected, all presidents fall into a delusion, thinking that all the decisions they have made are right. As a result, some presidents give a cabinet post to a person based on fleeting impressions. In addition to her overconfidence, Park tends to distrust and suspect others due to an unfortunate history of her own family. This has made her share power and authority only with a selected few with whom she has maintained close relationships. Most of those outside of this circle naturally feel alienated and seethe with discontent. Among all cabinet members in the history of the republic, those in the Park's cabinet obviously feel most insignificant and make the most cynical remarks about their own administration. Park can do whatever she wants to do and make achievements for the country during the remaining three years in her presidency, considering that she is relatively free of the fatal risk of scandals involving her family members and relatives. In this regard, she is advised to look back on Chun Doo-hwan's stabilization of prices and Roh Tae-woo's Nordpolitik. Regardless of people liking or disliking them, Chun is credited with developing the economy to a higher level by stabilizing prices and Roh is recognized for his foreign policy. These two former presidents made such achievements, because they admitted their ignorance of some matters and boldly transferred part of their authority to their competent aides. After hearing Chun or Roh say, "You do it, because I don't know about it well," their ministers and senior secretaries did their best. Fortunately, Park does not frequently replace ministers like pawns on the chess board. Many things will begin to change when she puts away piles of documents from her desk. [January 22, 2015]

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- Improvement of Income Distribution through Structural Reform

- Frustrating Part-time Work for Young People

- Corporate Tax Should be Removed in the First Place

- Deregulation in Seoul Area, Learn from London, Tokyo

Economic Democratization of Two Presidents

Civic activists serve hot soup to protesting non-regular employees of mobile and Internet service providers LG Uplus and SK Broadband, at a sit-in in central Seoul on February 15.

Park Min-hee Foreign News Editor The Hankyoreh

“Economic democratization" has come into focus again thanks to U.S. President Barack Obama. In his State of the Union address on January 20, Obama pledged to reduce inequality by raising taxes on the rich and reviving the middle class, which has not fully benefitted from the U.S. economic recovery. He asked the American people and Congress if they will "accept an economy where only a few of us do spectacularly well" or commit themselves "to an economy that generates rising incomes and chances for everyone who makes the effort." "So the verdict is clear. Middle-class economics works," he said. He reached out to the middle class by proposing raising minimum wages, reducing taxes on the middle class, and making community college free. He said he will raise money for these projects by raising taxes on the rich. He said, "Let's close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth. We can use that money to help more families pay for childcare and send their kids to college." Obama promised the American society to fight inequality amid criticism that there is a slim chance of its success because of an inevitable clash with the Republican-controlled Congress and powerful Wall Street firms. Recently, he has

persistently

implemented

policies,

including

granting

amnesty

illegal

immigrants, normalizing relations with Cuba, and pledging to raise taxes on the rich. Discarding the image of a weak president, he has been bringing back the early image of himself who, as a presidential candidate, presented the "audacity of hope" by which he envisaged a dream for change. Obama's new policy reminds us of the promise for "economic democratization" that President Park Geun-hye made several times, but discarded furtively. There is no trace of the promise Park has made. She said, "I'll help the economically underprivileged revive their dreams through economic democratization," while stressing the importance of principles and promises. Park stressed economic revival the most in her New Year's press conference. She mentioned economy 42 times. She seems to want to be a "hero of a second economic miracle" following her father's first, as she watched her father, despite his dictatorship, emerged as a hero through economic development. But since her New Year's press conference, her approval rating has been sagging. Whereas her image of being surrounded by incompetent aides is uncomely, her economic policy lacks vision, conflicts with the times, and shows that she has reneged on her promise of economic democratization. In this era of despair, 20 percent of young people begin their career with contract jobs of one year or less. Not surprisingly, the policy of extending the allowable contract of non-regular workers to four years from the current two years under the pretext of labor market reform and more outsourced jobs is spurring fear about "lifetime non-regular employment." The only thing we are hearing is a call for easing regulations for conglomerates, including removing regulations in the Seoul metropolitan area. The public anger over recent issues, such as the government's year-end tax adjustments for income earned in 2014 and its abrupt increase of cigarette prices, is based on their belief that the government is attempting to empty the pockets of the middle- and low-income people without rightfully raising corporate taxes or taxes on the superrich. Under the changed global economic environment, it is no longer possible to recover the economy with policies that only support conglomerates in exports, investments and real estate deals. There is growing concern that the Park administration is even damping hopes for the future with

policies that run counter to the times. Â At the beginning of his book "The Eighteenth Brumaire of Louis Bonaparte," Karl Marx writes, "Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice ... the first time as tragedy, the second time as farce." The book traces the path of Louis-Napoleon Bonaparte, the first president of France elected by a popular vote. Ascending as Napoleon III, he follows in the footsteps of his uncle, Napoleon I, after toppling the Republic government born as the result of the French Revolution. It does not seem far from our own reality. In the book, Marx declares, "The tradition of all dead generations weighs like a nightmare on the brains of the living." Â [January 22, 2015]

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Winning the Hearts and Minds of Chinese People

Chinese students attend "Dream Class," a corporate social responsibility program of Samsung China, held in Kunming, Yunnam province on July 22, 2014.

Yoo Hee-moon Professor of Chinese Studies Hanyang University

Many predict that China`s growth will wane this year. If so, Korean corporations heavily committed to the Chinese market will undoubtedly face fierce competition. They may not survive if they fail to win the trust of Chinese consumers. Multinational corporations already have started to communicate and make social contributions to win the hearts and minds of the Chinese. Pepsi is working on a pasture project in Inner Mongolia with the Chinese Red Cross. Not to be outdone, Coca-Cola along with the World Wildlife Fund has launched a project to clean the Yangtze River. French petrochemical company Total started a course on humanities, the environment and energy conservation for students at renowned universities. Thai agribusiness company Charoen Pokphand, known as Zhen Da in China, focuses on livestock and seed improvement education and training in Northwest China. Starbucks has also initiated an environmental preservation campaign among college students while DuPont is leading a new agricultural system in accordance with government policy. These are just some of the corporate social responsibility activities that are being undertaken by foreign companies in China. Intel has gone beyond mere social contribution. Seeking to create shared value, it

has launched a program designed to help reform China`s educational environment ― a program benefiting 1.7 million teachers around China. While battling corruption, the Chinese government is demanding that foreign companies abide by international business norms, protect the rights and interests of workers and consumers, and exercise corporate responsibility in local communities. The issues neglected during the nation`s rapid development, such as wasteful use of natural resources, pollution, lack of attention to food safety, violations of labor rights and safety concerns, are also highlighted. The Chinese government has also called on the local private sector to contribute to building a harmonious society amid widening gaps in wealth. China`s key state-run corporations are required to publish a social responsibility report. Jack Ma, founder and CEO of Alibaba, China`s biggest private e-commerce company, reportedly said, “The competition between me and Bill Gates is: Who can more effectively spend money on social contribution?” Lately, the Chinese news outlets are reporting more on defective foreign products. It is a reminder that foreign companies need to communicate with Chinese society in order to take root in the Chinese market. As labor disputes and government regulations of low-quality products grow, and the territorial dispute between China and Japan has led to a boycott of Japanese products, multinationals operating in China now consider corporate social responsibility as a key business strategy. Foreign companies in China contribute to the local communities as a tactic to survive and expand their operations in the Chinese market. As the Korea-China free trade agreement helps Korean companies expand their market shares in China, their corporate contributions to local communities will become even more important. The Chinese government`s focus on qualitative economic growth will raise demand for environmental preservation and conservation of energy and natural resources. In exploring new markets in China, Korean companies need to take corporate social responsibility and make investments that do not infringe on China`s values. For example, LG Electronics has launched an “LG Loves China” campaign in accordance with the Chinese government`s ideology by investing in education in

underprivileged regions. Samsung China runs “Dream Classes” for elementary school students in collaboration with the China Youth Development Foundation. Cultural heritage preservation and cultural facility management can also be a desirable form of communication with the Chinese society in the field of culture. BMW promotes a volunteer program for historic sites and food container company Lock & Lock has built a statue of Wu Zixu, a politician of the Wu kingdom, in Suzhou. Through partnerships forged with the Chinese government or nonprofit organizations, foreign companies also are helping to close the income gap between the rich and the poor, as well as the gap in education. They are also promoting environmental entrepreneurship.

preservation,

cultural

activities

and

innovative

The corporate social responsibility campaigns related to a sustainability model promoted by the Chinese government will not only translate into more revenues but also boost brand images and allow easier entry into the market. In China, demand for environmentally-friendly technology, such as low carbon dioxide emissions, renewable energy and food safety, is growing. Korean companies need to develop and implement environmentally-friendly programs customized for local communities. Strategic activities for corporate growth, social development and sustainability should be the focus of Korean companies operating in China. The shortcut to long-term survival in the Chinese market is sharing and spreading social values, fulfilling corporate social responsibility, protecting the environment and promoting the interests of workers, consumers and local communities. [JoongAng Ilbo, January 1, 2015]

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From ‘Incomplete Life’ to ‘Complete Life’

University students test miniature ocean rescue drones at a creative software demonstration fair, held at COEX in Seoul, on December 3, 2014.

Kwon Young-jin Director, Daegu Regional Headquarters Human Resources Development Service of Korea

“Misaeng” (Incomplete Life), a recent television drama, had great social repercussions as it dealt with issues concerning employment and new employees adapting themselves to corporate life. Most impressive about the drama was an uphill battle each new employee is fighting to do his or her share of work through trial and error. They complain that what they learned in school is of little help in the workplace. On the other hand, corporations have difficulty in finding suitable graduates to hire. According to “Education at a Glance 2014: OECD Indicators,” 66 percent of Koreans aged 25 to 34 have completed higher education ― the highest among members of the Organization for Economic Cooperation and Development. But, their rate of employment is about 40 percent, far below the OECD average. The low employment rate is unmistakable evidence that their classroom studies and extracurricular qualifications don`t match the tasks demanded of them at companies. As a remedial measure, the government is promoting both on-the-job training and off-the-job training programs and encouraging corporations to participate. The goal is to enlist 10,000 corporations by 2017, a nearly five-fold increase from

the current 2,079. The core of the program is to dissuade young people from placing too much emphasis on higher education and unnecessary certificates and licenses, give them on-the-job training at an early stage and also provide them with off-site training. The program reduces the time companies would need to train new employees and helps the recruits start building a career faster. Those who go through prehiring training only need to attend off-the-job lectures once they are employed. In a departure from the provision of traditional classroom education, the program stresses employment first and lectures later. Corporations take the helm in the training of young people, with educational institutions assisting them on the sideline. Under the program, corporations recruit “learning workers” and train them for select jobs. Then, the trainees undergo a formal education program based on the National Competency Standards. When the trainees complete that program, they are ready to be tested for licenses and certificates. The only way to survive intensifying competition in the world is to raise one`s work competency. The combination of on-the-job training with off-the-job training should serve as the first step toward the wansaeng [a go game term for “complete life” as opposed to misaeng, meaning “incomplete life”] of the Korean economy. [Chosun Ilbo, January 17, 2015]

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Another Protest from Salaried Employees

A bank advertises a tax-friendly long-term fund on January 22, amid outcries from salaried employees over increased tax burdens.

Jin Sung-ki Premium News Editor The Maeil Business Newspaper

Salaried employees still seethe with anger over the tax returns they filed at yearend. They cannot free themselves from the feeling that the government and the ruling Saenuri Party have been playing “a dirty trick to hide tax hikes” from the beginning, although, in the face of raging public opinion, they promised to amend the income tax law and expand tax credits retroactively. At the outset, the government said that there would be no tax increase for those who were paid 55 million won or less a year, and that there would be an increase between 30,000 won and 40,000 won for those in the 55 million to 70 million won pay range. But one salaried employee after another cried out they had received “tax bombs.” Instead of receiving tax refunds, as they usually had in the past, they had to pay more. No wonder they felt cheated. The government and its party are held accountable for failing to correctly explain their tax revision bill in 2013. They replaced tax deductions with tax credits but also removed items for tax credits or lowered their rates. They hid the fact that the bill would, in effect, raise the burden of middle-income taxpayers. The controversy shows how lightly the government and its party regard salaried employees in taxation. In announcing the revision bill in 2013, Cho Won-dong,

senior presidential secretary for economic affairs, referred to a goose feather theory. He quoted Jean-Baptiste Colbert, minister of finances of France under the rule of King Louis XIV, who said, “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.” Cho apparently wanted to keep salaried employees in the dark when the government intended to raise their tax obligation. In fact, salaried employees believe they are more taxed than warranted. They hear about various types of tax evasion when all their income is exposed to the scrutiny of tax collectors, who they say are looking into their “glass purses.” Go to an apparel store or a beauty salon. The cashiers probably won`t offer a discount for your cash payment. Of course, they will not give you a receipt ― a practice designed to hide part of their income from the tax authorities. Among the tax dodgers are some restaurants that overestimate expenses to reduce the amount of income subject to taxes. High-income self-employed people are not much different. Tax audits on the income of 721 self-employed people in 2013 found that 47 percent of their income, or 978.6 billion won, was hidden from taxation. They included owners of golf driving ranges and fancy restaurants and such professionals as lawyers and doctors. LG Economic Research Institute had good reasons to say in its November 2013 report that taxing the shadow economy should come before tax increases. The report estimated the nation`s 2012 shadow economy at 314 trillion won. Among the self-employed, 38 trillion won was untaxed. That amounted to 44.3 percent of their income, more than double the OECD average of 22.2 percent. Against this backdrop, the government took an easier path and attempted to tax salaried employees more. No wonder it fueled their anger. They were being asked if they were really gullible. This is not to say that the government should turn its back on the self-employed. Those in dire conditions deserve tax and financial favors. That is one thing and the prevention of tax dodging is another.

In her 2012 election campaign, President Park Geun-hye said, “Estimates about our shadow economy range from 19.2 percent to 28.8 percent of gross domestic product. It is by far larger than the average of advanced nations, which stand at 14 percent.” She promised to reduce the shadow economy by dealing sternly with tax dodging and tax payment delays. She said the nation`s information-collecting systems would be closely linked together for this purpose. Now she is being asked how committed she is after two years in office. [January 26, 2015]

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- Child Abuse at Daycare Centers Requires Gender Perspective

- Retirement Tsunami of the 386 Generation

- Society that No Longer Needs Patriots

Child Abuse Perspective

Daycare

Centers

Requires

Gender

A teacher and children play a game at a parent Cooperative daycare center in Seongsan-dong, western Seoul, on January 22.

