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  • Posts Tagged ‘Jasper Kim’

    “Decoding Kim Jong-un: What North Korea’s Leader Wants” (Forbes op-ed, Jasper Kim)

    February 14th, 2017  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is a truncated version of the original Forbes op-ed piece.
     
    For the full Forbes op-ed, click HERE
     
    This weekend, North Korean leader Kim Jong-un fired not just his country’s first missile test since U.S. President Donald Trump took office this year, he also fired the opening shot in a high-stakes negotiation match between two seemingly unpredictable alpha male world leaders.
     
    So why did North Korea conduct a launch in the very early days of Trump’s presidency?
     
    Kim wants to test his counterpart’s mettle: What will he do? What will he not do? Could Trump ever be trusted? These are the questions in Kim’s head.
     
    So why did North Korea conduct a launch in the very early days of Trump’s presidency?
     
    Kim wants to test his counterpart’s mettle: What will he do? What will he not do? Could Trump ever be trusted? These are the questions in Kim’s head.
     
    Words or action?
     
    Sanctions as sticks are not working as hoped to compel good behavior . Could diplomacy vis-à-vis China work? At the end of the day, it’s unlikely that Beijing would be willing to cooperate with Washington given Trump’s apparent intransigence about China, along with growing evidence that the PRC may be having less sway over the DPRK.
     
    Could then a pre-emptive military strike be a feasible option? In short, given that South Korea’s capital of Seoul has approximately ten million residents sitting in the backyard of the DMZ, which acts as a thin buffer between the two Koreas, the possible military and economic ramifications are too vast to justify a risky military encounter.
     
    This is why Kim finds himself relatively unrestrained from ordering missile test after missile test despite international outcry and sanctions. In fact, such outcries and sanctions are the very justification Kim needs to solidify his power base to his negotiation audience — his inside circle of advisers and elderly military leaders — that the outside world is truly “hostile” to their homeland.
     
    Direct appeal
     
    But perhaps there may be a better alternative to military strikes and more sanctions — why not speak directly to Kim himself to find out what he wants?
     
    A negotiation is defined as “getting what you want.” And most successful negotiations occur when both sides get at least a little of what they want. But too often, even the most experienced parties make sweeping one-size-fits-all assumptions about what the other’s demands are. As studies show, we see things as we are, rather than as they are. In other words, people superimpose their wants, fears, and values onto those with whom they are dealing.
     
    Past and perhaps even current U.S. officials have assumed that Kim is all about ruthless self-preservation. Others claim he wants a peace treaty, strong economy — even reunification. Statements from the North’s state-run KCNA news agency can also be viewed as negotiable first offers packaged in bombastic bluster.
     
    Which of these does North Korea’s leader want? We simply need more information to know. After all, information is power in negotiations.
     
    But rather than making broad-sweeping assumptions, a simpler and more effective approach exists: Just ask.
     
    For the amount of resources, lives, and security risks involved, the amount of direct communication between Kim and the most senior U.S. leaders commensurate to North Korean leader’s level of seniority have been negligent to nil. From the perspective of the Confucian and Stalinist-driven mindset of this young leader, it’s critical that a presidential level leader be present in the room. After all, the messenger is the message.

     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

    The End of the “One China” Policy?: Trump Using The “One China” Policy as a Bargaining Chip

    December 5th, 2016  by  Asia-Pacific Global Research Group - Jasper Kim

    trumptaiwanprcflags-copy 
     
    In recent days, US President-elect Trump has received criticism both domestically and internationally over his recent phone call from Taiwan President, Tsai Ing-wen.
     
    Given that the US has recognized a “One China” policy since 1979, what could be the meaning of Trump’s latest actions–defying decades of existing apparent political protocol?
     
    This is a broad question that will be further delineated from an apolitical perspective using a “negotiator’s lens.” As a self-professed negotiator, Trump has taken the view that “everything’s negotiable,” the following reasons could underly the President-elect’s decision to speak directly with Taiwanese President, Tsai Ing-wen.
     
    1. Why would Trump receive a call from Taiwan’s Tsai, given the potential for antagonizing China?
     
    The answer is simple. Trump spoke with Tsai to increase Trump’s bargaining power over China.
     
