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  • Archive for December, 2012

    South Korea (2012 Year in Review) – Top 5 Issues

    December 26th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    (Questions below are taken from a recent interview with a local broadcaster in South Korea):
     
    1. What would you pick as the five most important happenings in Korea this past year?
     
    5. Summer Olympic results for S Korea
    4. North Korea 3.0: The rise of Kim Jong Un & DPRK missile launch
    3. Apple v Samsung mega turf battle – billion dollar US verdict
    2. Korea’s 1st female president-elect
    1. Psy’s unexpected “Gangnam Style” global mega-hit
     
    2. It is hard to think of what to say about Psy’s “Gangnam Style” mega-hit song that has not been said already. But Koreans know that this was hardly Psy’s first album or his first song. What do you think we’ll see from him in the next year?
     
    Hopefully not a song dubiously titled as “Gangnam Style II” – which is often the local tradition here in terms of following up hit Korean brands and titles. Hopefully it will be a surprise in terms of expectations for his new fan base. It will be tough to top a song that carries the record-breaking distinction of having over a billion Youtube hits. He’s been around for over a decade, with arguably his next big hit a decade ago with his 2002 FIFA World Cup spirited “Champion” song, which was a local but not global sensation. If PSY is smart, he will try to include cameos with global (not just Korean) stars from a diversity of genres – from rap to maybe even country.
     
    3. About the Apple-Samsung patent lawsuit, the legal implications are already determined in many countries and still being fleshed out in others. But how has this changed the company’s reputation locally?
     
    Locally, Samsung will always be the “company to beat” so to speak since Korea is its home turf. Internationally, Samsung is certainly making headway, almost nearing the reputational level of Apple. Samsung Electronics’ share prices will reflect this.
     
    4. North Korea’s missile launch. We all thought this would fail, but it didn’t. Does this mean we have to re-consider a lot of what we assume about NK?
     
    Yes, North Korea’s missile launch is what I called a “game changer” on my earlier research blog from day one. Even if its missile, the Eunha 3, is based on decades-old Soviet-based technology, and even assuming its satellite is nonoperational, the embedded successfully tested ballistic missile technology still has the unsettling potential to cause potential harm up to and around the U.S. coastline.
     
    5. South Korea’s new president-elect, Park Geun-hye, was the readers’ choice for Time Magazine’s “Person of the Year.” Some of the prominent images associated with North Korea in the Western world are semi-comical and ironic depictions of Kim Jong-il (김정일) in, say, Team America: World Police. Do you think the world’s public takes his son seriously as a threat?
     
    Yes, since a “threat” is often defined as something or, in this case, someone, who is predictably unpredictable and/or predictably irrational. Examples include the two missile launch attempts just this year–the April attempt being unsuccessful, while the second attempt earlier this December being successful. This environment of predictable unpredictability by Kim Jong-Un will not dissipate in 2013, if anything, his regime may ramp up pressure and/or test the new South Korean president.
     
    6. Regarding Park Geun-hye’s (박근혜’s) election — she is the first woman leader in South Korea. Her gender was not a big part of the controversy around her. Has South Korea in 2012 entered what you refer to as a “post-patriarchal society”?
     
    Gender was interestingly not an issue in South Korea’s recent presidential election. This should actually be heralded as a significant landmark in South Korean politics in that she was a candidate who happened to be female, rather than a female presidential candidate in that order. It is the first step towards a post-patriarchal society in South Korea.
     
    7. All of these taken together — how do you think they changed Korea’s image abroad? How have they changed how Koreans view themselves?
     
    The two most well-known people in the Korean peninsula are Psy and Kim Jong-Un. Both are unlikely characters who each individually continue to mystify the global arena.
     
    In short, 2012 was a year of the “unlikely becoming likely” – from missile launches to music videos. It certainly gives us reason to wait with bated breath in terms of what 2013 has in store for us, now that we’ve confirmed that 2012 would not be the end of the world.
      
    Click HERE or view below an interview with Jasper Kim, Founder/CEO of Asia-Pacific Global Research Group, with Channel News Asia (CNA) re: South Korea’s new president-elect, Park Geun-hye:

    South Korea’s first female president, Park Geun-hye: 4 Factors

    December 20th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1. Foreign Affairs Policies and Impact:
     
    President Park Geun-hye’s first post-election policy speech this morning focused on North Korea. In effect, her North Korean policy will be one of “semi-Sunshine Policy,” or put another way, “Sunshine Policy lite.” That is, her administration will not completely shun the North, nor will it completely try to embrace the North. Rather, Park’s policy will be one of moderation, most likely with a moderate left pivot. The spirit of such policy will be economic aid and other incentives in a “something for something” quid pro quo manner, rather than “something for nothing” transactions in the form of purely ceremonial and costly summit meetings. The Park administration believes the Sunshine Policy was relatively ineffective in bringing about sustainable positive results, especially in light of the need to boost South Korea’s own economy and people in a post-subprime crisis recovery period.
     
