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  • Posts Tagged ‘South Korea’

    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.
    If you or your organization is interested in working with us, please contact Asia-Pacific Global Research here.

    Socrates v. Confucius: How Asians and Westerners Use a Different “Negotiator Lens”

    August 27th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Socrates v. Confucius: What a Difference a Culture Makes–and How it Shapes East-West Negotiators
    The Western (Socratic-based) Negotiator Lens:
    Many negotiators from the West were raised in an individual-based environment, which is relatively “flat” compared to many collective-based “vertical” social structures. Strange from the perspective of many Confucian, collective-based societies, many parents from individual-based groups will indirectly, and often unknowingly, begin the informal negotiation training from a very early age. This reflects the Socratic approach to teaching, which is much more prevalent in individual-based societies than collective-based societies, and is reinforced by a barrage of assignments, which tests the ability to question, such as the requirement to write critical essays. Such tasks require the person (and future negotiator) to think independently, question assumptions, and then come to a personal conclusion based on the evidence. In other words, a person in this type of Socratic-based “flat” environment reinforces the use of rationality over emotion.
    The Asian (Confucian-based) Negotiator Lens:
    in many collective-based negotiation settings, this rationale approach is at times seen as a cold, calculating and detached process, counter to their basic instincts and training. In stark contrast, the typical collective-based individual is raised by parents typically (but not always) set in a strict vertically based structure, in which dominant parent figures effectively lay down the “law of the land” in the household. The collective-based future negotiator, as a young person, is usually told, not asked, what to do. This goes from small things like what to eat, to bigger-ticket items like what to study, who to date, and when to go home. If the child in such Confucian-based structure questions what the parent says, this is interpreted as a very egregious act.
    Such an act is viewed as one of the more shameful in a collective-based society, in which obedience and trust is a virtue, while being branded with a betrayal mark is tantamount to a “scarlet letter” and later societal banishment (known in Korean society as wangda (왕따) and in Japanese society as murahachibu). The collective-based Confucius friendship structure is primarily also a top-down, command-and-control structure based on those with seniority (선배, sunbae in Korean, senpai in Japanese) and those who are junior (후배, hubae in Korean, kohai in Japanese). The only rare exception to the general rule is with the small band of friends in the same class year (동갑, dong-gahp in Korean). In short, the collective-based social, academic, and working structures share one commonality – they are all vertically-based top-down operating structures. This is a very important missing factor in terms of why many collective-based groups are not instinctual negotiators. For this reason, yes of course, the collective-based negotiators can negotiate, but they find it unusual and awkward, and often do it grudgingly.
    This blog is a partial excerpt from the published academic article, Mitigating Partisan Perceptions between Individual and Collective-based Groups (by Jasper Kim, International Studies Review, 2009)

    The Kaesong Negotiations: Why the two Koreas succeeded in getting to yes (and its implications)

    August 15th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    This blog post is based on an earlier version of a Wall Street Journal (WSJ) post and video interview that can be viewed here.
    After seven rounds of meetings and 133 days, the ongoing Kaesong Industrial Complex negotiations between the two Koreas culminated into a five-point agreement. The agreement’s key provisions included language to not disrupt operations within the complex unilaterally, provide for the guarantee of safety of Kaesong assets and workers, restore customs and telecommunications operations, maintain and promote the complex to attract international investments, and the creation of a joint Kaesong Industrial Complex committee
    What led to the bargaining breakthrough? The first six rounds of talks were mainly fruitless efforts of what negotiation analysts refer to as “positional bargaining,” in which each party states and restates its positions on a particular issue. Such positional jockeying can often lead to impasse, and even at times, a strategy of purposeful strategic non-cooperation in a form of “prisoner’s dilemma” (a simulation game in which two parties have a choice to cooperate or betray one another). This seemed to be the case with North Korea, which took the view that elongating and escalating the Kaesong negotiation process would yield a net benefit—the same modus operandi it employs with its ongoing nuclear nonproliferation negotiations.
    If North Korea viewed the Kaesong bargaining process as a prisoner’s dilemma, then what does it take to break its bad behavior? In prisoner’s dilemma, players betray rather than cooperate mostly out of fear and distrust, viewing the outcome as a zero-sum game in which player A’s gain must come at the expense of player B. But if fear can be mitigated and trust furthered, a greater likelihood towards cooperation exists.
    With such agreement leading to other talks related to inter-Korean relations, the one open question now is just how long the Kaesong agreement will last? If precedent is any indicator, it won’t take too long before discord strikes again.
    Contact us here at Asia-Pacific Global Research Group to see how we can help.