    From a negotiation perspective, China has generally viewed its nearly four decade “One China” policy with the US as a given. The One China Policy–negotiated by Kissinger and Nixon in the 1970s–is a policy that is viewed with great weight and pride by Beijing. After all, it is arguably because of the US-PRC’s One China policy that allowed China to definitively assert itself from a regional to a global purview as a diplomatic–as well as economic and military–powerhouse.
     
    By following long-held diplomatic protocol, Trump most likely took the view that the US would gain relatively little, if anything at all, as a new negotiator-in-chief. Even with the One China policy in a status quo state under the current Obama administration, tensions between the US and PRC have, if anything, escalated in the form of increased military tensions and posturing both in and outside the Asia-Pacific region.
     
    Why not then—from Trump’s negotiator’s mindset perspective—remind Beijing not to take the One China policy for granted? Why not remind Xi Jingping of the possible, albeit remote, risk of the US increasingly and purposely, as a negotiation strategy, taking greater notice of Taiwan? Even if such overtures from Trump towards Taiwan fall slightly short of an outright reneging on the One China policy, such negotiation tactic can increase the US’s negotiation power vis-a-vis Beijing. This could translate into greater terms and conditions for the US regarding things it wants from China now or in the future.
     
    As a rough analogy, imagine you are a partner for a large firm undergoing a perfunctory yearly performance review. Under normal circumstances, your mind would normally be preoccupied with the possible upsides that you hope to receive from your other partners (negotiation counterparties), such as the amount of your yearly bonus. But instead, imagine that the firm’s partners instead tell you that there’s a chance that you could be fired. Thereafter, after you go through various nightmare scenarios in your head of you looking for a new job, finding ways to support your family, and/or seek ways to live on your current savings, the partners thereafter inform you, “Well, congratulations, after some internal contemplation, you’re not fired after all; you get to keep your job, with all its current rights and obligations.” The outcome is still the same–the status quo. But surely, you will agree that such an unexpected and shocking review process will now serve as a renewed impetus towards dealmaking on behalf of the firm in the future.
     
    2. Why did Trump not follow traditional diplomatic protocol as suggested by certain experts and bureaucrats, including the US State Department?
     
    Tradition and protocol is good until it is not. In other words, the benefits of diplomatic tradition and protocol may, at a certain point, be outweighed by its constraints. This type of thinking is why so many of the best and brightest minds from around the world have constantly sought to seek US shores, rather than other countries, for jobs, education, and citizenship. It is because traditions and protocols that originally acted as fundamental pillars within certain societies suddenly became weighted tipping points and constraints in terms of limitations on individual and economic freedoms. This was certainly the case with the US colonies when it was ruled by the UK monarchy, leading to the Declaration of Independence and the formation of a new republic.
     
    As a political presidential candidate, Trump represented the epitome of an unorthodox political candidate. Trump’s supporters liked him not because he followed protocol in terms of his speeches and rhetoric, but to the contrary, because he challenged the norm, status quo, and political elitism.
     
    It should thus be no surprise then that Trump, now as President-elect, is trying to “think different” by not following the typical dog-and-pony show that certainly can exist in bureaucratic circles in Washington, DC, Beijing, and elsewhere.
     
    Why do such protocols exist in Washington, DC? From a negotiation theory perspective, it is based on a “not-to-lose” negotiation mindset, known as a dispute settlement negotiation (DSN) mindset, as opposed to a “play-to-win” negotiation mindset, known as a deal-making negotiation (DMN) mindset.
     
    A “not-to-lose” DSN mindset is often the mindset of cautious bureaucrats who fear risk rather than seek opportunity. Such a mindset is often based on a working assumption that the status quo (par) is as good as things can generally get. However, such extreme caution can lead to the tangible risk of missed opportunities and gains by taking a “play-to-win” DMN mindset–the type of dealmaking mindset that President-elect Trump proclaims to have, and appears to be taking based from his past business dealmaking experience.
     
    3. Could Trump’s perceived lack of possible diplomatic predictability lead to “lost in translation” communications between the US and its allies and foes?
     
    The short answer is yes. However, the rest of the world will adjust. This may seem somewhat pompous and arrogant, but it is true. The US, in the era of Pax Americana, is the world leader in terms of military, economic, and diplomatic might. For many countries, particularly non-liberal democracies, the election of a potentially new US president every four years is often perceived as a relatively frequent affair compared to the potential life-long tenure of an undemocratically elected dictator, king, or military ruler. And with what is often the case with an incoming US president from a competing political party, such new president will not only be busy trying to undo his predecessor president, but also have a unique personality and style while in the Oval Office, and thus, in communicating with world leaders.
     
