Korea's Changing Roles in Southeast Asia: Expanding Influence and Relations 9789812309709

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KOREA'S

CHANGING ROLES

IN SOUTHEAST ASIA

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The ASEAN-Korea Centre is an international organization inaugurated in March 2009. The Centre’s Secretariat is located in Seoul, Republic of Korea. The Centre Members consist of the governments of the ten ASEAN (Association of Southeast Asian Nations) countries and the Republic of Korea. ASEAN consists of Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The Centre’s objectives are to enhance ASEAN-Korea partnership by promoting economic and sociocultural exchanges and cooperations between ASEAN and Korea.

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publishing, an established academic press, has issued more than 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world. ii

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Edited by David I. Steinberg

Seoul

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Institute of Southeast Asian Studies Singapore

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First published in Singapore in 2010 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: http://bookshop.iseas.edu.sg All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2010 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of the publishers or their supporters. ISEAS Library Cataloguing-in-Publication Data Korea’s changing roles in Southeast Asia : expanding influence and relations / edited by David I. Steinberg. 1. Economic assistance, Korean—Southeast Asia. 2. Korea—Relations—Southeast Asia. 3. Southeast Asia—Relations—Korea. I. Steinberg, David I. DS910.2 A9K84 2010 ISBN 978-981-230-969-3 (hard cover) ISBN 978-981-230-970-9 (E-book PDF) Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Photoplates Private Limited iv

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Contents List of Tables, Figures and Photos

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Foreword by Han Sung-Joo

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Message from K. Kesavapany

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Acknowledgements

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The Contributors

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1

Tenuous Beginnings, Vigorous Developments David I. Steinberg

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Perspectives on Korea’s Role in ASEAN H.E. Surin Pitsuwan

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South Korea and Southeast Asia: Ideas for Deepening the Partnership David Koh

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Divergence Amidst Convergence: Assessing Southeast and Northeast Asian Security Dynamics Chung Min Lee

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Korea’s Economic Relations with Southeast Asia Jong-Kil Kim

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Investment of Korean Electronics Industry in Southeast Asia Bun Soon Park

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Contents

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Korean Assistance to Southeast Asia Yul Kwon

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Korean Development Model: Lessons for Southeast Asia Seok Choon Lew and Hye Suk Wang

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Southeast Asian Migrant Workers in South Korea Yeong-Hyun Kim

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Filipina Wives and “Multicultural” Families in Korea Minjung Kim

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A Fading Wave, Sinking Tide? A Southeast Asian Perspective on the Korean Wave Pavin Chachavalpongpun

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The Korean Wave: Korea’s Soft Power in Southeast Asia Joong Keun Kim

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The Republic of Korea in Southeast Asia: Expanding Influences and Relations Tae Yang Kwak

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Korea’s Preparation for Southeast Asia: Research and Education on Southeast Asian Studies in Korea Seung Woo Park

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Conclusion David I. Steinberg

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Index

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List of Tables, Figures and Photos TABLES Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 5.7 Table 5.8 Table 5.9 Table 5.10 Table 5.11 Table 5.12 Table 5.13 Table 5.14 Table 5.15

Korea’s Exports to and Imports from ASEAN, 1990–2006 82 Korea’s Exports to and Imports from ASEAN Member Countries, 1990–2006 83 ASEAN’s Exports to and Imports from Korea, 1990–2006 84 ASEAN Member Countries’ Exports to and Imports from Korea, 1990–2006 85 Share of Ten Major Export Markets and Import Origins of ASEAN, 1993, 1996, 2000, 2004, and 2006 86 Top Ten Commodities Traded between Korea and ASEAN-6, 1993, 1996, 2000, and 2004 88 Top Ten Commodities Traded between Korea and ASEAN-6 in 2004 89 Korean FDI Outflows to and Inflows from ASEAN, 1990–2007 91 Foreign Direct Investments from Korea to ASEAN Member Countries, 1990–2007 92 Foreign Direct Investments in ASEAN by Source Country, 1995–2004 94 FDI Inflows into ASEAN Member Countries by Source Countries, 1995–2004 95 Investments from ASEAN Member Countries to Korea, 1990–2007 96 FDI Inflows to ASEAN by Economic Sector in 1999–2004 97 Korea’s Sectoral Investment in ASEAN, 2007 99 Korea’s Manufacturing Investment in ASEAN and World, 2007 100 vii

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List of Tables, Figures, and Photos

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Table 5.16 Table 5.17 Table 5.18

Investments from ASEAN to Korea, by Economic Sectors, 1990–2007 101 Korea’s FDI Outflows by the Size of Firms, 1990–2007 102 Korea’s Overseas Construction Contracts 104

Table 6.1 Table 6.2 Table 6.3 Table 6.4

Korea’s Market Shares in the World Market Exports of Korea’s Electronics Industry Samsung’s ASEAN Subsidiaries (2007) ASEAN’s Main Economic Indicators

Table 7.1

Official Development Assistance Provided by Korea (1987–2006) ODA by Main Categories 2001–06 (Net Disbursement) Korea’s Trust Fund by Multilateral Development Bank Geographical Distribution of Bilateral Assistance (Gross Disbursement) Top Ten Recipients of Bilateral ODA (Gross Disbursement) Mid-term Strategic Partner Countries Poverty Rates by ASEAN Members KOICA’s Grant Aids by Country (1996–2006) KOICA Operatons through NGOs EDCF to ASEAN Members (1987–2006)

Table 7.2 Table 7.3 Table 7.4 Table 7.5 Table 7.6 Table 7.7 Table 7.8 Table 7.9 Table 7.10 Table 8.1

Table 9.1 Table 9.2 Table 9.3 Table 9.4 Table 9.5

Table 10.1 Table 10.2

Economic Policies of Korean Development Model: Support and Discipline Total Admissions of Industrial Technical Trainees to South Korea Annual Quota of Employment Permits for Unskilled Foreign Workers, 2008 Unskilled Foreign Workers in South Korea, 2006 Gender in Unskilled Foreign Workers, 2006 Registered Southeast Asian Residents in Seoul and Outer Seoul, 2007 Southeast Asian Immigrants and Female Marriage Migrants from Three Major Countries, 2001–06 Number of Marriage Migrants by Nation and Sex (as of December 2006)

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122 125 134 142

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List of Tables, Figures, and Photos

Table 13.1

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Cumulative Foreign Direct Investment in Vietnam, 1988–2007

Table 14.1 Table 14.2 Table 14.3 Table 14.4 Table 14.5 Table 14.6 Table 14.7

Occupation and Institutional Affiliation Undergraduate Schools and Majors Graduate Schools and Majors (Master’s Level) Graduate Schools and Majors (Doctoral Level) Main Themes in the Doctoral or Final Thesis Main Topics of Research Interests Curriculum of Some Selected Undergraduate Programmes for Southeast Asian Studies Table 14.8 Other Undergraduate Programmes with Course(s) in Southeast Asia Table 14.9 Two Selected Graduate Programmes with Southeast Asian Studies Curriculum Table 14.10 Other Graduate Programmes with Course(s) in Southeast Asia Table 14.11 Postgraduate Careers of PUFS Graduates

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FIGURES Figure 6.1

Share of the Electronics Industry in the Manufacturing Sector Figure 6.2 Composition of the Electronics Industry (1995, 2006) Figure 6.3 Shares of Main Industries in Total Korean Exports Figure 6.4 Investment of the Electronics Industry in ASEAN Figure 6.5 Investment in ASEAN by the Korean Electronics Industry (Number) Figure 6.6 Investment in ASEAN by the Korean Electronics Industry (Value) Figure 6.7 Samsung’s Market Share in Thailand (Market Share No. 1 Goods, June 2007) Figure 6.8 Employment of Samsung Electronics in ASEAN (2007) Figure 6.9 Samsung’s Regional Exchange of Parts and Components in ASEAN (1997) Figure 6.10 Production Sharing of TSE Figure 7.1 Figure 7.2

Trend of Korea’s Grant toward ASEAN Members (1992–2006) KOICA’s Sectoral Priority in Asia (2006)

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List of Tables, Figures, and Photos

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Figure 8.1

Figure 9.1

The Articulation of Formal and Informal Sectors in the Korean Development Model

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Migrant Labour Force in South Korea, 1992–2006

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Figure 10.1 Trend of Total Marriages and International Marriages, 2000–06 Figure 14.1 Sex Ratio Figure 14.2 Age Group Composition Figure 14.3 The Year When They Started Their Academic Career as Southeast Asianists PHOTOS Photo 1 Photo 2 Photo 3

Filipino Workers at the Roman Catholic Church of Hyehwa Wonkok Bon Dong, City of Ansan, Outer Seoul Southeast Asian Migrant Workers on a Sunday Afternoon in Wonkok

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Foreword The year 2009 marks the 20th anniversary of the ASEAN-Republic of Korea (ROK) Dialogue Partnership. As such, Korea hopes to use this occasion as an opportunity to further strengthen and expand its relationship with many Southeast Asian countries. In March of this year, ASEAN and ROK established the ASEAN-Korea Centre, aimed at promoting economic and sociocultural cooperation between ASEAN and Korea. In June 2009, the parties welcomed the opening of the ASEAN-Korea Commemorative Summit held for the first time in Korea. The celebratory events merely reiterate and reinforce the importance that South Korea attaches to its relationship with ASEAN. In trade, ASEAN is Korea’s third largest partner with a total volume of $90 billion (2008). It is also Korea’s third largest investment destination with a total accumulated FDI amount of $29 billion (1968–2008). It is Korea’s second largest construction market in the world with a cumulative order of $54 billion (1966–2008). Southeast Asia is also an important source of import commodities such as oil, gas, coal, palm oil, tin, and pulp for South Korea. ASEAN and Korea concluded an FTA (AKFTA) related to goods in June 2007 and shortly thereafter concluded an FTA on service provisions in November 2007. Cultural and personnel exchanges between Korea and the countries of Southeast Asia have expanded rapidly in recent years. The number of Korean visitors to ASEAN countries has increased more than three-fold in twelve years from 1.1 million in 1995 to 3.5 million in 2007. Nearly half a million ASEAN visitors travelled to Korea in 2007. In the context of a series of agreements such as the ASEAN Integrated Initiative (2000), Joint Declaration on Comprehensive Cooperation Partnership (2004) and Korea-ASEAN Action Plan (2005), the two sides xi

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agreed on cooperation in building IT infrastructure, human resource development, environment, energy, eradication of contagious diseases, and cultural exchange. But it is in the area of East Asian cooperation where the interests of ASEAN and Korea have coincided closely and the two parties have worked together most productively. Through the efforts of such bodies as the East Asian Vision Group (EAVG) and East Asian Study Group (EASG), Korea and ASEAN countries worked together to plan and build an East Asian community. This cooperation resulted in creating and/or re-invigorating such mechanisms as the East Asian Summit, ASEAN Regional Forum (ARF) and ASEAN+3 (APT). It is true that Korean policy towards ASEAN has not always been constant or consistent over the years. Either because of its preoccupation with more urgent and immediate issues, its relations with the major powers or with the Northeast Asian region, South Korea’s main attention was sometimes diverted from Southeast Asia. However, it is clear that in the 20th year of the Dialogue Partnership, South Korea now firmly recognizes the centrality of ASEAN as an important regional partner in development, culture, diplomacy and security. To South Korea, Southeast Asia is both a friend and partner in politics, economics, and cultural life. That partnership, which is growing ever stronger and closer over time, is here to stay. That is the reason why I welcome the publication of the book, Korea’s Changing Roles in Southeast Asia: Expanding Influence and Relations.

Han Sung-Joo Professor Emeritus Korea University Seoul

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Message from the Director In June 2009, the leaders of Korea and the ten ASEAN member countries met in Jeju for the ASEAN-Republic of Korea Commemorative Summit. At that historic meeting, the eleven leaders recognized that Korea and ASEAN had been developing a mutually beneficial relationship over the past twenty years. The summit took place also in the context of Korea’s efforts to strengthen its relations with ASEAN through the New Asia Initiative. The world’s economic centre of gravity is shifting towards the continent. Korea, as an Asian economic powerhouse, and ASEAN — a potential economic heavyweight in Asia on account of its population, its growth rates (dented but not destroyed by the global crisis), and attractiveness to foreign investors — enjoy natural points of compatibility and convergence that can solidify their cooperation in the years ahead. Cooperation is something that policy-makers in Korea and the ASEAN capitals must work towards if the region at large is to fulfil its potential. Unfortunately, Asia is home to several security challenges as well. The actions of the North Korean Government in upping the strategic stakes in Northeast Asia are a case in point. Terrorism remains a problem in Southeast Asia. As two responsible stakeholders in the international system, South Korea and ASEAN have a common interest in ensuring peace, stability, and prosperity in the two Asian sub-regions. One important point to remember is that they can achieve much because both are nonthreatening international actors whose benign intentions are recognized by others as well. Finally, the importance of people-to-people ties cannot be overestimated. The peoples of Korea and ASEAN must see themselves as xiii

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culturally fellow-Asians if the new Asia is to take its place at the table of the great powers. I look forward to that time. K. Kesavapany Director Institute of Southeast Asian Studies Singapore

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Acknowledgements The editor and authors would like to thank the following for their kind and generous support to this project: The Institute of Southeast Asian Studies, Singapore; The Korea Foundation; The Asia Foundation, Korea Office; The Pacific Century Institute; and the School of Foreign Service of Georgetown University.

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The Contributors David I. Steinberg, Distinguished Professor of Asian Studies, School of Foreign Service, Georgetown University, for ten years was Director of its Asian Studies Program. He writes extensively on Korean and Burma/Myanmar afffairs, and is the author of thirteen books and monographs and over a hundred articles/chapters. As a member of the Senior Foreign Service, USAID, Department of State, he was Director of Technical Assistance for Asia and the Middle East among other posts. He was a representative of The Asia Foundation in Burma, Hong Kong, Korea, and Washington, D.C., and President of the Mansfield Center for Pacific Affairs. Professor Steinberg was educated at Dartmouth College, Lingnan University (China), Harvard University in Chinese area studies, and the University of London’s School of Oriental and African Studies in Burmese and Southeast Asia. His latest volume is Burma/ Myanmar: What Everyone Needs to Know (2010). Surin Pitsuwan is Secretary-General of the Association of Southeast Asian Nations (ASEAN). He was educated at Thammasat University, Claremont McKenna College, American University and Harvard University, where he received his M.A. and Ph.D. A long time politician, he was elected to the Thai parliament in 1986, and was Deputy Foreign Minister 1992–95, and Foreign Minister 1997–2001. He has also been a journalist and academician. David Koh is a Senior Fellow at the Institute of Southeast Asian Studies (ISEAS), Singapore. He received his Ph.D. in Political Science from the Australian National University. ISEAS published his Ph.D. dissertation in 2006 as the Wards of Hanoi. His area of research is Vietnam’s politics and society. xvii

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Chung Min Lee is Dean and Professor of International Relations at the Graduate School of International Studies, Yonsei University, Seoul. He is also an Adjunct Senior Fellow for Asian Security at the International Institute for Strategic Studies (IISS). A graduate of Yonsei University, he received his M.A.L.D. and Ph.D. from the Fletcher School of Law and Diplomacy, Tufts University. He has served as a Visiting Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore, the Graduate Research Institute for Policy Studies (Tokyo), the National Institute for Defense Studies (Tokyo), and the Institute of East and West Studies, Yonsei University. A specialist in Asian security, he has worked at the RAND Corporation as a Policy Analyst (1995–98), a Research Fellow at the Sejong Institute (1989–94), and a Research Associate at the Institute for Foreign Policy Analysis (1985–88). He currently serves on a number of advisory bodies in Korea including the Presidential Council for Future and Vision and the President’s Foreign Policy Advisory Council. Jong-Kil Kim is a Professor in the Department of Economics, and former Dean of the College of Economics and International Trade at Inha University in Incheon, South Korea. He received his Ph.D. from the University of Connecticut. He has published several articles on Asian and Southeast Asian economies, such as “Chinese FDI towards ASEAN”, “Foreign Investment in Asia after the Asian Economic Crisis”, “A Comparative Study of ASEAN Economic Relations with China and Japan”, and “The East Asian Growth Model and the Intra-Regional Economic Cooperation among Asian Economies”. His latest publication, co-edited with Pierre-Bruno Ruffini, is Corporate Strategies in the Age of Regional Integration (2007). Bun Soon Park is a Senior Fellow at Samsung Economic Research Institute (SERI), a privately funded think-tank in Seoul. He received his Ph.D. from Hankuk University of Foreign Studies and was a researcher at the Korea Institute for Industrial Economics and Trade (KIET). His main research area is Southeast Asian economics and East Asian economic integration. In addition to his articles and books about East Asian economics, he has edited several online publications through SERI, such as China Rising: East Asian Responses (2006), India and the Asian Corridor (2007), and Study on Korean and Taiwanese Investment Patterns in China (2008). Yul Kwon is a Research Fellow at the Korea Institute for International Economic Policy (KIEP) in Seoul. He received his Ph.D. in Development Economics from Sogang University, Seoul. His research interests include xviii

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Southeast Asian economies as well as Korea’s ODA policy. His most recent books include The Evolution of ASEAN Plus Three Framework and Its Future Challenges (2005), Korea’s Official Development Assistance Policy: Challenges and Prospects (2006), and Korea’s Policy to Join the DAC: Challenges and Prospects (2009). Seok Choon Lew is a Professor of Sociology at Yonsei University, Seoul. He received his Ph.D. in Sociology from the University of Illinois. He has written extensively on issues concerning the affective networks in East Asia and developmental state, including an edited volume of his paper for a book, titled, Confucian Capitalism and Affective Networks in Korea (forthcoming) and a paper, titled, “Did the 1997 Asian Financial Crisis Transform the Korean Developmental State? Focused on the Public Fund” (2009). Hye Suk Wang is a Sociology Ph.D. Candidate at Yonsei University, Seoul. Her M.A. thesis, “Changes in State Autonomy and State Capacity after the 1997 Asian Financial Crisis”, examines the transformation of the South Korean Developmental State after the 1997 crisis. Her research focus is on institutional features of East Asian economies and the functions of social capital. Yeong-Hyun Kim is an Associate Professor of Geography at Ohio University with research interests in globalization, world-city politics, and international labour migration. She is currently working on a project that examines the return migration of ethnic Koreans from Northeast China to South Korea. Her most recent work, co-authored with John Short, was Cities and Economies (2007). Minjung Kim is an Assistant Professor of Cultural Anthropology at Kangwon National University in Chuncheon, South Korea. She is currently working on intermarriages between Filipinos and Koreans and their family relations, and how they interact with the local communities. Her research interests are gender, family, religion, and migration. Her recent works include “Living Together as a Family: Ethnic Identities for Children of Intermarriages between Korean Women and South/east Asian Men” (in Korean) and “The Changing Face of Families in Korean Society and Filipina Wives in Rural Areas” (in Korean). Pavin Chachavalpongpun is a Visiting Research Fellow and Lead Researcher for Political and Strategic Affairs of the ASEAN Studies Centre at the Institute xix

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of Southeast Asian Studies (ISEAS), Singapore. He received his Ph.D. from the School of Oriental and African Studies (SOAS), University of London in 2002. Pavin is the author of A Plastic Nation: The Curse of Thainess in ThaiBurmese Relations (2005), and the forthcoming Reinventing Thailand: Thaksin Shinawatra and His Foreign Policy (2009). He writes regularly for The Nation, Bangkok Post, the Straits Times, South China Morning Post, as well as webbased journals, The Irrawaddy and Opinion Asia. Joong Keun Kim is the Ambassador of the Republic of Korea accredited to Singapore. A specialist in international economics and trade, he has helmed many national bureaus in these and related fields, including serving as the Deputy Minister for Trade and Economy from 2005–07. Ambassador Kim is also an expert in North Korean affairs, having lived in the DPRK between 2001–03 as a Korean Peninsula Energy Development Organization (KEDO) representative. In addition, Ambassador Kim is well-versed in contemporary Korean cultural studies and is a principal figure in Korea-Singapore cultural exchange, whose achievements include organizing the first ever large-scale Korea Festival in Singapore in 2008. Tae Yang Kwak is an Assistant Professor of East Asian History at Ramapo College of New Jersey. His Ph.D. dissertation, “The Anvil of War: The Legacies of Korean Participation in the Vietnam War”, at Harvard University was the first comprehensive examination in any language about South Korea’s participation in the Vietnam War and its impact on South Korean development, inter-Korean conflict, and regional security. He recently completed a postdoctoral fellowship at Georgetown University and is preparing his dissertation for publication. Seung Woo Park is a Professor of Sociology at Yeungnam University in Korea, a post he has served since 1992. A former Vice-President of the Korean Association of Southeast Asian Studies (KASEAS), he also serves as editor of the Southeast Asian Review and is a member of the Board of Trustees at the Korean Institute of Southeast Asian Studies (KISEAS). Professor Park received his Ph.D. in Sociology from the University of Georgia in 1991. His research interests include political sociology, comparative sociology, and sociology of development. He has written extensively on Southeast Asia and on East Asian regionalism, including “The Dynamic Interplay of State, Social Class, and Nation in Southeast Asia”, “The Oligarchic Democracy in PostAuthoritarian Philippines”, and “Discourses on East Asian Regionalism and the Problem of Orientalism”. xx

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Tenuous Beginnings, Vigorous Developments

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Tenuous Beginnings, Vigorous Developments David I. Steinberg

1. Background Korea’s entry onto the world stage has not come trippingly; it started as a crawl but has turned into a sprint. Forgotten by most of the modern world because of Japanese expansionist policies in the early twentieth century and that country’s almost exclusive monopoly on scholarship on Korea during the same period, Korea was even ignored by the Allies in strategic considerations during World War II. The plans for stripping Japan of its Korean colony and for eventual Korean independence were poorly conceived at the November 1943 meeting of the United States, Great Britain, and China in Cairo. These plans determined that “in due course Korea shall become free and independent”, but were badly executed.1 The three-year American military occupation (1945–48) of the southern portion of the peninsula, juxtaposed with the Soviet occupation of the north, became one of the first Cold War confrontations, both externally with the North and internally with southern, leftist, popular organizations. Even the Korean War (1950–53), instigated by the North with the tacit approval and eventual support of the Sino-Soviet Bloc, as it was then called, has been known as the “Forgotten War”, yet this war was one in which the Philippines and Thailand each supplied a battalion to augment the defences

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of the United States and South Korea under United Nations auspices. Plagued by authoritarian rulers for a generation, subject to internal revolution in 1960, a military coup in 1961, and innumerable anti-government demonstrations in the interim and thereafter, Korea was not the poster child of the “free world”, as Western governments, principally the United States, liked publicly to proclaim. If Korea’s entry into, and its first generation of, modern independence were inauspicious, it has since performed in stellar fashion advancing from one of the world’s poorest countries to become the eleventh largest economy on the planet; raising the income of its people from a few dozen dollars per capita to over $20,000; and earning worldwide acceptance and respect for Korean brand names in medium and higher technological products. Korea lacked natural resources, had insufficient arable land, was overpopulated, had little infrastructure beyond what had been destroyed in the Korean War, and operated under a deplorable political system. Even the education level was sub-standard at the time. Yet Korea succeeded. There are now more students per capita in tertiary education in Korea than in any other country except the United States. The Korean “development model”, insofar as it was not sui generis, has been widely studied.2 Its success, compared to other countries in Asia with the same income and population, came as a surprise to both Korean and foreign experts. Further, its evident and boisterous democracy, though not without its problems, has passed the ultimate political test — the transfer of political power from one party to another (not among factions of the same party) by peaceful electoral processes, not once but on several occasions. The military returned to its barracks after holding power through “civilianized” administrations for a quarter of a century — without a murmur. This is a feat that few states have achieved and none as seamlessly as the Republic of Korea. No other country has accomplished so much in so little time. Although Korea is intensely integrated into the world’s trading establishment — about 80 per cent of the GNP is dependent on trade — Korea’s internal preparation and capacity for that role are less well developed. Korea’s contemporary international relations are extensive: it has free trade agreements with Chile and Singapore, spanning the Pacific; one signed in November 2007 with ASEAN (the “Framework Agreement” was signed on 15 December 2005); and another signed with the United States (though it is not yet legislatively approved and is under public dispute within Korea). Korean peacekeeping forces are in Iraq, Afghanistan, and Lebanon, and a former Korean diplomat and foreign minister is presently Secretary-General of the United Nations. Relations with China, which had sent “volunteers” to assist North Korea in its fight against the South and the United States, have

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blossomed; China is now South Korea’s largest trading partner and the site of the Republic’s most extensive foreign investments. Tens of thousands of Korean students studying in China — perhaps some 50,000, although this figure may be underestimated. Relations with its former colonial overlord Japan have been generally proper, sometimes even good, since the normalization of relations in 1965, though this relationship is always subject to the winds of cross-strait nationalism, such unresolved territorial issues as Tokdo or Takashima in the Eastern Sea (or the Sea of Japan depending on which side of the Tsushima Straits one is situated), the spectre of the Yasakuni Shrine, and considerable emotional angst. Korea’s entry into the OECD in 1996 — the first Asian state to do so after Japan — provided a certain economic and developmental cachet. This has been matched by an economic development assistance programme that is designed to help foreign nations achieve a similar level of success while spreading Korea’s reputation and helping to secure overseas trading and investment relationships. The Korea Foundation has supported academic programmes and cultural awareness and knowledge of Korea abroad. The process of worldwide acceptance, however, has by no means been easy, and Korea’s intellectual preparation for its multiple international roles has been less than adequate. Southeast Asian relations are no exception. 2. Korea: Openings to and in Southeast Asia On 21 November 2007, at the 13th ASEAN Summit in Singapore, the Republic of Korea and ASEAN (Association of Southeast Asian Nations) — comprising all ten countries of the region3 — signed a Memorandum of Understanding (MOU) for the establishment of an ASEAN-Korea Centre in Seoul, Korea.4 The establishment of this Centre was sought by Korea to commemorate the 20th anniversary of Korea’s Dialogue Partnership and Comprehensive Partnership with ASEAN, declared on 30 November 2004 in Vientiane. The commitment to establish the Centre, designed to improve economic and sociocultural ties, was reiterated at the 10th ASEAN-ROK Summit of 14 January 2007 in Cebu. The establishment of this Centre, to which the Korean Government has initially allocated some US$3 million, is an indication of the degree to which Korea is committed to the region, through multilateral as well as bilateral institutional ties with ASEAN and each of its member states in Southeast Asia. The formation of the Centre is a symbolic confirmation of the many aspects of Korean involvement with the Southeast Asian region. It came serendipitously at the same time that this book was being prepared. This

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work is an attempt to highlight the growing but often overlooked role of Korea in the region and the aspects of Korean society that have been affected by the deepening interpenetration of relationships. China’s historical and contemporary influence in Southeast Asia has been extensively documented and Japan’s contributions since World War II have been widely studied. But Korea’s relationships with Southeast Asian countries have been less well understood and appreciated. There remains a paucity of information on South Korea in the region in spite of many efforts, especially by the Korea Foundation, to fill that void at the academic level. Meanwhile, in Korea, there has been a growing interest in the area, reflected in the increased academic membership in and scholarship of the Korean Association of Southeast Asian Studies and the Korea Institute of Southeast Asian Studies. In the earlier period when Korea began to reach out to the region, bilateral conferences and symposia were held and some volumes produced that owed more to their diplomatic origins and objectives than to mutual analysis. At a 2005 conference in Singapore, relationships were characterized thus: Public perceptions in South Korea and ASEAN about each other still lag behind the reality of substantive ties. On one hand, public awareness in ASEAN about South Korea remained low and was generally focused on the issue of nuclear proliferation and the North Korean crisis; while, on the other, the public image of ASEAN in South Korea is equally skewed in the years following the onset of the Asian Financial Crisis.5

If present Korean interests in ASEAN, as reflected in the opening of the new Centre in Seoul, may distinguish a new period in Korean-Southeast Asian relations, prior relations may conveniently be marked by two internal Korean events that prompted the growth of enhanced concern about, and Korean involvement in, that region. These were the 1961 coup by General Park Chung Hee that inaugurated the era of expanded relationships with Southeast Asia and the people’s bloodless revolution of 29 June 1987 that liberalized the Korean political process. Although both were internal to the Republic of Korea, the first prompted the Korean military to expand its trading and diplomatic efforts, while the second, by releasing previously repressed internal labour unrest and resulting in higher wages, effectively forced labour-intensive industries of Korea to move south.6 Prior to 1961, Korea was within the chrysalis of U.S.-UN policies. With minor exceptions, its policies were otherwise isolationist. Korea established relations with the Philippines in January 1949 and although Thailand recognized the sovereignty of the Republic in October 1948, formal diplomatic relations were not established until 1958. Significantly, both countries were

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close to the United States. Both sent troops to Korea in the Korean War. But the focus of Korean concerns was on an anti-communist alliance; there were ties that continued in the post-Syngman Rhee period with the Asian People’s Anti-Communist League. During that era, the United States had encouraged and supported SEATO (Southeast Asia Treaty Organization), involving both the Philippines and Thailand, which was to act as a bulwark against the spread of communism as NATO in Europe and CENTO in the Middle East and South Asia. Occasional cultural troupes were sent to the region, such as those to the Philippines, Thailand, Malaya, and Singapore in 1958,7 but otherwise relations were marginal. South Korea’s primary motivation for expanding its relations with Southeast Asia after the 1961 coup was an attempt to increase its worldwide legitimacy in contrast to the influence of the Democratic People’s Republic of Korea (North Korea).8 Korean economic relations with the world consisted essentially of imports from the United States (up to 80 per cent of imports in the early period); Korean exports amounted to a few tens of millions of dollars of seaweed and handicrafts. It had no economic interests in the region in that early period. Korea had pursued an import-substitution policy rather than one devoted to expanding exports. The United States, in effect, guaranteed the Korean energy supply and other critical imports, the demand for which in any case was limited. Southeast Asia did not seem essential to Korean security. Politically, South Korea was at a disadvantage. South and North Korea did not recognize each other, each claiming jurisdiction over the whole peninsula. The South operated in that era under the “Hallstein Doctrine” of West Germany, in which if a state recognized East Germany, then West Germany would not have diplomatic relations with that state.9 South Korea abandoned this doctrine by presidential decree in 1973.10 The fierce competition for recognition cast South Korea as an underdog compared to North Korea. As a virtual client state of the United States, South Korea was excluded from the Non-Aligned Movement. The Bandung, Indonesia, meeting of the Movement in 1955 was a blow to Korea, as North Korea had agreed to establish relations with any state that supported the Bandung principles. President Park Chung Hee pushed what has been described as a “vigorous diplomacy”, travelling to the region in 1966 and, of course, pursuing the engagement of Korea in the Vietnam War, with massive political and economic encouragement from the United States, a subject detailed in Professor Seung Woo Park’s chapter (see Chapter 14). It was perhaps Park’s disillusionment with the commitment of the United States to the defence of Korea (the 1969 “Nixon” or “Guam” doctrine, which specified that the United States would

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no longer engage in ground wars in Asia but would defend allies with air and sea power), and the withdrawal of one U.S. infantry division from Korea that led not only to his efforts at self-reliance — the development of heavy, chemical, and defence industries and an attempt at nuclear weapons capacity — but also increased Korean interest in expanding diplomatic and economic ties with other parts of the world, especially in Asia. President Park, ever conscious of his rural background, took great pride in the Saemaul Movement (“New Village Movement”) that he founded and which nurtured, even demanded, rural change in Korea. A research institute was established to study the movement, which required state support and village self-help, but more importantly a training centre was initiated to train new village leaders and to which many foreign observers were sent. This was perhaps the first Korean “human resource development” programme — hundreds came from the developing world, especially Southeast Asia. How much it was emulated is questionable, given its rigorous, virtually military, regimen, for as a senior Philippine planner said, “We are not Koreans!”11 The late 1980s were, for Korea, a period of internally induced change. The government of President Chun Doo Whan (1979–87) was widely seen to be of limited internal legitimacy, having achieved power through what was belatedly recognized as a “coup-like event” on 12 December 1979, following the assassination of President Park Chung Hee in September of that year. The Kwangju incident or massacre of May 1980, as it was variously characterized, further undercut the regime’s efficacy and standing both internal and external. Ironically, it was the North Korean attempt to assassinate President Chun Doo Hwan in Rangoon in 1983 that highlighted the South’s involvement in the region. President Chun was on a major diplomatic initiative in that area. Some seventeen members of Chun’s cabinet and close advisers were killed. He escaped because of a slight delay in his arrival at a ceremony at the Aung San Memorial.12 Yet it was the massive civil protests of 1987 for reform, a new era of liberalization, and the direct election of a president — rather than by a blatantly controlled, select, pro-military group — that brought about change. This indigenous process of change was reinforced by the planned summer Olympics that were to be held in Seoul in 1988: any unrest would have embarrassed both the administration in power as well as the nation as a whole. The United States also encouraged this liberalization.13 On 29 June 1987, the government effectively capitulated to popular opinion (although it attempted to characterize it as a magnanimous gesture), and amended the constitution to allow for the direct popular election of a president and for freedom of the press. It also freed the most popular dissident, Kim Dae Jung,

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from the death penalty — in 1998 he finally became president, a post he had formally sought since 1971. The election of former general Roh Tae Woo as president in 1987 (he took office in February 1988) was caused by a split within the civilian opposition. President Roh was in a strong position: one of his major reforms was the development of “Nordpolitik”, or the opening to communist countries with which the Republic had previously had little if any official contact. This was, of course, the Korean equivalent of West Germany’s Östpolitik, or opening to East Germany. Nordpolitik proceeded in three phases: the analysis of trade issues, the formation of reciprocal trade offices, and finally the establishment of trade missions as de facto diplomatic missions.14 Nordpolitik was the theoretical rationale for the new strategic calculus of President Roh Tae-woo’s foreign policy in the Sixth Republic … With the change in the governing system, away from authoritarianism toward democracy, the old practice of anticommunism by waving the specter of North Korea’s possible invasion of South Korea was no longer suitable or credible … Seoul’s Nordpolitik was aimed at achieving the two objectives of relaxation of tensions with North Korea and improvement of relations with the communist bloc countries of China, the Soviet Union, and Eastern Europe.15

It was a policy of eminent success, which was spurred by the highly regarded management of the Seoul 1988 Olympics. The liberalization process was neither confined to foreign affairs nor to internal constitutional changes. As the political liberalization process proceeded, so too did labour relations change. Korean exports had in large part been built on the backs of controlled and forcibly contained labourers who worked for low wages under poor conditions and who were unable legally to give vent to their anguish. The only legal umbrella trade union, the Federation of Korean Trade Unions, was under government (KCIA) control. Laws even prevented educated individuals and students from working as labourers, as the state felt that they would incite labour unrest. Following liberalization, strikes became frequent and wages rose dramatically.16 At the same time, the United States was pressuring Korea to revalue its currency, the won, as the exchange rate also was fuelling exports and creating Korean surpluses, to the disadvantage of the United States. The result was the movement of labour-intensive industries to Southeast Asia, where labour was literate, cheap, and essentially controlled. Annual Korean labour costs per worker in manufacturing became prohibitive: they rose from US$3,153 in the 1980– 84 period to US$10,743 in 1995–99 — a 240.7 per cent increase.17 As we

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will document in Chapter 9, the need to find labour for low-wage and “dirty and dangerous” jobs that still had to be performed within Korea led to a reverse pattern — a means to employ inexpensive, foreign labour in Korea to fill the existing gap in manufacturing, as Koreans refused to work for the low wages necessary to fuel exports. Thus, “interns”, “trainees”, and others from Southeast and South Asia were imported into Korea, ostensibly to learn new skills but essentially to substitute for the Koreans. These workers were often subjected to sub-standard treatment, wages below the minimum legal for Koreans, and were denied basic labour rights. By 2007, there were 477,971 unskilled or semi-skilled labourers in South Korea, out of a total foreign population of over one million, or 2.19 per cent of the population. Due to demographic trends, the increase is “not anticipation, but a must” if the Korean economy is to continue to grow.18 As labour costs and conditions improved in Southeast Asia and when China was diplomatically recognized by Korea, there was increased interest in the movement of labour-intensive industries to China, where costs were even lower, transportation often cheaper, and where the Koreans were dealing with a culture they felt they understood, for the commonality of a Confucian patriarchal society (even in an ostensibly communist country) seemed to diminish the cultural dissonance that had given Korean managers and businesses in Southeast Asia a very bad reputation.19 It seems evident that in the past the Korean Government regarded the poor reputation of Korean labour practices in Southeast Asia as a product of certain individual Korean managers or firms and not as a systemic issue.20 Yet, while Korea’s advantages were remarkable, they were being squandered because of avarice, combined with a lack of cultural awareness that became more and more evident and was even expressed in the local Southeast Asian media, some of which was controlled by various governments, thereby indicating official concern. Korea had technological skills that were in demand and came to the region without either the historical impediments of Japan or of the local overseas Chinese populations that often controlled vast swathes of the local economies to the envy and chagrin of some indigenous populations.21 Yet knowledge of the cultures and issues of the Southeast Asian region was virtually lacking among Koreans in managerial positions. The capacity of Korean governmental ministries to deal with these cultural confrontations was also insufficient, as career advancement in the foreign service and other ministries was dependent on knowledge of the major powers, not of a backwater, as Southeast Asia was then considered. This situation has, fortunately, changed. The importance of Southeast Asia to Korea is amply demonstrated by a variety of the chapters in this book.

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ASEAN is the fifth largest trading partner of Korea, second in overseas construction, and third in overseas investment. Southeast Asia is prominent in the security calculations of the Republic, for a major portion of its oil and gas supplies emanate from or pass through that region. Thirty per cent of world trade and 50 per cent of energy supplies pass through the Malacca Straits — of course, these figures are much higher for Japan, Korea, and Taiwan. The region is the source of a variety of natural resources (timber, rubber, minerals, etc.) on which the Republic relies. Southeast Asia with some 500 million people is both a market for Korean products as well as a site for a variety of South Korean investments. As Chapter 4 demonstrates, security issues in Northeast Asia are of a more conventional nature, while those in the ASEAN region tend to be of a different ilk: terrorism, piracy, the protection of open sea lanes, environmental degradation, transnational health issues, pandemics, narcotics and transnational crime, border disputes, trafficking, radical Islam, multi-ethnic conflicts and unrest, migration, etc. In this chapter, Chung Min Lee links the security issues of Northeast Asia and Southeast Asia through the prism of China’s role in both regions. Policy and academic concentration on the vital issues of North Korea and Taiwan have deflected much-needed consideration of these linkages. Korea is involved intimately in ASEAN through the “ASEAN Plus Three” mechanism, which Korean President Kim Dae Jung had advocated, but it is more directly related to security through the ASEAN Regional Forum (ARF), of which North Korea is also a member. According to one eminent Malaysian, the most important contribution of Korea was to “kick start regional cooperation through the ASEAN Plus Three mechanism”.22 The ARF lacks a secretariat and has not been invoked in intra-ASEAN disputes or issues, as one might have imagined. Its potential thus remains unexploited. The increased interest in Southeast Asia is reflected in the growing programmes and academic offerings at a variety of universities in Korea. Yet there are still many deficiencies, for as the number of researchers who have published on the region has expanded (see Chapter 14), the major universities from which the foreign affairs establishment and the major chaebol recruit still offer very little substantive education on the region. Graduates seem to be employed by smaller firms, which in one sense is a positive development as these were the type of firms that were said to have committed the most egregious breaches of cultural sensitivity in the region, especially in Muslim societies.23 Although mutual recognition, UN membership, and the promulgation of President Kim Dae Jung’s “Sunshine Policy” towards North Korea and subsequent policies have obviated the competition between North and South

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Korea in that region,24 a new relationship has developed between the South and the North, through the influx of North Korean refugees through China to Southeast Asia and then on to South Korea. This route, although arduous, seems to have become popular, as the number of such refugees has exploded. Although the exact numbers have not been published, high-level Thai estimates indicate that North Koreans are entering that country alone at a rate of some 150 per month.25 Beyond poor business managerial practices, there are three additional aspects of international relations that should be a cause of concern for South Korea, both to the government and to civil society. These are the patterns of foreign assistance, the influx of tourism, and the role of religious (Christian) missionaries. Korean foreign assistance (see Chapter 7) is carried out under three rubrics. The first is KOICA (Korean Overseas International Cooperation Agency), established in 1991, which provides grants for technical assistance and training. The second is the Economic Development Cooperation Fund (EDCF), founded in 1987, which provides loans. The third is a window for security lending, which has been evident in the case of Indonesia (see below). The initial pattern separating loans from grants was based on a Japanese model that divided the respective responsibilities for each between JICA (Japan International Cooperation Agency) and OECF (the Overseas Economic Cooperation Fund). This is a split that in the case of Japan did not make for efficient administration, for the former was under the auspices of the Foreign Ministry and the latter under the Ministry of Finance — coordination was not easily accomplished. Korea, in copying many of the Japanese administrative organizational patterns, seems also to have followed the early Japanese aid programme model, especially during the period of Japanese reparations to some Southeast Asian states, as a means both to provide assistance and to develop markets for donor goods. EDCF loans are of four varieties: (1) development projects; (2) equipment loans; (3) two-step loans to governments or banks to allow end-users to procure equipment; and (4) commodity loans. Loans are not formally tied, but since they are in won, Korean firms benefit. The Asia-Pacific region absorbs some 60 per cent of the KOICA budget and about 58 per cent of all trainees.26 Overall, the ODA budget of Korea has expanded from about US$100 million in the early 1990s to about US$800 million in 2007. Korea’s foreign aid is said to be “unique”, in that it does not support longterm projects but rather short-term, small-sized projects, thus concentrating on “tangible” results.27 There seems to be little in terms of the overall planning of assistance. Emphasis could therefore be given to the supply of Korean

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equipment, which could help to open markets. KOICA collaborates with Korean NGOs in many fields; this enables Koreans to have field experience that could be invaluable to KOICA itself and to the Korean business community. In addition to the official Korean aid programmes noted above, the Korea Foundation has made efforts to raise the country’s profile. Set up by the Korean Government, the Korea Foundation was first funded by a tax on all Korean passports, the rationale being that the world needed to know more about Korea as Koreans began to travel abroad. Now, the funds are appropriated by the Korean National Assembly. Many in the West who are cognizant of Korea will have noted the extensive grants provided to many universities for chairs in Korean studies, research by academic institutions, their faculties, and think-tanks, as well as the growth of major exhibitions of Korean artefacts, usually pottery, at many of the major museums in the world. The Korea Foundation has been active in Southeast Asia as well.28 From about 1995 through 2007, the Foundation has supplied over US$1.4 million for the expansion of Korean studies, including large sum for the teaching of the Korean language. The largest recipient of funding has been the University of Malaya in Malaysia (US$326,875), followed by Gadjah Mada University in Indonesia (US$216,439). The University of the Philippines at Diliman received US$116,874, while Thailand received a total of US$368,315, spread among six universities (Mahasarakhan, Burapha, Prince of Songkhla, Srinakhaninwirol, Silpakon, and Thammasat). The Yangon University of Foreign Languages in Myanmar received US$56,600, the University of Brunei US$80,313, and the National University of Singapore US$18,000. In addition to language training, research and publications have been supported as well as an extensive programme in human resource development through training and exchanges. Cultural activities have been sponsored, including support to Korean centres and Korean opera groups. The effort has been impressive. The University of Malaya has more students studying Korean than Korean students studying Malay; it offers more courses on aspects of Korean history and economics than many universities in the United States. It seems probable that economics has driven interest in Korea, but the growth of the Korean Wave has no doubt been a factor as well. Southeast Asia has become a major tourist destination for Koreans (see Chapter 11): some 1.2 million Koreans visited the region in 2007. Direct flights link Seoul to the major cities in Southeast Asia. Korean tourists are the largest group in the Philippines (23 per cent of all arrivals) and in Cambodia (16.4 per cent). In Vietnam, they constitute about 11.4 per cent and in Thailand 7.5 per cent. The growth of Korean tourism has been phenomenal.