    Below is Jasper Kim’s video interview with the WSJ today:


    China’s ‘Smart’ Smartphone Strategy: Being ‘Global’ and ‘Globalized’

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

    As I mentioned in a 2011 BBC News article, while Samsung and Apple have locked legal horns over a global and costly patent dispute, Samsung (and Apple) should now be pivoted towards the rise of a new generation of Chinese challengers.
    Chinese smartphone firms that are not entirely household names today in South Korea, the U.S., and Europe, inevitably will be in the future. This may not happen today or tomorrow, but rising Chinese challengers—Huawei, Lenovo, Coolpad, and ZTE—just to name a few, have the potential to be true dominant global players. This results in two main challenges facing both South Korean and Californian tech firms going forward, especially as it relates to the largest growing smartphone market, mainland China.
    The first challenge for such firms is that China’s “Big 4” smartphone players are already localised, while others are less so. As a result, China’s smartphone firms will instinctively and strategically know how to compete with foreign competitors like Samsung on their own home turf (where China has recently displaced the U.S. as the world’s largest smartphone market). This will be critical since Chinese consumers are known to be fickle fast movers, switching to new smartphone models about every six months (compared to every two years in the U.S. market). Thus, such Chinese firms will be best positioned to be where future demand will be, while foreign firms will still be sorting through market research from an outsider’s perspective. Already, one of the Chinese Big 4, Huawei, has introduced the world’s thinnest smartphone with the introduction of its Ascend P6. China’s Big 3 also will be more sensitive to the need for competitive low pricing in a country where the average person earns a mere fraction of those in South Korea and North America.
    Second, while the likes of huge firms have focused on being global, such firms may not necessarily be globalised. To be a sustainable dominant player in the current ever-evolving environment, a company needs to be both global and globalised. While South Korean and California-based tech titans are certainly global (in terms of overseas revenue, market share, and branches), they have yet to be fully globalized (in terms of strategic decisions made by a diversified group of senior leaders from around the world based on global standards).
    Firms like Lenovo have a senior executive board that boasts a global group of diversified talent who have true decision-making authority for the betterment of the firm. In the case of South Korea’s largest smartphone producers, most or all of the senior management are entirely domestic. Although having an entirely domestic board does not in itself signal not being globalised, it is nonetheless an important and revealing indicator for outside investors. And while having a homogenous board may lead to a higher chance of seamless execution, its downside may be the relative inability to see or do things differently. 

    Korea’s Next War Will be a Cultural One Within: Clash of the Koreans will occur as the country grapples with its identity

    June 15th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    A revised version of this blog can be found HERE in the Wall Street Journal Asia (WSJ, June 11, 2013), Korea’s Immigration Problem
    Seoul needs newcomers to boost its economy and birth rate. But will they stay?

    Today, the number of foreigners (non-Korean nationals who reside in the country for over three months) in South Korea stands at nearly 2.5 percent (1.25 million) of the total population, a relatively small percentage, but one that represents a significant increase in just the past few years. This is a broad category that includes migrant workers, business executives, English teachers, and foreign brides, to name a few. Of such group, foreign brides are playing a pivotal role in the changing demographic landscape of modern day South Korea. In the past when marriages with foreigners were near non-existent, today such marriages account for approximately 14 percent (26, 274, in 2010) of all marriages in the country.
    Of such marriages, nearly a fifth of every marriage in South Korea’s rural areas now are “international marriages”–often in the form of a marriage between a Korean male with an “imported” foreign bride, typically from Southeast Asian countries such as Vietnam, Laos, Thailand, and the Philippines. Many of these countries have or have tried to place restrictions in one form or another on marriages with male Korean grooms due to mounting evidence of marital problems based largely on cultural clashes between the foreign bride and her Korean groom and the groom’s greater family unit. As is apparent, such marriages are not just a cultural issue, but an economic one as well–both the bride (often from an economically disadvantaged family in a lesser developed Asian country) and the groom (often a rural farmer) each represents the unfortunate lower end of their nation’s economic social class.
    Now what happens when such winds of demographic change meet head on with centuries old Confucian values-based South Korea? As many Korea insiders already know, behind the country’s “hardware” of ultra-modern landscape, hip music videos, and trendy electronics that many on the outside associate with modern Korea, is a country’s “software” that can at times still resemble the “Hermit Kingdom” of old mentality, in which foreigners are met with suspicion, fear, and uber-nationalistic tendencies.
    The children of South Korea’s emerging multiracial cultural class, who numbered 151,154 in 2011, are also facing unwanted discrimination, both innocent and less-than-innocent, at school by peers and within the nation’s greater homogenous societal fabric. In a recent poll of multiracial students by the National Human Rights Commission, 41.9 percent of those surveyed stated that they have been teased or discriminated against by their fellow Korean classmates for their inability to pronounce Korean words properly. 25.3 percent also encountered discrimination due to just their skin color being different generally, and darker specifically, than that of the typical Korean. This should come as little surprise. In a recent late 2012 survey by the Korea Ministry of Gender Equality and Family, 88.6 percent of Korean adults responded that Korean blood ancestry was important to be recognized as a Korean. In a report issued by Ernst & Young several days ago, Korea’s globalization ranking slipped due in part to its extremely low cultural integration score of 2.62 (out of 10).
    What do all these cultural and demographic changes mean for South Korea? In Japan, when Korean-Japanese were overtly discriminated against and not accepted into mainstream society (in which Japanese citizenship is only given based on blood lineage), a certain fraction of such mistreated cultural class turned to underground activities for economic sustenance. Even in places like Sweden and France known for their relative acceptance and assimilation of immigrants, recent cultural clashes have emerged. And of course, in the U.S. case, overt and invidious racial discrimination based on race and skin color, among other things, have led to economic disparity, a sense of social injustice, and urban riots, with vestiges still remaining today, despite having Barack Obama in the Oval Office.
    Contemporary South Korea is not at the racial boiling point yet. But it’s not far away either. If anything, South Korean society today is akin to the U.S. of the late 1950s Organization Man era on the verge of entering the early 1960s Beatnik era. While soon thereafter, South Korea’s unprecedented tectonic shifts in demographics and culture will challenge South Korea’s core social dynamics.
    If the Park Geun-hye administration is willing to face this burgeoning socio-economic issue head on, it will act to pre-emptively and strategically incorporate such emerging cultural diversity into strengths through a plethora of social support programs in the form of educational subsidies and support programs. Such efforts would reflect President-elect Park’s campaign theme of “economic democratization,” and would convert South Korea’s diversity into a strength. After all, with a focus on creative industries, a shrinking workforce, low fertility rates, and a rapidly aging society, South Korea needs all hands on deck—no matter the cultural background—to keep the Korean economy afloat and strong in the twenty-first century.