Ku Bon-ki Representative Ku Bon-ki Research Institute for Financial Stability

The public wrath over child abuse at a daycare center shows no sign of cooling. The suspect`s personal information has been available on the Internet for weeks. But does making the suspect`s identity public and condemning her or venting our anger at her prevent such incidents from recurring? And can we now leave our children at daycare centers with no worries? From my bookshelf, I took out “The Watchman`s Rattle,” written by American socio-biologist Rebecca D. Costa, and read it again. Costa convincingly explains five universal behaviors, which stand in the way of progress. One of them is the “personalization of blame.” For example, the 9/11 terrorist attacks were not committed by Osama bin Laden alone. However, many people believed so (some still hold onto that belief) and as a result, Osama bin Laden emerged as public enemy No. 1. So what? After he was removed, has the terrorism issue connected with Al-Qaeda in the United States been completely eliminated? Not at all. Needless to say, personalization of blame for a systemic problem is useful in getting the public to vent their anger. However, this very old-fashioned and unreasonable method does not help at all in resolving the problem fundamentally. A systemic problem should be solved in a systemic way. 34

The recent child abuse case is one such example. I can fully sympathize with those who vent their anger toward the teacher who cruelly treated a toddler. However, nothing will change by only blaming the teacher entirely for the incident. The teacher will soon be convicted. So, we need to expend the energy swelling in our hearts for a more useful purpose. Fortunately, I have noticed moves to see this incident as a labor issue (a systemic problem). The issue boils down to two major points. First, the entry barrier for daycare center teachers is remarkably lower than that for teachers at elementary, middle and high schools (a vetting problem). Second, labor intensity of daycare teachers is very high in view of their wage level (a compensation problem). I believe these two problems are relatively well summarized in an article contributed by Professor Lee Joon-koo of Seoul National University to the Huffington Post Korea on January 18, under the title, “Daycare Center Incident Seen from the Perspective of Efficiency Wage Theory.” I recommend those who are interested in this issue read the article. Now, let me raise an issue from a slightly different point of view. This incident should be seen as a gender issue as well. Labor and gender were intertwined in the child abuse incident. We should take this opportunity to think how much we have belittled so many household chores such as cleaning, laundry and childcare. Most of them are simply dismissed as things that should be done by women like wives and mothers, never by men. We also should think about how much value is rendered on the chores that are traded as “services” in the market and how the providers of such services are treated in our society. While discussing measures to prevent abuse of children at daycare centers from recurring, Lee Jung-hyun, a lawmaker and member of the ruling Saenuri Party`s Supreme Council, reportedly said, “We must earnestly consider having grandmothers visit daycare centers twice a day, in the morning and afternoon, and observe their operations.” The statement revealed the limit of the patriarchal way of thinking he is trapped in. He seems to believe childcare is a petty chore for women, a self-sacrificing job of wives and mothers. This episode clearly shows how much men look down on childcare.

Social and political institutions and ideologies are all created by men. As a daycare teacher nobody envisions a man; daycare teachers are all women. This is the reason why the treatment and entry barrier for daycare teachers are so inferior to those for elementary and secondary school teachers. The primary cause of the latest daycare center incident lies in sexual discrimination. This is why a gender perspective is required. Â [The Hankyeoreh, January 24, 2015]

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Retirement Tsunami of the 386 Generation

A job seeker looks around information booths at an employment fair for middle-aged people at COEX in Seoul on September 22, 2014.

Jung Kyung-min Business News Editor The JoongAng Ilbo

Mr. L, who was my senior at university, belongs to the so-called 386 generation: he was born in the early 1960s and went to university in the 1980s. As university students this generation spent more time on the street than in a lecture room, and was more familiar with throwing stones in political protests and drinking soju than reading books. Yet, when graduation neared, they didn`t have much difficulty finding a job because there were piles of letters of recommendation with professors` signatures waiting for them at the department office. Life at workplace was smooth enough as well, thanks to an economic boom amid the “three lows” [low interest rate, low oil price and low one/dollar exchange rate] which prevailed in the late 1980s. In the late 1990s, when this generation was in their 30s, they acted as a midwife for the birth of a progressive administration. Faced with the foreign currency crisis in 1998, they managed to survive the aftermath. But they had a really tough time last year. Companies with 300 or more employees must extend the legal retirement age to 60 beginning in 2016, so they began to lay off the older workers in advance, especially senior managers in their 50s. Mr. L didn`t worry even though he felt bitter that he had to quit just a few years before the extension of the legal retirement age. He owned an apartment in the

affluent Gangnam area and received several hundred million won in voluntary retirement incentive payment. He said he had a really sweet time in the first few months after retirement. Then, one day, his heart sank when he happened to calculate the interest income he would get from his 300 million won deposit at the bank. It was a mere 465,300 won per month after taxes. Also, he suddenly realized that his apartment in Gangnam, which would have been “a goose laying golden eggs” in the past, has long been a headache for him. Under the heavy burden of private tutoring for his two daughters, he couldn`t even afford to buy private pension or medical insurance policies. Still worse, he must wait eight more years to benefit from the national pension system. With this sobering realization, Mr. L belatedly began knocking doors here and there with his resume to look for a job and understood why so many people empathized with the TV drama series “Misaeng” (Incomplete Life). He suggested opening a fried chicken restaurant to his wife but the idea nearly cost him his marriage. His younger daughter is still a university student, so whenever he thinks about her tuition and the money he would need for his two daughters` weddings, he cannot help but sigh deeply. He says he doesn`t know how he will manage to get through the next 30 years. Is Mr. L the only person finding himself in such despair? No, he isn`t. Korea`s “386 generation” has peculiar characteristics. First, this generation accounts for as much as 17 percent of the nation`s population, while those born in the 1950s account for 12.8 percent (based on the 2010 census). Starting from 2020, when those born in the 1960s turn 60, some 800,000 people will retire every year. They will be soon followed by retirees born in the 1970s, who take up 16.5 percent of the total population. This means that, for nearly 30 years from now, Korea will face the tsunami of “half-retirees” who will continue to linger around the job market even after retirement. Compared to this, the retirement shock of the first baby boomer generation, who were born in 1955-1959, was a storm in a teacup. When the 386 generation, which played a leading role in the birth of a progressive administration, is downcast, how would they react? I am afraid that our society, already divided between the right and left, may suffer even more amid the

deepening gulf between generations. Due to the extension of the retirement age, the 386 generation is experiencing massive retirement five years earlier than anticipated. With the deposit interest rate in the 2 percent range, they cannot sustain themselves for the next 30 years or so, even if they remain “half-retirees.” Opening a fried chicken restaurant or working as a security guard for an apartment complex cannot be a solution. There should be practical extension of the retirement age by adopting a peak wage system and more part-time jobs. Investment products that guarantee 4 to 5 percent rates of return are desperately needed. The clock for our society`s evolution stopped at the 1980s, when we enjoyed an economic boom amid the “three lows.” At this critical moment, the earlier we stop expecting the “government to do something for us,” the better. I myself should keep in mind that I will need to make a whole new life plan for my retirement years. Already pressured by fears of deflation, we face another unbeaten path. There is no knowing where the path will lead us. [January 12, 2015]

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Society that No Longer Needs Patriots

Korean players sing their national anthem before a match against Australia at the 2015 AFC Asian Cup Final, held at Stadium Australia in Sydney, on January 31.

Oh Chang-min Business News Editor The Kyunghyang Shinmun

One of my acquaintances who traveled many foreign countries once said to me, “Countries with rockier histories have more patriots.” I realized what he meant during a visit to the Philippines. While the advanced countries in Europe have many historic sites dedicated to conquerors, philosophers and poets, you can see many statues of patriots of different ages and classes in the streets of Manila as well as rural areas across the Philippines. From independence activists who were executed for resisting Spain in the late 19th century to those who struggled against Japan during World War II, they all sacrificed their lives for their country and people. I was saddened to see the Philippines struggling in poverty. “Why is the country still in difficulty with its people suffering, when it has had so many patriots?” I asked myself. But it was a dumb question. You should say that the country has many patriots because it has had to struggle through difficulties, not that it still has to struggle although it has had many patriots. If the country had not been invaded by Spain, the United States and Japan, the Filipinos would have had no reason to resist them at the expense of their lives. Korea also has many patriots. During the 35 years of Japanese occupation,

numerous Koreans sacrificed their lives and fortune to fight for independence. Thanks to these people, Korea was liberated from Japanese rule. When the Korean War broke out, student soldiers picked up rifles instead of books. Decades later, the citizens of Gwangju shed blood for democracy and a dictatorial regime was overthrown. The nation also achieved rapid economic growth, dubbed the “Miracle of the Han River.” The money earned by Korean miners and nurses in Germany and Korean soldiers in Vietnam was invested in manufacturing plants back in their homeland. The nation`s GDP, which was $1.3 billion in 1953, grew more than 1,000 times to $1,304.3 billion in 2013. When a country becomes peaceful and affluent, its people`s patriotism and view of the state naturally weaken. Unless Japan asserts its territorial right to Dokdo and there are international sports events such as the World Cup and the Olympic Games, we seldom remind ourselves of our identity as Koreans. It is hard to believe that until some 20 to 30 years ago we used to point fingers at people smoking foreign brand cigarettes or driving exported cars. These days, Hyundai Motors and Samsung Electronics market their products and services focusing on their quality rather than appealing to consumers` patriotism. There is no need to lament ebbing patriotism, however, because it can be made up for with wholesome citizenship. Strictly speaking, patriotism involves aspects that cannot be seen as a genuine goodness. Above all, patriotism requires sacrifices of individuals. It is half right and half wrong to say that the state and organization come before individuals. Patriotism also makes neighboring countries uncomfortable. Patriotism of Japanese rightists who pay their respects at the Yasukuni Shrine and try to neutralize their “peace constitution” undermines peace not only in Northeast Asia but in the whole world. The frequent terrorist attacks in the Middle East are also rooted in extreme patriotism. The fact that patriotism peaks when nations go to war suggests a lot about the nature of patriotism. Patriotism is also frequently misused as blind loyalty to a political regime or leader. Germany under the Nazis and North Korea are outstanding examples. Love for one`s country involves loyalty to the government and regime, which in turn translates into worshipping the top leader. In South Korea, patriotism was packaged as “anti-communism and anti-North Korean sentiment.” The Charter of National Education, which Korea`s older generations can recite even in their sleep, says, “Patriotism, for the state and for the nation, in

the spirit of democracy, is the way of our survival.” President Park Geun-hye demands patriotism from Koreans. At a meeting to review key state affairs she hosted at Cheong Wa Dae toward the end of last year, Park quoted a line from the national anthem that goes, “Let us love our country in suffering or in joy,” and said, “We should love our country whether in good times or bad times.” Mentioning a scene from the recent hit movie “Ode to My Father,” she went on, “the couple was arguing with each other but when they heard the national anthem they stopped and saluted together.” Kim Ki-choon, the presidential chief of staff, emphasized loyalty to the state and the president, saying, “The Chinese character for loyalty is composed of two letters meaning the ‘center.` We should keep balance around the center.” It is a little hard to understand that the Park administration, which promised to open an “era of happiness for the people,” demands personal sacrifices from the people. Patriotism and loyalty are definitely essential for national development. The Republic of Korea in 2015, however, needs patriotism and sacrifice from politicians, senior officials, and the owners of large conglomerates, who threaten to move their factories overseas unless they are given tax benefits or relaxed regulations. If these people abandon their greed and selfishness, the general public wouldn`t have to worry about the country too much. At the dawn of a new year, I dream of a society that no longer needs patriots. [January 12, 2015]

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- Royal Palace Kitchen Restored after 100 Years

- Legoland or Gojoseon Land?

- Conflict Creeps into the Busan International Film Festival

- Retro Fever Sweeps Young Generation

- Zero Budget for Art Works at Cheong Wa Dae

Royal Palace Kitchen Restored after 100 Years

The royal kitchen complex in Gyeongbok Palace, in central Seoul, has been rebuilt 100 years after it was town down by the Japanese colonial government. (Courtesy by the Cultural Heritage Administration)

Lim A-young Staff Reporter The Kyunghyang Shinmun

The royal palace kitchen of the Joseon Dynasty (1392-1910) has been rebuilt a century after it was torn down by the Japanese colonial government. Sojubang in Gyeongbok Palace, featured in the popular TV drama series “Dae Jang Geum” (a.k.a. “Jewel in the Palace”), was originally constructed in 1395, when the palace was renovated and extensions were added. It was burned down during the Japanese Invasions (1592-1598), rebuilt in 1865, during the reign of King Gojong, when the palace was restored to its original state and again victimized by the Japanese, who removed many of the palace structures under the pretext of holding the Chosen [Korean] Industrial Exposition in 1915. The kitchen project began in September 2011 as part of a long-term restoration of Gyeongbok Palace, the main palace of the Joseon Dynasty. The Cultural Heritage Administration yesterday announced the kitchen was completed in January and that public viewing would start during the May 2-10 Royal Palace Culture Festival. The kitchen, actually a complex of 17 buildings, will be equipped with cooking utensils and everyday objects of the Joseon period so visitors can experience the ancient royal culinary culture. The kitchen complex is in the center of Gyeongbok Palace, to the rear right side

of Geunjeongjeon, the main throne hall. During the Joseon period, the complex included the “Inner Sojubang” where the king`s everyday meals were cooked; “Outer Sojubang,” or Nanjidang, where banquet food and ritual offerings were prepared; and “Saengmulbang,” or Bokhoedang, where snacks, porridge and panfried delicacies were made. Before the restoration project, the Cultural Heritage Administration excavated its old site to conduct preparatory investigations from 2004 to 2005. It also referred to various documentary sources, including “The Annals of the Joseon Dynasty” (Joseon wangjo sillok), “Illustrated Record of Historic Sites in Korea” (Joseon gojeok dobo), “Record of Royal Palaces” (Gunggwol ji), “History of Royal Palaces” (Wanggung sa), “Layout Plan of Gyeongbok Palace and its Rear Garden” (Bukgwol dohyeong). “This palace kitchen was a dynamic and vibrant place where many court ladies worked diligently from early in the morning till late at night, cooking food with utmost care because it was directly related to the king`s health,” said a concerned official at the Cultural Heritage Administration. “We are not simply intent on restoring the original architectural features of the royal kitchen, but plan to use it as a space for the visitors to experience and participate in royal culinary culture programs.” Reconstruction of Gyeongbok Palace began in 1990 and is scheduled for completion in 2030. By then, the palace will have 379 pavilions and other structures, according to the Cultural Heritage Administration. Heungbokjeon, a pavilion where the king met foreign emissaries, will be reconstructed this year. [February 17, 2015]

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Legoland or Gojoseon Land?

A massive historical site with burnt home sites and dolmens, presumably dating to the 11th-14th centuries, B.C., has been discovered on Jungdo, an isle in Chuncheon, Gangwon Province.

