Tag Archive | "domestic"

Demographic Decline in South Korea

Kylan Toohey

In 2017, the fertility rate in South Korea reached a record low of 1.05, a decrease of over 12 percent from 2016. If this persists South Korea’s population is expected to begin declining by 2027, an alarmingly early date. This “demographic crisis” is representative of a larger problem, one that reflects the struggles of a society struggling to adapt to its relatively newfound modernity in work and education opportunities.

In order to understand why South Korea is experiencing such rapid population decline, it is important to look at the broader societal conditions that have made it overly burdensome for South Koreans to have children. While these factors are all technically intertwined, it is helpful to examine them one by one to understand their individual implications for the long-term struggle to revive the South Korean birth rate.

First, the ever increasing costs of education. In South Korea, education is perceived to be directly linked to employment, and even marriage prospects. As a result, typical Korean parents will do whatever it takes to send their child to the best schools and hire the best tutors. However, as a result of this high competition, education costs have soared in recent decades. A 2015 report studying the value of private education in South Korea cited estimates as high as $25 billion, reflecting the competitiveness of the market for top-notch schools that parents view as essential for their children’s success later in life. Thus, rather than be forced by economic constraints to send their children to second-rate schools and potentially jeopardize their chances for success, young South Korean couples are instead foregoing having children entirely.

Second, rampant youth unemployment further exacerbates concerns over education. Recent data from the Ministry of Employment and Labor revealed that some 11.3 percent of Korean youth between the ages of 15 and 29 are out of work, a number nearly three times the overall unemployment rate. This alarmingly high rate of youth unemployment is the direct consequence of an economy dominated by a few giant conglomerates that generate over half of the country’s GDP, but cannot absorb the supply of over-educated and over-qualified youths entering the job market.

As South Korea faces no shortage of highly-educated young job seekers, this misallocation of labor and investment has created a job industry so competitive that Korean youth are forced through grueling test-taking processes just to get their foot in the door at a company, leaving many discouraged and ultimately jobless. In this environment, few Koreans want to contribute to this problem by having more children that will also have to eventually enter this harsh competition, making this another factor that leads to a declining birth rate for the population.

The question remains on what can be done to combat this steepening decline before it is too late. An aging society like South Korea’s incurs additional costs, such as increased health care expenditure for a growing population of elderly, while a shrinking workforce could harm labor productivity. Moreover, as a country that is still technically at war, South Korea must address the decline of its available military manpower.

While the government has introduced measures to publicly encourage families to have more children, it is vital that the South Korean government more clearly addresses the legitimate concerns of the unemployed youth, as youth unemployment is one of the major contributing factors to the declining birth rate. If South Korean youth are able to find work more easily, then education pressures may lessen and diminish the burden on parents. While there are surely other measures that the government could take, like policies more along the lines of direct assistance to mothers struggling to provide for their children, this would most likely be insufficient in lowering the overall birth rate without some sort of direct action taken toward lessening youth unemployment as well. If not, South Korea will soon find itself among the ranks of countries such as China and Japan in terms of an overly aged population and nearly negligible birth rate to counter it.

Kylan Toohey is a graduate student with the Asian Studies program at GWU. She is currently an Intern at the Korea Economic Institute of America. 

Photo from hjl’s photostream on flickr Creative Commons.


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Building a Safe South Korea

By Gwanghyun Pyun

“The State shall endeavor to prevent disasters and to protect citizens from harm therefrom”

–          (6),  Article 34, Constitution of the Republic of Korea

During his campaign, President Moon Jae-in said that the president and the Blue House should be the “control tower” for disaster management, citing Article 34 in the Korean constitution. In doing so, he pointed to a series of large-scale disasters which impacted the Korean people over the last several years, including the sinking of the Sewol ferry and the recent outbreak of avian influenza. This statement resonated with his supporters, causing him to name ‘Safe South Korea’ as one of his 12 major pledges.

Below are some of the disasters that have plagued the country over the last few years, including a few ongoing issues that Moon will have to deal with as he begins his presidency.

Major disasters for the last three years.

Sewol ferry, 2014

On April 16, 2014, the Sewol, a ferry transporting 476 passengers, including 323 Danwon high school students, sank off Jindo Island. The sinking of the Sewol was broadcast live on television, and Korean people watched for more than 20 hours as the ferry sank completely, killing 295 people.

Investigators said that the Sewol was carrying twice its weight limit, and this caused the ferry to capsize. In addition, the Sewol rescue operation missed the key window to rescue passengers, because its crews failed to notify the proper authorities in the region. Even after missing the prime response window, the rescue operation did not work well because responsibilities among different agencies were not clearly designated.