    Asia-Pacific Global Research Group







    Why North Korea is a risk-taker

    May 23rd, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    The analysis below is an excerpt based on the original piece, North Korea’s Risk-taking Explained (by Jasper Kim, Wall Street Journal, Korea Realtime, May 22, 2013), which can be read in full HERE.

    Most commentators who track the country say it would never aim to initiate a war with South Korea and its allies because that would inevitably lead to the end of the Kim Jong Un regime. Self-preservation is something the Pyongyang leadership has been very successful at over the last six decades.

    So what explains the North’s apparent affinity for risk in routinely confronting the South, mostly verbally but occasionally with deadly force?

    Mathematical modeling helps explain the counter-intuitive marriage of risk-taking and rationality at the heart of decision making in North Korea.

    Consider you have one of the two choices:
    A: Receive $80 guaranteed; or
    B: Receive a 90% chance to receive $100

    Which option should a rational decision maker chose? Studies show that most people would decide to take option A, the sure thing. The thinking is that it is generally better to receive a guaranteed return even if it means receiving less.

    But the rational choice is actually option B. Getting to the answer requires what’s called a standard expected value calculation. The expected value of option A is $80 (100% x $80 = $80). The expected value of option B is $90 (90% x $100 = $90). So, because $90 (option B) is greater than $80 (option A), option B would be the rational choice even though it involves taking a risk. 

    In the above example, the expected higher gains in option B — equivalent to regime survival — have incentivized risk-taking by North Korea, especially if it doesn’t believe an option A exists.

    * The U.S., South Korea and Japan are defensively postured and risk-averse because the aspiration point is primarily maintaining their current position (in terms of preserving military and economic interests);
    * North Korea is offensively postured and risk-seeking because its aspiration point is gaining more than its current position (in terms of actively pursuing economic and non-economic assistance and diplomatic recognition).


    Given the current incentive structure from North Korea’s view, the Stalinist state sees only incentives to take further risks. As a result, the DPRK’s provocation cycle will only continue, unless the current incentive scheme is changed.

    Financial hedging strategies in an unlikely Korean conflict: Q&A with Jasper Kim

    April 30th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is an English-version interview excerpt with Yonhap News and Jasper Kim (Asia-Pacific Global Research Group; Director, Center for Conflict Management, Ewha University in Seoul) released on April 22, 2013 (followed by the original Korean version).
    While most believe North Korea would not intentionally enter into a war with South Korea, Jasper Kim warns us about the possibility of ‘black swan event’ occurring in the Korean peninsula.
    He suggests that a black swan event should be factored in a risk management strategy. He also stressed the importance of hedging strategies, which include call, put, and credit default swap options on Korea-linked financial products.
    Below is the Q&A interview session with Jasper Kim:
    Q. Does 김정은 (DPRK leader, Kim Jong-un) not have the upper hand within his own military?
    He has to appeal to the military since his regime is predicated on a “military first” policy. There could be internal strife and/or change within the DPRK, but we cannot figure that out exactly. He has to prove his leadership by being “hyper hawkish” and “super patriotic.”
    Q. How can a black swan event happen?
    A black swan event be triggered at any level. It will have serious damage militarily and economically. Analysts, especially in the Ivory Tower, assume that all actors behave according to “rational” behavior at all times in all scenarios. But if you walk along or near the DMZ, from my standpoint, it is clear that there are risks that even one instance of irrational behavior could lead to a possible black swan event in the Korean peninsula.
    Q. Is there a “learning effect” relating to North Korean risk?
    The prevailing school of thought among Korean analysts assume that North Korea’s future provocations are “known, known” variables. But I disagree. Given the extremely unprecedented nature of the DPRK leadership (eg, background, age, lack of military experience, third-generation of the Kim clan, etc), it is dangerous to assume that future events by North Korea will mirror those in the past. This is akin to driving a car forward using one’s rearview mirror.
    Q. What are your suggestions for markets to prepare for a possible black swan event?
    In the unlikely but possible chance of a black swan event in the Korean peninsula, financial markets in and around Korea will fall in the short run, perhaps in free fall fashion, depending on the severity of such black swan event. But assuming that such event will be resolved, there is likely to be buying opportunities when such markets go south. At the same time, to hedge against further downside risk during a possible black swan event, contingency exit plans must be executed. Upon the occurrence of a black swan event when markets enter into negative territory, the US, China, and Japan each and collectively have a vested self interest in supporting South Korea’s capital markets. Such support can come in various forms, including lines of credit (LOCs), swap agreements, and/or unified and consistent public statements from relevant institutions that the US, China, and Japan will provide adequate liquidity as needed and appropriate to South Korea. Such clear yet succinct statement will be something that financial players and traders will understand, thus instilling market confidence back to the South Korean markets.
    Q. You take the position that information, such as the internet, can transform North Korea from within?
    Yes, soft power such as information about the outside world and how the outside world views North Korea’s economic and political conditions could be pivotal to create a desire for change from within North Korea, which I have written about in a recent WSJ Korea Real Time piece.