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From 1990 to 2004, Korean tourists increased from 65,731 to 754,093 in Thailand, 28,221 to 377,217 in the Philippines, and 32,977 to 189,949 in Singapore.29 In addition, some 230,000 Koreans resided in the region in 2007, with the largest number in the Philippines (approximately 87,000).30 Although in part welcomed by the countries concerned, the Korean tourists have not avoided sparking complaints. These complaints are reminiscent of those sparked by the influx of Japanese tourists to the region in the 1970s. Then, there were worries that the destination countries did not sufficiently benefit from such tourism. The Japanese arrived on Japanese aircraft, stayed at Japanese-owned hotels, ate at Japanese (or Korean) restaurants, shopped at Japanese-owned or designated shops, and had tour guides and tour buses from Japanese companies. There was also at that time a good bit of sexual tourism that seems today to have diminished. Today, all these characteristics of Japanese tourism that offended the Southeast Asians have been transferred onto the Koreans. The Japanese are now regarded as appropriately behaved tourists, while the Koreans are often seen as rowdy, demanding, boisterous, and argumentative, insulated from the local culture even as they visit cultural sites. As did the Japanese, perhaps partly as a result of limited foreign-language capacity, Korean tourists tend to stick to Korean establishments and facilities. As Korea’s economy and family incomes have expanded, so too has a different group of Koreans, not educated in cross-cultural sensitivities, gained access to the region. There is a need for civil society and tour groups to educate Korean visitors in cultural awareness.31 In August 2007, Korea and Indonesia signed an agreement in which both governments expressed the determination to double the number of Korean tourists to Indonesia over five years. Rather than improve relations, this could well cause problems for both governments if undertaken without appropriate care. The third area is missionary activity. Korea is said to send abroad more Christian missionaries (the most recent count is at 16,000) than any other country except the United States.32 Churches in Korea vie with each other to send young people abroad in this role, in part so that they may bond with the sponsoring church, but these activities are carried out with a sense of arrogance that is unacceptable and even illegal in many societies, for example in Muslim countries. According to one earlier study, as of January 2000 there were 8,208 Protestant missionaries from Korea in some 145 countries. Some have been characterized as “colonialistic” or “military-style” missionaries. Some of the problems are rooted in Korean culture (Confucianism, hierarchy, authoritarianism, han, “accumulated anger or grief ”, etc.), which missionaries are not well trained to understand. There have been many conflicts among

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missionaries themselves and problems with funding and lack of sufficient training. The training in area studies varies by institution, but there does not seem to be language training until the missionaries arrive in their host countries. A major issue is that mission-supporting groups want early demonstrations of success (i.e., conversions), so tensions are bound to develop.33 Although Korean foreign investment and economic assistance in the ASEAN area are dwarfed by Japanese involvement, an historical impetus to many of Korea’s goals has been to compete with and outperform the Japanese. Korea’s entry into the Vietnam market was prompted not only by its involvement in the Vietnam War, but also by the desire to beat the Japanese into Vietnam when that country first opened to foreign investment.34 The very first volume of Japanese assistance, together with more extensive pressures on the Japanese than on the Koreans by their U.S. allies, made for more cautious Japanese economic “adventurism” that was in the vanguard of U.S. policies. Japan also had to deal with local suspicions of Japanese economic neo-colonialism, the recreation of the “Greater East Asia Co-Prosperity Sphere”, that resulted in anti-Japanese demonstrations throughout Southeast Asia in the early 1970s. In addition, Japan more closely followed, at least verbally, U.S. concerns about human rights and democracy and the untying of economic aid in the region. Korea in its quiet way has ignored some U.S. pressures to conform to that country’s policies. This was evident in Libya when the United States placed stringent sanctions on that country and more recently in the case of Myanmar, where U.S. sanctions are also in place.35 More fundamentally, a problem facing Korea in attempting to deal both with Southeast Asian workers in Korea and with Southeast Asian cultures in the field, so to speak, is the inherent concept of Koreans not only as a nation but as a “race” of “pure blood”, linked by common ethnicity, culture, and indeed as a family. Yet recently some 13.6 per cent (11.1 per cent in 2007) of all marriages in Korea were international. Many of these marriages are with ethnic Koreans who have Chinese citizenship, but significant numbers are with non-Koreans and this is forcing, albeit slowly, a change in Korean attitudes. This provincialism affects how Koreans regard foreign workers in their own society and the degree of cultural sensitivity they have towards other multicultural states. The problem is discussed in Minjung Kim’s chapter (see Chapter 10) about the role in Korea of Filipina wives, who have special status because of their English language capacities. As one writer on the role of Indonesian workers in Korea describes, Korea is “characterized by a one blood, one race, one language, one culture, one people ideology…. In envisioning South Korea as the Borderlands, I suggest that its history with non-Korean others, including Indonesian migrant workers,

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has been one filled with discrimination, violence, degradation and blocked possibilities. It is also, however, characterized by active rebelliousness, increasing syncretism, and creativity.”36 She continues, quoting Underwood, that Korea has “an ideology of purity and uniqueness and exceptionalism which is reinforced by government, education, media, and family”. It creates “an attitude of fear, even hatred, toward foreigners in the hearts and minds of modern-day Koreans”. This may be especially true regarding the estimated 30,000 Indonesians who have worked in Korea and who have been especially discriminated against because of their Muslim identity.37 President Roh Moo Hyun, however, aimed to turn Korea into a regional hub that would transcend the new, impressive Incheon airport near Seoul and become a banking and commercial centre for the region and beyond. Yet the traditional attitudes towards foreigners of any stripe, when they intrude on Korean cultural norms and beliefs more intimately than simply as trading partners, may be slowly mitigated only by educating the population in alternative views both of themselves and other societies.38 The issue is not simply a long-term question. The demographics of Korea (and even more acutely those of Japan) are forcing the importation of new peoples into the society. Korea is rapidly ageing and the fertility of women in Korea is said to be among the lowest in the developed world. This, in effect, means that the replenishment of the Korean labour force will not occur internally, but must be externally induced. With this will come migration and intermarriage and a dilution of that mythic, preoccupation of Koreans, that they are a “pure” race.39 This is not likely to happen without significant social, even political, trauma. 3. Origins, Contents, and Issues This book has been about a year in preparation. It was a collaborative effort by the School of Foreign Service at Georgetown University, which offered the editor a semester’s sabbatical to pursue this research in Singapore; the Institute of Southeast Asian Studies in Singapore, which housed the researcher and was the sponsor and host of the planning meeting for this study in October 2007; the Asia Foundation Seoul Office, which provided logistic planning and intellectual support for the meeting in March 2008 from which this book emanates; and the Korea Foundation, which supported travel and conference expenses, as did the Pacific Century Institute. The dialogue on all of these issues, leading to this book, could not have been accomplished without the collaboration of the Korean Association of Southeast Asian Studies, whose members are the backbone of Korean knowledge of and intellectual

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involvement in Southeast Asia. The authors of this book thank all these institutions and their staffs for their participation and support. The limitations of time and the costs of publishing have not allowed the sponsors to pursue all aspects of Korea’s involvement in the region as we would have hoped. In spite of these limitations, we have attempted to cover significant aspects of Korea’s engagement with Southeast Asia, drawing upon specialists to delve into as broad a variety of subjects as time and finances would allow. The reader will note that most of these chapters are by Koreans; only three are by Southeast Asians. This was not the original intent, which was to have a more equal division of labour. Extensive travel in Southeast Asia, however, led the editor to conclude that there were few Southeast Asians who considered themselves specialists and who were willing to write on Korea from a Southeast Asian perspective. This is a gap we will consider in the concluding chapter of this book. The scope of this study is outlined below, but it is important to mention what has been excluded. There is, for example, little historical analysis in this book, with the exception of Korea’s engagement with Vietnam. One would have liked to have been able to include case studies of various important Korean business efforts, such as the eminent success of the Korlao company in Lao PDR (a company that is the largest private concern in Lao PDR and that has captured 50 per cent of the automobile market), and of business failures, such as in the automobile industry in Indonesia.40 Although one country study, on Vietnam, has been included in this book, one would have liked to have had additional studies of the extensive Korean involvement in Indonesia, Thailand (with some 200 Korean companies in the country and over 70 Korean restaurants in Bangkok alone out of 120–130 in the entire country), the increasing use of the Philippines as a base for training Koreans in English, and the importance of the often forgotten Korean role in Myanmar (Burma), in which there are some 40 Korean garment factories employing 30,000 workers and where over 1,000 Koreans reside. Daewoo’s role there in offshore gas exploration and exploitation has been innovative and critical. Both South and North Korea have supplied arms to that government. In additional, more sectoral studies would have been useful beyond the chapter on Samsung and the electrical sector (see Chapter 6), for instance on energy, an increasingly important security issue. In a sense, the first and last chapters are efforts to at least identify, if not eliminate, the lacunae inherent in such a book. Finally, the concluding chapter attempts to draw out lessons from these studies and make recommendations to the various actors both in Korea and in ASEAN as to what might be done to improve the mutual benefits of these expanding relationships.

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Here we will not outline each of the chapters in this book, for their titles indicate their content. It may be useful, however, to add a few comments subsidiary to the analyses presented herein. Strategic interests are necessarily part of Korea’s preoccupation with the region. These range from the provision of energy supplies and raw materials from the area to the protection of the sea lanes on which Korea is dependent. The economic relationships are evident, but Korea’s associations with individual states in the area also allow it to attempt to generate support for Korea’s position in various international fora. Perhaps the most important security relationship with an individual state in the region is with Indonesia. This would not be illogical, given Indonesia’s strategic location, size, natural resources, and market. It is also important because of Indonesia’s past (and perhaps future) leadership role in ASEAN and because of long, good relations with both states, Indonesia could play a mediating role between North and South Korea. In December 2006, both countries signed a joint declaration on a strategic partnership covering thirtytwo areas of cooperation, ranging from the political and security issues to science and technology.41 Deepening cooperation is expected in eight fields: trade and investment, forestry, nuclear power plants, small and medium industrial technology, anti-corruption, defence and security, cultural centres, and tourism. The Korean Electric Power Corporation and the Indonesian state power company signed in December 2005 a memorandum of understanding on nuclear cooperation. Yet Reuters (3 September 2007) said that the regional branch of Nahdlatul Ulama (NU), the largest Muslim political party in Indonesia (and, indeed, the world), issued a fatwa against the construction of a nuclear plant, which would cost between US$1.5 and US$3 billion.42 Defence cooperation has become important. From 1999–2006, Korea provided some US$130 million in loans for military vehicles and helicopters. In addition, Korea and Indonesia have agreed to a “counter purchase mechanism”, a sophisticated type of barter trade that involves exchanges of training aircraft and submarines. A third mechanism is through licensed production, especially of ships. This will be promoted through a Joint Defence Logistic and Industry Committee that will meet annually and that could eventually be a forum for defence policy cooperation. The fourth avenue is through mutual “capacity building” agreements for the exchange of training in the maintenance of military equipment. David Koh, in Chapter 3, discusses the present and potential usefulness of the “smaller powers” of Korea and ASEAN increasing their relationships by narrowing the social and cultural space between the two to mutual advantage. Although the economic footprint of Korea is large in Southeast Asia, the

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country’s roles in other sectors have been less developed. He has a number of suggestions for redressing the imbalance in this chapter, and also in the conclusion (see Chapter 15). The Korean Wave (hallyu) has caused something of a sensation in the Asia region — Southeast Asia is no exception (see Chapters 11 and 12). Korean film stars are the idols of many; tourist traffic into Korea has even markedly increased, it is said because people from other countries want to see the sites of many of these dramas. Korean popular singers are all the rage, and many countries run Korean dramas on television with subtitles in local languages.43 All of this not only provides sources of revenue, but more importantly it has built up Korea’s pride in its own accomplishments and provides a positive awareness of Korea that had been sorely lacking. Yet this phenomenon is not without its dangers. Korean papers have been written on Korean culture as something of an international standard, and the Korean Government is using the hallyu as an element of its foreign policy to expand Korean influence abroad.44 For example: Despite this linguistic barrier, hallyu is now a recognized agent of global cultural invigoration, committed to its core population of ethnic Koreans while simultaneously becoming attractive to a growing legion of adherents who choose to become cultural Koreans through their engagement with hallyu.45

Two aspects of the Korean Wave and its components are included in this book: one by a Southeast Asian in response to it and another by a Korean who has observed it in the field (i.e., Southeast Asia). Dr Pavin Chachavalpongpun points out in Chapter 11 that the effects of hallyu are likely to be ephemeral, while Ambassador Joong Keun Kim, observing the scene from his vantage point in Singapore, writes in Chapter 12 on its remarkable effect in that region. Perhaps images of Korea have changed in the popular mind since 2005 (see note 5), for Korea is far more in the public eye. Yet that awareness does not necessarily translate into better policy either by or towards Korea. It is remarkable that, in discussing this research topic, leading Southeast Asian intellectuals and policy-makers found it extremely difficult to identify nationals in their own countries who could be considered specialists or even knowledgeable about Korea in any depth. In Chapter 8, Professors Seok Choon Lew and Hye Suk Wang examine the Korean development experience to determine whether it is a model for Southeast Asia, as some have claimed. It is important here to determine whether the Korean development process is a model to be emulated or whether it is the results that should be sought. Korea’s phenomenal growth

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and reduced income inequality are targets that many states would like to reach. In fact, Korea adopted many characteristics that are inimical to the “Washington Consensus” of free markets and political freedom. State intervention (in violation of neo-liberal market principles), import substitution, the formation of monopolistic or oligopolistic markets, bans on various types of imports, together with a strong sense of political will all helped Korea achieve what it has accomplished. The disciplinarian ethos mandated by the state and the control over major businesses through credit mechanisms and direct intervention were policies based on President Park Chung Hee’s military (rural, middle-class) predilections and his mistrust of capitalists. The crisis of 1997 was based not on the continuation of this industrial policy but on its demise. Professor Lew maintains that globalization, contrary to the views of many, calls for a strengthening of the state rather than its decline. Southeast Asian states will have to find their own avenues for development, but lessons from the Korean experience may be germane. In Chapter 14, Professor Seung Woo Park provides the backdrop to how Korea prepares intellectually to deal with Southeast Asia. Although Southeast Asian languages are taught at two universities (one in Seoul and one in Pusan), the universities considered elite in Korean society offer little more than broad exposure to the region. Yet these elite universities are the institutions from which government ministries and the chaebol recruit their new staff. The large-scale funding that the Korean Government has supplied in the past to higher education to ensure the country’s place in the globalization process, formally called saegyehwa in Korean, effectively excluded those institutions that provided in-depth instruction on Southeast Asia.46 So ironically the expanding research and training on the region in Korea has had less of an impact on the very institutions that are in the forefront of Southeast Asian relations. Much more needs to be done in Korea to ensure that Southeast Asia and Korea enhance their mutually beneficial relationships. This book is a preliminary attempt to bring to public attention and to analyse a variety of important aspects of these multiple involvements. We hope it will complement the work of the new ASEAN Centre in Seoul and enable those responsible to build upon the progress that has been made and to diminish the deficiencies we have enumerated. NOTES 1. Consider the potential impact had the Allies publicly stipulated that all Koreans in the Japanese army should be treated as liberated, rather than as enemy combatants. Many lives might have been saved.

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2. See David I. Steinberg, The Economic Development of Korea: Sui Generis or Generic? (Washington, D.C.: A.I.D. Special Study no. 6, January 1982). Studying Korean development has itself become a growth industry. 3. In this analysis, the new state of Timor L’Este (East Timor) is excluded. 4. The following is from the text of that MOU. 5. “Conference on Strengthening the Korea-ASEAN Relationship”, Trends in Southeast Asia Series 10, Executive Summary (Singapore: Institute of Southeast Asian Studies, 2005). The Seoul Forum, an influential multi-academic-business intellectual group, alone has held six meetings on the area both in Korea and the region. 6. See David I. Steinberg, “South Korea in Southeast Asia: Enhancing Returns and Reassurances”, Southeast Asian Affairs 1995, edited by Daljit Singh and Liak Teng Kiat (Singapore: Institute of Southeast Asian Studies, 1995), pp. 74–88. Since there were no official relations with China in 1987, and since even the concept of North Korean industrial zones were still in the far distant future, as the North was still an enemy, there were few alternatives to Southeast Asia if Korea were to expand its export economy, hindered by rising internal labour costs. 7. See Park Joon Young, “Korea’s Return to Asia: An Analysis of New Moves in South Korean Diplomacy in the 1960s and 1970s” (Ph.D. dissertation, Columbia University, 1981). 8. For example, in 1949, South Korea was recognized by 5 countries and North Korea by 10. By 1960, they were each recognized by 14 countries. By 1962, however, the Republic had 52, and the People’s Republic 14, and by 1978 the totals were 104 and 93 respectively. Park, op. cit., p. 56. 9. This doctrine lasted from 1955 to 1969 and was first applied to Yugoslavia in 1957. It ended with the change in policy by West Germany to östpolitik. 10. Park, op. cit., p. 199. 11. Personal interview, Manila, 1974. A senior adviser on rural development to President Park, when asked why he gave up a prestigious academic appointment to work for him, said that Park would be the last president who would feel empathy for farmers, a background from which the adviser came. 12. That three North Korean agents were able to penetrate the memorial to General Aung San in Rangoon and place a bomb in its ceiling was likely caused by the purge of the chief of Burmese military intelligence, which in Burmese custom involved the dismissal of all his loyal staff (his entourage), and thus military intelligence, which probably could have prevented the bombing, was decimated. 13. See David I. Steinberg, “U.S. Policy and Human Rights in the Republic of Korea: The Influence of Policy or the Policy of Influence”, in Implementing U.S. Human Rights Policy: Agendas, Policies, Practices, edited by Debra Liang-Fenton (Washington, D.C.: U.S. Institute of Peace, 2004), pp. 167–216. 14. Dlynn Faith Armstrong, “South Korea’s Foreign Policy in the Post-Cold War Era: A Middle Power Perspective” (Ph.D. dissertation, Miami University,

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1997). 15. Young Whan Kihl, Transforming Korea Politics: Democracy, Reform, and Culture (Armonk: M.E. Sharpe, 2005), p. 241. 16. The figures are dramatic. There were only 276 labour disputes in 1986, involving 47,000 participants, and 72,000 work days were lost. In 1987, there were 3,749 disputes, with 1,262,000 participants and 6,947,000 lost working days. In 1988, there were 1,873 disputes with 293,000 workers, and 5,401,000 lost working days (Korean Ministry of Labor). Quoted in Sung-Baik Nam, “Labour Policy and Industrial Relations: Korea’s Experience”, paper presented at the Second Korea-ASEAN Conference, “Trends in Economic and Labour Relations between ASEAN and Korea”, 19–20 October 1995. 17. Chanin Mephokee, “ASEAN-Korea Economic Co-operation: Thailand’s Perspective”, in ASEAN-Korea Relations: Security, Trade and Community Building, edited by Ho Khai Leong (Singapore: Institute of Southeast Asian Studies, 2007), p. 73. 18. Lee Chan-young, “Korea’s Economic Challenges: Attracting the Right Kind of Foreign Workers”, Korea Herald, 27 August 2008. 19. The search for low-cost labour in a culturally familiar environment with positive political implications has led to the establishment of a South Korean-financed industrial park in Kaesong in North Korea. 20. Personal interview, Jakarta, with a high-level Korean official, circa 1994. But, as Aris Ananta noted, “Korean labors (sic) have made more problems than other foreign labors in Indonesia. Less conflict is found with other foreign labors.” “Labour Policy in Indonesia in Relation to Foreign Firms and Labour Relations in Korean Firms in Indonesia”, paper presented at the Second Korea-ASEAN Conference, October 1995. 21. There were some individual memories of the brutality of some Koreans who served in the Japanese army during World War II. 22. Personal interview, Kuala Lumpur, September 2007. 23. In travel around the ASEAN region in 2007, it was very difficult to identify Southeast Asians who were regarded, or regarded themselves, as specialists or authorities on Korea and Korean relations with the region. 24. When the government of Myanmar in 2007 wanted to re-establish diplomatic relations with North Korea, which Burma (Myanmar) had cut off in 1983, the South Korean embassy in Rangoon and the Korean foreign minister (at that time Ban Ki Moon) in Seoul informed the Burmese that South Korea would not object to that change. Personal interview, Rangoon, 2007. 25. Personal interview, Bangkok, November 2007. For an analysis of this phenomenon, see International Crisis Group, Perilous Journeys: The Plight of North Koreans in China and Beyond, Asia Report no. 122, 26 October 2006. 26. From 1991–2004, KOICA trained 11,706 individuals from Asia at a cost (through 2003) of about US$45 million. Lee Tae-ju, “International Development and Aid”, in Korea Policy Review, December 2005.

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27. Ibid. 28. The following documentation is taken from Korea Foundation documents in Korean. 29. . 30. These statistics are from the presentation given by Professor Jouyeon Yi-Kook of Ajou University at the March 2008 conference. 31. In Cambodia, the North Kyungsang Provincial Government, independent of the Korean Foreign Ministry, approached the Cambodians to build a Korean cultural centre and golf course in the UNESCO-protected Angkor cultural region. The Cambodians wisely turned this offer down and agreed to let them build in Phnom Penh instead. Personal interview, Phnom Penh, November 2007. 32. In Korea, “Christian” refers only to Protestants. Catholics are considered separately. 33. Choi Hyung Keun, “Preparing Korean Missionaries for Cross-Cultural Effectiveness” (Ph.D. dissertation, Asbury Theological Seminary, May 2000). 34. Comments in Seoul were that as Japan economically benefited from the Korean War, Korea would benefit from the Vietnam War, and as Japan re-emerged in the world after World War II as a result of the Tokyo Olympics in 1964, so Korea would be on the world stage after the 1988 Seoul Olympics. 35. According to the Xinhua News Agency (6 November 2006), Korean investment in Myanmar totalled $191.3 million in 34 projects, involving 100 companies. Bilateral trade was $124.59 million in 2005–06: exports were $38.63 million, and imports from Korea $85.96 million. Kim Dae Jung has been an exceptionally strong supporter of the opposition leader, Aung San Suu Kyi, who has been a strong advocate against foreign investment or economic assistance to that country. 36. Carol Marie Harvey, “Speaking Transnationally: An Ethnographic Study of Indonesian Migrant Workers on the Borderlands” (Ph.D. dissertation, University of Iowa, July 2005), p. 4. Other sources indicate that there are approximately 140,000 Muslims in Korea, of whom 100,000 are foreigners. 37. A story told of a Korean manager in an Indonesian factory forcing his Muslim workers to eat pork and kimchi so that they could work hard. The liberal newspaper, The Hankyoreh (19 December 2007) published an editorial “Ensuring the Rights of Migrant Workers” on the occasion of an international migrants’ day, and noted that Korea had not signed the convention for the rights of international migrants. 38. For an illustrative story, see The New York Times Magazine, 1 June 2008. 39. One of the attractions of North Korea for the leftist youth of the South has been the “purity” of North Korean culture and people. Many have felt that the culture of the South has been diluted by deleterious American or international cultural practices and that intermarriage further destroys Korean society. Thus, North Korea for this small minority is held up as the ultimate Korean cultural standard. As quoted in an Asian Times story in July 2008, a North Korean man said he would never marry a South Korean girl because that group has been polluted by

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intermarriage with foreigners. 40. See Christopher D. Hale, “Indonesia’s National Car Project Revisited: The History of KIA-Timor Motors and Its Aftermath”, Asian Affairs 41, no. 4 (July– August 2001): 629–45. 41. The following material is from a paper by Makmur Keliat, “The Future Direction of Defense Cooperation”, presented at a Korean-Indonesian forum in Seoul in August 2007. The president of Indonesia visited Seoul in July 2007 and thirteen memoranda of understanding were signed, with an investment value of nearly US$9 billion. 42. See “S. Korea and Indonesia Agreed to Enhance Economic Cooperation, with Huge Energy Deals Soon to be Sealed”, Diplomacy 33, no. 7 (2007). 43. One retired Burmese colonel and intellectual said that Arirang television (a Korean station in English) was his favourite TV channel. 44. The official journal Korea Policy Review, in its June 2008 issue, has a series of articles, including “Korea Heads Toward Being a Multicultural Society”, “New Members of Society: Foreign Brides”, and “The Korean Wave ‘Will Never Die’ in Vietnam”. 45. See “Hallyu: the Koreanization of World Culture. Korean popular culture is cool, profitable, compelling, sophisticated and introspective”, Korea Herald, 21 March 2008. One of twenty-five articles in this paper on hallyu. The official Korean Cultural Service (New York office) has published glossy volumes, “The Korean Wave as Viewed Through the Pages of the New York Times 2006” (March 2007), with an additional volume with the same title for 2007 (published March 2008). 46. Under President Kim Young Sam, the term “globalization” was first used, but in an attempt to back off from too great a perceived diminution of Korean culture, the Korean term was officially used. REFERENCES Ananta, Aris. “Labour Policy in Indonesia in Relation to Foreign Firms and Labour Relations in Korean Firms in Indonesia”. Paper presented at the Second KoreaASEAN Conference, October 1995. Armstrong, Dlynn Faith. “South Korea’s Foreign Policy in the Post-Cold War Era: A Middle Power Perspective”. Ph.D. dissertation, Miami University, 1997. Chanin Mephokee. “ASEAN-Korea Economic Co-operation: Thailand’s Perspective”. In ASEAN-Korea Relations: Security, Trade and Community Building, edited by Ho Khai Leong. Singapore: Institute of Southeast Asian Studies, 2007. Choi, Hyung Keun. “Preparing Korean Missionaries for Cross-Cultural Effectiveness”. Ph.D. dissertation, Asbury Theological Seminary, May 2000. “Conference on Strengthening the Korea-ASEAN Relationship”. Trends in Southeast Asia Series no. 10. Executive Summary. Singapore: Institute of Southeast Asian Studies, 2005. “Hallyu: the Koreanization of World Culture. Korean popular culture is cool, profitable,

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compelling, sophisticated and introspective”. Korea Herald, 21 March 2008. Harvey, Carol Marie. “Speaking Transnationally: An Ethnographic Study of Indonesian Migrant Workers on the Borderlands”. Ph.D. dissertation, University of Iowa, July 2005. Keliat, Makmur. “The Future Direction of Defense Cooperation”. Paper presented at a Korean-Indonesian forum, Seoul, August 2007. “Korea Heads Toward Being a Multicultural Society”, “New Members of Society: Foreign Brides”, and “The Korean Wave ‘Will Never Die’ in Vietnam”. Korea Policy Review, June 2008. Lee, Tae-ju. “International Development and Aid”. Korea Policy Review, December 2005. Nam, Sung-Baik. “Labour Policy and Industrial Relations: Korea’s Experience”. Paper presented at the Second Korea-ASEAN Conference, “Trends in Economic and Labour Relations between ASEAN and Korea”, 19–20 October 1995. Park, Joon Young. “Korea’s Return to Asia: An Analysis of New Moves in South Korean Diplomacy in the 1960s and 1970s”. Ph.D. dissertation, Columbia University, 1981. “S. Korea and Indonesia Agreed to Enhance Economic Cooperation, with Huge Energy Deals Soon to be Sealed”. Diplomacy 33, no. 7 (2007). Steinberg, David I. The Economic Development of Korea: Sui Generis or Generic? Washington, D.C.: A.I.D. Special Study no. 6, January 1982. ———. “South Korea in Southeast Asia: Enhancing Returns and Reassurances”. In Southeast Asian Affairs 1995, edited by Daljit Singh and Liak Teng Kiat. Singapore: Institute of Southeast Asian Studies, 1995.

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2

Perspectives on Korea’s Roles in ASEAN H.E. Surin Pitsuwan Keynote Address International Conference in Seoul 19–21 March 2008

Thank you very much, Prime Minister Lee Hong-Koo. I am surprised that you remember all those things that I have done. Even I forget them sometimes. Good morning, Dr Reed, the representative of The Asia Foundation here in Korea, and Professor Kim Woo-sang of the Institute of East and West Studies, Yonsei University. Certainly, thank you very much, Vice Minister Kwon Jong-rak of Ministry of Foreign Affairs and Trade, the Republic of Korea. Distinguished guests, Excellencies, ladies and gentlemen, it is, indeed, a great privilege for me to be in Seoul as the Secretary-General of ASEAN, and it is my first visit here in this capacity. Korea is a very, very important Dialogue Partner, one of the three in the ASEAN+3, which is a very unique group of countries and peoples who have decided to come together as a result of the financial crisis back in 1997. Former Prime Minister Lee introduced me as taking the helm of the Foreign Ministry in late 1997, but I do not want you to have the wrong impression that I engineered the financial crisis. We came into government as a result of the crisis because the previous government who caused it gave up. But we

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realized from that crisis, which occurred in early July 1997, that really we were more integrated, we were more connected than we realized, than we were aware of. Because it first occurred in Bangkok. The next day it was Malaysia. The next week it was Indonesia, and the next week it was the Philippines and not very long after that it was South Korea. Japan was large enough to absorb the impact. China was big enough to sustain the blow. But South Korea was very much affected. So a sense of community really emerged then. It was the first time that Former Prime Minister Mahathir called a meeting of his initiative. If you recall, this was the EAEC [East Asia Economic Community], which had been opposed quite actively by other powers outside the region. But as a result of the crisis, EAEC came into reality in the form of ASEAN+3, and we described the three as important economies adjacent to ASEAN — all three of you in alphabetical order, China, Japan, and South Korea. I have to say that because South Korea may feel a bit disappointed not being mentioned first. Only by alphabetical order. And as Professor Kim Woo-sang said, middle powers, small powers, banded together in the form of ASEAN and connected with other powers in the region. We became the cornerstone, we became the centrepiece of many other architectures in the region. I think we could claim that we were the centrepiece of APEC, because Australia, back in the late 1980s, felt that the growth in Southeast Asia, in East Asia, was very, very dramatic. And it wanted some connection with the region. So it came up with the idea of Asia-Pacific Economic Cooperation, APEC. That was in 1989. Since then, it has been elevated to the point of having a leadership summit every year, ever since President Bill Clinton. Along the way, the Europeans felt that they were being left out, so they proposed something called Asia-Europe Meeting (ASEM) that came into being in 1996. But you know what happened in 1997. We were all down. So the momentum of ASEM lost its force quite a bit during the times that we were down. We were all back on our feet by 2003, performing well beyond the period prior to the crisis. And now we are going full force, creating our own community in Asia — very ambitious. A sense of community is building quickly. A lot of people are talking about ASEAN now, and ASEAN has become a household word. You have ASEAN hotel, ASEAN Barbershop. The best one I saw was in Pattaya. A fleeting sign, ASEAN something. And I asked my driver, back up, back up, I just want to see what ASEAN that was, being incoming Secretary-General of ASEAN. He backed up and he

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said, “Sir, it’s ASEAN Massage Parlour.” So I can tell you that the whole region is excited about the word ASEAN, and I am glad that you are also signing on and would like to take part in our community building. Mr Vice Minister, thank you very much for creating the Korea-ASEAN Centre. Even though you are not revealing the location of it, I know for sure it will not be Pyongyang. I know for sure it will not be Panmunjeom, either. Southeast Asia and Korea were close even before ASEAN was created. If you go to Panmunjeom, just take a peek at the Armistice Hall or Room. You will see two flags. The Filipino flag and Thai flag. We were here, we were there at the front line, shoulder to shoulder with our Korean brothers and sisters. But ever since, Korea has been developing by leaps and bounds, and has performed a miracle in economic and national development. It has become a rightful member of the OECD, a seal of approval that you have made it in national and economic development. You have become our very, very important trading partner, as the Vice Minister said. Number five, only after China, Japan, the U.S., and the EU. The volume is large and increasing — $70 billion plus U.S. dollars, according to the Vice Minister. Korea-ASEAN FTA is evolving very actively. We are entering the fourth step of that trade agreement. Some reservations here and there, but it is going on very, very effectively. And we hope that we can seal this process of FTA evolution between Korea and ASEAN before the summit this year in Bangkok, when all ten countries of ASEAN are expected to ratify the ASEAN Charter. And the charter shall become the ground rule — the blueprint for our community building into the future. The ASEAN community will be built on three pillars. First is political [and] security, and we have the ASEAN Regional Forum for that. And we have South Korea as a member in that twenty-seven-member security forum in the Asia Pacific. The next is the ASEAN economic community. We are hoping to turn it into one market, 567 million strong. Ten economies, integrated — one market, one production base, one investment area with free mobility for what we call “qualified and skilled labour”. Just dream with us. In twenty years’ time, 567 million people shall become almost 700 million. Just dream with us — with the cooperation of Dialogue Partners like South Korea, one-third of our population by that time, almost 300 million people shall become middle class or the middle income. Just imagine what that middle-income bracket of Asia, almost 300 million people, will be for ASEAN’s industry — for Korean industry, Korean commerce, and Korean investments. Just like Aristotle said 2,000 years ago, the middle class shall be the transmission belt of all the good things in any society. They will ask for

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participation, they will ask for transparency, they will ask for accountability. They will be the anchor and stabilizing factor of that society. And imagine the entire ASEAN grouping will be anchored on that middle class twenty, thirty years from now. That is where Dialogue Partners are looking, because they are also very much interested in the rising middle class in China and India. ASEAN too can create and offer a vibrant market with purchasing power for our Dialogue Partners adjacent to ASEAN — Korea, China, and Japan. Korea now. So Excellencies, ladies and gentlemen, there is a large space for South Korea [in] your interaction with ASEAN countries. You can choose any of the three pillars. Security — you are already in the ASEAN Regional Forum (ARF), and it is with a sense of pride that I can tell you I brought North Korea into the ARF when I was the chair of ASEAN back in 2000. I had to court Mr Pak, the former Minister of Foreign Affairs of North Korea, DPRK. I had to hold his hand in Catalina, Colombia, during the meeting of the foreign ministers of the Non-Aligned Movement. From there it so happened that Cuba wanted to host the summit of the group of 77 plus China. Mr Castro sent two planes to pick us up in Catalina to go to Cuba. And we had to wait at the airport for over twelve hours because the planes were late and when they got there, they could not fly. I was holding Mr Pak’s hand and tried to lobby him, please come, please be available, please be in the region sometime during the ASEAN Ministerial Meeting in Bangkok. That was before the Six-Party Talks. I told him, “It just so happens that the sunshine policy has become fruitful, and some of your partners in the ASEAN Regional Forum would like to talk, so please be available and hop over to Bangkok and let’s have coffee.” I had to work with the Royal Government of Cambodia because King Sihanouk has the best relationship with DPRK among all of us in the ASEAN countries. Even his bodyguards are North Koreans. I am not revealing any secrets. His cook is North Korean. His servants, when we sit at the table with him, are North Koreans. That is when I got the idea that it has to go through His Majesty, King Sihanouk. I talked to Prime Minister Hun Sen, he said yes, we will work on that. But lo and behold, rather than being available in Cambodia or in a capital near Bangkok ready to come in, we got a message from Pyongyang saying that they wanted to join ASEAN officially, fully, the ASEAN Regional Forum. To the point where the original members of the ASEAN Regional Forum became suspicious. Why would they want to come in at this late moment and so enthusiastically? Nevertheless, Mr Pak came to Bangkok and became a full partner of the ASEAN Regional Forum.

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My only regret was that during the Six-Party Talks, all six participants are members of the ARF but not one word is being uttered about ARF. My idea was at least that ARF should have a special envoy flying around, listening, delivering messages. But we were thought to be too weak, too ineffective, and not ready, not up to the requirements or the challenge. Well, my response to that is if you treat a child like a child forever, he will be a child forever. Give ARF some responsibility and it will be up and coming. And I hope from now onward, ARF will be more effective, acting like a mature individual, ready to engage with the world. That is the ARF security and political community. Economic community, you are already there. Already active, already engaged, already participating and contributing. I think for South Korea, the third pillar is extremely important, Mr Prime Minister. We have heard of this “Korean Wave” travelling to Southeast Asia, this Hallyu, which is going to be discussed here. You can see it in various forms and manifestations. Hip hop music, movies, cuisine, movie stars going around. They are like the Beatles in the 1960s, with the teenagers jumping up and down, screaming, welcoming them. But it also could be regarded as an imposition, much like the Japanese experience in the mid-1970s. When Prime Minister Tanaka toured the region at the height of Japanese investment and presence in Southeast Asia, he was greeted with demonstrations and screams and shouts and burning of effigies. I was still a student at Thammasat University at that time, and was not part of it. The Japanese turnaround came with Prime Minister Fukuda in 1977, and his Fukuda Doctrine for Southeast Asia — heart-to-heart talk, intimate engagement. Not only in economic relations, but also sociocultural development. We are building the third pillar, sociocultural, among ourselves, where the people of ASEAN will have their space, where the NGOs will have their space, where the academics will have their space, where the media will have their space. I think this is an entry point for South Korea into ASEAN community building. I think that will be very useful, effective, and beneficial cooperation between South Korea and ASEAN countries in the cultural field, in the cultural space, in the area where we need to bring people together, where we need to guide all peoples of the ASEAN+3 to get to know each other more, to accommodate and appreciate each other’s cultures more. Without that, without a strong sociocultural space or pillar, the political-security community and the economic community will be built on a shaky foundation. I do hope that this idea will be taken up seriously by the government of South Korea and we may begin with a Korea-ASEAN

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Centre, as the Vice Minister has promised to me that it will be fully established before the ASEAN Ministerial Meeting in July, in Singapore, before Thailand takes over the chairmanship. Now, I am sure you will be covering many, many issues, many, many areas of cooperation and coordination between South Korea and Southeast Asia and ASEAN. But I do hope that you will not forget the people-to-people exchange, that you will not forget the social dimension of our community, you will not forget the real issues that matter most to the people, and that is their livelihood. So I am glad, Professor, you mentioned the issue of human security, you mentioned the issue that would certainly make life more secure, more happy, and more prosperous, because the idea of human security is not the traditional idea of security. It is not about sovereignty or territory or preparing for wars or talking about weapon acquisition. It is about the real security of the human person. So we are talking about the protection of people under threat, forced migration, running way from conflicts, vulnerable. We are talking about illiteracy and poverty. We are talking about health. We are talking about human development. We are talking about human empowerment. All these can also be part of the sociocultural pillar of ASEAN community building. I think that this entry point would be very much appreciated and very much welcome in Southeast Asia and ASEAN. Excellencies, ladies and gentlemen, this is a new age, an age of globalization, when it is no longer adequate to think of ourselves as a Korean national, to think of ourselves as a Thai national, to think of ourselves even as an ASEAN national, or even Asian national. The world is facing so many impasses, so many deadlocks, so many problems that seem to be unsolvable, so many imbalances. And, you know what? Our phenomenal growth itself here in the region has contributed to some of those imbalances and some of those impasses. So the challenge before East Asia — ASEAN included, South Korea included — would be how to contribute to the resolution of those deadlocks, impasses, and imbalances. The second largest economy, second highest contributor to the UN — Japan — is not in the UN Security Council. That is an anomaly. Fast-growing, soon-to-be number-one economy, China, is not in the G8. And the imbalances in trade, in payment that have occurred around the world, and the fluctuation of currency values affecting economies, affecting the health of our economies, all these things are occurring right in front of us. The question is what can Asians, what can East Asia contribute to the resolutions of those problems? That is the challenge before us.

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As I began with saying that ASEAN had contributed to the creation of many other architectures in the region, I am submitting to you, finally, that together ASEAN and East Asia, ASEAN and South Korea, can think about ways and means to work together in order to contribute to the resolutions of many, many of the global problems that we are facing, as the human family, as humanity. So it is a generation that has to think about new ideas, new initiatives, and new approaches to the old problems. Let me end by quoting somebody far away from this region but certainly one who has influence in Southeast Asia — Jalad ad-Din Rumi, a Muslim mystic, poet, Persian, who later on migrated to Anatolia, Conia. Six centuries ago, he surveyed the terrain of the Middle East and said we need a new beginning, we need new ideas, we need new approaches. He said vendors of all goods are gone, people of all ideas have receded into history. We need a new beginning. He said we are the new vendors. And he said this is our bazaar. I am leaving you with this thought: that East Asia, now, is our bazaar. We are the new vendors. We had better come up with new merchandise. We had better come up with new ideas, and I am glad we are beginning here, this morning, talking about the new role for Korea in Southeast Asia, because this is a new bazaar being built for all of us. Thank you very much.

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3

South Korea and Southeast Asia: Ideas for Deepening the Partnership David Koh

1. Introduction: The Rationale for Collective Pursuits and Closer Relations among Smaller Powers The Republic of Korea (Korea henceforth) is in Northeast Asia, physically thousands of miles apart from Southeast Asia. Historically, Korea and Southeast Asia — one a country, the other a region — have had contact and interaction, but their relations had never been closer than contemporary economic relations. On the basis of such good economic relations, I ponder the question: What more can they do together in cooperation, for each other? In the context of the “regional dynamics”, as one scholar noted, KoreaSoutheast Asia relations have long been in the shadows of the greater attention that each had always given to the major powers (Ho 2007, p. 1); “greater” as compared to the attention they had given to each other. They have been minors in a region packed with the presence and interests of major powers of the world. As the cliché goes, three of the five Permanent Members of the United Nations Security Council are in East Asia. This region brews not just territorial disputes that could escalate into war, but it also features the

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last frontier of the Cold War on the Korean Peninsula. In this strategic picture, pondering the space for closer relations begs the question: What is the practical value for closer relations? If the major powers dominate, would it not make much more sense for small countries to ensure their role via deep relationships with the major powers? From the perspective of a person familiar with international relations and politics, the fundamental reason for greater Korea-Southeast Asia relations arises from small players looking for a role in the geopolitics of the region. The geostrategic feature of the region of East Asia (including Southeast Asia, in the American post-war definition) has been the dominance of big countries native to the region and their relations with major, global powers from outside the region.1 When these powers calculate and act on their interests, they often posit their relations with each other as the primary set of relations in the region. The interests of smaller countries are often secondary unless these secondary interests are keys to the satisfaction of the larger set of interests arising from big power relations. Many instances in the history of international relations of the region confirm this point. Before the arrival of western colonialism in East Asia, countries in Northeast Asia and Southeast Asia based their foreign relations hierarchically. In Northeast Asia, dynastic China was the hegemon. In Southeast Asia, different kingdoms had dominated other territories of the region at different times and a number of such kingdoms regularly paid tribute to China as the overlord. The rise of Japan after the Meiji reforms transformed this pattern of international relations, which underwent further developments that were informed by the Atlantic Charter and the anti-colonial movement. These new developments established the principle of the equality of all countries in the international relations of the region and seemingly ended the age-old system of hierarchical relations in East Asia I said “seemingly” because the principle of the equality of nations did not replace the realpolitik of power. Because the United States and Russia projected their military power into the region after 1945, big countries native to the region such as China and Japan have had to compete with them for influence to secure their national interests. This complex set of Cold War dynamics posed different security problems and dilemmas to different countries and it gave rise to security perception differentials that produced zero-sum security calculations during the Cold War. At times when the biggest players were at odds, the smaller countries became proxies of this competition. In happier times, the bigger players were comfortable with each other, and smaller countries felt less pressure about having to choose their friends. Thus, in the larger picture of East Asia, smaller countries find their interests neglected and

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even harmed when big powers, for the purpose of either enmity or friendship, had to sacrifice their interests — unless the interests of the minor powers were closely aligned with the core interests of the major powers. Imperative, therefore, is the idea anchoring this chapter: smaller countries must forge closer relations with each other to collectively secure their self interests in the face of such big power dominance in international relations. This idea neither excludes nor includes the establishment of organizations to systematically pursue interests. It also does not privilege bilateral relations as a better form of collaboration than regionalism among countries. But, certainly, structures and processes that encourage dialogue and joint pursuits and that do not alarm big powers will benefit the collective of small powers and their relations with the big powers. More importantly, it enhances channels of communication and exchange that are independent of the major powers. Given that both Korea and Southeast Asia are in the nascent East Asian Community (EAC) and that their bilateral relations are seen to be the weakest set of the three sets of bilateral relations in the building of the EAC, better relations will enhance mutual understanding among the group of small players within the EAC (Hernandez 2007, pp. 41–58).

1.1. Current State of Korea-Southeast Asia Relations Assessments of the current state of South Korea-Southeast Asia relations are more or less in agreement — that they are in good health but receive only marginal attention from both sides. Economically, Korea and Southeast Asia are good business partners despite the physical distance between them, but the two have not become the closest of friends. The reasons are the differences in culture, their geographical isolation from each other, and Korea being a latecomer in establishing cooperative relations with countries in Southeast Asia (Ho 2007, pp. 1–5). One response to this statement would be that both sides are also good, if not better, business partners with the major powers, who have preponderant market sizes. These major markets are ignored at one’s own loss and are definitely more attractive than those of Korea or Southeast Asia put together. There is therefore ample reason to pay more attention to larger, rather than smaller, markets. Southeast Asia and Korea have not seen each other as the number one strategic partner. This is the reality that needs to be transformed. The mutual perception of both sides needs to go beyond the box of “big powers, small powers” to consider not only how intensive economic but also political and social relationships among small powers (which is the size that both sides ascribe to each other) could match the value derived from such relationships

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with the big powers. Certainly, the rationale for the ASEAN Free Trade Area and the ASEAN Economic Community is that small powers will have others take them more seriously if collectively they present a huge market rather than remain as segmented. Collectively, a united voice on issues would be strong; if they are divided, the big powers will turn a deaf ear to their views. This chapter sits on the following rationale: it will explore the space in between a strong Korean economic relationship with Southeast Asia and the laggard social and cultural aspects of the relationship. It will ask why and how this space can be filled. The review and exploration will lead to a set of recommendations for increasing Korea’s role in Southeast Asia. The operative questions I have to structure in this analysis are: What is the nature of the gap between the large Korean economic footprint in Southeast Asia and the medium-to-minuscule power role that Korea has in Southeast Asia? What are the ways to close this gap? Can this gap ever be closed? Are Korea-Southeast Asia relations consigned to a geostrategic fate of lying in the shadows of big neighbours and faraway superpowers? Thus, the structure of the chapter is as follows. Following the Introduction, the next section will argue that a gap between economic relations and other aspects of relations exists and will aim to highlight a number of manifestations of this gap. The third section suggests ways to close this gap, highlighting in particular the opportunities and geostrategic obstacles. This chapter ends with the conclusion. 2. The Nature of the Gap In ROK-Southeast Asia relations, a gap exists between the very healthy set of economic relations the two enjoy and the relative absence of the one in the other’s mind and agenda for action in non-economic areas. There is probably little dispute about whether such a gap exists, because objective data that can be gleaned from many sources to support it. One can debate, however, whether such gaps are natural in relationships between states or regions so far away from each other. The two sides began contact with each other as early as the thirteenth century. There was even a branch of a royal family from Vietnam’s Ly dynasty (AD 1010–1225), that was exiled from Vietnam for fear of persecution after dynastic change in 1225 and that thereafter sought refuge and eventually settled down in Korea. It was a time when there were few of the inducements of modern trade and its benefits to encourage exchange and migration. The number of Korean descendants of the Vietnamese Ly prince, called Ly Long Tuong, who led the exile could be around 1,500 (Viet Nam News).

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In the twentieth century, Koreans had already begun to live in Southeast Asia. Of note was their presence in Indonesia as agents of the Japanese occupiers there (Shin 2005, p. 1). After the Second World War ended, postwar colonial authorities prosecuted four Koreans and sentenced them to death for war crimes. A few thousands of Koreans were also repatriated. In the post-1945 period, Korea, Thailand, and the Philippines were all allies of the United States. Filipino troops fought in the Korean War, and Korean troops fought in the Vietnam War (as Korean pay-back for U.S. help in the Korean War) (Kim Minjung 2005, pp. 55–70). During the years immediately after the end of the Korean War and the armistice that divided Korea into two, both North and South Koreas had courted Southeast Asian countries as part of each country’s effort to demonstrate legitimacy by winning recognition, friends, and votes in the United Nations (Lee and Hong 1995, pp. 21–32). The Korea-Southeast Asia relationship went beyond the security dimension after the Korean War moved into armistice and stalemate. The Republic of Korea embarked on the road of industrialization and Koreans started to travel and to settle outside of Korea for business reasons. Intensive Korean interaction with Southeast Asia, however, started only in the 1980s, when South Korea began to find that its labour costs were no longer competitive. A number of firms relocated their operations to Southeast Asia. With this FDI movement came more and more trade and integration and Korean settlers in Southeast Asia. In fact, in the 1980s, almost the entire footwear industry of Korea migrated to Indonesia (Shin 2005, p. 5). By the early 1990s, Southeast Asia saw the opening of a new economic frontier, when Vietnam started to come out of its shell and welcomed foreign investments. Korea was one of a handful of pioneers (besides Taiwan and Singapore) that invested aggressively in Vietnam. At that time, Vietnam was not yet a member of ASEAN and thus statistically the relative share of ASEAN-6 in Korean FDI fell, since some of these Korean investments were being rechannelled to Vietnam and China (Wang 1995, pp. 1–20). Politically, Korea has also been actively taking part in the regionalism of ASEAN, particularly in the expanded framework that emerged once the Cold War was tottering towards an end. By 1989, Korea had become a Sectoral Dialogue Partner and by 1991 a Full Dialogue Partner of ASEAN. On this basis, one scholar argued that Korea’s ties with ASEAN were in fact stronger than some of the ties among ASEAN countries (Lee and Hong 1995, p. 24). For Korea to be taking part in the regional processes of the PMC and ARF of ASEAN, it must have assessed that regionalism centring on ASEAN was not a process that it should miss. Whether they saw an intrinsic strategic value in Southeast Asia is a moot point, although to some extent Southeast Asia’s economic value to Korea is demonstrated by Korea’s huge level of investments

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there. But Southeast Asia was important enough (because of the United States’ commitment to Vietnam) that Korea committed troops to Vietnam as well, although after the Vietnam War ended, the Korean Government apologized to the Vietnamese Government for its participation. One could say that while Southeast Asia is a region of economic productivity for Korea, the ASEAN process adds value to Korea’s economic presence because ASEAN promotes peaceful international relations and political stability, which are important for economic purposes. The disappointing realization, of course, is that without ASEAN, Southeast Asia to Korea is probably just an investment destination like any other — perhaps with higher risks. With the Cold War having ended, the North-South Korea competition for legitimacy is quite settled in favour of the South. With the looming Chinese giant in its backyard, Southeast Asia might still be less strategic and important to Korea, which means nothing might change and there may be no reason for change. The brighter side of the coin has been that Korea has also found it obligatory to channel Official Development Aid (ODA) to Southeast Asia, although the amount spent throughout the 1990s was less than 0.1 per cent of Korean GNP (Wang 1995, p. 19). In 2007, Korean ODA was 0.07 per cent of GNI; the country plans to increase the level to 0.25 per cent by 2015 (Korea Times). The amount and the target for year 2015, however, do not stand out and reflect in general the unwillingness of many developed countries to pledge and disburse more aid to help less developed countries.2 The gathering of scholars to discuss, therefore, how both Korea and Southeast Asia could do more with each other is testimony to the common perception of both sides that this Korea-Southeast Asia relationship is important beyond economics and should go beyond the Korea-ASEAN relationship. The idea to do more is new, but the evergreen component of it is that a higher state of relations will bring mutual benefits. What are the obstacles in the way and what are the advantages that Korea may enjoy in trying to move the Korea-Southeast Asia relation forward? Starting with the advantages, there are some social, economic, and political affinities between the two.