Shin Dong-ho Editorial Writer The Kyunghyang Shinmun

Jungdo is an isle in the city of Chuncheon. It emerged in 1967 when Uiam Lake was created as a result of the Uiam Dam construction. Despite its small size and brief history, it is one of the better known islands in Korea. It has lent its name to the “Jungdo-style plain coarse pottery,” which is one of the most important Iron Age legacies in the central regions of the Korean peninsula. It is also the place where the foreign plant species, white heath aster, was found and earned its reputation as the Jungdo chrysanthemum. More recently, the modest isle regained attention nationwide as opposing sides argued whether or not it should be developed as a major tourist attraction, namely the world`s largest Legoland. A Korean consortium and the UK`s Merlin Entertainments are partners in a 500 billion won (approximately US$500 million) investment to create a Lego-themed amusement park, hotel, resort, water park and retail properties. If all goes as planned, the new Legoland in Jungdo would cover 1.3 million square meters, more than double the world`s current largest Legoland (in the UK), which occupies 600,000 square meters. All seemed to go well when a massive historical site was unearthed. Over 1,400 structural remains, including 925 homes, 101 stone mounds and a moat dating

back to the Bronze Age have been discovered through the first excavation in July last year. This is the largest discovery of the kind in Korea to date. Each unearthed home has an average floor area of 31 square meters, with the largest one occupying 172.5 square meters. Important artifacts such as the violin-shaped bronze daggers and bronze axes were found in one of the homes located in the center of the site. At the very least the community would have accommodated 6,000 to 7,000 people, and it may have been even larger with as many as 10,000 residents. A town of such scale is likely to have had a strong leader governing a class society consisting of the nobles, producers and workers. In the Bronze Age between the 14th to the 11th centuries B.C., a community with a population of almost 10,000 people could very well make a state in its own right. The National Movement to Prevent Development and Protect the Ancient Remains of Gojoseon in Jungdo was founded on December 23 to preserve the island as a historically important site with keys to understanding Gojoseon (Old Joseon), the oldest known kingdom in Korean history. On January 7, they held a seminar on the ancient remains of Gojoseon on Jungdo at the National Assembly Memorial Hall. Dr. Lee Hyung-gu, professor emeritus at Sun Moon University, explained: “In archaeological terms, the remains on Jungdo date back to the Bronze Age. In historical terms, they belong to the Gojoseon period. We may have found a part of Gojoseon that we have not been aware of.” This statement triggered my memory of the Korean Route exploration eight years ago, in which Professor Lee also participated. The team set out to follow the traces of Korean ancestors across the Maritime Province, Lake Baikal, Hulunbuir Prairie, Greater Khingan Range, Manchuria, Liao River and Daling River, and discovered in the remains of the Hongshan Culture certain clues that could be linked back to the Korean peninsula. We visited the Niuheliang Site which is often referred to as the crown jewel of Hongshan Culture. The ruins dates back to as early as 3500 B.C. and has the three basic elements of a budding state — tombs, altars and houses of worship. The discovery of this site is considered a major archeological feat that pushed back the birth of Chinese civilization by a millennium.

In China, many view the Niuheliang Site as a proof that the legendary Yellow Emperor existed. Some Korean scholars connect the site to the tribal leader Chiyou who fought against the Yellow Emperor. Aside from these scholarly debates, stone mound tombs in the style of those found in Niuheliang were once popular across the Korean peninsula. In fact, the mounds unearthed on Jungdo exhibit a structural similarity with those in Niuheliang. More striking than the possible connection between Niuheliang and Jungdo is how the former has been preserved since. Dr. Woo Sil-ha of Korea Aerospace University who is currently a visiting professor at the Hongshan Culture International Research Center, Chifeng University has sent some of the latest photos of the site. The tomb of the goddess, which was protected by a makeshift structure eight years ago, is now fully encircled by a two-story building with artifacts on display. Far more impressive is a huge steel dome covering the entire site of the stone mound tombs. It cost 170 billion won to build the dome over the area, which is the size of three soccer fields. Unfortunately, Jungdo does not share the same fortune. Only some of the stone mounds and other structural remains will be transferred to another site. The rest will be restored to their pre-excavation condition. Already, some of the stone mounds are being relocated, and the National Movement to Prevent Development and Protect the Ancient Remains of Gojoseon in Jungdo has filed for an injunction to halt construction. They have also proposed to designate Chuncheon as “Special Zone for History and Culture of Gojoseon” so that the ruins can be preserved and restored while Legoland is built where there is less likelihood of historical remains, either on Upper Jungdo or on the former site of the U.S. military base, Camp Page. This proposal should be given sufficient thought. If done right, this may give Chuncheon both Legoland and Gojoseon Land. [January 12, 2015]

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Conflict Creeps into the Busan International Film Festival

Director Lee Po-cheung and actors of Hong Kong's "Gangster Pay Day" greet the audience at the closing ceremony of the 19th Busan International Film Festival on October 11, 2014.

Lim Bum Pop Culture Critic

In the early 2000s, when I was a film journalist, major film festivals were held in Busan, Jeonju, Gwangju and Bucheon. At the time there were endless conflicts between the festival organizers and the respective local governments. Once the chief organizer of a festival locked horns with a programmer over operational demands of city officials and the mayor of another host city went so far as to force a festival`s executive director to step down. Mostly, flawed festival operations were cited as the reason for conflict, but backbiting ensued always. Sometimes, kickbacks were brazenly demanded on the grounds that “since our city is providing the necessary budget for holding the festival, the festival organizers should give some benefit to the city.” I assume that there also might have been attempts to force festival organizers to hire people based on their political views or regional background. I still vividly remember that during the opening ceremony of a festival, the mayor of the host city was introduced only by his title since the chief organizer who was presiding over the ceremony forgot his name. After a while, the mayor demanded the resignation of the chief organizer and he was eventually ousted. The city officials explained that the chief organizer was asked to resign because he was concurrently serving as a university professor, which sounded implausible.

Filmmakers boycotted the festival, protesting on behalf of the ousted chief organizer. The festival became the biggest victim in the dispute and the city which provided the funding was dealt a serious blow as well. This incident occurred 10 years ago. At least it left a lesson that the arts and politics do not mix well. The Busan International Film Festival (BIFF) has grown into Asia`s largest film festival without experiencing any major conflict with the host city. It goes without saying that the festival has had a tremendous impact on the development of the Korean film industry. One of my friends attended the grand opening of the first festival held at the open-air arena at Suyeong Bay in 1996, and was overwhelmed to witness the unprecedented role of movies. He later became a film critic. I believe that young filmmakers who had honed their skills watching artistically acclaimed foreign movies at the festival helped open a renaissance of Korean cinema in the 2000s. There are countless episodes illustrating the prestige of the Busan International Film Festival. Director Park Chan-wook has said that many filmmakers from other countries say “I will see you at the BIFF” when they say goodbye. Famous Taiwanese actor and director Hou Hsiao-hsien is known to have been inspired by the fever at BIFF to make up his mind to do something for young filmmakers. Is the film industry the only beneficiary of the festival? Is it possible to calculate the festival`s contribution to the international prestige of Busan in monetary terms? Without the festival, how bleak would Haeundae Beach and the high-rise buildings lining it seem in autumn every year? It has been so good to see the Busan municipal authorities refrain from interfering with the festival`s operations to pursue a peaceful coexistence of the city administration and the festival. How nice it is that this famously conservative city, which has unflinchingly supported the ruling party, is magnanimous enough to embrace both conservatism and liberalism when it comes to the arts! It was not until I started to attend the festival that I grew fond of the city. Thus, I have come to indulge in its food and even love the boisterous accent of local people. Yes, politics and arts can go together like this. By respecting autonomy in the operation of the festival, rather than adopting the crude notion of cronyism

and regionalism in staffing its organizing committee, the city has indirectly and circuitously supported the festival to blossom fully. Now, it`s disheartening to hear that the Busan city government has asked the BIFF executive director to resign, accusing him for the failure to recruit staff through open competition and respect the proper procedures in reporting on the selection lineup. It`s difficult to understand how this can be the reason for demanding the resignation of the head of an organization that is not affiliated with the city administration. Local news media also seem to suspect the motivation. If the city`s move has to do with the screening of the controversial documentary “The Truth Shall Not Sink with Sewol” (original Korean title “Diving Bell”) in last year`s festival as speculated by the media, it would be paramount to denying the raison d'être of the festival. The city denies the allegation, but…. [The Hankyoreh, January 27, 2015]

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Retro Fever Sweeps Young Generation

A store in Gukje Market, featured in the recent hit movie "Ode to My Father," attracts tourists on January 28.

Jang Jae-seon Culture Editor The Munhwa Ilbo

Which age group has the most viewers of “Ode to My Father,” a nostalgic melodrama which is set to surpass 10 million in ticket sales soon? Data released by CGV has revealed interesting results: the admission ratios of viewers in their 20s, 30s and 40s showed little difference, accounting for 30 percent, 27 percent and 28 percent, respectively. The results were contrary to the expectations that cinemagoers in their 20s or 30s would not be interested in seeing a movie set decades ago. Data provided by Lotte Cinema was not much different. Moviegoers in their teens, 50s and 60s merely took up 4 percent, 8 percent and 2 percent, respectively. The results may be interpreted from diverse perspectives, but political controversy aside, I want to place significance on the fact that the story from our past has struck a chord in the hearts of people in their 20s and 30s. It means young people are communicating naturally with their grandparents` generation through the life of the movie`s protagonist who takes care of his family with dedication, overcoming dire poverty in the turmoil of contemporary history. Another instance highlighting intergenerational communication can be found in the craze for an episode of “Infinite Challenge,” an MBC entertainment program

which featured performances by groups and soloists who dominated the pop music scene in the 1990s. This episode subtitled "Saturday, Saturday is for Singers," also known as "TOTOGA,” recorded extraordinarily high viewer ratings and the songs that were featured topped the charts of online music sites. The social networking media was ablaze with excited responses for a while. The main audience of the episode was those in their 30s to 50s, who had enthusiastically enjoyed those hit songs in the 1990s. But, according to an analysis of the user groups who downloaded the songs from the KT music site, 20-somethings made up more than 50 percent. The majority of these people apparently watched the program on their mobile phones. Intergenerational communication is happening through songs from the 1990s. The retro boom triggered by the popularity of “TOTOGA,” coupled with the huge box-office success of “Ode to My Father,” has sparked a debate on retro culture. Incidentally, the opening of "C'est Si Bon," a movie which will take viewers back to the folk music craze of the 1970s, is imminent. KBS`s long-lived program “Gayo Stage” featuring old pop songs has also made headlines by becoming the mostwatched show among the programs airing in the same time slot. The retro revival in the pop culture scene is not new in Korea. It has been quite a while since cultural products targeting the financially affluent middle-aged people have appeared in various genres. Indeed, most musicals with high-priced tickets depend largely on the purchasing power of middle-aged people. Not surprisingly, the emotional background of the retro fever is nostalgia for the past. Some critical intellectuals point out that the current retro fever reflects the psyche of Koreans who are looking to the embellished past for comfort, avoiding the harsh reality here and now. They warn that at a time when cultural content straightforwardly portraying today`s life is needed to shape the future, going back to the past may result in social retrogression. They are right. We should guard against a social atmosphere in which people turn a deaf ear to the future to be explored by young people as depicted by the popular drama “Misaeng” (Incomplete Life), while admiring the struggle of older generations to wade through hard times. We should fend off a cultural trend that encourages such an attitude.

While heeding to these concerns, I want to mention virtues of the retro trend. How desirable it would be if members of different generations can communicate with each other through culture when generational divide grows ever deeper. Since the old custom of home education conducted at meal times has disappeared, cultural products will be efficient means for young people to share the experiences of older generations. This is the reason why more works drawing sympathy from young generations are needed. It goes without saying that the quality of retro cultural products is important. Despite criticism for some contrived circumstances, “Ode to My Father” has strong emotional appeal that connects all generations. In an interview with this newspaper, director Yoon Je-kyoon said, “I wanted to depict communication and harmony between generations, regions and classes.” An attentive viewer will find scenes delivering the director`s message here and there, such as the lead character Deok-su walking while holding his granddaughter`s hand tightly, sharing friendship with popular singer Nam Jin, who speaks in an unrefined Jeolla dialect, and showing tolerance toward foreign migrant workers. It may sound like an overstatement, but I think that underlying the current retro trend is a desire to look back on the past and recover the sense of unity from community life. That is a yearning for the good old times when people dreamed of a better future together. Some may denounce it as nostalgic nationalism, but it is a natural desire under our present circumstances where unity among community members is fading out. I hope that the forthcoming retro cultural products will contribute to intergenerational communication and social integration. Am I too ambitious? [January 9, 2015]

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Zero Budget for Art Works at Cheong Wa Dae

President Park Geun-hye meets U.S. President Barak Obama at Cheong Wa Dae on April 25, 2014. Behind them is a painting of the sun, moon and five peaks, symbolizing royal authority of the Joseon Dynasty.

Kim Mi-ri and Heo Yun-hee Staff Reporters The Chosun Ilbo

Last September, the Ministry of Culture, Sports and Tourism announced a mid- to long-term plan to promote art. This ambitious plan aims to heighten the status of Korean art by expanding the nation`s art market into one that is worth 630 billion won (approximately US$600 million) by 2018. However, within the Korean art community, an increasing number of voices are calling for a government-led campaign to change the public`s awareness of art first, although they still acknowledged the importance of financial assistance. Those involved in Korean art circles also point out that it is urgent to upgrade the level of art works that gain exposure in the international community through Cheong Wa Dae or the National Assembly, Korea`s major window to the outside world, in order to conduct “cultural diplomacy” commensurate with the status of the country.