    <인터뷰>제스퍼 김 이대교수, “北 블랙스완 리스크 경계해야”
    금융시장일반, 펀드 [2013/04/22 10:30 01]
    (서울=연합인포맥스) 태문영 기자 = “블랙 스완(Black Swan)은 (한국에) 군사적으
    로나 경제적으로 엄청난 피해를 줄 것이다. 금융시장에도 전염 효과를 낼 것이다. 아
    무도 도발에 대한 정의를 내릴 수 없다. 만약 총알 한 발 때문에 세계 1차대전이 발발
    했다면, 두 번째 한국전쟁이 일어날 가능성도 존재한다.”
    제스퍼 김 이화여자대학교 국제대학원 교수는 22일 연합인포맥스와의 인터뷰에서
    남북 간의 관계를 블랙 스완에 빗대어 설명했다.
    최근 개성공단 폐쇄와 북한의 도발 위협으로 남북관계는 위기를 맞았다.
    긴장 상태가 악화하면서 한반도의 지정학적 리스크가 재부각됐지만, 이전과 같이
    남북의 무력 충돌까지 치닫지는 않을 것이라는 전망이 아직은 많다,
    그러나 전혀 예상치 못했던 돌발변수가 발생하는 ‘블랙 스완’ 이벤트로 남북이 충
    돌할지도 모른다는 경고도 제기되고 있다.
    제스퍼 김 교수는 이와 관련해 북한 리스크로 촉발될 수 있는 블랙 스완 이벤트를
    경계해야만 하며 이 가능성을 리스크 관리 전략에서 고려할 사항에 넣어야 한다고 설
    김 교수는 (북한 관련) 상황을 모두 파악했다고 과신해서는 안 된다고 지적했다.
    그는 금융시장에서 예상치 못한 상황에 대비해 포트폴리오의 일정 부분을 헤지하는
    것이 중요하다고 강조했다. 또 심리에 좌우되는 금융시장에서 블랙 스완이 발생했을
    때 위기를 최소화하려면 한국과 주변국이 시장에 대한 신뢰를 보여줘야 한다고 진단
    다음은 제스퍼 김 교수와의 일문일답.
    – 북한이 개성공단을 포기한 이유와 그 주도 세력은.
    ▲ 남북관계는 군사와 외교, 경제 등 여러 차원(dimension)이 있는 체스판과 같다. 개성공단 문제는 새로운 차원이 추가된 것이다. 공단 폐쇄는 남북한 모두가 잃는 게 많은 루즈-루즈(lose-lose) 상황이다.
    공단 폐쇄 이유는 여러 가지다. 먼저 김정은 국방위 제1위원장의 지정학적 전략 계산에 근거한다. 개성공단에서 벌어들이는 외화와 일자리를 포기하는 대신 장기적으로 더 큰 뭔가를 얻어내기 위함이다. 미래의 편익이 개성공단 폐쇄에 따른 단기 손실을 상쇄하고도 남을 것이라는데 베팅한 것이다. 둘째로 김정은이 직접 선택한 것이 아니라 체제 내 파벌, 즉 군부의 명령에서 비롯됐을 가능성이 있다. 경제적 차원의 문제인 개성공단 폐쇄를 원한 군부의 저의는 긴장을 악화시켜 군이 영향력을 행사하도록 한다는 것이다.
    – 김정은이 군부에 우위를 점하고 있지 않다고 보나.
    ▲ 김정은은 무엇보다도 국내 청중, 즉 군부의 호감을 사야 한다. 북한의 위협 수위가 높아졌다는 점은 체제 내 갈등과 직접적인 관련이 있을 수 있다. 김정은이 정권을 잡은 지 1년이 약간 지났는데 지도부에 많은 변화가 있었다. 새로운 지도자가 들어섰기 때문에 자연스러운 현상으로 볼 수 있지만, 달리 보면 꽤 많은 일이 진행될지도 모른다는 점이 우려다. 우리는 이를 알아낼 수 없다는 점만을 인지할 뿐이다. 각 가능성이 좋지는 않다.
    김정은이 더 개방된 사회와 근대화를 원한다고 보나, 그전에 군부에 호소해야 한다. 따라서 그는 최소한 초기에 강경한 정도가 아니라 초강경한 태도를 보여야 한다. 자신이 초 애국적임을 군부에 증명해야 하기 때문이다. 또 너무 어린 나이를 벌충할 수 있어야 한다. 한국 문화나 정서상 나이가 갖는 의미는 크다.
    김정은은 근대화를 위해 쏟는 노력 그 이상을 군부에 기울여야 한다. 그렇지 않으면 그는 나약해 보이고 친미주의적으로 비칠 것이며, 그 순간 말로를 맞을 것이다. 따라서 그는 극도로 반미주의적 성향을 보여 그런 평가를 떨쳐내야 한다.