2.1. Affinities between Southeast Asia and Korea The chief and most current manifestation of this affinity is the ease with which popular Korean culture in the form of Korean films has penetrated Southeast Asian societies and become accepted as an important part of the popular and recreational diet. The chapter by Pavin Chachavalpongpun in this book goes into greater detail on the Korean Wave. Without trying to repeat what he has written in his chapter, it could be surmised that Southeast Asians (and to a

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significant degree Chinese and Japanese) have accepted the Korean Wave because of the points of cultural affinity portrayed in Korean films with which Southeast Asians can identify. Borrowing from Kim Hong-Ho, who analysed the affinity between Thailand and Korea, these points of cultural affinity are Buddhist-Confucianist value systems and the Southeast Asian (particularly Thai) tolerance and embrace of foreigners and foreign culture.3 In terms of religious affinity, one might also add that, at least between Singapore and Korea, Christianity is an additional and important point of common reference. I would qualify that the popularity of the Korean Wave among the more than 200 million Muslims of Southeast Asia (about half of the entire population of Southeast Asia) is unknown. This begs the question of whether the Korean Wave is worthy of note only among non-Muslims in Southeast Asia. Going back a little in history, it should also be noted that participation by Korea, the Philippines, and Thailand in alliance relationships with the United States, together with the role that other countries in Southeast Asia played in the supply of resources for the U.S. alliance could also have assisted mutual understanding between Koreans and Southeast Asians in general. It could also have provided a common template in their understanding of the geopolitics and international relations of the region, if not about each other’s security perceptions and military workings. Understanding naturally leads to empathy, particularly if there are similarities in experiences and values between two parties. This is probably the reason why the North-South Korean competition in legitimacy in the international arena has ended in favour of South Korea. In other words, Korea and Southeast Asia (and ASEAN as well) have played on the same piano and sung in the same key. In the post-Cold War environment, the United States has expanded military cooperation with all maritime Southeast Asian countries, thus expanding the number of Southeast Asian countries that have security interactions and links with Korea. After its economic growth took off, flows of Korean people, goods, investments, tourists, and trade with Southeast Asia became significant. While each has not counted the other as the top partner in all these areas, the positions of each in the other’s books have been high. The Philippines, Thailand, Singapore, and Vietnam are in the top ten destinations for Korean tourists (Kim Minjung 2005, p. 61). Globalization, in which both Korean and Southeast Asian economies play important roles, would also have brought both sides closer through the common ways and standards that their business practices and government regulations must follow. Despite these affinities, significant differences remain. Arguably the largest differences lie in mutual perception. Let me deal with the Southeast Asian perception of Korea first.

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2.2. Perceptions of Korea in Southeast Asia In the first instance, since Korean businesses started to invest in Southeast Asia, contact with Korea has always been considered important in Southeast Asia, although most of the time this was also considered to be in second place to contact with Japan and the West. The main reason, perhaps, was because Japanese and Western investments came to Southeast Asia earlier than those from Korea. What this means is that, by virtue of the longer period of association or contact, Southeast Asians are more familiar with Japan than they are with Korea, although this is not to say that Japan’s relations with Southeast Asia did not have their problems. In fact, both the Korean and Japanese economic presence in Southeast Asia have met with strong protests by workers when conditions of work did not match expectations. In the case of Japan, the riots against Japan that happened in Jakarta in 1973 demonstrated vividly the problems that arose from foreign investments when they were coupled with a weak state role in the regulation of the relationship between capital and labour. In Korea’s case, its political democratization starting from 1988 disallowed poor labour practices at home and many businesses that had relied on the exploitation of labour moved overseas to Southeast Asia, in particular to Indonesia and Vietnam (Shin 2005, pp. 5–6). These investments were initially welcomed but there were soon strikes among unhappy workers. Korean firms, in particular, have been prosecuted for brutality and violence against workers in Southeast Asia. Thus it is essential that Korea and Korean companies catch up to the positive image that Southeast Asians have of Japan and the West as Ho Khai Leong has pointed out (Ho 2007, pp. 1–5). By no means will this process be easy, not least because Koreans and their culture lack deep roots in Southeast Asia. Better understanding and empathy will require deeper Korean involvement with Southeast Asia, especially in mutual cultural understanding and behavioural adjustments. As one scholar pointed out, “The Southeast Asian region … is a dead space for the Korean government’s endeavor for international cultural exchange” (Kim Minjung 2005, p. 55). It is difficult to agree or disagree totally with this statement, because, while affinities exist, there lacks a strong motivation to intensively cultivate cultural exchange. Most of the time cultural exchange is not promoted for its own value but for the mutual understanding that it could bring to bear on other issues. One of these issues is that of mutual friendship. In researching this subject, I read many articles and books that reviewed the Korea-Southeast Asia relationship and also analysed the East Asian strategic situation. The value of the Korean-Southeast Asia relationship as a subject of analysis comes through in this limited literature mainly in two terms: the

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Korean Peninsula as a flash point and Korea’s economic power as being second to Japan, although quite significant to the individual investment destinations in Southeast Asia. In addition, the strategic value of Southeast Asia to Korea seems limited. In contemporary Korean strategy and diplomacy, the Korea-Southeast Asia still unimportant as evidenced by its absence from the core of Korean considerations about its own security (Sarantakes 2008, pp. 87–104). Notwithstanding the fact that they are common allies of the United States, Korea and Southeast Asia do find it difficult to discover common areas of cooperation that are beyond the economic, especially when each side is strategically of no strong consequence to the other. There is no doubt that a new war on the Korean Peninsula would have ripple effects reaching Southeast Asia in the form of economic slowdown, because war would destabilize East Asia and hurt economic progress. But the more fundamental reason why a new Korean war would be consequential to Southeast Asia is that it would drag major powers into confrontation. Thus, in promoting understanding and security through cultural exchange, it is with the major powers and its North Korean brothers that Korea needs to do the most work. One view is that the whole issue of Korea reaching out to Southeast Asia culturally is a function of the need for international exchange (Kim Minjung 2005, p. 55). Economic motivations have been the greatest drivers of this exchange. Cultural exchange would promote greater understanding on both sides as to why things are done in certain ways, so that less friction in human relations is produced. Southeast Asians therefore have found a need to learn the Korean language and about Korea. Koreanology in Southeast Asia indeed started in tandem with the political economy of Korea-Southeast Asia relations. In Southeast Asia, Koreanology appeared to be the most developed in Thailand. Begun in 1980 by individuals, research in the late 1980s was being undertaken at least at six universities. But the harvests were limited because of the small range of subjects taught and the small number of graduates. Perhaps this was because Korean FDI was still small when compared to that of Japan and also because the courses were functional in purpose. This was also despite the fact that Korea was recognized by Thailand as early as 1949 (while Koreanology in Thailand started in the 1980s) and that both Korea and Thailand were allies of the United States and contributed troops to the Vietnam War (Kim Hong-Ho 2005, pp. 42–45). On the other hand, for Singapore, a country that has close political and economic ties with Korea, Koreanology has yet to take root and the universities in Singapore have not seen it as important to launch Korean studies as a way to equip Singaporean students to work in Korea — and this is two decades after Koreanology started in Thailand. Perhaps this reflects the competition between the Korean and Singaporean economies, because the Singaporean

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education system has long emphasized practicality (training for the labour market) over philosophical or cultural needs. In Singapore, there is some demand for Korean language instruction and Korean studies, driven by both economics and the Korean Wave, but these demands are small in scale and are being satisfied only outside the schools and tertiary institutions. It could be argued that Koreanology in the universities of Southeast Asia has not taken the understanding of Korea into the hearts of the common people in the region. A 1995 opinion survey by Hankook Ilbo of Korea and Yomiuri Shimbun of Japan showed that three-quarters of Indonesians surveyed had a negative image of Korea (Shin 2005, p. 7). (However, the same source showed that those Koreans who had stayed for a long time in Indonesia appreciated and were aware of the features of Indonesian society. We might infer from this that more close contact will increase mutual understanding.) The authors of the survey hit a big nail on the head with this observation: “It is surprising to learn, and difficult to understand, that a people without any memory of invasion as colonization thought so badly of another country.” Through the same survey, it was found that Koreans were not favourite employers, presumably because Koreans are often thought of as tough. In Hanoi, a new Korea Centre to promote the learning of the language and culture was established in 2007. It is remarkable that this first centre was established only two decades after Korean investments in socialist Vietnam started.

2.3. Perceptions of Southeast Asia in Korea There is an understanding in Southeast Asia that Koreans have always looked down on the backwardness of the region. These words of a Singaporean student who studied in Korea for her Masters degree shed some light on Korean thinking: The Koreans look down on Southeast Asia. They think there is no country from Southeast Asia that is their equal in terms of progress and development, except for Singapore, which they consider as equal or even better in some aspects. Therefore the Koreans in general are not concerned with or interested in Southeast Asia.

This understanding of Korea is apparently not without some basis. A scholar has also noted that Koreans do perceive Southeast Asia as backward, primitive, traditional, and even ancient (Kim Minjung 2005, p. 69). Two university lecturers working in Korea, one a Korean and the other a Southeast Asian, whom I interviewed for this chapter lamented that Koreans are largely

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ignorant of Southeast Asia. (Few universities and colleges among the more than 400 in Korea actually have a full range of courses that teach students about Southeast Asia. Where a Southeast Asian component in the curriculum exists, language training and linguistics seem to be the only subjects available — this is the mirror image of the limited functionality that grips Koreanology in Southeast Asia.) Pondering the reasons for this Korean view of Southeast Asia essentially leads us to what can be called the world view of Koreans, a view that is closely associated with the nationalism that is one of the most, if not the most, important drivers of Korean foreign policy. To Korea, the fundamental relationships on which it must get on the right footing are those with China and the United States. China is critical for its size and the age-old influences it has had on Korea. China is also the most important backer of the North Korean regime; arguably, China now sees both North and South Korea as equally important in its strategic policy towards the Korean Peninsula. The United States has been the security benefactor and guarantor for Korea for the past six decades. While considerable opposition to this close security relationship exists in Korea, the alliance with the United States remains a cornerstone of the Korean strategy, especially to deter aggression from North Korea. Beyond these two major powers, North Korea’s possible collapse and Japan’s territorial disputes with Korea also drive nationalism and the core strategic agenda of Korea. Therefore, the Northeast Asian strategic calculus is the fundamental matrix that influences the Korean world view; arguably this is also true for North Korea. In this obsession with China, the United States and Japanese and North Korean intentions, it is hardly surprising that Southeast Asia weighs in fifth as a security and political priority for Korea.4 The role that Korean nationalism has played in its foreign policy could also be considered as a strong obstacle to greater Korea-Southeast Asia relations. Essentially, Korea’s world view is transfixed by its concern with giant neighbours that have histories of dominating and colonizing Korea. It is commendable that such a world view remains at its fundamentals. However, the tracing of some Koreans roots to Southeast Asia has had the effect of sharpening Korean perceptions of Southeast Asia and perhaps even transforming them. The relevation that some Koreans have their roots in Vietnam could urge a number of Koreans to look at Southeast Asia in a different light, particularly as their ancestors are now understood to come from a supposedly more backward region than Korea. At least, it serves to dilute the idea that the Koreans are a homogenous race and highlights an important historical fact of interaction among the peoples of Northeast and Southeast Asia, far as the regions might be from each other. A Korean

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descendant of the Vietnamese Ly house has even said that though he was a Korean in appearance, he had a Vietnamese soul (Viet Nam News). 3. Closing the Gap: Suggestions and Ideas Despite the lack of physical proximity, Korea and Southeast Asia are tied together in the strategic landscape and globalization of twenty-first century East Asia. There is enthusiasm by Korea and Southeast Asian countries to do more for each other. Below are some suggestions on new areas of cooperation that Korea and Southeast Asia might be able to work on more intensively. The first area concerns the strategic picture that is likely to emerge in East Asia in another twenty years. By that time, it is possible that China will overtake the United States as the number one economy in the world. The world is expecting China to flex new military and political muscles when its economic gains allow that. The current strategic issues as concerns both Korea and Southeast Asia are of two types: traditional and non-traditional. With respect to traditional issues, what kind of great power will China be? What would the role of the United States be? What is the new paradigm in East Asia that will accommodate harmoniously the interests of the United States, China, and Japan? All are major matters to be settled. Other than these three big powers, Korea and Southeast Asian countries, in particular ASEAN, are the smaller players. As such, they should consult each other more often about the direction of big power developments — to prevent domineering behaviour on the part of big powers at their expense. The structures of such consultations have existed, as in the ASEAN-Korea dialogue processes, but more of these channels should be established outside ASEAN. In particular, such consultations and exchanges of views need not necessarily be just about how to contain the big powers. They could also be about how to construct a regionalism of East Asia that might, among other things, overcome the bitter memories and emotional baggage of World War II and construct and propagate the appropriate values of international relations and domestic governance that should feed into a sense of community in East Asia. Concomitant to that, as learned from the financial crisis of 2008, the smaller countries of East Asia could take the lead in erecting regional mechanisms for financial regulation and stabilization in times of crisis, with the participation of Japan, China, Korea, and ASEAN as equal partners. In terms of non-traditional issues, in recent times Southeast Asian countries have appeared to face challenges in the form of religious extremism, laid over a thin layer of nationalism, which in turn is laid over a thick layer of ethnic diversity and difference and, in some instances, secessionism. In addition to

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these, however, are immediate threats posed to the environment, especially in the urban areas and in industrial and mining areas. As regards the latter, Korea is far ahead of Southeast Asia in having been able to construct a space for civil society to take root and lead in policing and providing feedback on the dangers to the environment angle of certain investments and industrial policies. In Southeast Asia, such a role for civil society (other than in perhaps the Philippines) is severely lacking. There are also doubts whether civil society does play an effective role even where it exists and the state recognizes its role. Where the state cannot scrutinize and police both investors and itself, then civil society should be given a large role. Korea could share its experiences and impart know-how with more networking between its civil society components and those in Southeast Asia. If the governments of both sides will not do it, then it is imperative that the umbrella associations of civil society take the lead. There are also a huge number of non-traditional security issues beyond the environment that need addressing; both Korea and Southeast Asia are likely to have mutual interests in them. The starting point on these issues is not to have a “holier-than-thou” attitude but for both sides to explore the areas where each has better expertise and then to construct the mechanisms for sharing those experiences. Where one side lacks the experience, the other side could provide the training. Within Southeast Asia, there is also a development gap that Korea can help to close. This is the gap between the Indochina members of ASEAN and the others. Apparently, Vietnam is pulling away from Myanmar, Cambodia, and Lao PDR, but the lead it enjoys is not very clear and is still vulnerable to economic mismanagement. Ways for outsiders to close this new-old ASEAN gap include direct transfers to help the poor; channelling more FDI to these countries if they welcome it and if the market mechanism deems it feasible (as part of the China+1 strategy); giving cheap loans to these countries to build up the necessary conditions to develop their economies, such as infrastructure construction and maintenance (electric power, lighting, safe water, good roads, airports, and seaports) that must pass through environmental and transparency filters; training strategies and plans for workers in order that the investment projects have their manpower needs satisfied; the transfer of technology; the establishment of skill training institutes by Korean business associations to equip Southeast Asian workers with the skills that Korean companies require; and so on. The list could be quite lengthy; it is important for the Korea-ASEAN dialogue process to update this list and to mobilize resources and manpower to the priority areas. Good domestic governance is an underlying element in all these areas, in ultimately determining how quickly the gap can be closed. Without

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trying to say that governance in Korea is better, certainly its successes can be shared and transplanted. The traffic is likely to be more one way — Korea to Southeast Asia, although there are pockets of excellence in the latter that Korea might want to know more about. One additional area both in terms of closing the development gap in ASEAN and of improving the Korean image in Southeast Asia is the need, either through governments or civil society, to police acceptable standards in labour practices. When many European, Japanese, and U.S. companies invest in Southeast Asia and elsewhere, they are always admired for their good human resource practices; consequently they are often the companies for which locals in Southeast Asia want to work. Korean companies do not enjoy a similar status and regard, but there is no reason why it should remain that way. Peace in industrial relations with local workers would kill several birds with one stone. First, productivity can increase. Second, ill treatment of workers would no longer need to be on the agenda of bilateral relations and the Korean image would improve. Third, it will further consolidate the movement towards a healthy respect between capital and labour, which should be a pillar among the values of the new East Asian Community. The standardization of contracts for each and every Southeast Asian country, perhaps for all Southeast Asian countries, should be a goal worthy of pursuit. Standardization does not necessarily mean the equality of all conditions. It should be the pursuit of a core set of human resources management values and principles that could benefit capital, labour, and social peace at large. Governments or civil society from both Korea and Southeast Asia should sit together to pursue this, starting with standardization within each country and providing mechanisms for aggrieved companies and workers to seek redress speedily and fairly. As another way to promote industrial peace, the Korean Government, or its business associations, or civil society can fund briefings and entry training for Southeast Asian workers who want to work with Korean companies; such briefings can include the expectations that both sides should have of each other. Without prejudice, workers who do not wish to come under Korean corporate regimes could decide not to sign up for work. Governments of both sides should also cooperate to regulate companies’ dealings with labourers, to moderate expectations and charges. Much also needs to come under state and civil society supervision in terms of the exploitation that labour agencies perpetrate on workers when they are exported to work in foreign lands, whether in Korea or as employees of Korean companies in third countries. It is also important to consider again the strategic considerations for closer Korea-Southeast Asia relations and for cooperation in the tight space

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between the great powers present in East Asia. On its own, Korea is sandwiched, whereas in Southeast Asia, ASEAN has taken the lead in the international relations and politics of its region. Now, ASEAN is sitting in the driver’s seat for the East Asian Community building process, although it is not clear if the car will have enough wheels to work. But if Korea works closely with ASEAN and strongly supports the ASEAN lead in constructing the EAC, chances are that Korea will be able to help safeguard its own interests as a “sandwiched nation” via the promotion of the values that smaller nations want to see embedded in a regional community. There remain ample opportunities and foreseeable benefits for Korea in standing by ASEAN in its foreign policy stance with regards to the use of regionalism to regulate international behaviour in this region. 4. Conclusion Korea and Southeast Asia have competitive advantages with regard to their relations with each other. These competitive advantages, if properly identified and driven, would help not just in boosting their relations but also in furthering regionalism and peace in East Asia. The fundamental principle for closer strategic cooperation is that they are, region and country, small and weak states entrenched but sandwiched between major powers. In this space, the history of international politics does not augur well for regionalism in the future. Nor has history been forgotten, let alone forgiven. Regionalism in Southeast Asia has done better than in Northeast Asia; it is a form of regionalism that seeks not just to balance the major powers to prevent conflict and to build confidence, but also to ensure that small states articulate a collective and united voice. Korea is the only small state in Northeast Asia and arguably its perspectives on regionalism and the regulation of relations among the major powers resemble those of ASEAN more than of its neighbours. Strategic cooperation between Korea and ASEAN to build the East Asian Community and a regionalism safe for all, in particular smaller states, can only be in the interests of both Korea and Southeast Asia. There are also the economic and social angles in their relations that show that there is fertile ground for closer cooperation. Crucially, Korea’s competitive advantage over Southeast Asia is its democratization, governance, global integration, and economic management. It has shown that all these goals are compatible not just with each other but also with a sense of independence and nationalism that is said to be the primary force obstructing closer cooperation among Southeast Asian countries. These countries are evidently

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less developed than Korea and will benefit from Korea showing the way — not doing it for or preaching to Southeast Asia. NOTES 1. 2.

3.

4.

Wang Gungwu, “Welcome Remarks” in 2007 RSPD Forum Report. The United Nations’ target set for ODA in 2006 was 0.7 per cent of gross national income. In 2006, only five countries met this target: Sweden, Luxembourg, Norway, The Netherlands, and Denmark. U.S. and Japanese figures in 2006 were 0.17 per cent and 0.25 per cent respectively. See “Development aid from OECD countries fell 5.1% in 2006”, OECD report. Kim Hong-Ho, “Korean Pop Culture Phenomenon in Thailand: Analysis and Evaluation”, pp. 42–45. Kim also included as a factor the refreshing nature and high quality of Korean films. This is a valid point at the point in time when the Korean Wave started to arrive. At that time Southeast Asian countries were already inundated by films from Taiwan and Hong Kong, which after a while did not achieve the breakthroughs and freshness that Korean films had. For a more detailed reading of the views on nationalism as the driver of Korean foreign policy and the Northeast Asian strategic picture that form the core world view of Korea, see Allen, “Nationalism in a Postcolonial World: The Case of Korea”, pp. 209–25; Lee, “Changing Security Environments in Northeast Asia: A Korean View”, pp. 30–37; Sarantakes, “History Still Matters: Contemporary South Korean Strategy and Diplomacy”, pp. 87–104; and Lee and Hong, “ASEAN, South Korea and the Asia-Pacific Region”, pp. 21–32.

REFERENCES Allen, J. Michael. “Nationalism in a Postcolonial World: The Case of Korea”. In Weaving A New Tapestry: Asia in the Post-Cold War World: Case Studies and General Trends, edited by William P. Head and Edwin G. Clausen. Connecticut: Praeger, 1999. “Development aid from OECD countries fell 5.1% in 2006”. OECD report. (accessed 30 September 2008). Hernandez, Carolina G. “Strengthening ASEAN-Korea Co-operation in NonTraditional Security Issues”. In ASEAN-Korea Relations: Security, Trade and Community Building, edited by Ho Khai Leong. Singapore: Institute of Southeast Asian Studies, 2007. Ho, Khai Leong, ed. “Introduction”. In ASEAN-Korea Relations: Security, Trade and Community Building. Singapore: Institute of Southeast Asian Studies, 2007. Kim, Hong-Ho. “Korean Pop Culture Phenomenon in Thailand: Analysis and Evaluation”. In Relation Between Korea and Southeast Asia in the Past, edited by Yoon Hwan Shin and Chayachoke Chulasiriwongs. Thailand: ASEAN University, Westvale, and Korean Association of Southeast Asian Studies, 2005.

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Kim, Minjung. “Prospect for Cultural Exchange between Korea and Southeast Asian countries”. In Relation Between Korea and Southeast Asia in the Past, edited by Yoon Hwan Shin and Chayachoke Chulasiriwongs. Thailand: ASEAN University, Westvale, and Korean Association of Southeast Asian Studies, 2005. “Korea Moving to Expand Overseas Aid”. Korea Times, 29 September 2008.

(accessed 30 September 2008). Lee, Poh Ping and Hong Seok Jeong. “ASEAN, South Korea and the Asia-Pacific Region”. In ASEAN and Korea: Emerging Issues in Trade and Investment Relations, edited by Daljit Singh and Reze Y. Siregar. Singapore: Institute of Southeast Asian Studies, 1995. Lee, Soe-Hang. “Changing Security Environments in Northeast Asia: A Korean View”. In ASEAN-Korea Relations: Security, Trade and Community Building, edited by Ho Khai Leong. Singapore: Institute of Southeast Asian Studies, 2007. “Royal descendants carve business niche”. Viet Nam News, 14 January 2007.

(accessed 17 September 2008). Sarantakes, Nicholas Evan. “History Still Matters: Contemporary South Korean Strategy and Diplomacy”. In Strategic Stability in Asia, edited by Amit Gupta. Aldershot: Ashgate Publishing, 2008. Shin, Yoon Hwan. “The Korean Community in Southeast Asia: A Case Study of Koreans in Jakarta in the mid-1990s”. In Relation Between Korea and Southeast Asia in the Past, edited by Yoon Hwan Shin and Chayachoke Chulasiriwongs. Thailand: ASEAN University, Westvale, and Korean Association of Southeast Asian Studies, 2005. Wang, Yen Kyun. “Overview of ASEAN-South Korea Economic Relations”. In ASEAN and Korea: Emerging Issues in Trade and Investment Relations, edited by Daljit Singh and Reze Y. Siregar. Singapore: Institute of Southeast Asian Studies, 1995.

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4

Divergence Amidst Convergence: Assessing Southeast and Northeast Asian Security Dynamics Chung Min Lee

1. “Rubik’s Cube”: Conceptualizing Asian Security Commensurate with Asia’s phenomenal rise over the past three decades as a major economic bloc with matching political influences and military capabilities, understanding the core undercurrents and drivers of Asian security has assumed centre stage for two main reasons. First, the rise to the fore of Asia’s strategically consequential powers — including the Big Three (China, Japan, and India) and key middle powers such as Indonesia, Vietnam, and South Korea — have opened unparalleled opportunities for the global economy with relatively greater influences in determining the global strategic balance. And second, while no major wars have been fought in Asia since the end of the Vietnamese War in 1975, the region confronts a range of security threats and challenges that are unprecedented in their magnitude, potential systemic impacts, and domestic political repercussions.

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Indeed, one could arguably assert that no other “region” in the world faces such a broad and deep compendium of security challenges as East Asia in the early stages of the twenty-first century. In this context, understanding the various strands and associated networks of security heritages and emerging issues from Southeast and Northeast Asian perspectives are crucial, although complicated by the contrasting security perceptions and approaches in these two major sub-regions of East Asia. Increasingly connected and dependent on each other’s markets, goods, and services, Southeast and Northeast Asia share a wide range of security imperatives yet they remain separate in important aspects primarily, although not exclusively, due to relatively weaker majorpower contestations in Southeast Asia and greater sensitivities to a range of non-traditional security issues. The push for a regional identity and cooperative security in Southeast Asia and Northeast Asia’s search for a more stable regional order in the context of intense major-power competition and cooperation means that no single, overarching concept or theory can readily explain the centripetal and centrifugal forces that have shaped, and continue to shape, the Asian strategic landscape. As a case in point, the collapse of the Sino-centric regional order in the early twentieth century resulted in five decades of civil wars and interstate wars (notably, the Chinese civil war from the 1920s until the formation of the PRC in 1949, Japan’s invasion of China in 1937, the spread of World War II throughout the Asia Pacific after 1941, and the Korean conflict from 1950–53), followed almost immediately by huge internal convulsions within the PRC in the forms of the Great Leap Forward and the Cultural Revolution. The rise and fall and rise of Asia’s two dominant powers (China and Japan), the burst of newly independent states, intense ideological strife and attendant conflicts, compressed industrialization, accelerating democratization and rapid globalization have all occurred over the past one hundred years. Thus, Asia’s journey since the late nineteenth century is arguably without historical precedent in terms of the speed, magnitude, and diversity of domestic and external convulsions. As Michael Yahuda has commented: In considering regionalism and security in Asia, it behooves us to recognize that an overwhelming number of the states in China’s neighborhood must be regarded as fragile, or relatively fragile, especially in comparison to their Western counterparts. Most have gained their independence within the last fifty years and still bear the marks of colonial legacy, both domestically and externally. Arguably, it is that legacy that is largely responsible for their longstanding disputes over their respective territorial bounds. Few have established political systems that can be expected to endure in their current form. Many may still be regarded as in the process of consolidating their national

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identities … Not surprisingly, most of these states are conscious of their vulnerabilities, and hence they have tended to be strong upholders of their sovereignty and have been alert to the problems of external intervention.1 (Emphasis added).

In contrast with its Southeast Asian neighbours, Northeast Asia’s fundamental security framework and dominant outlooks continue to be shaped and led by major-power interactions and “hard security” challenges such as balance of power politics, the ongoing South-North competition on the Korean Peninsula, and cross-strait relations between China and Taiwan. But the two sub-regions also share a growing list of security concerns, not least stemming from the very roots of East Asia’s economic success. The growing empowerment of and matching socio-political demands by Asia’s burgeoning middle classes from Jakarta to Shanghai, the future of entrenched one-party systems, the spectre of failed or failing states (notably but not limited to such states as Myanmar, North Korea, and perhaps even Pakistan), the proliferation of weapons of mass destruction as shown by Pyongyang’s October 2006 nuclear test, and an ever-expanding menu of human security requirements all attest to the region’s daunting list of security imperatives. With the notable exception of nuclear non-proliferation, which is presently focused most sharply on North Korea, however, it is Southeast Asia that confronts a greater share of human security challenges and non-traditional security threats. Thus, how Asian powers manage and respond to a range of security issues over the ensuing two to three decades is going to have profound implications for the global system. Asia’s unprecedented accumulation of economic power and its increasingly sophisticated military forces stretch across its three major sub-regions: Northeast, Southeast, and South Asia. This is not to suggest that a new and potentially dangerous arms race has begun or is even inevitable in the region. But one of the most striking features of Asia’s security template in the early twenty-first century is that “rapid economic growth is clearly leading to a shifting balance of power within the region although no country in the region is yet a global military power nor is one likely to become so in the next decade or two”.2 China is the principal Asian candidate that could over the longer term emerge as what U.S. defence planners refer to as a “theater peer”. If China does become a “theater peer”, it would affect both Southeast and Northeast Asian balance configurations, although more sharply and deeply in Northeast Asia, given Japanese and South Koreans (or even unified Korea) sensitivities to a militarily preponderant China. Prior to September 11, the strategic and political stability of the region was being undermined by numerous factors: the acquisition of destabilizing

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weapon systems, increasing political tensions in crisis spots, and the proposed deployment of a regional BMD (Ballistic Missile Defence) system. Since the terrorist attacks in 2001, the arms buildup in the region has accelerated. An examination of regional defence expenditures and weapons acquisition patterns indicates that the continuing instability in Asia’s traditional flashpoints, the Taiwan Strait and the Korean Peninsula, are fuelling competitive arms processes, with wider regional implications…In both Northeast and Southeast Asia, resources are being directed towards externally oriented weapons systems, including submarines, surface ships, fighter aircraft and missiles of all types. This strongly suggests competitive arms processes that are ‘heavily weighted towards types of weapons that destabilize the military balance’.3 (Emphasis added). Interestingly, the region’s steady force modernization, spurred in large part by China’s own heavy military investments, may have been a major impetus for China to move more aggressively on the multilateral security front. For instance, the degree to which China has cultivated its ties with ASEAN states over the past fifteen years or so attests to Beijing’s growing diplomatic agility in Southeast Asia in order to preemptively contain, minimize, or even prevent ASEAN’s negative reactions to the increasingly robust Chinese strategic footprints in Southeast Asia, including the South China Sea. From a broader perspective, Asia’s increasingly irreversible linkages with the global economy mean that as much as it may want to delay more active, assertive, and responsible forays into the global system, the time has passed for selective engagement. Asia’s ties with the world are unalterable; nor can the world afford to disengage from Asia. Consequentially, the rise of Asia and attendant security issues — including socio-economic and political developments — can no longer be appreciated fully or understood primarily on the basis of regional approaches and prisms. As Asia’s linkages with the world system grow exponentially, any major spillover in Northeast or Southeast Asia is likely to have region-wide and even global repercussions, as illustrated amply by the outbreak of the Asian financial crisis of 1997–98, ongoing aftershocks following a nuclearized North Korea, and the accumulation of social and political pressures in China and other authoritarian regimes in certain Southeast and Northeast Asian states.

1.1. Key Trends and Emerging Consequences For the most part, the fundamental security dilemmas in Europe that were driven by the exigencies of the Cold War have waned, while Asia’s are just beginning. Clearly, as the recent Georgian crisis reminds us, a resurgent Russia that claims to be ready for “Cold War 2.0” may usher in a new chill

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between the West and Russia.4 Notwithstanding Russia’s irredentist impulses, however, it is Asia — and in particular the strategies and policies its key actors are likely to pursue — that will shape significantly the contours of global security well into the mid-century and beyond. But forecasting Asian security paths is a process replete with uncertainties due primarily to two equally relevant trends: the unprecedented opportunities for enduring cooperation based on increasingly robust economic ties and the declining spectre of major wars at the very same time as new security dilemmas, economic and environmental dislocations, and political transformations may emerge, based on Asia’s cumulative rise. Conceptually, the key question lies in whether a market-driven security paradigm, i.e., greater economic integration and interaction amongst Asian states and enhanced interdependence that could mitigate significantly outstanding security threats or prevention of more dangerous security dilemmas, is sufficiently robust to offset lingering historical legacies, intensified nationalism, and increasingly sophisticated power projection capabilities. Specifically, four key drivers may be said to be characteristic of Asian security in the formative stages of the twenty-first century. First, the cumulative rise in the capabilities of the region’s strategically consequential states — notably China, India, Japan, South Korea, Indonesia, and Vietnam — and a tangentially more complex regional power balance. Second, China’s increasingly robust footprints (economic, military, and political) at all levels and sub-regions in Greater Asia (that is to say stretching from Northeast and Southeast to Central and parts of South Asia) with correspondingly unparalleled opportunities as well as potential sources of discord. Third, the historically unprecedented rise in Asia’s standard of living coupled with all of the downsides associated with accelerated and unbridled economic growth in addition to a range of political and social challenges. And fourth, the extent to which key Asian players are ready and able to mitigate and resolve a spectrum of security challenges — many of which may not have originated, but have been amplified, by the choices and strategies of Asian states. Although other regions (notably sub-Saharan Africa and the Middle East) confront an array of security challenges, it is not an exaggeration to suggest that Asia houses the most expansive combination of hard and soft security risks. Yet divining Asia’s security future is made even more complicated by the contrasting and overlapping features of its two main sub-regions: Northeast and Southeast Asia. While growing intra-regional trade (led by the magnetic Chinese market and the first- and secondgeneration Asian Tigers) connects these two sub-regions more closely than

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at any other time, their approaches to outstanding security threats and risks differ substantially. This should not come as a surprise when one considers the contrasting historical, socio-political, and ideational foundations of Southeast and Northeast Asian states, but it does pose significant constraints in articulating more clearly what is truly “Asian” in Asian security, given the widely contrasting origins, conceptualization, and operationalization of regional security norms and issues between Asia’s various sub-regions. As misleading as it is to use “Middle Eastern” or even “European” security as an overarching, umbrella term, such an effort is all the more complicated in the Asian context, given the presence of the world’s strongest powers, the highest concentration of modernized military forces, global economic players, and potent historical legacies. Working from the perspective of regional security complexes (RSC), Buzan has argued that one could compartmentalize Asian security during the Cold War into three fairly distinct sub-zones: the Northeast Asian RSC, the Southeast Asian RSC, and the South Asian RSC.5 In the post-Cold War era, however, he asserts that Asia’s security framework can perhaps be better understood by an East Asian RSC under a broader “Asian Supercomplex” that is imbued with distinctive sub-regional characteristics. He suggests that an emergent East Asian security complex is dependent upon three parallel developments: first, shared concerns in Northeast and Southeast Asia about the ramifications of Chinese power; second, the “partial and fragile” but still not insignificant creation of institutional connections between the two sub-regions; and third, the emergence of an East Asian regional economy “which is widely thought within the region to have strong links to politico-military stability”.6 Others such as Francis Fukuyama have asserted that Asia needs to link the ongoing Six Party Talks (SPT) mechanism designed to denuclearize North Korea with a wider multilateral security and trade network such as ASEAN, the ASEAN Regional Forum (ARF), the ASEAN+3 (APT, that is, ASEAN Plus China, Japan, and South Korea), and a combination of free trade agreements (FTAs). Fukuyama argues that “Asian multilateralism will be critical not just for coordinating the region’s booming economies, but also for damping down the nationalist passions lurking beneath the surface of every Asian country.”7 Many observers often cite Southeast Asia’s (and in particular, ASEAN’s, although the two are not synonymous) multilateral advantage over its Northeast Asian neighbours. This is certainly true given the relative absence of multilateral security mechanisms in Northeast Asia. That said, it also remains to be seen whether the “multilateralist tradition” in Southeast Asia can be readily expanded throughout East Asia or whether

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ASEAN’s minimalist collective security initiatives can result in fundamental solutions to the region’s outstanding security threats.

1.2. Linkages and Divergences between Southeast and Northeast Asia There are, of course, common features in the Northeast and Southeast Asian security landscapes such as the preponderance of the American strategic influence and presence through a web of bilateral security alliances, although the two sub-regions each perceive the U.S. role through contrasting prisms. Some observers have given three key reasons for the differing perceptions of the United States in Southeast and Northeast Asia. First, the United States’ strategic interests in Northeast Asia (or for that matter, in South Asia, the Middle East, and Europe) outweighs its interests in Southeast Asia. Second, the U.S. presence has “not shielded Washington’s allies and partners in the region from low-intensity conflicts and internal conflicts; in some instances, it may even have contributed to such issues”. And third, although the major powers can be seen as the principal providers of public good (regional stability), the Southeast Asian experience suggests that “weaker regional states and institutions function equally as providers of security for the region”.8 Such caveats notwithstanding, the United States continues to have active security ties with Thailand, Singapore, the Philippines (a former treaty ally), and Indonesia in fostering a balance of power conducive to regional stability. Moreover, the increasingly robust network of intra-regional trade ties (particularly in the context of the growing attractiveness of the Chinese market to Southeast and Northeast Asia) is another significant factor that binds the two sub-regions together. The same could be said for non-traditional security (NTS) issues such as avian flu, vast natural disasters (such as the Christmas Eve Asian Tsunami of December 2005 and China’s Sichuan earthquake in May 2008), the outbreak of SARS in China and parts of Asia in 2004, and transnational crime and terrorism that do not discriminate between national borders or sub-regions. One of the most significant developments in Asian security in the postCold War era has been China’s increasingly ubiquitous influence in all directions of the Asian land mass and its littoral states. As the only nation that borders fourteen countries and that has direct geographical link to Asia’s four sub-regions, the Asianization (and incrementally robust internationalization) of Chinese foreign policy has affected every major actor in East Asia. How Southeast and Northeast Asia (not to mention Central Asia and South Asia) respond, accommodate, and counterbalance

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the Middle Kingdom over the next two to three decades can be regarded as the new sine qua non of Asian security. Yet inasmuch as Southeast and Northeast Asian security templates are linked for the reasons outlined above, dissimilarities abound. Indeed, these dissimilarities may be more important when one considers the differences in scale of the security imperatives that shape Northeast and Southeast Asia. From an overall perspective, Northeast Asia’s prevailing security environment is dominated by the convergence of world’s major powers in its backyard. One is constantly reminded of the geographical and political uniqueness of Northeast Asia as the fulcrum point of major-power interests and capabilities. While this fact maybe overstated in assessing the driving forces behind Northeast Asia’s security template, the sheer mass and magnitude of the major powers in this region put this regional security complex in a class by itself. The Korean Peninsula remains the last Cold War frontier, as evinced by the world’s attention on the North Korean nuclear issue and, very recently, regime transition complications in that country.9 Coincident with Asia’s rise, however, is a situation that is without historical precedent: China and Japan (and more recently India) “have never been powerful at the same time: for centuries, China was strong while Japan was impoverished, whereas for the most of the last 200 years, Japan has been powerful and China weak”.10 Moreover, any wide-ranging disruption or dislocation in any of these major Asian giants (but especially China and India) would reverberate throughout Asia and Northeast Asia, with consequences also for the rest of Asia’s middle and smaller powers. Japan’s economic hegemony in Asia for most of the post-World War II decades (more pronounced since the 1960s) has been challenged by the rapid rise of China since the 1980s; this is suggestive of a power transition between Japan and China by 2030 or 2040. In a 2003 study by Goldman Sachs entitled Dreaming with BRICs (Brazil, Russia, India, and China), it was forecasted that the BRICs would become the major engines of the global economy by 2050. In the latest version of the earlier study, Goldman Sachs argues that India’s GDP will surpass that of the United States before 2050, making it the world’s second-largest economy. Despite doubts about whether China is able to sustain long-term growth in the face of expected labour shortages, an ageing population, and the sheer task of managing the world’s most populated country, Goldman Sachs still estimates that China will surpass the United States in GDP by 2040 though not in per capita terms.11 With new-found wealth and expanding economies, Northeast Asia’s three main actors have also invested heavily in defence modernization over the past two decades, to the point where they are now able to project power

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more readily, assertively, and at longer ranges than any time since the end of the Korean War. Rising nationalism is a critical concern, as noted in a 2005 International Crisis Group report that observed, “the economic rise of China, generational shifts in South Korea, and the waning of Japan’s economic dominance have spurred xenophobia that occasionally spills over into violence”.12 To be sure, it is premature to suggest that Northeast Asia is in the throes of intensifying political and military competition, but it is also clear that national capabilities have never been stronger in the postWorld War II era. Scholars often point out that the danger does not lie in enhanced capabilities per se but in the near absence of multilateral mechanisms to cope with a range of economic, political, financial, and security challenges. As recently observed, “Seen in comparative regional perspective, Northeast Asia has the most pronounced formal organizational gap of any area, as well as growing inadequacy of long-standing informal alternatives. It is clearly dysfunctional from many perspectives, yet the gap stubbornly fails to close.”13 The launch of the SPT in 2003 was Northeast Asia’s first collective approach to an outstanding security threat, i.e., North Korea’s nuclearization. Depending on its overall success, the SPT itself could be transformed into a sub-regional security CBM grouping along the lines of the CSCE (the precursor to the OCSE). For the foreseeable future, however, formalization of multilateral security norms is likely to be significantly constrained by major-power politics and the sheer magnitude of the core security challenges confronting Northeast Asia. In Southeast Asia, the founding of ASEAN in 1967 at the height of the Vietnamese conflict and at a time of discord between Indonesia and Malaysia ushered in Asia’s first real attempt at institutionalized, multilateral cooperation. Or as one observer has noted, “until the Asian financial crisis of 1997–98, the Association of Southeast Asian Nations (ASEAN) was generally considered the most successful multinational political organization among developing countries in the world”.14 (Emphasis added). Four decades since its inception, however, and despite the launch of the ARF and the APT dialogue, ASEAN’s overall effectiveness is open to debate. Proponents of Southeast Asia’s multilateral achievements often point to three major developments: (1) despite inertia and constraints, ASEAN has made key strides in addressing common security challenges, mostly in addressing outstanding NTS such as infectious deceases, natural disasters, environmental pollution, and transnational terrorism; (2) “creeping institutionalism”, including the more recent launch of the East Asian Summit (EAS), that has

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spurred, at least in the initial stages, a truly region-wide approach to outstanding security challenges; and (3) greater attention to results-oriented multilateral security initiatives.15 Conversely, those who argue that ASEAN continues to face major hurdles often point to the problems associated with enlargement and the principles of non-interference and non-use of force. Until the mid-1990s, ASEAN’s nonintervention principle meant that for all practical purposes member states were effectively barred from speaking out or taking action on sensitive political issues, i.e., human rights and democratization. With the inclusion of Vietnam (1995), Lao PDR (1997), Myanmar (1997), and Cambodia (1999), ASEAN could no longer ward off domestic as well as international criticisms on gross violations of human rights in member states (such as Myanmar). Passage of the ASEAN Charter has been stymied owing to opposition from key member states, but ASEAN’s ability to take charge of core political and security issues has been hamstrung by its principle of non-interference and the peaceful settlement of disputes. With ten full members that include Myanmar (Burma), Lao PDR, Cambodia, and Vietnam, ASEAN’s principle of non-interference has come under increased scrutiny. As a case in point, ASEAN expansion has actually imposed new security burdens such as overlapping maritime exclusive economic zones (EEZs) and unsettled maritime borders in addition to ongoing bilateral territorial disputes between Thailand-Vietnam, Vietnam-Cambodia, and Myanmar-Thailand.16

1.3. Coping with Asia’s Twin Challenges For the most part, the situation in East Asia as we head towards 2030 is likely to be characterized by an Asian version of a Rubik’s Cube — a hybrid mix of opportunities and potential dislocations until such time that more stable, institutionalized, and cooperative security and economic regimes are established. However the region’s security framework emerges over the ensuing decades, much of the regional states’ attentions are likely to be consumed by three inter-related tasks: (1) accommodating and adjusting to accelerated globalization at all levels of state and society, with attendant discords and consequences; (2) coming to grips with new governance challenges stemming from greater calls for democratization, decentralization, and localization and with potentially wrenching political transitions (particularly those states that continue to be ruled by various shades of authoritarian regimes and that are coping with the consequences of failed or failing states); and (3) augmenting national security requirements with

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regional security demands and enhancing capacity-building to meet traditional and non-traditional security threats. In a more positive vein, Evelyn Goh asserts that earlier forecasts of a bruising and potentially brutal intra-regional power competition have been ameliorated, at least partially, by two key developments: “(1) the building of regional multilateral institutions that serve to regulate exchanges, develop norms, and create regional identity, thereby institutionalizing cooperation among the major powers and socializing China; and (2) indirect balancing against potential Chinese (or other aggressive) power by facilitating the continued U.S. security commitment in the region”.17 Two key points bear mentioning at this juncture. If the cumulative rise of Asia over the past two to three decades is measured against the region’s record of multiple convulsions from the mid-nineteenth century to the middle of the twentieth century (Asia’s version of “One Hundred Years of Conflict”), the Asia of the early twenty-first century is decidedly more stable, internationalized, and wealthier. No other region has overcome searing colonial legacies and experiences, internecine conflicts and upheavals that resulted in millions of casualties, and relatively limited natural resources — and emerged as the third pillar of the world economy in fifty or so years. In turn, this “New Asia” has contributed and continues to contribute vitally to a more stable global system. At the very same time, however, there is a point that continues largely to be missed by proponents of the so-called linear school or those who equate Asia’s rise as manifestly violence-free and more importantly as a phenomenon that should be associated strongly with the “failure of the West”: the daunting quandaries posed precisely by Asia’s rise. One of the most articulate proponents of this view is Kishore Mahbubani, who has written extensively on the socalled “failure of the West” in direct contradistinction to the “success of the East”. In a recent critique of the manifold flaws of the West (although it is unclear exactly what he means by the West), he notes that “the West is understandably reluctant to accept that the era of its domination is ending and that the Asian century has come” and, furthermore, that “partly as a result of its growing insecurity, the West has also become increasingly incompetent in its handling of key global problems”.18 He asserts further that: The experience of Asia shows that where Western aid has failed to do the job, domestic governance can succeed. This is likely to be Asia’s greatest contribution to world history. The success of Asia will inspire other societies on different continents to emulate it … The West is not welcoming Asia’s progress, and its short-term interests in preserving its privileged position in various global institutions are trumping its long-term interests in creating a more just and stable world order. Unfortunately, the West has gone from being

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the world’s primary problem solver to being its single biggest liability.19 (Emphasis added).

Without a doubt, the West as a collective entity or even more broadly as political and economic idea faces a range of challenges; its policies are certainly not universally accepted. Like most states, the leading nations of the West often employ double standards when their core national interests are at stake, whether with regard to human rights, democratization, nuclear nonproliferation, or climate change. Yet it is crucial to understand that to find Asia’s identity on the basis of anti-Western bandwagonning is short-sighted, misplaced, and ultimately harmful to Asia’s own self-esteem — Asia’s net worth should not be perceived primarily on the basis of how much it dislikes or mistrusts the West. Rather, a more self-confident and introspective Asian identity must be established with the acceptance of both the positive and negative dimensions of Asia’s rise. For those states that have fully embraced democratic values and institutions (notably Japan, South Korea, and Taiwan in Northeast Asia, for instance) and that are also either advanced or nearly advanced economies with a vibrant and at times vocal but open civil societies, adopting “Western” or universal values need not exclude their national heritages or cultural legacies. There is, of course, a compelling need for good governance at all levels of society but, again, good governance need not preclude liberal societies and open political systems. As South Korea and Taiwan have demonstrated through their remarkable transitions from authoritarian to full-fledged democratic rule of law over the past two decades, it is eminently possible to retain one’s cultural DNA while practising good governance and across-the-board adoption of human rights and human dignity. Asia and democratic values are not mutually exclusive; most importantly, universal values should not be viewed as exclusively Western constructs. Rapidly declining birth rates (Japan and South Korea), unprecedented environmental disasters and time bombs (notably China but not exclusively limited to it), explosive birth rates in the more underdeveloped states (primarily in Southwest and parts of Southeast Asia), energy and food insecurity, brittle political systems and parties, and daunting NTS threats — no single Asian country has the capacity to cope with any of these issues on their own. More disturbingly and with potentially long-term consequences for the region and the international system, the push for sustained economic growth with correspondingly powerful military instruments could result in cascading dislocations. Adroitly balancing Asia between these two contending futures is in essence Asia’s existential security task.