◇ Cheong Wa Dae`s Failure to Look After Existing Art Works The presidential residence can serve as a kind of an art gallery where Korean art works can easily draw international attention without having to go abroad. When the photographs of visiting dignitaries are shown through international news outlets, the art in the background is naturally exposed to people around the world. According to our investigation, Cheong Wa Dae has more than 300 pieces

of art, including paintings by Kim Ki-chang, Jeon Hyeok-lim and Suh Se-ok. The collection also includes some 30 pieces loaned from the National Museum of Modern and Contemporary Art (20 pieces), the Seoul Museum of Art (4 pieces) and the Art Bank (2 pieces). The director of a state-run art museum who provided advice to the presidential residence in preparation for visits by foreign heads of state, including U.S. President Barack Obama, said, “Among these art pieces currently possessed by Cheong Wa Dae are several outstanding pieces, but the collection is largely comprised of mediocre works donated by the artists themselves, so it`s disconcerting to regard them as art works representing Korea.” The representative of an art gallery who is familiar with the current conditions of the art collection at Cheong Wa Dae also noted, “A former president ordered a banquet hall to be filled with works of an artist whom he personally knew. Another former president took some pieces with him when he retired. Some former presidents considered art works at Cheong Wa Dae their private property. However, things changed when Kim Dae-jung, who was well versed in art, took office. He consulted experts to arrange paintings for exhibit at Cheong Wa Dae.” There also are problems with Cheong Wa Dae`s management of its art collection. An art expert who once looked after the collection said, “The storage at the presidential residence is slightly damp, which has caused some paintings to become discolored.” A Cheong Wa Dae official said that there has been no budget allocated for art purchases since 2008. Cheong Wa Dae seems to be weary about purchasing art because of the Shin Jeong-ah scandal in 2007 and the involvement of the Seomi Gallery in the Samsung slush fund scandal in 2008. The two incidents have caused the public to view art circles as a hotbed of corruption. Currently, the task of managing the art collection at Cheong Wa Dae falls on the office of the presidential secretary for administrative affairs. Beginning from the end of the Roh Moo-hyun administration (2003-2008) into the Lee Myung-bak administration (2008-2013), curators were dispatched to provide advisory services from the National Museum of Modern and Contemporary Art. Currently, however, there are no professional curatorial services in place.

All of this is in a striking contrast with the White House, which has had the White House Office of the Curator in place to look after its collection of over 5,000 art pieces since 1961 when President John F. Kennedy was in office. The 7th White House curator, William Allman, has served for almost 40 years. The White House, which considers itself a museum that preserves the nation`s cultural assets, even held an exhibition of its collection at the Renwick Gallery of the Smithsonian American Art Museum in 2011.

◇ Price Limit on National Assembly Art Purchases In the National Assembly Members` Hall building, which was remodeled in 2013, there are a total of 12 works of art currently on display, including “The Forest” by Kim Jong-hak exhibited on the third floor, “The Angel Solider,” a photograph by Lee Yong-baek, and “A Shepherd Boy and a Crown,” a sculpture by rising artist Lee Chang-won. All of the art works except “The Forest” were purchased at the time of the remodeling. In accordance with the Culture and Arts Promotion Act, some $500,000, equivalent to a hundredth of the total construction cost, was spent on the purchase and installation of these art works. Apart from them, the majority of art pieces at the National Assembly came through donations. Currently, the Secretariat of the National Assembly and the National Assembly Library manage 218 pieces (including 62 pieces on loan) and 365 pieces, respectively. Highly valued art works and old paintings created before the 1980s that came into the National Assembly`s possession are mostly housed at the National Assembly Library. National Assembly Secretary-General Park Hyung-jun said, “In advanced countries, their parliaments purchase works of art from artists representative of their countries and use them to introduce their culture to the outside world in a natural manner. That`s the underlying strength that culture carries. In this respect, Korea has a long way to go.” Under the Enforcement Decree of the Commodity Management Act, the National Assembly is not allowed to purchase any art work worth more than 500,000 won (approximately $450). Park added, “As this amount is not enough to buy good works, the only alternative is to exhibit loaned works. But the borrowing cost is prohibitive. Also, we have no professional curator.”

As for the management of art collection, the National Assembly is no better than Cheong Wa Dae. The mural painting “Heaven Lake at Mt. Paektu” by Chang Woosung (1912-2005) is a custom-made work built into the wall of the National Assembly building during its construction in 1975. In order to install this hugesize painting (190 x 650 cm), the wall across the cafeteria had to be redesigned. However, an informed figure from art circles said, “When the National Assembly building was repaired some years ago, the wall painting was taken off and sloppily mounted. Since then it has been moved elsewhere.” He lamented that the incident showcased the National Assembly`s careless attitude in handling a valuable piece of art. Art critic Jeong Jun-mo said, “It is undesirable there is a change in the cultural atmosphere of Cheong Wa Dae and the National Assembly whenever they have new occupants. In order to reveal the nation`s history and authenticity consistently, the art works in their possession need to be systematically managed and exhibited.” You Hee-young, a former director of the Seoul Museum of Art, said that it is advisable for Cheong Wa Dae and the National Assembly to allocate a budget for art, even if a small, symbolic amount. If this is not possible, he advised that at least they hire a professional curator to put the art works currently in their possession in proper order. [January 20, 2015]

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Â - Economic Effect of the Reunification of the Korean Peninsula

Â - Trends in Economic Happiness and Policy Implications

Economic Effect of the Reunification of the Korean Peninsula National Assembly Budget Office Republic of Korea

I. Estimation of Economic Effect 1. Purpose and Necessity of Study People in both South and North Korea yearn for unification. Debates on possible economic gains from reunification are actively under way these days. It is believed that a reunified Korea would enjoy higher international status thanks to its expanded economic scale. Since the German unification, studies on territorial reunification in South Korea have focused mainly on its cost to the national economy. Estimates range widely from US$50 billion (Rand Corporation, 2005) to US$5 trillion (Peter Beck, 2010). This has led to concerns about the obvious tax burdens that individuals and corporations would face, generally souring public opinion on reunification. In contrast, it has not been possible to calculate the gains from reunification to society with as much clarity. Yet, reunification of the divided peninsula would undoubtedly be an opportunity to re-energize the South Korean economy, which has been stuck in low growth due to structural problems. Enterprises have not found promising investment opportunities, employment is unstable and consumption is sluggish. When reunification is realized, development projects in North Korea will increase demand for all resources, leading to large-scale corporate investments and substantial job creation. The first premise in preparing for unification or studying the effects of unification is that strong mutual trust will prevail. Accordingly, efforts will be mounted to form a national consensus. Unification in which one system absorbs the other will lead to unbearable political and economic burdens. After the unification of Germany, which was a case of the East absorbed by the

West, the economy of the eastern half rapidly shrank and unemployment soared. Some recent studies on Korean reunification suggest that keeping the North under separate economic management would be the best way of maximizing the benefits of unification while minimizing its associated costs and negative economic consequences. This report analyzes the expected benefits and costs of Korean unification. Particular attention will be placed on the financial aspects, considering the favorable conditions of low wage levels and high investment efficiency that will be available in the North. The large gap in economic scales and income levels between the two sides will be a major drag on the economy of the unified Korea. North Korea`s real GDP (as of 2012) amounted to 25 trillion won, or 2.3 percent of South Korea`s 1,104 trillion won, and its per capita national income of 1,370,000 won was 5.4 percent of the South`s 25,590,000 won. The GDP of East Germany before the 1990 unification approached 30 percent of the West. The cost of unification amounted to 4 to 5 percent of the unified Germany`s gross domestic product. The important task in the process of Korean unification will be to reduce the destabilizing factors stemming from the temporal difference between the large cost required in the early stage of unification and its benefits created in the long term. Government investments should be the primary catalyst for speedy normalization and economic growth in the North. But that will be a major challenge in South Korea, where a rapidly aging population will push up fiscal demand. Keeping the expenditures for unification at an affordable level will be an inevitable priority as fiscal reserves will play a decisive role in managing the postunification economy. This study examines ways to secure fiscal soundness through improved financial systems. 2. Parameters The primary premise of this study is that the Korean peninsula is reunified peacefully. The time of unification is set for 2015 so as to use all the statistical data currently available. The more unification is delayed, the higher the cost will be because of increasing difference in the income level between the two Koreas.

As such, corrections will be needed to reflect changes between the present and the time of unification. Economic benefits from unification will appear gradually as a result of policies adopted by the unified government. In order to reduce the unification cost and increase benefits, policies deemed most effective at present should be explored and implemented. The benefits of unification will be gleaned from different areas of unified Korea and will be reflected in a rising gross domestic product. Positive indirect factors also will materialize, such as reduction in military forces, higher economic participation by youths and lower logistics costs. However, income differences will widen and social conflicts will likely deepen. Therefore, estimates of economic benefits in monetary units may be substantially bigger or smaller. Estimates for individual economic categories will help instantly understand the effect of unification. But more important for analyzing the overall fiscal picture is obtaining macroeconomic variables such as GDP, unemployment rate and prices. The period of observation in this study is 45 years from 2016, the year after the supposed unification, to 2060. This much time will be needed for the normalization of the North Korean economy and a complete integration of the economies of the North and South. Analysis will be made on the impact of unification on the state debt and fiscal soundness of the unified Korea in conjunction with the long-term financial forecasts by South Korea`s National Assembly Budget Office for the period of 2014-2060. These forecasts involve the rising financial burden due to the population aging in the South. Long-term observation is necessary to absorb the temporal discrepancy between the immediately required costs and the benefits to be achieved gradually. Especially in social overhead capital, large-scale investments will be needed immediately after unification but their effect will appear over a long period of time. 3. Economic Benefits 1) Method of Macroeconomic Predictions for North Korea

Macroeconomic indicators including growth rates for the North Korean area have been estimated by the growth accounting model based on the gross production function. The growth accounting model is widely used in development economics as an alternative to the DSGE (dynamic stochastic general equilibrium) or CGE (computable general equilibrium) models. Also, these methods could involve unrealistic hypothesis that the North Korean economy is a fully competitive market system. To foresee economic growth in the North Korean area, it is necessary to review and compare the growth process of such development models as South Korea and Taiwan, which share some geopolitical commonalities with North Korea, as well as such systemic transition models as China and Vietnam. Also valuable is the experience of economic growth in the post-unification East German area. Estimated investments from South Korea and foreign sources are based on economic growth projections. The level of labor input and the ratio of labor income distribution are linked to the overall wage scale and infrastructure investments, including education investment. It is supposed that 1 percent of South Korea`s GDP is invested in the SOC development in North Korea for 20 years (2016-2035), after which the rate is cut by 0.1 percent each year until 2045, to achieve 1 percent additional productivity increase during the period. The investment will mainly go into the infrastructure and agricultural sector, with the aim of narrowing the income disparity between the North and South to the current level of domestic disparity in South Korea. An annual 1 percent increase is foreseen in productivity given such advantages as the use of the same language, free transfer of South Korean technologies and the Northern area`s adaptation to the South`s advanced socio-economic system. 2) Prospects The average GDP in the Northern area will increase 9 percent annually, from 29.7 trillion won in 2016 to 1,211.3 trillion won in 2060. The North`s relative GDP size against the South will grow from 2.3 percent (against 1,268.0 trillion) to 39.0 percent (against 3,105.7 trillion won) over the period. The North`s per capita GDP will climb from 1,190,000 won in 2016 to 47,020,000 won in 2060, or from 4.8 percent of the South to 66.5 percent. The disparity is

comparable to the current gap between the highest and the lowest per capita GDP areas in South Korea ― Ulsan Metropolitan City with 18.31 million won and South Jeolla Province with 12.49 million won, or 68.2 percent of Ulsan (as of 2012). The major macroeconomic indicators used in estimating the unification cost are: - Employment rate rising from 54 percent in 2016 to 60 percent in 2030 and 64 percent in 2060; - Average annual wage increasing from 1,660,000 won in 2016 to 3,080,000 won in 2020, 6,990,000 won in 2030 and 51,650,000 won in 2060; and - The ratio of self-provided investment (from enterprises and private savings in the North Korean area) growing from 59.3 percent in 2016 to 70.3 percent in 2020, 80 percent in 2024, 90 percent in 2029 and 100 percent in 2036. The unified Korea will have a GDP scale of 1,318 trillion won in 2016, which will grow by an annual average of 2.8 percent to reach 4,320 trillion won in 2060. These figure are obtained by combining the long-term prospects of the South`s GDP and the the North`s rising GDP after unification with its ripple effect on the South. Without unification, the South`s economy is forecast to grow by 2.1 percent annually during the period.

3) Ripple Effect on the South 64

The ripple effect of the South`s investment and fiscal assistance for the postunification North on its own production, value added and employment has been estimated. The inter-industry relationships for the 2007-2011 period were used to pick up the average figures for the production inducement coefficient, value added inducement coefficient and employment inducement coefficient in order to minimize the variations from economic cycles. This produced total production inducement effect on the South worth 3,650 trillion won (81 trillion won on average annually) and value added effect of 1,683 trillion won (37.4 trillion won on average annually) for the 45 years. In the longterm GDP prospects, about 1 percent value added effect is foreseen to be achieved (0.4 percent through investment in the North and 0.6 percent through fiscal assistance). In annual amount the value added effect will increase from 26 trillion won in 2016 to 65 trillion won in 2036, but its percentage to the longterm GDP forecasts is expected to drop slightly from 1.65 percent in 2016 to 1.5 percent in 2036 and further down to below 1 percent beginning in 2042 and eventually to 0.03 percent in 2060. The employment inducement effect is estimated at an aggregate of 29,530,000 workers (656,000 in annual average) for the 45-year period; the aggregate number of wage earners will be 25,320,000 (563,000 on average annually). With the ripple effect from unification, the employment rate in the South will rise from 62.8 percent in 2016 to 66.5 percent in 2025, but the rate will slowly fall to 65.1 percent in 2036, 62.0 percent in 2045 and 60.6 percent in 2060. Overall, the number of employed people will increase by 2.4 percent and the employment rate by 1.5 percent annually. 4. Cost of Unification 1) Method of Estimating the Unification Costs The cost of unification has been measured in five areas ― social security, public administration, education, industrial investment and other discretional expenditures. The unified Korean government will be obliged to operate the four social insurance programs ― national pension, national health insurance, employment insurance and industrial disaster insurance ― for the Northerners, subsidizing their insurance while collecting very little insurance dues. The government will also have to pay the basic pension for low-income earners.

Raising the South will investment percent of investment

administrative and educational standards in the North to those in the require a huge outlay in personnel costs. As observed above, in the social overhead capital in the Northern area will amount to 1 the GDP in the South for the first 20 years after unification. The will be reduced by 0.1 percent annually for the next 10 years (2036-

2045). In a previous study, the Korea Research Institute for Human Settlement estimated that 93.5 trillion won will be needed to upgrade the North`s infrastructure during the first 10 years after unification. The Korea Rural Economic Institute expects that 26.3 trillion won will be needed for the agricultural sector over the same period of time. Investment in these and other areas will total 208 trillion won, taking up the bulk of the unification expenditures. Other discretionary expenditures will include the costs for SOC maintenance and education programs aimed at easing social and cultural differences. In view of the South`s fiscal capacity and the North`s ability to absorb inputs, it is reasonable to assume that these costs will be equal to 1 percent of the South`s GDP. But this type of spending will depend largely on the policy direction of the fiscal authorities and the overall fiscal situation of the unified Korea. 2) Estimated Amounts The National Assembly Budget Office estimates that the total unification cost for the 45 years from 2016 to 2060 will amount to 10,428 trillion won by the current price (4,657 trillion won in real terms), with an annual cost of 232 trillion won (103 trillion won in real terms). The first year of 2016 will demand 68.0 trillion won (53 trillion won in real terms) and the annual amount will peak in 2056 when 357.2 trillion won (127 trillion won in real terms) will have to be spent. The final year of 2060 will see the annual unification cost recede to 339.9 trillion won (115.8 trillion won in real terms). The share of the unification cost against the GDP of the unified Korea will average 3.9 percent, rising from 4.2 percent in 2016 to 4.8 percent in 2035, and then steadily decline to 2.8 percent in 2060. These percentages will more realistically reflect the impact of unification cost on the overall economy than the net amounts.