    2. Economic Policies and Impact:
     
    President Park Geun-hye’s economic policies will focus on widening the country’s “social safety net” while rolling out policies related to “economic democratization.” Regarding the social safety net issue, this will include such policy platforms as increasing job security, expanding affordable housing options, boosting job security (especially for non-permanent contract employees), and debt forgiveness. Regarding economic democratization issues, this will include working “with” (rather than against) the nation’s large family-owned conglomerates–known as “chaebol”–relating to cross-share holdings and forging greater cooperation with SMEs. Thus, shareholders of such firms as Samsung, LG, SK, and Hyundai, should be relatively relieved with Park’s election, rather than Moon’s, given the more friendly (or at the very least, relatively less hostile) policy stance towards the chaebol.
     
    At the same time, Park Geun-hye understands that the Korean economy is in essence a “one pillar” economy that is highly (some would say, overly-) dependent on exports. In total, 48% of South Korea’s GDP depends on its exports (compared to 28% and 18% for China and Japan, respectively). The proffered policy solution is the fostering of a second economic pillar in the form of a “creative economy”–basically the nation’s IT and biotech industries–that may better cater to South Korea’s innate competitive advantages in such areas. This will also help create jobs and boost productivity and production by SMEs, which account for up to 94% of South Korea’s total labor force (compared to just 6% by the largest chaebol).
     
    3. The Female Factor:
     
    Will Park’s gender as South Korea’s first female president play a key role? The answer is yes and no. Yes, in terms of creating a demonstration effect for half of the nation’s population. This is especially notable given that South Korea has one of the lowest female workforce participation rates among OECD member countries. In essence, although many Korean women begin to work in their 20s, a disproportionately large number of women drop out of the workforce, many due to societal pressure to get married and raise, not just bear, children, to get the family’s children into “top schools” (stemming in part from traditional Confucian/Korean values and norms). This links to many other related issues, such as the lack of day care facilities and hyper competition within the country’s educational landscape (highly dependent on attending private learning institutes outside of normal school hours).
     
    No, in the sense that president-elect Park never made her gender–being a woman–a primary campaign issue. In part, this is due to the fact that Park could not have brought the “female factor” issue to the forefront since most of her suppot base comes from “conservative” voters, e.g., older Korean males. Thus, South Korea is entering into a “post-patriarchal” political era, in which one’s gender to assume the highest office in the land–the presidency and the Blue House–does not have to be linked to gender, similar to what was seen with former British prime minister Margaret Thatcher (who was cited as a benchmark by candidate Park) and current German Chancellor Angela Merkel.
     
    4. Challenges:
     
    Park won the presidency by a relatively small margin of approximately 51% to 48%. This is in contrast to the previous presidential cycle, in which the presidency was secured by a 20+% margin of victory by Lee Myung-bak. Thus, the challenge going forward will be: how to garner the support of the Korean public when just as many voters were with you as against you? Many skeptics must also be convinced that Park Geun-hye will be different enough from her father, former president Park Chung-hee, which has been a constant looming issue not just throughout Park as a political candidate, but throughout her life before seeking public office. If Park can prove to be an acute listener, who can then integrate the interests of both her supporters and non-supporters alike, her initial honeymoon period in the Blue House stands a reasonable chance of relative success.
      
    For an interview clip with National Public Radio (NPR) on president-elect Park Geun-hye’s formative years, featuring Jasper Kim of Asia-Pacific Global Research Group, click HERE


    For a Bloomberg news article relating to Park and chaebols, quoting Jasper Kim, click HERE.

    ; ; 
    For a Bloomberg TV interview clip by Jasper Kim, click HERE OR VIEW BELOW.
     

     
    For an Al-Jazeera English TV interview clip, CLICK HERE OR VIEW BELOW. 

      
    For an interview clip as part of a larger CNBC TV segment aired today, see below (clip begins from about the 1 minute mark):
      

          

    Game-Changer: North Korea’s Surprise Missile and Satellite Launch [Int’l Security]

    December 12th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    North Korea’s Launch a Surprise:
     
    As of yesterday, the consensus was that the DPRK’s Eunha 3 (Galaxy) ballistic missile was being dismantled due to a “technical” problem. This was a relatively easy-to-accept narrative, given North Korea’s four previous similar, but failed, missile launch attempts in 1998, 2006, 2009, and April 2012. But to the surprise of most in the international community, this morning the world saw evidence of a potentially concerning possibly “game changing” event – in the form of the DPRK’s first successful intercontinental ballistic missile launch. This clearly shows just how truly little the world knows about one of the world’s most closed and secretive states. 
     
    DPRK Missile Launch Implications:
     
    The international community may consider further sanctions, but the PRC (a permanent UNSC member with veto power) may or may not support another sanction against its ally, the DPRK. Alternatively, certain states may opt to enforce domestic sanctions against North Korea unilaterally.
     
