Summer Special: #Shigak no. 24

By | September 19, 2015 | No Comments

A screenshot from YouTube of a Channel A report on the Lotte Group family feud. | Image: Sino-NK

A screenshot from YouTube of a Channel-A report on the Lotte Group family feud. It shows 93-year old Shin Kyuk-ho (top left), his three wives and four children. Current Lotte Group Chairman Shin Dong-bin is bottom row, second from right. | Image: Sino-NK

“Shigak” (시각), or “perspective,” is a multilingual data collection effort that uses Twitter to curate sources dealing in key political, social, and economic issues on South Korea. Each issue takes only the most important tweets posted by Sino-NK analysts under the hashtag #시각 and augments them with essential annotations and a small dose of concentrated analysis.

Shigak is edited by Steven Denney and Christopher Green. Back issues can be found on the dedicated page. All users of Twitter are encouraged to adopt the hashtag and take part in the project.

Summer Special: #Shigak no. 24

by Sino-NK

Summary | Shigak returns from a brief summer hiatus with analysis of summertime developments in South Korea between early June and September. Stories include: a vote of confidence for the embattled opposition party chair, educational reforms at the university level, Daum Kakao’s plan to launch a web-only bank, #LotteGate and chaebol business intrigue, symbolic protests against labor market precarity, and a recent IMF report on the follies of trickle-down economics.

NPAD leaderMoon Jae-in announced a vote of confidence on his leadership after internal bickering triggered by attempts to push forward with party reform initiatives. His measures to reform the party have been strongly opposed by other members of the NPAD, but while Moon acknowledges that there are many who want to see his resignation, he plans to pursue his reform initiatives and the vote of confidence despite the opposition.

When Moon stated that he would hold a vote of confidence, he immediately faced open criticisms from Ahn Cheol-soo and Park Ji-won, his former presidential rival and party leadership rival, respectively. The in-fighting within NPAD did not start just a few weeks ago; it was looming large even as Moon stepped into his leadership position seven months ago. It remains to be seen whether the party can sort out the factional fighting before the 2016 general election.

After weeks of speculation, President Park Geun-hye attended China’s celebrations of the 70th anniversary of the end of World War II from September 2 to September 4. South Korean media noted that Park was observing China’s military parade from the top of Tiananmen Gate with President Xi Jinping, where 60 years ago North Korean leader Kim Il-sung and Chairman Mao once sat together.

President Park’s visit to China comes after an intense period of tension between North and South Korea. During her visit, the leaders of both countries called for the denuclearization of the Korean peninsula. President Park’s visit to China is viewed domestically as a success, but she has another important foreign visit coming up. She will be visiting the US in October.

At the end of August, the Ministry of Education published the findings of higher education facility inspections (대학구조개혁평가). No fewer than 66 schools, 32 four-year universities and 34 two-year vocational colleges, received a failing grade (meaning grades D and E, equating to a score of less than 70/100).

One of the country’s relatively prestigious “national universities” (국립대학교) found itself on the wrong side of the line: Gangwon University, which got a D. The university immediately announced its intention to appeal the embarrassing verdict, which then-Chancellor Shin Seung-ho called unacceptable, but by mid-September he had resigned amidst student-led demands for reform.

The number of students going to university in South Korea is predicted to fall steadily over the coming years, and the government’s response involves structural reform to meet changing patterns of demand. In this context, each school’s inspection grade directly impacts its future funding from the state, access to lines of credit, and permitted student numbers.

Seoul National University sociology professor Kim Seok-ho suggests there is a rising sense of patriotism among younger South Koreans. Although those in their “20s did not receive an anti-communist education and are politically apathetic,” recent North Korean provocations have generated a sense of patriotism or South Korean nationalism among this age cohort. “Because they experienced the sinking of the Navy corvette Cheonan and shelling of Yeonpyeong Island in their teens or early adulthood, they may have developed conservative and nationalistic views.”

South Korea’s (new) nationalism and the rise of young “national security conservatives” have been written about elsewhere. Online comments posted during the latest round of inter-Korean tensions provides some data in support of the new nationalism thesis. It is an open question whether such attitudes are here to stay or merely transitory.

Despite a decrease in profits for the second quarter of the fiscal year, Daum Kakao, a South Korean internet company formed in 2014 when Daum Communications and Kakao merged, is set to launch an online-only bank called Kakao Bank.