    Presidential candidate Trump has already used very direct language during the course of his 2016 campaign, including those directly aimed against Beijing. But Beijing is so far not in apparent panic mode. So far, China’s leaders have more or less taken a “wait and see” patient approach–a wise, strategic move. The world should follow suit.
     
    Maybe President Trump will adjust his language, tenor, and approach once in the White House, maybe not. But one virtue of being the world’s most powerful man in the world’s most powerful nation, is that the world will adjust, if anything because the world has little choice but to adjust to the style of a new US president.

     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

    Negotiating with Powerful Parties: 5 Strategies

    December 23rd, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    powerbalance
     
    The recent and original Star Wars trilogies involve an epic clash between good and evil. Within the context of the Star Wars story line, a small rebel alliance was pitted against a seemingly much larger galactic Empire (The First Order, in the recent plot line of The Force Awakens).
     
    Such epic clash may appear like the concoction of science fiction rather than a real world scenario. But this is not exactly true.
     
    Switch the Empire/First Order with a larger competitor/superpower. Then switch the Rebellion/Resistance with a smaller start-up/organization/non-superpower. Now things become all the more real with very real and practical implications.
     
    This then raises the question: What is the best negotiation strategy for dealing with a seemingly larger and more powerful counterparty?
     
    Below are five (5) strategies supported by practitioner perspectives, but also academic studies:
     
     
    1. IS YOUR COUNTERPARTY REALLY MORE POWERFUL?
     
    Your foe may seemingly appear larger and thus more powerful. But it’s important to note that larger is not more powerful in every contextual situation.
     
    The benefit of being a larger entity is often a general association with more resources–along with greater scale and scope (i.e., domestic or global footprint/presence). But in certain situations, being large can have its distinct disadvantages. Such disadvantages can at times outweigh the advantages of being a larger entity. For example, a behemoth company may be overly diversified, with its resources spread out overly thin, domestically and globally.
     
    Think: The Roman Empire. The reason for the Roman Empire’s implosion—seemingly at the very pinnacle of its power–was ironically due to its string of prior successes (of conquering people, land, and resources). The Roman Empire was simply too large to succeed. In the current era where technology and being nimble is a strategic advantage, being too large is arguably now a sine quo non to stress-testing, collateral damage, or outright collapse of a larger entity or foe.
     
    Much like the Roman Empire, the Empire (First Order) appears like a foe that can easily defeat the Rebellion (Resistance). But as we see in the Star Wars mythology, a smaller often ill-equipped band of unlikely heroes can prevail over a larger more organized and well-equipped foe.
     
     
    2. IS YOUR COUNTERPARTY WILLING TO USE ITS POWER?
     
    A key strategic question is will your counterparty understand and actually use its power? First, does your foe understand its actual power? You may believe this is to be a given. But it is worthwhile to stress-test this working assumption. For example, even just prior to the U.S.’s delayed entry into World War II, it was arguably uncertain from not just America’s perspective, but its other Allies as well as its enemies, just how powerful America’s entry would impact the outcome of the war. In hindsight, it was a game changer. At the time, it was not so certain.
     
    Second, is your negotiation counterparty actually willing to use its power against you? It’s important to note that the question to ask is definitively stated one, without the ambiguous “may” or “could” wording that clouds a clear strategic analysis. The answer should be a definitive and categorical yes or no, based on the best available imperfect information attainable (at the time, and of course, given the circumstances).
     
    For example, regarding the Korean peninsula, a key question would be: Is North Korea actually willing to use its nuclear weapons against its enemies (above and beyond mere saber rattling)?
     
    In the lighter context of the Star Wars trilogies, the key question would be: Is Darth Vader willing to use the Death Star to destroy planets (and stars)? The answer in A New Hope (Episode IV) was an emphatic yes, as demonstrated when the Death Star used its laser weapons capability to destroy Alderaan, the home planet of Princess Leia (who was then being held captive by the Empire to solicit information about the whereabouts and plans of the Rebel Alliance). Similarly, in The Force Awakens, the First Order Star Destroyer’s “Catapult” superweapon was in fact used to destroy many lives (above and beyond the mere appearance of having such power).
     