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2. Process or Progress? Assessing the Southeast Asian Securitization Record Compared to Northeast Asia’s more rigid security make-up (owing to the direct convergence and overlap of major-power interests and nominally higher stakes), Southeast Asia’s security template has historically been characterized by notionally more fluid, diversified, and non-traditional security-centric features. This is not to suggest that the region has been devoid of conflicts — witness the decades-long anti-colonial wars (Indochina conflicts and the Vietnamese War), insurgencies (the Malayan communist insurgency), and border conflicts (the 1979 Sino-Vietnamese border war). Since the postVietnam War era, however, Southeast Asia has enjoyed for the most part prolonged stability. Even with China’s growing maritime presence in the South China Sea and sources of instability within and between certain ASEAN states, the region’s strategic stability over the past three decades has been quite remarkable. Four decades after the founding of ASEAN in 1967, a Southeast Asian security specialist asserted that: [T]oday, the main role played by ASEAN is to act as an anchoring hub for regional socialization. Asia is no longer lacking in institutional density, especially since the end of the cold war and the establishment of APEC, ARF, ASEM, APT, and now the East Asian Summit. The common thread among all these organizations is that they are all ASEAN-based. Some call this ASEAN’s “leadership” role. If that is an accurate description, what ASEAN exercises is normative and ideational leadership, rather than leadership as traditionally understood. ASEAN is not a regional power in the conventional sense. Nor is it aspiring to become a “pole” in a future multipolar Asia, as some Chinese scholars have suggested, mistakenly in my view. ASEAN can only exert its influence through soft power, by remaining a neutral broker among its great power interlocutors and delegitimizing containment and traditional power balancing policies that would aggravate the regional security dilemma.20 (Emphasis added).

Although ASEAN does not purport to represent Southeast Asia and is much looser in its organizational make-up than the European Union (EU), many proponents argue that ASEAN’s key contribution lies in building a baseline for a nascent “Asian” security community, albeit restricted for the moment to ASEAN states. By 2020, ASEAN leaders believe that ASEAN can transform itself into a viable security community, though this is neither assured nor guaranteed given the complexities and discords within ASEAN itself. However, it remains to be seen if ASEAN can become a viable and fully functioning security community or a grouping of like-minded states that are able to construct norms and institutions that supersede state sovereignty over

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critical security issues and to forge regional responses. The ability of ASEAN states to overcome serious political divisions (such as in coping with Myanmar’s decades-long military dictatorship, intra-regional border disputes, widely divergent approaches to political development, etc.,) is a major litmus test the sub-regional organization has to pass in order to qualify as a legitimate security community.

2.1. Towards an Asian or ASEAN “Security” Community? Beyond the ability of ASEAN and other non-member Southeast Asian states to overcome these and other shortfalls, the key question lies in whether ASEAN is able to transform itself into a viable multilateral security mechanism, not unlike the OSCE or, over the longer term, perhaps even into a collective security system such as NATO. Even proponents of ASEAN argue that a collective security system is unlikely to emerge for a long time and that, at any rate, priority should be given to institutionalizing cooperative security norms and policies. Insofar as the overall U.S. role is concerned, some scholars have argued that in contrast to the U.S. presence in Northeast Asia, the U.S.-led balance in Southeast Asia is incomplete due to American ambivalence towards the region and, moreover, that “there clearly is an incipient community in ASEAN, which has benefited the United States”.21 The context of ASEAN’s creation was unique in many respects: the need to enhance intra-regional cooperation during the height of the Vietnam War, uncertainty in China after the unleashing of the Cultural Revolution, and the growing strength of the Non-Aligned Movement (NAM) or “a shared sense of weakness rather than strength [which] facilitated ASEAN’s capacity to transform the regional order”.22 Although it is difficult to measure precisely ASEAN’s direct contributions in fostering a relatively conflict-free regional order for the past four decades, the push for new security norms and consensusbuilding through the “ASEAN Way” has enabled Southeast Asia to be free from major inter-state warfare.23 Again, in contrast to Northeast Asia and South Asia, where security magnitudes are much greater (the intersection of three declared nuclear weapons states — the United States, China, and Russia — and more recently, a nuclear-armed North Korea in Northeast Asia and the Indo-Pakistani nuclear standoff in South Asia), the security menus confronting ASEAN states are significantly different. Thus, measuring what ASEAN can and cannot do (either for lack of political will or institutional constraints) fluctuates substantially depending on the assumptions pertaining to ASEAN’s core missions. That said, however slowly and in piecemeal fashion, ASEAN is moving towards some form of an “Asian Community”, as in the convening of the first East Asian Summit in

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Kuala Lumpur in 2005. Although limited by the de facto principle of a minimal common denominator and by the wide-ranging nature of participating states (Indian participation and American exclusion coupled with intense wrangling over whether to invite Australia), the East Asian Summit declared, in part, that we agreed that the East Asia Summit with ASEAN as the driving force is an integral part of the overall evolving regional architecture. We also agreed that the East Asian region had already advanced in its efforts to realise an East Asian community through the ASEAN+3 process. In this context we believed that the EAS together with the ASEAN+3 and the ASEAN+1 processes could play a significant role in community building in the region.24 (Emphasis added).

Many of the issues that ASEAN has tackled lie in the domain of NTS and human security imperatives, in keeping with its emphasis on maximizing soft power. The launching of the ARF in 1994 was a symbolic departure from Asia’s (especially Northeast Asia’s) reliance on U.S.-led alliances as the principal security architecture and as a complementary step towards building a nascent multilateral security regime. Although the ARF, like most of its cousins such as the ASEAN+3 or even APEC (which has also discussed a range of security issues), is constrained by the principle of consensus-building, one of the most interesting side effects was emboldening China’s forays into active, if not aggressive, multilateral security diplomacy. Until the end of the Cold War, the PRC eschewed multilateral engagement, given its professed political independence, but it has come full circle since the mid-1990s. Beijing has realized the benefits of a leadership role in multilateral fora not only in enhancing its political and economic prestige and presence but also as a means to counterbalance Western (and particularly American) influence on the world stage. With the founding of the so-called Shanghai Five organization in 1996 (China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan) — renamed as the Shanghai Cooperation Organization (SCO) in June 2001 after Uzbekistan’s inclusion — China has used the SCO to expand its influence in Central Asia. China’s hosting of the SPT since 2003 to cope with the denuclearization of North Korea has also been a major departure from previous policies.25 Or as one security analyst commented recently: It is in Southeast Asia, however, that China has really stunned the world, signing a string of agreements across all areas of policymaking. These include a 2002 plan to establish an ASEAN-China Free Trade Area (AFCTA) in goods by 2010 and a Joint Declaration on the ASEAN-China Strategic Partnership for Peace and Prosperity in 2003, as well as the ASEAN Treaty

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of Amity and Cooperation. Even on the most sensitive issue of territorial claims in the South China Sea, China agreed in 2003 to sign up to a Declaration on a Code of Conduct. That Beijing chose the ARF foreign ministers’ conference in July 2002 as the place to unveil its “New Security Concept”, which bases its foreign relations on the principles of “mutual trust, mutual benefit, equality and cooperation”, demonstrates how Southeast Asia has become a kind of laboratory in which Beijing experiments with its new enthusiasm for multilateralism.26

Although progress is marked by the very fact that most East Asian states are now able to discuss a series of security issues multilaterally, it remains uncertain whether an “ASEAN Security Community” can make the leap to become an effective “Asian Security Community”. As a case in point, since the September 11 Al-Qaeda attacks on the United States, transnational terrorism has surfaced as a major threat to regional stability, especially in Southeast Asia. Although Southeast Asia has always been vulnerable to terrorist attacks and certain countries such as the Philippines have faced decades-old insurgencies from organizations such as the Abu Sayyaf terrorist group, 9/11 and in particular the Bali bombings of 2002 ushered in a new awareness and policy responses to transnational terrorism. Yet collective approaches to combating terrorism in Southeast Asia are only really just beginning and they continue to be complicated by a complex play of ethno-religious sensitivities within and between ASEAN states, such as in Thailand’s unsuccessful crackdown on Muslim separatist movements in its three southern provinces. But it remains clear that “after 2000, JI’s [Jemaah Islamiyah or the Indonesian terrorist movement affiliated with Al Qaeda] attacks on soft targets across the region transformed Southeast Asia from a zone of peace into the second front in the so-called global war on terrorism”.27 After the Bali bombings on 12 October 2002, ASEAN redoubled its efforts in combating terrorism; yet it was a rude awakening in that Indonesia, for example, had now to admit that extremist terrorist networks were operating within its borders — a point that Jakarta had steadfastly downplayed or even denied in the past.28 Indonesia quickly passed a series of anti-terrorism bills and related measures and also moved to control separatist violence in such areas as Aceh, where a memorandum of understanding was signed between the Indonesian Government and the rebel group GAM in August 2005 in Helsinki.29

2.2. The Promises and Limitations of ASEAN’s Multilateralism As mentioned in previous sections, ASEAN’s approach to regional security CBMs can be said to have resulted in real progress if progress is measured by

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consensus-building and incrementally more cohesive policy coordination over a range of NTS challenges. Again, perceptual differences on how to approach security cooperation account for much of the debate on the efficacy or lack thereof of the “ASEAN Way”. Some scholars have argued that ASEAN has overemphasized normative principles and regional identities especially in the post-Cold War era on the belief that “assumes the inexorable withering away of the state as the primary unit in the international system”.30 John Rawls has characterized ASEAN as an example of a “realistic utopia” (the fostering of a new security paradigm through international law and shared norms) and the “combination of ideational factors, norms, and denser networks of communication modifying perceptions of material self-interest sustain this open-ended transformative process”.31 Consequently, analysts can dismiss the impediments to shared identity formation, such as regional terrorism and the absence of denser networks to restrain it, as short-term delays on the inexorable path to a rational order grounded in public reason. Given this mind-set, regional interdependency in the Asia Pacific represents a “basic truth” and it “is not in doubt that the process will foster the identity of an East Asian community”.32 But counter-arguments are equally valid when seen from a constructivist paradigm or the need not to constrain oneself through realist assumptions of state behaviour and the attendant perceptions of and responses to core security challenges. From an ASEAN perspective (although it is wrong to assume a uniform ASEAN view), one of the key assumptions is that capacitybuilding by regional states can contribute to more stable outcomes precisely because misperceptions can be minimized over time and with the understanding that behavioural change is, by definition, time-consuming and complex. As Ogilvie-White has written, “Less tangible, but equally significant, is the role that regional institutions can play in bridging the divide between the so-called universalism of global governance and the cultural peculiarities of different regions”, and furthermore: Although it is not always the case, regional security institutions can potentially afford greater recognition to states that feel threatened and undermined by global institutions and Western security agendas. This is one of the most important functions of ARF, in that it promotes a more holistic approach to regional security, encouraging security cooperation over issues such as environmental degradation, weapons proliferation, and trans-national crime, without trampling cultural and societal sensitivities to the degree that global mechanisms often do.33

Whether ASEAN’s approach to cooperative security can be duplicated in Northeast Asia (or, for that matter, in other parts of Asia) is a pertinent

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question, but owing to the differences in scale and magnitude of their respective security challenges, it is perhaps less urgent than assessing ASEAN’s baseline contributions to regional stability and security cooperation. From the minimalist definition offered by Karl Deutsch that there be “a real assurance that [members] will not fight each other physically, but will settle their disputes in some other way”,34 one could argue that ASEAN has made significant strides. The potential for Track II fora such as CSCAP (Council on Security Cooperation in Asia Pacific) or the ASEAN-ISIS initiatives will always exist to the extent that these dialogues serve constantly to update, selfgenerate, and evaluate the need for multilateral security cooperation. In certain respects, however, ASEAN’s emphasis on proliferating more “alphabet soups”, or formal, semi-formal, inter-governmental, and non-governmental organizations and processes, runs the risk of equating enduring securitization with process rather than progress. Or as one long-time observer of Southeast Asian politics and security has written, there are four major reasons why ASEAN is not yet a security community. First, the divided scholarly and expert opinion on whether a security community was nascent or near nascent. Second, given its own goal of becoming a security community by 2020, ASEAN has admitted that it is not yet a security community. Third, an absence of “properly empirical data on the existence and nature of emotional solidarity within the organization”. And fourth, what does ASEAN or a security community really mean to the people who should be most affected (in a positive way) or to the grassroots of Southeast Asia?35 3. Security Stakes and Future Paths in Northeast Asia Since the end of the Vietnamese War in 1975, Southeast and Northeast Asia have enjoyed what may be characterized as an Asian version of a “long peace”, but sustaining this peace is going to require unprecedented policy management skills by the region’s strategically consequential states and the broader international system. From the Opium Wars of the 1840s onward, internal and external conflicts were the norm rather than the exception, spurred by Western imperialism, the accelerated decay of the Qing Dynasty in the late nineteenth century, and Japan’s rise to military and economic predominance. The formal annexation of Korea by Japan in 1910 terminated Asia’s longestsurviving dynasty (1392–1910) and, with the collapse of the Qing Dynasty in the following year, the Sino-centric world order in Northeast Asia also came to an end. The rise and ultimate fall of Imperial Japan at the end of World War II ushered in a unique era in Northeast Asian history: no single Asian country assumed the role of dominant hegemon. And it was the United States — the latest Western power to venture into East Asia — that by default

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more than grand strategic design assumed the mantle of strategic leadership in the Asia-Pacific region. While contestations for influence among the major powers in Southeast Asia is readily visible, it is not nearly as focused as in Northeast Asia. Three of the world’s declared nuclear weapon states, the top five largest standing armies, the newest nuclear breakout power (North Korea), and the world’s largest providers of goods and services are either Northeast Asian economies or economies that have critical economic and financial interests in Northeast Asia, such as the United States. Asia’s rise as a pivotal economic pillar has led to the formation of irreversible linkages with the global economy, but at the very same time, the global economy today is shaped more than ever by fluctuations in key Asian markets, as illustrated by Asia’s (in particular China’s) unprecedented thirst for oil and other energy resources (see Table 4.1). Northeast Asia in the early stages of the twenty-first century is marked by “entrenched parallelism”, or the coexistence of two interrelated drivers: as a major engine for the global economy but also home to the world’s most pressing security problems. The sub-region also exhibits a fairly fragile “cooperative culture” based primarily, although by no means exclusively, on outstanding historical legacies, bilateral border disputes, and the exigencies of domestic politics, particularly unchecked hyper-nationalism. Thus, while resolving the ongoing nuclear crisis in North Korea or institutionalizing more stable cross-strait relations would significantly alleviate Northeast Asia’s outstanding security dilemmas, the fundamental fabric of major-power competition and cooperation is unlikely to be altered significantly. Table 4.1 Top Ten Oil Consumers

Top Consumers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

United States China Japan Germany Russia India Canada South Korea Brazil France

World Total

bbl/day 20,730,000 6,534,000 5,578,000 2,650,000 2,500,000 2,450,000 2,294,000 2,149,000 2,100,000 1,970,000 82,234,918

Source: .

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3.1. Coping with Giants: Sources of Instability and Cooperation in Northeast Asia The task of assessing Northeast Asia’s security futures and paths is complicated further by the region’s sheer weight — political, economic, military, and demographic — in the international system. Based on 2006 World Bank data, China, Japan, and South Korea alone comprise 16 per cent of the world’s GDP ($7.9 trillion out of $48 trillion) and if one adds the United States and Russia, the figure jumps to 46 per cent of the world’s GDP ($22.1 trillion out of $48 trillion). According to the CIA World Handbook data, world defence spending in 2007 was estimated at $1.2 trillion, of which the United States assumed $623 billion (2008 projection), or 52 per cent of the world total. China, Japan, South Korea, and North Korea accounted for $133 billion, or 11 per cent of the world total and if Russia is included ($32 billion), the figure jumps up slightly to $157 billion, or 13 per cent of the global total. Of the world’s top ten oil consumers measured by bbl/day figures, China (6.5 million), Japan (5.6 million), and South Korea (2.1 million) accounted for 17 per cent of global consumption. These figures do not necessarily correlate with the level or depth of influence of Northeast Asian states, but they do illustrate the magnitude of the region’s share of global wealth, military power, and energy consumption. In brief, notwithstanding the regional states’ irreversible linkages with the international system, the shaping of the global system also rests increasingly on actions, strategies, and developments within the principal Northeast Asian states. Thus, for the first time since the collapse of the East Asian order of the late nineteenth century, Northeast Asia’s cumulative rise has had, and will continue to have, a decisive impact on the emerging global order well into mid-century. From such a perspective, even if such geopolitical hotspots as the Korean Peninsula and the Taiwan Strait are managed successfully with winwin outcomes, Northeast Asia’s geostrategic fulcrum is not going to be altered significantly. This is not to suggest that Northeast Asia or the region at large is inexorably destined for great power turmoil. Indeed, the last major war that was fought in Northeast Asia was the Korean War (1950– 53). Prospects for interstate war in Northeast Asia or more broadly in East Asia are at their lowest point since the immediate post-World War II era. Clearly, North Korea’s nuclear test of October 2006, China’s strategic force modernization, the Japanese Self Defense Forces’ (SDF) increasingly sophisticated maritime assets and, of late, the rejuvenation of Russia’s armed forces suggests that military competition is on the rise in Northeast

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Asia, but the region is not, as some would assess, in the throes of a classic arms race. As Ashley Tellis writes, Most informed observers conclude that rising regional military expenditures — and the concomitant trend in rising arms exports — are unlikely to abate any time soon. China, Japan, South Korea, Taiwan, India, and Australia have all unveiled multibillion dollar military modernization programs that will be implemented in the coming decade.36

But if one considers potential catalysts for armed conflict in Northeast Asia outside of the Korean Peninsula and the Taiwan Strait, it would be difficult to imagine the outbreak of a major conflagration. Even on the Korean Peninsula, or for that matter in the Taiwan Strait, the escalation into a full-fledged war would be highly dependent on extremely fluid, non-linear scenarios. What is of concern, however, is the possibility of prolonged crises — political, economic, military, or even environmental — that could debilitate the crisis management capabilities of Northeast Asia and its constituent states. Northeast Asia’s rise as the third pillar of geopolitics and geo-economics (after the United States and the European Union) serves as a catalyst for sustained economic growth, integration, and the dialling down of conflicts, but at the very same time, this very growth also corresponds to unprecedented dislocations, vulnerabilities, and spillover disputes. In other words, Northeast Asia’s cumulative rise means that almost none of the major security (or for that matter economic and environmental) issues can be perceived as intrinsically “domestic” or even “regional”, given that ruptures and prolonged crises in the region cannot but have global consequences. Thus, precisely because developments within the region now carry undisputed global ramifications, it also serves significantly to constrain potentially aggressive or even irredentist behaviour. Based on such an assessment, one could assert that the key sources of instability in Northeast Asia no longer stem primarily from aggressive major-power strategies (such as active containment, proxy wars to maintain a favourable balance of power, and support for national liberation movements) but rather from a combination of negative domestic determinants (i.e., rising opposition to the Chinese Communist Party’s continued monopolization of political power), the ability to absorb internal and external shocks (such as a global economic depression, prolonged recession in the major economies, or an accelerated decline in growth and investments in China), and misperceptions over key strategic developments such as accelerated change in and the potential demise of the prevailing political order in North Korea.

3.2. China’s Strategic Forays and Constraints The central preoccupation with domestic issues, however, does not mean that great powers such as China are going to ignore or minimize key foreign policy

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issues. Indeed, based on China’s unprecedented energy demand alone, Beijing’s forays into energy- and resource-rich Third World countries have seen the largest increase since the 1960s. Japan’s ongoing attempts to revive Article 9 in the so-called Peace Constitution and to become a permanent member of the UN Security Council have served as catalysts for intensified Chinese diplomacy, not only to offset Japan’s potentially enlarged political space but also to constrain the preponderant American influence in the Asia-Pacific region. As Thomas Christensen has written, “China itself might be adopting accommodating strategies in the region not as a reward for American and allied moderation, but at least in part as a way to counter U.S. influence. Beijing wants to make it more difficult and painful for regional actors to choose the United States over China in any future standoff.”37 Therefore, the most important question is how China’s external behaviour is likely to be constrained by an unprecedented confluence of domestic challenges concomitant with the desire to expand and deepen its strategic footprints in Asia. Rising income disparities and inequalities, increasing pressure for more political openness and reforms within the CCPdominant power structure, a growing middle class with widely varying historical references, and the increasingly mismatched, politically divisive, and structurally unstable marriage of convenience between a one-party dictatorship and a flourishing market economy, etc. — all are going to pose increasingly difficult political choices for China’s leadership. At no point in its history has China become so intertwined with the world; by extension, its leaders have been forced to cope with the forces of globalization and their attendant consequences. This is perhaps the single most important unintended consequence of China’s bold reforms that were begun under the leadership of Deng Xiaoping in 1978. As noted above, Northeast Asia’s security matrix today and well into the foreseeable future (i.e., into the 2020–30 time-frame) is highlighted by the convergence of interlinked threats and challenges that are quantitatively and qualitatively distinct from Cold War or even post-9/11 security threats. Any massive dislocation in the world system or disruptions in the regional order are not only going to have long-term and sustained repercussions, but the recovery costs and the restoration of institutional stability and integrity will also likely outweigh the capabilities of any one country. Thus, while the possibility of conflicts cannot be discounted, the sheer costs of security, political, and economic mismanagement are likely to be profoundly unsettling; this is likely to mitigate aggressive and conflict-prone national security policies and strategies. Clearly, one of the most important conceptual questions that has yet to be fully answered is whether growing economic linkages and incremental integration is likely to lead to most positive behavioural changes, i.e., the growing acceptance and internalization of global or universal norms.

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One of the most positive changes in the Northeast Asian scene over the past two to three decades has been in the area of intra-regional trade and economic cooperation. China became the largest trading partner of Japan and Korea in 2005, surpassing the United States. Sino-Japanese bilateral trade alone amounted to $184 billion in 2006. It would have been virtually unthinkable during the height of the Vietnamese War in the 1960s that, in a span of some three decades, these two Asian giants would emerge as key economic partners. Nonetheless, whether such robust trade and economic linkages will result over time in an equally vector-shaking political relationship is a much more complicated question, given the seminal importance of domestic politics, outstanding historical legacies, and contrasting geostrategic interests (including the central role of the United States in the shaping of Chinese and Japanese security attitudes). But if the SPT can serve as a guide (albeit an incomplete one given that the North Korean nuclear issue remains far from resolved), it is noteworthy that Chinese and Japanese leaders have been able to cooperate through this mechanism. Clearly, future developments in North Korea may well result in significantly different and contending policy postures on the part of China and Japan, especially if high levels of uncertainty prevail in a post-Kim Jong Il North Korea, including the very real prospects for intensified power struggles among the armed forces, the party, and key members of the Kim family. And cooperation in the Six Party Talks does not necessarily correlate with cooperation on other security fronts, for instance counter-terrorism efforts such as PSI. Indeed, Beijing and Tokyo continue to hold widely divergent views on the missile defence (MD) issue in Northeast Asia, on the Spratly Islands, and on China’s consideration of the broader South China Seas region as its “near abroad”. Overall, however, and even with a large dose of caution, one is left with the abiding impression that none of the strategically consequential states in Northeast Asia wants to break the chain of stability and mutual prosperity that has been one of the central hallmarks of the Northeast Asian political economy over the past three decades. Thus, the critical, sufficient condition for more institutionalized cooperative frameworks in Northeast Asia should begin with a reconsideration of the notion that greater and virtually irreversible economic linkages necessarily leads towards enhanced political and security cooperation.

3.3. Korean Possibilities and Consequences Prospects for a negotiated denuclearization of North Korea remain a critical challenge for the future of the global non-proliferation regime and for

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maintaining strategic stability in and around the Korean Peninsula. Indeed, the peaceful resolution of the North Korean nuclear issue is going to become a key litmus test not only for peace and stability on the peninsula, but also as a significant test bed for great-power cooperation when unification becomes a strategic possibility. But so long as the regime’s survivability depends critically on maintaining a strategic buffer zone, the nuclear card provides critical assets to the North Korean regime and in particular to its armed forces. This fundamental Gordian knot therefore lies at the heart of the North Korean nuclear quagmire and, by extension, the success or failure of the SPT process.38 Without a fundamental reorientation of the regime’s core goals and policies, Pyongyang is highly unlikely to voluntarily give up its nuclear weapons, especially when it continues to receive critical, life-sustaining support from China and South Korea. The last consideration is the cumulative consequences of South Korea’s strategic choices throughout the phase of transformation on the Korean Peninsula, including the post-unification era. It is important to define the terms and conditions of unification that would obtain depending on whether the process was carried out under the auspices of South Korea or of North Korea. Assuming that Korea is going to be unified under the leadership of the South, the process by which unification occurs — through a negotiated political settlement, gradual integration, collapse and absorption, or in the worst-case scenario, through conflict — the political make-up of a unified government, and the strategic choices that a unified Korea undertakes are likely to emerge as the principal benchmarks of a unified Korea. Also critical is the degree to which the key major powers — China and the United States — are going to support the unification process. Interestingly, while many outside observers have noted South Korea’s “tilt” towards China, Seoul’s overall overtures towards Beijing are more nuanced.39 Although it is beyond the scope of this chapter to undertake a detailed assessment of the various unification scenarios, unification through negotiated settlement — while most desirable — may be difficult, given the history of protracted South-North conflict. While unification through force should be avoided virtually at all costs, unification following some type of a North Korean collapse may be the most likely scenario. The strategic contours of a unified Korea are likely to be defined significantly by environmental factors (the dissolution of the North Korean threat and the potential rise in majorpower competition), the degree of coinciding security interests between a unified Korea and the United States (as well as other key U.S. allies in the region), the capabilities-based security and defence-planning dynamics of a unified Korea, and the political aspirations of the same. South Korea has been able to preserve its core national security interests through a robust alliance

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with the United States and this template still remains valid. But this alliance alone is unlikely to guide South Korea down the path of unification. The task ahead will be more complex, politicized, and perhaps even polarized, given the uncertainties associated with North Korea’s narrowing exit strategies. At the same time, South Korea must conceptualize not only how to enhance growing economic linkages with China — already its largest trading partner — but also how to deter China’s strategic weight, particularly in the form of “virtual vetoes” if North Korean transitions should turn volatile. Major-power cooperation in Northeast Asia has already occurred in the economic realm with intermittent progress at the political level, as evinced by the SPT. With specific reference to the Korean Peninsula, three key points may be emphasized. First, beginning with the outbreak of the first nuclear crisis in 1993–94, continuing into the second nuclear crisis (October 2002), and more recently, the October 2006 North Korean nuclear test, all of the major powers’ interests have converged on averting the outbreak of a major crisis or even war on the peninsula. At a minimum, this trend suggests that, notwithstanding North Korean antics and provocative actions, South Korea and the major powers have shown a high degree of interest collusion in preventing disruptions on the Korean Peninsula. (To be sure, attempts to cajole North Korea into giving up its nuclear programme through the 1994 Agreed Framework ultimately failed and North Korea’s recent actions to halt its nuclear disablement process may well result in a similar fate.) Second, while North Korea’s October 2006 nuclear test was, and is, a significant military and political threat to South Korea, the United States, and Japan, Pyongyang’s fateful test also resulted in key strategic changes on the part of China and to a lesser extent Russia. Although the evidence is circumstantial, the Chinese leadership is likely to have been extremely upset with North Korea, not just because Pyongyang broke its explicit promises to China, but because the nuclear test may also have been perceived as a direct threat to China’s core strategic interests. As a result, China’s propensity for multilateral diplomacy on the peninsula and, more importantly, preparing for the post-Kim Jong Il era in the North, signals China’s shift away from maintaining its historical alliance with North Korea at almost all costs. In other words, more negative shifts in Chinese attitudes vis-à-vis the SinoNorth Korean alliance may have been one of the biggest losses for the North Korean leadership. Finally, the need for a robust and strong ROK-U.S. alliance persists not only in the context of security on the peninsula, but more broadly in containing key sources of instability in Northeast and East Asia. In this context, South Korea’s ability to forge a bold but also highly risky

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engagement strategy with the North could not have been launched without the critical presence of U.S. forces in South Korea. More to the point, the core value of the alliance stems not only from maintaining deterrence and defence vis-à-vis the North, but also in terms of expanding South Korea’s relative strategic leverage not only against North Korea but also against other key regional stakeholders.

3.4. Asian Security and Strategic Management Forecasting Asian security is to a great extent always a work in progress, but the record since the end of the Cold War suggests that Asia’s entry into the twenty-first century is markedly more stable, with relatively weaker conflict triggers as compared to early twentieth century. Southeast and Northeast Asia’s primary national goals have been focused on ensuring sustained economic growth while cushioning, to the extent possible, their expanding and deepening linkages with the global economy. In sharp contrast to the Asia of the early 1900s, when economic and political fragility were at their peaks, the vast majority of the regional economies today are critically dependent upon open markets, access to energy and natural resources, and more unfettered transfer of peoples, cultures, and technologies. The last vestiges of Western colonialism expired formally with the return of Hong Kong and Macao to Chinese sovereignty. With the exception of the region’s two demonstrably pariah states, i.e., North Korea and Myanmar, and those states that have yet to fully embrace free-market reforms (such as Lao PDR), almost all of the regional economies have increasingly robust and, crucially important, irreversible ties with the global economy. This is one of the most important features of the Asian landscape and Asia’s key legacy to the rest of the world in the twenty-first century — the notion that socioeconomic development is possible, even under geopolitically adverse conditions. Northeast Asia took the lead in Asian industrialization, beginning with Japan’s post-war recovery and the Four Tigers’ emulation of Japan’s export-led growth. Parallel policies were also pursued by key Southeast Asian states (notably Singapore and Thailand from the 1970s) to the extent that ASEAN’s enlargement over the past decade and a half would not have been feasible without market-friendly national economic policies. But it remains to be seen whether Asia’s generally market-friendly economic and trade policies and strategies can be transformed into equally positive behavioural changes in the political and military arenas. As mentioned in previous sections, there is little doubt that Asia has made huge strides in overcoming endemic political struggles; even in the most fragile, conflict-

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prone zones, such as the Korean Peninsula and the Taiwan Strait, the use of force has been deterred effectively for the past five decades. As Asia successfully extricated itself from its “Hundred Years of Conflict” (roughly from the midnineteenth to mid-twentieth centuries), the key litmus test rests on comanaging five major issues: (1) more accurate estimates on the rise of China and subsequent ramifications, given the growing importance of the China factor in shaping Asia’s overall strategic terrain; (2) mitigating, to the greatest extent possible, major-power competition, particularly between the United States and China and between Japan and China, based on the United States’ central role in preventing the rise of an anti-status quo hegemon in the region and also in constraining major-power clashes; (3) coming to grips with key tipping points such as the prospect of a unified Korea, most likely following prolonged uncertainty and pockets of volatility in North Korea; (4) facilitating Southeast Asia’s diverse transitions and ensuring that this sub-region does not become a new zone of major-power competition (such as potentially intensified Sino-American maritime competition); and (5) ensuring greater transparency in the conduct of national security policies by the strategically consequential powers of Southeast and Northeast Asia. If the post-war era has demonstrated Asia’s ability to emerge as the third pillar of the global economy, the major future challenge lies in inculcating a new strategic culture with matching institutions that curtails significantly the chances of conflict and any wide-ranging major-power clashes. Asia can arguably be said to have overcome or at least co-managed key security flashpoints but this track record could be reversed, perhaps even sharply, if the regional powers continue to pay less attention to the potent mix of challenges that are surfacing today, based precisely on the roots of Asia’s economic success. Asia may no longer have to worry about inter-state wars as existential threats, but a series of cascading and overlapping crises may test Southeast and Northeast Asia’s co-management abilities more severely than at any other time since the rise of Asia in the post-Cold War era. NOTES 1. Michael Yahuda, “The Evolving Asian Order”, in Power Shift: China and Asia’s New Dynamics, edited by David Shambaugh (Los Angeles, CA: University of California Press, 2005), p. 349. 2. Dwight H. Perkins, “East Asian Economic Growth and its Implications for Regional Security”, Asia-Pacific Review 14, no. 1 (2007): 47. 3. Robert Hartfiel and Brian L. Job, “Raising the Risks of War: Defence Spending Trends and Competitive Arms Processes in East Asia”, The Pacific Review 20, no. 1 (March 2007): 17.

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4. See C.J. Chivers, “In Georgia and Russia, a Perfect Brew for a Blowup”, New York Times, 10 August 2008 . In partial response to the Russian invasion of Georgia, the Bush administration rescinded an earlier agreement for civil nuclear agreement with Russia. For its part, Russian prime minister and paramount leader Vladimir Putin intimated in an interview with CNN that the United States may have conjured up the crisis in order to help Senator John McCain’s presidential campaign. The White House rejected the accusation as absurd and Putin did not offer any evidence. On 12 September, the Asian Development Bank provided a $40 million low-interest loan to Georgia. As the New York Times reported, “Russia’s military incursion into Georgia has alarmed other Asian countries that also have potentially separatist regions and do not want a big power to align itself with any of these regions.” Keith Bradsher, “Loan to Georgia Illustrates Asian Dismay with Russia”, New York Times, 12 September 2008 . 5. Barry Buzan, “Security Architecture in Asia: The Interplay of Regional and Global Levels”, The Pacific Review 16, no. 1 (2003): 145–48. 6. Ibid., p. 160. 7. Francis Fukuyama, “Re-Envisioning Asia”, Foreign Affairs (January/February 2005), p. 76. 8. Amtav Charya and See Seng Tan, “Betwixt Balance and Community: America, ASEAN, and the Security of Southeast Asia”, International Relations of the AsiaPacific 6 (2006): 39. 9. “North Korean Leader is Very Ill, U.S. Official Says”, New York Times, 9 September 2008 . When North Korean leader Kim Jong Il failed to show up at the sixtieth anniversary celebrations of the DPRK, it was reported widely that he had been debilitated by a stroke. North Korean officials immediately denied foreign press reports as being “not only worthless, but rather as a conspiracy plot” and Pyongyang did not show any overt signs of alarm. Yet South Korean and other intelligence agencies seemed to believe that Kim Jong Il was confronting a fairly serious health condition although no authoritative confirmation was given. Kim was last seen in public in mid-August during an on-site inspection of a military facility but has not been seen since. In 2004, Kim was also absent for over forty days, fuelling speculation that he had suffered a serious accident or a major health problem. 10. James F. Hoge, Jr., “A Global Power Shift in the Making”, Foreign Affairs (July/ August 2004), pp. 3–4. 11. Goldman Sachs Global Economics Department, BRICs and Beyond (New York: Goldman Sachs, 2007), pp. 12, 56. By 2030, it is estimated that China’s per capita GDP (in 2005 prices) will be $22,000, still way below the United States ($61,000), Japan ($60,000), and Germany ($51,000). 12. International Crisis Group, “Northeast Asia’s Undercurrents of Conflict”, Asia Report no. 108, 15 December 2005, p. 3.

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13. Kent Calder and Min Ye, “Regionalism and Critical Junctures: Explaining the ‘Organizational Gap’ in Northeast Asia”, Journal of East Asian Studies 4 (2004): 191. 14. Sheldon W. Simon, ASEAN and its Security Offspring: Facing New Challenges (Washington, D.C.: Strategic Studies Institute, 2007), p. 1. 15. Mely Caballero-Anthony, “Nontraditional Security and Multilateralism in Asia: Reshaping the Contours of Regional Security Architecture?”, Policy Analysis Brief (Iowa: The Stanley Foundation, June 2007), p. 2. 16. Simon, ASEAN and its Security Offspring, p. 6. 17. Evelyn Goh, “Great Power and Hierarchical Order in Southeast Asia”, International Security 23, no. 3 (Winter 2007/08): 113–14. 18. Kishore Mahbubani, “The Case Against the West”, Foreign Affairs 87, no. 3 (May/June 2008): 111–12. 19. Ibid., p. 124. 20. Amitav Acharya, “Constructing Security and Identity in Southeast Asia”, Brown Journal of World Affairs 12, no. 2 (Winter/Spring 2006): 156. 21. Amitav Acharya and See Seng Tan, “Betwixt Balance and Community: America, ASEAN, and the Security of Southeast Asia”, p. 54. The 1976 passage of the Treaty of Amity and Cooperation (TAC) by ASEAN upheld four major principles: non-interference in domestic affairs, settlement of disputes by peaceful means, renunciation of the threat or use of force, and effective cooperation among the member states. 22. David Martin Jones and Michael L.R. Smith, “Making Process, Not Progress: ASEAN and the Evolving East Asian Regional Order”, International Security 32, no. 1 (Summer 2007): 152. 23. There have been exceptions such as the Vietnamese invasion of Cambodia (then under the rule of the Khmer Rouge in 1978) and the Sino-Vietnamese border clash of 1979. While intense fighting occurred in these two “incidents”, it should be borne in mind that these conflicts did not spillover into larger wars. 24. Chairman’s Statement, First East Asia Summit, Kuala Lumpur, 14 December 2005 . The Second EAS was held in Cebu City, the Philippines, on 15 January 2007, where the leaders announced the “Cebu Declaration on East Asian Energy Security”. The Third EAS was held in Singapore on 21 November 2007. At the latest EAS, the leaders announced the “Singapore Declaration on Climate Change, Energy and the Environment” and agreed to set up an Economic Research Institute for ASEAN and East Asia. 25. Christopher R. Hughes, “New Security Dynamics in the Asia-Pacific: Extending Regionalism from Southeast to Northeast Asia”, The International Spectator 42, no. 3 (September 2007): 323. 26. Ibid., p. 324. 27. Jones and Smith, “Making Process, Not Progress”, p. 169. 28. See Ralf Emmers, “Comprehensive Security and Resilience in Southeast Asia: ASEAN’s Approach to Terrorism and Sea Piracy”, Working Paper Series no. 132, S. Rajaratnam School of International Studies, 10 July 2007, p. 6.

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29. Ibid. “Indonesia and the Philippines, which have faced the most serious terrorist threats in the region, have taken sharply different approaches to combat it. Each has achieved some success, offering lessons to American and allied counterterrorism efforts worldwide. But there are worrisome signs that the threat could rebound quickly … Senior American officials, government authorities in the region and counterterrorism specialists say that the most serious threats are on the wane — in contrast to American intelligence assessments that Al Qaeda in the Pakistani tribal areas is resurgent and that regional affiliates like Al Qaeda in the Islamic Maghbreb are gaining strength.” Eric Schmitt, “Experts See Gains Against Terror Network, New York Times, 9 June 2008 . 30. Jones and Smith, “Making Process, Not Progress”, p. 180. 31. Ibid., p. 181. 32. Ibid. 33. Tanya Ogilvie-White, “Non-Proliferation and Counter-terrorism Cooperation in Southeast Asia: Meeting Global Obligations through Regional Security Architectures?” Contemporary Southeast Asia 28, no. 1 (2006): 20. 34. Cited in Donald K. Emmerson, “Security, Community and Democracy in Southeast Asia: Analyzing ASEAN”, Japanese Journal of Political Science 6, no. 2 (2005): 181. 35. Ibid., pp. 181–82. 36. Ashley Tellis, ed., “Military Modernization in Asia”, in Strategic Asia 2005–06: Military Modernization in an Era of Uncertainty (Washington, D.C.: National Bureau of Asia Research, 2006), p. 19. 37. Thomas J. Christensen, “Fostering Stability or Creating a Monster?” International Security 31, no. 1 (Summer 2006): 125. 38. For a succinct overview of the SPT and likely futures, see James L. Schoff, Charles M. Perry, and Jacquelyn K. Davis, Nuclear Matters in North Korea (Dulles, VA: Potomac Books, 2008). 39. See Jae Ho Chung, “Dragon in the Eyes of South Korea”, in Korea: The East Asian Pivot, edited by Jonathan D. Pollack (Newport, RI: Naval War College Press, 2004), pp. 253–66. REFERENCES Acharya, Amitav. “Constructing Security and Identity in Southeast Asia”. Brown Journal of World Affairs 12, no. 2 (2006): 55–63. Acharya, Amtav and See Seng Tan. “Betwixt Balance and Community: America, ASEAN, and the Security of Southeast Asia”. International Relations of the AsiaPacific 6 (2006): 37–59. Buzan, Barry. “Security Architecture in Asia: The Interplay of Regional and Global Levels”. The Pacific Review 16, no. 1 (2003): 143–73. Caballero-Anthony, Mely. “Nontraditional Security and Multilateralism in Asia: Reshaping the Contours of Regional Security Architecture?” Policy Analysis Brief. Iowa: The Stanley Foundation, June 2007.

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Calder, Kent and Min Ye. “Regionalism and Critical Junctures: Explaining the ‘Organizational Gap’ in Northeast Asia”. Journal of East Asian Studies 4 (2004): 191–226. “Chairman’s Statement of the First East Asia Summit”. Kuala Lumpur, 14 December 2005 . Chivers, C.J. “In Georgia and Russia, a Perfect Brew for a Blowup”. New York Times, 10 August 2008 . Christensen, Thomas J. “Fostering Stability or Creating a Monster?” International Security 31, no. 1 (2006): 81–126. Chung, Jae Ho. “Dragon in the Eyes of South Korea”. In Korea: The East Asian Pivot, edited by Jonathan D. Pollack. Newport, RI: Naval War College Press, 2004. Emmers, Ralf. “Comprehensive Security and Resilience in Southeast Asia: ASEAN’s Approach to Terrorism and Sea Piracy”. Working Paper Series no. 132. Singapore: S. Rajaratnam School of International Studies, 10 July 2007. Emmerson, Donald K. “Security, Community and Democracy in Southeast Asia: Analyzing ASEAN”. Japanese Journal of Political Science 6, no. 2 (2005): 165– 85. Fukuyama, Francis. “Re-Envisioning Asia”. Foreign Affairs, January/February 2005, p. 76. Goh, Evelyn. “Great Power and Hierarchical Order in Southeast Asia”. International Security 23, no. 3 (Winter 2007/08): 113–57. Goldman Sachs Global Economics Department. BRICs and Beyond. New York: Goldman Sachs, January 2007. Hartfiel, Robert and Brian L. Job. “Raising the Risks of War: Defence Spending Trends and Competitive Arms Processes in East Asia”. The Pacific Review 20, no. 1 (March 2007): 1–22. Hoge, James F. Jr. “A Global Power Shift in the Making”. Foreign Affairs, July/August 2004, pp. 3–4. Hughes, Christopher R. “New Security Dynamics in the Asia-Pacific: Extending Regionalism from Southeast to Northeast Asia”. The International Spectator 42, no. 3 (September 2007): 319–36. International Crisis Group. “Northeast Asia’s Undercurrents of Conflict”. Asia Report no. 108, 15 December 2005, p. 3. Jones, David Martin and Michael L.R. Smith. “Making Process, Not Progress: ASEAN and the Evolving East Asian Regional Order”. International Security 32, no. 1 (Summer 2007): 148–84. Mahbubani, Kishore. “The Case Against the West”. Foreign Affairs 87, no. 3 (May/ June 2008): 111–12. “North Korean Leader is Very Ill, U.S. Official Says”. New York Times, 9 September 2008 . Ogilvie-White, Tanya. “Non-Proliferation and Counter-terrorism Cooperation in

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Southeast Asia: Meeting Global Obligations through Regional Security Architectures?” Contemporary Southeast Asia 28, no. 1 (2006): 1–26. Perkins, Dwight H. “East Asian Economic Growth and its Implications for Regional Security”. Asia-Pacific Review 14, no. 1 (2007): 44–53. Simon, Sheldon W. ASEAN and its Security Offspring: Facing New Challenges. Washington, D.C.: Strategic Studies Institute, 2007. Tellis, Ashley, ed. “Military Modernization in Asia”. In Strategic Asia 2005–06: Military Modernization in an Era of Uncertainty. Washington, D.C.: National Bureau of Asia Research, 2006. Yahuda, Michael. “The Evolving Asian Order”. In Power Shift: China and Asia’s New Dynamics, edited by David Shambaugh. Los Angeles: University of California Press, 2005.

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5

Korea’s Economic Relations with Southeast Asia Jong-Kil Kim

1. Background Korea’s economic relationship with ASEAN for both trade and investment dates far back. Indeed, when Korea’s economy began expanding vigorously in the past, especially before the normalization of its relationship with China in 1992, Southeast Asia — mainly ASEAN — was the main area among the developing regions of the world where Korea’s trade and particularly its outward foreign direct investment were carried out. Then China began to replace ASEAN, to some extent, in Korea’s trade and investment markets from 1992 onwards. However, it was after the outbreak of the Asian (and Korean) financial crisis in 1997 that China really began to replace ASEAN as Korea’s main economic partner. Both Korea and ASEAN were too badly hurt by the crisis to continue their existing economic relationship; the economic recessions shrank market demand and the shortage of foreign exchange limited investment potential for both Korea and ASEAN shortly after the crisis. Since 2000, the economic relationship between Korea and ASEAN has begun turning back to the pre-crisis level as both economies have emerged from the doldrums of the crisis. The history of the trade and investment relationship between Korea and ASEAN in the past, turbulent fifteen years or

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so will first be described in this chapter. This will be followed by an investigation of other related issues such as Korea’s construction activities in the area, FTA negotiations with ASEAN, and labour migration from ASEAN to Korea. Then, the role of Korea in ASEAN in view of the presence of other very important East Asian players in this region, namely Japan and China, will be discussed. Finally, prospects for a future economic relationship between the two will be explored. 2. Korea’s Economic Relationship with ASEAN

2.1. Korea’s Trade Relationship with ASEAN (1) Annual trend and country distribution The annual trend of trade in terms of exports, imports, trade volumes, and trade balances between Korea and ASEAN from 1990 to 2006 is shown in Table 5.1. From the table, the following can be summarized with respect to the trade relationship between ASEAN and Korea: (1) The total trade volume of Korea with ASEAN during this period increased 5.5 times during 1990– 2006. However, the share of ASEAN in total Korean trade volume fluctuated around a 10 per cent level — reaching 11.5 per cent in 2000 but since declining to less than 10 per cent in more recent years. (2) The absolute amount of Korean exports to ASEAN increased from $5 billion in 1990 to $29 billion in 2006. But the share of ASEAN in Korean exports has declined since reaching its peak of 14.8 per cent at the time of the economic crisis in 1997.1 (3) Korean imports from ASEAN rose a bit more slowly than the rise in exports. The share of imports from ASEAN continued to expand, reaching 11.3 per cent in 2000; it has also begun to decline slightly since then. (4) Korea’s world trade balance has moved into positive territory since 1998, having been negative before the crisis in 1997. On the other hand, Korea’s trade balance with ASEAN countries recorded positive figures throughout the period. In fact, the positive trade balance with ASEAN countries before the crisis greatly helped to mitigate Korea’s negative world trade balance. Among ASEAN member countries, Singapore, Malaysia, and Indonesia continue to be important countries for Korean exports (see Table 5.2). For example, exports to Singapore accounted for 29.8 per cent of the total Korean exports to ASEAN in 2006. But it should be noted that the share of Vietnam for Korean exports rose most sharply from 7.6 per cent of the ASEAN total in 1995 to 12.3 per cent in 2006. As for imports into Korea, Indonesia has continued to be the most important source country, followed by Malaysia and Singapore. These three countries constituted close to three-quarters of Korea’s total imports from ASEAN countries in 2006. When exports are

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–4,831 10

134,885 10,188 (7.6)

69,858 5,089 (7.3)

65,027 5,099 (7.8)

–9,764 8,349

260,940 27,443 (10.5)

135,352 9,547 (7.1)

125,588 17,896 (14.2)

1995

–8,569 8,470

281,277 31,954 (11.4)

144,923 11,742 (8.1)

136,354 20,212 (14.8)

1997

39,333 6,204

226,073 24,498 (10.8)

93,370 9,147 (9.8)

132,703 15,351 (11.6)

1998

11,776 1,960

332,738 38,308 (11.5)

160,481 18,174 (11.3)

172,257 20,134 (11.7)

2000

23,124 1,369

545,542 53,497 (9.8)

261,209 26,064 (10.0)

284,330 27,433 (9.6)

2005

14,816 1,850

578,534 56,214 (9.7)

281,859 27,182 (9.6)

296,675 29,032 (9.8)

2006

(US$ million, %)

Note: Numbers in parentheses are percentages of Korea’s export to, import from, and total trade with ASEAN out of Korea’s total worldwide exports, imports, and trade respectively in each year. Sources: DOT 1995, 2000, and 2007.