By category, social security will require the largest share of the total unification cost. It will take up 47.7 percent. In order to stabilize the North Korean people`s livelihood, unified Korea will need to spend 10.8 trillion won in 2016, or 15.9 percent of the year`s unification cost. The cost of this category will rise to 154.1 trillion won, or 45.3 percent of the total expenditures for unification, in 2060, with the annual average at 28.1 trillion won over the 45-year period. Expenditures in education, including teacher salaries, will balloon from 13.9 trillion won (20.4 percent of the total unification cost) in 2016 to 48.9 trillion won (14.4 percent) in 2060, with an annual average of 28.1 trillion won. In public administration, which will include payments to public servants, unified Korea will spend 11.9 trillion won (17.5 percent) for unification in 2016 and 50.4 trillion won (14.8 percent) in 2060, with an annual average of 27.7 trillion won. Total industrial investment will reach 769.6 trillion won over the 30 years following unification. Other expenditures at the discretion of the unified Korean government will increase from 15.7 trillion won in 2016 to 86.5 trillion won in 2060, with an annual average of 48.4 trillion won. About 1 percent of the unified Korea`s GDP is expected to be allotted to this portion of the unification cost, which will include the money for SOC maintenance and various training/education programs for the Northerners to help them adapt to new social and economic situations.

5. Maximizing the Economic Effect of Unification 1) Overall Economic Effect The combined GDP of South and North Korea in 2013 was $1.4 trillion (1,135 trillion won). Unified Korea`s GDP in 2060 is projected to reach $5.5 trillion to bring its global ranking to 10th place from 12th in 2013. Unified Korea`s per capita GDP will also swell from $29,000 in 2013 to $79,000 in 2060, rising from 19th to 7th in the world. These estimates are based on the exchange rate set at 788.9 won per dollar by the OECD`s 2005 purchasing power parity.

The economic benefits from unification are calculated by combining the added value of products from the South and North as a result of unification. By the real price, the net benefits will amount to 14,451 trillion won ― by subtracting the total unification cost of 4,657 trillion won from the total benefits of 19,111 trillion won. The net benefit will thus be 3.1 times larger than the estimated cost. To calculate the portion in the North Korean area`s GDP added by unification, GDP volumes by an imagined growth rate of 1.2 percent (the real growth rate between 2000 and 2013) are subtracted from the prospective North Korean GDP figures obtained through the growth accounting method. 2) Inter-Korean Economic Cooperation The unification cost will be higher if the gaps in income and social and cultural standards are not narrowed. Expenditures for unification can be reduced if the income gap is closed through increased economic cooperation ahead of unification, possibly by transferring the South`s experience in developing a market economy. Inter-Korean trade was insignificant at $18.7 million in 1989. But it leaped to $1,055.8 million in 2005 when the Kaesong (Gaeseong) Industrial Complex, a pilot economic cooperation project, opened in the North Korean border town of Kaesong. The bilateral trade increased to $1,970 million in 2012 and then fell to $1,135.8 million in 2013 due to disagreements over operations. Bonded processing trade using the North`s low-cost labor involves relatively low investment risks. Inter-Korean cooperation in this category recorded $209 million in 2005, growing to $409 million in 2009. However, the South`s punitive measures of May 24, 2010 following the sinking of the Navy`s patrol craft Cheonan attributed to a North Korean torpedo attack kept inter-Korean trade to a minimum level. The aggregate trade volume through the Kaesong Industrial Complex project recorded $8,940 million between 2004 and 2013, accounting for 46 percent of the total trade between the two Koreas during the period. The joint industrial park has more than 100 production plants established with South Korean investment. North Koreans produce goods from parts and materials brought from the South. During the nine years from 2005 through 2013, the project significantly contributed to the South Korean economy with total production inducement of

10,429 billion won and employment of 43,600 people, including 32,700 wage earners. The Kaesong complex is by far the most successful international economic cooperation project that North Korea has undertaken to date. Expansion of the this complex as originally planned is desirable and similar facilities may be built elsewhere in the North. In addition to the joint industrial complex, South Korea can take part in North Korea`s special economic zones and promote its participation in multilateral economic cooperation programs. The Rason Special Economic Zone, earlier called the Rajin-Sonbong Special Economic Zone, in the northeastern fringe of North Korea is seen as the most important staging point for South Korean enterprises` cooperation with the North, considering the infrastructure and geographical factors. The Sinuiju Special Economic Zone on the northwestern border with China can be another target of South Korean investment in the North. The South can help promote North Korea`s economic reform and openness by linking its North Korean cooperation programs with its East Asian regional cooperation initiatives. For the success of North Korea`s special economic zones, South Korea`s participation is essential. Inter-Korean economic projects not only assist the economic survival of North Korea but can serve as a major growth engine for the South Korean economy. 3) Labor Productivity in the North The most desirable way to minimize the financial burden from unification in the mid to long term is to increase productivity in the North, thereby raising its income levels. Increase of productivity requires expansion of investment, improvement of the quality internationalization of economy.

labor,

technological

development

and

While education and vocational training in the North are important, there is also a pressing need to address general malnutrition, low birthrate and the aging of population. The North`s fertility rate fell from 2.2 in 1993 to 2.0 in 2008, and it is on course to an aged society (with the 65-and-over group exceeding 14 percent of the total population) in 2033 and a hyper-aged society (with the 65-and-over group exceeding 20 percent) in 2058. The infant mortality rate in the North is

reported to be 26 out of every 1,000 births, which is seven times higher than that of South Korea. In order to slow down the aging of North Korean society, it is necessary to provide more food and expand assistance to improve maternal health and the general medical environment. Total grain consumption in the North amounts to 5.4 million tons a year, which is far lower than the WHO standard of 6.59 million tons. About half of the infant deaths are caused by dysentery and respiratory inflammation, which can be prevented with the adequate supply of basic medicine and clean water. Among children aged below five years, 27.9 percent suffer from chronic malnutrition and 23.7 percent from anemia. Maternal mortality, amounting to 76 out of every 100,000 childbirths ― five times higher than that in South Korea ― is mostly attributed to excessive bleeding. President Park Geun-hye has said that South Korea will provide $13.3 million for the maternal health programs in North Korea via international organizations. North Korea will undergo a drastic industrial transformation as unification proceeds. Therefore, it is necessary to make preparations to allow a smooth change in job categories and skill sets. Substantial vocation training will be needed as the North`s industries transition from being labor-intensive to technology-intensive. The experiences of retraining refugees from North Korea over the past years will be useful in this regard. Technical training facilities need to be opened in any joint industrial estates to be established in the North. The technical education center at the Kaesong Industrial Complex for which South Korea invested 20 billion won ($18 million) should be fully utilized to produce skilled workers. Exchanges in science and technology education need to be expanded. The Pyongyang University of Science and Technology is a successful example. The institute established with money and facilities provided by private South Korean organizations started lectures for 100 undergraduate and 60 graduate students on October 25, 2010, with faculty from the United States, Canada and other countries. Future projects could include joint science and technology research institutes to study how the industrial infrastructure and systems standardization could be improved in the North.

Technological development and standardization/globalization of industrial systems are essential for the increase of productivity in North Korea. Particularly important is cooperation in agriculture through technology transfer and standardization of statistics, which will help accelerate economic development in the North. There also is the need for close cooperation in information and communications technology which both South and North Korea regard as the main growth engines of their economies. Inter-Korean science and technology cooperation projects which began in 1999 have been suspended since May 2010. Yet it is necessary to reopen at least the joint programs for industrial standardization and statistical collaboration as soon as possible. The “South-North Industrial Standards Integration Program,” which began in 2001, also remains suspended. 4) Maximizing the Effect of SOC Investment Unification will bring about larger sovereign territory, a bigger population and integration of resources and labor, which are all elements for stronger national competitiveness. To maximize their impact, it is essential to build and operate effective SOC facilities. In 2014, President Park proposed the establishment of “composite rural estates” where the two Koreas would jointly engage in agriculture, forestry and livestock projects. She also offered investment in transportation, communications and construction businesses and participation in multilateral cooperative programs with North Korea, China and Russia in the Sinuiju and Rajin-Khasan areas. SOC investment involves long preparation and large-scale financing. The South Korean government should carefully study the appropriate timing of investment to ensure maximum efficiency. All of the projects for general development of the North with the construction of advanced transportation networks call for close cooperation with the international community so the North can fulfill its potential as a strategic gateway to the Northeast Asian economic sphere. The Korean peninsula has the geographical advantage to play a vital role for economic and cultural exchanges in the region in coordination with China, Russia and Japan. These nations are participants of the six-party talks, which started in 2003 to deal with North Korea`s expanding nuclear arsenal. Besides the security

issues, South Korea needs to get these states interested in the economic development of North Korea. The South Korean government should prepare to launch SOC projects in North Korea as soon as unification is realized. Complete construction blueprints and investment plans should be on hand. Under the present state of unpreparedness for SOC investment, more than 10 years will be needed to see substantial outcomes of any infrastructure projects in North Korea. Feasibility tests and drafting of basic plans should start as soon as relations between the two Koreas begin to thaw. It is necessary to open SOC projects for North Korea to domestic and foreign private investors in order to reduce the fiscal burden on the the South Korean government. In the past, the Hyundai-Asan Group invested 98 billion won in the development of Changjon Port in the North, Kookyang Shipping Co. spent 2.1 billion won for the improvement of port facilities in Nampo, and the Yanbian Xiantong Ocean Shipping Group put $2.6 million in the modernization of loading and unloading facilities at Rajin Port. These cases can be useful precedents of private investment in North Korean SOC projects in the future. The current system of the government bearing the entire land compensation cost and part of construction cost in local SOC projects can be applied to infrastructure projects in the North.

II. Fiscal System of Unified Korea 1. Government Spending 1) Normalization of Northern Economy and Redistribution of Income The unified Korean government will need to help normalize the North`s economy as quickly as possible after unification to minimize the financial burden on the South. The unification cost, as observed above, is expected to amount initially to 4.3 percent of the GDP in South Korea in the first year of 2016. The proportion will grow to 5.4 percent by 2035 and will from thence go down to 3.9 percent in the target year of 2060. Despite the pressure of unification cost, the South`s economy will expand by more than 1 percent during the early years after unification thanks to broader market access and infrastructure projects in the North.

As the North Korean economy grows rapidly, the government of unified Korea should exercise its fiscal power to ensure fair distribution of economic benefits to people in the North. In the case of China, large businesses and capitalists took up the lion`s share of fruits from economic growth, widening income disparity. Such consequences should be avoided by implementing an effective system of income redistribution in unified Korea. 2) Private Investment to Ease Fiscal Burden In the initial period after unification, the government should be ready to bear the financial burden but it should also be prepared to draw in large investment from private businesses. No one but the government can shoulder the cost of integrating two basically different economic systems. Yet, the added value from unification can be transferred to the private sector in the form of wages and profits when projects are open to private investments or borrowings from home and abroad. Private capital can be utilized for SOC construction, energy and resources development and tourism industry. The government should also pre-determine the possibility of development loans from international organizations as well as foreign investment. The best combination of tax increases and issuance of state bonds will need to be sought while considering the main recipients of benefits, how burdens should be fairly divided among generations, and the relative effects of supplementing revenues. Universal tax increase may be justified for welfare and other ordinary expenditures as all people will benefit from unification, but expenditures for SOC investment should be covered by state bonds since benefits will go to future generations. 3) Ensuring Fiscal Soundness of Unified Korea The unified Korea will come under dual fiscal pressures from the aging of society in South Korea and the heavy unification cost. Strategic management of state debt is required not to allow fiscal disruption. Without fiscal soundness, economic growth and redistribution of income will be hard to come by amid expanding macroeconomic instability.

Unification will vastly expand the domestic market but external dependence will also grow. Therefore, wise fiscal management to meet short- and long-term pressures is imperative. Despite additional acquisition of natural resources from the North, the nation will continue to depend on energy imports. The unified Korea`s export-oriented economy will keep it vulnerable to external factors. If sovereign ratings fall due to soaring state debt, interest rates on government bonds will rise to raise the cost of international borrowings. That could block reissuance or replacement state bonds. To ensure fiscal soundness, extra efforts will be needed to manage state debts at an appropriate level and control the issuance of bonds to cover the cost of unification. The problem is that the benefits from unification take a long time to materialize and therefore cannot meet the immediate high cost of unification, forcing the government to issue bonds in large quantities. In the case of Germany, the proportion of Bunds repayable over 10 to 30 years increased from around 40 percent of total bonds in the 1980s to over 50 percent in the 1990s after unification. South Korea has been issuing 30-year bonds. The government will have to issue bonds with 40- to 50-year maturity to ensure stable debt management and stimulate purchases. In 2013, circulation of 20- to 30-year government bonds amounted to only 121 trillion won compared to 2,857 trillion won of 3-10 year bonds. 2. Fiscal Outlook of Unified Korea Additional revenues resulting from unification have been calculated on the basis of a long-term fiscal outlook for South Korea compiled by the National Assembly Budget Office. Revenue from South Korea`s long-term economic growth specified in the NABO report was not included in the fiscal outcome of unification. Supposing that the taxation rate of 19.4 percent is retained in the unified Korea, revenue increase from unification is to stand at 12.4 trillion won in 2016, going up to 175.9 trillion won in 2040 and 690.4 trillion won in 2060. The ratio of state debt against the GDP is estimated at 38.7 percent in 2016, eventually rising to 163.9 percent in 2060. In NABO`s long-term outlook, South

Korean government debts will be 36.8 percent of the GDP in 2016 and 168.9 percent in 2060. The percentage of the unified Korea`s government debt against the GDP in 2060 will be slightly lower than that of South Korea because the addition of North Korean residents will mean a larger tax base, which will increase the overall GDP scale. Unified Korea`s state debt is calculated by adding up the fiscal liabilities arising from unification and their interests as well as fiscal deficits in the South (subtracting deficits in the four social security accounts). In 2040, the percentage of government debt against the GDP is to hit 133.6 percent, far higher than South Korea`s 85.1 percent for the year, reflecting the large proportion of unification costs in state finance up until that time.

