Saturday, September 30, 2006

Hot Fakes in Korea - Numbers

The Chosun does a breakdown on the growth of counterfeit imports the past couple years:

In 2004, the amount of counterfeit Adidas wear stood at a mere W27 million, but in just two years that has exploded to 3,953 times that amount. Other brands that have seen major increases in sincere flattery in Korea are Piaget (133-fold increase) Gucci (99 times), Frank Muller (9.3) Montblanc (8.8) and Vacheron Constantin (8.2). On the other hand, poor man’s versions of Fendi, Versace, Celine, Tiffany and DKNY products have plummeted, presumably along with the esteem in which the originals are held.

 Stalwarts Louis Vuitton, Cartier and Rolex spawned the largest numbers of knock-offs over the last three years. In 2004, the entire value of intercepted counterfeit merchandise was W205.5 billion, but through July 2006, that number jumped to an alarming W922.3 billion.

What is worth noting here is that these numbers only cover counterfeits COMING IN. The problem is that Korea is also well known as a source of origin for high quality fakes. The real numbers could be much higher.

Tuesday, September 26, 2006

Fun with Statistics - Is the KTX really successful?

Last week yielded a head scratcher about the KTX (Korea's bullet train):

In December, rail passengers can look forward to viewing the latest movies while riding the country's bullet trains, the KTX. The "cinema train" project entails turning the first car of the train into a theater....The railroad believes movies-on-the-go will be attractive to long-distance passengers traveling more than two hours on the bullet train, at speeds of up to 300 km/h. Rail officials predict the new service will attract 2.5 million passengers a year.

OK lets work the numbers. KORAIL says the plan will attract 2.5 million a year (lets set aside if that will actually happen for the moment), this works out to 6850 people per day. To do this they will need to donate a car in the train, or about 60 seats. Now lets count KTX trains, to do this lets count number of trains between two segments both ways, Seoul to Daejeon and Yongsan to Seodaejeon (this assumes that all KTX's at least stop at Seoul area to Daejeon area, and perhaps continue elsewhere). This equals 138 KTX trips a day. This also equals a loss of 8280 seats a day as per the movie theater plan.

So we have the first problem, this will give up more possible revenue seats than it will possibly gain. Or to put the problem into starker relief, this plan calls for the use of 15230 seats a day (the 8280 for the theater plus the 6850 additional seats sold) that are not currently being sold! 

Or if you want to take a look at capacity, thats 60 seats a car, 18 cars a train, 138 trips, making 149040 seats. Which means this plan will hopefully call for the use of 10% of capacity unsold on a basis so regularly that they can be assured of both the space needed for the theater and the additional riders.

Now lets look past what this probably means for KORAIL's real rider-ship, and talk about this conceptually. One of the main benefits of the KTX is the shorter travel time, or about half that of the other classes. This leads to travel times currently of about three hours to Pusan and four to Kwangju/Mokpo. The problem is your average movie is about two hours or longer, so only a few people will see the entire movie. Secondly since these are first-run, or very recent, movies I am willing to wager that few people will be willing to walk in and sit on a movie already half way through. 

What does all that mean? The number of people an innovation like this would attract would be very narrow. They would have to be people who:

A. Need to travel at least two hours on KTX line
B. Start from at least Seoul, Pusan, or Mokpo/Gwangju
C. Willing to pay 50-100% more over slower classes of service (or even more in the case of the bus)


A. A free movie is enough to lure people from Air travel which they take out of time efficency or prefernce over rail transit.

Now given that airlines have reduced Seoul-Pusan service since the KTX's introduction, you could say that those remaining loyal to the airlines need some pretty strong inducements. I wonder if a movie is enough. 

Regardless, it is from these two groups that KORAIL hopes to attract 6850 per day (on average) from.

In defense, if we are generous and say that KORAIL is running at 75% KTX capacity currently on average, this leads to sales increase of about 6%. Ambitious but attainable. (Then again if real capacity is less...)

Hope for counterfeit victims?

An interesting thing is coming out of the plans for a new prostitution law. According to the Chosun Ilbo the new law will hold liable owners of buildings liable for illicit  sex being offered under their roof. 

A few months ago quite a few foreigners (obviously not familar with Korea) got excited about a Chinese case that held the overall owner of a Chinese shopping center liable for rather blatant sales of counterit mechandise by tenants. The foreign companies were eager to try it here, only to be met with an amount of patronizing. If this sex law gets past, could it be possible to lobby for the same for buildings peddling fakes?

Not your father's seller of Crest and Tide

A delightful oversight on the Chosun Ilbo reminds me why I love the global economy:

The lesser-spotted Japanese cosmetics brand SK-II is at the center of controversy in Korea and China after Chinese authorities said they detected the heavy metals chrome and neodymium in some products by P&G Japan.

P&G Japan? P&G? Why does that ring a bell? Thats right kids, its Procter and Gamble's Japan division. I love the fact that not only the Korean press does not correctly identify the overall parent, but also the company does nothing to clarify its pedigree. Granted Tokyo sounds more of a beauty and fashion center than Cincinnati.

Incidentally ever wonder about the name?:

Amid the controversy, some were confused about the name and thought the cosmetics were made by an affiliate of Korea’s SK Group. But there is no relation between the two. In the coined name SK-II, “SK” means a “secret key” to clean and clear skin, and “II” means a tradition older than 20 years, the firm explains.

"II" is a tradition older than 20 years? Does this mean ten years ago the stuff was called SK-I? and twenty simply "SK"? Does global marketing in the 'natti know about this?

Dong-A learns Economics 101

Homeowners Not Selling As Prices Rise  

Dong-A Ilbo, December 13, 2006

Korean Firms Still Undervalued (?)

Or at least that is the headline of a rather odd dispatch of a Korean Exchange report. The Korea Times/Hankook Ilbo's rationale for such a conclusion:

The comparison is so ludicrous that it almost barely worth mentioning. Then again one would think somebody like the Korean Stock Exchange would know better. Simply put you cannot make a blanket comparison like that across economies given their GDP and population. There is also a more fundamental flaw here, the idea that absolute size is a measure of worth. Data later in the article show this:

Since the ROE is much higher on Korean firms than Japanese firms, one can easily argue its the Japanese companies are actually overvalued, rather than Korean ones being undervalued. Another odd thing about this article, or perhaps even more disturbingly the report itself, is the way it treats PE ratios:

Were to start with this slaughter of stock statistics....whooo boy! First a PE ration does not tells you little about underlying value of the company. The number is used not to find value per se, but value relative to companies in the same sector. First we have not indication that the Korean top 30 are of the same industrial composition of the Japanese top 30. Another problem are discrepancies in on each local exchange that effect a PE ratio, such as the amount of shares floated in relation to volume or even more basic things like local economic conditions (ask anybody who follow ADR's on the NYSE versus stock in their home economies). Last even if a company puts in a good PE relative to its peers, it says little about things that actually effect valuation like assets, industry profitblity/potentional, and management quality.

On that last issue, management quality I love the selective memory at the end of the article:

Lets not mention that SK Networks was once guilty of accounting fraud which overstated profits, and the man convicted for fraud in the scandal is still head of SK Networks (not to mention the whole proxy fight in relation to that power struggle). I think things like that have more to do with a company valuation that some number from a stock price.

Fun with Statistics - Ms. Choi's Schooling Costs

Me thinks Ms. Choi is lying:

Late last year, a 46-year-old Korean housewife in Bundang, south of Seoul, started working as a teacher at a local private cram school. But the woman, who only revealed her surname, Choi, did not take the work out of choice: It was, she said, the only way she could afford the school fees and living costs for her 16-year-old son, who has been studying in the United States for the past two years. "On my husband's salary alone, we can't afford my son's school fees and living costs, which come to four to five million won ($5,230) a month," Ms. Choi said.

Schooling her son costs US$60,000 a year? Thats more that the US's GDP per capita! Even if you add average private school fees, the amount is unexplainable. Mater Dei, a selective catholic school around where I lived in LA, only charges about US$9,000 for the entire year.

Something fishy is going on with Ms. Choi.

What's the sound of one hand clapping?

Roh applauds alliance before U.S. audiences

Headline Joongang Ilbo, September 15, 2006 

Spoiled Brat

Daughter of KAL chairman wants better food, service

Headline, JooangAng Ilbo, September 22, 2006.

Thursday, September 14, 2006

When is your IP not your IP?

Welcome to Korea! You just spent millions of dollars to buy a failing Korean firm. It may have been tough, but you bought the thing. Now you own it lock-stock-and-barrel. Or do you?

If all the restrictions in Korea were not enough, there is a growing movement to restrict something else, technology. Over the past few weeks, three major cases have been put in the press about foreign companies who have the gall to buy Korean companies and their Intellectual Property and then use that IP outside Korea.

I do not want to raise larger issues about property rights, the rule of law, and perhaps cultural attitudes. However these cases should be noted as it should give a foreign investor pause as to why he is buying assets in Korea and the portability of those assets once (he thinks) he has purchased them.

In perhaps the case furthest along, a NGO and related labor unions have sued Sssangyong motor for, well, making a business decision from the Joongang:

Spec Watch Korea, a civic group that monitors foreign investors, and members of Ssangyong Motor Co.'s labor union yesterday filed a lawsuit against nine directors of the Korean car maker for allegedly stealing auto assembly technology from the company for its Chinese parent firm, Shanghai Automotive Industry Corp (SAIC).

In late June, Shanghai Automotive announced it will make Ssangyong Motor's sport utility vehicles in China through a licensing deal worth 24 billion won ($25 million). The pact sparked a massive protest among Ssangyong Motor workers here for "an unusually small amount of money" for a deal of its size.

Now I would assume that when SAIC bought Ssangyong for millions of dollars, part of that would include the intellectual property of the firm. This would include all plans, production methods, name plates, etc. The transfer cost of US$25 million, and whether or that is fair or not, is a bit of red herring if you ask me.

Moving on we now have the case of Daewoo Electronics. In perhaps one of the final chapters in the disintegration of the once huge Daewoo chaebol after the Asian Financial Crisis, Daewoo Electronics (a small piece of that) was sold to a consortium lead by an Indian electronics firm.

One would think this would be a cause to celebrate. This is a firm that has limped on long past the time a firm in the west would be taken out behind the barn and shot. It survived long enough to get a new life, and fresh capital. However that view is not the view shared by the CEO. The top paragraphs from his press conference announcing the deal:

There is no practical way to prevent Daewoo Electronics Co.'s technology from being leaked to India once it acquisition is final, said Lee Seung-chang, president of Daewoo Electronics.

Mr. Lee's remarks came at a press conference in Seoul yesterday.
Mr. Lee confirmed that a joint consortium of RHJ International, the holding company of the U.S. private equity fund Ripplewood, and India's Videocon Industries, was selected as the preferred bidder on Sept. 8.

"After the merger, 10,000 patents that Daewoo Electronics owns may be turned over to India's Videocon," Mr. Lee said.

No granted that was not the entire content of the press conference, but one has to wonder the motives behind this comments/questioning and how it was of such import that it was dwelt on long enough to be noted.

The final case is interesting somewhat due in part by the omissions by the reporter:

Korean management at BOE Hydis requested court protection in an August 8 petition to Seoul Central District Court, saying that there was a shortage of capital at the company. BOE Hydis said its situation was in part due to parent company BOE Group failing to invest in the firm. BOE Group is a China-based firm that took over the Korean firm Hydis in 2003.

Chung Nam-il, a leader of the labor union at BOE Hydis, said that BOE Group "has not invested [in Hydis] at all since 2003 when it took over the company. BOE only has an mind to drain away state-of-the-art core technologies at an unreasonably low price."

The BOE Group lent Hydis’ Advanced Fringe Field Switching (AFFS) technology to BOE’s Chinese affiliates in 2004. This year, the group’s Chinese affiliates tried to grab experts in the technology and bring them to China. This move was strongly resisted by creditor banks and the Korea-based company’s labor union. In addition, in 2004 BOE Group paid BOE Hydis 75 billion won (US$78 million) for using the technologies for 20 years, fueling controversy that the company had in effect been sold at a bargain rate.

The history left out of this article is the fact Hydis was once Hyundai Display Technologies. In other words it was part of Hynix nee Hyundai Electronics. The sale of Hydis to the Chinese firm was actually done at the behest of Korean government owned banks in order to shore-up Hynix.

In other words, the Korean government and all the stakeholders (even union leader Chung Nam-il) knew what they were getting into. They all agreed in some measure to both the sale of Hydis and the price. But for some reason its fine to buy the company to save Chung’s ass, but no to effectively leverage their assets.

Speaking of which I remember a scare tactic used by Hynix back then. When it was all but officially bankrupt, the company was desperate to keep going somehow. Part of this effort was to get more and more favorable terms from its creditors, who by this time were all government owned banks (Korea Exchange, Cho Hung, Korea Development Bank, et. al.). One of its negotiation cards was to discuss accepting a tender offer from an overseas company (with usually “Chinese” instead of overseas). Perhaps this is not a recent worry/phenomenon.

Consider yourself warned foreign investors.

Obligatory 9/11 Post

In lieu of all the conversation and remembrances, I would like to relate a bit for my friends and regular readers. Perhaps its therapy for me as well.

I do not want to remember the 9/11 attacks. I do not want to hear the tapes. I do not want to see the TV news footage. I do not want to sit through a movie about it. Too painful.

The closest I got the attacks was a rather frantic phone call from a guy I barely knew. He was a business contact I knew from the States. We had a few good lunches together and had a great rapport. With hopes of keeping the contact I sent him my contact information in Korea.

It was sometime in the afternoon on September 12, which made it the middle of the night in the US. I got a call from him, it started off business like, "Er just thought I would call you..." but I could hear the fatigue and edge in his voice. The conversation turned, "You see what happened over here today...". The edge became sharper. "You know my brother worked in those buildings...". It clicked, in the dead of the night his options were few. My weathered contact information a lifeline to help him get through a sleepless night.

The odd thing, his distance and isolation in the middle of night neatly summed up my own isolation from the attacks. On that day, and subsequent days I never felt so alone in my life. It was a rather odd, feeling the pain every American felt yet unable to talk about it much, unable to have that community experience, unable to do anything about it. I just had to sit and watch in that odd mix of loneliness, fear, and anger. No, I do not want to remember that day.

More Fake Cigarettes Flood Korea

The Korea Times reports on the growing number of fake cigarettes imported into Korea from "China and South East Asia"

In just a six-month period from February to July, KTRA officials found and reported to police more than 290,000 packs of smuggled cigarettes that were sold at shops in Chongno, downtown Seoul, Ha said. 

"About half of the fake or illegally imported cigarettes were Dunhills and most others were popular foreign brands, with some Korean brands in the mix. If we find this much in just Chongno, imagine the amount of illicit products traded nationwide,’’ he said. 

On Tuesday, police arrested 65 illegal traders who smuggled more than 35,000 packs of counterfeit cigarettes made in China through the ports of Inchon and Pyongtaek and sold them to bars, karaoke rooms, night clubs and other entertainment establishments.

Note used quotes on "China and South East Asia". Why? One thing not said to much is the fact North Korea produces and exports a number of fake cigarettes. Is the Customs Service and KTRA (Korea Tobacco Retailers Association) hiding something not to get the North mad?

Final thought I love the headline on this piece:

Fake Cigarettes Imperil Smokers

Reminds me of a joke about the warning labels put on cigarette packs in the US. "Smoking is safe for me, becuase I am a man and I only buy the packs that say they are harmful to pregnant women."

Wednesday, September 13, 2006

US ROK FTA - Third Round Score Card

The third round is now over, and depending who you talk to little or
no progress was made. However due to all the press reports, we can
now construct a scorecard on what was wanted, and how much progress
was made. Lets look at things by sector. Please excuse the lack of

Negotiation Tactics

Before the details, I want to give my thoughts on the negotiation
tactics being used by the both sides. I think part of the reason for
the significant impasses in part have to do with the fact that both
sides seem to have different styles. The Korean side seems to want to
keep negotiations compartmentalized. Korea says “we talk about
agriculture now, that’s it”, so compromises are to be very narrow in
their view. The US side meanwhile seems to want to make compromises
on a broad level, e.g. “We accept your position on Textiles, and you
accept our position on Automobiles.”


Little progress was made, and I do mean little. The little progress
is mainly due to both are still talking about it and the Korean
government seems to agree that their list of agricultural goods could
be revised by mid-September. It is a ray of light, but who knows if
its light at the end of the tunnel, or an on rushing train.

To clarify the current status is the US wants every agricultural good
to be imported freely by opening up the market in stages lasting 10
years. Korean meanwhile wants to protect 280+ items (284 says
Joongang, 288 says Chosun) and lift what is not included in stages of
15 years.

Of those items not on the 280+ list, little of it makes sense that
will take 15 years to be tariff free; there is not much sanity in my
opinion. Accordingly to the Dong-A two items in debate in this area
are corn and beans for animal feed. What makes Korea’s resistance a
little odd is that Korea produces negligible amounts anyway. So
eliminating this tariff right away will not impact farmers one iota.


This is something the US is being hard on (perhaps to mirror Korea’s
stonewalling on agriculture). Korea wants the US to eliminate all
tariffs on textiles. The US basically agrees, but wants them to be
phased out in 10 years (similar to their agricultural proposal,
reinforcing my mirror idea). Korea finds this unacceptable and wants
them phased out much faster.

For some reason the Textile issue has seemed to fixate the media.
This is somewhat puzzling to me since China, India, and others are
(or are set) to become booming textile importers to the US in their
own right. Granted it is a big industry for Korea, but their face a
very competitive market in the future in the US.


Basically, no change. The US wants cars to be subject to a lower
tariff and a revision to the engine displacement taxes. Korea is
holding firm. Korea though seems to be offering a compromise on the
initial tariff and giving a two-year grace period on emissions. What
this last part means is not described, however clearly Korea is
holding firm in my opinion.

Despite initial word that foreign nameplate cars will be excluded
from the talks, some news reports says this issue is still up in the
air. Out of curiosity, I wonder how a Hyundai made at their new
factory in Alabama will be taxed if brought back to Korea.


One of Korea’s more interesting issues is their worries about US Anti-
dumping and other trade protection measures. The US is firm this is
not to be discussed. I wonder if again this is firmness to mirror
Korean firmness in other areas.

Backing up this theory is I wonder if some of these measures can
actually be placed from the executive to judicial branch of the US
government. Currently once a firm is found by the Executive branch as
dumping product, companies involved can sue to get compensation. Why
not in turn just leave the determining and compensation to the court
system? Also it the companies could conceivably be protected by anti-
trust statues (granted though after Matsushita v. Zeinth this can be
dicey). Anyway, there is a fall back position to this for the US
which can be a good compromise.

On the other hand, the US may be linking this issue to the use of
government owned banks to subsidize Korean companies. Recently
government subsidies given to Hynix Semiconductor were found to
violate WTO rules. Part of the Hynix case was the company was allowed
to dump (sell below cost to gain market share) memory chips on the US
market because of these subsidies. Perhaps if Korea would agree to
change its banking sector, including the somewhat controversial Korea
Development Bank, a compromise can be found here.

Finally, the time difference may make this negotiation moot. The Dong-
A reports that the US side has to make reports to congress about
changes in anti-dumping policy six month before signing. Keeping in
mind the March to June deadline for signing (I forget the exact
date), this means that an agreement on this area must be reached in
the next couple months. If no progress is made the next round in
Jeju, this may be a dead issue.


As you may recall, some progress was made in a special session in
Singapore regarding Korea’s “positive list” system. In short the US
was willing to accept it if other concessions were made in areas such
as intellectual property rights, testing and access in relation to
pharmaceuticals. This seemed to get a positive reaction initially
from the Korean side.

The US likely came into Seattle ready to put this to rest.
Unfortunately this was not to be so. As further details came out from
both sides, negotiations seemed to have stalled. Or perhaps somebody
added more restrictions. It is unclear from the media what exactly
happened, but this can was kicked down the road.

Something left out of this reporting that concerns me is there is no
talk of medical devices and such being included in this. Many of the
complaints about barriers, such as regulation, testing, and even the
positive list system (as I recall) also applies to medical devices.
Is the lack of discussion simply an omission and press shorthand or
does it show a quiet compromise on the issue?

Television Market

It seems some progress was made in the TV market. The US has seemed
to have won some concession on laws limiting foreigners to a minority
share of cable TV channels.

Intellectual Property

Both countries have made the obligatory pledge to respect and enforce
IPR rights. Meanwhile the US has requested Korea to extend the time
of copyright protection from 50 to 70 years. It is expected this will
be a big issue the US will raise in the future.

Gaesong Industrial Complex

It stands as it always did, the US saying “Over my cold dead body!”

Monday, September 11, 2006

Samsung Phone Breakage Video

Samsung is upset at a viral circulating the internet:

The 15-second video clip entitled "Samsung handset, easy to break at one try!’’ has been circulating on the Internet since last week. It shows a smiling young woman snapping Samsung’s 6.9-milimeter-thick mobile phone in two.

There is some anecdotal evidence that motorola may be behind the viral. Samsung says the phone must have been doctored due to the high quality plastic used in the Ultra phone in the viral. I have personally been unable to view it. Gotta find it.


Thanks to a reader who found the video:

Friday, September 08, 2006

US ROK FTA - Yehaaa! Begin the Third Round Round-up

The third round of the US ROK FTA talks are now underway, and with it a flood of news about what the Koreans are doing to “defend” Korea against the Americans in a agreement they “must” make that will cause Korea “pain and toil”. And the funny thing is this the language used by the Pro-FTA forces! Further more expect the anti-FTA forces to come out of the woodwork as the US makes further demands this round. More importantly the US’s head trade rep touches the third rail of Korean politics!

Speaking of pro and anti forces, something must said in passing about the protests in Seattle during the talks. An account from the Hani:

"I don't understand why our government pushes ahead with the free trade talks with the U.S., because it would be no help for our national interest," Kang Ki-gab, a South Korean opposition lawmaker, said at the rally.

Wearing South Korea's traditional cotton robe and slippers, the farmer-turned lawmaker from the labor-friendly Democratic Labor Party claimed the proposed free trade deal would only help big businesses…

"America's workers have too much experience with failed agreements like NAFTA," said Thea Lee, a policy director of the American Federation of Labor and Congress of Industrial Organizations…"The promises are always the same: more jobs, more investment, more economic growth. But the reality is always the same: jobs lost and greater inequality," she said.

Aehwa Kim, an official with the Korean Alliance Against the Korea-U.S. FTA, which organized the Seattle rally, said, "American workers will be just affected as well as Korean by low-paying jobs or unemployment, and the loss of benefits."

That must have been some protest. One person with a sign that says “FTA Takes Korean Jobs” and the other “FTA Takes US Jobs”. One has to wonder where all those jobs went. Perhaps this what Ross Perot meant by the “giant sucking sound” of jobs leaving.

Meanwhile back in Korea members of the Assembly have protested in what could be described in new fashionable way in Seoul, claiming the whole FTA process is unconstitutional:

In Seoul yesterday, 23 lawmakers, including 13 from the Uri Party, filed a lawsuit at the Constitutional Court contending that the administration had violated the National Assembly's right to ratify international treaties guaranteed by the Constitution — even though no treaty has been agreed to or signed.

The lawmakers complained that the administration was unilaterally and aggressively pushing the free trade deal without sharing information with the National Assembly or seeking its assent.

So in other words the lawmakers are saying because nobody is talking to them, their feelings are hurt, and that is unconstitutional somehow. I know it will not happen, but I hope the Constitutional Court throws the book at these guys. Any book, but preferably something big and heavy.

As expected, Korea is commenting over and over again on how rice will not be on the metaphorical table. This is part of a regime of 284 goods that they want to exclude from the treaty. As you can also expect these 248 goods happen to be exactly of the caliber that the US is eager to export, rice, beans, beef, pork, chicken, peppers, onions, garlic, fruit, etc. This impasse will likely either stall/end the talks, or if included in the pact will make it exceedingly difficult for the US senate to ratify the FTA (IMHO anyway).

Meanwhile, of the agricultural goods Korea is willing to lift the tariff on, Korea wants the tariffs lifted in 15 years not the US request of 10. All this looks somewhat silly given the Korean side also demands the US the speed up its lifting of textile tariffs to five years from the US proposed (reciprocal) proposal of 10 years.

The stalemates that hindered the first rounds, cars and drugs, are expected to continue. However, there may be a compromise in the offing in regards to drug pricing. The US recently at a side meeting in Singapore agreed to Korea’s positive list system, as long as additional steps are taken so as US drug companies are not discriminated against

(Personal note, frankly I think the US has given up the drug issue. The US proposals are laughable in that they require the cooperation of sectors of the Korean government who are not really use to cooperating with foreigners. I think it’s all a face saving measure by the US)

Remember the “Singapore plus” statement in the last round of talks? This was the Korean offer that said we will restrict 100 sectors plus a few more, same as the Korea Singapore FTA. What was outrageous about this was this was basically most of the things the US trades, services, agriculture, entertainment, etc. The issue of these services, ex. Agriculture, is finally boiling over. We start with the Dong-A:

Reports have it that Korea said it will exclude about 100 services, including electricity, postal service, legal service, accounting and medical service from opening up. Earlier, the U.S. said it has no interest in the opening up of the educational market, but U.S. chief negotiator Wendy Cutler said at the second round, “We are interested in access to Korea’s Internet education service market.”

Some of these are understandable. However it should be said that the Korean media’s ambiguity can lead to some drastic misunderstandings. For example take “postal service”, this is not get rid of the Korean Postal Service, nor allowing the US Postal Service to set up shop in Korea. It is about the domestic delivery of packages in Korea. Again from the Dong-A:

With regard to home-delivery service, whether U.S. companies such as FedEx could advance into Korea’s home-delivery service market, especially for small-sized items, is likely to be a hot issue.

This is actually a bigger issue than it may seem. One of the largest complaints about doing business in Korea, and not just by foreigners, is the cost of shipping and logistics in country. In my opinion, allowing foreign competition and with it certain amount of consolidation for efficiency sake will drastically alter the prices of most goods in Korea.

Among the other things the US wants to talk about is the media restrictions in Korea (from the Chosun):

When it comes to broadcasting, the government thinks Washington will not go as far as to demand privatization of state-run network KBS, allowing U.S. investors to buy shares in it, but the details remain to be seen...The U.S. reportedly wants Korean national TV networks to scrap or reduce a quota obliging them to fill 80 percent of their broadcasts with domestic content, and the government to lift regulations preventing cable TV channels from dubbing foreign broadcasts in Korean.

Wow, imagine the furor that will come from KBS after this. MBC may have done its chop piece on NAFTA. I expect the rest of the Korean media to pile on as more details of this comes out. All the major broadcasters have invested much money on TV production here, expect them to fight to protect that investment.

Another US requests you can read through the links in this post are change in the ownership rules of communication firms and openings of the Legal, Education, and Medical markets.

The biggest news though is Wendy Cutler, the head US Trade Rep, makes an admirable effort but ends up touching the third rail of Korean politics, the cheabols! From the Dong-A:
During the third round of FTA negotiations between Korea and the U.S. that started on September 6, local time, the U.S. required that trade related laws including fair trade laws should be strictly applied to the Korean companies including large conglomerates (known as Chae-bol) and this be clearly stated in an FTA agreement.

How about that for Cutler doing what I think would be diplomatic equivalent to nailing somebody’s balls to the wall. In other words Cutler is asking Korea to agree in writing to something everyone knows, the chaebols play by a different rules than everyone else.

Needless to say this does not sit will with Korean government (from the Korea Times):

In response, chief Korean negotiator Kim said, “The U.S. view toward chaebol is wrong,'' citing the rules of investment ceiling on funding to subsidiaries.
Officials at the Ministry of Foreign Affairs and Trade also left no room for negotiation over the U.S. demand in consultation with the Fair Trade Commission (FTC), Korea's anti-trust regulator.
“Their demand was worth no consideration,'' a senior government official said on condition of anonymity.
“We are applying the competition law rigorously to all companies. We had ignored the demand involving a crackdown on chaebol.''

And that was just the government response mind you. While a FKI statement was somewhat restrained, one can only wonder what the reaction was in the boardrooms in Korea. In case you are wondering the whole position of the FKI and the government is “Some regulations are being strictly applied, you expect ALL the rules to be applied?”. As head Korean negotiator Kim Jong-hoon notes:

Korea’s Chief Negotiator Kim Jong-hoon responded to this issue by saying, “With regard to the regulation on large conglomerates, the U.S. perspective is clearly wrong. Large conglomerates in Korea are currently subject to reverse discrimination, in terms of Korea’s fair trade law and a law that puts limits on the total amount of corporate financing.

What is really puzzling about all this is the language in the FTA is simply something like “Both parties agree to apply competition laws equally among US and Korean corporations”. All they would be doing is agreeing to an existing fact (a fact on paper that is). What would be so wrong with both companies confirming their respect for the rule of law? I think we all know the answer to that question in relation to the chaebols.

Actually I see Cutler working here. Time to ask for things that Korea would really be against to get concessions elsewhere. Or so I hope.

Finally as part of my mission to point out things that can sell the FTA I would like to point out to this in the Chosun:

The prices of major foods including beef, pork, milk and potatoes in Korea are the fifth highest among 34 leading economies. The country has become one of the world’s most expensive nations, with consumer prices soaring about 20 percent since 2000.

A comparative study on consumer price growth in 30 OECD member countries from 2000 to the first six months of 2006 showed Korea experiencing a growth rate of 20.3 percent on average, the sixth highest after Turkey, Hungary, Mexico and Spain…When Korean consumer prices are set as the standard of 100, U.S. prices stood at 180 in 2000. But the figure dropped to 148 in 2002, 116 in 2005 and 110 in June 2006. In other words, U.S. consumer prices were 80 percent higher than in Korea in 2000 but only 10 percent higher this June. British and Swiss consumer prices were twice as high as Korea with 180 and 209 in 2000 but only at 126 and 159 June this year. In Japan, consumer prices were 1.38 times as expensive as in Korea in June, down from 2.64 times.

Hmm…what can Korea do to lower food prices? Anybody?

Thursday, September 07, 2006

Korea to vote on Industrial Spying

A new korean espionage bill may be ready to clear the National Assembly. A new bill is needed (this will come to no shock to some of you) because trade secret theft in Korea was not a big issue until now. Actually the main reason is because Korean Law has very weak provisions for valuing intangible items. So if an employee steals a CD with a billion dollar production secret, technically speaking all he has stolen is a 25 cent CD (Yes, I am simplifying this somewhat to make my point).

It is worth noting that the new bill still reflects a historic dichotomy:

According to the bill, those who transfer or sell intellectual properties of private and public organizations overseas will be sentenced to up to seven years in prison, and/or up to 700 million won in fines. For selling intellectual property inside Korea, the punishment will be up to five years in prison, and/or a 500 million won fine. Any financial benefits resulting from the selling of the knowledge will be confiscated.

Lets read this another way, "If your Korean and steal another Korean's secrets, its no big deal."

Now what I really do wonder is how this dichotomy stands up when the secret is stolen from a Korean firm which happens to be owned by a foreign co. I want to read that proposed law if I have chance.

Wednesday, September 06, 2006

US ROK FTA - One Arugument For

In a futile effort to help Korea point out the positives of the FTA I want to point out two stories in today’s papers.

First, poisonous produce. Chosun’s take:

Large concentrations of lead and cadmium have been detected in agricultural goods grown near closed mines….In the case of rice…lead and cadmium concentrations were above the safe level in 27 percent and 8 percent of 757 cases tested. In the case of cabbage…27.5 percent and 28.1 percent out of 367 tested cases contained higher-than-permitted concentrations of lead and cadmium. Some 1,08 million sq. m of land was found to be unsafe for growing rice and cabbage…Up to 38 percent of potatoes, sweet potatoes, spinach, green onions, corn and radishes tested also had unsafe lead and cadmium levels. The test also found other heavy metals including arsenic, copper and mercury but in a permissible concentrations.

That overviews the problem, but who’s idea was it in the first place. The JoongAng:

Since 1980, the government has been implementing a project to protect towns near the closed mines from being contaminated by heavy metals spilled out from the mines, spending 210.5 billion won ($220 million). The measures included setting up walls around the mines and removing the sources of contamination.

"Because the project was separately conducted by each ministry, the work was not very efficient and professional," said Ahn Cheol-sik, an official at the Ministry of Commerce, Industry and Energy.

So in other words the government thought it best to press land not suited for agriculture into service. In part, you can argue, due to the artificial prices given to these products because of the tariffs.

In addition to poisoned food, we have general corruption, form the Dong-A:

The police disclosed a scandal involving the Ministry of Agriculture and Forestry officials who received bribes for government awards from related manufacturers or subsidiary institutes.

Consumers bought high-priced products selected by these officials, trusting they were high-quality ones.

Now we have improperly labeled food achieved through bribery. Again one can argue such skullduggery would not nearly pay off so well if food prices were not so artificially high due to tariffs. Further, because of the restrictions consumers have little choice but to trust, or not trust, a labeling process which is now proven to be sold to the highest bidder.

While I will not make the statement that an FTA would solve the problems immediately or make them disappear for good, I will say that if consumers are given more alternatives and price points they will have an positive impact in alleviating these problems.

Trade Barrier Conspiracy Theories

I found this little item interesting:

Korean Air has forbidden the use of Dell and Apple laptop PCs during flight due to the risk of battery explosion...The batteries, manufactured by Sony, were reported to have caught fire while in use on several occasions.

Not only is this interesting since I think this is a first, but also because I own a Apple Laptop. Or more specificaly, I own an Apple Laptop who's batter was recalled. The odd thing is it was an older recall and the battery was not made by Sony. It was made by LG Chemical, and had similar problems. The paranoid in me wonders why the ban all of a sudden.

(Final funny note, the LG Chem battery was replaced with one of the defective Sony batteries...sigh!)

US ROK FTA - Third Round Subjects

This little dispatch on the eve of the third round of the FTA talks is of interest to me since I did not think the US side would be pushing so hard for this:

In the third round, both parties are expected to struggle over the issue of opening the door to competition with state-run companies. The U.S. team has already demanded that market rules be applied to state-run companies, and that American companies be allowed to invest in privatized state-run companies, just as Korean businesses can. The U.S. party is also expected to come out strongly against the Korean government's support for state-run banks as well as its restrictions on foreign investors in the telecommunication industry to 49-percent stakes.

It will be interesting if the US gets far with this.

Monday, September 04, 2006

Infrigement (?) - Victoria's Secret

Originally uploaded by Drambuie_man.
Found this in the fancy new remodeling of Yongsan Train Station. Despite the obvious mimicry of this lingerie store, its not a case I would personally choose to prosecute in Korea unless they trademarked "secret" seperately.

Infringement - Tommy Hilfiger

Originally uploaded by Drambuie_man.
I have seen my share of stores made to look like part of a larger brand (Nike stores in particular), but this is a litlte ridiculous.


Originally uploaded by Drambuie_man.
Anybody want to guess what treat this was attached to at a local bakery?

Sunday, September 03, 2006

Top Counterfeit Targets in Korea?

The Chosun has an item of passing interest. It covers the most popular luxury brands in Korea as determined by Lotte Department Store and separate similar survey done by a website G-market. It is interesting to note that G-market is a small seller type site which is known for offering more than few luxury items of dubious origins. One must wonder how many fakes of these brands are circulating the market.

Finally, huge props to Procter and Gamble who's SK-II cosmetics line is named #2 on the Lotte list. Great brand building. Never rule out those marketing wizards from the 'nati.

Saturday, September 02, 2006

US ROK FTA - Time to Clean Up KDB

This was already commented on a bit somewhere, however I want to include my thoughts.

The Korean trade delegation announced yet another trade protection they want to leave in place. Namely:

A South Korean negotiator said yesterday, "The United States will likely take issue with the government’s giving assistance to public entities based on the ’national treatment’ provision. Under this provision, neither country is allowed to discriminate against products and services of the other country. At the previous two rounds of talks, the two nations merely confirmed the existence of the issue, and they will begin discussing it seriously beginning at the upcoming third round of negotiations," added the official.

The U.S. side’s agreement proposal clarifies that public entities competing with private entities are to be included in the negotiation. A Korean delegate remarked, "If this provision is included in the agreement, foreign financial institutions can file a lawsuit over government assistance to those banks." For example, if the government-run Korea Development Bank (KDB) raised money under favorable conditions and then lent the money to a domestic company at a lower interest rate than other banks, CitiBank would be able to sue KDB for unfair competitive practices.

I am going to refrain the more obvious pithy comments. However there is good reason for this. The inclusion on this matter into the trade talks is likely due to the Hynix subsidy matter. The dispute was basically the Korean government was using government owned banks to subsidies Hynix Semiconductor. Micron Technologies asked, and got, anti-dumping tariffs from the US government. Korea took the matter to the WTO “court” and eventually lost the case.

As a service to the woeful Korean sales technique on the FTA I want to show what the FTA may help. One of the main arguments for an FTA is that increased compeition has an the effect of making the marketplace better (unless of course you want to take a Marxist view of things, even then you are on shaky ground, however lets set that aside). Meanwhile Korea holds up as an example of a “socialy responsible” bank the Korean Development Bank (KDB).

So lets take a brief look at the recent press archives about KDB. If you ask me competition is needed here either to right a leaky ship, or root out the corruption and inefficacy here.

Support of fraud and cronyism:

Local banks hold an important key to the fate of SK Corp. as they will effectively have a casting vote with their 14 percent stake in the nation's largest oil refinery at the shareholder meeting on March 12….
Shares owned by nine local banks, including Kookmin and Hana, totaled 14.31 million, 11.36 percent. Hana, Shinhan and Korea Development Bank (KDB) are known to be friendly partners for SK Corp. [Thus defending against an effort by shareholders to unseat chairman Chey Tae-won who was recently convicted of fraud in his role as chairman of SK Corp.]
– Korea Times, March 21, 2004

Polarization in salaries runs deep among employees in government-affiliated financial and other organizations with the highest earner making more than twice the lowest.

On the top of the salary ladder are the employees of the state-funded Korea Development Bank (KDB). Its governor Kim Chang-lok has already been under fire for getting 711 million won, or more than $700,000 per year, the highest paid position in state-funded public services institutions. The bank explained that 45 percent of the figure covered allowances to pay for public activities which technically should be excluded from his salary.

The average annual salary of 2,079 KDB employees, excluding executives, was 85.4 million won ($90,000) last year, up 8 percent from 79.1 million won in 2004, it said.
– Korea Times, July 24, 2006

Management incompetence and poor lending

The Board of Audit and Inspection (BAI) announced on Tuesday that it has begun probing domestic lenders as some were found to have conducted irregular lending to credit defaulters as well as risky companies.
The BAI’s move came after the nation’s inspection agency found that local lenders of some bank and non-bank financial firms extended new loans to credit defaulters and invented corporate credit ratings.
“In our preliminary inspection, we found that some local lenders, including the Industrial Bank of Korea (IBK) and the Korea Development Bank (KDB), offered 3.49 billion won in new loans to 136 credit defaulters over the past two years,’’ a BAI official said.
– Korea Times, May 4, 2004

State-run Korea Development Bank (KDB) on Wednesday announced plans to provide 3 trillion won to small and medium-sized enterprises (SMEs).

In addition, it will set aside 1.8 trillion won for existing corporate borrowers to extend maturing loans.

KDB said it would make more loans available for SMEs in order to offset reduction of credit by commercial banks.
As of August, the overdue debt ratio of SMEs came to 2.92 percent, up from 2.1 percent at the end of 2003. (Great, few people pay them back so they give them more money – DM)
– Korea Times, November, 3, 2004

In its latest report on the economic value of the service industry, the KDB said domestic banks should increase loans to non-manufacturing firms, stressing that the sector could be a savior of the sagging economy… The KDB also commented on the service industry’s weakness compared with other countries. (So they are urging more investment in a sector they think is weak? – DM)
– Korea Times, May 29, 2005

The Korea Development Bank (KDB) is suffering from poor credit screening and management with 20 percent of its total loans extended to insolvent firms.
During the parliamentary audit of the state-run bank on Friday, lawmakers expressed concern over the asset soundness of the bank involving loans to insolvent firms and losses in foreign currency trading.
“The outstanding loans from the KDB to financially-troubled companies reached 17.6 trillion won in June,’’ said Rep. Lee Kye-ahn of the ruling Uri Party.
The amount accounts for about 20 percent of the state-run policy bank’s total loans amounting to 91.2 trillion won.
Lee also said that more than 800 companies of the total corporate customers are even failing to pay their debts. “The loans to the insolvent firms increased by 5 trillion won over the past three years.’’
– Korea Times, October 7, 2005

Crooks at the Helm

The government has decided to grant presidential pardons to 352 people, on the occasion of Buddha’s Birthday Wednesday, including six people convicted of playing roles in an illegal money transfer to North Korea in 2000, officials said on Tuesday…former head of the Korea Development Bank (KDB) Lee Keun-young [and] former KDB vice president Park Sang-bae were convicted of [there complicity in] illegally sending $500 million to Pyongyang ahead of the summit between former President Kim Dae-jung and North Korean leader Kim Jong-il in June 2000.
– Korea Times, May 25, 2004

One executive and eight general managers of the state-run Korea Development Bank (KDB) were relieved of their duties for unauthorized involvement in stocks and futures contracts.

The disciplinary action was taken as an assistant KDB manager mobilized 5.8 billion won from his seniors, colleagues and family members to establish a private fund aimed at investing in equities and futures contracts. The end result was the complete loss of the investment pool, although the unauthorized fund manager initially provided 20-30 percent return on investments.
– Korea Times, July, 20, 2004

The prosecution is planning questioning of Hyundai Automotive Group chairman Chung Mong-koo this week over how he spent tens of billions of won in slush funds, and who he lobbied with the money, prosecutors said on Sunday.
Chung was arrested Friday night on charges of embezzlement and breach of trust. The Seoul Central District Court, after hours spent questioning the 68-year-old tycoon, issued the warrant requested by the prosecution on Thursday…
He allegedly took the money in exchange for lobbying officials at the state-run Korea Development Bank (KDB) and the state-run Korea Asset Management Corp. (KAMCO) on behalf of the automaker.

According to prosecution, he allegedly gave Park Sang-bae, former KDB deputy governor, 1 billion won and Rhee Sung-kun, former KDB director, 100 million won in 2001 and 2002 to have Hyundai Automotive affiliates’ bad debts written off.
Park allegedly instructed Rhee to forgive 55 billion won in bad debts of machinery company Wia and parts-maker Aju Metal by using public funds in collaboration with KAMCO.
– Korea Times, March 20, 2006

Promotion of economic isolationalism:

The chief of the nation’s top state-run bank on Wednesday expressed concern over the excess foreign capital holding more than 60 percent of stakes in Korean commercial banks.

At a press conference in Seoul, Yoo Ji-chang, governor of the Korea Development Bank (KDB) said he is not sure if the foreign funds, such as Lone Star and Newbridge Capital, will give positive effects on the nation’s financial market development.
- Korea Times, March 12, 2004

Presidents of two major state-owned policy banks said they are opposed to foreign capital taking over LG Card.
Yoo Ji-chang, governor of Korea Development Bank (KDB), and Kang Kwon-seok, president of the Industrial Bank of Korea (IBK), said that they want the leading card issuer to be sold to domestic investors through competitive bidding.
– Korea Times, March 9, 2005

The end of a cozy club?

Well its about time if you ask me! I say that not due to the facts of the case, but rather one more dismaying things about Intellectual Property infringement in Korea is how rarely Korean firms sue other Korean firms for IPR infringement, or vice versa how unconcerned they are about ripping off another Korean firm's IP. For an example of this later phenomenon look at the heavily used GS Group logo which is currently being litigated over.

A recent Korea Times piece artfully puts this disregard in the mobile phone industry as the following:

Samsung said that Korean mobile phone manufacturers are in a kind of loose partnership and it is not likely that a patent infringement would take place.

You can translate that as "We would never sue another Korean mobile phone manufacturer". Or is that true? That same article linked above refers to a behind the scenes dispute between Samsung and LG over mobile phone designs. I am interested to see how this turns out. While I cannot point to anything specific off the top of my head, Samsung and LG have been at loggerheads for some time over things like standards and more germane over the licensing fees being charged among the companies (one, LG as I recall, is charging a normal licensing fee not the "special" one Korea firms normally charge among themselves). Things could spill out into the open sooner or later.

US ROK FTA - Korean Chutzpah

How are the FTA negotiations going? The US side may be silent but its hilarious to watch the Korean side spill the beans on a daily basis. The Joongang Ilbo has some detailed blow by blow negotiation points. Let me have some fun by mimicking the negotiations:

US: We need to lower Agricultural tariffs

ROK: We need to lower Textile tariffs

US: Well how about this, you take down the Agricultural Tariffs in steps of now, two, five, and ten years. Meanwhile we will do the same thing for Textiles.

ROK: We really prefer tariffs be lowered in steps of now, three, and five years.

US: Thats even better! Sounds like a deal, Agriculture and Textile tariffs eliminated in five years!

ROK: Shhhhhhhh! (Sucks air through teeth)

US: <rolls eyes knowing what's coming>

ROK: Actually we want to remove Agricultural tariffs in steps of now, five, ten, and fifteen years.

US: So you want us to accept it will take 15 years to open the Agricultural Market in Korea meanwhile you want our Textile market open in five years. That hardly seems fair, but I guess it will be fine considering we will be able to import things like rice, beef, pork, garlic, and apples tariff free in 15 years.

ROK: Shhhhhhhh! (sucks more air)

US: Now what!

ROK: Well we cannot reduce tariffs on any of those in under the 15 year program. That is to say,  please look at this list of 284 Agricultural goods that we cannot reduce tariffs on what so ever.

US: So let me get this straight, we are to eliminate all Korean Textile tariffs in 5 years, meanwhile you will take 15 years to reduce Agricultural tariffs on all things except these 284 items which includes almost everything we produce?

ROK: (Big happy smile)

US: (whispers to aide) You know, I know have a new found respect for Christopher Hill.

(Note: More items noted in similar KT piece)

Court Tells Unions No Violence

In another sign of how classy Korean labor unions are, they actualy have to be ordered to give common courtesy:

The court granted the university's request to bar the union from staging "unreasonable" job actions, and enjoined the strikers against using violence.  The "unreasonable job actions" cited by the court include unauthorized entry to the university president's office by union members, violence and using abusive language against non-union members at the university. The court also prohibited union members from disrupting classes by making noises above 80 decibels during daytime. 

What kind of world is it where somebody has to be told not to use violence and abusive language?

Lies, Damn Lies, and...

This is more of a rant than a substantive post, but I want to record it somewhere so I can retrieve it again. If you want a good example of a journalist chopping up a study to fit a political agenda, the Dong-A has a doozy today.

It concerns the amount spent on medicine, note the second and third 'graphs:

Jung-gu in Daegu spent on medicine the most in the country  an average of 947,400 won per person annually. The reason seems that the district has as many as 123 pharmacies with just a population of 80,000. 

In Seoul, Jongno-gu ranked first (663,100 won), followed by Jung-gu (440,200). Gangnam-gu came in third (272,400) and Yeongdeungpo (254,200) and Dongdaemun (232,200) followed it. The four districts except Gangnam are thought to put much money into pharmaceuticals because they have many large pharmacies and commercial complexes.

So one looks at this an concludes this is not consumer spending on medicine but wholesale spending on medicine. However how the hell from this do they get the headline and first sentence:

Study: Wealthy Spend More on Medicine 
Statistics showed that the rich spend more on medicine.

There is no linkage between income and spending mentioned in the entire article. No one was polled as to their income and spending. All on can point to is a rather weak link between real estate prices in certain wards ("gu's") and their spending. However even that is pointless given the fact the author of the "study" immediately writes off some of the priciest real estate in Seoul since they have "many large pharmacies and commercial complexes". Further this assumption implies another all other districts in Seoul do not have "many large pharmacies and commercial complexes".  Finaly all "gu's" are not uniform as the assumption also implies. I remember reading somewhere that Kangnam-gu, home to some of the most expensive real estate in Korea, still has shanty towns on its fringe. 


Actualy there is option "C"

I try to avoid most North Korean commentary here, but I chuckled at this quote from the Chosun:

Nam Sung-wook, a North Korea specialist at Korea University said the North is caught between a rock and a hard place. It can either continue to suffer the economic sanctions or go through with the test, which could spell the end for the regime. "If they proceed as they have in the past and go ahead with the nuclear test, they will have passed the point of no return,” he said. "They have to be prepared to be disavowed by South Korea and China."

Mr. Nam, what about choice "C", returning to the six-party talks and giving up there nukes? Why is that not an option? Second I am not so sure either South Korea or China would "disavow" North Korea in the event of a test. And that said, I would bet China would be more likely to do so than South Korea at this point. Just look at the logic of Mr. Nam, a famous North Korean specialist at Korea University, he is convinced the North has no other choice but to give a test. Why is it impossible to doubt that others in South Korea share this strangelove-ian sympathy.

Fun with Statistics - Maybe They Should Get Math Teachers

An article in the Korea Times describes a effort by the city of Seoul to hire more native speaking englsih teachers. To make my point, let me reorder the paragraphs of the orginal story:

The Seoul Metropolitan Office of Education (SOME) said yesterday it will gradually place a native English speaker in every elementary and middle school in Seoul.

Currently, there are 562 elementary schools and 367 middle schools in Seoul and only some schools have foreign teachers supported by the Seoul Metropolitan Government or funded by the school budget. 

Seoul will recruit 929 English native teachers by Sept. 2008 to cover all elementary and middle schools in the city. 

As part of its four-year plan to facilitate English education, the local office has already positioned foreign teachers in 100 elementary and middle schools. 

“To give the opportunity to all students to learn from foreign teachers, we will recruit 600 foreign teachers,” said Choe Chun-ok, an education supervision who is in charge of recruiting English native teachers

OK lets do the math. 100 current plus 600 planned hires does not equal 929, or one teacher for every school as the city promises. Second the current year, 2006, with a four year plan means completion in 2010, not the stated goal of 2008.

Finally, if we were to be charitable assume the project ends in 2008 with a start date of 2004, that means that the city some how finds a way to hire 50 teachers a year (100 current teachers over two years). This makes the date all schools will have a native speaking english teacher is 2023. They better get hiring, I hear there is this guy in Colorado...

Friday, September 01, 2006

OK Who had Day 4,3pm in the Bet Pool?

Just when you think Korean Labor unions can play like nice, you get this:

The Federation of Korean Trade Unions (FKTU), one of the country's two leading labor organizations, Wednesday suddenly walked out of the ongoing International Labor Organization’s Asian regional meeting in Busan. Some 30 representatives from the labor organization left for Seoul at 3 p.m., immediately after FKTU chairman Lee Yong-deuk told reporters of the decision.  The move came in protest against Labor Minister Lee Sang-soo's remarks at a press conference in the morning, when he made public details of the government’s negotiations with the unions on the labor reform bill and said that the government will proclaim the law on Sept. 7 despite union opposition.

Again let me remind you, this is after four days into an ILO meeting that was canceled last year due to Korean Unions striking.