    – 블랙 스완 이벤트가 북한 군부 상층이 아니라 하층에서 발생할 수 있다는 지적이 있다.
    ▲ 블랙 스완은 군사적으로나 경제적으로나 엄청난 피해를 줄 것이며, 금융시장은 급락하면서 또 다른 전염 효과를 낼 것이다. 블랙 스완은 상하 모든 계층에서 일어날 수 있다.
    아무도 도발에 대한 정의를 내릴 수 없다. 미국과 남한 모두 도발에 대한 정의를 내리고 사례를 세우고자 했지만, 이는 이성적인 발상이다. 비무장지대(DMZ)에서 이성적인 행동만이 나오지는 않는다. DMZ에서 지치고 겁에 질린 사람들이 예기치 않은 총격을 유발할 수 있다. 만약 총알 한 발 때문에 세계 1차대전이 발발했다면, 두 번째 한국전쟁이 일어날 가능성도 존재한다.
    – 블랙 스완이 발생한다는 신호나 징조는 없나.
    ▲ 신호가 있겠지만, ‘과거에도 있었던 일이며 평소와 다름없다’고 해석된다.
    하지만, 일각에서는 과거의 패턴이 반복된다기보다는 새로운 패턴이 시작된다고 인식하며 전과 다른 계획을 세운다.
    대부분은 북한의 도발이 과거와 비슷하다고 판단할 것이다. 도발 후 수위가 높아지다 요구가 드러나고 상황이 진정되는 식이다.
    일부는 상황이 조금 달라졌다고 본다. 북한을 대표하는 지도자는 완전히 새로운 인물이다. 그는 알려지지 않은 ‘재화(commodity)’다. 어린데다 경험도 적고 외국에서 교육을 받았다. 그가 고위 군부 대신 권력을 쥔 유일한 이유는 성(姓) 때문이다. 김정은이 지도자가 되면서 북한 개방에 도움이 될 것이라는 시각이 있지만, 오히려 그 반대가 될 수 있다고 생각한다. 김정은의 자질이 고위 군부에 약점으로 인식되는 경우다. 김일성 세대에서 멀어지면서 이번 지도자를 어떻게 이해할지 모르겠다는 평가가 나올 리스크가 커진다.
    – 북한 리스크에서 학습효과가 있다고 보나.
    ▲ 김정은의 정권 장악 이후 학습효과가 약간 없어졌다고 본다. 그가 어떤 시각을 가지고 있으며 무엇을 원하고 이를 어떻게 성취할지 아무도 정확히 모른다. 그 자신도 이제 막 권력을 잡았기 때문에 잘 모를 수 있다. 그는 군부에 통솔력을 증명해야 하며, 이것이 그가 초강경 발언을 쏟아내는 이유다.
    다음 도발이 언제 어떻게 발생할지 모르기 때문에 앞으로도 북한의 행보에 그때그때 일일이 대응해야만 하며, 같은 도발이 있다 해도 상황이 달라질 수 있다. 대응 절차를 세우기가 매우 어려울 것이다. 도발의 정의는 과거 사례를 기반으로 했기 때문이다.
    – 블랙 스완에 대한 대응에 대해 설명해달라.
    ▲ 누구도 블랙 스완이 발생하길 원하지 않는다. 단지 리스크 관리를 위한 계산에 블랙 스완이 고려돼야 한다고 생각한다.
    미국 주택시장 거품이 붕괴하기 전 위기 가능성을 경고한 사람들은 비이성적이라는 평가를 받았지만, 2008년 이들은 갑자기 천재가 됐다. 통념과 반대되는 생각이 언제나 가장 대중적인 생각은 아니다.
    한반도의 평화는 유지돼야 한다. 다만, 일어날 가능성이 매우 작은 상황이 발생했을 때를 대비한 비상계획이 있어야 한다.
    비상계획은 블랙 스완 발생 전후를 모두 아우른다. 이벤트 발생 시 그 여파를 완화하고 사후에는 또 블랙 스완이 나타나기 전에 방어를 위해 쓸 수 있는 수단을 제시하는 것이다.
    예를 들어 금융시장에서 북한 관련 블랙 스완이 발생할 것으로 생각한다면, 국채에 대한 풋옵션이나 신용부도스와프(CDS) 등의 수단을 써서 포트폴리오 전체가 아니라 일부분만 헤지해놓으면 된다.
    – 금융시장이 쓸 수 있는 다른 전략이 있다면.
