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  • Archive for October, 2013

    3 Reasons why North Korea repatriated 6 South Koreans

    October 29th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    South Korea’s Unification Ministry announced the return of the six men, aged between 27 and 67, at the truce village of Panmunjom Friday, along with the body of the South Korean wife of one of the defectors. The six South Korean citizens was a curious move by North Korea, in which the KCNA (Pyongyang’s official news agency) announced that it “leniently pardoned” the individuals prior to their release back to South Korea.
    In a continued series of predictably unpredictable (yet potentially rational) moves by one of the world’s most secretive and closed states, here are three things to know about North Korea’s latest move:
    1. COLD WAR CALCULUS: North Korea’s move was more than a mere “olive branch” based on good will for recent failed talks related to family reunions and other related efforts, as many have speculated. Instead, it is part of Pyongyang’s ongoing Cold War calculus, which somewhat resembles a multi-dimensional chessboard in which the country’s top minds game scenarios on how to maximize the chance of power perpetuation. In its Cold War calculus, Pyongyang has concluded that a perceived good will gesture at this point would maximize future economic and non-economic benefits in various forms, including bilateral and multilateral talks with members of the international community.
    2. EMPATHY EFFORT FROM THE INTERNATIONAL COMMUNITY: North Korea has repatriated six South Korean nationals to be perceived in a better light from the purview of the international community, both at the leadership level as well as the everyday person. The DPRK understands that such perception is one important piece among many complex moving pieces to garner possible support through efforts meant to garner empathy from those outside its traditional allies (namely, Beijing) in a form of international security hedge play.
    3. PROVOCATION PRECURSOR: One pattern from Pyongyang is that a perceived good will gesture can at times be followed by a direct or indirect act of provocation. This is somewhat akin to a finance play involving a perfect hedge that involves taking a risk position for potential gain that is completely (perfectly) hedged by another play to mitigate such related risk. If Pyongyang believes in that such international security hedge can work in reality, then it may actually incentivize North Korea to take even more risk now or in the future.
    For a related article by by Tim Hume, in which Jasper Kim is quoted, CLICK HERE.


    Negotiating in Asia: Assembling Your East-West Dream Team (Tip #1)

    October 24th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Negotiating in Asia or with Asian counterparties?
    This blog series provides relevant strategic “tips” to guide in terms of the substance and style of assembling your East-West negotiation dream team.
    Tip #1 – Degrees Matter: Asian counterparties in both the public and private sectors generally consider educated persons in the most favorable light. This is in part due to the high regard for historical and modern-day exam-taking (to gain entrance into Asia’s elite educational institutions and coveted career positions). While those in the West may view too much education as unnecessary if seen as not directly relevant to the individual’s direct career arc, the pursuit of more education is generally considered to be a good thing by many Asian counterparties. Such educational attainment will generally be interpreted in the form of academic degrees earned. For this reason, your negotiation team should, to the extent possible, be composed of individuals who have attained not only university degrees (ideally from the more renowned institutions), but those with graduate degrees, particularly doctorate holders. Such team composition could lead to a bargaining advantage since such degree holders are viewed with a substantial amount of greater deference in most parts of Asia.

    Barbarians at the Legal Gates?: South Korea’s Liberalization of its Legal Sector (5 Things to Know)

    October 17th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    1. Prior to the passage of the Korea-U.S. free trade agreement that would liberalize South Korea’s legal services market to allow for the onshore entry of U.S. law firms for the first time in its history, domestic Korean law firms rapidly began a race-to-the-biggest strategy, trying to gauge the potential costs and benefits of merging with other law firms. The collapse by many of South Korea’s law firm dominance was a tangible fear by many Korean legal professionals based on evidence of legal markets having been liberalized in such countries as Germany and France, which was subsequently followed by domi- nation in the league tables by foreign law firms in each of their home markets. South Koreans, always fearing the potential for perceived global embarrassment—in part stemming from the country’s 1910–45 occupation by Japan as well as the 1997–98 financial crisis—did not want to see its own domestic league tables dominated by non-Korean firms.
    2. In response, the South Korean government put forth a set of three “pre-emptive” globalization policies to reconstitute and increase the overall competitiveness of its lawyers and legal services sector through various agencies to help the local legal services sector related to legal education and licens- ing of foreign legal professionals. The three pre-emptive globalization policies included (1) a mandatory course in Anglo-American law taught in English (required for all incoming new Korean lawyers under the Traditional Bar Exam); (2) the introduction of “American-style” professional graduate law schools (beginning in 2009 by converting twenty-five government-selected law pro- grams to three-year “American-style” professional graduate law school system as well as instituting a New Bar Exam); and (3) the passage of a FLCA (allow- ing for foreign legal consultants to practice in South Korea).
    3. Such pre-emptive globalization policies, set forth by various entities in the legal services and education sectors, reflected the South Korean desire to sty mie the possible negative effects of having foreign law firms enter its borders in a “barbarians at the gates” perceived scenario following the implementation of various free trade agreements, namely with the U.S. (but also with the EU), which effectively opened South Korea’s historically closed legal gates to foreign participants for the first time in its modern history.
    4. The South Korean legal market now allows for the entry of foreign law firms for the first time in its modern history due to the signing of the Korea-U.S. free trade agreement. In an effort to globalize its domestic legal services sector pre-emptively in the face of an inevitable “barbarians at the gate” scenario, Asia’s fourth-largest economy unveiled three pre-emptive policies as a means by which South Korea’s legal sector could become more globally competi- tive in the face of such incoming foreign legal competition.
    5. Thus, the question often asked within South Korea’s legal circles was, “Will South Korea’s legal market follow the footsteps of Germany and France, or will it meet a different fate in which South Korean law firms will be able to sufficiently compete with American and European law firms?” Cognizant of this, and bearing the lessons learned from Germany and France, Korean policymakers strategically structured the liberalization of South Korea’s legal market in a way that would maxim- ize the benefits and mitigate the risks to local law firms.
    To view the full academic article by Jasper Kim, “Barbarians at the Legal Gates: Examining South Korea’s Pre-emptive Globalization Policies Prior to Legal Market Liberalization” (Peking University Transnational Law Review, vol. 1, issue 2, 2013), click HERE.
    For an article featuring Jasper Kim’s views on South Korea’s legal market liberalization in the UK’s Law Society Gazette, “UK law firms are making headway in the tough South Korean market,” CLICK HERE.
    For an academic article by Jasper Kim focusing on South Korea’s implementation of “American-style law schools” in South Korea, entitled Socrates v. Confucius:
    An Analysis of South Korea’s Implementation of the American Law School Model” (Asia-Pacific Law & Policy Journal), CLICK HERE.

