Asia-Pacific Global Logo
Tagline - Opportunity begins now.
Map of NE Asia
    • Geo-Politcal Analysis
      Business Development
      Risk Management
      Emerging Techologies
      Legal
      Negotiations
  • Posts Tagged ‘korea’

    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 “lost generation” of youth? – 6 socio-economic challenges

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

    *(Q&A below is taken from a recent interview with a local South Korean broadcaster as of the date of this upload)
     
    1) Last year there were over 300,000 Korean college graduates, but only 18,500 jobs for them, what sort of impact is this having on the younger generation?
     
    It’s a case study where supply vastly trumps demand. So it’s a big hit economically for the younger generation trying to secure employment after graduation. This is especially impactful since typically it’s the first job after graduation that can often define a person’s career trajectory. What this statistic does not show is the “invisible” overlapping demand for the same types of jobs with the same bandwidth of companies and organizations. In Korea, there’s a singular mindset that being “successful” in terms of securing a job means working for one of the large conglomerates (Hyundai, Samsung, LG) or to become a government official (공무원). Since many young people still live with their parents until marriage or other event, this means that they are not as “economically squeezed” as compared to those seeking jobs in the US and Europe where independence is considered a relatively greater virtue.
     
    2) Due to the difficulty of securing entry-level jobs, many young South Koreans are giving up their dreams, taking low-paying temporary jobs and postponing marriage, how is this going to reshape the economy?
     
    South Korea’s youth employment challenges have led to a “lost generation” – which accounts for a sizable portion of the nation’s economy. Take the statistic that South Korea’s youth unemployment (those seeking jobs between the ages of 15-29) has more or less hovered around the 7% mark, nearly twice the number for the general population. What’s also interesting is the unique Korean cultural aspect to this equation, that many of the most qualified talent in Korea are not actively engaged in the labor markets since they are in “near constant test preparation” as a default, career in and of itself. This comes in the form of taking several years from employment to study and sit for either a company-specific or government entrance exam. As an example, the former Korean bar exam was notorious for its excessively low passage rate of 3-5%. Even successful bar exam passers had to sit for the bar three years on average. Japan has a similar “lost generation” phenomenon. In short, for contemporary South Korea, its youth will earn less, in a more volatile and changing job market, which will dramatically change South Korea’s socio-economic landscape in the near future.
     
    3) Many are unable to save up for their own house, let alone saving for retirement, how can the Korea, government continue to support an aging population which will no longer be able to support itself?
     
    Our Group has seen clear evidence that South Korea is one of the world’s fastest aging societies. Soon the demographic structure will be top heavy with senior citizens who are seeking public funds rather than contributing to them. As a result, the country will be hard pressed to figure out how to pay for such public benefits with a shrinking workforce, low fertility rates, and a super aging society. Ultimately, if no other solution is found, South Korea will simply have to go into debt (through the issuance of Korean government bonds in the open markets). But such funding scheme will only delay, not resolve, its fiscal woes.
     
    4) Students who study overseas are finding success in starting-up their own businesses abroad, is this a sustainable direction for the younger generation to follow?
     
    This would in essence mean a net outflow of South Korea’s best and brightest offshore. Many countries, including India and China, have benefitted from so-called “boomerang” talent–those who left the country to live and/or for education, but then return for one reason or another. The challenge in South Korea is that its culture is not a “risk taking” culture, rather, it’s defensively postured for secure “permanent” jobs with the largest corporations or the public sector. But having a critical threshold amount of boomerang talent could change this pivot towards a more offensively postured one that is more geared to making modern day South Korea a start up nation similar to the US and Israel (to name just a few).
     
    5) Considering South Korea’s e-commerce is the sixth largest in the world, why is the market so difficult for domestic start-ups to penetrate?
     
    The main, but not only, factor is the lack of true venture capital (VC) firms onshore in South Korea today. VCs exist in name, but in substance, the true “high risk, high reward” risk-taking, long-run spirit is still lacking. Also, a notable portion of start-up capital is sponsored (subsidized) through the government. As the former Harvard president and US Treasury Secretary, Larry Summers, once quipped, “The government makes a terrible venture capitalist.” This is because most start-up funding is based on the mindset that the invested company must go public (IPO) as soon as possible, so that the investor can be profitable in the short run. Maybe South Korea has a different interpretation of how to create a start-up nation, but our Group’s view is that the VC/angel investor must be patient and adhere to the “99 strike-outs for 1 home run” investment mindset.
     