Trade balance World ASEAN

Trade volume World ASEAN

Import from World ASEAN

Export to World ASEAN

1990

Table 5.1 Korea’s Exports to and Imports from ASEAN, 1990–2006

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Table 5.2 Korea’s Exports to and Imports from ASEAN Member Countries, 1990–2006 (US$ million)

Exports to Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN total Imports from Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN total

1990

1995

1997

1998

2000

2005

2006

– – 1,079 – 708 38 500 1,805 969 –

– – 2,962 – 2,957 – 1,494 6,700 2,428 1,355

– 52 3,542 – 4,361 – 2,604 5,799 2,247 1,607

18 62 1,786 5 3,602 149 2,844 4,070 1,451 1,364

16 96 3,505 4 3,515 289 3,360 5,648 2,015 1,686

61 144 5,046 14 4,608 120 3,220 7,407 3,381 3,432

20 179 4,456 20 4,590 106 3,583 8,655 3,859 3,564

5,099 17,896 20,212 15,351 20,134 27,433 29,032 (7.8) (14.2) (14.8) (11.6) (11.7) (9.6) (9.8) 269 – 1,600 – 1,586 3 270 897 464 –

– – 3,322 – 2,515 – 611 2,164 935 –

– 1 4,090 – 3,276 – 704 2,392 1,279 –

5,089 (7.3)

9,547 11,742 (7.1) (8.1)

340 1 3,070 – 2,210 13 808 1,712 809 184

492 2 5,287 1 4,878 23 1,815 3,723 1,631 322

787 6 8,184 2 6,012 56 2,316 5,318 2,689 694

1,106 5 8,053 14 6,539 93 2,030 5,429 3,076 837

9,147 18,174 26,064 27,182 (9.8) (11.3) (10.0) (9.6)

Note: Percentages are total amount of Korea’s exports to and imports from ASEAN out of Korea’s total exports and imports worldwide. Sources: DOT 1995, 2000, and 2007.

added to imports, Singapore, Indonesia, and Malaysia can be said to be three of the most important ASEAN trading partners of Korea. These trends can also be verified from the ASEAN perspective (see Tables 5.3 and 5.4). The share of ASEAN imports from Korea (3.2 per cent–5.0 per cent) continued to outpace that of ASEAN exports to Korea (3.2 per cent– 4.0 per cent) during 1990–2006. The result was a continued trade deficit for ASEAN vis-à-vis Korea throughout the period. But, unlike the ASEAN

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Table 5.3 ASEAN’s Exports to and Imports from Korea, 1990–2006 (US$ million, %)

1990 Export to Korea Import from Korea Trade balance

1995

1997

1998

2000

2005

2006

4,556 10,184 12,271 8,429 15,689 24,913 27,790 (3.2) (3.2) (3.5) (2.6) (3.7) (4.0) (3.6) 5,131 16,229 16,695 13,407 17,657 27,254 34,962 (3.2) (4.5) (4.5) (4.8) (4.8) (4.8) (5.0) –575 –6,045 –4,424 –4,978 –1,968 –2,341 –7,172

Note: Percentages are total amount of ASEAN’s export to and import from Korea out of ASEAN countries’ total exports and imports worldwide respectively. Sources: DOT 1995, 2000, and 2007.

position for Korean external trade (about 10 per cent of the total), Korea accounted for about 4 per cent of ASEAN’s total external trade. Korea’s position in ASEAN’s external trade can be seen in Table 5.5. Korea occupies the top sixth or seventh export market position in ASEAN, with 2.9 per cent–3.8 per cent of market share. Its position was slightly higher than that of China until 2000. However, by 2006, China’s position had moved up to fifth position with a huge jump in market share to 8.7 per cent, whereas Korea remained at sixth position with 3.4 per cent. Similar trends may be noted with regard to import shares of the ASEAN market. In the 1990s, Korea was a bigger import source for ASEAN than China. The trend also reversed in 2000 — by 2006 China’s share of 11.5 per cent (third position) was three times the share of Korea, with 4.1 per cent (sixth position). (2) Commodity composition of exports and imports between Korea and ASEAN Korean exports to ASEAN are mostly industrial intermediate goods and other capital-intensive manufactured goods, while its imports from ASEAN are mostly industrial raw materials including natural resources such as petroleum. More specifically, the top three export products of Korea to ASEAN, according to the Ministry of Trade and Industry (MTI) classification in 2006, were MTI 831 (semiconductors), MTI 133 (petroleum products), and MTI 812 (wireless communication equipment), whereas the top three import products of Korea from ASEAN were MTI 831 (semiconductors), MTI 134 (natural gas), and MTI 131 (petroleum) (Kwon 2007, p. 49). Similar commodity composition can also be found from examining ASEAN sources. According to the ASEAN Statistical Yearbook 2005, the top

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Table 5.4 ASEAN Member Countries’ Exports to and Imports from Korea, 1990–2006 (US$ million)

Exports to Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN total Imports from Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN total

1990

1995

1997

1998

2000

2005

2006

– – 1,363 – 1,360 9 230 1,173 394 27

631 – 2,917 – 2,015 – 442 3,243 801 235

721 – 3,462 1 2,521 – 436 3,699 1,014 417

309 – 2,568 – 1,672 12 509 2,566 626 167

407 0 4,318 1 3,235 21 1,173 4,916 1,265 353

715 1 7,086 2 4,737 51 1,391 8,053 2,246 631

1,006 3 7,321 13 5,806 84 1,408 8,736 2,652 761

4,556 10,184 12,271 (3.2) (3.2) (3.5)

8,429 15,689 24,913 27,790 (2.6) (3.7) (4.0) (3.6)

– – 992 – 742 23 499 1,776 1,046 53

20 – 1,528 5 3,359 164 2,293 3,041 1,496 1,501

42 – 2,451 2 3,179 – 1,428 5,399 2,474 1,254

57 – 2,322 3 4,070 – 2,295 4,132 2,251 1,565

16 77 2,083 5 3,663 318 2,754 4,822 2,165 1,754

68 22 95 146 2,869 4,901 15 22 5,706 7,068 132 117 2,294 3,218 8,599 10,477 3,875 5,071 3,601 3,920

5,131 16,229 16,695 13,407 17,657 27,254 34,962 (3.2) (4.5) (4.5) (4.8) (4.8) (4.8) (5.0)

Note: Percentages are total amount of ASEAN’s exports to and imports from Korea out of ASEAN’s total exports and imports worldwide. Sources: DOT 1995, 2000, and 2007.

two items in terms of the Harmonized System (HS) classification, HS85 (electronic machinery, equipment, and parts) and HS84 (machinery and mechanical appliances), occupied a dominant share of ASEAN imports from Korea (i.e., Korean exports to ASEAN) throughout the 1990s and 2000s. Moreover, the share of these two product groups has been rising, from 42.4 per cent in 1993 to 62.0 per cent in 2004 (see Table 5.6). Adding either HS72 (iron and steel) or HS27 (mineral fuels, mineral oils, and products of distillation), these three top product groups occupied a major share of the total ASEAN imports from Korea throughout the period.

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ASEAN USA EU Japan Taiwan Korea China Australia Canada India Top-10 Others

1 2 3 4 5 6 7 8 9 10

Total

Country

Rank

1993

100.0

21.1 20.3 15.2 15.0 3.0 3.0 2.2 1.8 0.9 0.7 83.2 16.8

Share ASEAN USA EU Japan Taiwan Hong Kong Korea China Australia India Top-10 Others

Country

1996

100.0

25.0 18.4 14.5 13.3 3.5 3.3 2.9 2.3 1.9 1.2 86.3 13.7

Share ASEAN USA EU Japan Hong Kong Korea China Taiwan Australia India Top-10 Others

Country

100.0

23.2 17.6 14.8 13.3 5.3 3.5 3.2 3.0 2.0 1.6 87.7 12.3

Share

Export Markets (%)

2000

ASEAN USA EU Japan China Hong Kong Korea Taiwan Australia India Top-10 Others

Country

2004*

100.0

22.6 14.2 13.2 12.3 7.4 5.7 3.8 3.4 3.1 2.0 87.8 12.2

Share ASEAN USA EU Japan China Korea Australia India Hong Kong Taiwan Top-10 Others

Country

2006

Table 5.5 Share of Ten Major Export Markets and Import Origins of ASEAN, 1993, 1996, 2000, 2004, and 2006

100.0

25.2 12.9 12.6 10.8 8.7 3.4 3.1 2.5 1.8 1.2 82.2 17.8

Share

(%)

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Japan ASEAN USA EU Taiwan Korea Australia China Switzerland Canada Top-10 Others

Country

100.0

24.9 17.4 15.1 14.3 3.7 3.2 2.4 1.9 0.9 0.7 84.4 15.6

Share Japan ASEAN EU USA Korea Taiwan China Australia Hong Kong Switzerland Top-10 Others

Country

100.0

20.9 18.3 16.4 15.1 3.8 3.6 2.6 2.5 1.5 1.4 86.1 13.9

Share ASEAN Japan USA EU China Korea Taiwan Australia Hong Kong India Top-10 Others

Country

100.0

21.3 19.0 14.0 11.3 5.2 4.5 3.2 2.5 2.5 0.9 84.4 15.6

Share ASEAN Japan USA EU China Korea Taiwan Saudi Arab Australia Hong Kong Top-10 Others

Country

100.0

22.0 15.8 12.0 11.3 9.3 4.5 4.3 2.1 2.0 1.9 85.2 14.8

Share ASEAN Japan China EU USA Korea Australia Taiwan India Hong Kong Top-10 Others

Country

100.0

25.0 12.3 11.5 10.1 9.8 4.1 2.0 2.0 1.5 1.0 79.3 20.7

Share

Note: * refers to ASEAN-6. Sources: ASEAN Secretariat, ASEAN Statistical Yearbook 2003, 2005 and ASEAN Secretariat (for 2006).

Total

1 2 3 4 5 6 7 8 9 10

Rank

Import Origins (%)

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Table 5.6 Top Ten Commodities Traded between Korea and ASEAN-6, 1993, 1996, 2000, and 2004 (HS classifications, US$ million, %)

1993 HS

1996

Value

HS

ASEAN exports to Korea 27 2,233 27 44 1,052 85 85 612 84 84 477 44 24 263 38 40 160 40 15 129 29 38 104 26 29 91 72 55 83 74

2000

2004

Value

HS

Value

HS

Value

3,247 1,496 1,172 648 284 273 165 160 141 138

27 85 84 44 26 99 29 40 38 74

4,388 3,811 2,498 296 240 233 226 192 190 175

85 27 84 29 44 40 38 90 26 39

6,714 6,006 1,803 429 422 417 305 244 223 217

10 major

5,204 (85)

10 major

Total

6,126

Total

9,447

Total

14,510

Total

19,771

Korea 85 84 27 72 39 89 71 87 29 55

4,761 1,430 1,401 760 516 512 474 442 282 249

85 84 27 29 39 72 87 73 89 54

6,572 1,691 898 707 690 660 386 280 276 209

85 84 72 39 27 87 29 73 74 76

10,371 2,354 1,205 979 881 730 604 307 232 205

ASEAN imports from 85 2,173 84 855 72 622 39 432 55 361 27 339 41 294 73 241 54 206 29 174 10 major

5,695 (80)

Total

7,148

7,726 10 major 12,249 10 major 16,779 (82) (84) (85)

10 major 10,826 10 major 12,369 10 major 17,867 (81) (82) (87) Total

13,294

Total

15,071

Total

20,530

Note: HS Code: 27: Mineral fuels, mineral oils, and products of distillation; 85: Electronic machinery, equipment, and parts; 44: Wood and articles of wood; 84: Nuclear reactors, boilers, machinery, and mechanical appliances; 26: Ores, slag, and ash; 40: Rubber and articles thereof; 90: Optical photos/cinematographic measuring, precision, and medical instruments; 39: Plastics and articles thereof; 87: Vehicles (not railway, tramway, rolling stock), parts, and accessories; 72: Iron and steel; 74: Copper and articles thereof; 29: Organic chemicals; 73: Articles of iron and steel; 76: Aluminum and articles thereof; 38: Miscellaneous chemical products. Sources: ASEAN Secretariat, ASEAN Statistical Yearbook 2003 and 2005.

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Interestingly, the same HS85 and HS84 items also play a role as important ASEAN export items to Korea (i.e., Korean imports from ASEAN), as the share of HS85 in particular has been rising in recent years. This can be interpreted to mean that there has been a high level of intra-industry trade between the two regions. Additionally, the share of HS27 was quite significant in the 1990s and early 2000s, while the share of HS44 (wood and articles of wood), which was significant in 1993, has more or less been diminishing in recent years. Table 5.7 shows Korea’s share in the exports and imports of ASEAN for each HS item in 2004. Among the major items of ASEAN imports from Korea, HS85, HS72 and HS39 (plastics and plastic articles) reveal a relatively high share for Korea in the total ASEAN imports of these products from all regions. On the other hand, among the major items of ASEAN exports to Korea, HS85 and HS84 reveal a relatively low share for Korea in the total ASEAN exports of these products to all regions. HS27 and HS26 (ores, slag, and ash) show rather high export shares for Korea in the total ASEAN export of these products, with 10.2 per cent and 10.3 per cent respectively.

Table 5.7 Top Ten Commodities Traded between Korea and ASEAN-6 in 2004 (HS classifications, US$ million, %)

ASEAN exports

ASEAN imports

HS

To Korea

Total Share ASEAN-6 Exports

85 27 84 29 44 40 38 90 26 39 10 Major Others

6,714 6,006 1,803 429 422 417 305 244 223 217 16,779 2,992

163,220 58,988 88,666 16,877 8,283 12,417 4,252 10,946 2,163 14,498 380,311 138,914

4.1 10.2 2.0 2.5 5.1 3.4 7.2 2.2 10.3 1.5 4.4 2.2

Total

19,771

519,225

3.8

HS

From Korea

Total Share ASEAN-6 Imports

85 84 72 39 27 87 29 73 74 76 10 Major Others

10,371 2,354 1,205 979 881 730 604 307 232 205 17,867 2,663

140,991 73,372 15,765 12,756 60,995 13,616 12,258 6,769 3,737 4,168 344,428 111,579

7.4 3.2 7.6 7.7 1.4 5.4 4.9 4.5 6.2 4.9 5.2 2.4

Total

20,530

456,007

4.5

Note: HS Codes are same as in Table 5.6. Source: ASEAN Secretariat, ASEAN Statistical Yearbook 2005, p. 130.

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2.2. Korea’s Investment Relationship with ASEAN It is well known and documented that Korea began noticeably to invest abroad from the mid-1980s, when Korea’s foreign exchange position improved as a result of consecutive years of trade surpluses. It was mainly towards Southeast Asian countries that Korea’s initial overseas investments headed at the time, for the following two reasons: first, Korea could utilize the lower labour cost in Southeast Asia for export production to other advanced countries. Second, Korea could use these investments abroad, in essence the departure of “sunset” or “incompetent” industries, in an effort to restructure Korea’s domestic industries. At the time, the demand for foreign capital in Southeast Asia was also great, as these ASEAN countries were vying for foreign sources of funds to industrialize their economies. Later on, Korea’s investments to ASEAN also began to aim for expanded sales in the internal ASEAN market. However, after the normalization of relations between Korea and China in 1992, China began to replace ASEAN as the favourite destination of Korean FDI abroad in Asia. (1) Annual trend and country distribution of Korean FDI to ASEAN According to Korea Export-Import Bank Statistics, the total amount of Korean overseas investments (actual base) between 1990 and 2007 was $90,967 million (see Table 5.8). Among the various regions, investment in ASEAN during this whole period was $11,600 million, or 12.8 per cent of the total.2 As noted in this table, the share of ASEAN in total Korean investments abroad has been more or less on a declining path since 1990; and the share of China began to surpass that of ASEAN from 1995 onwards. However, the share of ASEAN in total Korean investments abroad seems to have been picking up again in recent years. It is a little too early to ascertain whether this trend may signify some real change taking place. However, there may be some reasons for this turnaround. One of the reasons would be the rising cost of production in China, as China continues to grow quickly and as wages and other production costs soar as well.3 In other words, the advantage to having a production base in China is diminishing. Also, China tends to be cautious and selective in the kind of foreign investment inflows allowed in recent years, promoting technology-intensive investment and discouraging the traditional labour-intensive manufacturing investments that Korean firms have mainly been engaged in. Among ASEAN countries, the largest amount of Korean investment went to Vietnam ($3,566 million), followed by Indonesia ($2,436 million), and Singapore ($2,085 million) (see Table 5.9). In 2007 alone, the total

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803 14 (2) 236 (29)

1,116 265 (24) 16 (1)

1990

1,948 283 (15) 425 (22)

3,296 625 (19) 914 (28)

1995

6,971 772 (11) 266 (4)

3,915 647 (17) 779 (20)

1997

8,858 1,454 (16) 510 (6)

4,742 523 (11) 681 (14)

1998

15,256 1,713 (11) 2,452 (16)

5,144 482 (9) 746 (15)

2000

11,565 641 (6) 1,881 (16)

6,836 693 (10) 2,799 (41)

2005

11,240 703 (6) 2,108 (19)

10,992 1,351 (12) 3,349 (31)

2006

10,509 595 (6) 990 (9)

20,735 3,064 (15) 5,466 (26)

2007

135,542 11,800 (9) 16,964 (13)

90,967 11,600 (13) 23,225 (26)

1990–2007

(US$ million, %)

Notes: (1) Korean FDI outflows are actual-basis, inflows are notification-basis. (2) Numbers in the parentheses are shares of ASEAN, China, and Japan from Korea’s total worldwide investments in each year. Sources: Export-Import Bank of Korea (for Korea’s FDI outflows) and the Ministry of Commerce, Industry, and Energy of Korea (for Korea’s FDI inflows).

From Japan

Inflows Total Korean inflows From ASEAN

To China

Outflows Total Korean outflows To ASEAN

FDI

Table 5.8 Korean FDI Outflows to and Inflows from ASEAN, 1990–2007

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Source: Export-Import Bank of Korea.

Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN

Host Country – – 180 – 18 9 32 12 15 – 265

1990 2 0 208 1 113 1 58 22 22 198 625

1995 0 8 186 26 20 5 32 23 192 155 647

1997 – 1 94 6 22 6 67 130 117 81 523

1998 – 4 95 0 9 9 145 118 33 71 482

2000 0 32 94 0 23 1 41 126 52 325 693

2005 0 125 138 3 59 0 61 304 72 589 1,351

2006

Table 5.9 Foreign Direct Investments from Korea to ASEAN Member Countries, 1990–2007

0 625 245 25 126 1 111 507 140 1,284 3,064

2007

2 841 2,436 67 672 58 927 2,085 944 3,566 11,600

1990–2007

(US$ million)

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amount of Korean overseas investment (actual base) was $20,735 million. Among the various regions, investment in ASEAN was $3,064 million, or 14.8 per cent of the total amount in that year. Investment in Vietnam, at $1,284 million, was the largest among ASEAN members in 2007. On the other hand, the shares of China during the whole period (1990–2007) and in 2007 were 25.5 per cent and 26.4 per cent respectively. Considering the fact that Korea’s normal investment relationship with China began only after normalization in 1992, the importance of China cannot be overemphasized and it can be said to have replaced a sizeable portion of Korea’s preceding relationship with ASEAN. From the ASEAN perspective, Korean investment in the ASEAN region as a whole is rather insignificant, totalling $3.82 billion for ten years during 1995–2004 (see Table 5.10). This is a mere 1.6 per cent of the total net inflows of FDI towards ASEAN ($236.55 billion) during this period.4 The bulk (76 per cent) of this Korean FDI to ASEAN was to three countries — 41.7 per cent ($1.59 billion) to Vietnam, 20.6 per cent ($786 million) to Singapore, and 13.3 per cent ($508 million) to Indonesia. However, the share of Korea in an ASEAN member country’s total FDI inflows during 1995– 2004 was the highest in Lao PDR (21.2 per cent), followed by Indonesia (10.5 per cent), Vietnam (9.8 per cent) and Cambodia (9.4 per cent) (see Table 5.11). Now, let us look at ASEAN investments in Korea. The time trend of ASEAN investment in Korea shows that it was increasing until 2000 when it reached $1,713 billion.5 Since then, it has levelled down to around $600– $700 billion a year in recent years (see Table 5.12). The total amount of ASEAN investments in Korea was recorded at $11,800 million during 1990– 2007. Almost of all of these investments, 97.7 per cent of the total, were made by just two countries — $7,013 million (59.4 per cent) by Malaysia and $4,515 million (38.3 per cent) by Singapore. (2) Sectoral distribution of FDI between Korea and ASEAN (1) Korean investments in ASEAN The largest economic sector of net FDI inflows from all sources to ASEAN during 1999–2004 was the manufacturing sector — $43.0 billion, or 34.1 per cent of the total $126.4 billion. It was followed by the financial intermediation (23.2 per cent) and trade/commerce (11.4 per cent) sectors (see Table 5.13). A similar though slightly different sectoral distribution can be noted with regard to ASEAN FDI inflows from Korea. The share of manufacturing was the largest one, with 35.1 per cent. But the trade/commerce sector was as large as the manufacturing sector, with 34.9 per cent, followed by the real estate sector (13.2 per cent).

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94

Note: Figures in parentheses are percentages of Korea from the total. Because of statistical irregularities, FDI inflows to Cambodia are excluded. Reinvestments and inter-company loans for Singapore and the Philippines are also excluded. Source: ASEAN Secretariat, ASEAN Statistical Yearbook 2005, pp. 142–43.

236,551

30,309 206,242 20,010 7,290 3,817 8,903 1,018 737 32,071 68,478 12,476 640 42,285 247 399 27,880

2004 1995–2004

28,080 29,915 33,931 22,163 27,251 22,672 18,584 13,705 18,447 21,804

1997

Sub-total

1996

4,654 4,272 5,236 2,731 1,789 763 2,495 3,634 2,302 2,433 23,425 25,643 28,695 19,433 25,461 21,909 16,089 10,070 16,145 19,371 2,845 2,242 3,521 1,930 1,629 1,460 1,828 568 1,559 2,428 1,271 928 1,885 1,162 698 1,129 –432 205 100 345 660 504 722 91 529 –45 –265 92 632 897 914 810 914 678 403 376 2,525 271 827 1,187 137 118 62 291 63 –133 147 –81 189 226 108 69 90 93 42 80 32 96 81 46 5,649 5,283 5,230 3,938 1,688 455 1,606 3,366 2,318 2,538 5,050 7,362 6,334 5,553 9,806 13,480 6,007 4,236 5,230 5,421 1,172 2,121 1,993 1,308 2,242 361 47 852 1,444 937 609 205 1,111 –207 –14 –398 –555 –192 –11 92 4,318 5,177 4,950 3,222 5,932 7,312 4,569 358 1,395 5,052 535 325 246 –302 –935 –303 –95 203 181 393 35 31 29 25 80 43 15 54 89 –2 2,967 2,710 5,130 3,581 4,929 –446 2,488 612 3,670 2,241

1995

(US$ million, %)

ASEAN Rest of the world Asian NIEs Hong Kong S. Korea Taiwan China India Japan EU-15 Other EU Canada USA Australia New Zealand All Others

Source Countries

Table 5.10 Foreign Direct Investments in ASEAN by Source Country, 1995–2004

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8,654

Total 510

98 412 131 8 48 75 111 0 4 –6 0 12 11 –2 0 151

Cam.

4,861

1,888 2,973 468 3 508 –43 –37 –4 –31 3,776 643 118 –1,982 –169 1 191

Ind.

519

269 251 120 2 110 8 33 1 19 24 1 3 4 43 0 2

Lao

40,686

7,989 32,697 2,265 1,355 200 710 123 –6 5,899 9,428 826 358 10,840 392 45 2,527

Mal.

Source: ASEAN Secretariat, ASEAN Statistical Yearbook 2005, pp. 158–59.

1,405 7,249 50 31 14 5 2 9 394 6,416 1 0 58 46 233 40

Bru.

ASEAN Rest of the world Asian NIEs Hong Kong S. Korea Taiwan China India Japan EU-15 Other EU Canada USA Australia New Zealand All Others

Source Countries

3,793

1,047 2,746 385 329 56 0 18 0 119 1,758 2 33 406 7 3 15

Mya.

12,212

1,355 10,857 930 486 238 206 304 4 3,099 1,390 94 4 2,968 99 –4 1,970

Phi.

Host Countries

115,692

7,145 108,547 6,947 1,319 786 4,842 224 733 11,309 39,588 9,524 22 25,740 –615 110 14,964

Sin. Vie.

33,421 16,204

236,551

30,309 206,242 20,010 7,290 3,817 8,903 1,018 737 32,071 68,478 12,476 640 42,285 247 399 27,880

ASEAN

(US$ million, %)

6,176 2,939 27,245 13,265 3,910 4,804 2,499 1,258 268 1,590 1,144 1,955 51 189 –5 5 8,785 2,474 3,330 2,774 646 740 65 24 3,627 613 345 101 9 2 6,481 1,540

Tha.

Table 5.11 FDI Inflows into ASEAN Member Countries by Source Countries, 1995–2004

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– – 0 – – – – 14 – – 14

1990 – – 0 – 218 – – 65 – – 283

1995 – – 4 – 722 – – 46 1 0 772

1997

Source: Ministry of Commerce, Industry, and Energy of Korea.

Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN

Host Country – – 1 – 263 – 3 1,184 4 – 1,454

1998 0 – 7 – 1,408 – 0 297 0 – 1,713

2000 – – 26 – 211 0 11 389 4 1 641

2005 0 0 0 – 66 0 77 557 1 0 703

2006

Table 5.12 Investments from ASEAN Member Countries to Korea, 1990–2007

1 0 0 – 75 0 0 516 2 1 595

2007

10 0 116 0 7,013 1 124 4,515 17 3 11,800

1990–2007

(US$ million)

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9,903

Total 17,847

155 918 3,768 –400 1,975 8,553 125 1,634 1,119

USA

40,859

171 4,975 17,134 35 2,949 10,526 888 1,163 3,018

EU-15

1,792

212 –11 629 –254 625 –36 236 132 259

Korea

262

14 22 148 –4 66 –124 183 42 –85

China

1,350

–82 279 365 –31 448 –339 36 178 495

H. K.

5,364

87 26 2,533 68 118 1,991 89 204 248

Taiwan

Emerging markets of East Asia

Note: * The total is greater than the sum of countries listed, because it covers the rest of the world. Source: ASEAN Secretariat, ASEAN Statistical Yearbook 2005, pp. 170–72.

–60 –183 4,576 118 2,883 2,957 –262 546 –670

Japan

Agriculture, fishery, forestry Mining and quarrying Manufacturing Construction Trade/commerce Financial intermediation Real estates Services Others

Economic Sector

Source Countries

Table 5.13 FDI Inflows to ASEAN by Economic Sector in 1999–2004

10,834

389 1,090 5,165 120 1,392 1,903 2,808 1,158 –3,190

ASEAN

126,296

1,027 11,493 43,028 –448 14,419 29,362 4,944 6,550 15,923

Total*

(US$ million)

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Korea’s FDI to ASEAN in gross terms, according to the data from the Korean side (Ex-Im Bank of Korea), also confirms the heavy concentration of Korea’s investment in the manufacturing sector of ASEAN. For example, the total gross amount of Korea’s FDI to ASEAN during 1999–2004 was $2,727 million. From this total, the share of manufacturing investments was 51.0 per cent or $1,392 million. However, unlike the net term investment data of ASEAN shown in Table 5.13, the gross-term Korean data reveal that the trade/commerce (or wholesale and retail) sector, with $454 million (16.6 per cent), was the second-largest sector, followed by the mining sector with $310 million (11.0 per cent). Among the various manufacturing sector investments, $478 million or 34.3 per cent went to the electronic components and equipment industry and $307 million (22.1 per cent) to the textile industry during this period. For example, in 2007, out of a total $3,064 million gross investments in ASEAN by Korea, the largest amount by country went to Vietnam ($1,284 million, or 41.9 per cent) as already noted in Table 5.9. But it was the manufacturing sector that received the most — $934 million, or 30.5 per cent of the total (see Table 5.14).6 The second-largest sector of Korean FDI in ASEAN was the real estate and rental sector with $591 million (19.3 per cent), followed by the mining sector with $327 million (10.7 per cent). However, Korea’s manufacturing investment in ASEAN was only 13 per cent of Korea’s total worldwide manufacturing investment in 2007. The sectors where Korea’s investment in ASEAN constituted a relatively large share of its total worldwide sectoral investment were lodging and restaurants (46 per cent), real estate and rental (35.2 per cent), transportation (32.8 per cent), construction (30.1 per cent), and so on. Korea’s manufacturing investment in ASEAN was 13.0 per cent of its total worldwide manufacturing investment in 2007 (see Table 5.15). In terms of the amount, it was also heavily geared toward heavy and chemical (H&C) industries ($650 million, or 70 per cent). In particular, investments to three major H&C industries — basic metals, chemical products, and other electronic machinery and transformers — constituted one-half of Korea’s total manufacturing investments in ASEAN in 2007. It might also be noted that investments in these three H&C industries in ASEAN also occupied large shares of Korea’s total worldwide investment in each of those industries — 47.0 per cent, 23.3 per cent and 44.6 per cent respectively. But investments in the major manufacturing industries of ASEAN (such as electronic parts and equipments and motor vehicles), were small in absolute amount as well as in share. Finally, the shares of ASEAN in Korea’s total worldwide investment in light manufacturing industries (such as wood and wood products, leather,

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Table 5.14 Korea’s Sectoral Investment in ASEAN, 2007 (US$ million, %)

Sector

ASEAN total (A)

World total (B)

ASEAN total/ World total (A/B)

94,417 7,904 2,000,449 7,165,901 398,542 926,738 2,468,956 314,658 383,986 139,099 1,351,960 1,679,078 3,407,182 501 52,448 21,268 233,890 80,980 6,948

27.9 14.8 16.3 13.0 10.2 30.1 8.5 46.0 32.8 2.8 7.8 35.2 5.3 0.0 23.6 14.4 30.0 4.1 97.2

0.9 0.0 10.7 30.5 1.3 9.1 6.8 4.7 4.1 0.1 3.4 19.3 5.9 – 0.4 0.1 2.3 0.1 0.2

3,063,642 20,734,905

14.8

100.0

Agriculture & forestry Fishery Mining Manufacturing Electricity, gas, & water Construction Wholesale & retail Lodging & restaurants Transportation Communication Financing & insurance Real estate & renting Business service Public admin. & defense Educational service Healthcare & soc. welfare Leisure, cultural, & athletic Other public & personal serv. Domestic service Total (C)

26,330 1,173 326,738 934,291 40,475 278,522 209,109 144,712 125,996 3,927 105,326 590,941 180,516 – 12,394 3,058 70,066 3,317 6,751

Sector/ ASEAN total (A/C)

Source: Export-Import Bank of Korea.

fur and footwear, apparels, and textiles) were also found to be relatively very high, as might be expected. (2) ASEAN investments in Korea As noted earlier in Table 5.8, the total amount of ASEAN investment in Korea during the period of 1990–2007 amounted to $11,800 million. It should also be noted that investments from Malaysia (59.4 per cent) and Singapore (38.3 per cent) accounted for almost all investments from ASEAN countries to Korea (see Table 5.16). Malaysian investments in Korea concentrate on the services sector, whereas the manufacturing sector slightly outweighs the services sector in the case of Singaporean investments. When the Malaysian investments are broken down, the services sector accounted for 57.7 per cent, followed by the manufacturing sector (35.9 per cent) and the electricity, gas, and construction sectors (6.3 per cent).

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Table 5.15 Korea’s Manufacturing Investment in ASEAN and World, 2007 (US$ million, %)

Sector

ASEAN total (A)

World total (B)

ASEAN Ind/ World ASEAN (A/B) total (A/C)

Food & beverages 44,899 Tobacco – Textiles 80,471 Apparels 80,044 Leather, fur, & footwear 32,487 Wood & wood products 12,635 Pulp, paper, & paper products 7,660 Printing & publications 761 Cokes & petroleum products 3,096 Chemical products 137,105 Rubber & plastic products 67,680 Non-ferrous metals 12,673 Basic metals 225,116 Fabricated metal products 23,011 Other machinery & equip. 13,533 Computers & office equip. 1,469 Other electric machinery & transformers 103,410 Electronic parts, visual & audio equip. 30,356 Medical, precision, & optical equip. 4,858 Motor vehicles & trailers 20,090 Other transportation equip. 7,980 Furniture 19,761 Renewable manuf. materials 4,000

270,574 33,856 237,634 184,603 72,461 25,811 24,355 20,059 39,695 587,836 259,204 233,913 478,567 278,481 383,396 115,033

16.6 – 33.9 43.4 44.8 49.0 31.5 3.8 7.8 23.3 26.1 5.4 47.0 8.3 3.5 1.3

4.8 – 8.6 8.6 3.5 1.4 0.8 0.1 0.3 14.7 7.2 1.4 24.1 2.5 1.4 0.2

231,715 1,788,337 142,306 1,336,547 291,622 124,717 5,180

44.6 1.7 3.4 1.5 2.7 15.8 77.2

11.1 3.2 0.5 2.2 0.9 2.1 0.4

Total (C)

7,165,901

13.0

100.0

934,291

Source: Export-Import Bank of Korea.

(3) Korea’s FDI to ASEAN by size of firm The total number (and amount) of Korea’s investments in ASEAN increased from 334 projects ($265 million) in 1990 to 571 projects ($647 million) in 1997, before declining to 314 projects ($523 million) in the depths of the financial crisis in 1998. It rose again to 3,442 projects ($1,833 million) in 2007 after the crisis. This is an approximately ten-fold rise in the number of projects and a seven-fold rise in the amount of investments during the seventeen-year period, which is still less spectacular than the sixteen-fold and

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Table 5.16 Investments from ASEAN to Korea, by Economic Sectors, 1990–2007 (US$ million)

Sector Country

Agr., livestock, fish. & mining

Manufacturing

Services

Elect., gas, construction

Total

Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam

– – – – 22 – – 1 – –

0 – 9 – 1,979 – 35 2,202 7 0

10 0 108 0 4,665 1 89 1,921 10 3

– – – – 348 – – 392 – –

10 0 116 0 7,013 1 124 4,515 17 3

Total

22

4,233

6,806

739

11,800

Source: Ministry of Commerce, Industry, and Energy of Korea.

ten-fold increases respectively for Korea’s investments to all regions of the world (see Table 5.17). Korea’s manufacturing sector investments in ASEAN similarly show less dramatic rises in both the number of projects and the amounts (5.5 times and 3.5 times, respectively) than for all sectors. The average amount of investment per project in ASEAN rose sharply from $0.79 million for all industries and $0.66 million for manufacturing in 1990 to $1.67 million and $1.47 million respectively in 1998. This rise does not reflect a normal increase in the amount of investment. Rather, it reflects the sharp decline in the number of projects especially by small- and medium-sized firms (plummeting to 172 projects) in the depths of the crisis. Since the crisis, the numbers have tapered off to $0.53 million and $0.41 million in 2007. In fact, the average amount of investment per project by large firms rose from $1.45 million in 1990 to $4.14 million in 1998, before shrinking a little to $3.25 million in 2007. In contrast, the average amount of investment per project by small- and medium-sized firms declined from $0.52 million in 1990 to $0.24 million in 1998, before rising slightly to $0.41 million in 2007. However, the average amounts of investment per project in all regions of the world were higher than in ASEAN for most of the period except in mid-

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Total Large S&M Others Total Large S&M Others Total Large S&M Others Total Large S&M Others Total Large S&M Others Total Large S&M Others Total Large S&M Others

976 451 500 25 3,473 914 2,299 260 4,006 982 2,272 752 2,764 877 1,392 495 5,446 721 3,358 1,367 15,983 1,175 7,997 6,811 15,857 1,141 8,400 6,316

No. 1,098 878 217 2 3,273 2,539 685 49 3,879 3,231 571 76 4,741 4,407 306 28 5,139 2,712 2,261 166 6,810 3,592 2,547 671 11,073 5,904 4,245 924

Amount 543 183 348 12 2,409 422 1,830 157 2,620 402 1,770 448 1,664 330 1,023 311 3,103 273 2,191 639 9,993 583 5,850 3,560 8,175 406 4,939 2,830

No. 485 346 139 1 2,041 1,478 526 37 1,899 1,486 378 35 2,274 2,037 222 15 1,639 1,132 457 50 3,704 1,804 1,658 242 5,084 3,104 1,680 300

Amount

Manufacturing

To all regions-worldwide All industries

Source: Export-Import Bank of Korea.

2007

2005

2000

1998

1997

1995

1990

Year

Sizes of firms 334 102 224 8 483 144 311 28 571 165 359 47 314 116 172 26 620 101 417 102 1,914 122 1,104 688 3,442 262 2,030 1,150

No. 265 148 117 1 625 518 103 5 647 544 99 4 523 480 42 1 482 310 159 13 692 322 313 57 1,833 852 835 146 298 75 216 7 387 94 271 22 426 94 291 41 187 52 115 20 414 54 298 62 1,217 47 786 384 1,652 68 1,109 475

No. 198 105 92 0 515 417 94 4 272 197 71 4 274 241 32 1 328 195 123 10 349 135 186 28 684 367 268 49

Amount

Manufacturing

(No. of projects, US$ million)

To ASEAN

Amount

All industries

Table 5.17 Korea’s FDI Outflows by the Size of Firms, 1990–2007 102

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1990s, reflecting the relatively small size of the average Korean investment in ASEAN. Also, it is important to note that there has been a sharp rise in the number of projects by Korean small- and medium-sized firms in ASEAN especially since 2000, whereas the total amount of investments by these small- and medium-sized firms has not risen as much. This made the average amount of Korean investment in ASEAN by small- and medium-sized firms very small compared to that of large firms. This is shown for all industries as well as in manufacturing. One can argue that this smallness-of-averageamount of Korean investment in ASEAN by small- and medium-sized firms is a factor in the criticisms on the labour practices of Korean firms or factories in Southeast Asia for many years.

2.3. Korea’s Other Economic-related Relationships with ASEAN (1) Korea’s construction activities in ASEAN In addition to trade and investment interactions, Korea has also been quite active for many years in various fields of construction in ASEAN — civil engineering, residential and office buildings, power plants, gas treatment facilities, chemical plants, etc. For example, as early as 1982–85, the Hyundai Construction Co. of Korea built the Penang Bridge in Malaysia. In the 1990s, the following projects were constructed by Korean firms: the Olefins Petrochemical Plant in Thailand in 1992–94, Hang Nadim Airport in Indonesia in 1993–96, SIPCO co-generation power plant in Thailand in 1997–2000, and a part of the Singapore RMT subway system in 1997–2002, to name a few. Table 5.18 shows that the total number of projects and the amount involved in Korea’s construction contracts in ASEAN were 1,467 projects and $49,690 million respectively from 1965 to 22 February 2008. The shares of the ASEAN region in the worldwide total are 24.1 per cent in the number of projects and 19.1 per cent of the amount. The largest portions went to the Middle Eastern countries, with 42.0 per cent of the number of projects and 58.2 per cent of the amount. Among ASEAN countries, the Korean construction industry has been most active in Singapore in terms of amount and in Vietnam in terms of the number of projects. Among current or recently received contracts, the following are the most important: Cirebon Coal-Fired Power Plant in Indonesia ($543 million, 2008–11); reclamation for the Pasir Panjang Terminal in Singapore ($632 million, 2007–13); Sixth Gas Separation Plant ($623 million) and Ethane Separation Plant ($456 million) in Thailand (2007–10); Cebu Coal-Fired Power Plant in the Philippines ($318 million, 2007–11); Kaeangnam Hanoi

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Table 5.18 Korea’s Overseas Construction Contracts (No. of projects, US$ million)

Region

Cumulative no. of project

Cumulative amount

Current no. of project

Current amount

Middle East Asia ASEAN Cambodia Indonesia Lao PDR Malaysia Philippines Singapore Thailand Vietnam China India Others North America Europe Africa Latin America

2,561 2,744 1,467 51 276 35 174 239 191 125 376 369 100 1,634 384 119 214 69

151,719 82,490 49,690 467 7,587 940 7,677 5,932 14,718 7,453 4,916 8,008 8,520 35,978 6,181 7,280 9,048 4,054

18 67 40 2 1 2 0 8 2 4 21 8 0 56 4 3 4 0

4,322 2,945 1,915 155 31 0 0 618 297 665 149 849 0 1,768 319 160 543 273

Total

6,091

260,771

96

8,289

Note: Cumulative figures are those for the years between 1 December 1965–22 February 2008. Current figures are those for the years between 1 January 2001–22 February 2008. Source: International Contractors Association of Korea (ICAK) .

Landmark Tower ($721 million, 2007–10) and Dung Quat Polypropylene Project ($117 million, 2008–10) in Vietnam. (2) Korea’s FTA negotiations with ASEAN At present, Korea has concluded five FTAs with other countries or regions: (1) Korea-Chile FTA, which came into effect on 1 April 2004; (2) KoreaSingapore FTA, which came into effect on 2 March 2006; (3) Korea-EFTA FTA, which came into effect on 1 September 2006; (4) Korea-USA FTA, which was concluded on 2 April 2007; and (5) Korea-ASEAN FTA (for goods) that came into effect on 1 June 2007. In addition, the Korea-ASEAN FTA for services was signed in Singapore during the recent Korea-ASEAN Summit meeting on 21 November 2007. Among these, two — (2) and (5) — involved ASEAN countries. The Korea-ASEAN FTA for investment is currently under negotiation.7

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The concluded Korea-ASEAN FTA in goods resulted from long discussions and negotiations between the two sides in the past few years. Initially, the two sides agreed to start a joint study on a Korea-ASEAN FTA at the ASEAN+1 Summit meeting in 2003. And after the joint study was concluded a year later, it was agreed to start the actual negotiation between the two sides at the 2004 ASEAN+1 Summit. After numerous negotiations, the agreement on trade in goods became effective in June 2007 and the agreement on trade in services was signed in November 2007. Furthermore, the agreement on investment is currently under negotiation, hopefully to be concluded within 2008.8 Needless to say, the early conclusion and effectuation of this agreement is to be welcomed. Let us look more carefully into the Korea-ASEAN Free Trade Agreement in Goods, which has come into force already. First, the tariff reduction and elimination schedule varies among the parties: Korea and ASEAN-6 (Indonesia, Thailand, the Philippines, Malaysia, Singapore, and Brunei) by 2010; Vietnam by 2016; Cambodia, Lao PDR, and Myanmar by 2018. Second, with this agreement in force, 63 per cent of all goods imported into Korea from Malaysia, Singapore, Myanmar, and Vietnam enjoy the benefit of immediate elimination and 45 per cent of all Korean goods exported to these countries enjoy low tariffs of 0–5 per cent. Third, products made in the Gae-Sung industrial complex in North Korea are also acknowledged as Korean products. Fourth, this agreement became effective two years from the date of signing, in contrast to the otherwise similar agreement between China and ASEAN. But in both Agreements, the elimination of tariffs on Normal Track products will be similarly scheduled and enforced by 2010. (3) Labour migration from Southeast Asia to Korea A foreign labour force began entering Korea around the end of the 1980s, when wage and income levels in Korea began rising significantly relative to those of ASEAN countries and China. For example, according to data from the Ministry of Justice in Korea, the total number of foreign workers in Korea was only 21,235 in 1990 — (legal workers numbered 2,833 [13.3 per cent]; illegal 18,402 [86.7 per cent]). The figure continued to rise, reaching 394,511 by June 2006: legal workers with work-permit visas numbered 166,597 (42.2 per cent); legal workers with training visas 38,692 (9.8 per cent); and illegal workers numbered 189,220 (48.0 per cent) (Lee et al. 2007, p. 28).9 Thus, foreign workers now constitute approximately 1.7 per cent of the total Korean labour force. The number of foreign workers with a legal work permit within the legal worker category was, as mentioned, 166,597. Among these, the largest

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category was the non-specialty work-permit (E-9) visa-holders. Workers from ASEAN countries constituted 37.4 per cent, or 43,649, out of a total 116,650 E-9 visa-holders: Vietnam, 13,125 (11.3 per cent), the Philippines, 12,995 (11.1 per cent), Thailand, 12,189 (11.1 per cent), and Indonesia, 5,340 (4.6 per cent). On the other hand, illegal workers from ASEAN countries also constituted at least 23.3 per cent or 44,081 (the Philippines 13,988 [7.4 per cent], Vietnam 12,377 [6.5 per cent], Thailand 11,363 [6.0 per cent], and Indonesia 6,353 [3.4 per cent]) (Lee et al. 2007, p. 31).10 Chinese and ethnically Korean Chinese nationals constituted 42.6 per cent, or 80,590, out of this illegal labour force of 189,220. It is understandable that the majority of these illegal workers would have been ethnically Korean Chinese because of the similar looks and language. Assuming that more workers from ASEAN countries have legal status, it can be estimated that approximately 30 per cent of foreign workers in Korea are from ASEAN countries. According to a survey done by the Korea Labor Institute in 2003, the wage level of the foreign workforce was found almost to match its productivity level. The productivity level of the foreign workforce was considered to be about 87.4 per cent of the domestic workforce. On the other hand, the wage level of the foreign workforce was about 4,000 won per hour — about 71.4 per cent of the 5,600 won per hour that the domestic workforce earned. However, if the dormitory cost (or subsidy) of 820 won per hour is added to this wage level, the total expense of the foreign labour force amounted to 86.1 per cent of the expense (or wage level) of the domestic workforce (Lee et al. 2007, p. 52). 3. Japan and China: Factors in the Economic Relationship between Korea and ASEAN

3.1. Overview of the Past Economic Relationship between Korea and ASEAN Although economic interactions between the two had been ongoing for some decades, mostly in the form of bilateral trade, the significant and meaningful economic relationship between Korea and the ASEAN countries can be said to have begun in the mid-1980s, when Korea reached the stage of being able to invest in Southeast Asian countries. This is when the economic influence of Japan was dominant in this area. Other newly industrializing countries of Asia (the so-called Asian NIEs, including Korea) also began joining Japan and expanding their economic interactions with Southeast Asian countries. Indeed, the so-called “flying-geese” model of

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East Asian economic development (which assumes that Japan is the leader of the flock) seemed perfectly well in operation. In the 1990s, Japan saw its “bubble” burst, after which its economy entered into a decade-long tunnel of economic recession and enervation. In spite of its small and weakened position, the Japanese economy was still dominant in the region in the early 1990s; Korea began expanding investment opportunities abroad on a small scale; China was at an infant stage of domestic industrialization and its external economic interactions were rather limited. Then, after the normalization of relations between Korea and China in 1992, China began replacing ASEAN countries and emerged as Korea’s major trade and investment market. But it was after the outbreak of the Asian (and Korean) financial crisis in 1997 that the hitherto strong “flying-geese” model seemed no longer viable; China began promoting a new economic dynamism in the region, somewhat sidelining Japan and assuming a position as the new leader of the flock. The economic relationship between Korea and Southeast Asia was especially weak immediately after the crisis, as both sides were seriously hurt by it. Korea lost the strength to invigorate its ongoing external economic ties with ASEAN countries after the crisis because it had its hands full recovering and restructuring its own economy. ASEAN countries were also hit by the crisis; as a result the attractiveness of ASEAN as an FDI destination for other countries, including Korea, was significantly eroded. China successfully replaced the ASEAN countries and became the major economic partner of Korea. It was around 2000 that both Korea and Southeast Asia emerged from the severities of the crisis and the economic relationship between the two began to be reinstated to the pre-crisis state. But the fact that this weakened relationship has not been restored fully in the period after both sides had recovered needs an explanation. Here again, the rise of China is probably the most important reason for this. China was not directly affected by the crisis and could replace the ASEAN countries as a prospective destination of world FDI, including that from Korea. China also began replacing the ASEAN nations as an export market, especially after it was admitted to World Trade Organization (WTO) in 2001. Thus, the rise of China has certainly altered the traditional, bilateral economic relationship between Korea and ASEAN; although it has recovered a little, this relationship between the two continues to be weak. Indeed, the economic relationship between Korea and ASEAN countries since the early 1990s has been affected first by the surge of the Chinese economy and second by the relative decline of the Japanese economy.11 In

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fact, these two phenomena seem to have had impacts on almost all economic relations as well as individual economies in East Asia. On the whole, the emergence of the Chinese economy has contributed positively towards strengthening the vitality and dynamism of the regional economy in East Asia, while the relative decline of the Japanese economy did the opposite. Additionally, it can be assumed that the positive effect of the surge of the Chinese economy outweighed the negative effect of the decline of the Japanese economy, so that the region as a whole has benefited greatly by the rise of China. In fact, it can even be asserted that the recovery of the Japanese economy after the long recession in the 1990s is indebted, to a certain extent, to the expansion of the Chinese economy. However, this generalization applicable only to the region as a whole and must be cautiously interpreted when applied to some individual bilateral relations. For example, the surge of the Chinese economy, contrary to this generalization, has indeed negatively affected bilateral trade and investment relations between Korea and ASEAN countries. It was only because the positive effect of this surge and the new Korea-China relationship outweighed the negative effect on the Korea-ASEAN relationship that a net positive effect resulted for the Korean economy. Likewise, the decline of the Japanese economy probably helped, offering an opportunity for Korea to strengthen its economic relationship with other Asian countries, including both China and the ASEAN nations.