     
    3. TAKE PRE-EMPTIVE STRATEGIC STEPS
     
    Take strategic steps to maximize the likelihood of your success. As Sun Tzu claimed, “Every battle is won before it is ever fought.”
     
    If you’re the smaller party, fighting a battle in the traditional sense is a game that will often be geared against you than in support of you (i.e., pivoted towards a loss than a gain). Thus, strategically, you should seek to delay, divert, or dispense of the need for battle with your larger counterparty.
     
    Strategically, understand what is your GPS (Game rules, Payouts/Penalties, Strategy) vis-à-vis your opponent. Next, step into the shoes of your foe to calculate the other side’s GPS. In doing this, assign a person to play the role of your adversary foe. This will help clarify and extend the relative perspectives of both sides in terms of positions (what you/foe want) and interests (why you/foe want such positions). This in turn will help clarify your negotiation strategy analysis.
     
    Next map out a “decision tree” of possible best next steps, with assigned probabilities. For example, let’s say you are a small Silicon Valley start-up about to negotiate with Google (a tech titan). Further along in this simplified hypothetical, let’s say you then consider, calculate, and then ultimately conclude that the possible decision tree possible outcomes could be (1) majority buy-out (30% probability); (2) minority investment (35% probability); and (3) no agreement (35% probability). As before, this is calculated on the best available imperfect information at the time.
     
    In Star Wars: A New Hope and The Force Awakens, the smaller renegade group of rebel fighters determine that their GPS would be to counter-attack the Death Star (Star Destroyer).
     
     
    4. USE INFORMATION STRATEGICALLY FOR TACTICAL ADVANTAGE
     
    Negotiation is an “information game.” If you have a competitive advantage in information, the game pivots more towards a win for you (or your team/organization/country).
     
    But where do you get information about your negotiation counterpart? First, seek information from publicly available information (Google, public filings, the press, news articles, etc.). Second, seek information from your foe’s other counterparties, enemies, and even friends. Specifically, find out who they are, then reach out and make strategic contact with them. You can be honest and say that you are making contact merely to get information on how to best work with a particular entity with which the person who has been contacted has had prior dealings. Third, for all remaining data, seek information directly from your counterparty (through a separate but related negotiation communication strategy).
     
    In The Empire Strikes Back (Episode V), Han Solo (Harrison Ford) and Princess Leia (Carrie Fisher) could have solicited information about the Empire from Lando Calrissian (Billy Dee Williams). Lando, as mayor of Cloud City, had prior dealings with the Empire, who stayed strategically neutral until Han and Leia’s unexpected arrival to Cloud City sufficiently incentivized Lando to betray Han and Leia (however, Lando then later betrays the Empire by subsequently helping Leia, Luke, Chewbacca, C-3PO, and R2-D2 to escape along with Han Solo in frozen carbonate form).
     
     
    5. KNOW YOUR “WALKAWAY POINT”
     
    What is your “walkaway point”? This is your negotiation decision matrix anchor—based on your personal metrics (i.e., money, emotion, pride, nationalism, etc.). Knowing this information, you will know the general limits and boundaries of your “yesable” negotiation range. Without knowing this information, you will conversely not know the general limits and boundaries of your “yesable” negotiation range. This in turn will increase the likelihood of you not knowing what you ultimately don’t want (as well as what you do want in your dealings with your counterparty opponent). This is a very dangerous position to put yourself or your organization–especially when such risk can be mitigated through this suggested strategic approach.
     
    For example, in the 1990s, when Microsoft was being investigated by the Department of Justice for alleged antitrust behavior at the time, Microsoft’s management team should have considered whether it would allow Microsoft to be broken up into smaller independent entities onshore if legally compelled to do so, similar to the case of the Baby Bells previously. Or alternatively, would this be beyond its walkaway point, compelling Microsoft to consider other alternatives, such as moving some or all of its offices offshore to other countries? Knowing such valuable walkaway points is not just useful, it is absolutely critical.
     
    In Star Wars: A New Hope (Episode IV), Obi-Wan Kenobi (Alec Guinness) determined that his walkaway point for an impending and epic light saber duel with Darth Vader would be the ultimate sacrifice of his own physical body (although he would continue to exist in non-physical form through the Power of the Force).
     