Middle East Respiratory Syndrome (MERS), 2015

MERS was brought to South Korea by a man who had traveled to Bahrain in May 2015. It spread so rapidly as to infect more than 100 people a month after the official outbreak. In the end, MERS infected 186 Koreans and killed 36 before the South Korean government officially declared a ‘de facto end’ to the outbreak.

The government did not provide much information on MERS to the public at first, causing people to panic. For example, the Ministry of Health and Welfare hid the list of hospitals where the infected people stayed to avoid creating unnecessary anxiety among the hospital customers. The World Health Organization (WHO) pointed out the government response was late, despite the fact that initial countermeasures are important for infectious disease management.

Avian Influenza (AI), 2016

Last December, AI spread quickly nationwide and damaged Korean stockbreeding farmhouses in most of regions of the country. It was recognized as the worst AI accident ever in South Korea, as those farmhouses had to slaughter 26.7 million chickens, 2.5 million ducks, and 2.5 million other birds to prevent the spread. People suffered from anxiety over possible transmission to humans and a surge in the price of eggs.

Koreans blamed state and provincial governments for the crisis. Professor Jae Hong Kim at Seoul National University said that the failure of initial preventive measures and the late response of the government made the disaster worse.

Current issues for national safety

Fine dust

These days, the most urgent safety issue is the notorious fine dust. The public was shocked and riveted when Airvisual ranked Seoul No.2 among the world’s cities for serious air pollution on March 3 this year.  An Organization for Economic Cooperation and Development (OECD) report said within 60 years South Korea is expected to have the highest death toll in the world due to air pollution.

Nuclear Power Plants

The danger of nuclear power plants is also becoming a hot issue. South Korea has 23 active nuclear power plants, five plants in the course of construction, and 12 more new plants already planned. In addition, Korea has the highest density of nuclear power plants in the world, with six million neighborhood residents near the plants. Last year, a series of earthquakes near Gyeongju raised concerns about the ability of these plants to withstand natural disasters.

Moon promised ‘Safe South Korea’

For a safe country, managing disasters is as important as preventing crime and deterring war. According to an article from Monthly Chosun, Koreans were disappointed that the former government did not deal with the sinking of the Sewol ferry and MERS outbreak well.

President Moon said Korea should undertake reforms to avoid the mistakes of the prior administrations and show greater responsibility for addressing national safety. To do this, he will be making a new crisis management system for national-scale disasters and handle domestic problems by becoming the “control tower” as the president.

As Moon promised, he has to show his management ability when the next national disaster comes.  Meanwhile, he also promised a 30 percent reduction of fine dust and vowed to create a “nuclear power zero era.” In order to meet public expectations for a “Safe South Korea,” the Moon administration should not only address the mistakes made in prior disasters, but also prepare for new kind of disasters such as the recent ransomware attack that hit several major companies around the country.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from arif_shamin’s photostream on flickr Creative Commons.

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Moon Vows to Become a “President of All People,” but Faces a Nation Divided

By Gwanghyun Pyun

Moon Vows to Eradicate “Deep Rooted Evils” of Previous Administrations

An unexpected early presidential election was held on May 9 in South Korea. This election was the result of the impeachment of President Park Geun-hye. The election was won by Moon Jae-In, who strongly argued for eradicating ‘deep rooted evils”’ in Korean society, referring to the turmoil from the former President Park. Moon largely won the support of those who protested against the Park administration, and during his campaign he praised the “candle sentiment” of the people who took to the streets with candles to protest. But while he was supported by those who protested against the administration, how will his policies tackle the issues they stood up for?

In Moon and the Minjoo Party’s official pledge book, his first pledge out of twelve is for there to be a ‘Republic of Korea without corruption,’ including the ‘eradication of deep rooted evils’ as its primary agenda. It specifically promises that the next administration would eradicate the deep rooted evils that resulted from the nine years of the former two conservative administrations. This means that his strategy during the election focused on criticizing the previous two  presidents to gain the support of those who took part in the candlelight protests. According to a poll by Gallup Korea, the reasons people voted for Moon were the “eradication of deep rooted evils” (20 percent), “regime change” (17 percent) and Moon’s “good personality” (14 percent).

A Republic of Korea where people are sovereign by finishing the candlelight revolution

Moon and the Minjoo Party decided to begin his list of  four visions for Korea with a vision of “finishing the candlelight revolution, a Republic of Korea where people are sovereign.” It suggests that during the nine years of the two former administrations, Korean society has belonged to the 1 percent of people who have vested interests in the system such as bureaucrats, the chaebol and the rich. Moon insisted during the campaign that finishing the candle revolution would bring a society where all the people are sovereign.

As the first pledge, Moon made promises to take Korean society back from the 1 percent. To do this, his administration will set up a special committee for clearing out deep rooted corruption and confiscating any wealth accumulated by illicit means. While he spoke out against the meddling in state affairs by Choi Soon-sil, a friend of the former president Park closely tied with the scandal that led to hear impeachment, Moon also promised to reform corruption among high-ranking bureaucrats, to remove the blacklist of cultural figures who supported left-wing causes, and to negate the state authored history textbooks made under the Park’s administration.

At the same time, Moon pointed out what he thinks is the fundamental reason why a small number of people have too much power –  the Korean constitution made in 1987 is outdated. Because this constitution has given prior leaders imperial presidential power, he said, Korea needs constitutional revisions to ensure balance between the presidency and the National Assembly.

The 58.6 percent who did not vote for the President Moon

Since he has focused on giving power back to the people, Moon needs to be aware of the views of the 58.6 percent of people who did not vote for him. Considering the fact that Moon’s first vision and pledges are about fixing faults from the last nine years, it seems that his victory  is more about the perceived wrongs committed by the prior two administrations than his policies on security and the economy.

During the election, Moon had two main rivals – the conservative Hong Joon-pyo and the centrist Ahn Cheol-soo, who won 23.3 percent and 21.8 percent of the vote respectively.  He also faced two minor opponents in the center-right Yoo Seung-min and the left Shim Sang-jung, who won 6.8 percent and 6.4 percent respectively.

Excluding the topic of cleaning up corruption, Korean publics opinion on other policies are polarized. Especially in terms of security policy, the three other candidates who collectively won 52.9 percent  offered a different vision for dealing with North Korea than Moon’s pledge  to inherit the ‘Sunshine policy’ that pushed for a close relationship between South and North Korea during the liberal administrations of 1998 to 2008.

The two conservative candidates, Hong and Yoo, insisted that Seoul needs to maintain a hardline stance against the North, including deploying tactical nuclear weapons in South Korea. The main candidate, Ahn, said that without North’s denuclearization first, there cannot be any cooperation with North Korea. Furthermore, these three candidates support the deployment of THAAD, while Moon argued that the THAAD deployment decision should be left to the new administration.

When it comes to economic policy, Moon insisted that the government should lead the creation of job opportunities, and has set a target for creating 810,000 new jobs in the public sector. In contrast, his three main rivals argued that private sector should lead job creation and criticized Moon for having no proper plan to budget for the 810,000 jobs he wants to create.

But while Moon Jae-in may face these splits on economic and security policy, particularly among those who did not vote for him, he has acknowledged the need to bridge divides. In his inaugural address, Moon said “I will become a president of all people. Each person who did not support me will still be my people and I will serve them as such,” highlighting the nation’s integration. It will be an important task for him to address the faults of past, but he must also work to overcome the current divisions in society and bring the nation together.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from Republic of Korea’s photostream on flickr Creative Commons.

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Not Worth a Dime? Korea Should Stop Producing 10 Won Coins

By Patrick Niceforo

Late last year, the Bank of Korea (BoK), South Korea’s central bank, announced its plans for a “Cashless Society,” which first and foremost means getting rid of coins by 2020. A proposed method for gradually removing coins from circulation is encouraging travelers in South Korea to deposit their change onto their T-Money cards, electronic travel passes that are used to pay for metro and bus fares. But while the BoK has reduced its annual expenditure on coin production by 200 million won from 2015 to 2016, it could do more. Similar to Canada ceasing production of its penny, South Korea could simply stop minting its equivalent of a penny, the 10 won coin.

The BoK issues won banknotes in denominations of 50,000, 10,000, 5,000, and 1,000 and won coins in denominations of 500, 100, 50, and 10. According to a recent study, only 8.5 percent of 10 won coins are in circulation, with the remainder sitting in jars or private safes in peoples’ homes.  As of last year, the cost of producing the 10 won coin (0.009 USD) was reportedly twice its face value at 20 won (0.018 USD). Other sources such as KNN and Asia Economy, however, have estimated the cost of production to be as high as 40 won (0.036 USD).

Besides the fact that it costs more to mint a 10 won coin than it is actually worth, the coin’s value is so low that it has little, if any, purchasing power. At the current exchange rate, the 10 won coin is worth slightly less than an American penny. As a result, its only real use is when one needs exact change, which is rare since just 20% of financial transactions involve cash. Furthermore, given the coin’s low value, most coin-operated devices such vending and laundry machines do not even accept it.

In addition to Canada, many other countries such as Brazil, Australia, Finland, Israel, and Malaysia have removed their equivalent of a penny from circulation, primarily because inflation rendered the coin virtually useless. To compensate, many penniless countries round prices to the nearest 5 or 10 cents. South Korea could easily implement similar policies, especially since prices in Korea already include sales tax. In other words, consumers who pay with cash in South Korea can easily calculate how much one or more item costs before reaching the cash register since their final price is whatever is listed on the labels. Getting rid of the 10 won coin will not only make Koreans’ wallets lighter, it will actually expedite cash transactions.

It does seem like South Korea is naturally moving further away from physical currency, with more Koreans starting to use smartphone apps in lieu of credit cards. Nonetheless, achieving a cashless society could take some time, especially since cash discounts are common in the informal sector. Moreover, the gifting of cash is a cultural tradition in South Korea at weddings and during certain holidays. A small and cost effective step consistent with a cashless society policy could be to cease minting the 10 won coin. Many other countries have already removed the penny from circulation for these same reasons. Perhaps South Korea should, too.

Patrick Niceforo is a graduate student at the Middlebury Institute of International Studies and an intern at KEI. The views expressed here are the authors’ alone.

Image from YunHo Lee’s photostream on flickr Creative Commons. 


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The Realignment of Korean Politics

By Thomas Lee

In the wake of the 20th legislative elections on April 13th, the Minjoo Party edged out the conservative Saenuri Party to win the slimmest possible majority of one. This has been hailed as a revolution as this was the first instance in South Korean history of a ruling party with a sitting president in power losing the majority in the National Assembly. Add to the mix the liberal split and President Park Geun Hye’s reputation as the “election queen,” and this loss is even more stunning for the Saenuri Party.

The Saenuri Party lost its strongholds of Seoul, Daegu, Busan, and Ulsan. Seoul in particular was lost to the Minjoo while the others were split between Minjoo, independent, and former Saenuri representatives. The People’s Party in turn swept the Minjoo out of Honam (Gwangju and the Jeolla Provinces). Discontent with the ruling party, especially with young voters, who surged to the ballot box, denied the Saenuri the predicted gain in seats. At the same time, with the Minjoo spending most of its time attempting to win the capital and the southeast, discontent likewise evicted the Minjoo from its own former regional stronghold. Although the Minjoo Party gained in the National Assembly, people voted for it not because they suddenly favored the Minjoo, but because they were voting against the Saenuri Party. This was a painful setback for both the conservative and opposition parties.

Chart Korean Voters

NA Voting Map

The idea of a third party that operates beyond the traditional framework of the entrenched two-party system resounds within South Korea’s electorate. Nearly doubling its number of seats to 38, the People’s Party has gained considerable power and has set the Party up as a potential kingmaker, as the number of seats between the two traditional parties are almost neatly split.

That is not to say that the People’s Party won. Yes, this was a major victory and the Party became an undeniable force, but looking at the spread of seats that it holds, the People’s Party cannot claim to be a centrist party as Ahn Cheol-soo desired, but a Homan faction. Ahn’s plans called for a wave of support from citizens at the ballot booth who identified with equality, justice, and a fresh start. This would have translated into support from people all over the nation who were tired of traditional regionalism. This simply did not materialize.

This shows that although the South Korean electorate would like to see the values that Ahn himself personally came to represent materialize on the political stage, they believe that he would have been unable to bring about this change and that his party is not the  vehicle to do so. His party’s success has stemmed more from disapproval of the Minjoo party than zeal for his party’s values.

While the 20th National Assembly is beginning afresh, Ahn Cheol-soo found himself wedged between a plummeting Party approval rating and allegations of corruption involving some of Ahn’s closest aides. From an internal struggle on whether to merge with the Minjoo Party or not, to remarks about allying with the Saenuri Party to deny the opposition party the speakership, to controversial statements made by Ahn himself, the People’s Party was struggling to gain a foothold and now the resignations of Ahn Cheol-soo and party co-founder Chun Jung-bae put its future in doubt. The party’s difficulties should have been expected, taking into account that the southwest region has detested conservative factions since the 1960s, and that a number of lawmakers in the National Assembly harbor a shady past.

With the Minjoo Party regaining ground in the Honam region and President Park’s  approval rating rising  due to her achievements in international relations and diplomacy any third party would have an uphill battle ahead of it.  In the meantime, whether and how United Nation’s Secretary-General Ban Ki-moon enters the race for the Presidency is the biggest question in Korean politics.

Thomas Lee is a former intern at the Korea Economic Institute of America and a graduate of American University. The views expressed here are the author’s alone.

Photo from daumdna’s photostream on flickr Creative Commons.

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