The net debt burden, calculated by subtracting unification costs from the fiscal revenues resulting from unification, will steadily climb from 55.5 trillion won in 2016 to 116.4 trillion won in 2035 but will continuously decline thereafter until 2047, when there will be a balance between unification costs and revenues. Government debt to meet unification costs against the GDP will continue to fall from 3.4 percent in 2016 to -2.9 percent in 2060.

If the tax rate is raised by 1 percentage point from the current 19.4 percent to 20.4 percent, the ratio of government debt against the GDP will fall to 122.4 percent in 2060, or 41.5 percentage points down. The raise will add 16.4 trillion won to tax revenue in 2016, 59.5 trillion won in 2040 and 122.1 trillion won in 2060. If the tax rate is raised by 3 percentage points, the government debt to GDP ratio in 2060 will decline to 39.5 percent. HigherHiA higher tax rate will allow reduction in state bond issues and improve the fiscal situation. A 1 percentage point tax raise will result in a dramatic fall in the issuance of bonds and lower total interest payments from an estimated 179.7 trillion won to 33.4 trillion won in 2060.

3. Improvement of Fiscal System 1) Special Accounts for Financing Unification Money collected through government bonds or higher tax rates to cover the cost of unification should be managed in special accounts or special funds. If such revenues are delivered to general accounts, the fiscal order will be disrupted and the government could find it difficult to expend the additional revenues for unification. If North Korea`s current local administration system (one city under direct control of the central government, two special cities and nine provinces) is incorporated into the unified Korea`s administrative framework, there will be a total of 29 provincial and metropolitan administrations (17 in the South and 12 in the North). It means that 12 more local administrations will share the 40 percent portion of internal tax revenues, significantly denting the amounts distributed to the local administrations in the South. The incorporation of North Korean local administrative units into the nationwide administration network of unified Korea may therefore be delayed and special

accounts may be introduced with fiscal resources secured through a unification surtax or unification bonds for the sole purpose of meeting fiscal needs of the North Korean area. Germany delayed incorporating the East German area into its inter-state fiscal coordination system for five years and used the special unification fund for the territory during this period. Normal fiscal system replaced the unification fund in 1995. 2) Sustainable Welfare System for Unified Korea The North`s population structure may help slow down a bit the population aging in unified Korea. But the low birthrate and increase of aged people will cause serious deficits to the existing welfare systems with fewer contributors and more recipients. As of 2013, the number of people aged 65 or older in South Korea accounted for 12.2 percent of the total population. The ratio will reach 14.5 percent in 2018 to push South Korea into an aged society and then in 2026 South Korea will become a super-aged society with 20.8 percent of its population in the 65-andover group. North Korea reached “aging society” status (7.2 percent of its population aged 65 or older) in 2003 and is expected to become an “aged society” in 2033. It is crucial to establish a sustainable social welfare system in South Korea, particularly various schemes related with population aging, ahead of unification so that unified Korea will be ensured financial sustainability for welfare needs. The public pension system in the South involves many problems, including grey areas, low contributions and unstable management. The National Tax Service needs to make more efforts to identify the sources of taxable income and the welfare authorities should correctly classify beneficiaries. Occupational pension schemes for teachers, soldiers and public servants also need measures to improve financial sustainability. In order to ensure the stable finance of the health insurance system, collection of insurance dues should be rationalized to have richer people pay more and poorer people pay less while generally lowering medical expenses and spending on medicine. 3) Effective Management of Public Properties in the North

Many legal disputes could arise after unification over the ownership of properties in the North. Frequent lawsuits such as those to recover properties and get compensation for unredeemable estates will hinder economic development and social integration. If any SOC construction projects are delayed due to such disputes, investment will be delayed, causing grave consequences. In Germany, a total of 2,220,000 property claims were filed in four years after unification and the deadline for final settlements has been extended from 2010 to 2018. As of September 1994, the German government earned 65 billion marks through the sale of public properties and had to pay 350 billion marks for compensation and other expenses. Unification planners in Korea need to take lessons from the German experiences regarding property claims and other aftermaths of unification. Strenuous studies should be made on timely investment in SOC construction and other industrial programs to have unification accompanied by sustained economic and social development of the entire Korean peninsula. Editor`s Note: This is a summary of a report prepared by the National Assembly Budget Office. [December 2014]

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Trends in Economic Happiness and Policy Implications Kim Dong-yul Head, Division of Policy Studies Hyundai Research Institute

Hong Yoo-rim Research Fellow, Economic Research Department Hyundai Research Institute

I. Major Obstacles to Economic Happiness Most Koreans feel a lack of preparation for later life and children`s education are the two greatest obstacles to their economic happiness, according to Hyundai Research Institute`s latest survey. Among the respondents (812 adults aged 20 or older), 24.8 percent citied “lack of preparation for old age” and 22.6 percent cited “children`s education” (22.6 percent) as the primary factor that hinders their economic happiness. The survey, which was conducted on December 11-19, 2014, also revealed that as people grow older, the factors affecting their economic happiness change from employment to housing, to children`s education and to preparation for old age. “Housing problem” was picked by 16.6 percent, “lack of jobs” by 16.3 percent, “private consumption slump” by 13.3 percent, and “sluggish business investment” by 6.4 percent. Reponses differed by age group: people in their 20s most frequently blamed “lack of jobs,” those in their 40s suffered most from difficulties of “children`s education,” and those in their 60s or older are most worried about “lack of preparation for old age.” People in their 20s, who have just entered into adult society, cited “lack of jobs” (27.7 percent) and “housing problem” (25.7 percent) as the two biggest headaches, followed by “lack of old age preparation” (15.8 percent). People in their 30s, who get married and raise a family, were most sensitive to “housing problem” (31.1 percent), followed by “lack of old age preparation” (18.9 percent) and “children`s education” (17.5 percent). Among people in their 40s, the most dominant reply was “children`s education (42.4 percent), and 50-somethings most

often cited “lack of old age preparation” (28.8 percent) and “children`s education” (20.7 percent), while people aged 60 or older cited “lack of old age preparation” (48.5 percent) in an overwhelming portion.

Factors that affect economic happiness differed widely depending on marital status. Also, the higher the respondents` income and education level, the higher their response rate of “children`s education.” Unmarried respondents most often mentioned “housing problem” (30.2 percent) and “lack of jobs” (24.9 percent), 82

while married respondents cited “children`s education” (27.9 percent) and “lack of old age preparation” (26.5 percent) the most. The high response rate on “children`s education” as the greatest obstacle to economic happiness among people with higher income and education indicates they spend relatively large sums for the education of their children. On how to increase financial resources to enhance welfare services conducive to greater economic happiness, the respondents most often cited “tax hikes on the wealthy” (41.3 percent), followed by “preventing tax avoidance” (31.7 percent) and “government`s belt-tightening” (21.1 percent). The response rate of “tax rate increase” was very low at 6.0 percent, probably because it would increase their own tax burden. In scraping up funding for welfare expansion, the “NOOMP” (Not Out Of My Pocket) phenomenon could still be observed, as people want the wealthy class and government to be the main sources and regard sharing the burden by all people (tax rate increase) to be the least appealing. The response for “tax hikes on the wealthy” continued to rise from 39.2 percent in 2012, to 40.5 percent in 2013 and to 41.3 percent in 2014, while that of “preventing tax avoidance” fell from 37.5 percent to 34.8 percent and to 31.7 percent over the corresponding period. The response for “government`s belttightening” was 21.1 percent in 2014, up from 18.7 percent in 2012 and 18.2 percent in 2013. Supporters of “tax rate increase” rose slightly from 4.6 percent in 2012.

II. Features of Economic Happiness As of December 2014, the economically unhappiest person in Korea was a selfemployed, college-educated, divorced man in his 40s, while the happiest person was a single professional woman in her 20s. By age group, economic happiness was highest among people in their 20s, and lowest among those in their 40s. Economic happiness was very low among people aged 60 or older in previous surveys, but it spiked higher in the latest 84

survey thanks to the expansion of basic pension payments months earlier, among other reasons. Those in their 40s showed the lowest happiness level. By education level, economic happiness was highest among those who finished graduate schools, and lowest among college graduates. The level of education paralleled the level of happiness in previous surveys, but in the latest survey the economic happiness of college graduates (43.8 percent) fell below that of high school graduates (45.0 percent) for the first time. Other demographic trends have changed little from the past. By marital status, the level of economic happiness used to be led by the unmarried followed by the married and divorced; by gender, women showed a higher level of happiness than men; and by occupation, happiness level was highest among professionals, trailed by government employees, private sector employees and self-employed. These trends remained largely unchanged.

By age group, economic happiness was high among those in their 20s and 60s but low among those in their 40s, forming a U-shaped curve for the first time since the survey was first conducted in 2007. The economic happiness index of people aged 60 and over rose 8.2 points from the previous survey period to reach the highest level ever, and that of 50somethings also climbed 4.7 points, indicating the economic happiness of middle- and old-aged people soared recently. The sharp rise of economic happiness among people aged 60 and over in the last survey can be partly attributed to the expansion of basic pension payments in July 2014. In advanced countries where people have little concern about post-retirement life because of well-established pension systems, economic happiness of people aged 60 and over is as high as that of those in their 20s, showing a U-shaped pattern. The economic happiness index of 20-something people, at 48.9, was higher than any age group, up 1.1 points from the previous period, while that of 40something people was the lowest at 40.9, down 5.3 points from the previous period. In the case of 30-somethings, their economic happiness index fell by 3.4 points to 45.4, but they still were the second happiest group.

Â As a result of averaging the outcomes of the last 10 surveys (from the fifth survey in July 2010 to the 15th survey in December 2014) in 16 provinces and metropolises, the economic happiness index was found to be highest in Ulsan, which also recorded the highest gross regional domestic product (GRDP). In terms of mega-economic sphere, Daegu-North Gyeongsang region had the highest economic happiness index. Â Five provinces and metropolises showed higher levels of economic happiness than the national average through the past 10 surveys. They are Ulsan Metropolitan City, Gyeonggi Province, Daegu Metropolitan City, Daejeon Metropolitan City and North Gyeongsang Province.

In the comparison of seven mega-economic spheres, Daegu-North Gyeongsang, Busan-Ulsan-South Gyeongsang and Chungcheong showed relatively higher economic happiness indices than others.

Among the six factors of the economic happiness index, “economic equality” (27.6 points) and “economic insecurity” (31.1 points) were the lowest, pulling down the overall results. Also below 50 points was “economic progress,” which is closely related to economic future. It stood at 45.9 points. 88

“Economic progress” and “economic insecurity,” the two factors related with future outlook, fell from the previous period; “economic stability” and “overall happiness” edged up; and “economic superiority” and “economic equality” showed relatively notable increases. The economic stability factor, which is related with jobs and income, marked slight gains of 0.7 point and 1.5 points, respectively, but the economic superiority and economic equality factors showed relatively firm increases of 3.0 points and 3.1 points, respectively.

The economic happiness index in the 15th survey stood at 44.5 points to hover below the 50-point level, but marked a 0.9-point gain from the previous period (June 2014), and a 3.9-point rise from a year earlier (December 2013), continuing

an upward streak from the five-year period of the Lee Myung-bak administration. Unlike the rising trend of the economic happiness index, “future economic happiness prediction index” has been declining in the last four surveys, pointing to a rather gloomy outlook for the future. In the first two years of the incumbent administration (from the 12th to 15th surveys), the economic happiness index averaged at 42.5 points, up 3.2 points from the average of 39.3 points in the five years under the previous administration.

III. Policy Implications Considering that “economic insecurity” and “economic equality” got very low points, the government will need to support old age preparations, children`s education and stable employment, as well as make continuous efforts to reduce income inequality. “Economic insecurity” was conspicuous across all age groups, suppressing the overall economic happiness index. Therefore, it is necessary for the government to help ease people`s uneasiness about the future by providing support for job security and preparations for later life. Given the continuous downturn of the future prediction index, economic policymakers also need to draft measures to make economic recovery more tangible.

Although the notable improvement in the economic happiness of people aged 60 and over can be thought to have reflected the effect of the expanded payment of basic pension, Koreans still regard “lack of old age preparation” as the biggest obstacle to their economic happiness. In this regard, the government should continue to provide policy support for senior citizens by, for instance, creating senior-friendly jobs and raising post-retirement income. The government also ought to pay keen attention to the fall of economic happiness among highly-educated people, including college graduates, particularly the acute sense of “economic insecurity” and “economic inequality” prevalent among them. Considering that the sense of economic insecurity is widespread even among highly-educated people like college graduates as well as middle- and high-income classes, policymakers need to exert greater efforts to enhance job security and narrow income gap. [Appendix 1] Outline of the Economic Happiness Index Survey and Profiles of Respondents • Outline of Survey - Period: December 11-19, 2014 (nine days) - Method: Telephone poll - Subjects: 812 men and women aged 20 or older across the nation (distributed by minimum regional allocation and population ratio) - Margin of error: 95 percent confidence level with an error margin of minus and plus 3.4 percentage points.

[Appendix 2] What is the Economic Happiness Index? • Definition Hyundai Research Institute defines the “economic happiness index” as an appraisal of the level of satisfaction and pleasure felt by an individual with respect to economic factors that can change due to one`s economic situation, awareness and external conditions. • Purpose By determining the meaning of “economic happiness” as well as repeatedly measuring and releasing the economic happiness index felt by Koreans on a regular basis, this institute aims to provide data that can be useful in formulating economic and social policies. It has surveyed and compiled the index every six months since December 2007. • Components The five elements that constitute the economic happiness index are economic security, economic superiority, economic progress, economic equality and economic insecurity, each of which is turned into an index to be combined into the economic happiness index. 92

• Calculation Method Economic happiness index can be produced by putting “five sub-indices” and “overall feeling of happiness” together. - Each of the five sub-indices is the average score of positive replies (100 points), neutral replies (50 points) and negative replies (0 point). - The scoring of economic insecurity was made in reverse; the higher the point, the lower the insecurity. - In order to measure the overall sense of happiness, the survey asked respondents whether they were economically happy, and gave 100 points to the happy group, 50 points to the average group and 0 points to the unhappy group, and then produced final scores by averaging them. - Economic happiness index ranges from the minimum 0 point and the maximum 100 points with the median level at 50 points

• Economic Happiness Prediction This institute also surveyed future trends in economic happiness, or economic happiness prediction. - Separate from the economic happiness index, the survey aims to measure an independent item and turn it into an index to predict changes in economic

happiness. - So the survey asked whether the respondents think “they would become happier economically in the future,” and added 50 points (after multiplying the weight of 0.5) to the difference in the share of “yes” and “no” replies. If the final score is 50 or higher, it means the respondent thinks his/her economic happiness will improve, and if it is below that level, the person thinks his/her economic happiness will decrease (identical method to calculating the business survey index). - If the “yes” replies account for 60 percent and “no” replies 40 percent, for instance, the difference is 20 percent. If this figure is multiplied by the weight of 0.5 and 50 is added to it, the economic happiness prediction index is 60. - Economic happiness prediction index ranges from 0 point to 100 points with the median level at 50 points.