    In summary, these are five (5) concise strategies (of many more that can be utilized), which are easy to implement and extremely value-added.
     
    These strategies have proven to be the difference maker when it comes to negotiating with larger and seemingly more powerful counterparties.
     
     
     
    Sources: Kim, Jasper (2015); Adler, R. S. & Silverstein, E. M. (2000).

     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     
     
     

    American Law 101: An Easy Primer on the U.S. Legal System (by Jasper Kim)

    January 20th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    American Law 101 - COVER
     
    Publication Release Announcement: Asia-Pacific Global Research Group Team
     
    American Law 101: An Easy Primer on the U.S. Legal System is a thorough introduction to American legal principles, a highly accessible user’s guide into both the spirit and the black letter law underlying the U.S. legal system. Everyone who wants a better, working understanding of U.S. law and the way it is applied—foreign lawyers, law students or those thinking about law school, business professionals, journalists, and the simply curious—can use this straightforward, approachable guide to the American legal system.
     
    American Law 101 offers:
    • easy-to-read and succinct explanations and examples of most of the concepts covered in U.S. law schools
    • concepts and terms explained in plain English, with minimum use of American colloquialisms, cultural references, and slang
    • short executive summaries of each chapter that cover the most crucial, “big picture” applications of the concepts covered
    •simple and useful diagrams •complete copies of the U.S. Constitution and Bill of Rights, as well as a glossary of legal terms
     
    Chapters include thinking like an American lawyer, contracts, torts, constitutional law, criminal law and procedure, American perspectives on international business and public law, and alternative dispute resolution and civil litigation. American Law 101 offers a better understanding of the U.S. legal system–and the legal professionals working in it—to domestic and international readers.
     
    About the Author
     
    Jasper Kim is a visiting scholar at Stanford University, former visiting scholar at Harvard University, professor at the Graduate School of International Studies at Ewha Womans University in Seoul, South Korea, and adjunct faculty at the Straus Institute of Dispute Resolution, Pepperdine University School of Law. Previously, he worked for Barclays Capital, Credit Suisse, and Lehman Brothers.
     
    Jasper Kim is a member of the Washington, D.C. bar and received graduate economic training from the London School of Economics (LSE), graduate legal training from Rutgers University School of Law, and negotiation training at Harvard Law School’s Program on Negotiation. He is a contributor to various media, including the BBC, Bloomberg, Christian Science Monitor, CNBC, CNN, LA Times, NPR, NYT/IHT, Voice of America, and the Wall Street Journal (WSJ). He is the founder of Asia-Pacific Global Research Group, asiapacificglobal.com, and author of ABA Fundamentals: International Economic Systems, and 24 Hours with 24 Lawyers: Profiles in Traditional and Non-Traditional Careers.
     
    Website link (American Bar Association Press):
    http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=131991070
     
     
     
    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
     

    Mobile phones in North Korea?: 1.5M users and growing (4 Factors)

    February 5th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    (The questions below are taken from an interview with a local Korean broadcaster on 2/5/2013)

    1) Mobile phones are a reasonably new phenomenon in North Korea, with even King Jong-Un himself sporting a smartphone, how might increased usage shape the political landscape?
     
    The increasing use of mobile phones, including smartphones, in North Korea has the real potential to dramatically reconstitute the political landscape. An estimated 1.5 million people, according to one source, currently use mobile phones of some sort within the closed Stalinist state. The DPRK even has 3G capabilities–through a joint venture between Orascom (an Egyptian carrier) and Koryolink (a North Korean telecommunications entity)–which is actually comparable to the carrier services used by many South Koreans and Americans today. So this should be a wake-up all that the North is ready, willing, and certainly capable of becoming a wired and connected society–a dramatic shift from its recent past as one of the most closed-off and disconnected states in the international community.
     
    2) Texting has become extremely popular in Pyongyang, and has increasingly been used as a tool in organising protests/riots around the world (think Cronulla riots in Australia, Mozambique riots, London riots), could this new technology lead to an uprising from the people?
     