3.2. China To be more specific, the opening of a new economic relationship between Korea and China undoubtedly damaged Korea’s previous trade and investment relations with ASEAN countries. In terms of the trade, Korea’s exports to ASEAN countries were not affected much by the China factor. But Korea’s imports from ASEAN countries were negatively affected, as Korea found a new supply source in imports from China. This is reflected in the balance of trade between Korea and ASEAN countries, which turned against ASEAN countries from the early 1990s onwards.12 However, the question of whether the normalization of relations between Korea and China was primarily responsible for the reversal of the trade balance between Korea and ASEAN countries is debatable. True, China certainly replaced some of the ASEAN exports to Korea. But it is also true that what Korea imported from ASEAN countries was very different from what Korea imported from China.13 And furthermore, even without the China factor, ASEAN countries had been industrializing at so fast a pace that ASEAN countries had been increasingly dependent on intermediate and capital-goods imports from Korea. Thus, the

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China factor can be said to have contributed to the balance of trade turning against ASEAN countries vis-à-vis Korea, but only to a limited extent. Likewise, Korea’s FDI also began to be turned from ASEAN towards China, especially from 1992 onwards. Compared to the ASEAN countries, China as a location for Korean FDI had the following advantages in the 1990s; (1) lower wage rates, (2) geographical closeness, (3) the presence of ethnic Koreans especially in the northeastern part of China, and (4) the government’s strong encouragement of investment in China as one of the effective means of Korea’s “Northern” politics. The emergence of China certainly took much of Korea’s previous investments away from ASEAN countries, for the nature of Korea’s FDI towards ASEAN countries and China was quite similar — namely, the small-scale investments initiated by small- and medium-sized firms in the labour-intensive manufacturing industries, in which the ASEAN countries and China were competitive with each other until the early 1990s. Indeed, as Korea’s FDI in China increased phenomenally in the 1990s, the share of ASEAN countries in the total Korean FDI declined (see Table 5.8). Only recently has Korea begun emphasizing FDI in Vietnam, a new ASEAN member, diverting some of the FDI that could have gone to China.

3.3. Japan In contrast to the case of China, the economic slowdown of Japan seems to have affected Korean trade with ASEAN — its exports in particular — in both positive and negative ways. Positive effects were possible because Japan’s export capacity was damaged by the high value of the yen over a long period, so that Korean exports of manufactured goods (especially capital goods and industrial supplies) could gain price-competitiveness vis-à-vis Japanese goods in the ASEAN market. On the other hand, the economic slowdown in Japan forced Japanese firms to establish overseas production bases from which they could import necessary parts and products. As a consequence, Korean exports were negatively affected not only in the Japanese market (directly by weak demand and indirectly by re-export) but also in the ASEAN market (by competition with firms invested by Japan). Therefore, it is difficult to measure here how much the slowdown of the Japanese economy was responsible for the rise of Korean exports to (or imports from) ASEAN countries. For one thing, it is not clear how much and to what extent Korean exports were substitutable for Japanese goods. Furthermore, the price competitiveness should also have been applied to exports from other countries, particularly the Asian NIEs, since their currencies were similarly depreciated against the yen. In a similar vein, the initial decline

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of Korean FDI in ASEAN countries in the 1990s was due primarily to the changed external and domestic economic environment of Korea and ASEAN countries, rather than to a weakened Japanese economy per se. Of course, Korea may have expanded its FDI in labour-intensive manufacturing industries in these countries, whereas Japan used to operate but began switching towards more technology-intensive and higher value-added industries, reflecting a slowdown and thus a need to restructure its economy. Thus, the decline of FDIs from both Japan and Korea to ASEAN countries has been due mainly to the emergence of the Chinese market and the “switch effect” from ASEAN countries to China rather than the slowdown of the Japanese economy per se. Yet, the slowdown of the Japanese economy may have some important implications for Korea’s trade and investment relations with ASEAN countries in the coming years. The modus operandi of Japanese investment in ASEAN countries (and China) has undergone some changes in this period of economic slowdown since the 1990s. To counter adverse business environments, Japanese FDI has begun emphasizing intra-firm transactions, i.e., imports of parts, intermediate supplies, and finished products from overseas bases in these countries, thus creating the problem of “industrial hollowing” in Japan. Facing similar economic slowdown and difficulties, Korean firms may also follow in the footsteps of Japan and look into intra-firm sources of input supplies along with other purposes of FDI such as market expansion and reexport to third countries (Kim 1997, pp. 275–80). Finally, it should always be underlined that, although it is waning a little, the economic presence of Japan in East Asia was and still is dominant. For example, the share of Japan in the total trade of ASEAN countries in 2006 was 11.5 per cent, the largest among extra-ASEAN regions and countries — surpassing slightly that of the United States or the EU-25 (ASEAN Secretariat 2007, External Trade Statistics, Table 21). Japan, by occupying 18.0 per cent of the total FDI inflows to ASEAN during 2002– 06, was also the second-largest source after the EU-25. Moreover, the share of Japan was increasing, from 16.3 per cent in 2004 to 17.6 per cent in 2005 and to 20.6 per cent in 2006 (ASEAN Secretariat 2007, Foreign Direct Investment Statistics, Table 27). 4. Summary and Prospects for Future Economic Relations of Korea with ASEAN The historical development of the economic relationship between Korea and ASEAN countries can be summarized with the following: 1) Over the years, Korea’s economic relationship and interdependency with ASEAN countries in both trade and investment exchanges have been

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strengthened particularly with respect to the quantitative magnitude. They were strong in both absolute and relative terms in the late 1980s and early 1990s. 2) This relationship has been somewhat tarnished since 1992, as the new Korea-China relationship emerged and replaced some of the trade and investment transactions that were previously conducted between Korea and ASEAN countries. 3) The dominating influence of Japan in the East Asian developing countries began waning from the early 1990s as Japan experienced a severe economic recession and a long economic slowdown. In this new economic environment in Asia, Korea (along with other members of the NIEs) began usurping some of Japan’s roles, by forging stronger economic ties in both trade and investment with other East Asian developing countries, including ASEAN countries and China. The trend continued throughout the 1990s and into the early 2000s when Japan’s economy began to recover somewhat. 4) In contrast to the decline of Japanese influence, the rise of the Chinese economy — its continued economic growth and industrialization — has been the most significant development in this region of East Asia since the early 1990s. 5) As a result of the Asian economic crisis in 1997–98, the KoreaASEAN relationship was temporarily damaged as both sides were directly hit by the crisis. However, the relationship has been more or less restored as both sides have recovered. 6) The Korea-ASEAN economic relationship has recently encountered a new phase: first, as China began expanding its economic prowess especially after it joined the World Trade Organization (WTO) in 2001, and, second, as Korea has begun renewing its traditional economic ties with ASEAN countries, in particular strengthening its economic relationship with Vietnam, which joined as a new member of ASEAN in 1995. In short, it can be emphasized that, even without the occurrence of the Asian financial crisis, the rise of China has certainly altered the traditional bilateral economic relationship between Korea and ASEAN countries in such a way that it has weakened and damaged this relationship. Indeed, the rise of China offers both challenges to and opportunities for other countries and regions of the world, including most certainly both Korea and ASEAN countries. Challenges, because China was not directly hit by the crisis and to a certain extent replaced ASEAN countries as a prospective destination for world FDI. China also began replacing ASEAN countries in the export markets of advanced countries, especially after it was admitted to the World Trade Organization (WTO) in 2001. Opportunities, because the rise of China has necessitated and thus been accompanied by a rising demand for

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goods from other countries. At the same time, China, which has been a black hole for world FDI inflows in the past two decades or so, began noticeably investing in other countries around the turn of the century.14 What, then, can finally be said about the future prospects for Korea’s economic relationship with ASEAN countries? As can be expected, there are both dark and bright sides of those aspects that might influence the future course of the economic relationship between Korea and ASEAN countries. Let me first list aspects that might pose negative impacts on this relationship. These are (1) intensifying intra-ASEAN cooperation, and (2) expanding cooperation between ASEAN countries and China or Japan. First, Korea should be mindful that ASEAN countries are strengthening their own intra-regional economic cooperation and integration. There has been an expansion of membership in ASEAN countries in the past decade and a half. But more importantly, there has been a deepening economic interdependency in both trade and investment among the member countries within ASEAN.15 ASEAN is also aiming to activate the AFTA (ASEAN Free Trade Agreement) and establish an ASEAN economic community by 2015. The economic integration between the more developed and less developed members of ASEAN countries is also expected to be intensified.16 The enlarged and strengthened ASEAN will be good for external countries, including Korea, in the long run. However, efforts will be more concentrated within and among ASEAN member countries in the short run, as a result of which the economic relationship or cooperation between Korea and ASEAN is likely to receive a lower priority. Second, ASEAN’s perception of China seems to have shifted from “Chinathreat” to “benign China” to “China as an opportunity” (Teo 2007, pp. 319– 20). ASEAN is indeed enhancing its economic cooperation with the new dynamic economies of China these days. For example, the ASEAN-China FTA has been effective since July 2005. China’s investment in ASEAN countries is rather insignificant compared to its investment in other countries or regions so far.17 However, there are good reasons to believe that China’s investment in ASEAN countries will grow significantly in the near future for both economic (markets and natural resources) and non-economic (political and security) reasons.18 Among these, the geographical, cultural, and historical proximity of Southeast Asia to China and the presence of an ethnic Chinese network in Southeast Asia are certainly important factors by which China can maintain its competitive edge over Korea. Third, Japan has also concluded bilateral FTAs with various individual ASEAN countries, in part to check the deepening economic cooperation between China and ASEAN: Singapore (2002), Malaysia (2006), the

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Philippines (2006), Brunei (2007), Indonesia (2007), and Thailand (2007). Japan is currently negotiating an agreement with Vietnam. With respect to an FTA with ASEAN as a whole, both sides held the eleventh round of negotiations in Singapore in November 2007. Along with its FTA policies, Japan is also pursuing an economic partnership agreement (EPA) — covering broader and more comprehensive aspects of economic cooperation than an FTA — with ASEAN countries. Again, Japan employs various means to maintain its traditional economic ties with ASEAN countries and to counter the spread of Chinese economic influence in the region, including lavish deployment of ODAs and an increase in both bilateral and multilateral investment on the infrastructural development of the region. As a consequence of these considerations, especially the expanded economic influence of China and Japan in Southeast Asia, the economic role of Korea seems likely to diminish further in this region. Despite the possibility of a weakened relationship, however, the importance and closeness of ASEAN to Korea can still be underlined by the fact that ASEAN is currently the fifth trading partner, the second overseas construction destination, and the third overseas investment destination of Korea. Moreover, the importance of ASEAN cannot be overemphasized as a stable supplier of the natural resources that Korea needs, such as petroleum, natural gas, rubber, and timber. These considerations necessitate that Korea intensify its efforts to expand trade and investment with ASEAN. As was pointed out earlier, this renewed interest of Korean investment in ASEAN has already begun.19 This is especially true now as Korea tries to diversify its export markets and overseas investment destinations away from China, so that it can lighten its economic dependence on China. On the trade side, Korea is also trying to expand its imports from ASEAN, in part to mitigate its balance of trade surpluses vis-à-vis ASEAN. More importantly, however, Korea is also trying to enhance cultural and tourism exchanges with ASEAN countries, in addition to the aforementioned efforts on trade and investment. One of the outcomes from this effort on various fronts would be the opening of the Korea-ASEAN Centre in Seoul in August 2008. It would also be beneficial for ASEAN to renew and strengthen its economic relationship with Korea. Japan has shown reluctance to open its agricultural and labour markets, which ASEAN countries have been demanding. Unless these problems are resolved, there will be a limit on the further progress of economic cooperation between Japan and ASEAN countries. In the case of China, non-economic problems (e.g., a territorial dispute) may at any point cloud or hamper the economic relationship between China and a member country of ASEAN or ASEAN as a whole. The recent developments

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with respect to infrastructural investments on railroad and highway constructions by China in its southern neighbours invite not only applause but also suspicion. Korea may not be as attractive and important an economic partner for ASEAN to consider as China or Japan, but an expanded market for its exports and an added investment opportunity for its burgeoning industrialists should always be encouraged. Furthermore, the level of Korea’s industrial technology is appropriate, if not ideal, for ASEAN to follow and emulate in East Asia. Finally, Korea can also be a good substitute or an alternative when ASEAN deals with Japan or China with respect to trade and investment. As the prospects for reconciliation in the rivalry between China and Japan seems dim in the near future, the role of the Korea-ASEAN relationship can be all the more important. NOTES 1. In contrast, the shares of China in both Korea’s exports and imports have been rising throughout the period. For example, the share of China in Korea’s exports rose six times, from 3.5 per cent in 1992 to 21.3 per cent in 2006. Likewise, the share of China in Korea’s imports continued to rise from 4.6 per cent to 15.7 per cent during the same period (DOT 2007, p. 542). 2. Korea’s total investment in China during 1990–2007 is the largest, with $23,225 million, or 25.5 per cent of the total, followed by the United States with $19,897 million, or 21.9 per cent of the total. 3. For example, the JETRO survey, which was taken in November 2006, finds that the wage rate for ordinary workers in Guangzhou (China) was $134–$446 per month in 2006. This figure is situated in a similar range with those of other ASEAN metro-cities, e.g., Kuala Lumpur (Malaysia), $221; Bangkok (Thailand), $164; Jakarta (Indonesia), $177; Manila (the Philippines), $263–$303). However, this is certainly higher than those in other cities in the less developed ASEAN member countries, such as Ho Chi Minh City (Vietnam, $122–$216), Phnom Pehn (Cambodia, $100), and Yangon (Myanmar, $19–$31). Japan External Trade Organization, or JETRO . 4. Important sources of FDI inflows to ASEAN during this period of 1995–2004 are as follows: EU-15 (28.3 per cent), USA (17.5 per cent), Japan (13.3 per cent), other ASEAN countries (12.5 per cent), Australia (5.2 per cent), Taiwan (3.7 per cent), and Hong Kong (3.0 per cent). 5. Although not shown in Table 5.6, investments from ASEAN to Korea actually reached the peak of $2,218 million in 1999. 6. Indeed, the manufacturing investment in Vietnam ($604 million) was the single largest sectoral FDI commitment in an ASEAN member country by Korea in 2007. Within the manufacturing sector of Korea’s FDI in Vietnam, basic metal

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8. 9.

10. 11.

12.

13.

115

($152.3 million), electrical machinery and equipment ($95.9 million), and textiles ($66.7 million) were three major industries. Counterparts of Korea’s other FTAs under negotiation are Canada, India, the EU, Mexico, and Japan. Korea is also currently studying FTAs with China, MERCOSUR, and GCC. This was agreed at the 21st Korea-ASEAN FTA Trade Negotiating Committee, which was held from 14–18 January 2008 in Baguio City, the Philippines. The Ministry of Justice (Korea) announced that the total number of foreign residents — both legal and illegal — in Korea was officially 1,000,254 as at July 2007. Long-term foreign residents, excluding short-term and illegal residents, stood at 724,967, out of which foreign workers (including industrial trainees) totalled 404,051. Exactly 93.3 per cent of the total foreign workers (or 377,373) were considered low-skilled workforce. It was also announced that the total number of illegal foreign sojourners was 225,273 (Hankyung Daily, 25 August 2007). In passing, it can be noted that the total number of Korean residents in ASEAN was estimated to be 228,187 (86,800 in the Philippines, 53,800 in Vietnam, 30,700 in Indonesia, 25,000 in Thailand, 12,656 in Singapore, 14,934 in Malaysia, etc.) as of 1 May 2007 (Ministry of Foreign Affairs and Trade, Korea). The rest of them are mostly workers from South Asia, the Middle East, and Mongolia. For example, ASEAN’s exports to Japan gradually declined from 18.9 per cent to 10.6 per cent of the total between 1990 and 2006, whereas those to China rose from a mere 1.8 per cent to 8.5 per cent of the total during the same period. Likewise, ASEAN’s imports from Japan also gradually declined from 23.1 per cent to 11.9 per cent of the total between 1990 and 2006, whereas those from China rose from 2.9 per cent to 11.6 per cent of the total during the same period. Tables 5.1 and 5.2 show that the balance of trade turned sharply in favour of Korea (and against ASEAN) between 1990 and 1995. This trend can be further verified if we extend the data to 1988 when Korea’s balance of trade registered as a negative (–$356 million) against ASEAN, at the same time as ASEAN’s balance of trade recorded as a positive ($8 million) vis-à-vis Korea. China has replaced ASEAN in the Korean market in the case of some food and direct consumer goods in the primary sector and some non-durable consumer goods in the labour-intensive manufacturing sector. However, there are only a few primary goods that are in a competing position. For instance, in 1994, Korea imported mainly wheat, maize, and animal feed from China, and sugar and molasses from ASEAN countries. As for other primary goods among industrial supplies, the competition between the two is also not significant, for Korea imported rubber, wood, and lumber from ASEAN countries, and wool and cotton from China. Moreover, the real competition with regard to these products is not that between ASEAN and China as far as Korea is concerned. Rather, it

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14.

15.

16.

17.

18.

19.

is the competition among the primary producing countries. A similar opinion has also been shared by Ariff (1994, p. 35). “The strong growth in China’s overseas investment should continue in the coming years. China, ranked 17th in the world among outward investors in 2005, is likely to become an even more important source of FDI in the near future” (WIR 2006, p. 55). See also Chen Wen (2007, p. 79). The dominant and rising intra-ASEAN trade has been one of the most important characteristics of ASEAN trade in the past. For example, the intra-ASEAN destination of exports has been dominant and increasing for ASEAN, from 21.1 per cent of the total export share in 1993 to 25.2 per cent in 2006, whereas the share of the second-largest destination — the United States — declined from 20.3 per cent to 12.9 per cent during the same period. The intra-ASEAN origin of imports has also been dominant, especially after 2000 — the share of this has risen from 17.4 per cent in 1993 to 25.0 per cent in 2006. On the other hand, the share of Japan, the most important source of imports with a 24.9 per cent share in 1993, halved but still maintained the place of second-largest import source at 12.3 per cent in 2006 (see Table 5.5). Similarly, the investment flow also reveals the trend of deepening intra-ASEAN FDI inflows — from 8.0 per cent in 2004 to 9.2 per cent in 2005 and to 11.9 per cent in 2006 (ASEAN Secretariat 2007, Table 27). For example, the East-West Economic Corridor (EWEC) and 1,450 km highway between Vietnam and Myanmar — through Lao PDR and Thailand — is expected to be constructed by 2012. This will function as a link between the Indian Ocean and the Pacific Ocean. Da Nang (Vietnam) aims to become a regional hub port after the construction. More importantly, the construction would help narrow the development gap among Mekong delta regions and countries. For example, in 2005, China’s FDI to ASEAN-10 countries was recorded at $158 million, or 1.29 per cent of the total $12,261 million worldwide, by flow base and $1,256 million, or 2.20 per cent of the total $57,206 million, by stock base. Ministry of Commerce, PRC, September 2006 (accessed July 2007). Similarly, FDI net inflows from China to ASEAN were recorded at $1,018 million, or 0.4 per cent of the total net inflows to ASEAN, $236,551 million, during 1995–2004 (ASEAN Secretariat, ASEAN Statistical Yearbook 2005, pp. 142–43). Recently, the 1,818 km North-South Highway between Kunming (China) and Bangkok (Thailand) — through Lao PDR — was opened in March 2008. By the completion of this new highway, road transportation can theoretically be extended from Beijing to Singapore. This is expected to improve the logistical networks and to raise investment flows in this region. As an example, Posco Co., Korea’s biggest steel-maker, began building a $490 million factory in Vietnam as part of its $1.12 billion project to meet growing steel demand in the emerging Asian country. The plant, located at the Phu My industrial complex near the southern Vietnamese city of Ho Chi Minh and slated for completion by 2009, will produce 1.2 million tons of cold-rolled steel

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a year, the company said. As part of the project, Posco will start construction of another steel plant, which will eventually produce 3 million tons of hot-rolled steel a year, according to the company. This cold-rolled plant is aimed at coping with demand for high-end steel in Vietnam as well as other Southeast Asian markets (JoongAng Daily, 2 August 2007). REFERENCES Ariff, Mohamed. “ASEAN’s Comparative Advantage in a Changing Pacific Division of Labour: Implications for ASEAN-China Economic Relations”. In ASEAN-China Economic Relations: Industrial Restructuring in ASEAN and China, edited by Joseph Tan and Lou Zhaohong. Singapore: Institute of Southeast Asian Studies, 1994. ASEAN Secretariat. ASEAN Statistical Yearbook 2005. ———. External Trade Statistics 2007. Table 17 – Table 23. ———. Foreign Direct Investment Statistics 2007. Table 25 – Table 27. Chen, Wen. “ASEAN-China Trade Relations: Origins, Progress and Prospects”. In ASEAN-China Economic Relations, edited by Saw Swee-Hock. Singapore: Institute of Southeast Asian Studies, 2007. Export-Import Bank of Korea (EXIM Bank). Overseas Investment Statistics. . International Contractors Association of Korea (ICAK). . IMF. Direction of Trade Statistics Yearbook (DOT). Japan External Trade Organization (JETRO). . Kim, Chang-Won. “The first shovel of the POSCO’s Vietnam project. Annual production of 1.2 million tons”. JoongAng Daily, 2 August 2007. Kim, Jong-Kil. “Economic relation between Koreas and ASEAN: Implications for Korea-Japan relation”. Bulletin of the Institute of Business and Economic Research (Inha University) 11, no. 1 (1997): 263–300. Kwon, Yul, Cheong Jae-Wan, and Lee Jaeho. Korea’s Mid- to Long-term Economic Strategy for the ASEAN. Seoul: Korea Institute for International Economic Policy (KIEP), 2007. Lee, Kyu-Yong, Ryu Kil-Sang, Lee Hae-Choon, Seol Dong-Hoon, and Park SungJae. An Analysis on Foreign Workforce in the Korean Labor Market, and the Direction for Improving Its Management System in the Mid- and Long Term. Research Report 2007–09. Seoul: Korea Labor Institute, June 2007. Ministry of Commerce, Industry and Energy (Korea). . Ministry of Commerce (People’s Republic of China). . Ministry of Foreign Affairs and Trade (Korea). . Moon, He-Chung. “Foreigners residing in Korea now exceed 1 million”. Hankyung Daily, 25 August 2007. Teo, Chu Cheow Eric. “Strategic Dimension of ASEAN-China Economic Relations”. In ASEAN-China Economic Relations, edited by Saw Swee-Hock. Singapore: Institute of Southeast Asian Studies, 2007. UNCTAD. World Investment Report (WIR) 2006.

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6

Investment of Korean Electronics Industry in Southeast Asia Bun Soon Park

1. Introduction The Korean electronics industry started with the production of radio receivers in 1959. The semiconductor industry (mainly memory chips) emerged in the late 1960s with the investment of U.S. producers and subsequently became an icon of Korean industrialization. In the late 1960s, Korean manufacturers started to produce colour television sets and other consumer electronics. Currently, semiconductors, mobile phones, and products based on Liquid Crystal Display (LCD) technology are the main export goods from Korea’s electronics industry. Even though LCD monitors are well developed, the computer sector, including peripherals, is still below its full potential. From the very beginning, this industry was developed as an export industry. In order to respond positively to the increase in production costs in Korea and in the world market, manufacturers began to engage in overseas investment in the late 1980s. Increasing production costs, particularly of labour, and protectionism in developed countries were the two dominant factors that led Korean manufacturers into Southeast Asia by the end of the decade.

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In Southeast Asia, the electronics industry is also an engine of economic growth, with semiconductors leading industrial output in Singapore and Malaysia. The remaining ASEAN countries adopted export-oriented industrialization after the Plaza Accord; the consumer electronics industries, led by Japanese firms, became the top export earner. The MNC-led electronics industry in ASEAN resulted in a surge of imports and low-technology diffusion to local companies. Accordingly, continuous structural change and the technological development of the electronics industry in Southeast Asia are critical for sustained economic growth in the region. This chapter will examine the current state of Korea-Southeast Asia cooperation by focusing on Korea’s investment in Southeast Asia in the electronics sector. Therefore, the key questions to be addressed in this study are: What is the status of Korean investment in Southeast Asia? And what is the impact of this investment on the electronics industry in the region? This chapter seeks to address various questions related to the presence of Korean firms in Southeast Asia. First, the most basic purpose is to answer in detail the question of what Korean electronics firms are doing in Southeast Asia. This chapter seeks to examine which sectors are the most popular and to evaluate investment flows by country. Second, this chapter will try to explain the background and motives of Korean investment in Southeast Asia. This is related to the Korean companies’ ownership advantage in investment in this region. Through case studies of several companies, we will come to understand Korean firms’ competitiveness. Third, this chapter deals with the evolving interaction between Korean companies and the Southeast Asian location advantage. Changes in the investment environment of individual countries in Southeast Asia, such as per capita GDP, factor endowment, and incentive schemes all affect the location choice of Korean investors. Fourth, the economic impact of investment by Korean firms on Southeast Asia should be assessed. We need to assess Korean companies’ managerial performance, in such matters as the degree of localization and structure of markets. For Southeast Asia, technology transfer, change of competition structure, and increases in exports are expected. 2. Development of the Korean Electronics Industry

2.1. Structural Changes in the Korean Electronics Industry The electronics industry is the largest industry in Korea in terms of employment, output, and exports. This industry is also well known for its strong competitiveness. The employment share of the electronics industry in the Korean manufacturing sector was 14.5 per cent, its value added was

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Figure 6.1 Share of the Electronics Industry in the Manufacturing Sector

unit: % 25 20

Employment Value added Capital stock

22.0

19.8 16.9

16.8

16.0 14.5

15

12.4 10.1 10.5

10

21.5

20.3

10.4

12.7

10.8

8.5

5 0

1991

1995

2000

2003

2006

Source: National Statistics Office.

21.5 per cent, and its capital stock was 22 per cent in 2006 (see Figure 6.1).1 The share of employment increased from 10.1 per cent in 1991 to 14.5 per cent in 2006; the share of value added and capital stock increased more than two times. The electronics industry is divided into several sub-groups, including consumer electronics, parts and components (e.g., semiconductors and displays), and industrial electronics (e.g., telecommunications equipment and computers). In the early stages, Korea’s electronics industry was developed as two separate sectors. One produced labour-intensive consumer products such as radios, cassette players, black-and-white TVs, and audio equipment. The other was integrated circuit (IC) assembly. As time passed, consumer electronics further segmented into telecommunications equipment and computers, while IC assembly evolved into the dynamic random-access memory (DRAM) industry, which has become symbolic of the Korean electronics industry. The Korean electronics industry has rapidly evolved, particularly since the mid-1990s. For example, the value added of consumer electronics in the electronics industry was 41.1 per cent in 1995; the shares of semiconductors and parts, and telecommunications equipment was 40.4 per cent and 9.3 per cent respectively, while that of computers was 9.2 per cent. However, in 2006, the share of consumer electronics went down to 19.7 per cent, while the share of semiconductors and parts increased to 55.7 per cent. The share

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Figure 6.2 Composition of the Electronics Industry (1995, 2006)

Telecommunication equipment

Computers Telecommunication equipment 9.2 9.3

Consumer electronics

Computers

Consumer electronics

6.1

19.7

18.5 41.1

55.7

40.4 Semiconductor/ parts

1995

Semiconductor/ parts

2006

of telecommunications equipment almost doubled to 18.5 per cent (see Figure 6.2). Although for the last fifty years, Korean electronics has enjoyed near miraculous growth, the beginnings of the industry were comparatively meagre and simple. LG Electronics, formerly known as Gold Star, produced the first radio receiver under its own brand in Korea in 1959, launching the Korean electronics industry. The radio set was based on a model developed by a Japanese company, Sanyo, with core components imported from West Germany. Since then the world has witnessed surprisingly rapid growth in the Korean electronics industry. In the 1970s and 1980s, Korean electronic companies grew through a supplier-oriented industrial upgrading in which producers supplied output to OEM-buyers. In the 1990s, Korean companies achieved rapid technological development and became independent producers by establishing their own brands. As the structure of production and consumption in the global electronics industry evolved (Sturgeon et al. 2004), Korea emerged as a global leader with its own brands — a unique feat when compared to other emerging electronics industries in the region, e.g., Taiwan. The market share gains of Korean firms throughout this period were great. The market share of LCD was 46.5 per cent in 2006; Korea is the largest supplier. The market share of plasma display panels (PDP) was also the largest, with 54 per cent. In the case of NAND flash, market share was very high, with 63.9 per cent in the first half of 2007, while that of DRAM was 48.6 per cent. See Table 6.1. In the case of mobile phones, Samsung Electronics was second only to Nokia, the largest producer in the world. The production

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Table 6.1 Korea’s Market Shares in the World Market unit: %

1995 LCD (value) PDP (value) Mobile phone (quantity) TV (value) DRAM (value) NAND Flash (value) Computers (production value)

2000

2005

2006

31(1)

5.0(4) 15.8(2) 38(1)

3(10)

4(6)

40(1) 56(1) 19.4(2) 19.3(2) 49(1) 63.4(1) 5.6(4)

46.5(1) 54(1) 19.4(2)* 27.3(1)* 48.6(1)* 63.9(1)* 5.5(5)

Notes: 1) Numbers in parentheses are the rank in world market share; * based on the first half of 2007. 2) Mobile phones are based on Samsung Electronics and LG Electronics data; semiconductor data is from Samsung Electronics and Hynix. 3) In 2000, TV means colour TVs; after 2005, TV means digital TVs. Source: Kim Jong-Ki (2007).

volume of Samsung and LG was, in the first half of 2007, 19.4 per cent of global production. In the case of computers and TVs, China’s gains in market share were at the expense of Korean producers. Korea’s market share in digital TVs was the largest at 27.3 per cent. The products where Korea has the largest market share were not actually produced before the year 2000, signifying the gains in innovation emerging from Korean R&D efforts. The high growth of the electronics industry is attributed to several factors. The first factor was Korea’s absorption capacity for advanced technology from Japan and the United States. Its adoption of the development policies of the former facilitated the expansion of this industry. Multinational companies (MNCs) from the United States and Japan transferred production technology in consumer electronics, general parts, and computers to Korean companies. LG Electronics’ first radio, the A-501, was based on Sanyo’s model. LG also dispatched six engineers to the Hitachi Totsuka TV Factory to learn about B/W (black-and-white) TV production technology in 1963. In 1966, LG produced its first B/W TV. In 1968, Orion Electric made a licensing contract for cathode-ray tubes (CRTs) with Toshiba. This was followed by Samsung’s cooperation with another Japanese company, NEC. In December 1969, the newly established Samsung Electronics established a joint venture with Sanyo, Samsung Sanyo Electronics, which produced its first B/W TV in 1970. The development of the semiconductor sector may be attributed in part to investment by U.S. companies. In 1966, Fairchild set up its first semiconductor manufacturing company in Korea with a 100 per cent

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ownership stake. Since then, Motorola, Signetics, IBM, and Control Data have established transistor assembly plants in Korea. Certain features of the Korean economy, such as its well-educated yet relatively low-cost labour force, attracted these multinational firms. For example, Motorola Inc. established in 1967 the US$754 million firm Motorola Korea Ltd, a subsidiary of the semiconductor division. Motorola Korea Ltd was Motorola’s first overseas semiconductor plant (Kwon 2003). It imported semiconductor chips from its parent, which were assembled and exported to the United States Motorola Korea Ltd’s exports were US$12 million in 1969 and accounted for 10 per cent of total Korean electronics exports from 1984–85.2 Second, the policies of the Korean Government promoted the development of the electronics industry. In 1969, Law 2098, The Electronics Industry Promotion Law, was enacted to facilitate development of the electronics industry as an export industry. Furthermore, the government began to establish an industrial estate for the electronics parts and component industry in Gumi City in 1967. Construction of the estate was completed in 1973 and it became a Mecca for the Korean electronics industry. Furthermore, departments related to the electronics sector were set up at national universities to develop human capacity in this field. At the same time, Korean scientists living overseas, especially in the United States, were invited to return to Korea to participate in R&D activity. From 1981 onwards, the semiconductor industry was the focus for development by government and business. Samsung Electronics announced the development of 64K DRAM in November 1983. The following year, through tripartite joint research by business, government, and academia, the government-sponsored research institute, ETRI, developed TDX-1 (timedivision digital switching system), an electronic switching system. In the 1990s, code division multiple access (CDMA) was commercialized, marking a significant moment for Korean mobile phone production. In this period, the government introduced a competition scheme in the mobile telecommunications sector that resulted in the mobile phone industry.

2.2. The Characteristics of the Electronics Industry As previously noted, the Korean electronics industry was developed as an export industry with the support of the government.3 Since 1962, when LG exported its first radio set to the United States, the electronics industry has emerged as the largest foreign exchange earner, starting in 1990. In the late 1960s, U.S. semiconductor assembly exports accounted for most of Korea’s electronics exports, but since the first Korean-made TV was exported in

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1971, Korean manufacturers’ exports have increased gradually in importance. While in 1977 the largest export earner was ICs, other consumer electronics such as B/W TVs (87 million), radio sets (77 million), cassette players (108 million), colour TVs (26 million), stereo components (76 million), car stereos (24 million), and speakers (16 million) were also important export products. Except for ICs, export products were mostly labour-intensive, low-to-mediumpriced consumer electronics goods. The composition of exports has changed rapidly. In 1985, monitors (173 million), VCRs (240 million), and microwave ovens (212 million) emerged as main export items, while colour TVs (411 million), B/W TVs (220 million), and cassette players (522 million) remained important. In this period, manufacturers produced consumer electronics to supply an OEM base for U.S. companies. With the development of their own technology and market images, Korean producers started to export under their own brand names. However, in 2000, the structure of the electronics industry in terms of exports changed significantly, with mobile phones and computer parts becoming the main sources of foreign currency. In contrast, TV exports were 1,759 million, which was much lower than the figure of 2,536 million in 1995 (see Table 6.2). In the case of VCRs, export value in 2000 was 1,002 million, smaller than 1,614 million in 1995. Sales of cassette players and microwave ovens also stagnated. In 2006 the export value of electronic goods was US$120.7 billion, or 37.1 per cent of total Korean exports. The top export earner was the electronics parts segment with US$56.1 billion, attributable mostly to semiconductors at US$37.4 billion. Handsets were another contributor to Korean exports at US$27 billion. The share of the electronics industry in total exports was 3.5 per cent in 1970. The share increased to 10.8 per cent in 1985, 21.2 per cent in 1990, and to 40 per cent in 2000. As of 2006, the share was 37.1 per cent, lower than in 1990. This resulted from a decrease in international semiconductor prices. Another important industry, textiles, accounted for 40.1 per cent in 1970; by 2006, the share had decreased to 4.1 per cent. See Figure 6.3. Another characteristic of the Korean electronics industry is the high concentration of mass production manufacturing. While Korea developed its electronics industry in line with the Japanese model, from the mid-1990s there was an emphasis on the IT sector, particularly semiconductors and mobile phones. Korea has a capital-intensive memory segment in semiconductors, yet non-memory semiconductors are an important import item as well. Mobile phones are also produced by the mass production system.

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Table 6.2 Exports of Korea’s Electronics Industry unit: US$ million

1977

1985

1990

1995

2000

2003

2006

Total exports 10,046 30,283 85,016 125,058 172,268 193,817 325,465 Electronics 1,086 4,900 18,002 44,602 68,932 77,438 120,709 – Industrial Electronics 137 1,015 3,959 12,252 24,190 35,862 44,024 • Mobile phone 51 189 552 1,483 7,882 18,697 27,018 • Computers 27 559 2,549 4,743 14,687 14,977 12,576 LCD monitors 0 173 1,117 3,116 3,632 5,667 5,472 Computer peripherals 27 208 666 947 5,391 5,379 3,214 – Consumer electronics 506 2,250 7,346 10,041 10,136 12,610 14,553 • Colour TVs 26 411 1,638 2,536 1,759 3,587 6,734 • refrigerators 3 55 177 407 767 1,099 1,732 – Parts 379 1,310 5,949 20,805 32,229 26,189 56,128 • Semiconductors 298 965 4,541 17,695 26,006 19,535 37,360 • Flat displays 0 7 29 147 284 739 12,388 Source: Korean International Trade Association (KITA) DB.

Figure 6.3 Shares of Main Industries in Total Korean Exports

unit: %

45 Automobile Textile Electronics

40 35 30 25 20 15 10 5 0

1970

1977

1985

1990

1995

2000

2003

Source: Korean International Trade Association (KITA) DB.

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Companies have concentrated in semiconductor and mobile phone production in order to achieve economies of scale, as well as to respond to the appeal of these products on international markets. Korean companies with a small domestic market focus on final assembled products rather than on parts and components, which are the mainstay of Japan’s electronic industry. As a result, like other industries in Korea, processing and assembly manufacturing are the main production activities. Processing-styled manufacturing was followed by standard-styled mass production systems; this resulted in a weak point in developing the parts and components industry. The Korean electronics industry is characterized by the dominance of a few large firms such as LG and Samsung, with a high level of competition in sectors such as mobile phones. Heavy competition is also found in the semiconductor sector, where Samsung Electronics and Hynix Semiconductor produce memory chips. The intense competition in the domestic and international market has led Korean producers to focus on technological development. At the same time, small and medium enterprises have found it very difficult to survive. Domination by large enterprises facilitates fast decision-making and capital-intensive investment. However, high dependence upon large companies occurs at the expense of the growth of small and medium enterprises. For example, several mobile phone producers that had played an important role in forming the Korean telecommunications industry closed their doors from 2000 onwards. Also, the focus on assembly caused the parts and components industry to be underdeveloped; this is the main cause of the trade deficit with Japan. 3. Investment of the Korean Electronics Sector in Southeast Asia

3.1. Current Situation of Korean Investment (1) Trends in Investment The Korean electronics industry started to invest in the ASEAN region in order to maintain its competitiveness in the wake of escalating production costs after the Plaza Accord. An example may be found in the case of Sammi Sound Tech, established in Thailand in 1987. Sammi focused on providing loudspeakers for televisions, telephones, toys, car audio systems, and amplifiers. Maxon Telecom, a wireless telephone set producer that had played a significant role in the development of the telecommunications equipment industry in its early stages, entered Thailand in March 1988 and

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the Philippines in December 1988 to produce cordless phones, key phones, and transceivers. Before 1990, mainly labour-intensive consumer electronics and components producers entered ASEAN. Most of these companies wanted to make use of cheap labour to gear production for markets in the United States and Europe. In the late 1980s, Samsung Electronics and LG Electronics began to invest in ASEAN. LG Electronics established a joint venture, LG Mitr Electronics, in September 1988 with Thai BMC in order to produce televisions for the markets in developed countries. In this period, Samsung Electronics set up a joint project in Thailand that produced colour TVs for advanced markets. Products produced at this plant were then exported to the United States and Europe. Investment in LG and Samsung induced investment from parts-producing companies. There is an urgent need to cooperate with parts companies in ASEAN where the Japanese companies have a leading role. In the 1990s, investment took place more extensively. The case of Jeewon Industrial Company, which entered Indonesia in 1990, should be noted. As a small-sized manufacturer of car stereos, Jeewon decided to invest in Indonesia to respond to protectionism from advanced countries in the late 1980s, increasing wage rates in Korea, and a changing demand structure, which had moved from medium- or low-priced products to high-end products. The firm began to produce low-end products in Indonesia, where low-cost labour was abundant. Jeewon took into consideration Indonesia’s designation as a GSP country and the quality of production of Indonesian firms when making its investment decision. After production began in 1991, Jeewon’s decision proved correct; its subsidiary, Jeewon Jaya Indonesia, was quite successful, as reflected in its listing on the Jakarta Stock Exchange. Jeewon Jaya Indonesia was the first subsidiary listed on the local stock exchange after Korean investment entered Southeast Asia. In November 1990, LG Electronics established a joint venture, P.T. Gold Star Astra (currently LGEIN), with Astra International, an Indonesian business group, that was expected to produce TVs and refrigerators. This was followed by the PT LG Electronics Display Devices Indonesia (LGEDI) investment in a comprehensive components facility amounting to 250 million in 1996. LGEDI’s product mix included 3 million CRTs, 2 million VCRs, 0.6 million computer monitors, 10.9 million electron guns, 2 million DYs (depletion yokes), and 2 million FBTs (Playback transformers). President Soeharto attended the opening ceremony of LGEDI.4 The investment of Korea’s electronics industry in ASEAN was quite active from 1993 to shortly before the Asian crisis in 1997, peaking in 1995.

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Figure 6.4 Investment of the Electronics Industry in ASEAN

unit: US$ million 300 250 200 150 100 50 0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Source: Export-Import Bank of Korea.

In this period, Samsung Group’s Seremban Complex, the largest production base for a Korean company in ASEAN, was constructed. Investment in ASEAN decreased rapidly after the Asian crisis and showed mild recovery with the technology boom in the United States. From 2002, shortly after China’s entry to WTO, it has been decreasing. See Figure 6.4. (2) Investment Sector While Korean investment in ASEAN largely consists of consumer electronics investment, there are not many cases of investment in telecommunications equipment and semiconductors. In the early stages of investment, labourintensive parts and components such as car stereos, speakers, transistors, and tuners were the targeted sectors. With Samsung and LG’s investment in Thailand in the late 1980s, consumer electronics emerged as the main investment field. The first consumer products introduced included TVs and VCRs, which require relatively large labour forces in the manufacturing process. In contrast, washing machines and refrigerators were latecomers because of their capitalintensity. Samsung produced washing machines from 1995 in Thailand and LG started to produce them in 1997. The large transportation costs associated with the manufacture of refrigerators creates an incentive to locate production in the consumer market. Given Indonesia’s population, the potential demand for refrigerators warranted investment. Samsung was the first to enter the Indonesian market and was subsequently followed by LG.

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In relation to consumer electronics such as TVs, refrigerators, washing machines, microwave ovens, and air-conditioners, suppliers that produced components for final assemblers followed them to Southeast Asia. The assemblers invited those parts and components companies to invest, since assemblers need sufficient supporting firms in order to maintain competitiveness. Colour picture tubes (CPTs), monitors, and condensers were some of these items. In the case of parts and components, some producers entered Southeast Asia on the basis of collaboration with large assemblers. One of the strong medium-sized companies in Korea, Digital Power Communications (DPC), a producer of High Voltage Transformers (HVTs) for microwave ovens, accompanied SEMA to Malaysia in 1990 to supply HVTs. Since then, DPC has established two factories in China and become one of the largest suppliers of HVTs. In addition, Korean producers invested in ASEAN to diversify their products. While high value-added products were produced in Korea, low value-added products were produced in ASEAN and the products of ASEAN subsidiaries are standard products. For example, in 1997, TVs produced in ASEAN were smaller than 25 inches. The Korean parent company produced monitors greater than 17 inches, and ASEAN subsidiaries’ products were mostly 14 inches. Product differentiation continues today. (3) Regional Distribution Figures 6.5 and 6.6 show the composition of Korean electronics investment in each ASEAN country in terms of number of projects and investment value. Indonesia, Malaysia, Vietnam, Thailand, and the Philippines are the main recipient countries among the ten ASEAN members. With respect to the number of projects, Thailand, the Philippines, and Indonesia attracted similar levels representing approximately 24 per cent of the total, while Malaysia and Vietnam accounted for around 13 per cent. In terms of invested value, the Philippines (24.9 per cent), Indonesia (23.8 per cent), and Vietnam (18.6 per cent) have similar shares. Most of the Japanese producers of consumer electronics entered Thailand before Korea began to invest. Matsushita Electric started to produce National brand B/W TVs in 1962. Other manufacturers followed Matsushita to Thailand because Thailand’s market was relatively large, with a substantial population and a well-developed middle class. In the 1990s, the seven major electronics companies of Japan increased their market share relative to that of the U.S. and European makers such as Philips, Siemens, RCA, Whirlpool, and Electrolux — about 75 per cent of market share went to the Japanese makers. This was due in part to the preferences of the Thai people, who did

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Figure 6.5 Investment in ASEAN by the Korean Electronics Industry (Number)

0.2% Cambodia 0.2% Myanmar

0.2% Lao PDR 1.9% Singapore

Singapore

24.4% Philippines 23.3% Indonesia

Indonesia Malaysia Vietnam Thailand Philippines

11.4% Malaysia 25.4% Thailand

Cambodia Myanmar Lao PDR

13.1% Vietnam

Figure 6.6 Investment in ASEAN by the Korean Electronics Industry (Value)

0.0% Myanmar

0.0% Cambodia 0.0% Lao PDR 4.3% Singapore

24.9% Philippines 23.8%

Indonesia

Singapore Indonesia Malaysia Vietnam Thailand Philippines Cambodia

13.3% 15.0% Malaysia

Thailand 18.6% Vietnam

Myanmar Lao PDR

not think of Japanese products as foreign brands.5 LG and Samsung Electronics entered Thailand in the late 1980s and had to compete with the entrenched Japanese makers. The main sub-sector of the electronics industry in Malaysia is electronic parts, especially semiconductors. Malaysia launched its semiconductor industry in the early 1970s when foreign multinational companies, including Intel, Motorola, Hitachi, Philips, and Thomson began to assemble transistors there. In consumer electronics, Japan’s Mathushita built a large-scale production

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complex in the 1960s for the production of consumer electronic goods. With a relatively small population size, a government export-driven policy, and relatively high wages compared with other ASEAN countries, Korean companies were not eager to invest in Malaysia. Samsung Group constructed a production complex that includes Samsung Electronics, Samsung Corning, and Samsung SDI. Samsung’s investment accounted for most of the Korean electronics investment in Malaysia. The investment in Indonesia followed after Thailand. Eyeing Indonesia’s huge population, which at present amounts to some 220 million, in 1990 LG Electronics entered Indonesia on a joint venture with PT Astra International to produce TVs. Two years later, LG Electronics built a production line for refrigerators in Tangerang, which has become its centre for TV production with 2,000 employees at present. Also in 1992, Samsung followed suit and entered Indonesia. In this period, products were mainly for export.6 Currently, Korean manufacturers account for a good deal of the Indonesian market and they continue to introduce new high-end products in order to maintain competitiveness. It has been only thirteen years since LGEIN and SEIN started to construct facilities. However, they have caught up to the Japanese makers, including SONY, Panasonic, and Sharp. As observed in the Jakarta Post on 22 January 2008, “Samsung, for example, ranked only fifth in Indonesia in sales of television sets six years ago. Today, it is the leading player in flat televisions, which use liquid crystal displays (LCDs) technology.” The first significant investment project in the Philippines was done by a wireless phone maker, Maxon Telecom, in December 1988. Anam Industries (presently New York-based Amkor) followed suit by establishing an assembly and test facility in 1990. Amkor is one of the world’s largest providers of semiconductor assembly and test services. Founded in 1968, Amkor has become a strategic manufacturing partner for many of the world’s leading semiconductor companies and electronics OEMs. In 1991, RADIX Communication Inc. (formerly Daeryung Ind. Inc. Phil.) invested in the Philippines. Samsung Electro-Mechanics Co. (SEM) entered the Philippines in 1997 in order to produce electric parts and components. Vietnam offered a different environment for Korean companies because it introduced an open-door policy in the early 1990s. Korean investors usually followed Japanese firms to other ASEAN countries. In the case of Vietnam, however, Korean and Japanese firms were on relatively equal footing. At the beginning, the small size of the Vietnamese market did not induce foreign investment, but a shift in perspective occurred in the mid-1990s as firms decided to enter. Daewoo Business Group, one of the largest business

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groups in Korea before the Asian crisis, thought that Vietnam had great market potential. Consequently, Vietnam emerged as an investment destination for Korean electronics companies. In January 1993, Orion Hanel Picture Tube Co. Ltd was incorporated in Vietnam, with a production capacity of 1 million colour picture tubes and 600,000 black and white CRTs. Orion Electric, owned by the Daewoo Group, made a 70:30 $170 million joint venture with the Hanoi Electric Corporation in Vietnam. Orion Hanel Picture Tube Co. Ltd turned out its first colour picture tubes (CPTs) in July 1995. Orion-Hanel has an annual production capacity of one million CPT for colour televisions and 600,000 black-and-white picture tubes for television monitors. Orion-Hanel shipped its maiden export, 25,000 CPTs, to Indonesia in October 1995 and has sent additional shipments to Thailand and Brazil. The plant is also meeting Vietnamese domestic market requirements for colour television production. Daewoo’s ambition could not be achieved because of the Asian economic crisis. Following Daewoo, Samsung Electronics and LG Electronics entered Vietnam. LG is located in North Vietnam and Samsung is in South Vietnam. Both of the companies are active producers of consumer electronics.