Earlier this summer, South Korea’s financial regulars revealed a new set of measures permitting non-financial firms to hold up to a 50 percent stake in internet-only banks. The Financial Services Commission (FSC) is seeking to ease regulations that impede growth of fintech firms and technologies. Regulatory adjustments such as these would enable the rise of internet-only banking and related financial technologies. Indeed, according to Yonhap, Korean Investment Holdings Corp. and Daum Kakao Corp. “have agreed to form a consortium for the launch of an Internet-only bank.” This new regulatory environment would, it is noted, encourage big tech companies, like Kakao, to further develop new banking platforms such as Bank Wallet Kakao, a digital wallet. [The second paragraph above was adopted from “South Korea’s Next Growth Frontier: Fintech,” written by Steven Denney and published at The Diplomat. — Editors]

Korea’s globally recognized chaebol (conglomerate) companies have no truck with the maxim that you should “never do business with family.” Perhaps they are right to eschew the homespun wisdom; plenty have amassed fortunes in post-war South Korea by ignoring it. However, this summer saw the Lotte Group (a Japanese-Korean hybrid) descend into family farce, as brothers Shin Dong-bin and Shin Dong-joo battled for control of the family firm, hitherto dominated by 93-year old founder and General President Shin Kyuk-ho (aka Takeo Shigemitsu). The story is complex, involving multiple firings, some reinstatements, and at least one television interview. It is rendered into English and summarized here. A Korean video version from Channel-A is here (also see image above).

Making a rare (for a chaebol chair) appearance before a parliamentary committee on September 17, apologetic Chairman Shin Dong-bin claimed the family feud is over, adding that a “task force” has been created to improve the company governance structure and restore its battered brand image.

Both North and South Korea announced plans for amnesties to mark the 70th anniversary of the liberation of Korea from Japanese rule on August 15. Amnesties are not rare events in either country. In North Korea they come about in commemoration of major national events; most recently, for the 100th anniversary of Kim Il-sung’s birth in April 2012, in 2005 to mark the 60th anniversary of Korea’s liberation, and in April 2002 to mark the 90th anniversary of Kim Il-sung’s birth. In South Korea, meanwhile, the main bone of contention is whether senior officials from major conglomerate companies incarcerated for crimes like embezzlement and dereliction of duty should be released at all.

This latter question feeds into a broader, longstanding debate over South Korea’s identity and international standing. President Park Geun-hye and the head of the ruling Saenuri Party both framed the amnesty in terms of bringing about economic growth, with Saenuri chair Kim Moo-sung suggesting that it would be a “well-timed” event that could help to “gather the nation’s energy” to that end. However, one poll carried out by the Saenuri Party’s in-house think tank indicates that the public may be split; whilst an amnesty is broadly popular, there is significant opposition to including economic elites, presumably from those who, inter alia, wish to see priority going to governance by rule of law.

Seoul’s overpasses are being systematically removed and the road system reoriented to improve traffic flow through the city north of the Han River. The next overpass to go is 서대문고가도로 (Seodaemun gogadoro). Built in 1971 to connect Chungjeongro with the main intersection at Gwanghwamun across Tongilro and Seodaemun Station, on July 15 work began on deconstructing the 374m overpass, the imminent disappearance of which is said to have instantly added $50,000 to 84m2 jeonse (lease-on-deposit) house rental prices in the area.

Whilst northern Seoul is the cultural and political heart of the city, it has long been beset by traffic congestion and is felt to be wanting for green spaces. Haneul (Sky) Park (2002) on the site of a former landfill in the west and Seoul Forest (2005) in the east have helped to resolve the latter problem, whilst plans to transform Seoul Station Overpass into a park by 2017 should address both to an extent. All part and parcel of what Hong Kal calls “historically necessary and even natural” urban transformations that help to forge “collective national subjectivity within the mutually constitutive narratives of ethnic nationalism and globalization.” Also a good day out.

As “People’s TV New” reported elsewhere (Tweet #2), “Jang Geu-rae Marches” took place earlier this summer across the country to show support for and solidarity with precarious workers and as an act of protest against a low minimum wage and irregular employment.

Jang Geu-rae is a character from the enormously popular cable TV drama series Misaeng (미생; “Incomplete Life”). In the show, Jang works as an irregular employer at a major trading company; at the end of his two-year contract he is not hired as a full time employee. His plight resonates with many of South Korea’s irregularly employed. Those pushing labor reforms and the South Korean labor movement(s) have since appropriated his name.

One such act of expressive protest took place in front of Seoul City Hall (tweet #1) in support of dismissed Kia Motors employees staging a “high-altitude sit-in” [고공 농성]. University of Toronto professors Jennifer Chun and Judy Han argue that expressive protests and the use of cultural repertoires gives form, meaning, and movement to expressive politics that go beyond mere contentious politics.

A recent “IMF Staff Discussion Note,” written by by five IMF economists, argues in no uncertain terms that trickle-down economics does not promote growth. Investing in the bottom 20 percent does, they find. From the Guardian summary of the full report: “The study – covering advanced, emerging and developing countries – said technological progress, weaker trade unions, globalisation and tax policies that favoured the wealthy had all played their part in making widening inequality ‘the defining challenge of our time’.”

The report was immediately picked up by the Kyunghyang Sinmun, a left-leaning South Korean daily. Kyunghyang interpreted the report’s findings as an unequivocal denunciation of neoliberalism by IMF economists, thus marking an end to the “neoliberal era.” The economic reforms of the 1990s, especially those implemented during the 1997-1998 “IMF Crisis,” are seen by some, and many on the left, as ushering in an era of pro-business policies and precarious employment.

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