    Potentially, but nobody knows for sure. It’s not a certainty mainly because the DPRK has strategically disallowed the use of the internet, except for a few rare cases related to the military and one or two educational institutions. So in effect, the mobile phones used by North Koreans today allow for internal calls and texting, but not international/cross-border communications. This exclusion includes the use of social media, such as Twitter and Facebook. This is no accident since the DPRK leadership has likely carefully scrutinized what can and has happened when the general public is allowed to have such access to social media, in which existing government structures can potentially be toppled and replaced–the very outcome that North Korea is seeking to avoid at almost any cost.
     
    3) Kim Jong-Un has been seen with a HTC smartphone (distributed by the KCNA on January 27, 2013). Is this a political choice, a personal preference of design or does he fancy himself a bit of a hipster going against the mainstream?
     
    Kim Jong-Un is the current leader of one of the most provocative states in the world. So he doesn’t have the luxury to choose much of anything, let alone a smartphone with potential cutting edge technology, to be based on purely personal preferences. Almost every move he makes and every word he states can and most likely surely is scrutinized heavily to the highest level of minutiae both inside and outside the DPRK. The HTC smartphone Kim Jong-Un was seen recently with, placed directly next to him at a high level internal meeting involving military and foreign affairs officials, can be interpreted to signal to the outside world that the DPRK is not as technology handicapped as many people believe it to be. Add on to this the North’s successful missile launch last month and we have the makings of a country that may be seeking technology for further future provocative “predictably unpredictable” acts defined to include traditional (military and paramilitary) as well as non-traditional (cyberattacks) in scale and scope.
     
    4) Do you think mobile phones may be another way for the regime to have a heavy hand over its people by spreading mass propaganda?
     
    Certainly so. We believe that the DPRK has signaled an increasing interest and desire to shape the narrative in terms of how the world, including global media outlets, sees it. In the past, North Korea allowed for others to shape this narrative about its intents, capabilities, and desires. But now, maybe because Kim Jong-Un has grown up in Switzerland with the internet, Google, and probably Facebook, the North has become increasingly proactive about allowing foreigners, including foreign journalists, into its borders, as well as to release more information more quickly through its state news channel, the KCNA. So, with 1.5 million mobile phone users, it wouldn’t be surprising to see the DPRK leadership use it as another outlet upon which to shape the narrative about its alleged accomplishments (and maybe even failures, as seen in the April 2012 failed missile launch attempt).
     
     
     

    South Korea’s Q2 GDP figures release – analysis (breaking news)

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

    RELEASED ECONOMIC FIGURES TODAY:
    Q2 ’12 GDP (qtr-to-qtr): 0.3%
    Q2 ’12 GDP (year-on-year): 2.3%
     

    ASIA-PACIFIC GLOBAL RESEARCH GROUP – ECONOMIC PROJECTIONS:
    Q3 ’12 GDP (qtr-to-qtr): p.2-0.45% range
    Q3 ’12 (year-on-year): 2.2-2.5% range
     
    2013 (fiscal year): 2.5-2.7%
     
    SOCIO-ECONOMIC ANALYSIS:
     
    POTENTIAL RISKS (TO SOUTH KOREAN ECONOMY):
    – EXTERNAL: U.S. (lower manufacturing levels), CHina (Higher inventory levels), and EU (ongoing fiscal crisis). These 3 regions represent South Korea’s top trading partners. Given that South Korea’s GDP is nearly 48% dependent on exports, any slump in one or more of these regions may have a negative impact on the local economy.In other words, less sales of Samsung smartphones and Hyundai cars abroad in the U.S., China, and/or EU, will translate into lower future GDP growth levels.
     
    – INTERNAL: South Korea’s rising household debt (including mortgages, credit card debt, and non-bank loans). The economy also has one of the world’s lowest fertility rates and a rapidly aging/retiring labor force, which will also lead to less people able and willing to work, in addition to greater demand for retirement/pension benefits. Such factors will continue to put a heavy strain on the South Korean economy.
     
    POTENTIAL BENEFITS (TO SOUTH KOREAN ECONOMY):
    – FISCAL STIMULUS PLAN: possible US$7.5 bln equivalent (without a supplementary budget appropriation) may be announced soon, but it is unclear what positive economic effects such stimulus plan will ultimately have.
    – Possible economic rebound in one or more of the following regions: US, China, EU
     
    OTHER RELATED CONSIDERATIONS: The overall macroeconomic trend is downward economic forecasts for South Korea. In 2011, South Korea grew at 3.6%. Government estimates for 2012 range from 3.0-3.3% (revised from previous higher forecasts), while private sector economic forecasts have been more bearish, from 2.5-3.0% growth for 2012 overall. Other negative drags on the economy include a year-on-year drop in Exports (-6.2%) and Imports (-9.8%). Thus it is likely that 2013 economic forecasts may similarly also be revised downward to the 3.2-3.5% range, subject to various endogenous and exogenous variables and geopolitical events.
     
