Year of change and hope

Offices in Seoul prepare for the New Year. The Korea Herald, in a bid to offer a guiding map for the year, has pinpointed 10 key trends to watch, ranging from political reform and the new government led by President-elect Park Geunhye, to economic, social and cultural challenges as the country grapples with a low growth rate, aging population and new lifestyle patterns. (Kim Myung-sub/The Korea Herald)

Given that South Korea has never been without drastic ― often turbulent ― changes in the past decades, the year 2013 will be similarly dramatic, if not more so.

The Korea Herald has picked 10 trends that are likely to shape the country’s political, economic, social, cultural and other sectors this year, a set of focal points that will certainly engage many policymakers and affect the majority of hard-working Koreans amid growing uncertainties at home and abroad.

One of the most fascinating areas to observe is politics. Koreans elected Park Geun-hye, daughter of late President Park Chung-hee, as the person to navigate the nation in the coming five years. Yet the election result was far from a landslide; Park confronts a daunting task of reforming established politics and uniting Koreans, many of whom fought for their regional and ideological base in a confrontation that illustrated a deeper divide than had been believed.

The structure of the government itself is set to be modified, as the new administration is widely expected to revive the science and maritime affairs ministries. Depending on the administrative changes and reshuffling of policymakers, a host of Korea’s key industries might be required to change strategy this year.

On the diplomatic front, North Korea watchers are predicting that Kim Jong-un will take more steps to solidify his position and bolster the North’s shattered economy by toying with ballistic missile and nuclear weapon technology.

For those who are less concerned about politics and diplomacy, the fact that Korea has welcomed its first female president is seen as a sign that positive developments await Korean women. Expect some women-friendly policies, but it remains to be seen whether they will have a real impact on Korea’s traditionally male-dominated society.

Not so murky is the outlook that the Korean economy might struggle to pick up growth. A growing number of local and foreign experts are revising down the country’s projected growth rate amid the protracted slump in the global economy. Investors worldwide remain jittery and Korean consumers are increasingly losing their appetite to buy big-ticket items.

Policy-wide, however, the fuzzy phrase ― “economic democratization” ― will top the agenda during the Park administration, at least in its first year. A general perception is that the new administration will make more efforts to nurture a fair economy in which small enterprises and consumers will be given some protection against the wayward acts of overly powerful conglomerates. But reining in cash-rich conglomerates ― and their owners with deep pockets ― might be easier said than done. 

Cheong Wa Dae with Bugaksan Mountain in the backdrop is covered with snow on the last Sunday of 2012. President-elect Park Geun-hye will move into the presidential office-residence on Feb. 25. (Kim Myung-sub/The Korea Herald)

Equally challenging is the rapid aging of Korean society. In 2000, the population aged 65 or over made up 7 percent of the total. The figure climbed to 11 percent in just 10 years, alarming policymakers as well as the general public. Extending the working age to 60 is an option to consider as the average retirement age of 57 does not fit the reality of an aging Korea.

Another noticeable demographic change is the explosive growth of multicultural families. Government and private support programs need to be strengthened; the Korean public is also urged to tackle the issue more seriously so that Korea will become a society where people get the same opportunity to realize their dreams.

Psy realized his dreams with the popularity of his horse-dancing antics in “Gangnam Style,” fueling expectations that the Korean Wave, or hallyu, will get fresh momentum to expand from Asia to other parts of the world. It’s a safe bet that more talented Korean singers and actors will attempt to put themselves on the expanded Korean Wave map this year.

Last but not least, more Koreans, particularly those of the younger generation, prefer to spend time alone. They are by no means loners; the “solo” population is yet to be identified and studied as its members demonstrate different behavioral patterns. What’s certain is that more Koreans are adopting this new lifestyle, whose impact will be felt more resoundingly in diverse sectors this year.

By Yang Sung-jin (insight@heraldcorp.com)

Reform, N.K., gender policies areas to watch

Meeting public desire for change to be first test for new government

Having taken center stage in an election-filled 2012, political reform is expected to continue its presence in the New Year, as the new government confronts the difficult task of fulfilling pledges to revamp established politics, break down regional barriers and unite people of different ideologies.

“There is little time as it will be difficult for the Park government to continue its momentum unless it accomplishes an adequate level of political reform in the first year,” said Bae Jong-chan, managing director at Research & Research.

“Unless the direction of the political reform approvable by the people is set within the first year, it will be extremely difficult for Park to maintain support for her administration at above 40 percent, a crucial margin needed for the government to run the nation,” he said.