[VIP Report 15-01, No. 598, January 7, 2015, Hyundai Research Institute]

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- Neighbors Help Siblings from North Korea Enter Seoul National University

- ‘Seals Embody a Person’s Fate’

Neighbors Help Siblings from North Korea Enter Seoul National University

Lee Yeong-jun receives congratulations from Prof. Jeong Yong-hyeon, police inspector Lee Hyeon-suk and pastor Park Ro-Gyeom (from left) at Seoul National University on January 15.

Jeong Gyeong-hwa and Kim Ji-yeon Staff Reporters The Chosun Ilbo

“I was admitted to such a prestigious university thanks to the help and support of so many people. The only way for me to repay your kindness is to study hard and make you all proud.” Standing in front of the entrance to Seoul National University on January 15, Lee Yeong-jun (fictitious name), 21, expressed his gratitude to the people who had gathered to congratulate him. Lee was accepted to the College of Engineering in the balanced opportunity admissions category. He is the 20th North Korean defector to enter the elite Korean university in the past 10 years. His older sister, who is 27 years old, was also accepted to the same university last year. The siblings finally realized their dream of studying together at Seoul National University just three years after fleeing the North and settling down in South Korea in 2012. (February 13, 2014 Chosun Ilbo article) The two are the first siblings from North Korea to attend the university together. Lee and his sister lived a relatively comfortable childhood in North Korea, their father being a college professor and mother, a doctor. But when the economic and social situation in the North deteriorated to the point that even the elite,

such as their parents, had to peddle goods in the market to put food on the table, the family decided to flee the country in 2009. The first attempt ended in tragedy. The Chinese police arrested the family and sent everyone back to the North. Lee`s father never made it back alive. In 2012, Lee and his sister and mother finally succeeded in making it out of the country. Lee`s remarkable accomplishment was made possible through the kind and generous support of his neighbors in Yangcheon-gu, Seoul, who cared for him like one of their own. Gil Hye-yeong, 39, the owner of a study room in the neighborhood, allowed Lee free access to the facility from July to November last year. “Students that pay a monthly fee don`t even come on a regular basis. But Yeong-jun would come here straight from school every single day and study until we closed at 1 a.m. in the morning,” said Gil. One of the criteria for college admissions was volunteer work, but Lee did not even understand the basic concept of “volunteering.” That`s where Reverend Park No-gyeom, 47, stepped in. He ran an organization for people with disabilities, and he arranged for Lee to do volunteer work at the facility. Lee Hyeon-suk, a lieutenant at Yangcheon Police Station, and people in the security division there helped Lee`s sister get a private tutoring job, and also recommended Lee to a scholarship foundation that agreed to provide 6 million won (approximately US$6,000) over two years. Jeong Yong-hyeon, 68, a professor at the Graduate School of Public Administration, Dongguk University, who became acquainted with Lee through the police officers, explained the differences in the social system between the North and South, and advised, “Make sure to keep your promises, and value human relationships and trust.” “When I expressed concern about him studying at school in the cold, Yeong-jun would say, ‘I`m fine! North Korea is way colder,`” Jeong said. “He is not only studious, but such a bright and likeable kid, and full of confidence, that you just can`t help wanting to do things for him.” It was Lee`s hard work that made the neighbors` help and support all the more worthwhile. “For the past two and a half years, I spent every waking moment studying,” said Lee. He woke up at 6 a.m., was the first one at school, and studied

until 1 a.m. the next morning. His math teacher Park Yeong-hui, 43, said, “Most students from North Korea are quiet; they don`t want to draw attention. But Yeong-jun participated actively in class asking a lot of questions.” He would follow his teachers around with questions, and thanks to such determination he was able to maintain good grades, ranking among the top 20 in the whole school throughout his senior year. In last year`s College Scholastic Ability Test, he received first grade in Korean language, a subject he had found particularly difficult. He was well-liked by his classmates who called him “hyeong” (older brother), and would often liven up the atmosphere in the classroom. Lee chose engineering as his major following in the footsteps of his father, who was an engineering professor in North Korea. He had been surrounded with books on engineering when he was young and his father`s friends were all engineers, so naturally he nurtured the dream of becoming an engineer from an early age. “Last year I read the book ‘Robot Da Vinci, Designing My Dream` by Dennis Hong. It inspired me to become an engineer, designing and building robots that aid in disaster relief,” said Lee. Lee`s mother, 53, worked 12 hours a day cleaning buildings to take care of him and his sister. “After losing my husband, I took my two children and escaped to South Korea. Now both of them have made it into Seoul National University. I can`t express how happy and proud I am,” she said. “My daughter is doing great in school, ranking fifth in her class. I`m so grateful that my children have been able to fulfill their father`s wishes, and also thankful to this country for allowing them to achieve their dreams. I hope they mature into responsible members of society who contribute and give back some of what they have received.” “My school teachers and so many others willingly extended a helping hand even before I asked. They sincerely cared about me and help me out in earnest,” said Lee. “All I could do to repay their kindness and generosity was to do my best.” Gwon O-hyeon, the admission dean of Seoul National University, said, “Lee and his sister`s unswerving determination despite difficult circumstances is truly an inspiration to other students.” He added, “I hope they will be able to do great things in the future and particularly play a role in the social integration of the two Koreas.”

[January 16, 2015]

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‘Seals Embody a Person’s Fate’

Seal engraver Ryu Cheol-gyu gives final touches to an engraving of bodhisattva with 1,000 hands at his studio in Daejeon.

Kim Chung-ryeong Staff Reporter The Chosun Ilbo

Wood engravings of the thousand-hand bodhisattva and Dharma; minute engravings of aphorisms on a hexagonal stone tablet; restoration of the state seal and written seals of noble families from the Joseon Dynasty; and various calligraphic works. Ryu Cheol-gyu, 60, is a skilled seal craftsman who was awarded the official government title of “master artisan of the Republic of Korea.” But the artworks on display in his workroom Seonghosa are not limited to seals. He starts his day at dawn with a daily ritual of 108 prostrations before commencing with his main occupation of making seals. He does this only until noon, limiting the workload to less than two seals per day. The work requires a high level of concentration and is something that cannot be rushed to meet production orders. He devotes his afternoons to other artworks, such as wood and stone engravings, and calligraphy. He was an invited artist at the Korea Calligraphy Association and the Korean Calligraphy and Painting Artists Association. “My teacher told me to become an artist, not just a seal maker,” said Ryu. Ryu first entered the world of seal engraving in 1970 at the age of 16 as a way to make a living. When his father passed away during his freshman year in high school, he became the man of the family. So he had to quit school and became

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an apprentice of the seal craftsman Lee Seok-seong in Daejeon. In the beginning, he didn`t get any pay; he was just grateful for food and lodging. “All I did for the first three years was clean and sharpen knives. At night I would copy my teacher`s works,” Ryu recalled. His teacher saw the seals he had been secretly carving on his own and decided to teach him the craft. “I expected something along the lines of a ‘five-minute seal engraving technique.` But instead he handed me the Thousand Character Classic. His principle was that to acquire true mastery of seal engraving, one needed knowledge of Chinese classics and calligraphy. After finishing the Thousand Character Classic, I also read the Analects of Confucius, the Works of Mencius, as well as the Book of Odes and the Book of Documents. It was hard enough mastering the five different styles of writing Chinese characters, namely the decorative engraving script, clerical script, regular script, the semi-cursive and cursive script, but learning how to write them the other way round presented a formidable challenge,” said Ryu. Lee Seok-seong sent Ryu to work under another famed master. That`s where he learned the craft of wood and stone engravings, and in 1980, 10 years after setting foot in the field, he started his own business. “I believe seals are works of art that embody a person`s fate and soul,” said Ryu. That is why he considers his clients` fortune based on their year, month, day and time of birth prior to production. It allows him to make a seal better tailored to each person`s nature and constitution. “Expensive materials are not always the best. Depending on the person, I may use ivory, water buffalo horn or thunderstruck jujube tree (thought to ward off evil spirits). For a person with a mild temperament, I would use a stronger, bolder script on the seal,” explained Ryu. After devoting 23 years to the art of seal carving, Ryu was recognized as a “master artisan of the Republic of Korea” in 2003 at the age of 49. Ryu has even created his own script style, a combination of the small seal script and decorative engraving script. “My seals are impossible to forge. I believe you should strive to become the best in whatever you do,” he said. Among his seals, there are high-priced items that are valued at millions of won. However, since 20 years ago, the seal carving business has been on the decline. Demand has plummeted as signatures have taken its place. Also, machines have

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replaced human labor knocking out a seal in a matter of minutes. It`s only natural that many have left the industry. Ryu`s seal engraving shop is the only one remaining among the more than 30 stores that once thrived in front of the South Chungcheong provincial government building. “Business has been hit hard … But, then again, I only make two seals a day anyway,” said Ryu with a chuckle. That is largely why Ryu devotes a good part of his time to promoting the culture of seal making. He gets together with master craftsmen and artisans from the Daejeon area and holds an exhibition every autumn. He also worked as a Saemaul (New Community) leader for 12 years from 1985, helping parentless children left in charge of their families. “I spent my youth ‘locked up` in my own little world of seal making. I was indifferent to what was going on in the outside world and the plight of others. That`s not how you should live life….” Ryu also teaches the craft of seal making to the general public. With calligraphy recently gaining popularity, people interested in the art of letter design come to learn how to handcraft personal seals. But it is hard to find anyone willing to learn the traditional art of seal engraving, thus no one to pass down his skills. “I plan to build a seal museum,” Ryu said. “It will house a vast collection from traditional seals to novel and unique ones. I hope it will function as a reminder of the excellence of our culture and its great potential.” Maybe it could inspire someone to succeed in his footsteps. [January 3, 2015]

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- Destruction of Humanity in North Korea More Serious than Food Shortage

- Life Seen through the Studies of Joseon

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Destruction of Humanity in North Korea More Serious than Food Shortage Lee Han-su Staff Reporter The Chosun Ilbo

On the northeastern outskirts of Pyongyang stands the Kumsusan Palace of the Sun. This is where the body of the late Kim Il-sung lies immaculately embalmed in a clear glass sarcophagus. Jiang Xuen, deputy chief editor of Hong Kong`s Yazhou Zhoukan (Asia Weekly) visited the palace on April 15, 2005 as an invitee of the North Korean government but was strictly forbidden to do any sort of media coverage. The problem? He did not make an entry in the visitors log book. The concerned North Korean official informed him that he would be prohibited from conducting any journalistic activity in the country, and explained that no one else had refused to write in the visitor log about his or her feelings about the visit. What alarmed him more were the documents the North Korean agent produced, saying, “We have done detailed research on your past and your actions today.” The dossier included the picture of his daughter at age seven when she performed in North Korea as a member of a children`s art troupe in 1985. It was a silent but chilling threat. Jiang Xuen had to write a repentant essay addressed to Kim Jong-il, which went something like this: “I have acted inappropriately. I shall correct my wrongdoings.” The next day, he was taken to the exhibition hall where the flowers Kimilsungia and Kimjongilia were on display. There he wrote in the visitor log, “The Kimilsungia is the most beautiful flower, and the Kimjongilia the most elegant in the whole wide world.” In truth, he was thinking how absurd it was to see a country suffering from severe food shortages investing so much on such flowers. Yet, it would have been very unwise to do anything other than praise.

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"The Riddle Named North Korea" written by Jiang Xuen, translated by Gu Seong-cheol and published by Esse Publishing Co.

◇ The Money Noodles ― Instant Noodles from South Korea Worth Half a Month`s Salary “The Riddle Named North Korea” By Jiang Xuen, Translated by Gu Seong-cheol, Esse Publishing Co., 400 pages, 18,000 won “The Riddle Named North Korea” is Jiang Xuen`s account of the reclusive country based on his six visits over 15 years beginning in 1996. In his eyes, North Korea seemed very similar to China in the 1960s. The streets were covered with political slogans such as “The Great Supreme Leader Kim Il-sung is forever with us,” or “The Juche ideology is the sword of no defeat.” The author assumed that those propaganda lines may have been fashioned after popular Chinese slogans of the 1950s and 60s. TV broadcasts constantly blared out the achievements of Kim Il-sung and Kim Jong-il and praised the excellence of the socialist system. The author also noted that the level of economic development in North Korea was comparable to that of China in the 1960s. For example, the monthly income of an average North Korean citizen was 6,000 won, just enough to buy 1.8 kg of pork. When the author stealthily asked at the hotel`s souvenir shop while his escort was not watching, the clerk admitted that she had only two meals a day. Goods from South Korea were traded in secret and were apparently very popular. For instance, a packet of South Korean instant noodles cost 2,500-3,500 won, half the average monthly salary and therefore affordable to the elite class only. It`s no surprise that the North Koreans refer to 105

this delicacy as the “money noodles.” Tap water is available only at certain hours of the day. Warm water supply runs just for two hours in the evening even in upscale hotels. Pyongyang has apartment buildings that are 20 stories high. Unfortunately for the residents, however, these buildings either lack elevators or have elevators that are rarely operated. Everyone is accustomed to using the stairs. Power is scarce, and at night time Pyongyang is pitch black as if submerged in the dark ocean.

"Without You, There Is No Us" written by Suki Kim, translated by Hong Gwon-hee and published by Dione Publishing Co.