    ▲ 가격이 하락하면 한국 금융시장이 평가절하되므로 중장기적으로 저가매수 기회가 생길 것이다. 그러나 블랙 스완이 발생했을 때 유일한 방법은 시장에서 탈출이다. 그러나 미국이나 일본, 중국 등 주변국이 크레디트라인이나 외환 스와프를 체결하는 등 한국의 유동성을 지지한다는 짧은 발언을 하는 게 유일한 방법이다. 특히 G2 국가가 중요하다. 금융시장은 심리와 신뢰를 기반으로 한다. 중국과 미국은 신용을 지지할 수 있다. 신뢰가 있다면 시장은 리스크를 저가매수기회로 여길 것이나, 그 반대라면 시장은 바닥을 형성하지 못하고 떨어질 것이다. 다른 국가들이 유동성을 공급한다는 발언으로 한국시장에서 시장 변동을 막지 못한다면 그 여파는 전 세계로 퍼져 모두에게 영향을 줄 것이다. 이런 상황은 아무도 원하지 않는다. 따라서 한국에 도움과 지지를 보내는 일이 모두의 이익에도 맞는다.
    모든 것이 시장에 영향을 미칠 수 있기 때문에 그 어떤 것이라도 블랙 스완이 될 수 있다. 하지만, 금융 시장에서 좋은 점은 리스크를 관리할 헤지가 가능하다는 것이다. 따라서 금융시장에 대한 믿음이 있다. 다만, 모든 가능성을 파악했다고 자만하는 순간 추락해버릴 것이다.
    – 미국이 대화 의지를 보였고 북한은 먼저 사과를 요구했다.
    ▲ 신경전이 계속되나, 이견이 조금씩 좁혀지고 있다. 적어도 아예 대화를 거부하진 않았으니 긍정적이라고 본다. 양측 모두 유연성을 발휘할 여지가 있다. 시간이 지나면서 북한과 미국은 직간접적으로 대화할 것으로 생각한다.
    중국과 미국 북한의 ‘G3’ 회담이 효과적이라 본다. 기존 6자회담 참가자는 너무 많다. 북한이 양자회담을, 다른 국가와 6자회담을 원한다면 3자회담이 타협점이라 생각한다. 대화를 통해 서로 이해관계를 확인하는 것이다. 가장 중요한 것은 신뢰다. 6자회담은 이제 너무 형식적이어서 원조를 받을 수는 있어도 신뢰를 쌓을 여지가 매우 작다. G3에서라면 원조와 신뢰 모두를 얻을 수 있다. 신뢰와 신용이 없다면 금융시장에도 도움이 되지 않을 것이며 지정학적으로도 부정적이다.
    대북 정책에서 성과를 기반으로 한 관계 형성이 괜찮은 대안이라 생각한다. 북한이 특정 기준을 충족하거나 목적을 달성하고 나서 이를 증명하면 더 많은 지원을 약속하면서 한 단계씩 나아가는 것이다. 기본급에 성과급을 더해주는 것과 비슷하다.
    – 북한에 정보의 자유로운 이용이 필요하다고 언급한 바 있다. 실현 가능하다 보는지.
    ▲ 가능하다고 본다. 이미 한국 매체에 대한 암시장이 형성돼 있고 북한 내부에는 인터넷과 휴대전화가 있다. 주민들이 외국 정치권에서 하는 말은 선전이라 생각해 믿지 않지만, 보고 듣는 한국 비디오와 음악은 믿을 수 있다. 이를 원하는 주민들 때문에 티핑 포인트(tipping point)가 발생하면 모든 게 급격하게 바뀔 수 있다.
    소프트 파워(soft power)가 (북한을) 움직일 것이다. 문화와 정보, 이에 대한 갈구가 외교보다 더 큰 힘을 발휘할 수 있다.
    – 경제적 원조보다 영향력이 클지.
    ▲ 개성공단 문제만 봐도 알 수 있다. 개성공단으로 어떤 효과를 거뒀다고 확신하기 어렵다. 북한과 남한 근로자들이 함께 일한다면 이론상으로는 서로 더 가까워지고 극적인 효과가 있어야 하나 그렇다는 이야기를 듣지 못했다. 경제 개혁은 긍정적이나, 남북관계에서 기대만큼 게임체인저(game changer)는 아니다.
    – 북한 리스크 이외에 ‘코리아 디스카운트(Korea Discount)’ 요소가 있다면?
    ▲ 대부분 기업 경영구조와 관련한 것이긴 하나, 많은 진전이 있었다. 또 일본과 중국이라는 두 강대국 사이에 있기 때문에 영토 분쟁 리스크 요인이 있다. 이 역시 블랙 스완이 될 수 있다. 하지만 ‘코리아 디스카운트’는 대부분 북한과 관련한 것이다.