Political reform is one of the three pillars of reform, along with reform of government organizations and the prosecution, pledged by president-elect Park Geun-hye. Among the measures are a reduction of lawmakers’ privileges and enhanced powers for the prime minister.

“Once the people become dissatisfied with the standing leader, they tend to look for an alternative, who in this case could very well be former independent candidate Ahn Cheol-soo,” Bae said, adding that “collaboration” on policies may be essential.

Achieving new politics is also key for the Democratic United Party in the New Year as it has repeatedly failed to become an alternative force despite public fatigue with the incumbent government. The party must strengthen its outreach to moderates, focus on the public’s livelihoods and carry out high-level political reform to regain the people’s trust, observers said.

New government under Park: Familiar look, new priorities

The new government is likely to take a familiar shape, consisting of 18 ministries, with a renewed focus on science and technology. 

“I expect the presidential transition committee to be able to come up with a blueprint (for the government restructuring) in January, for it to be able to pass through the parliament in mid-January,” Rep. Lee Hahn-koo, the floor leader of Park’s Saenuri Party, said last week.

Park, in her first pledge as a presidential candidate, unveiled her vision for a new governing structure called “Government 3.0,” based on her philosophy that the benefits of Korea’s national development must now trickle down to individuals.

“If ‘Government 1.0’ is defined as a top-down structure and ‘Government 2.0’ an interactive model, ‘Government 3.0’ can be explained as a more transparent, effective and service-oriented architecture designed to better serve individual needs,” she explained.

Going into details of the governmental structure, two ministries ― the science and maritime affairs ministries ― are likely to be revived. A new body that will govern the entire ecosystem of the information and communication technology industry, encompassing contents, platforms, networks and devices, is expected to be created.

An engineering graduate, Park envisions a “creative economy,” stressing that the country must find a new engine for economic growth in creativity, science and technology.

The role and clout of the prime minister is likely to be strengthened.

Park has said that she would let the prime minister preside over Cabinet meetings, giving him or her greater say in management of state affairs. Under incumbent President Lee Myung-bak, the Prime Minister’s Office has almost halved in staff numbers.

Pyongyang likely to take foreign policy steps

In the New Year, North Korea is expected to take some crucial foreign policy steps as its fledgling leader Kim Jong-un may have more time to look outward after a year of power consolidation. 

Some observers cautioned that Pyongyang could make provocative moves such as a third nuclear detonation to test new administrations in Seoul, Washington, Beijing and Tokyo and map out its external policy accordingly.

To many observers, adopting some level of reform and openness appears to be inevitable for Kim to shore up the moribund economy and strengthen his leadership, which has added to the prediction that Pyongyang would take a more active foreign policy in 2013.

But the external environment does not appear favorable for the reclusive regime. The international community’s confidence in the North has seriously eroded due to its saber-rattling, including the Dec. 12 launch of a long-range rocket.

Although President-elect Park pledges to seek more dialogue in a departure from the Lee Myung-bak administration’s strictly reciprocal policy, she is not expected to embrace the unruly neighbor with unconditional aid.

During his second term, U.S. President Barack Obama was expected to take measures to mend fences with the North. But he might not condone North Korea’s “bad behavior” that could pose a threat to security in the region and beyond. Observers say new Chinese leader Xi Jinping may also feel discontent as its impoverished neighbor behaves in a provocative manner that could undermine China’s national interests.

But Beijing, saddled with a slew of domestic challenges of slowing growth, income disparities and corruption, may not apply much pressure to the North.

Greater public acceptance expected for women-orientated policies

Korea is expected to see a substantial boost in gender equality and women-friendly policies under the nation’s first female president.

Her victory may herald a pivotal moment for the traditionally male-dominated society and accelerate changes needed to help women better balance work and family, they added.

“As the nation elects the first female president, the new government is likely to enjoy greater public acceptance of women-friendly policies which didn’t have much support from the incumbent Lee Myung-bak administration for the last five years,” said Lee Soo-yeon, director of the Center for Gender Equality Policy at Korea Women’s Development Institute.

Park promised to increase women’s opportunities in education and employment and, most importantly, to ease the burden of child care. Her policies include providing free child care services, reduced work hours for pregnant workers, and one month’s paid paternity leave to encourage fathers’ participation in the raising of their young children.

The percentage of women in Cabinet, the parliament and public offices in Korea is one of the lowest in the world. The same holds true for private companies.