◇ ‘I study for the Great Leader` “Without You, There Is No Us” By Suki Kim, Translated by Hong Gwon-hee, Dione Publishing Co., 352 pages, 15,000 won “Without You, There Is No Us” is a chronicle of life in North Korea written by Korean-American novelist Suki Kim. The author has visited the kingdom five times since 2002, her most extensive stay being the six months she spent from July to December 2011. She taught English at the Pyongyang University of Science and Technology (PUST) to which only young men from elite families were admitted. She details how all class materials and printed handouts had to be submitted to a supervisor for permission to use. She was also informed by a source affiliated with the school that some of the students may be reporting and/or recording the exchanges taking place in the classroom. The first shock she received in her interactions with the students was how 106

ignorant they were of the world outside their own. One of the students, in fact, asked if everyone in the world spoke the Korean language, adding that he had heard people in the UK, China and the United States spoke Korean because it was by far superior to other tongues. Her students also believed that the Juche Tower was the highest structure in the world, and their amusement park the most exciting. They time and again declared something in North Korea was the best, making comparisons with its counterpart in the world though they had never seen or experienced it. The university, which was dedicated to the disciplines of science and technology, did not allow student access to the Internet. During writing class, they would produce texts that were more like practiced choruses, speaking almost identically of commitment to working together to build a powerful nation and studying hard to make the Great Leader proud. In the author`s view they were either coerced to lie and/or exaggerate the greatness of their leaders or genuinely believed in what they were saying. She admits that she could not decide which was sadder. There are people who spend a few days in North Korea and exalt it as a beautiful country based on the managed glimpses that they are given. The reality that is North Korea as told by the Chinese journalist and the Korean-American novelist based on their numerous and extensive stays is quite different. "It is absurd that North Korea should call itself Democratic People`s Republic of Korea when there is nothing democratic or republican in the way it denigrates its people,” wrote Jiang Xuen. Suki Kim intoned a similar sentiment by saying she could understand the severe shortage of food and resources, but the real lack was in the stark absence of basic human dignity. [January 19, 2015]

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Life Seen through the Studies of Joseon

"Life in the Study" written by Park Cheol-sang and published by Munhak Dongne [Literary Community]

Ahn Jin-yeong Staff Reporter The Munhwa Ilbo

“Life in the Study” By Park Cheol-sang, Munhak Dongne [Literary Community], 320 pages, 17,000 won Yeoyudang Jeong Yak-yong, Yeonam Pak Ji-won, Wandang Kim Jeong-hui, Damheon Hong Dae-yong … These names and their preceding pen names are familiar to anyone who has spent his or her school years in Korea. Not everyone knows, however, that their pen names are also the names they gave to their studies. In fact, intellectuals in the Joseon Dynasty saw their rooms filled with books as both the locus of life and a comfortable sanctuary. It is then quite understandable that they preferred to be addressed by the name of the place that brought them the greatest joy. The name of a study often revealed something about the character and the philosophy of the owner. Jeong Yak-yong`s pen name “Yeoyudang” (與猶堂) is a reference to the words of Laozi: “Cautious, as is yeo ( 與 ) in wading through a winter river, wary as is yu (猶) afraid of his own neighbors.” The words advise one to be cautious in words and deeds and to be mindful of the people around him. For Jeong Yak-yong who had been banished while still a young and promising scholar for having been influenced by Catholicism, this reminder to constantly

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reflect on his own life and to exercise caution must have held a special significance. For similar reasons, the writer Jo Hui-ryong, also of the Joseon Dynasty, named his study “Baek-yi Yeonjeon Jeollyeo” ( 百二硯田田廬 ) meaning “a hut in the country with 102 ink stones.” Instead of tilling the farmland he would grind his ink stick against one of the ink stones, cleansing his mind in the repetitive act. He would use the black ink stone as a lady would her mirror to study his reflection and refine the way he carried himself. King Jeongjo had the largest study. His library was called Hongjae (弘齋), literally “a large study.” Although his official title was the monarch, Jeongjo was one of the most prominent scholars in the history of Joseon, diligent and dedicated to academic pursuits. The proof of his passion for learning is Hongjae jeonseo (Complete Works of Hongjae), a 100-volume anthology of the works of the king himself. It was not customary for the king to take on a pen name, but Jeongjo loved his study so much that he used its name as his alias, which he had engraved on a stamp to mark books in his possession. The author of this book also gave a name to his library, Sugyeongsil. The word sugyeong refers to “a long rope tied to a bucket.” In order to draw water from a deep well — which he uses as a metaphor for searching for knowledge in the works of ancient scholars — one must have a bucket tied to a long rope, or in this case extensive effort and a wealth of materials to study. The author has a special love for the moldy scent of old dusty books. He was exposed to ancient texts under the guidance of his father, a scholar of Chinese classics. The story of 24 leading thinkers of the Joseon Dynasty told by such an author takes us beyond the studies they had occupied to grasp the important lessons of the their age and to fathom their ways of life. [January 9, 2015]

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- Kim Soon-kwon: “I was Cheated Out of Payment for Fertilizer and Used by the Politicians.”

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Kim Soon-kwon: “I was Cheated Out of Payment for Fertilizer and Used by the Politicians.”

Dr. Kim Soon-kwon at his corn farm in Sanye, Hainan Province, China, where he is experimenting with 20,000 species of corn.

Choe Bo-sik Senior Reporter The Chosun Ilbo

“Look at my fingertips,” Dr. Kim Soon-kwon said. They were all black. “They got this way from pollinating the corn with my own hands. At the very tip of the corn stalk are the tassels, the male part, while the corn silks on the ears are the female part. When pollen falls on the silks and fertilizes them, then each silk leads to the growth of one kernel of corn. Artificially pollinating corn silks with the pollen from a different type of corn is called cross-fertilization. I`m currently experimenting with 2,000 different species,” Dr. Kim said. ‘Dr. Corn`: Former Superstar-Turned-Farmer Dr. Kim Sun-kwon, 70, once a celebrated figure nominated for the Nobel Prize, was left forgotten with the change of government. Today, he lives in Sanya, Hainan Province, China, doing research in corn breeding. Sanya is a city where it is summer all year round. For the seventh year now, Dr. Kim has been coming to this city every winter. The corn is planted in early November and harvested in late March. Dr. Kim`s farm is about an hour`s drive from the city. Pointing to the brown corn, he said, “It contains a lot of lignin, so the cows can digest it easily. Most types of corn have five or six leaves wrapping the kernels, but this type has 12. This means we can extract a lot of ethanol, an alternative fuel for cars, from 111

this corn.” A sports cap on his head, he mumbled to himself and it was hard to catch what he was saying. It was clear that his mind was far from worldly matters. When speaking of past incidents that could be deemed controversial, he was open and did not try to hide anything. Q. How did you end up here in China? A. I was invited to visit here in 2008 and realized that it was an ideal place to do research on corn breeding in winter. If I succeed in producing the finest species through cross-fertilization, surely it will help to ease food shortages around the world. Q. Back in the Kim Dae-jung administration (1998-2003), there was quite a stir about the “super corn” that would help ease North Korea`s food shortage. A. I have made 59 trips to North Korea so far. The “super corn” was not something special, just a type of corn adapted to fit North Korean conditions. In cooperation with the North, we experimented with 3,000 species of corn at 12 test farms. While working at the International Institute of Tropical Agriculture (ITTA) in Nigeria, Dr. Kim developed corn that could withstand the parasitic weed called striga (aka witch`s weed). He was lauded for relieving famine in Africa, and was nominated for the Nobel Prize five times for this achievement. Putting an end to 17 years of research in Africa, he returned to Korea in 1995. He says he wanted to help the food shortage problem in North Korea. He was a star. Distinguished Korean figures came together to form an executive committee to help him win the Nobel Prize. Q. With the end of the Kim Dae-jung administration, you disappeared from the media. A. I was ignorant of the ways of the world. I think I was used by the politicians. Q. It wasn`t that you were using politics? In the 1997 presidential election, didn`t you support Kim Dae-jung, exploiting your fame as the “world-famous

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corn specialist”? A. Six months before the election, I got a call from Lim Dong-won (who would later serve as minister of unification and head of the National Intelligence Service for the Kim Dae-jung administration), asking me to help candidate Kim Dae-jung. I knew him from the time he served as ambassador to Nigeria. Sometime later, Kim Dae-jung visited my farm in Daegu and we had lunch together. It pained me that the North and the South were divided and that there was such a gap between the Yeongnam and Honam regions. I decided to sacrifice myself [to a greater cause]. Q. What do you mean by “sacrifice”? A. At the time, for a person from the Gyeongsang region (Yeongnam) to support Kim Dae-jung meant risking everything. Q. Didn`t you do it in return for a promise of support from Kim Dae-jung for your visits to North Korea? A. It`s true that he made such a promise. But I supported him for the sake of the country. It was a hard decision to make. A high official at the NIS told me, “There is little chance of Kim Dae-jung being elected. When the election is over, we will help you visit the North.” Kim Dae-jung did win the election, by a margin of 160,000 votes. In January 1998, when he was president-elect, Dr. Kim was able to go to North Korea. Several days before the visit, Chung Ju-yung (the late chairman and founder of the Hyundai Group) asked to meet me. In his office, he asked me to come near, and in a low voice said, “Convey these words to the North exactly. First, Hyundai wants to take charge of the Mt. Kumgang (Geumgang) tourism business. Second, we want permission to drill for oil in the West Sea. Third, ask about the welfare of my aunt in my hometown of Tongcheon. If all goes well, tell them I will give one-tenth of all my assets to the North.” Q. So, did you pass on the message? A. In regard to the 10 percent, I thought the North would have no idea of the

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extent of his assets. So I changed the 10 percent to the highest number I could think of, which was 10 billion won [approximately US$9.1 million]. At the time I had no idea of the astronomical wealth of Chairman Chung. Q. Did the North accept these requests? A. It was my job simply to convey the message. But the North`s response was, “Do you really think Chairman Chung will give us 10 billion won? Daewoo can`t even give us 100-200 million won.” Q. What about Chung Ju-yung`s aunt? A. I went to Tongcheon myself and met her. She was very thin and could not see. “How little have you eaten to get so thin?” I asked. And she said, “They don`t give us anything to eat.” She couldn`t see, so didn`t realize I had escorts with me. The escorts said, “This old woman, she must be crazy.…” I made a video of her and gave that to Chairman Chung. Q. What did he say? A. He wept as he watched the video. Then he asked me, “Is there anything I can do for you?” He donated 500 million won to the International Corn Foundation (ICF). Later, from that amount I had to pay for the costs of the fertilizer sent to the North, which the government failed to pay for. Q. The government failed to pay for the fertilizer? A. Soon after the inauguration of the Kim Dae-jung government, the Korean Council for Reconciliation and Cooperation (KCRC) was established with lawmakers Han Kwang-ok and Sul Hoon. It was supposed to be a channel for cooperation with the North. An official from the organization came to me and asked if control of the project to plant corn in the North could be handed over to them. But I wasn`t in a position to decide. Instead, I said I would act as liaison between the government and the North. And on the spot he agreed to my suggestion that they send 50,000 sacks of fertilizer (1,000 tons) to the North.” Q. Why did you make such a suggestion?

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A. To plant corn you need fertilizer. I purchased 50,000 sacks on credit from Namhae Chemical in Yeosu, promising to make payment one month later. The sacks were stamped with the name “Korean Council for Reconciliation and Cooperation” and with a KCRC representative we delivered the fertilizer at Nampo Harbor. But the KCRC kept delaying payment. A year and a half later, I eventually paid 360 million won for the fertilizer out of funds of the International Corn Foundation. You can`t imagine what a hard time they gave me back in my hometown when I supported Kim Dae-jung. And his government cheated me. I was through with them. Q. It wouldn`t have been a lot of money for the government. Why do you think they let this happen? A. I don`t know the inside story. Before Kim Dae-jung went to the North for the South-North summit (June 15, 2000), he invited 200 university presidents and other people to Cheong Wa Dae to hear their opinions. I was invited too. I had played a part, in my own way, in making the summit happen. I told him what I thought: “You must not get mixed up in their plans. Be assertive and make sure you negotiate from a high position.” And then I mentioned payment for the fertilizer. Q. So, did you get the money for the fertilizer? A. A few days later, I got a call from Sul Hoon telling me to meet someone, and that that person would settle the bill. The person I met turned out to be an executive from a big corporation. It surprised me to find that the company was going to foot the bill instead, but when the executive told me to be satisfied with only half the amount, I got upset and refused. During the Roh Moo-hyun government, we sued and through court mediation received just 100 million won. That was the end of that. Q. You said you played a part for the South-North summit. Does that mean you were given a mission? A. No, it wasn`t that concrete. When I participated in an international conference on corn in Brazil in early 2000, an NIS official said to me to help President Kim

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Dae-jung win the Nobel Prize. I had also thought that rather than someone like me, it would be better for unification for Kim Dae-jung and Kim Jong-il to win the Nobel Prize. So I talked to the North Korean officials and persuaded them that the two leaders could jointly win the Nobel Prize if the North allowed reunions of dispersed families and agreed to a South-North summit. Q. Aren`t you exaggerating your part in the process? A. Before the summit took shape, the North said, “Dr. Kim, we will accept your requests. Send the director of the NIS to us.” So Lim Dong-won went to North Korea. In regard to the family reunions, I went on a hunger strike at the Koryo Hotel in Pyongyang. I wept and wailed all night and finally the North Korean escort said, “Dr. Kim, I told the General [Kim Jong-il] about your distress and he said he would give his answer within 10 days. So have hope. Go back to Seoul and wait.” Ten days later the news came out — that the family reunions would take place. I completed the NIS mission of making the 2000 South-North defense ministers` meeting on Jeju Island take place. In Pyongyang, I had told them to send their defense minister. That`s what it would take for the leaders of the two Koreas to jointly win the Nobel Prize. Q. Did you have that in mind — Kim Jong-il jointly winning the Nobel Peace Prize? A. If we had strategically worked to have Kim Jong-il jointly win the prize, even if he was not qualified, I wonder if that would have helped to solve the nuclear issue. When Kim Dae-jung would read his acceptance speech, through an agency I asked him to mention Kim Jong-il, but it didn`t happen. In fact it would have been difficult for him to win the prize without Kim Jong-il`s help. When I went to Pyongyang later, they accused me of tricking them. Q. Did you ever meet Kim Jong-il in person? A. No. I only heard that he was grateful to me for leaving my research in Africa with the sole aim of helping North Korea. They say he ordered people to “learn from Dr. Kim, the man from the South who is devoted to helping the North.” Q. Your activities stopped with the Roh Moo-hyun administration, which

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followed the Kim Dae-jung administration. A. After being cheated on the fertilizer payment during the Kim Dae-jung administration, I supported Lee Hoi-chang [from the rival Grand National Party, which is now the Saenuri Party] in the 2002 presidential election. From that time I was no longer invited to visit the North. I was only able to return after three more years had passed. In any case, South-North research on corn had ceased as the government did not give us any research funds. The last time I went, there were many regulations even when I went to visit the collective farm, unlike in the past. Dr. Kim lives alone in a room on the second floor of communal housing. The only furnishing is a bed, a computer and a desk. They are covered in dust. Q. Why are you living like this, away from home? A. My son is a successful businessman in the United States. At my age, I could live comfortably. But my work is here. [January 26, 2015]

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COPYRIGHT Korea Focus is a monthly webzine (www.koreafocus.or.kr), featuring commentaries and essays on Korean politics, economy, society and culture, as well as relevant international issues. The articles are selected from leading Korean newspapers, magazines, journals and academic papers from prestigious forums. The content is the property of the Korea Foundation and is protected by copyright and other intellectual property laws. If it is needed to reprint an article(s) from Korea Focus, please forward your request for reprint permission by fax or via e-mail. Address:

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