    South Korea-China trust process needed: Why the two countries are mutually dependent

    April 16th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is an article by Jaeho Hwang, PhD of the Asia-Pacific Global Research Group.
    In the article, Jaeho Hwang argues for closer ties between South Korea and China.
    Original title : Korea-China trust process needed: Why the two countries are mutually dependent (신뢰프로세스도 필요)
    Date :March 03, 2013 (Kyunghyang Shinmun; 경향 신문)
    Written By : Jae-Ho Hwang, PhD (황재호): Professor, Hankuk University of Foreign Studies (HUFS); Asia-Pacific Global Research Group
    [English summary translation below]:
    There should be a trust process as it relates to Korea-China relations.
    Recently, in both China and South Korea, new leaders have been chosen for each respective country. From China’s perspective, South Korean president Park Geun-hye is viewed as a good partner who considers stability of critical importance. If South Korea sets a good geopolitical strategy for the Korean Peninsula, the relationship between South Korea and China could go forward in a credible manner.
    However, as China is less likely to change its policy on North Korea, South Korea should not force China to change its stance on Sino-DPRK relations. If South Korea attempted such move, it would worsen Sino-South Korean relations. Instead, South Korea should initiate a credible-based approach towards the proposed confidence and trust building process.

    [Original Korean language version below]:
    강성대국(强盛大國). 강대하고 번영하는 나라를 건설하는 것이 북한의 오랜 염원이다. 그러나 한자 두 개를 바꾸어보면 전혀 다른 뜻이 된다. 강한(强) 성격(性)의 짝퉁(代) 국가(國)가 바로 북한이다. 국가보다 정권의 생존을 최우선시하며 이를 위해서라면 일부터 저지르고 본다. 외부와의 커뮤니케이션에 서투르고 욱하길 잘한다. 그런 북한이 지난 2월12일 제3차 핵실험을 감행했다. 핵무기의 소형화와 경량화에 좀 더 다가섰다는 평가가 지배적이다.
    이런 북한을 불안하게 바라보는 국가가 있다. 화가 나서 한 대 쥐어박고 싶지만 그럴 수도 없고, 한숨 쉬는 중국이다. 지난 한 주 국내 언론들은 중국의 대북정책 변화 가능성에 대해 많은 보도를 하였다. 중국의 광저우와 선양에서 벌어진 반북 시위, 환구시보의 북한 비난 사설에 이어 북한 포기를 주장한 중앙당교 기관지 부편집인의 영국 파이낸셜타임스 기고문을 집중 보도하였다. 중국의 웨이보(트위터)에서는 지금도 중·북관계의 미래와 관련해 격론이 벌어지고 있다.
    중국 인민들의 반응이 예전과 다른 것은 일정 부분 사실이다. 그러나 중국이 당장 한반도정책을 바꿀 것이라고 믿는 것은 섣부른 기대이다. 중국의 대북 인식이 변하고 있지만 여전히 제한적이다. 일부의 불만을 중국정부의 대북정책 전환으로까지 연결시키는 것에는 무리가 있다.
    북한에 대한 불만은 중국정부도 당연히 크다. 중국이 주중 대사를 외교부에 초치하는 등 무형의 압력을 가했지만 보기 좋게 무시당했다. 그럼에도 중국의 대북정책은 그대로일 수밖에 없다. 중국은 향후 10년을 전략적으로 중요한 시기로 본다. 자국이 실제 G2로 부상하기 위해서는 국내경제 발전에 집중해야 한다. 따라서 주변 안보환경이 안정적이어야 한다. 북한이 자생력만 있다면 그대로 안고 가고자 한다. 섣부른 결정으로 불확실한 낭패를 보고 싶지 않다.
    중국은 북핵문제에서 미국과 공조하는 데 불신을 갖고 있다. 북한의 제1차 핵실험 직후 북한을 제멋대로라고 즉각 비난하면서 미국의 입장에 동조했지만, 미·북은 베를린에서 따로 만나 2·13 합의를 도출했다. 중국의 입장에서는 미국만 믿고 따라가서는 손해 볼 수 있다는 인식이 강하다. 이 때문에 국제사회의 결정에 반보 늦은 행보를 보이고 있다. 중국은 여전히 냉정한 대응과 대화를 강조하면서 군사적 개입 등 강도 높은 제재는 반대한다.
    이제 한·중 양국은 새 지도자를 맞이했다. 안정감을 중시하는 중국 지도자들에게 박근혜 대통령은 좋은 파트너이다. 박 대통령은 3·1절 기념사에서 북한이 추가적 도발을 중지한다면 대화를 시작할 수 있다는 긍정적 메시지를 보냈다. 신정부의 대북정책에 기대를 가지고 있는 중국은 북핵 국면이 끝나는 대로 한국의 건설적인 대북 접근을 기대하고 있다. 한국의 한반도 신뢰프로세스가 합리적인 것으로 판단된다면 북핵을 계기로 양국은 더 큰 협력적인 관계로 나아갈 수 있다.
    단 중국의 대북 입장 변화 가능성이 매우 낮은 상태에서 중국에 입장을 바꾸라고 요구해서는 안될 것이다. 성사도 되지 않을뿐더러 감정만 상하게 된다. 오히려 향후 5년 동안 한국의 대중외교는 한국의 전략적 가치에 주목하게 하고 신뢰를 구축하는 데 집중해야 한다. 한·중 간 신뢰프로세스도 동시에 진행해야 한다.
    첫 5년 시진핑의 대북정책은 신중하고 수세적으로 갈 가능성이 크다. 그러나 시진핑의 후반 5년부터 중국의 대북정책은 공세적이고 선제적일 수 있다. 북한에 끌려가기보다는 북한문제에 전향적인 결정을 할 수 있다. 이때 우리가 원하는 방향으로 중국이 결정을 내리도록 하려면 신뢰를 확실히 구축해야 한다. 강한(强) 성격(性)의 짝퉁(代) 국가(國) ‘북한’보다, 의연하고 굳건한(剛) 성격(性)으로 큰 일을 준비하고 기다리는(待) 국가(國), 즉 또 다른 강성대국 ‘한국’과 한반도 대사를 논할 수 있겠다는 믿음을 심어주어야 한다.