    Even with further UN or domestic-based sanctions, it is also unclear how much more influence more sanctions will have on the reclusive DPRK, given that it is currently one of the most sanctioned countries in the world. The US will put more pressure on the PRC to compel the DPRK that it should refrain from further such acts, although this will probably have relatively little effect. Japan, may react most noticeably, in the form of greater internal public and political sentiment and pressure to revamp its constitution to allow its “self-defense” forces to be used in a broader way for self protection against possible future North Korean provocative acts.This will continue to further aggravate the ongoing “Confucian Cold War.” between Japan, the Korean peninsula, and mainland China.
     
    Missile Launch as Strategic Timing:
     
    The North’s missile launch (and possible satellite orbit) was purposely timed to fall within the timeline trifecta of (1) the centennial of the birth of North Korea’s founder, Kim Il-Sung; (2) year anniversary of Kim Jong-il’s death; and (3) upcoming presidential elections on December 19 (possibly shifting support to conservative Saenuri candidate, Park Geun-hye, given her relative hawkish stance relating to the DPRK). Kim Jong-un essentially “doubled down” on his political capital with the launch, and subsequently his political power base has been solidified–at least in the short term–through the North’s successful launch within (rather than past) its original pre-December 22nd trifecta timeline.

    South Korea’s Possible Response:

     
    South Korea will work with the U.S. to possibly push for more UN sanctions, given that North Korea’s missile launch would be in violation of UN Resolution 1718 and 1874. Now that the North has demonstrated its successful intercontinental missile launch technology (and apparent satellite orbit), this will also put South Korean military forces on further edge, given past provocations. In contrast to the North, South Korea has yet to successfully launch a satellite into orbit, which will further compound a possible “satellite gap” perception–somewhat similar to the “missile gap” and space technology gap that pervaded during the U.S.-USSR Cold War period.
     
    North Korea’s Next Move:
     
    North Korea is predictably unpredictable, generally to its benefit. Kim Jong-un has employed a “one step forward, one step back” policy of modernization on the one hand, counterbalanced by seemingly provocative acts to placate its military. The NLL border region is likely the next area where possible conflicts in the future may occur. Cyberattacks is also another increasingly used option by the DPRK against South Korea, although this could be used against any other perceived foe in the future.
     
    To view a related op-ed piece written by him on Global Times (China’s English newspaper), click HERE.
     
    To view Jasper Kim (Founder/CEO) discuss this issue with CNN, click HERE or view BELOW.
     

     
    To view a separate CNN TV interview clip with accompanying online report click HERE and VIEW below:

     

     
    For a Bloomberg/Businessweek interview clip, see below (December 12, 2012):


           

    Business Law: Social Co-Op Law (South Korea) – 5 Things to Know

    December 6th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1) Can you explain what this new law that aims to help Korea’s social co-operatives is all about?
     
    Korea’s new social co-operative law allows certain non-profit organizations to register as social co-ops. Under Korean law, 2 types of cooperatives exist: general and social. Social co-ops operate as non-profits, in which 40% of the social co-ops business must be for the “public good.” Korea’s new law took effect on December 1, 2012.
     
    2) How does the system of operating social co-operatives work in Korea? How large of a system is it?
     
    Social co-ops is a business structure in which the entity’s employees (workers) are also its owners (as opposed to outside shareholders for public stock corporations in South Korea). The Korean government expects up to 10,000 of such new co-ops to be formed in the next 5 years, resulting in 40,000-50,000 new jobs.
     
    3) Do you believe that this law that supports social co-operatives will gradually resolve Korea’s mounting unemployment?
     
    The rise of social co-ops could only help, not hurt, the Korean economy. Social co-ops will particularly help at the bottom-up level, since most social co-ops in terms of employees and capital will be small and medium-sized firms. One socio-cultural and economic factor that represents a policy challenge is that the majority of Koreans still much prefer to work at Korea’s mega-comglomerates (chaebol), at times even forgoing employment opportunities with smaller firms in a country that still has the mindset of “bigger is better.”
     
    4) What do you think is behind government efforts to protect small and medium-sized businesses? Do you think that the government is favoring small merchants because of increased concerns created by wholesale monopoly?
     
    The current socio-political buzzword in South Korea today is “economic democratization.” One interpretation of this is redistribution of profits more towards smaller firms. This is where social co-ops and Korea’s new social co-op law can play a role. The social co-op law also provides the following for recognized social co-ops: 1) possible receipt of government benefits (subsidies) 2) can participate in government projects; and 3) avoids regulation of Korea’s fair trade law (although as small economic entities, this issue would arguably not be highly problematic). In essence, the social co-op law is one (of many) legislative efforts by the government to “flatten the economic playing field.”
     
    5) Can you give us a comparison with co-operatives in other countries? What is their agenda and how do they work? And do you think their system can be applied to Korea?
     
    The concept of co-ops has existed for years. The large US hotel chain, Best Western, and ACE Hardware are examples of certain types of existing co-ops that also represent highly recognized brands worldwide. South Korea also has existing co-ops involving a wide variety of goods and services such as chauffeur-drivers and foundations offering discounted/free lunch programs.
     
     
    The author is book editor of: Korean Business Law: The Legal Landscape and Beyond