    6) Are the economic difficulties for the younger generation, which was once the backbone of the Korean economy, likely to continue or is there hope ahead?
     
    Nobody knows for sure. But in a slow growth era, where governments are highly indebted, it looks like economic difficulties for the younger generation will continue. The one silver lining is that South Korea is highly tech-savvy, at least in terms of the products and physical landscape of Seoul. Further, its mindset, the nation’s operating system, has a chance to convert from the “Chosun Corea” mindset to the globally competitive “Global Korea” mindset, as more and more of the nation’s youth live, study, and work overseas and bring such perspectives back to their native ecosystem.
     
     

    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):
      

          

    Apple v. Samsung: $1.05b verdict, the beginning or the end?

    August 25th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    Apple has “won”…for now.

     

    Today, a federal US court ruled against Samsung, relating to patent infringement claims against certain Apple products (iPhones, iPads). Samsung has also raised claims against Apple.

     

    HIGHLIGHTS:

    – The jury’s conclusion was: $0 to Samsung, $1.05 bn to Apple.

     

    – We believe the ruling is not the “end” of the Apple-Samsung lawsuit war–instead it may be the “beginning.” True, the two have spent millions (or its won equivalent) in dozens of lawsuits spanning 4 continents. But this US lawsuit was important because (1) it is on Apple’s “home” territory (California); and (2) Samsung is highly dependent on US consumers buying Samsung products.

     

    – South Koreans will view the ruling as an unfair “home court” ruling (i.e., that this is a US court with US jury members in San Jose, CA, Apple’s backyard). Such sentiment may trigger a patriotic backlash against Apple products. In the past, Apple was identified less as an American company, but his may soon change. This could negatively effect the next iPhone (5) handset sales in South Korea. What Apple risks is an anti-Apple, anti-US double backlash effect in a country that has surprisingly been fond of Apple products (surprisingly because the rapid use of Apple products, specifically iPhones and iPads, happened right in Samsung’s own backyard, as explained in my ‘iPhoning of Korea’ WSJ op-ed below). Samsung may also request that certain Apple products be banned in South Korea in the future.

     

    – Importantly, the US ruling, with or without treble damages (where damages can be tripled), is not a “knock out” blow for Apple (given Samsung’s cash reserves), but it is a serious momentum shift towards it for Apple.

     

    – The ruling could just be the “beginning”? Namely, although the US court is a district court–the lowest federal court level–the lawsuit can in theory appeal at least 2 more times: (1) to the US appellate court; and then; (2) the US Supreme Court.

     

    – In practice, the higher up on the federal court hierarchy, the lower the chance that the appeal will be heard. So the chance of a successful appeal is not guaranteed (unlike in South Korea, in which appeals are often automatically granted). Even if an appeal is granted by the US appellate court, only issues of “law” not “fact” will be heard by a 3-judge panel and/or jury. In plain English, this means that the higher court will only hear an appeal if it believes that a possible “error in law” was applied by the judge. Basically, the appeal process is an uphill battle.

     

    – The case was heard by Judge Lucy Koh, one of the few Asian-American judges nominated to serve at the federal court level. She is a Harvard Law School graduate (a bit before my time there).

     

    – The momentum has now shifted significantly towards Apple

     

    CONCLUSION: before anyone begins to celebrate, this is not the end–Apple has won the battle, but it has yet to win the legal war against Samsung.

     

    * Check out my earlier WSJ op-ed piece (below), which explains how Apple’s iPhones surprisingly became so popular in Samsung’s own backyard of South Korea.

     

    Disclaimer: the author does not own any Apple or Samsung shares

    ———–

     

    The iPhoning of Korea – How Steve Jobs pried open a sheltered market and changed the way a country uses its mobile phones.

     

    Korean tech junkies are cheering this week’s move by the government to allow the import of the iPad, Apple’s new tablet device. Its introduction had been stalled by a government agency that claimed it needed to “certify” the tablet’s wireless networking feature. Popular pressure forced Seoul to reverse course. But while fans go aflutter over the possibilities of this new kind of computing, the transformation being wrought by the last Next Big Thing, the iPhone, is hardly finished either. It’s not simply that programmers and users continue experimenting with the iPhone’s technological capabilities. The iPhone also is shaking up …
    [The rest of the article can be found on wsj.com for subscribers]

     

    Asian education and economics – Al Jazeera TV

    April 11th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is an interview I recently did with Al Jazeera on the topic of education in Asia. I talked about the current state of education in Asia; whether it is adequately preparing students to compete globally in the 21st century.

    123