    Korean Peninsula on edge – inside post-Gen X Kim Jong-Un’s head (Update)

    April 12th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    With the Korean peninsula on the edge of a possible multiple missile test, US Secretary of State John Kerry is scheduled to land onshore in South Korea today.
    The purpose of Secretary Kerry’s visit is to listen to the situation from an on-the-ground perspective and calibrate such views with those in Washington.
    Most likely, North Korea’s actions of belligerent and bellicose rhetoric is another attempt to put fear into the international community as a strategy to bring South Korea, the US, and other states to the bargaining table, as it has done with success in the past. South Korea has indirectly hinted yesterday that it is willing to seek dialogue with North Korea. So it seems that North Korea’s negotiation strategy of bipolar brinksmanship (good DPRK, bad DPRK), is a moderately effective one.
    We believe, despite the odds against it, that a possible “black swan” event exists in which a low probability event can occur that results in high levels of potential damage. Neither side of the DMZ wants a war. But the risk is of possible miscalculation by either or both sides. From North Korea’s perspective, artillery shelling of an island or warship killing military personnel and civilians did not lead to a military response from South Korea (e.g., the attack on South Korea’s Cheonan warship and Yeongpyeong Island, both in 2010). Similarly, two missile launch attempts last year in 2011 and nuclear weapons tests in 2006 and 2009 also yielded no military retaliation, only diplomatic consternation. Thus, its assumption (which may no longer be valid) is that a similar, or even slightly amped down action, will likely lead to the same type of direct military non-response from South Korea and/or the U.S. According to the DPRK’s possible war game calculus, at most, only more mere sanctions may be imposed upon it. This would sway most states, but not so much with the DPRK, an already super-sanctioned state.
    In theory, economic sanctions should deter a “rational” state. But North Korea is not a fully rational state–rather, the DPRK is an emotional, Stalinist state. Thus, economic sanctions–counter to its intended purposes–has made North Korea more belligerent. Further, indirect recent criticism of North Korea from China’s new president, Xi Jinping, may add to North Korea’s paranoia that the international community is against it. If the DPRK feels like it is being backed into a corner, rational behavior can be trumped by fear, which then leads to action that is viewed as “reasonable” and “defensive” from its perspective, but “unreasonable” and “provocative” from an outside perspective.
    It’s been said that North Korea’s post Gen-X dictator, Kim Jong-Un, does not want to commit suicide by attacking South Korea, the U.S., or their allies. But what about the possibility of an “accidental provocation” that was neither intended or foreseen?
    If a single bullet triggered conflict in Europe and World War 1, could not a small yet unlikely “black swan” miscalculation–defined to include such iterated or non-iterated acts as artillery shelling, transboundary incursions, military technology testing, cyberattacks as well as traditional military provocations–occur and lead to another conflict in South Korea in the future?
    Hopefully not. But just like we have life insurance for remote, statistically unlikely possible events, we should also consider the insurance (foreign/military) policy in the event of such unlikely yet possible future black swan events as it affects geopolitics and our highly interconnected global capital markets.
    Some may argue this is overly contrarian and alarmist. But such views were also heralded prior to the subprime crisis. As a geopolitical risk management solution, however unlikely or not, contingency and exit plans in the short-run carry little downside, while buying opportunities may exist soon thereafter as the markets become overly discounted due to such inter-Korean tensions.


    See below media clips on this issue:
    WSJ: Korean War 2? Tiger Tails and Black Swans – by Jasper Kim

    – Austria Broadcasting Corp (FM4): South Koreans “on edge”

    Australia Network News (ABC), Newsline with Jim Middleton interview segment
    CNN TV interview – with Jasper Kim (Power of the Kim dynasty):

    – CNBC TV interview – with Jasper Kim (Worldwide Exchange):