    WHAT SOUTH KOREA NEEDS:We believe that South Korea can utilize funding vis-a-vis investment to convert South Korea from a “Copycat Confucian” to a “Creative Confucian” capitalist system. This will involve “rejiggering” the nation’s basic economic components to (1) a more Socratic-based education/teaching system; (2) a more robust and dynamic venture capital (VC) infrastructure; and (3) a pivot towards a more risk-taking mind-set by the general population.
     
    Jasper Kim, founder of the Asia-Pacific Global Research Group, discussed these issues with BBC TV’s Asia Business Report today, which can be seen below:

     

    Economics of Psy’s “Gangnam Style” – 5 Things to Know

    August 30th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1: Who is Psy (real name: Park Jae-Sang): bad boy v. court jester?

     

    He is a Korean-version bad boy and court jester packaged into one person. Psy’s biggest hit before ‘Gangnam Style’ was ‘Champion,” which was a hit due to remarkable timing with Korea’s hosting of the 2002 FIFA World Cup, in which Korea was viewed as a soccer/football ‘champion’ in the form of a quarterfinal team.

     

    2. Is he an unusual K-Pop star?

     

    His is an unlikely figure for singing stardom due to his age (mid-30s) and looks (typifying the average person rather than a meticulously prefabricated singer beauty). No one could have expected “Gangnam Style” – originally geared for local audiences – to be a global sensation. Psy is the anti-beauty, anti-model, anti-authority singer – ironically, this could his the recipe for success. Psy’s unique combination of these qualities have been fairly constant for the past decade. But what has changed is what the world, inside and outside Korea want, in a youtube era – authenticity, reality, and buzzworthiness – all of which Psy fortunately had at the right time, and the right place (youtube, with about 60 million hits for the song, twitter and other social media).

     

    3. What is Gangnam Style?

     

    Gangnam style as the current pop hit song is a fun, lovable, and catchy song that features outlandish entertainment in the form of mesmerizing supertechno beats and rhythms combined with outrageous “horse dance” moves, with fast cars and attractive women as backdrops. At the less visible level, it is a “satire with synthesizers” placing all the perceived virtues of “Gangnam” (an affluent region of Seoul) under a critical light, essentially mocking the superficial, consumer-driven, style over substance Gangnam area culture.

     

    4. What does Gangnam represent socially and historically?

     

    “Gangnam” literally means “south of the Han River.” Today, the Gangnam area is viewed as an upper-class region, home to famous celebrities, top Korean firm headquarters, and pricey shopping and apartments. For these reasons, the Gangnam area typifies the consumerism of modern day Confucian Korea. The area is an $82 billion economic region, which is also home to the country’s most prestigious university (in which an estimated 41% of its student body are from Gangnam), the alma mater of a disproportionately large amount of Korea’s top power players in business and government. Gangbuk, north of the Han River, is the traditional area of Seoul, which is viewed as a less economically elite region. Gangnam, in short, is geographic symbol of current day conspicuous consumption in a time when Korea’s education, income, social status are increasingly bifurcated between the “haves” and “have nots.”

     

    5. How can Psy’s hit be monetized?

     

    South Korea’s government has been supporting Korean entertainment overseas as a form of “soft power” diplomacy – similar to the soft power of Hollywood – which has had some success, but mostly within Asia. Psy’s success has been a surprise. If you believe that a Korean hit pop song in the US market is not a “one hit wonder,” then buying shares in Korean entertainment companies (SM Entertainment, CJ Entertainment, JYP, YG Entertainment) may line up with your investment view.

     

    Interviews about this topic with Jasper Kim, Asia-Pacific Global Research Group, are below:
     
    ABC TV’s Nightline with Jim Middleton:
     

    ABC Radio:
    available here with ABC, the Australian Broadcasting Corp’s “Common Knowledge” program (interview begins from the 15:00 min mark):
     
     
    The actual “Gangnam Style” music video featuring PSY is below: