Tuesday, July 01, 2008

Addiction to chaos

While it's been almost a month since I last updated this blog, the street protests against U.S. beef haven't stopped yet. Actually, they seem far from being over. The rallies are still being held every night into the dawn, with an increasingly diverse spectrum of people joining in.

I believe people's freedom to express their opinions is sacred and should be respected. I know how depressing a society can become when such rights are denied - I guess a prime example is Singapore, which pretty much prohibits any kind of public demonstrations. But watching the protests here, I can't help but feel something's wrong.

This week, a group of labor unions, led by those representing Korea's flagship carmaker Hyundai, announced that they'll go on a strike, and oddly, their demands include the withrawal of the beef agreement with the U.S. The labor union of Hyundai goes on a strike almost every year any way, and it seems like they just conveniently took on the beef issue this year, because that's what everyone's talking about these days - so much so that even a Catholic group took to the street.

In the beginning, the protests were prompted by genuine concerns about health, but it's quite hard to understand what's keeping the protesters on the street now. The president has appologized publicly twice, and the government managed to deliver what people wanted through additional negotiotions with the U.S. I thought that would've been enough to calm people down, but apparently it wasn't. Ironically, the first shipment of U.S. beef that went on sale this week sold out in less than a day, according to the media.

Maybe people just don't like the president any more - the same guy they voted for just months ago - like in a bad marriage. The Wall Street Journal did a story on this, saying the root of the protests is disappointment in the president, although they started because of U.S. beef. I'm not a big fan of the president myself , and I wouldn't have voted for him, but it seems a bit too soon to judge him now, especially given how people elected him with such overwhelming support.

To me, it seems more like people came to know what it tastes like to get what they want by demanding it, and they are getting addicted to the taste, not knowing when enough is enough. After all, the current protests have long lost their legitimacy, by allowing irrelevant self-interests to get in the way.

Saturday, May 31, 2008

New era of expensive oil

Things are officially nuts - diesel prices have surpassed already crazy gasoline prices here. When my parents bought their first diesel-powered SUV four or five years ago, they were delighted that they were going have to pay only a third of what they had been paying to fill up the tank.

Diesel prices, however, have been rising steadily, at a faster pace than other petroleum products including gasoline, as global demand increased. At the same time, the Korean government has been raising the domestic tax on diesel with a goal to make it almost - but not exactly - as expensive as gasoline. The idea is to protect the environment by curbing diesel consumption. Combine these two factors, the result is people being forced to pay more for diesel than for gasoline at the pump, although in theory, diesel is supposed to be cheaper than gasoline because of the quality differential.

Refiners must be having a field day - who would've thought they could sell diesel at higher prices than gasoline? Particulalry, Korean refiners are so-called "export-oriented" refiners, with products like diesel making up the bulk of their exports. So, as long as overseas folks like China buy, they will make money.

Meanwhile, SUV drivers like my parents are getting screwed, but more broadly, truckers and bus drivers will be hit hard, and eventually, the impact will be felt by consumers. As such, truckers' unions are threatening to walk out if the government doesn't do something about this. And the government is busy trying to come up with a solution, looking into giving subsidies to certain businesses or even lowering the tax.

But with oil prices trending up, we all know none of these measures will solve the problems fundamentally, especially given that using fiscal policies to control oil prices can only be detrimental to economies. So everyone's hands are tied. Perhaps it's about time to really give a serious thought to going green.

Friday, May 23, 2008

Being a president in Korea

Being a president and being popular at the same time seem like a tough, if not impossible, job in Korea. The approval rating for the current president here has nosedived in just a few months, from something like 90% to below 30%. Behind this is the whole beef controversy, for which he appologized through a televised conference, looking more serious than ever.

But certainly, he isn't the only president who the public has turned their back on so quickly. Actually, I can't think of a single president who was particulalry popular while in office.

The relationship between presidents and the public here is pretty strange. Roh Moo-hyun, the previous president, was probably one of the least popular presidents during his term, with an approval rating around 50% when he left office.

As the New York Times reported, he's a rock star now, with hundreds of people waiting outside his house in the countryside to see him upfront every day. Humbleness seems to be the reason why people are going crazy over him now, as he lives among ordinary people, unlike other former presidents who live in heavily guarded mansions. But when he was in office, not a day went by that he didn't get attacked by the press for whatever he tried to do, and as such, people blamed literally everything on him.

During Roh's administration, there was this nostalgia about Park Jung-hee, who was a brutal milatary dictator in the 1970s. People feared Park like the devil back in the days, but 30 years later, people are saying they miss his leadership which led the country out of proverty, as Korea's economic growth seems to be slowing down.

My theory is that the Koreans, as impatient as they are known to be, want quick answers to their problems from their leaders, and if there's no visible improvement in their lives, they get disappointed just as easily. And then they look back, as the old Korean saying goes, "old officials are good officials."

But often people forget they are the ones who picked those people as their leaders. Especially in case of current president, people had every reason not to vote him, given he was mired in shady scandals, but people still gave him a landslide victory. Hope people learned something this time around.

Monday, May 19, 2008

Dejavu: Singapore penetration

When I first went to Singapore two years ago, I was pretty surprised to see Korean stuff everywhere. I had heard about the "Korean wave," but I had no idea it was that big in Asia.

Now, since I came back to Seoul, I've been seeing ads for Singapore on quite a few occasions. It seems like there's some big Singapore tour promotion going on here, and on top of that, some rare Singaporean brands have made it here.

Come to think of it, I think I've actually read in the Straits Times that Breadtalk was trying to branch out to Korea, and indeed, I've seen a couple of Breadtalk shops here, with pretty big crowds curiously picking up bread in there. It was a dejavu of a bunch of Singaporeans standing in circle outside DVD shops, aimlessly watching Korean dramas.

I think they put up a big banner saying, "Singapore's Breadtalk finally arrived in Seoul," or something. As lame as it sounds, it was intriguing enough to almost drag my friend in - that is, before I stopped her. We also have Kaya toast, advertised as the Southeast Asia's finest product, and I can't wait to see a hawker center open in the middle of Seoul one day.

All of this must be part of globalization at work, and I should give it credit for dragging the Lion city out of its little box.

Friday, May 09, 2008

Beef fiasco

There's been huge protest against the Korean government's decision to resume importing American beef. Thousands of people have been holding candlelight vigils across the country, asking the government to withdraw the agreement with the U.S., which was reached just in time when the Korean president was on his first trip to the U.S.

People may be overly concerned about American beef and mad cow disease, but their fears are ligitimate, since their health is at stake. But public health is probably the last thing politicians care about at the moment. The pro-business, pro-American president must have wanted to get the beef issue out of his way so he can move on and talk with the U.S. about ratifying the FTA as quickly as possible.

Indeed, the FTA was all he talked about during his trip to the U.S. And the news of the beef agreement, which was signed in Seoul, was privately broken to the president first when he was in the U.S., even before the negotiations offcially wrapped up and before any of the Korean media got hold of it. A reporter who followed the president at the time in Washington said the president and the Korean delegates drew a cheer from the American crowd while relaying the news, and put an embargo on the news.

The ruling party is blindly supporing the president, although they were the ones who opposed the resumption of American beef imports when the previous government was under pressure from the U.S. Back then, they said bringing in American beef could seriously jeopardize public health, but it has become clear now that all they wanted was just to bash the then leftist president and administration, because that's the way Korean politics works - all that matters is which party you belong to, no matter what ideas and values your party represents, and flipping sides isn't that big of a deal.

The current opposition parties are just doing that. Are they criticizing the government because they worry about people? Some may do, but I doubt that's the sole motive. They are attacking the government because they are on the opposition side, and they've been taking advantage of the deteorating public sentiment against the government amid mounting fears of mad cow disease.

Talking about people's fears of American beef, there's another side to this issue. Such fears are valid to some extent, but the problem is that the fears in large part were created by groundless and non-scientific hearsay about the danger of American beef that the Korean media spread. And the result is near paranoia about eating American beef.

This is a classic case of how statistics and scientific studies can fool you. One example: a broadcast station aired a documentary, saying how dangerous it is to eat American beef, especially for Koreans. It cited some statistics showing all of the British people who got mad cow disease had a certain type of genes, which 90-something percent of Koreans have. Therefore, Koreans are more likely to get mad cow disease than any other races. In response, the government claims, backed up by some doctors and health experts, that just because those Brits and Koreans have the genes, it doesn't mean Koreans will get mad cow disease more easily.

At this point, the truth doesn't matter to them any more. What matters to them is spotting flaws in each other's argument, and win the debate, using all those stats and obscure studies. And while they are at it, the public is out there on the streets, begging to be part of the game.

Tuesday, May 06, 2008

How high is too high?

We are living in a scary world. When I started to cover the crude oil market at Dow Jones about two years ago, if I remember correctly, Nymex crude futures were in the neighborhood of $60 a barrel. Goldman Sachs had been predicting crude prices would rise above $100 a barrel sooner or later, but a majority of other market watchers felt such a spark won't materialize easily; if it ever did, the world economy would be in serious trouble.

Fast forward to now, Nymex crude futures rose well past the $100 mark, breaking above $120 a barrel. In other words, crude prices almost doubled over the past two years. The global economy has been holding up relatively well - certainly better than people had expected, barring the impact of the subprime crisis.

But it is getting pretty scary. High oil prices are pushing up prices for literally everything, with rises in the prices of commodities, especially food, being the most visible. And poor countries are being hit the hardest by run-away inflation, which is seriously threatening their livelihood. In more developed countries too, increases in wages don't keep up with the surging prices, so unless you are a big commodities investor like Jim Rogers, this is becoming a hard time for everyone.

The scariest part is there seems to be nothing that can stem inflation driven by rising commodities prices.

People can blame high oil prices on speculators, but the hard fact is it is becoming harder to find new oil fields, whereas existing fields are aging, and production from the fields is declining as a result. Although it's arguable if the current supply and demand situation justifies the current prices, and how much premium is built in the prices by speculators, as long as traders see the imbalance in supply and demand, prices can only rise. Similarly, growth in food production is being outstripped by demand, and without a significant, revolutionary increase in production, which would take years, the trend won't be reversed.

People are already talking about $200-a-barrel oil, without being laughed at. If we get there, then what? Will people start talking about oil selling at $250 a barrel? Unlike stocks, it's hard to know what the appropriate values of commodities are, so for these monsters, only sky seems to be the limit. And when they finally land, perhaps we'll all have come crashing down.

Wednesday, April 30, 2008

China striking back

Having had enough of criticism, the Chinese are finally biting back! About 6,000 Chinese people, mostly students, took to the streets in Seoul earlier this week and physically confronted anti-Chinese protesters and riot police during the Olympics torch relay. According to the Korean media, they beat up a Korean citizen with a flag pole and threw stones and bottles at the police.

And there was a New York Times story today about how Chinese college students in the U.S. are speaking up for their home country, becoming increasingly hostile toward the Western media which they think are blatantly biased against China. That sentiment is expressed well in this poem cited in the story.

"When we have a billion people, you said we were destroying the planet./ When we tried limiting our numbers, you said it is human rights abuse."When we were poor, you thought we were dogs./ When we loan you cash, you blame us for your debts./ When we build our industries, you called us polluters./ When we sell you goods, you blame us for global warming."

Well, they may have a point. The world is blaming so many things on China, but certainly, China isn't the only country is the world doing those things. And it shouldn't feel good to get so much negative attention.

But we are talking about China here, a country with a billion people. Yes, that many people can destroy the planet, if they keep doing horrible things, and if that many people build industries freely, it'll pollute the environment like hell. There are ways to keep the billion people without doing too much harm to the planet and there are ways to control the population without abusing people's basic rights. There are ways to build the economy more cleanly.

As its economy grows, China is having greater impact on the world, and it needs to learn to act more responsibily and openly as a member of the global community. And yet, China is going backward, which is why people are getting angry.

I read that China is basically kicking out foreign students by not extending their visas until the Olympics is over, while restricting visa issues for foreigners as a way to deal with growing criticism overseas. Who are they holding the Olympics for after all? That kind of paranoia certainly won't help bolster China's image, nor will hysteric responses the Chinese have shown elsewhere.

Wednesday, April 23, 2008

Living with Murdoch

It's happening exactly as everyone had expected. The Rupert Murdoch reign has begun to transform the Wall Street Journal, one of the most prestigious daily newspapers in the world, into a News Corp. product.

Marcus Brauchli, the managing editor of the Journal, said he'll resign from the post, and Murdoch will install one of his people in the position. Prior to Brauchli's departure, Murdoch had already replaced the paper's publisher with Robert Thomson, former top editor of the Times.

Changes Murdoch is trying to make are rattling nerves, because he's basically trying to destroy the tradition of the paper by making it appealing to a wider range of readers. He wants shorter stories and more general news coverage, shifting away from the current heavy emphasis on smart, in-depth business and financial news coverage. By doing that, the paper may gain more readership, but it will certainly lose its prestigious status as the world's finest business paper.

Murdoch agreed to keep the Journal's editorial independence, but he's the same Murdoch, and he'll have his way regardless, as the early changes show. The question is how far he will go in breaking the paper apart.

And News Corp. won't stop there and may go far beyond that. Murdoch has just got himself a seat on the AP's board directors, and he's now trying to buy Newsday, the 10th largest paper in the U.S. in terms of circulation. A sad fact of life.

Thursday, April 17, 2008

Samsung executives indicted

Samsung Group's executives, including Chairman Lee Kun-hee, were indicted for several charges, including breach of trust and tax evasion. But will they ever be thrown into jail? I don't know. To begin with, none of them was detained.

According to the media, a member of the independent panel investigating the case said there is a "discrepancy" between the law and reality when it comes to prosecuting the conglomerates, or chaebols, given Korea's "unique business practices." So it already looks like these people will likely get away with the charges, like other chaebol executives have in the past.

The dilema is obvious: the whole economy depends on these companies, and it won't do much good for the country to screw them, but there's this thing called justice. Which one should be more valued? I don't know.

Wednesday, April 09, 2008


We had parliamentary elections today. Because I've been overseas most of the time since I became eligible to vote at 20 or something, I hadn't got a chance to vote, but I finally did my first voting today. Honestely, I wasn't even sure if I should vote, since I had no idea who were running and what their pledges were. But my parents almost dragged me to the polling place, and I voted for a candidate who seemed to be a liberal. Oh well, at least I exercised my right to vote, unlike nearly half the eligible voters who didn't even bother - the media said turnout was only about 50%, a record low.

Street campaigning during elections - be it parlimentary or presidential - is quite a scene. Candidates make speeches on the back of trucks or in street corners with their entourage, often including celebrities, standing behind them. Their supporters, clad in colors symbolizing their parties, do choreographed dancing, with their supporting songs in full blast.


But often, I feel like the candidates' messages get buried. I tried to find out what the candidate I voted for today had been pledging, but she didn't seem to go beyond saying "I'll make this neighborhood a better place."

If not, they talk about such tired topics as the economy and education, especially English.

I think the Korean economy has been doing pretty well since the Asian financial crisis, and you can actually see a lot of improvement here, but the way politicians talk about the economy hasn't changed much. They always say Korea's still a poor country, and Koreans should try harder to make Korea an advanced country, a mentality that almost seems like an inferiority complex.

Similiary, Koreans have a complex about their English, and the amount of efforts and money they put into English education is ridiculous. The new president even considered banning schools from teaching in Korean, which could've been a cultural suicide. He later backed out, only because of criticism that the idea isn't realistic, rather than concerns about preserving Korean culture.

At the end of the day, I'm afraid this country is only trying to be a copycat of other countries. It wants to be like the U.S., Japan, Singapore, while no one is raising fundamental questions about what good it will do for the people. And people are growing tired of hearing the same bullshit over and over again, with nothing being done for them, as the low turnout today shows.

Sunday, April 06, 2008

New Korean elitism

In the photo is Jungwook Hong, who's now running for parliament. He wrote his autobiography in the early 1990's right after he finished college, mainly about his experience in U.S. elite schools. Inspired by John F. Kennedy, he went to the same high school as Kennedy and went to Harvard. The first edition of the book sold more than a million copies in Korea, and I also own a copy, which I read twice when I was in junior high. I don't know why other people went crazy over his book, but to me, it was one of the most inspirational books I'd ever read at that time. Back then, he was one of rare Koreans who went to an Ivy League school, an achievement great enough to make me admire him as a teenage kid.

Then everyone, including me, forgot about him for a while before he came out with the second edition of his book a few years ago. The new edition has additional chapters about what he had been up to after college, where he majored in East Asian study. He went to Beijing University to do a master's degree, but only to be disappointed at the quality of education there, so he dropped out. Instead, he decided to go to law school in the states, and went to Stanford law school. After law school, he took the same path as many elite Americans, working at Wall Street investment banks, including Lehman Brothers, specializing in corporate M&A.

And he came back to Korea and took over a media company publishing a major English-language newspaper, which many people saw as a stepping stone to become a politician. The English-language newspaper market in Korea is small - circulation is about 50,000 at the most. To make the company profitable, he launched a Korean-language business paper, which, however, has big tabloid-style entertainment coverage. And he resigned as the CEO of the company this year to run for parliament as a member of the conservative ruling party.

Honestly, I was a bit surprised at his career path. I naively admired him for what I thought was a pure passion for literature and history, and the last thing I expected of him was to be an investment banker. Regardless, it'd be still interesting to see how high he can move up the political ladder in Korea. His background is unprecendented in the old, close-knit Korean political scene, and his entry to it may open up the door for many other foreign educated Koreans later, who, I think, collectively will be a key part of new elites in Korea in the near future, given the number of Koreans studying overseas now. I'm not so sure if it'll be a good thing or bad thing, but it'll be an interesting change.

Thursday, April 03, 2008

Back for one last time

So I'm back here, back to exactly where I was two years ago, except I now have two years of work experience under my belt, while I could've been done with the army thing and been a free man by now - is this going to be a worthwhile tradeoff? I don't know, I guess only time will tell.

Right now, I don't feel anything. I don't think much - I'm just trying do whatever I can put my mind to. I've been keeping myself busy unpacking and settling in, but now that I'm done with it all, reality seems about to set in.

I read an interesting article on Yahoo the other day. The Korean government is now trying to encourage more young people to have overseas work experience, and one thing they are thinking about is to exempt people doing certain volunteering work overseas or even just working overseas from the military service. And the same people called me in, forcing me to give up my noble overseas job. What an irony.