3.2. Samsung Electronics’ Investment (1) Evolution of Samsung Electronics’ Investment in ASEAN Samsung Electronics is the largest firm in Korea, with sales of 78.3 trillion won and 8.5 trillion won of net profit. Like many large firms, Samsung Electronics’ beginnings were humble as it was only an OEM supplier of electronic goods of middling quality. In 2000, Samsung emerged as an important player in the world electronics industry, with a large market share in DRAM semiconductors, CDMA mobile phones, and consumer electronics. According to the weekly magazine Business Week: It [Samsung Electronics] has been the biggest maker of digital mobile phone using code division multiple access (CDMA) technology … Now Samsung is the best-selling brand in TVs priced at $3,000 and above…. Samsung has blown past Micron Technology, Infineon Technologies, and Hynix Semiconductor in dynamic random-access memory (DRAM) chips and is gaining on Intel in the market for flash memory.7

As of 2007, Samsung Electronics has ten affiliates in ASEAN. Four subsidiaries are dedicated to sales activity, three are dedicated to production, and the rest are engaged in both sales and production activities. All of the subsidiaries’ activities are coordinated by Samsung Electronics’ Southeast

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Asian headquarters. Thailand, Indonesia, Vietnam, and the Philippines have one plant each, while Malaysia has two. SEMA in Malaysia specializes in the production of MWO, while SEPHIL of the Philippines specializes in ODDs, which are components of computer and DVD players. SDMA of Malaysia produces monitors and CTVs. Other subsidiaries are diversifying their product mix. According to Samsung Electronics’ Southeast Asian headquarters, the production value of Samsung Electronics in ASEAN amounted to US$5.2 billion in 2007. ODD (1,482 million), CTVs (1,297 million), and monitors (856 million) are the main products. The production value increased rapidly from 1.8 billion in 2002 to 5.2 billion in 2007, 2.9 times more than in 2002. Of course, the sales of Samsung Electronics in ASEAN are greater than the amount produced locally as the company also imports these products into ASEAN for final sale. Including these imported products, Samsung’s sales amounted to 6.7 billion in 2007. Samsung’s entry to ASEAN can be divided into four separate phases. The first phase began in 1979 and lasted into the late 1980s, when Samsung established sales branches in Singapore (1979), Indonesia (1983), and Thailand (1987). The second phase lasted from the late 1980s to the mid-1990s in what is called the “construction phase” of production bases. Samsung Electronics chose Southeast Asia as a production base for exports destined for advanced countries. Thai Samsung Electronics (TSE) of Thailand (1988), Samsung Electronics (M) Sdn. Bhd. (SEMA) of Malaysia (1989), PT Samsung Maspion Indonesia (SMI) in Indonesia (1989), and SEIN (1991) were respectively established. At the same time, Samsung set up representative branches in the relatively small markets of the Philippines, Malaysia, and Vietnam. From the mid-1990s to 2000, Samsung expanded production facilities at subsidiaries in ASEAN due to the deterioration of the parent company’s competitiveness. In this period, Malaysia’s SDMA (1995) and Vietnam’s SAVINA (1995) were built as production subsidiaries. SAPL (1995) in Singapore and SEPCO (1996) in the Philippines were built as sales subsidiaries. In addition, as business expanded and diversified in Southeast Asia, the company’s Southeast Asian headquarters was set up in 1999 to coordinate and facilitate regional production and sales activities. Samsung Electronics calls this period the “expansion period” of production facilities. The last phase began in 2000, when Samsung increased efforts to expand its regional market share. In this period, Samsung also reinforced diversification of production at its facilities in what is called the multi-product production system. A new production plant constructed during this phase was SEPHIL (2001) in the Philippines.

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Table 6.3 Samsung’s ASEAN Subsidiaries (2007)

Entering Time

Production Capacity (annual, million)

Capital (US$ million)

Share

TSE*

1988

SEMA SEIN* SDMA SAVINA* SEPHIL

1989 1991 1995 1995 2001

CTV 2, Monitor 1, W/M 1, REF 1, MWO 3, AC 0.2 MWO 12 DVD 8, CTV 1.2, OMS 32 Monitor 6, CTV 0.5 CTV 2, Monitor 0.2 WG 0.1 ODD 32

135 89 124 141 16 34

91.83 100 99.99 100 80 100

Note: * indicates production and sales subsidiaries. Sources: Samsung Electronics Corporation (SEC) and the Export-Import Bank of Korea.

(2) Regional Distribution of Samsung Electronics’ Investment See Table 6.3. TSE of Thailand was established in 1988 and produced its first CTVs the following year. TSE’s Thai partner is a leading, ethnic Chinese business group, Sahapathana, whose equity share in the venture was 51 per cent. As the first Samsung production facility in the ASEAN region, TSE is a comprehensive consumer production base that is currently manufacturing CTVs, monitors, washing machines, refrigerators, MWO, and air-conditioners. TSE will be discussed in the next section. Samsung Electronics in Malaysia has one subsidiary office and two manufacturing facilities. Samsung Electronics (M) Sdn. Bhd. (SEMA) was established in 1989 and is located in Port Klang. It is involved in the manufacturing of microwave ovens and is currently the only microwave oven manufacturer in Malaysia. SEMA was appointed as the global headquarters for Samsung’s microwave oven business in 2004. Samsung Electronics Display (M) Sdn. Bhd. (SDMA) was established in 1995; the business includes the manufacturing of colour monitors and TFT-LCD monitors. It also produces colour TVs for the Malaysian market. SDMA is located in Seremban, Negeri Sembilan. SDMA supplied monitors, beginning with a 17-inch model, to MNCs that were operating in Malaysia and neighbouring countries. The first Samsung Group company was Samsung Electron Devices (presently Samsung SDI), which produces CRTs. Samsung Corning, another associate company of Samsung Electronics, entered this complex in 1992 to produce glass bulbs, an important input to CRT manufacturing. SDMA’s location completed the vertical integration of this complex, which is connected to Samsung Corning-SDI-SDMA.

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Samsung Electronics made a joint venture in 1989 with an Indonesian company, Maspion, with 50:50 equity. PT Samsung Maspion Indonesia (SMI) was expected to produce refrigerators for the Indonesian domestic market. Samsung Electronics started another investment, Samsung Metro Data Electronics (currently SEIN), with PT Metrodata Epsindo in 1991 in order to produce VCRs and audio products. In the case of SMI it was required that Samsung enter into a joint venture for sales in the domestic market. However, the two partners did not match each other in operations and, finally, Samsung sold its equity stake to Maspion. Currently, SEIN imports refrigerators from its parent company in Korea. Samsung Metro Data Electronics underwent a restructuring after the financial crisis in 1997 and was ultimately renamed Samsung Electronics Indonesia (SEIN). SEIN expanded production to include electronics parts (CD-ROMs, DVDs, DVDWs, CD-RWs) and the audio sector was moved to Huizhou Samsung Electronics in China, which specializes in these products. Indonesia’s SEIN is the hub of Samsung Electronics’ DVD production. DVD products and OMS — computer memory equipment — accounted for more than 90 per cent of sales. More than 95 per cent of DVD and OMS products are exported to other countries. CTV accounted for about 10 per cent of SEIN’s sales and are mostly sold domestically. Including imported products such as mobile phones, SEIN’s total sales volume in 2007 was estimated to be 2 billion, of which CTVs accounted for 0.1 billion, the remaining 1.9 billion was accounted for by DVDs (45 per cent) and OMS (55 per cent) exported to Europe and the United States.8 Vietnam’s SAVINA was incorporated in 1995 in partnership with Samsung and Vietnam TIE, which had an equity share of 20 per cent. Operations started in May 1996, producing CTVs for the domestic market. SAVINA began to assemble washing machines in December 1999, refrigerators in May 2000, and then monitors in October 2001. Compared with other production subsidiaries in Southeast Asia, SAVINA’s local content ratio is low, as Vietnam’s supporting industry was immature as a result of the small local market size. SAVINA insists that from 2001, CTVs, monitors, and DVD players were its top sellers. Encouraged by the rapid growth of the Vietnamese market and a rich pool of skilled labour, Samsung Group held an Asian strategy conference in Vietnam in July 2005. In October 2007, Samsung Electronics convened another conference in which the heads of each subsidiary in Southeast Asia participated. At this conference, they discussed whether Samsung should establish a mobile phone production facility. The Philippines is the country which Samsung Electronics entered most recently. Construction of the SEPHIL factory began in 2001 for the production

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of CD/RW; the production of Combo (July 2002) and DVD-W (May 2005) followed. SEPHIL’s business was successful: it became the Philippines’ twentysecond company in terms of sales volume and sixth in the manufacturing sector in 2006. The product mix for SEPHIL in 2007 was 41.9 per cent for DVD-W, 34.4 per cent for DVD-W Slim, and 15.3 per cent for Combo. DELL, HP, and TDMT are SEPHIL’s main customers. Samsung’s production items are divided into two groups, namely consumer electronics and electrical parts. While TSE and SAVINA concentrate on the production of the consumer electronics goods, SEIN and SEPHIL, which are able to hire relatively low-wage labourers, focus on the production of electrical parts and components. The Seremban complex, where supporting industry is well developed, also produces parts and components. CTVs are produced in Thailand, Indonesia, Malaysia, and Vietnam. In spite of AFTA, the reason why various countries produce the same goods is to respond to the logistical needs of their customers. Of course, Samsung is aware of the AFTA. In November 2006, the president of the Southeast Asian headquarters told a newspaper reporter that “because it is necessary to focus on competitive locations, Samsung is considering relocation of its production line”.9 According to the report, Samsung is considering having TSE specialize in TV and white goods in the medium term, SEIN in Audio and DVDs, SEPHIL in CD/DVD-ROMs, SAVINA in TVs, and SDMA in LCD TVs and monitors. (3) The Case of Thai Samsung Electronics (TSE) TSE is the hub of consumer electronics goods production for Samsung Electronics in ASEAN. Compared with other subsidiaries, TSE produces a variety of products in one of the larger facilities. Capacity for CTVs is equal to two million on an annual basis, much bigger than for SDMA and SEIN. TSE produces air-conditioners, refrigerators, and washing machines; these are not produced by other subsidiaries. At the end of June 2007, according to the market research institute GfK, Samsung has a leading position in terms of market share in most consumer electronics goods in Thailand. When TSE established a joint venture with Thailand’s consumer goods business group Sahapathana, the Thai partner contributed land and Samsung contributed financial backing. Saha seemed to want to make a partnership with a Japanese manufacturer, but most of the leading Japanese companies were already established in Thailand, so Saha finally chose Samsung as partner. Samsung’s equity share was 49 per cent due to the fact that foreign investors were regulated if they intended to sell in the domestic market. Over time, TSE has increased capital and Samsung’s share has increased to 92 per cent.

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Figure 6.7 Samsung’s Market Share in Thailand (Market Share No. 1 Goods, June 2007)

27

Auto W/M LCD Monitor

24

Colour Monitor

28

2-door Ref

18

SBS Ref

42

LCD TV

34

CTV total

23

0

10

20

30

40

50 unit: %

Source: Thai Samsung Electronics (TSE).

When TSE began to produce TV sets in 1988, the first product was 14 inches wide. This size of TV could not make any profit in Korea and demand was decreasing. However, TSE soon started to produce 20-inch and 25-inch models, while the parent company produced larger-sized models in Korea. TSE started in 1996 with a 29-inch model. Shortly after that production began on washing machines; in 1997 refrigerators, which are capital intensive, were introduced. TSE introduced a variety of products to the Thai market along with a change of each item’s export competitiveness. In order, these products are TVs, washing machines, refrigerators, colour monitors, MWO, and airconditioners. Each division has its own global strategy and, according to this global strategy, they chose Thailand as a production base. The divisions for colour monitors and washing machines considered the market size of Thailand and decided to invest to attain market leadership in the country. TSE started to produce colour monitors when SDMA in Seremban, Malaysia had already undertaken production. However, Samsung decided to produce monitors in TSE because they are an input for their TVs and also because of the relatively cheap and abundant labour force of Thailand. The case of MWO is the same for colour monitors in the sense that SEMA in Malaysia is producing MWO. The Japanese company Sharp’s Thai plant, which is dedicated to production of MWO, is said to be the largest plant in the world. Consequently the supporting industry in relation with MWO is well developed in Thailand. Samsung’s

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TSE produces a high-end, enamelled MWO, and SEMA in Malaysia focuses on OTR (Over the Range) MWO. The economic crisis in East Asia in the late 1990s came as a blessing in disguise to Samsung Electronics, with its diversified product mix. Samsung Electronics started a restructuring effort in both the parent company as well as its subsidiaries. Several divisions were downsized and restructuring was completed by 2000. As a result, the industrial structure of Samsung Electronics drastically changed and Samsung was free to invest in more lucrative segments and in R&D. In this period, Samsung TV emerged as a second-tier brand after its Japanese competitors, while from 2004 Samsung took the place of Japanese manufacturers such as Sony and Panasonic as having the largest market share in terms of production and sales volume. TSE introduced LCD and PDP TVs in 2005. The Thai market changed to an LCD-led market in 2006. In 2006, the demand for LCD TVs was a meagre 18,000 — a small portion of the total 2.4 million. However, the demand for LCD TVs increased to 270,000 against total TV demand of 2.5 million in 2007.10 TSE procures parts and components from approximately 100 suppliers, including Samsung Electro-Mechanics Co. (SEM). Around fifteen suppliers accompanied TSE to Thailand; the company is the buyer of 80–90 per cent of their total output. The rest of the suppliers are Thai, Korean, or Japanese companies. Samsung maintains competition when it procures parts and components in order to procure the best quality and price and to avert the risks associated with relying on a single supplier. So, most of the suppliers supply for LG and Japanese companies as well as TSE.11 TSE believes that, on the basis of competition, TSE’s procurement of parts and components is more efficient than that of Japanese companies because they utilize the “Keiretsu” system to procure components. (4) The Ownership Advantage of Samsung Electronics Samsung Electronics’ ownership advantages, which are the foundation of Samsung’s success in ASEAN, consists of three aspects. First, Samsung Electronics is competitive in terms of production technology. While the Japanese manufacturers delayed restructuring and development of new products during the “lost decade” in Japan, Samsung upgraded its technology capacity through aggressive restructuring and R&D activities after the Asian crisis. When the new millennium began, Samsung reemerged as a new company in every aspect, including the quality of its final products, the production technology of its components, and design. Sony now uses Samsung’s LCD panels and Apple uses Samsung’s flash memory. Even though Samsung is an assembler, Samsung also has a parts-and-components section in its business

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area. In its design activities, Samsung introduced a “first- design” and “seconddevelopment” system. Second, intra-Samsung cooperation systems created synergies. Samsung was one of the first developers of DRAM semiconductors. In addition to the success of DRAM, Samsung’s mobile phones are so popular in Southeast Asia that consumers have reappraised the quality of Samsung’s consumer electronics products made in the region. Other synergies can be found in production. A few years after TSE’s launch, Samsung Electro-Mechanics Thailand Co. (SEMTHAI), an associated company, was located near TSE to produce electrical parts and components. For example, SEMTHAI’s tuner, which is a key component in consumer electronics, was supplied to TSE. In the Philippines, SEPHIL is cooperating with SEMPHIL, which supplies MLCC. The assembler, TSE, can enjoy just-in-time delivery, or what Samsung calls Value Management Innovation (VMI), a system where suppliers establish a warehouse in an adjacent assembler. Malaysia’s Seremban Complex is another good case. When Samsung SDI set up its facility to produce CPT, Samsung Corning and SDMA followed to achieve vertical integration. This complex connected inputs, i.e., glass bulbs to CRTs to monitors. The labourers in the complex do not distinguish between the entities. For them, the three companies are all Samsung. Thirdly, Samsung’s Southeast Asia headquarters in Singapore, established in 1999, coordinates the activities of production, sales, marketing, and procurement in ASEAN. The Southeast Asia headquarters controls and coordinates ten subsidiaries. It also has common functions including a procurement office (IPC), service centre (ACS), marketing team, and management assistant team that includes the functions of finance, tax support, management innovation, integrated logistics, human resources development, and legal affairs. The Southeast Asian headquarters has contributed to enhancing productivity and reducing costs.

3.3. Main Characteristics of Korea’s Investment in the Electronics Industry (1) Upgrading of the Ownership Advantage According to the OLI paradigm (Dunning 1988, 1993), ownership advantage is a pre-condition of MNC overseas investment. In order to overcome the intrinsic disadvantages of a foreign country, companies must possess some kind of firm-specific advantages. Various research studies have concluded that Korean firms expanded overseas without substantial firm-specific advantages (Kwon et al. 2004). Nevertheless, Korean companies have succeeded in their

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investment in Southeast Asia. When Korean investors entered Southeast Asia, they had to compete with Japanese companies, which had arrived first in ASEAN and had strong brand power. Compared with Japanese companies, the ownership advantage of the Korean electronics industry was its relationship with buyers in the United States and Europe that procure OEM products from Korean producers. Korean producers supplied products to them on an OEM basis and this relationship continued to function as they moved into ASEAN.12 Another ownership advantage was the relatively high quality of products at low prices. Korean electronics companies produced goods of higher quality than Southeast Asian producers even though their quality was lower relative to their Japanese competitors. As a result, mid-range technological investors with buyers in industrialized countries were quite successful until the early 1990s. Speakers, car stereos, and telephone sets were successful products. However, this kind of investment faced deteriorating conditions when wages increased and Chinese products entered the international market. In addition, the impact of the financial crisis on the foreign exchange market of ASEAN was a serious blow to medium-sized Korean investors. In other words, Korean ownership advantages, such as their relationship with buyers and mid-range technology, were fragile and volatile. With the financial crisis, even medium-sized companies could not survive the new environment. Once considered as case studies for investment success, Jeewon Industries, Sammi, Radix, Orion Electric, and Maxon Telecom faced various problems following the crisis — some failed. For example, Maxon was quite successful in Thailand and the Philippines; the sales volume of Thai subsidiaries was once more than 100 billion KRW. After the crisis and with its financial position deteriorating in the wake of weak sales, Maxon Telecom’s parent company finally declared bankruptcy in 2002. Other companies such as Sammi, Jeewon, and Radix could not escape the same predicament as Maxon and went bankrupt as well. However, Samsung Electronics and LG Electronics, which had entered ASEAN at the same time, survived the economic crisis. Originally, one of their ownership advantages was also relatively good-quality and low-priced products based on mid-range technology. The purpose of investment for large Korean producers such as Daewoo, LG, and Samsung was to produce for the domestic and foreign market. They exported medium-priced products on an OEM basis as well as their own brands and marketed low-priced and mediumquality products to the domestic market, where Japanese companies dominated the high-end segment. In 1996, the market share of TSE TV of Thailand was around 20 per cent, but most of the TVs that Samsung produced were

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14–16-inch models. At that time, the large TV market (defined as larger than 29 inches) was dominated by Japanese firms. However, during the economic crisis, these large companies succeeded in creating new ownership advantages through technological development. While the Japanese companies delayed restructuring, Korean manufacturers enhanced the competitiveness of their product mix. The new ownership advantage was formed with the help of a new trend in the international electronics industry, which had evolved from analog to digital technology. In the digital era, convergence is an important trend. Compared with the Japanese producers, Samsung and LG maintain a wide range of electronics products such as AV, Audio, white goods, IT, PCs, and monitors. In the analog era, specialization was a source of comparative advantage, but in the digital era, diversification is the source of ownership advantage. As Bun Soon Park (1999) has already indicated, a business group structure is an important source of firm-specific ownership advantages. (2) Internalization and Management Control MNCs enter foreign countries as a form of direct investment rather than an arrangement for exporting and licensing to internalize their ownership advantage. That is to say, direct investment is more profitable than other forms of entry. One of the characteristics of Korean investment in Southeast Asia is the limitation of investment areas. Korean investments mainly concentrate on consumer electronics and the related components sector. There is no investment in semiconductors, the symbol of the Korean electronics industry. Telecommunications equipment is excluded as well. In the case of mobile phones, Samsung’s strategy, which emphasizes high-quality and highpriced products, did not match well with ASEAN. Instead, Korean producers exported these goods from Korea directly to this region. This means that with the high competitiveness of these sectors, Korean companies made more profits from export than from investment. This is related to the internalization of ownership advantage. Compared with semiconductors, which are relatively capital-intensive and massproduced, the consumer electronics sector has to respond to the needs and tastes of consumers in the market. However, since technology is easily transferred, it is necessary for companies to control and internalize production technology through direct investment. In this regard, Korean electronics investors prefer sole ownership. For example, excluding Indonesia which does not allow 100 per cent ownership by foreign investors and Vietnam where Samsung chose a Vietnamese partner to facilitate business activity, Samsung’s equity shares are all 100 per cent.

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Samsung did not enjoy 100 per cent ownership equity at the outset in all instances. Since Indonesia required joint ventures before the mid-1990s, Samsung created joint ventures. However, over time Samsung bought its Indonesian partner’s equity. In the case of SEIN, Samsung’s share increased from 80 per cent to 99 per cent after the financial crisis because Samsung bought its partners’ shares. Samsung’s TSE share increased from 49 per cent to 80 per cent. LGEIN, which was incorporated as a joint venture of LG Electronics and ASTRA International of Indonesia, is now solely owned by LG Electronics as it bought ASTRA’s share after the economic crisis. (3) Choice of Investment Location The investment environment of Southeast Asia played a critical role in the choice of Korean investors. Compared with the textile and clothing industry, where availability of low-wage labours is important in choosing locations, the electronics industry is said to be less sensitive to wage rates. However, the small- and medium-sized producers that have to take account of wage rates preferred Thailand, the Philippines, and Indonesia. Although large companies were more sensitive to market size than to wage rates, they chose low-wage countries such as Indonesia and Thailand. Market size, in terms of GDP and population, was important for the choice of location. The Thai Government did not permit 100 per cent ownership if the investors sold products to the domestic market. Until 1993, Indonesia also regulated for up to 80 per cent of foreign ownership, with Table 6.4 ASEAN’s Main Economic Indicators

Malaysia Thailand Indonesia Philippines Vietnam GDP (US$ million)

1996 2006

1,009 1,470

1,819 1,946

2,274 3,510

828 1,169

247 553

Per capita GDP

1990 1995 2006

2,437 4,303 6,088

1,528 2,828 3,162

638 1,038 1,641

727 1,084 1,352

98 288 723

Export/GDP (%)

1990 1995 2000

65.0 80.7 104.9

26.8 33.2 55.3

23.4 23.5 39.6

18.5 23.5 49.2

26.7 25.1 46.3

32(94) 28

30 30

35(94) 30

35 35

25 28

Corporate tax (%)

Mid-1990 2006

Source: Various sources.

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equity stakes greater than 52 per cent requiring transfer to an Indonesian partner within twenty years of the investment. In spite of these regulations, Samsung and LG entered Indonesia and Thailand based on joint ventures with host-country entrepreneurs. This means that Samsung and LG took market size into account. The Philippines had a rule similar to Indonesia but there was no consumer electronics investment there, perhaps because of its small market size. Another decisive factor that influenced Korean investors’ choice of location was the size of local demand for specific items. In other words, the size of local demand determined which items received investment. Samsung Electronics, which has no semiconductor plant in ASEAN, operates in China and supplies products to MNCs such as Apple and Dell. As far as mobile phones are concerned, Samsung has maintained a “premium strategy”, which means supply of high-end products to high-income groups. Accordingly, Samsung exports mobile phone to the ASEAN market rather than engaging in production. As the market for mobile phones expanded and Nokia effectively exploited the market with low-priced models, the market share of Korean manufacturers in ASEAN decreased rapidly. Recently, Samsung attempted to change its “premium strategy” for mobile phones to produce lower-priced products. Accordingly, Samsung Electronics is considering investment in Vietnam for the production of mobile phones. It is in Malaysia that the industrial environment played a decisive role in location. Malaysia was highly liberalized and allowed 100 per cent equity ownership where MNC exports amounted to more than 80 per cent of total output. SEMA chose Malaysia for the production base of its export-oriented strategy. Malaysia’s strong foundation in electronics and the rich demand for parts and components were the deciding factors that led Samsung to establish the Seremban Complex. Considering the overall advantages of Southeast Asia, it is clear that the location advantage of the region has deteriorated as China has emerged. The market size of China and the development of supporting industry has attracted new Korean investment to China. As a result, Samsung and LG have not created new ventures in ASEAN since 2001, when Samsung Electronics invested in SEPHIL. 4. Impact of Korea’s Investment on the ASEAN Economy

4.1. Southeast Asia’s Electronics Industry The development of ASEAN’s electronics industry began in the early 1970s with the production of semiconductors such as transistors, which involved a

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particularly labour-intensive process. ASEAN’s entry represented its participation in an internationally fragmented semiconductor industry. The Plaza Accord, which rapidly appreciated the value of the Japanese yen and the currencies of NIEs, played an important role in establishing the exportoriented electronics industry in Southeast Asia. The main motive for investing in Southeast Asia was to capitalize on the availability of cheap labour, which is needed for the labour-intensive assembly process. Even in the case of consumer electronics, the Japanese and Korean investors that entered after the Plaza Accord pursued an export-oriented strategy as opposed to focusing on sales in the domestic market. As a result, the electronics industry became the most important export industry in Southeast Asia. According to statistics from Singapore’s Ministry of Trade and Industries, in Singapore, the share of electronics exports compared to non-oil domestic exports was 46.8 per cent in 2006. The export share of Malaysia’s electronics industry was 51.1 per cent in 2006, while Thailand’s share was 17.7 per cent in 2007. In the Philippines, the share of the electronics industry was rather high at 62.6 per cent. Another characteristic is that the electronics industry of ASEAN was developed by MNCs from the United States, Japan, and NIEs. MNCs developed the semiconductor sector in Singapore and Malaysia and the consumer electronics sector of Indonesia and Thailand. Compared with China, which has developed its own brands such as TCL and Haier, none of the Southeast Asian producers have succeeded in developing their own brands in any electronics sector. In the case of consumer electronics, the Japanese have been the main players in the region since the 1960s. Recently, Chinese producers have entered this region for export and production. The considerable efforts aimed at developing an independent industry failed in Southeast Asia because of limited domestic markets and the low technology level of indigenous entrepreneurs. Domination by MNCs of the electronics industry in ASEAN resulted in the weakness of this industry. The technology of the electronics industry was not controlled by the host country and MNCs were reluctant to transfer technology. While there was technology transfer by direct investment, its impact was limited to technology diffusion to local producers. Even in Singapore, which is the most advanced country in the electronics industry, MNCs dominate production. The enhanced competitiveness of the Chinese electronics industry challenged Southeast Asia; the consumer electronics sector of Thailand and Malaysia were particularly hard hit. In addition, the competitiveness of the hard-disk industry of Singapore has deteriorated rapidly. Thailand’s TV production was 6.94 million sets in 2004, 6.26 million sets in 2006, and 6.07

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million sets in 2007. The production volume of monitors decreased from 4.47 million in 2004 to 1.38 million in 2006 to 0.94 million in 2007, while Thailand’s production of hard disks, refrigerators, air-conditioners, and washing machines is rising. Thai electronics is facing drastic restructuring. Malaysia’s electronics industry is also shrinking. The production volume of TVs in 2005 was 10.53 million sets and decreased to 7.74 million sets in 2007. The production of air-conditioners is experiencing a similar decline. The export competitiveness of the electronics industry is deteriorating. It is natural that the electronics industry’s exports, especially semiconductors, would fluctuate due to changes in the international business environment. The increase in electronics exports for Singapore was 4.3 per cent in 2006, which is lower than NODE’s increase of 8.2 per cent. In particular, the export of hard disk decreased by 30.7 per cent and the export of PCs decreased by 7.9 per cent in 2006. The export of Malaysia’s consumer electrical products decreased by 15.6 per cent in 2006; this trend continues in 2007 with a decrease of 19.0 per cent in the first quarter, 16.8 per cent in the second quarter, and 13.5 per cent in the third quarter.

4.2. Korean Investment and ASEAN’s Electronics Industry (1) Employment and Export Creation The electronics industry is one of the largest industries in terms of employment in Southeast Asia. However, it is difficult to account for how much is generated by Korean investment. Considering that Korean investment was relatively concentrated in labour-intensive industries, it is not wrong to conclude that there would be significant creation of jobs in this region. For example, as of January 2008, Samsung Electronics employs 6,637 personnel, a number that had increased by more than 1,000 from May 2005. The total number of people employed by the Samsung Group’s, including other affiliates was 13,865 in May 2005. See Figure 6.8. In addition, employment is also generated by Samsung Electronics’ suppliers. For example, SEPHIL in the Philippines employed only 713 people in January 2008 compared with 749 in May 2005. In this period, SEPHIL increased outsourcing of its production lines to certain Korean subcontractors, so employment actually decreased by thirty-six while sales volume increased. Including the subcontractors, producers (which accounted for more than half of the total production lines), and second vendors who supplied parts and components, total employment reached 7,000.13 What is interesting is that the employment figures for Malaysia’s subsidiaries are decreasing while those of Indonesia, Thailand, and Vietnam are increasing.

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Figure 6.8 Employment of Samsung Electronics in ASEAN (2007)

2,500 May 2005

2,000

Jan 2008

1,500 1,000 500 0 SEIN

TSE

SEMA

SDMA

SAVINA

SEPHIL

Note: SEMA, SDMA, and SEPHIL are production subsidiaries; SEIN, TSE, and SAVINA are production and sales subsidiaries. Source: Samsung Electronics Corporation (SEC).

This reflects differences in wages among the countries. Excluding Samsung, some Korean companies employ a large number of workers. Amkor Anam employs 8,000 workers to produce integrated circuits in the Philippines and LGEIN employed around 3,800 workers in 2006.14 The purpose of Korean investment in ASEAN is to produce exports for third countries. The sales volume of TSE was US$1.2 billion in 2007; of this, exports accounted for 65 per cent, which is much higher than the average Japanese company’s 20–30 per cent of export ratio. What is more, TSE exports goods to the Middle East, Latin America, Central Asia (including Russia), and Africa, while Japanese investors confine exports to neighbouring regions. This signifies that TSE contributes to the diversification of Thailand’s export markets. The sales of the Thai subsidiary of LG were estimated to be US$1 billion in 2007. LG emphasizes exports, including CRT, so that the export ratio seems to be higher than that of TSE. SEMA is the sole producer of MWO and 100 per cent of MWO is exported. SEIN in Indonesia exports 95 per cent of total DVD and OMS production; in the early stages of its development, the firm exported most of its output.15 According to the Jakarta Post (22 January 2008), while domestic sales of SEIN increased from US$170 million in 2002 to $350 million in

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2007, exports will reach $1 billion in 2008. The sales volume of LGEIN was US$275 million in 2003 and $322 million in 2007 and is expected to increase to $420 million in 2008. LGEIN exports around 35 per cent of its refrigerators and TVs relative to total output. (2) Technology Transfer Korean companies that produce components might transfer production technology to Southeast Asia. Electrical parts, CPT, and monitors are now produced in ASEAN and the technology for these has been transferred. For example, magnetron is required for the production of MWO. In 1997, there were only a few companies, such as Samsung and LG that were able to produce magnetron, which accounts for 18–20 per cent of the total production cost of MWO. SEMA imported magnetron from its Korean parent, which controlled the core technology. As of 2007, production of magnetron shifted to the Malaysian subsidiary. In terms of final products, Korean manufacturers in ASEAN upgraded their product mix over time so that production of high-tech products is now the focus of manufacturing efforts. For instance, TSE, leading the upgrading of the electronics industry, became the first producer of LCD TVs in March 2006, followed by Sony. In fact, Samsung Electronics led the way as the industry has evolved from CRT TVs to LCD TVs, as washing machines have advanced, and as refrigerators are upgraded from two-door models to side-byside models. Samsung and LG are playing the leading role that Sony once took in the premium market. In Indonesia, LGEIN will start to operate production lines for high-tech, high-end plasma televisions beginning in July 2008. Also, LG Display Indonesia (LGDI) will produce LCD televisions in June of this year. As a consequence, “with updated technology and the appetite of Indonesian consumers for top-end products, it seems that Korean electronics will indeed continue to be a major force in Indonesia”.16 The upgrading of products in Southeast Asia can be found in SDMA in Malaysia. When SDMA started production of monitors in 1996, the main model was 14 inches wide while the parent company in Korea produced monitors larger than 17 inches. When the market changed from 14 inches to 15 inches, SDMA introduced a 15-inch version. R&D activities also intensified. Even though Samsung’s R&D in ASEAN pertains to the modification of existing technology to suit local consumers’ preferences, it would help to enhance regional technological development. Subsidiaries of Samsung Electronics are expanding their R&D activities: TSE’s R&D personnel number 157 (including four from Korea), SEIN’s number 150 (three are Korean), and SEMA thirty-three (one Korean).

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However, it is not easy to diffuse technology to ASEAN industrial sectors owned by ASEAN entrepreneurs. While the technology of the electronics industry is rapidly evolving, the underdeveloped supporting industry in ASEAN has not caught up to the technological trends. Therefore the local contents ratio cannot be raised. (3) Integration of ASEAN Investment in ASEAN by Japanese firms has played a pivotal role in promoting regional economic growth and regional integration. Korean investments have played the same role, albeit to a smaller degree. In the production process, Korea’s electronics manufacturers generate intra-regional trade. Although the size and scope of Korean investors’ intra-regional trade could not be compared with that of the Japanese, Korean companies contribute to production sharing for the electronics industry in ASEAN. For instance, Samsung Group’s extensive intra-regional network was in place by the time of the financial crisis. Figure 6.9 shows the regional exchange in the Samsung Group in 1996–97. SEMTHAI in Thailand supplied electric parts to several production subsidiaries of Samsung Electronics in ASEAN. Samsung SDI in Malaysia supplied CPT to the factories that

Figure 6.9 Samsung’s Regional Exchange of Parts and Components in ASEAN (1997)

Malaysia’s Complex

Samsung Corning Glass bulb

Samsung SDI

SDMA

CPT

Monitor

DY, FBT SEMTHAI (DY, FBT, HVC, Tuner)

HVC

DY, FBT Tuner

CPT

TSE

DY, FBT Tuner

CPT

SEIN

SEMA (MWO)

DY, FBT Tuner

CPT

SAVINA

Source: Author’s survey.

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produced televisions. Figure 6.9 describes the network of Samsung Group, but it should be noted that Samsung SDI and SEMTHAI supply products to the regional MNCs as well. With the rise of China, the intra-company trade of parts and components is changing (see Figure 6.10). SDMA in Malaysia procures IP boards for LCD monitors from a subsidiary of Samsung Electro-Mechanics (SEM) in Dongguan, China, while TSE procures key parts from Samsung’s regional subsidiaries. CRTs originate from Seremban in Malaysia, motors for airconditioners from Samsung Electro-Mechanics Co. (SEM), and magnetron used in MWO is procured from SEMA in Malaysia. Compressors for refrigerators and air-conditioners originate from Suzhou, China. In other words, over time the intra-regional trade has expanded beyond the ASEAN region. Final products are also traded in the region. SEIN in Indonesia produces only CTVs among consumer electronics goods and imports other goods in this category such as refrigerators, washing machines, and air-conditioners. Middle to low-end products are imported from China and TSE; high-end

Figure 6.10 Production Sharing of TSE Korea IPO

Consumer

Middle East, ASEAN, Africa, etc.

Singapore, IPO

Consumer

Thailand

World

China Malaysia

Vertical Integration, Conglomeration

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SEC or Subsidiaries and Associates Other Korean suppliers Other Country’s suppliers

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products are procured from the parent company in Korea. LG produces airconditioners in Thailand for export to Malaysia, the Philippines, and Indonesia.17 It seems that AFTA is not very influential in the choice of location for Korean investment in the region. However, some Korean investors are rearranging production items. LG halted the production of air-conditioners in Indonesia and moved their manufacturing to Thailand. LG has also established Southeast Asian headquarters in Thailand. Samsung Electronics is considering rearranging its production items as AFTA grows. 5. Conclusion The Korean investment in ASEAN was motivated primarily from the late 1980s by the attractive labour market. At the onset, the main investors were small- and medium-sized companies. In 1988, Samsung and LG began their forays into ASEAN in order to produce consumer electronics. As Korean assemblers started production, supporting companies followed. The assemblers invited these parts-and-components companies to enhance competitiveness. Assemblers need a sufficient supporting industry for production; CPTs, monitors, and condensers are needed items. In the case of parts and components, some producers entered into Southeast Asia on the basis of collaboration with large assemblers. From the mid-1990s, capital- and technology-intensive industries took the place of labour-intensive industries. Due to weak market demand, the electronics industry in ASEAN targeted production towards high-income countries, such as the United States. However, demand in ASEAN was gradually growing and thus production for domestic markets increased. This kind of investment was different from that of the late 1980s and early 1990s. The Asian economic crisis also impacted Korean investment. While the number of investment projects continued to increase, the amount of investment decreased because large projects by investors were complete and there was a new investment destination, namely China. Needless to say, the existing subsidiaries continue to upgrade their production facilities and diversify their product mix to meet the changing market. The main sector of Korea’s investment in Southeast Asia has been consumer electronics. Within the electronics industry, telecommunications equipment and semiconductors did not receive investment in Southeast Asia even though these sectors have strong competitiveness and good market potential. This is related to the ownership advantage of Korean manufacturing and the location advantage of ASEAN.

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The ownership advantages enjoyed by early movers connected to buyers in industrialized countries, as well as the mid-range technology that enabled production of low-priced, medium-quality goods, could not continue. In comparison with consumer electronics, semiconductors and telecommunications equipment have never faced deteriorating competitiveness, which means there is little reason to invest abroad. Furthermore, Southeast Asia’s location advantage is best served by labour-intensive industries. The future of Southeast Asia’s electronics industry is not bright. One of the recent trends in the international electronics industry indicates that competition is severe among a small number of brands with digital technology. Competition is able to introduce high-tech products to market, but with the low income levels in Southeast Asia, people cannot afford such expensive products. For example, the demand structure for CTVs is changing from CRT TVs to LCD TVs, but the effective demand for LCD TVs is in highincome countries rather than in Southeast Asia.18 The other trend is related to the rise of China. As China emerged as the factory of the world, especially in the electronics industry, ASEAN’s markets were crowded out. Considering its high dependence on the industry, ASEAN will be significantly affected by China’s rise. For the ASEAN economy to thrive, the electronics industry must continue to grow. In this regard, ASEAN has to attract foreign direct investment from countries such as Japan, Taiwan, and Korea. In order to induce FDI, ASEAN has to improve the investment environment, including in human resources development. In some time India will emerge as another economic power. ASEAN should try to play an important role in forming a production base between China and India. In doing so, the development of the parts-and-components industry should be emphasized. At the same time, development of indigenous enterprises is also important. ASEAN’s technology and the development of its supporting industry has been shaped by the current MNC-led electronics industry. Upgrading of the supporting industry is absolutely necessary for the ASEAN electronics industry.

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APPENDIX Abbreviations for Information and Communication technologies AV B/W TV CDMA CD-ROM CD-RW CPT CRT CTV DRAM DVD DVD-W DY GSP HVT IC IP LCD MWO NIEs NODE ODD OEM OLI OMS OTR PC PDP TDX-1 TFT-LCD VCR VMI

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– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Audio Visual B/W (black and white) TV Code Division Multiple Access Compact Disk-Read Only Memory Compact Disk-Read/Write Colour Picture Tube Cathode Ray Tube Colour Television Dynamic Random Access Memory Digital Versatile Disc Digital Versatile Disc-Write Depletion Yokes Generalized System of Preferences High Voltage Transformer Integrated Circuits Internet Protocol Liquid Crystal Display Microwave Oven Newly Industrializing Economies Non-Oil Domestic Export Optical Disk Drive Original Equipment Manufacturer Originating Line Information Optical Media Storage Over the Range Personal Computer Plasma Display Panel Time-division Digital Switching System Thin Film Transistor-Liquid Crystal Display Video Cassette Recorder Value Management Innovation

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NOTES 1. Capital stock is tangible fixed assets. 2. Motorola Korea’s webpage . 3. Korea’s input-output table shows that the export ratio of the electronics industry, and of exports/total domestic output was 50.8 per cent and 54.9 per cent respectively in 2003. The export ratio of the textile industry, the most important industry in the 1970s, decreased from 49.2 per cent in 2000 to 39.8 per cent in 2003. 4. Jakarta Post, 31 July 1996. 5. TSE’s senior officer’s comments (interview, December 2007). 6. Leony Aurora, “Korean Business: Late Start, Fast Growth”, Jakarta Post, 6 October 2007. 7. “The Samsung Way”, Business Week, 16 June 2003. 8. Interview with Lee Mun Bong, a former staff member of SEIN, Seoul, January 2008. He was head of sales division at SEIN for more than three years until March 2007. 9. Maeil Economic News Paper, 16 January 2006. 10. TSE senior officer’s comments (interview, December 2007). 11. For example, a supplier supplies 70–80 per cent of air-conditioner compressors to LG Electronics. He founded the company after he resigned from TSE. 12. Some buyers in the labour-intensive industries asked producers to move to ASEAN when production costs in Korea soared during the process of democratization. 13. SEPHIL, The Current Situation of SEPHIL, December 2007. 14. David Llorito, “Philippines Scoffs at China Electronics Threat”, Asia Times Online, 16 September 2006. 15. Leony Aurora, “Korean Business: Late Start, Fast Growth”, Jakarta Post, 6 October 2007. 16. Jakarta Post, 22 January 2008. 17. Hankook Ilbo, 20 September 2007. 18. Total demand for LCD TVs in ASEAN is only 700,000, while demand in Europe reached 6 million sets in 2007. REFERENCES Dunning, H. John. Explaining International Production. London: Unwin Hyman, 1988. ———. Multinational Enterprises and the Global Economy. Wokingham: AddisonWesley Publishing Company, 1993. Kim, Jong-Ki. “Changes in the Korean Electronics Industry Amid Changing Global Economic Conditions”. KIET Industrial Economy (December 2007): 33–47. Kim, Youngsoo. “Technological Capabilities and Samsung Electronics’ International Production Network in Asia”. BRIE. Working Paper 106, November 1997.

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Kiyoshi Kojima. Direct Foreign Investment: A Japanese Model of Multinational Business Operations. London: Croom Helm, 1978. ———. “Macroeconomic Versus International Business Approach to Direct Foreign Investment”. Hitotsubashi Journal of Economics 23 (1982): 1–19. Knickerbocker, F. Oligopolistic Reaction and Multinational Enterprise. Boston: Havard University, 1973. Krishnan, Rishikesha T. and K. Kumar. “Capturing Value in Global Markets: The Case of Samsung Electronics”. SCMS Journal of Indian Management (October– December 2005): 63–73. Kwon, Seung-Ho, Rhee Dong-Kee, and Suh Chung-Sok. “Globalization Strategies of South Korean Electronics Companies After the 1997 Asian Financial Crisis”. Asia Pacific Business Review 10, no. 3 (2004): 422–40. Kwon, Soon Woo. “Causes of Stagnating FDI in Korea” [in Korean]. CEO Information 385, 2003. Park, Bun Soon. “A Study on the Evolution of Korean Investment in ASEAN” [in Korean]. Ph.D. dissertation. Hankuk University of Foreign Studies, 1999. Samsung. Samsung Profile 2007, 2007. SEPHIL. The Current Situation of SEPHIL, December 2007. Sturgeon, Timothy J. and Richard K. Lester. “The New Global Supply Base: New Challenges for Local Suppliers in East Asia”. Global Production Networking and Technological Change in East Asia, edited by Shahid Yusuf, M. Anjum Altaf, and Kaoru Nabeshima.World Bank, 2004. Suh, Joonghae. “The Industrial Competitiveness of Korea’s IT Industry”. Paper presented at a joint conference of AKES, RCIE, and KDI. “Korea and the World Economy III”, 3–4 July 2004 . “The Samsung Way”. Business Week, 16 June 2003. Downloaded from . UNCTAD. A Case Study of the Electronics Industry in Thailand. New York and Geneva: United Nations, 2005.

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7

Korean Assistance to Southeast Asia Yul Kwon

1. Introduction Korea, as a country that achieved remarkable industrial growth out of a wartorn economy in the 1950s, owes much of its economic success during the past four decades to the assistance and support of the international community. Until the 1980s, Korea received development assistance worth over US$15 billion, which provided the country with strong momentum for rapid economic development. Its economy now ranks among the middle-level OECD countries, as the world’s twelfth economy in terms of GDP and trade volume. Korea has successfully transformed itself from an aid recipient to an emerging donor through rapid economic development with its outstanding economic and social performance. As a former beneficiary of development cooperation, Korea now acknowledges that its effort to extend ODA is in reciprocating what it received from the international community in the past. Currently, most of Korea’s official development assistance (ODA) is concentrated in the Asian region. In 2006, 60.5 per cent of bilateral ODA was disbursed to Asia and 24.2 per cent of bilateral grant aid was disbursed to Southeast Asia. This high level of concentration is partly due to the geographical and cultural proximity between Korea and the countries in the region.1 In particular, Korea has maintained close economic and diplomatic

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relationships with the Association of Southeast Asian Nations (ASEAN), which is one of the Korea’s important trade and investment partners. So, there are undoubtedly common interests and potentials for further cooperation between Korea and ASEAN.2 Since the 1997 financial crisis, Korea and ASEAN have launched a number of different regional initiatives, such as ASEAN-Korea FTA and ASEAN+3, etc. In particular, Korea has participated in the global trend of RTAs by concluding an FTA with ASEAN that entered into force in June 2007. Korea is also focusing on promoting development cooperation between the relatively well-off ASEAN members and the CLMV countries (Cambodia, Lao PDR, Myanmar, and Vietnam) to address a wide development gap within the region. In addition, Korea has shared its experience of economic development with ASEAN members and made efforts to help apply its experience to the closing of the development gap among Southeast Asian countries. In this regard, many projects are currently being implemented between Korea and ASEAN and they can be categorized as follows: grant projects, including IAIrelated projects, EDCF (Economic Development and Cooperation Fund) projects, projects under the framework of the ASEAN+3 Economic Ministers Meeting, and other cooperation projects. By sector, much of Korea’s development programme in the region has focused on human resources development (HRD), mostly through education and vocational training. ASEAN trainees are often invited to Korea to learn at first hand the development experience of Korea. In addition, Korea has been paying even greater attention to the promotion of cooperation in information technology and knowledge-based industries. This chapter aims to enhance the understanding of the role of Korean ODA in Southeast Asia by reviewing its trends and exploring the opportunities, challenges, and impacts in Southeast Asia. It will firstly provide an overview of Korea’s ODA policy toward ASEAN and then identify the main features of the recent development programme, including NGO activities in the region. This chapter will conclude by evaluating past performance and addressing future challenges of Korea’s ODA policy. Finally, it will finally make suggestions for the promotion of further cooperation between ASEAN and Korea. 2. Overview of Korea’s ODA Policy

2.1. History of Korea’s ODA Korea’s first official development assistance started in the mid-1960s when trainees were invited from developing countries to receive technical training.

