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  • Posts Tagged ‘Korean economy’

    Korea in 2014: Big 3 Impacts to Watch

    December 19th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

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    1. NORTH KOREA’S NEXT MOVE: North Korea could decide to initiate provocative acts in 2014, including the early part of the new year. The months of January and February are particularly noteworthy, since these months include dates commemorating the birth of both of the DPRK’s former leaders, Kim Il Sung and Kim Jong Il. Precedent also exists for such provocative acts. Earlier this year (in 2013), North Korea also tested its nuclear weapons technology at the start of the Chinese New Year, which both Koreas recognize and celebrate. Although the financial markets generally have not overreacted to North Korea’s often purposely provocative acts, given the high inter-linkage of the Asian markets, an unexpected known-unknown black swan event could lead to market surprise to the downside.
     
    2. BANK OF KOREA’S (BOK) KEY RATE HIKE: the BOK has left its key rate steady at 2.75% for seven consecutive months, as the local economy is showing signs of a moderate recovery amid tame inflation.But the BOK is likely to increase its rate in 2014. The BOK’s decision to keep its rate steady at the end of 2013 came as a set of data pointed to a moderate recovery of the Korean economy while the timing of the Federal Reserve’s monetary stimulus tapering still remains uncertain. The South Korean economy grew 1.1% on-quarter in the third quarter, the same pace as in the second quarter, on improving domestic demand and a pickup in facility investment. The country’s industrial output grew 1.8% on-month in October, the fastest gain in 11 months, indicating that the economy might be picking up. South Korea’s inflationary pressure remains subdued as consumer prices are running below the BOK’s 2.5-3.5% inflation target band for the 18th straight month in November. The on-year growth of consumer inflation picked up to 0.9% in November from 0.7% in October.
     
    3. REAL ESTATE AND CONSUMER DEBT MAY MOVE UPWARDS: The South Korean real estate market has been relatively static in 2013. But a pick up in the real estate market could occur based on relaxed policies in 2014. This potential positive upward movement in the nation’s residential real estate market, however, must also be managed with the nation’s burgeoning consumer debt levels. A survey of 20,000 households conducted jointly by the Bank of Korea (BOK), Statistics Korea and the Financial Services Commission showed households had an average debt of 58.1 million won ($55,000) in March, up 6.8% from the previous year. The debt of those households in the lowest-income group rose 24%, from 10 million to 12.4 million won, while the other groups, not including the richest, saw their average debt increase between 9.7 and 16.3%. Of households in debt, 8.1 percent said they may not be able to repay the money they owe, up from last year’s 7%. The survey showed that the lower a household’s income level, the higher the ratio of people who said repayment was unlikely.
     
     
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    Education: The Rise of South Korea’s “corporate colleges” (Asia-Pacific Global Research Group – blog report)

    November 28th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1. LG Electronics as well as Hyundai Department store, two of the most prominent Korean conglomerates, opened their so-called “corporate colleges” last month. And I’m sure this sounds pretty foreign to many of us… Could you tell us a little bit about what these are?

    Students attending these so-called “corporate colleges” typically spend half of their day studying regular subjects and the other half working or receiving specialized job training. Accepted students are promised to have a full-time job at the company when they graduate. Most if not all of the programs are highly subsidized, sometimes free of charge.
     
    As one example, Hyundai Department Store will offer up to 450 hours of classes a year focused on teaching knowledge and skills necessary for retail workers. Hyundai’s corporate college has already accepted 31 high school graduates and has promised to hire them on a full-time basis after they complete the two-year program, which starts next year. The corporate college also offers a graduate-school-level program specializing in marketing, setting a new precedent. LG Electronics has decided to run 14 programs for 1,500 trainees a year.
     
    2. Are these corporate college programs linked to private sector Korean corporates backed by the government? What’s the government’s response to these novel institutions of education?
     
    South Korea’s Ministry of Employment and Labor is very supportive and cooperative. . Labor Minister Lee Chae-pil has stated: “Schools like these will help recruiters focus more on the practical abilities of job applicants [rather than just looking at their educational background]… We encourage large companies to build a quality labor force through operating such educational facilities.” The same Ministry plans to cover at least 80 percent of the education fees. It has also given the companies the freedom to weight the content of their curricula in favor of their specific industry or niche. The government is preparing to open up to eight more corporate colleges this year. “We want to show job seekers who only have a high school education that they can still pursue higher education while working,” said Park Sang-yoon, an official at the Labor Ministry’s human resources department.
     
    3. Are there other examples of models resembling ‘corporate colleges’ in different countries that are trying to deal with similar problems of unemployment and underemployment? Or is this a unique case?
     
    Corporate colleges outside of South Korea are still the exception, rather than the norm. But examples still exist. For instance, Pearson, the parent company for the Financial Times newspaper will launch Pearson College beginning September 2013. Admitted students will be given internships and a mentor, which will most likely link with Pearson’s many subsidiaries. Students still must pay tuition, but they are granted a final degree, validated by the University of London.
     
    4. What are some potential practical problems that you foresee with an alternative education system like this?

    Corporate colleges do not award an official degree, so it is no guarantee of getting a job at companies outside the one sponsoring the school. The education will also be very industry and company specific. So the skill sets learned will probably not be very transferable to other companies in and outside the industry. Still, a subsidized education linked with internship and job prospects will be very appealing for many, but not all, parts of the population.
     
    5. Do you think the attention and governmental support that corporate colleges are receiving, in conjunction with the bad rap traditional universities are getting for low employment figures among graduates, etc, will pressure those standard universities to take on reforms? If so, what kind?

    For many South Korean universities, the perception will be that corporate colleges are not a threat, namely for the reasons stated earlier, particularly that no degree is conferred to students. However, many local universities are becoming more focused on practical training. But this can be a challenge since many faculty are theory-based, rather than practice-based. The challenge is to blend both together for the benefit of the student (and future member of the global working population).
     
    6. As an educator and as someone who writes and speaks about education, does this give you cause for concern — the corporatization of education? Education being, in a way, defined and subsidized by moneyed interests?
     
    It does not. Rather, it gives hope to those who may not normally be able to receive education beyond high school, especially for the economically disenfranchised. In our free market system, the more choices the better. If the system of corporate colleges don’t work, then it can be eliminated later on.