    For a WSJ op-ed by Jasper Kim, “Cracking Open Hermit Kingdom LLP,” CLICK HERE.
    For a book on legal careers by Jasper Kim featuring 24 “24-hour career profiles” of law school graduates working in traditional and non-traditional global careers, titled “24 Hours with 24 Lawyers: Profiles of Traditional and Non-Traditional Careers” (West Publishing/Thomson Reuters), CLICK HERE.

    Does South Korea Have the Smartest Kids?: 5 Things to Consider

    October 3rd, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    1. Greed to be degreed?: Korea has the highest percentage of young people with high school diplomas and bachelor’s degrees among the member countries of the Organization for Economic Cooperation and Development (OECD), according to a survey published last month. Ninety-eight percent of Koreans aged 25-34 graduated from high school as of 2011 while 64 percent graduated from college or graduate school, according to the OECD. It was the fifth straight year South Korea topped the list in terms of high school education and the fourth consecutive year it ranked No. 1 in college education.
    Analysis: South Korea has transformed from a country that was undereducated to a modern economy that is arguably overeducated—meaning that the country’s supply of highly educated graduates greatly outnumbers the demand for such graduates (from a very narrow bandwidth of domestic South Korean firms, namely the large conglomerates, such as Samsung, Hyundai, and LG, to name a few).
    2. Korean education isn’t cheap, but is it worth it?: Such achievements at the national level comes with costs and negative socio-economic externalities. Annual tuitions at Korean universities in 2011 averaged $5,395, the fourth highest among 25 countries, following Ireland at $6,450, Chile’s $5,885 and the United States’ $5,402. The survey found that tuition rates at South Korea’s private universities were the fourth-highest, trailing only behind the U.S., Slovenia and Australia.
    Analysis: Given South Korea’s GDP per capita, and factoring in purchasing power parity (PPP), the country’s tuition rates are considerably high. But education is an investment. Thus, so long as one’s education investment has a reasonable return on investment (ROI), then such investment (and thus relatively high tuition rates) should be reasonable. However, this is an open question, given the current job market in which the graduation employment rates of most of South Korea’s top universities are in the 60-70 percentile range.
    3. Going private for basic education: Private Cram School spending is a near necessity: Under Korea’s fiercely competitive education system, Koreans have become used to paying for supplementary education from private cram schools, or hagwon.
    The survey showed that Korea spent 7.6 percent of its gross domestic product on education as of 2010, the third-highest following Denmark at 8 percent and Iceland at 7.7 percent. But it was top of the list in terms of private spending on public education (as opposed to government spending), which accounted for 2.8 percent of its gross domestic product, three times higher than the OECD average of 0.9 percent.
    Analysis: The near necessity to need financing for private education above and beyond what is needed for public education sends some worrisome signals. First, that the public education K-12 structure is not working properly (i.e., not pareto efficient). Second, that the need for such additional private education will increase South Korea’s already prevalent gap between the haves and have-nots. Economically, this is non-optimal since all of South Korea’s human capital is not being put to good use. And socially, such effect can lead to a feeling of detachment and even backlash, in which a sense by many among the nation’s youth of the “Korean dream” may be just that—a mere dream.
    4. Higher education meets higher tuition: There has been growing public concern over high college tuitions, prompting the government to spend more on scholarships and restrict yearly increases in tuition rate to 4.7 percent, down from a previous restriction of 5 percent in 2012.
    Analysis: Scholarships for students are a fairly recent phenomenon in South Korea, compared to places like the U.S., UK, and Australia (based on the traditional collectivist mindset that one’s family should shoulder such responsibility). But with ever-increasing tuition rates, the need for greater scholarships are much needed.
    5. More education with less need for financing: One of President Park Geun-hye’s presidential campaign pledges was to reduce college tuition by 50 percent, while the Education Ministry pledged to be able to give scholarships to all students in the bottom 30 percent.
    Analysis: More funding should be allocated towards this end. This is especially the case since South Korea’s greatest asset is its people (i.e., thus, greater human capital investment would prove beneficial, particularly in a country with a shrinking population and exceedingly low birth rates). However, such pledge was during President Park’s pre-presidency campaign efforts. So it is yet to be seen whether such words will culminate into action. If so, it will be welcomed by many.
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