Having more female leaders in society would help more gender issues be heard, particularly regarding the difficulty of balancing work and family, it is argued.

“Women leaders are more interested than men in nurturing a women-friendly culture in their organizations and this will contribute greatly in bringing changes in our society in regard to gender issues,” Lee said.

Experts said, however, that having a female president won’t be enough to bring radical change in women issues due to centuries of tradition that decreed that men work and women stay at home.


Prospects for economy, multiculturalism, hallyu and lifestyles

Low growth may become entrenched this year

Low growth is likely to be another key trend this year with many research institutions revising their projections downward.

The Korea Development Institute, which is a state-controlled research institute, revised its projection on the nation’s gross domestic product growth for 2013 down to 3 percent, down from its earlier estimate of 3.4 percent.

In a report, the think tank advised policymakers to expand fiscal spending by consulting with the parliament and also cut the benchmark interest rate.

The Finance Ministry is also expected to announce a revised 2013 projection saying that the country’s annual potential growth rate will remain at 3.8 percent until 2020 on Wednesday.

The potential growth rate refers to the maximum possible rate at which an economy can expand without triggering inflation.

The government had forecast that the economy would grow by 4 percent this year in its earlier projection.

Also, the U.S.-based International Monetary Fund had expected 3.6 percent growth in Korea’s 2013 economy, with Hyundai Economic Research Institute forecasting 3.5 percent.

While the Bank of Korea (3.2 percent), LG Economic Research Institute (3.3 percent) and many others predicted a low 3 percent range, the projection by the Korea Institute of Finance stayed at 2.8 percent. “The potential growth rate was in the early 4 percent range before the economic crisis and it is estimated to be in the mid or latter 3 percent range, but it will still fall behind the initial potential growth rate for three years in a row,” said Lee Jae-joon, a researcher at the KDI. “Since there is a high possibility that the market could run into an era of deflation with the current economic conditions, stabilizing the economy is a needed measure at this point.”

Such low growth projections come amid the sluggish global economy, which has impacted both exports and investment figures of the local economy, which has a high level of dependence on trade, according to market observers.

The sectors of construction and real estate have been deeply influenced by the slowing economy. Investments in construction are expected to increase merely 2.3 percent in 2013, whereas it showed minus growth in 2011 and 2012.

The impact of lower growth will also most likely be acutely felt in the job market with the new Park Geun-hye administration being met with a serious setback in 2013.

‘Economic democratization’ boon for small firms

In Korea, the concentration of economic power in the family-owned conglomerates has reached the point that it could severely undermine smaller players.

A series of detailed measures to overhaul the imbalanced market situation will likely be carried out after Feb. 25 when Park Geun-hye will take office as President.

The coming Park administration is set to promote “economic democratization” in order to realize fair competition in the economy that protects the market, small and mid-sized businesses and consumers from mammoth economic forces such as Samsung and Hyundai Motor groups.

Her economic democratization measures feature fostering growth of small and mid-sized enterprises and restraining monopolistic position of large family-owned businesses.

The President-elect also underscores that large businesses’ positive roles in fueling growth and creating jobs must be maximized.

She pledged to remove discrimination between regular and irregular workers, limit conglomerates’ advances into areas better fit for smaller businesses, and curb large retailers’ abuse of power against smaller suppliers.

Stricter penalties with jail sentences would be introduced for chaebol owners for embezzlement or malpractice, and presidential pardons limited.

While liberal candidates had sought to revamp the family-centered ownership structure of major conglomerates, President-elect Park prioritizes establishing a fair market through strict application of the competition laws rather than big player-reform itself.

“I will turn the conglomerate-centered economic structure into a satisfying economic system where small and medium-sized businesses and consumers can grow together via fair and transparent market order, equal opportunities and reasonable rewards,” Park said during her presidential campaign.

Employment best solution for rapidly aging Korea

Korea became an aging country in 2000 when the population aged 65 or over made up 7 percent of the total. In 2010, the figure of senior citizens surged to 5.45 million, about 11 percent of the nation’s population.

Amid a falling birth rate, industry watchers say, the best welfare policy for Korea is employment. 

In a recent report, the Ministry of Strategy and Finance stressed the necessity to raise the standard age for welfare benefits for elderly people from the current 65 to 70 or 75, though in phases.

“Considering increased life expectancy and healthier population, we need to revise the current standard age for senior citizens that was set in the late 19th century,” the report said.

“Most people and those aged 65 or over also consider people who age 70 or older as senior citizens,” the report said, hinting at a revision to the current system.

Legal revisions to select beneficiaries under the renewed system seem unavoidable. The government is considering differentiating the age standard depending on economic conditions.

The average retirement age at 57 also could be adopted flexibly by individual workplace by extending the working age, reemploying retired workers or abolishing retirement ages entirely.

President-elect Park Geun-hye pledged during her campaign that the incoming government would oblige companies to set their retirement age at 60.

“The government will supplement reducing workforce at an aging society and support for elderly citizens to work longer even after retirement,” the report said.

Park to give education support to migrants and families

President-elect Park Geun-hye has 10 pledges for migrant workers and their families, which include government services for newly arrived migrants and special education programs for migrant women and their children.

“Seventy-eight percent of migrants who come to this country by marrying a Korean citizen have graduated high school overseas,” said Saenuri Party lawmaker Jasmine Lee. Lee is the first non-ethnic Korean and naturalized citizen to become a legislator.

“But most of them find it hard to get decent jobs because their education credentials are often not recognized in Korea. We are planning to support those whose monthly income is less than 1 million won so they can prepare for and take high-school qualification exams. We are also going to support 50 percent of their university tuition once they get admitted.”

Other pledges by Park include special education programs for children of multicultural families, government support programs for domestic violence victims, and a mentorship program between newly arrived migrants and foreign-born, naturalized citizens who have successfully settled in Korea.

“Children of multicultural families can be more flexible and adaptive to other cultures, which can be a great asset to this country in the future,” said Lee. “It is necessary to develop their potential to the full.”

On Oct. 7, Park attended a special event held for multicultural families at Seoul Square.

“I hope this country to be a place where everyone gets the same opportunity to fulfill their dreams as long as they are willing to work for it, no matter where they are from,” she said at the event.

“I will do my best to make sure everyone, no matter where they are from, can feel proud and happy to be living in this country.”

Directions of hallyu in the New Year

With the sudden explosion of K-pop thanks to Psy’s record-smashing music video, hallyu has a golden opportunity to further spread its’ wings.

With the anticipation of Psy’s follow-up track to “Gangnam Style,” which is expected to be released partially in English to cater to his international fan base, Korea has been receiving even more attention abroad beyond just political spats involving its counterpart in the North. K-pop has now increased the world’s awareness of Korea.

A survey conducted by the Korea Tourism Organization involving 1,556 internationals from 77 countries. The studied found that nine out of 10 foreigners wanted to visit Korea after watching the “Gangnam Style” music video.

The increase in the hallyu wave may also compel a new influx of English singles and albums by Korean musicians in 2013. In November, U.K. newspaper the Guardian predicted that girl group Girl’s Generation (SNSD) will continue the worldwide hallyu fever that was ignited by Psy. The nine-member group has announced that they are planning to release their first all-English album next year with Interscope Records.

Artists such as SNSD, Big Bang, BoA, 2NE1, JYJ and even the new rookie male trio Lunafly, are no strangers to releasing English-language tracks. As the interest in K-pop and hallyu continue to expand beyond Asia’s borders, the Korean music industry seems to be turning toward a more bilingual path.

‘Go it alone’ population surges over future jitters

The number of young Koreans who prefer to spend time alone rather than participate in group activities has increased rapidly. 

The “solo” population has many subgroups, such as households with only one occupant and people who are in seclusion in order to escape from reality.

Restaurants have renovated interiors by placing tables for one person to make comfortable spaces for customers who come alone to enjoy a meal.

Cafes near university area that used to be a place to meet friends and chat started to make study-rooms for those who want to study quietly.

Over 74 percent of college students consider themselves part of the “enjoying life alone” group, according to online recruiter InCruit.

More than 81.9 percent of respondents said they prefer to be alone “to manage time effectively” followed by “feeling comfortable without others”, with 36.1 percent.

Yang Yoon, a psychology professor at Ehwa Womans University, said that people in their 30s are the age bracket most clearly showing the trend.

“Thirtysomethings are those who witnessed their parents’ collapse throughout the IMF economic crisis and the 2008 global financial crisis. They have no certainty about their future. That’s why they tend not to make a family because they feel a grave responsibility to do so” said Yang.

The professor said that the trend reflects on consumption patterns. “Small packaged food sales skyrocketed as one-occupant households increased”

Yang said that the social structure has sparked the trend rather than individual circumstances.

By Herald staff