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Until the mid-1970s, Korean Government implemented aid programmes in cooperation with international organizations, including UN agencies. Then in the 1980s, the Korean Government designed and implemented the International Development Exchange Programmes (IDEPs) to promote SouthSouth cooperation. However, a full-fledged ODA programme took place in the late 1980s as the two main ODA-related government bodies were established. The Economic Development Cooperation Fund (EDCF) was founded in 1987 to offer concessional loans to developing countries. The operation and management of the EDCF was entrusted to the Export-Import Bank of Korea (EXIM Bank) by the Ministry of Finance and Economy (MOFE). In April 1991, the Korea International Cooperation Agency (KOICA) was established under the Ministry of Foreign Affairs to provide grants and technical cooperation programmes to developing countries. Accordingly, the overall shape of Korea’s ODA system is similar to Japan’s, which puts Korea into a group of DAC members such as France, Germany, and Japan.3

2.2. Korea’s Aid Volume and Allocation Korea’s development assistance has been steadily growing; it was recorded at US$423.3 million in 2004 — a jump from US$100 million in the early 1990s. In 2005, Korea’s net ODA disbursement increased by 212 per cent compared to the 2004 level, reaching US$752.3 million as a result of strong growth with multilateral assistance. Multilateral assistance constituted 38 per cent of total ODA, amounting to US$289.9 million. The ODA/GNI ratio sharply increased to 0.096 per cent in 2005 from 0.062 per cent in 2004. See Tables 7.1 and 7.2.

Table 7.1 Official Development Assistance Provided by Korea (1987–2006) (unit: US$ million, %)

1987 1995 1998 2000 2001 2002 2003 2004 2005 2006 ODA total 23.5 116.0 182.7 212.1 • Bilateral 1.4 71.5 124.7 131.2 – Grant 1.4 50.1 37.2 47.8 – Loan (EDCF) – 21.4 87.5 83.4 • Multilateral 22.1 44.5 58 80.9 ODA/GNI (%) 0.018 0.026 0.058 0.047

264.7 171.5 53.0 118.6 93.1 0.063

278.8 206.8 66.7 140.1 72.0 0.051

365.9 245.2 145.5 99.7 120.7 0.060

423.3 330.8 212.1 118.7 92.6 0.062

752.3 463.3 318.0 145.3 289.0 0.096

Source: Ministry of Finance and Economy of Korea (2006).

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Table 7.2 ODA by Main Categories 2001–06 (Net Disbursement) (unit: US$ million, %)

ODA total • Bilateral ODA a. Grant Project and Programme Aid Technical Cooperation Emergency/Distress Relief Support to NGOs Administrative Costs Other Grants b. Loan (EDCF) • Multilateral ODA a. Grants and Capital Subscriptions UN Agencies World Bank Group Regional Development Bank Other Multilateral b. Concessional Lending ODA/GNI (%)

2001

2002

2003

2004

2005

2006

264.7 171.5 53 12.8 21.7 8.2 0.8 8.1 1.4 118.6 93.1 95.1 25.5 35 24.4 10.2 –2 0.063

278.8 206.8 66.7 21.6 30.2 3 1.4 9 1.5 140.1 72 85.1 21.5 34.5 19.5 9.8 –13.1 0.051

365.9 245.2 145.5 83.3 36.9 3 7 13 2.2 99.7 120.7 137.5 25.1 52.5 34.3 25.5 –16.7 0.06

423.3 330.8 212.1 123.8 53.8 12.9 2.2 17.5 1.9 118.7 92.6 102.6 21.6 44.2 28.3 8.5 –10 0.062

752.3 463.3 318 185 80.2 26.7 4.5 19.4 2.2 145.3 289 318 38.3 120.1 125.9 11.3 –6.6 0.096

455.3 376.1 259 81.6 116.8 24.4 5.3 25.3 5.6 117.1 79.2 111.7 42.86 0.71 53.9 14.1 –32.5 0.051

Source: Ministry of Finance and Economy of Korea (2006).

Bilateral assistance accounted for 61.6 per cent of total ODA, amounting to US$463.3 million in 2005. The grants portion was only 30 per cent during the 1995–2000 period but the figure sharply rose to 60 per cent in 2004. Bilateral grants exceeded the loan programme for three consecutive years on a net disbursement basis due to large grants made to Iraq and Afghanistan. The bilateral loan programme executed by EDCF, amounting to US$145.3 million, has also facilitated the development of economic and social infrastructure in developing countries. Most of the grants have been committed by the KOICA.4 Among bilateral grants, project aid and programme aid accounted for the largest share at 60 per cent in 2005. Technical cooperation (TC) followed with a slightly lower share of 21 per cent, yet played a very critical role. Technical cooperation is expected to continue in the future despite increased project-type cooperation. The TC programme mainly involves human resources, with such programmes as invitation of trainees and dispatch of experts.5 Korea’s spending on multilateral assistance increased by 212 per cent from the previous year as it acquired membership in the IDA in 2005.

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Contributions to the IDA and the IDB made up 70 per cent of multilateral assistance, amounting to US$119.7 million and US$81.2 million respectively. The Korean Government will continue its support to the Multilateral Debt Reduction Initiatives (MDRI), IDA, and the Asian Development Bank (ADB). It will also establish trust funds with the World Bank, IDB, ADB, and EBRD. As seen in Table 7.3, the Korean Government established e-Asia and Knowledge Partnership Fund out of an initial amount of US$20 million to the ADB in 2006. In addition, it will seek to continuously expand cooperation with UN development organizations. Here, Korea’s upcoming participation as a member of the Executive Board at both the UNDP and UNICEF from 2008 to 2010 is expected to provide valuable opportunities for development cooperation with the UN. Table 7.3 Korea’s Trust Fund by Multilateral Development Bank (unit: US$ million)

IDB World Bank ADB EBRD AfDB

Title of Fund

Agreements Years

Sector/Theme

Amounts

KPRF KPKF KSDF ICTDF PRSEDF e-Asia & KPF KTCF TACF KTCF KOAFEC

2005 2005 2005 2007 2007 2006 1993 2007 1999 2007

Poverty Reduction Knowledge Sharing SME ICT Poverty Reduction ICT Multi-sector ICT Multi-sector Economic Cooperation

50 50 40 15 15 20 0.6 1.5 2 5

Source: Ministry of Finance and Economy and the Export-Import Bank of Korea.

2.3. Geographical Distribution About 130 countries receive ODA from the Korean Government each year. In 2006, a major share of bilateral assistance was channelled to the Asian region (61.6 per cent); including Southeast Asia, other major recipient regions were Africa (12.8 per cent) and Latin America (6.6 per cent). At the country level, Iraq received 15.2 per cent of the bilateral ODA in 2006 and 54.2 per cent of the resources headed to the top ten recipients, including Indonesia, Cambodia, Vietnam, and Lao PDR (see Tables 7.4 and 7.5). By income group, 38.5 per cent of the bilateral assistance went to countries with a GNI per capita less than US$825. Specifically, the Least

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Table 7.4 Geographical Distribution of Bilateral Assistance (Gross Disbursement) (unit: US$ million, %)

2000 Africa Asia America Oceania Europe Bilateral Unallocated Bilateral, total

2001

2002

2003

2004

2005

2006

25.86 7.11 8.36 20.92 29.85 42.41 51.33 84.25 130.30 169.37 202.63 272.39 388.89 247.20 12.23 13.81 9.45 11.78 15.54 20.53 26.66 2.20 4.53 1.52 5.31 0.90 1.07 1.76 1.04 14.26 19.54 3.71 7.71 4.04 31.92 9.40 11.03 10.40 14.66 21.55 25.64 42.50 134.98 181.02 218.63 259.02 347.93 482.57 401.37

Source: Ministry of Foreign Affairs and Trade of Korea (2006).

Developed Countries (LDCs) received 24.5 per cent of the total bilateral assistance. Assistance to low- and middle-income countries with GNI per capita of less than US$3,255 took a 49.9 per cent share in 2006.

2.4. The Recent Development of Korea’s ODA Policy Korea has pursued a proactive policy for cooperation with developing countries in respect to the quantity and quality of ODA. In recent years, the Korean Government decided to double its aid by 2009. At the same time, in order to establish an efficient and comprehensive aid policy, it prepared a general ODA improvement plan in December 2005 that presents Korea’s ten-year ODA vision and blueprint for management system reform. The plan contains three objectives: to contribute to poverty eradication; to support the sustainable development of developing countries; and to improve conditions for Korea’s advancements to developing countries. Targeting 2015, the year of MDG completion, the plan is designed to identify an overall strategy of Korean ODA reform, including the mid- to long-term ODA plan and to establish an efficient ODA management system at the national level. The plan is specifically focused on establishing Korea’s own development cooperation model based on its development experience and comparative advantages. The plan sharpens its vision by elaborating priority sectors such as knowledge transfer, poverty eradication, human resource development, social and economic infrastructure, and IT. In March 2006, the International Development Cooperation Committee (IDCC) was launched. Consisting of fifteen ministers together with the president of KOICA, the president of Korea EXIM Bank in charge of EDCF,

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Top 5 recipients Sri Lanka Panama Pakistan Philippines Papua 3.28 New Guinea

72 8.61 8.09 6.42 3.87

28.34 23.59 22.71 18.9 16.69 40.57 30.17 21.12 19.92 19.06 72.15 34.44 28.02 23.88 23.78

2005

Top 5 recipients Indonesia Vietnam Cambodia Ghana

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Bilateral, 134.98 total Bilateral, 181.02 total Bilateral, 218.63 total

Source: Ministry of Finance and Economy of Korea (2006).

Bilateral, total

Bilateral, 259.02 total

Bilateral, 347.93 total

Top 5 recipients Kenya Cambodia Vietnam Lao PDR

Iraq Sri Lanka Bangladesh Indonesia Albania

2006

Bilateral, 482.57 total

401.37

Top 10 343.6 recipients 215.72

13.47

144.9 16.25 13.83 13.72 13.55

57.09 26.99 22.51 21.37 16.94

(unit: US$ million)

11.65 China

262.5 19.29 18.69 17.77 13.7

Iraq 149.54 Sri Lanka 33.21 Bangladesh 32.83 Yemen 24.1 China 22.82

8.26 Kenya

Top 5 recipients 182.28 Afghanistan 21.54 Indonesia 18.6 Ghana 15.22 Philippines 9.35

Iraq Vietnam China Cambodia Bangladesh

2004

7.54 Sri Lanka

Top 5 recipients 130.84 Vietnam 13.71 Ghana 12.38 Cambodia 10.76 Bangladesh 10.58

Iraq Indonesia Afghanistan Sri Lanka China

2003

7.41 Myanmar

Top 5 recipients 110.23 Indonesia 14.67 Sri Lanka 13.57 Kazakhstan 10.91 Myanmar 7.45

China Vietnam Cambodia Croatia Mongolia

4 Philippines

109.4 12.18 10.46 4.43 4.24

39.08 23.14 17.59 16.27 13.32

2002

Top 10 Top 10 Top 10 Top 10 Top 10 Top 10 recipients 102.27 recipients 144.71 recipients 164.24 recipients 185.81 recipients 255.25 recipients

Philippines

Top 5 recipients Angola Panama Bangladesh Indonesia

Vietnam Indonesia China Uzbekistan Croatia

Uzbekistan Vietnam China Tunisia Sri Lanka

18.49 16.03 14.62 12.02 10.84

2001

2000

Table 7.5 Top Ten Recipients of Bilateral ODA (Gross Disbursement)

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six civilian members, and others, the committee headed by the prime minister plays a key role in coordinating Korea’s ODA policy. Regarding operation system reform, the committee has prepared a mid-term ODA plan as well as country programmes for the core recipients to reinforce cooperation and coordination among the related agencies. Furthermore, the Korean Government planned to conduct a strategic evaluation to improve the aid accountability and enforce the effective monitoring and evaluation system. This can be considered as an important step to strengthen its aid effectiveness in line with the Paris Declaration. The government has also established the Country Assistance Strategy (CAS), which includes loans and grants for eighteen countries on the principles of “focusing and concentration” for effective delivery of aid resources. CAS, closely linked with the Mid-term ODA Strategy and annual schemes, is expected to provide a guideline for project/programme design and evaluation. As priority partners, seven countries in Asia, four countries in Africa, three countries in Latin America, and two countries each in the Middle East, Central Asia, and Eastern Europe were selected, considering various factors such as international development goals, development needs of partner countries, bilateral relations, attitudes as well as capacities of aid management in partner countries. As seen in Table 7.6, Vietnam, Indonesia, the Philippines, and Cambodia in Southeast Asia were selected as mid-term strategic partner countries. CAS formulated development assistance strategies by region and by country through close analysis of the needs of the aid recipient and the optimal assistance Table 7.6 Mid-term Strategic Partner Countries

Region

Country (total of 18 countries)

Asia (7 countries)

Vietnam, Indonesia, Philippines, Cambodia, Sri Lanka, Bangladesh, Pakistan

Africa (4 countries)

Egypt, Tanzania, Senegal, Angola

Central and South America (3 countries)

Guatemala, Peru, Colombia

Middle East (2 countries)

Iraq, Yemen

Central Asia, Eastern Europe, and CIS (2 countries)

Uzbekistan, Kazakhstan

Source: The Prime Minister Office, IDCC (2005).

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methods based on Korea’s comparative advantages. CAS evolves according to the national development strategies of partner countries and ODA strategies of donor countries identified through meetings among donor countries and bilateral policy dialogues. 3. Main Features of Korea’s ODA in Southeast Asia

3.1. Trends of Korea’s ODA in Southeast Asia Development issues in Southeast Asia encompass various fields, including poverty, health, the environment, digital divide, energy, and regional integration. As one example, Table 7.7 shows that the region comprising ASEAN is characterized by wide development gaps.

Table 7.7 Poverty Rates by ASEAN Members

Cambodia Lao PDR Myanmar Vietnam Brunei Indonesia Malaysia Philippines Singapore Thailand

Per Capita (2006)

$1-a-day (%)

$2-a-day (%)

HDI (2004)

Gini Coefficient

436.2 572.1 208.6 723.9 30,928.90 1,640.60 5,610.70 1,347.70 29,499.60 3,166.40

18.5(2004) 28.8(2002) – 8.4(2004) – 7.7(2002) 0.0(2004) 13.2(2003) – 0.0(2002)

76.5(2004) 74.4(2002) – 43.2(2004) – 52.9(2002) 9.8(2004) 43.6(2003) – 25.8(2002)

129 133 130 109 34 108 61 84 25 74

0.381(2004) 0.347(2002) – 0.371(2004) – 0.343(2002) 0.403(2004) 0.440(2003) 0.425(1998) 0.420(2002)

Sources: Asian Development Bank (2007) and United Nations Development Programme (2006).

A large share of Korea’s aid has been directed towards ASEAN members to strengthen development cooperation as a top priority (see Figure 7.1). In 1987–2006, ASEAN was the largest destination of Korea’s ODA in cumulative terms — US$1.13 billion was disbursed to the region. As far as grant projects are concerned, the Korean Government has been conducting the Korea-ASEAN development cooperation programme since the early 1990s and will improve current development-cooperation relations into a “development cooperation partnership”, taking into account the growing importance of Korea-ASEAN ties.

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Figure 7.1 Trend of Korea’s Grant toward ASEAN Members (1992–2006)

Source: KOICA Annual Report (2006).

At the 4th ASEAN Informal Summit held in 2000 in Singapore, ASEAN and Korea identified areas of information technology, human resource development, cultural exchange, medical assistance, and Mekong Basin development cooperation as priority areas for cooperation. Since then, ASEANKorea development cooperation has been expanded to cover the areas of trade, investment, tourism, science and technology, and the environment. Cooperation in the areas of human resource development, people-to-people exchange, and bridging the development gaps has been given due attention. A number of ASEAN-Korea development cooperation projects have been implemented and supported by the ASEAN-Korea Special Cooperation Fund (SCF) and Future Oriented Cooperation Project (FOCP) Fund. From 2000 to 2004, 51 projects were implemented, 11 projects are ongoing, and 21 projects are pending. From 1990 to 2003, Korea contributed about US$17.7 million and US$7 million to the SCF and FOCP respectively. People-to-people contact continues to be an area of importance in ASEANKorea cooperation. Exchange programmes funded by the FOCP are held for cultural experts, government officials, media personnel, academic, and youth.

3.2. Korea’s Grant Aid to ASEAN Members KOICA is responsible for administering the Korean Government’s grant aid and technical cooperation programme. It maintains close relations with

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Korean embassies abroad. It has twenty-two representative offices in twentyone partner countries that play a critical role in implementing KOICA’s aid programmes at the field level. KOICA’s grant aid programmes include the following: invitation of trainees; dispatch of experts and volunteers; research for development studies; emergency and distress relief activities; and provision of commodities, capital, and facilities. Also prescribed in the Act are programmes to support civil society organizations, cooperation with multilateral organizations, research and policy planning as well as projects entrusted by the Korean Government. As of 2007, KOICA had 213 employees with 20 per cent of its staff dispatched to overseas offices. Its headquarters have three policy departments and eight operational divisions by sector (i.e., Health, Education, Environment and Gender, Information and Communication Technology, Rural Development, Governance, Industry and Energy, and Disaster Relief and Reconstruction). See Figure 7.2. The operational divisions are responsible for conducting feasibility studies, handling grant agreements, dispatching experts and overseas volunteers, and supervising the overall implementation of KOICA’s programmes. As of 2007, 94.1 per cent of KOICA’s total budget was dedicated to implementing assistance programmes, while administrative expenses accounted for 5.9 per cent of the total budget. To design and implement effective aid programmes, KOICA continuously collects information on the aid demands of Southeast Asian partner countries by

Figure 7.2 KOICA’s Sectoral Priority in Asia (2006)

Source: KOICA Annual Report (2006).

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8,863 21.5

– 1,690 130 850 5 1,148 241 437 890 3,472

Note: * Percentage of KOICA’s total budget. Source: KOICA Annual Report (2006).

Brunei Indonesia Malaysia Philippines Singapore Thailand Cambodia Lao PDR Myanmar Vietnam Total (ASEAN-10) Percentage (%)

1996

9,398 21

38 2,162 144 655 – 730 1,803 825 379 2,662

1997 16 1,903 103 539 4 379 297 297 466 6,193

1999 49 1,984 259 2,224 – 651 637 629 730 4,880

2000 10 1,939 128 3,038 – 599 1,057 681 651 4,814

2001 18.0 2,544 83 1,729 – 869 1,467 1,262 1,406 4,700

2002 26 2,613 139 5,964 – 904 2,341 2,048 1,460 3,515

2003 21 6,545 120 6,366 – 1,990 3,341 3,379 2,045 9,789

2004

2006

19 – 9,305 17,650 122 40 5,059 6,644 0.2 – 3,150 1,349 5,813 6,328 2,119 4,243 3,407 2,794 9,290 7,873

2005

(unit: US$ thousand)

7,147 10,197 12,043 12,917 14,078 19,010 33,596 38,284 46,921 23.2 33.1 31.4 27.5 23 15.3 18.9 18.2 24.2

13 1,526 74 509 3 827 301 216 551 3,127

1998

Table 7.8 KOICA’s Grant Aids by Country (1996–2006)

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holding policy dialogues with various stakeholders and/or conducting surveys through Korean embassies and six overseas offices in Cambodia, Lao PDR, Indonesia, the Philippines, Thailand, and Vietnam. Based on such information, KOICA then designs detailed project plans and implements the projects directly or through outsourcing. Regarding cooperation with Southeast Asian partners, KOICA administered US$46.9 million, or 24.2 per cent of its total budget, an increase of 22.5 per cent from US$38.3 million in 2005. In 2006, most projects were concentrated in Southeast Asia, with Indonesia receiving the largest volume of assistance (US$17.65 million), followed by Vietnam, the Philippines, and Cambodia (see Table 7.8). As for participation by civil society, the assistance from KOICA consists of direct assistance for NGO projects, the dispatch of volunteers through Korean NGOs, and programmes to strengthen the capacity of NGOs. In 2007, assistance to NGOs reached US$5.56 million, with 34 NGOs covering 42 projects in 19 countries and 192 NGO volunteers dispatched to 32 countries (see Table 7.9). In terms of regional distribution, Asia receives the most support with 46.8 per cent of the partnership assistance; the Middle East, 25 per cent; and Africa, 10.3 per cent. Korea is effectively improving ODA operations by focusing on the least developed countries in Africa and the regions that governmental assistance programmes may not reach. Programmes for refugee assistance and emergency relief have further expanded the partnership between the government and NGOs. The PublicPrivate Assistance Partnership Forum was formed to provide active relief assistance in the aftermath the Indian Ocean Tsunami. Partnerships with NGOs are concentrated on Basic Human Needs (BHN) areas, including famine, health, elementary education, water supply, and housing improvement;

Table 7.9 KOICA Operations through NGOs

Category Amount (US$ thousand) Countries (no.) Organizations (no.) Operations (no.) NGO overseas volunteers (no.) KOICA’s total budget (%)

2004

2005

2006

2007

919 14 21 21 33 0.5

2,286 19 25 41 35 1.8

4,169 17 24 39 78 2.2

5,563 19 34 42 192 2.4

Source: Ministry of Foreign Affairs and Trade of Korea (2007).

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they support emergency relief and reconstruction in regions affected by natural disasters and damage due to conflicts. As part of its efforts to support civil organizations, KOICA will provide capacity-building programmes for NGOs and improve monitoring and evaluation systems to enhance programme efficiency. In this vein, it also made a plan to increase the percentage of matching funds, from the current level of 50 per cent in proportion to the capacity development of NGOs. Furthermore, in cooperation with the Korean NGO Council for Overseas Cooperation established in 1997, KOICA has held photographic exhibitions, symposia, and workshops to help develop the capacity of NGOs and to promote public awareness. In the near future, KOICA plans to expand the range of assistance partners to international civil organizations and regional NGOs in Southeast Asian developing countries, to diversify programme development methods and to promote specialization of NGOs by providing customized support matching their comparative advantage.

3.3. Korea’s EDCF Projects by Country Since its establishment in July 1987, the Korea EXIM Bank has been entrusted by the Ministry of Finance and Economy (MOFE) with the operation and administration of EDCF. MOFE formulates the policies and institutions related to the EDCF through the Fund Management Council, coordinates discussions among the related ministries regarding EDCF programmes through the Working-level Consultation (fifteen Ministries and execution agencies), and manages and supervises the EXIM’s execution of EDCF. MOFE also supports aid programmes on a grant basis through, for instance, providing technical assistance facilities for feasibility studies before the implementation of EDCF assistance and consultations on establishing development plans for developing countries. For multilateral aid, the International Financial Institutions Division of the International Finance Bureau at MOFE, acting as a governor at the MDBs, formulates policies and makes contributions and subscriptions and also acts as a channel for cooperation with the MDBs. Participating in the policy-making process on concessional loans, MOFE, in charge of economic cooperation and international finance, makes a concentrated effort for the efficient utilization of ODA. Types of loan include Development Project Loan, Equipment Loan, Two-step Loan, and Project Preparation Loan. The first two make up the majority of loans given out. As of the end of 2007, sixty-five full-time employees of the Economic Cooperation Headquarters are in charge of EDCF operation and administration, five of which are EDCF correspondents. The Economic

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Cooperation Headquarters at the Korea EXIM Bank consists of four offices: the Economic Cooperation Planning Office for planning and assessment of fund programmes; two offices for loan operations including programme development, execution, and post-implementation management; and the Economic Cooperation Development Office for procurement, technical review, and cooperation with MDB. The Korea EXIM Bank integrated its operation of human resources in the EDCF division and the public export credit division and thus utilizes its management knowledge of international transactions acquired through imports and exports and foreign investment financing. Aid recipient countries are determined by the Minister of MOFE through deliberation by the Fund Management Council in consideration of GNI per capita and the level of industrialization as defined by OECD/ DAC. For both grant aid and concessional loans (EDCF), ASEAN members received more than a third of Korea’s official development assistance (ODA). As shown in Table 7.10, ASEAN members took a 32.7 per cent share of the soft loans in cumulative terms, amounting to US$897.1 million. For Southeast Asian countries in the top ten list of partners, EDCF spent 28.9 per cent of its total project budget, with 9.8 per cent of the total budget allocated for Indonesia. 4. Korea’s Increasing Role in Poverty Reduction in Southeast Asia Korea is a prime example of a country that successfully overcame poverty in a short period through development assistance. The valuable experience Korea gained in reducing poverty through ODA is unprecedented. Korea is Table 7.10 EDCF to ASEAN Members (1987–2006)

Rank 1 3 6 7 12 28

Country

Case

Indonesia Vietnam Cambodia Philippines Myanmar Lao PDR Total

13 10 6 8 6 1 44

Amount (US$ million)

Percentage*

271.70 227.96 159.29 130.78 84.70 22.70 897.13

9.8 8.1 6.4 4.6 2.9 0.9 32.7

Note: * Percentage of EDCF’s total budget. Source: EDCF Annual Report (2006).

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thus ready to share its own experience of development with developing countries in Southeast Asia. Korea’s development experience has been internationally recognized as a leading practice of good governance, the lack of which is the most critical impediment for the development of Southeast Asian countries.6 Despite the possible risks when applying one’s own development policy to other developing countries facing different initial conditions, the Korean experience could be a valuable reference for developing countries in Southeast Asia in some areas. Since developing countries in Southeast Asia are usually in short supply of financing for their domestic development, the promotion of trade and inducement of foreign investment can often be seen as effective responses to obstacles that all developing countries must overcome. Korean ODA could thus facilitate the process of setting up an enabling environment for the promotion of trade and foreign investment in Southeast Asian countries, by assisting capacity-building in areas such as economic policy, institution building, education, and training. Korea has already played an important role in capacity-building and human resource development (HRD). As part of such efforts, Korea has been conducting a variety of projects such as building training institutions, providing educational equipment, and technical cooperation. Korea, as an IT industry leader, has recently been participating in regional efforts to narrow the digital divides in Southeast Asian countries through building IT centres, transferring IT technology, and consulting on related policies. The most effective method of assistance that an emerging donor with relatively limited resources can provide would be technical cooperation focused on knowledge transfer. The technical assistance rendered in the establishment of the stock exchange market in Vietnam is a good example of capacitybuilding as well as knowledge transfer. The Korean Government launched a project to assist the establishment of the stock exchange market in Vietnam and provided financial support of $1.6 million in three instalments between 1996 and 2002. The project supported the Vietnamese Government’s efforts to adopt a market economy and achieve industrial growth and contributed to the improvement of economic ties between the two nations. HRD has also been regarded as one of Korea’s comparative advantages. Support to developing countries in the area of HRD was provided through inviting trainees, dispatching experts, and building vocational training centres. In addition, health care and education services were provided to fulfil basic human needs and offer a social safety net. Particularly, education is a crucial driving force for long-term development in the poor countries of Southeast Asia — education stretches the potential of nations and builds capacity in

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tackling important issues such as poverty reduction, industrial development, regional development, and organizational efficiency of public offices. In this regard, Korea has been providing various technical cooperation projects, such as building educational institutions, providing equipment, developing teaching materials and curriculum, as well as training teachers. 5. Conclusion: Challenges and Opportunities Korea’s aid operation lags far behind those of other DAC member countries with little domestic support from the public. Under these circumstances, Korea faces a formidable task in meeting the high standards set by other major donor countries in terms of both quantity and quality. As the world’s twelfth largest economy, Korea is already a larger net donor than five DAC members in 2005; it was ranked the eighteenth largest donor among countries that provided preliminary data to OECD. According to the DAC, Korea would become the world’s fourteenth largest donor if the Korean Government met its target of 0.25 per cent by 2015.7 This will imply an estimated programme of around US$2.8 billion. If the DAC members meet their commitments of 0.7 per cent of GNI by 2015, however, Korea’s ODA/GNI will still lag far behind. In order to be comparable to DAC members, Korea’s ODA budget needs to increase dramatically. The Korean Government has been taking steps to join the Development Assistance Committee (DAC) by 2010 in order to improve its capacity for ODA management and to promote greater harmonization of aid policies with other advanced countries. The Korean Ministry of Foreign Affairs and Trade (MOFAT) first publicly announced that it would pursue preparations for joining the DAC at the Development Assistance High Level Meeting at the OECD in April 2006.8 However, it faces a tough budget issue due to the aid to North Korea. The Korean Government provided US$432.6 million, including US$216.8 million of grants to North Korea in 2005. This burden on the budget might crowd out Korea’s net ODA disbursements to other developing countries. At present, aid to the DPRK is not counted as total ODA because North Korea is technically regarded as a territory of ROK according to the Constitution. In terms of quality, Korea has a long way to go. About 80 per cent of Korea’s bilateral aid is tied and the overall grant level is relatively low. This is the area in which Korea needs to show the greatest improvement as soon as possible in order to support international targets for development financing. Korea will need gradually to untie its aid while improving the financial terms of its assistance according to the recommendations from DAC.

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In addition, Korea provides a relatively high proportion of bilateral loans compared to DAC members. This trend will be continued until 2010, according to the mid-term financial operation plan. Loans are an appropriate aid type for emerging donors with insufficient financial resources for two reasons. First, as loans are revolving funds, they can be provided to more beneficiaries as long as they are repaid. Second, aid in the form of loans may prevent moral hazard for recipients. But even with these advantages, Korea needs to increase the portion of grant aids especially to LDCs in the region. The Korean Government is currently reviewing its ODA policy and practices to enhance their effectiveness and to cope with the challenges it will face as its ODA increases significantly in the coming years. The first step is to substantially reform the ODA management system to improve aid effectiveness in Southeast Asia. Also, Korea’s ODA policy will focus on strengthening CLMV capacity in designing and managing poverty reduction strategies under an aid coordination mechanism. The recent initiatives of the Korean Government to implement development assistance with a strong regional focus should give us some perspectives on the future.9 After the 1997 financial crisis, Korea actively participated in the ASEAN+3 Economic Ministers Meetings, proposing three ongoing cooperation projects: the Conformity Assessment Development Programme in Industrial Standards, the ASEAN+3 SMEs Network, and the East Asia Special Cooperation Initiative. Korea has also played a positive role in the projects proposed by other countries. Korea’s constructive role in “Strengthening the Competitiveness of ASEAN SMEs”, proposed by Malaysia and Myanmar, is an example.10 Recognizing that the establishment of a DB centre is essential for creating business opportunities and for enhancing bilateral trade and investment relations, the Korean Government has made a continuous effort to establish and elaborate the ASEAN+3 SMEs Network. In particular, the Joint Declaration on Comprehensive Cooperation Partnership between ASEAN and Korea, concluded in Vientiane in November 2004, is an important testimony to the fact that this substantial bilateral relationship has garnered critical momentum. Under the framework of the ASEAN-Korea FTA, the Korean Government is establishing an institution known as the ASEAN-Korea Centre to promote trade and investment linkages and facilitate business opportunities between them. The Centre will facilitate technical cooperation, including the transfer of technology, and support initiatives and programmes related to narrowing the development gap in ASEAN. Korea now realizes that it is its turn to give back and share its experience and knowledge with ASEAN to contribute to the regional partnership for

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sustainable development. Korea needs to reinforce and explore the cooperative programmes targeting regional cooperation with ASEAN, especially at a time when the process of ASEAN integration is being highlighted. Furthermore, reflecting ASEAN’s needs and interests in the initial stages of designing development projects will serve the mutual interests of Korea and ASEAN and help pursue strategic cooperation. NOTES 1. Ministry of Finance and Economy and the Export-Import Bank of Korea (2006), p. 37. 2. Le Dinh Tinh (2007), p. 102. 3. Refer to OECD/DAC, DAC Evaluation Network Mini-survey Summary of Member Responses (2006), p. 43, and M. Roeskau, “Development Cooperation: Korea’s New Role in the 21st Century”, in Proceedings of Conference in Commemoration of the 10th Anniversary of Kora’s Accession to the OECD (Seoul, 2006), p. 116. 4. The share of KOICA in bilateral grants gradually decreased from 88.8 per cent in 2001 to 82.3 per cent in 2004. 5. Most TC programmes mainly involve human resources such as the invitation of trainees and the dispatch of experts. 6. See Park Sukbum, “The Recent State of Korea’s ODA Policy”, Proceedings of Conference in Commemoration of the 10th Anniversary of Korea’s Accession to the OECD, p. 161. 7. Roeskau, “Development Cooperation”, p. 117. 8. See Park, “The Recent State of Korea’s ODA Policy”, p. 163. 9. The ASEAN Vision 2020, adopted by the ASEAN Leaders in Kuala Lumpur in 1997, resolved to promote equitable economic development and to reduce poverty and economic disparities in the ASEAN region. This policy mandate was reiterated in the Ha Noi Plan of Action of 1998 and the Ha Noi Declaration on Narrowing the Development Gap for Closer ASEAN Integration of 2001. 10. With regard to the “Conformity Assessment Development Program in Industrial Standards”, the Korean Agency for Technology and Standards (KATS) conducted a training programme on standardization and conformity assessment. The training programme will contribute to enhancing cooperation among the ASEAN+3 member countries and to building the infrastructure for the further industrial development of ASEAN member countries. REFERENCES ADB. Building on Success: A Strategic Framework for the Next Ten Years of the Greater Mekong Subregion Economic Cooperation Program, 2002. ———. Key indicators of Developing Asian and Pacific Countries, 2007.

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Alesina, A. and D. Dollar. “Who Gives Foreign Aid to Whom and Why?” Journal of Economic Growth 5 (2000): 33–63. ASEAN Secretariat. ASEAN: Narrowing the Development Gap, 2005. ———. ASEAN Statistical Yearbook 2006, 2006. Bergsten, F. “Toward a Tripartite World, East Asian Regionalism”. Economist, 15 July 2000. Cassen, Robert. Does Aid Work. Oxford: Oxford University Press, 1985. Collier, P. and D. Dollar. “Aid Allocation and Poverty Reduction”. European Economic Review 46 (2002): 1475–500. Dollar, D. and V. Levin. “The Increasing Selectivity of Foreign Aid: 1984–2002”. World Bank Policy Research Working Paper 3299. World Bank, 2004. FASID. The User Guide to Log-frame Evaluation Application Design. Tokyo, 2005. Gupta, Kanhaya L. Foreign Aid: New Perspectives. Boston: Kluwer Academic Publishers, 1999. Jang, Hyunsik. “Korean Type International Cooperation: Its Meaning and Directions” [in Korean]. Joint Symposium’s Proceedings of APLC and KOICA. Chuncheon: Kangwon National University, 2006. KOICA. Annual Report 2006. Seoul, 2006. Korean Government. Millennium Development Goals: Progress Report. Seoul, 2005. Korean Government and the OECD. Proceeding of Conference in Commemoration of the 10th Anniversary of Korea’s Accession to the OECD. Seoul, 2006. Kwon, Yul. Operational Framework of Official Development Assistance in Korea: Issues and Solutions for the Future [in Korean]. KIEP Survey Report 95-05, 1995. ———. Korea’s Official Development Assistance Policy: Challenges and Prospects [in Korean], edited by Lee Chang-Jae, et al. KIEP Policy Paper, 2000. ———. A Study on the Poverty Reduction Strategy of Southeast Asian Countries [in Korean]. KOICA Analysis 04-66, 2004. ———. “Korea’s ODA Reform: Monitoring and Evaluation for Results” [in Korean]. Joint Symposium’s Proceedings of APLC and KOICA. Chuncheon: Kangwon National University, 2006. ———., et al. Korea’s Official Development Assistance Policy: Its Challenges [in Korean]. KIEP Policy Paper 06-03, 2006. Maizels, A. and M.K. Nissanke. “Motivations for Aid to Developing Countries”. World Development 12, no. 9 (1984): 879–900. McGillivray, M. “Descriptive and Prescriptive Analyses of Aid Allocation: Approaches, Issues, and Consequences”. International Review of Economics and Finance 13 (2003b): 275–92. Ministry of Finance and Economy and the Export-Import Bank of Korea. EDCF Annual Report 2005. Seoul, 2006. ———. Korea’s ODA in 2005 [in Korean]. Seoul, 2006. Nishigaki, Akira and Shimomura Yasutami. The Economics of Development Assistance. Tokyo, 1999.

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Noel, A. and J.-P. Therien. “From Domestic to International Justice: The Welfare State and Foreign Aid”. International Organization 49, no. 3 (1995): 523–53. OECD/DAC. Harmonising Donor Practices for Effective Aid Delivery, 2003. ———. Managing Aid: Practices of DAC Member Countries, 2005. ———. DAC Evaluation Network Mini-survey Summary of Member Responses, 2006. Park, Sukbum. “The Recent State of Korea’s ODA Policy”. Proceedings of Conference in Commemoration of the 10th Anniversary of Korea’s Accession to the OECD. Seoul, 2006. Prime Minister’s Office of Korea. A General ODA Improvement Plan [in Korean], 2005. Roeskau, M. “Development Cooperation: Korea’s New Role in the 21st Century”. Proceedings of Conference in Commemoration of the 10th Anniversary of Korea’s Accession to the OECD. Seoul, 2006. Round, J.I. and M. Odedokun. “Aid Effort and its Determinants”. International Review of Economics and Finance 13 (2004): 293–309. Sachs, Jeffrey D. “The Development Challenge”. Foreign Affairs 84, no 2 (2005): 78–90. Schraeder, P.J., S.W. Hook, and B. Taylor. “Clarifying the Foreign Aid Puzzle: A Comparison of American, Japanese, French, and Swedish Aid Flows”. World Politics 50 (1998): 294–323. SIDA. Looking Back, Moving Forward. Sida Evaluation Manual, 2004. ———. SIDA Annual Report, 2005. Tinh, Le Dinh. “ASEAN-Korea Co-operation in the Development of New ASEAN members”. In ASEAN-Korea Relations: Security, Trade and Community Building, edited by Ho Khai Leong. Singapore: Institute of Southeast Asian Studies, 2007. UN. In Larger Freedom: Towards Development, Security, and Human Rights for All, 2005. UNDP. Handbook on Monitoring and Evaluation for Results. New York, 2002. ———. Human Development Report. New York, 2006. Vaughn, Bruce. China-Southeast Asia Relations: Trends, Issues, and Implications for the United States. CRS Report for Congress, 8 February 2005. World Bank. World Development Report 2005: A Better Investment Climate for Everyone. Washington, D.C.: World Bank and Oxford University Press, 2004. ———. World Development Indicators 2005 (CD-Rom), 2005.

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8

Korean Development Model: Lessons for Southeast Asia Seok Choon Lew and Hye Suk Wang

1. Introduction The 1990s saw an explosion of works on the fast-growing economies of East and Southeast Asia, by individual scholars as well as international development institutions. Influential books, by Amsden (1989) and Wade (1990) as well as by Johnson (1982), have explored the distinctive nature of the East Asian developmental state, especially the role of government in determining the allocation of resources to particular industries, in building industrial infrastructures through public firms, and in developing the educational system. The widely discussed report published by the World Bank (1993) on the East Asian “miracle” endeavoured to draw lessons, not just from the experience of Japan, South Korea, and Taiwan, but also from four fast-growing economies in Southeast Asia — Singapore, Indonesia, Malaysia, and Thailand. They all point out that high-performing Asian economies (HPAEs) are the only economies that achieve high growth and diminish inequality at the same time. Most of literatures usually consider the region as economically integrated, coherent, and homogeneous. Terms such as “Asia-Pacific”, “Pacific Asia”, “East Asia”, “Asian Miracle”, “Yen Bloc”, “flying geese”, “tigers”, “dragons”, and so on have tended to reflect and encourage this perception. However,

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this perception is far from the truth: the countries of the region have little in common in terms of their nature, quality, and effectiveness of each development path. For sure, the World Bank differentiates the first-tier, newly industrializing countries such as Taiwan and South Korea from the second-tier, newly industrializing economies (Indonesia, Malaysia, and Thailand). The World Bank stresses that, despite differences in their initial condition and industrializing period, the miracle in both regions would not have been possible but for market forces and government intervention with marketfriendly industrial policies. However, even little dragons, as the first group is called, show varied degrees of state intervention and various industrial policies and strategies for catching up. Shin and Chang (2003) insist that the states in Japan and South Korea played the role of market-substituting while other dragons, Singapore and Hong Kong, pursued the market-complementing strategy.1 Regarding the historical role and type of government, they also insist that even the Korean experience can be differentiated from the Japanese case. In the midst of this lack of agreement about how the economic development in the region came about, this chapter tries to spell out the crucial aspects of Korean economic development. The existing literature on the Korean developmental state show their limits in focusing on the economic institutions and policies. This perspective is doomed to fail in explaining why some underdeveloped countries, in pursuing a development strategy similar to the Korean one, could not catch up. To answer this puzzle, this chapter highlights hidden aspects of Korean development — behind the scenes, at the level where social milieu comes into operation (Platteau 1994a, 1994b). In particular, this chapter focuses on the relationship between the strong state and strong society to explain how such autonomous governance was created to penetrate the revitalized society and result in synergy for development (Evans 1995; Woolcock 1998). This is not to say that initial conditions such as economic and political institutions do not matter, but institutional arrangements can be a result of cooperation between the state and society (Putnam 1993; Evans 1996). Sound strategic prescriptions may be copied, but they cannot work alienated from their social and cultural contexts (Chang 2007; Rodrik 2007). However, some would take a dim view of the viability and sustainability of the Korean development model in the age of globalization. Actually, as the Asian financial crisis hit the Korea economy in 1997, this model was blamed for the fundamental vulnerability of the economy to systematic crises and risks (Krugman 1998). However, others question this prevailing critique

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(Chang 2006; Lew 2000b). They insist that the real nature of the financial crisis in Korea was contagion from the Southeast Asian crisis and that the Korean economy is fundamentally sound. This chapter, championing the latter view tries to argue that the crisis did not result from the continuation of the developmental state model, but was the result of its demise. Further, it will show that the developmental state model is still required for the second stage of catching up in the age of globalization. To claim that the developmental state model is necessary for the economic development is one thing; to claim that the Southeast Asian economies should follow and emulate it is another. There exist too many differences between the two regions. With regard to the replicability of the Korean developmental model, this chapter will compare the two regions and identify societal resources in Southeast Asia that might be utilized as a positive factor for the region’s own development recipe. 2. The Developmental State Model in Korea

2.1. Economic Dimension There exist many studies on how economically rational and technically expedient the economic policies that Korea selected and pursued were (Amsden 1989; Johnson 1982; Wade 1990; Woo-Cumings 1998; World Bank 1993; Shin and Chang 2003). They stress the important role of the government’s strategic industrial policies and state interventions with financial support and discipline. However, the evaluations of the role of the state and the industrial policies taken by the Korean Government vary from market-enhancing and, market-friendly to market-substituting. Their differing definitions on the mode of state intervention show how deeply the state intervened in the market and the private sector. Some take the Korean case as a textbook study for economic development through strategic participation in the international economy with free-market and free-trade policies, namely, the kinds of policies and institutions that constitute the Anglo-Saxon model: this represents the market-enhancing and the market-friendly view (Balassa et al. 1982; World Bank 1991, 1993; Aoki, Kim, and Okuno-Fujiwara 1997). If this interpretation is adopted, there is no point in talking about the Korean development model, because it is essentially the same as the Anglo-Saxon one (Chang 2006). Others insist that Korea’s rapid growth was possible because of the strategic violation of neoclassical economic rules: they represent the marketsubstituting view. Further, they charge that the World Bank’s East Asian Miracle study of 1993 was wrong in judging the Asian miracle to be a result

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of relying on market forces and getting things right (Amsden 1989; Wade 1990; Lew 2000; Shin and Chang 2003; Chang and Grabel 2004; Chang 2006). For them, Korean development was the result of “getting the things wrong” and the distortion of market prices. To evaluate these two contrasting views, this section will scrutinize the main institutional features of the Korean developmental state. The main feature of Korean development policy can be summarized as “financial support and discipline” (Davis 2004; Lew and Wang 2007). However, this feature also exists in the market-oriented model of laissez-faire doctrine. Actually, the ideal type of laissez-faire state, which does nothing for the market, has never existed in the real history of capitalism (Chang 2002; Polanyi 1957; Fligstein 1996, 2001). So, what makes the support and discipline of the Korean development model so particularly effective and efficient that it can outperform the Anglo-Saxon one? The following examination of three arenas — investment, industrial, and trade policy — will offer clues, scrutinizing how and for whom the state exerted financial support and finally how it disciplined the recipients of its support (see Table 8.1). In trade policy, the export success of Korea is often touted as living proof of the validity of the doctrine of comparative advantage and free trade. However, this view underestimates the historical fact that informational and financial help from the government was crucial in helping the firms export. It is impossible for firms in newly developing countries to compete with the already well-established firms from developed countries in the international market. In the face of such competition, it is necessary for the newly developing country to deliberately violate the principle of comparative advantage and protect the new, or “infant”, industry from international competition before it attains internationally competitive levels of productivity. Table 8.1 Economic Policies of Korean Development Model: Support and Discipline

Support

Discipline

Industrial policy

Selective support for infant but competitive industry

Periodical screening on rent recipients

Investment policy

Financial support through nationalized banks

Capital outflow control

Trade policy

Informational and financial support for infant industries’ export

Heavy tariffs or ban on unnecessary import

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In order to help exporting firms, the government provided export subsidies (Amsden 1989; Chang 2006). These subsidies were in the form of loans for exporters, tariff rebates on export inputs, or generous “wastage allowance” to the exporters using domestically scarce inputs. The government also provided information on foreign markets, usually through the government trading agency (KOTRA) but sometimes even through the diplomatic service. There were also efforts to promote the development of private sector organizations that could perform some of these functions (such as exporters’ associations, industry-based associations, or general trading companies). However, such support was not for every sector or every firm. The government supplied these supports only to targeted industrial sectors, which had competitiveness in the international market. These supports included organizing mergers and negotiating market segmentation in industries with too many producers with sub-optimal scale so that economies of scale could be achieved; subsidizing capital equipment upgrading through “rationalization” or “modernization” programmes aimed at specific industries; subsidizing R&D or training in specific industries directly or indirectly through the operation of public research or training institutes; and spreading information on best-practice technologies in particular industries by various public or semi-public agencies. As a result, they fostered more favourable conditions for domestic firms to fully realize economies of scale. Those who are sceptical about state intervention argue that such a “selective” industrial policy that targets specific sectors or even firms does not work because it often “distorts” market signals, is technically difficult to manage, and is liable to capture and corruption by interest groups. However, in a world of limited financial resources and administrative capabilities, there is always some degree of “selectivity” involved in the conduct of industrial policy. Moreover, in developing countries with weak administrative capacities, policies that are more precisely targeted may in fact have a better chance of success because they save on administrative resources. The support of government tells only half of the story. For instance, Singapore and Taiwan also used similar financial support for private capital (Jomo 2003; Shin and Chang 2003; Shin 2005). The important characteristic that differentiates the Korean case from that of these countries is the disciplinary intervention of the state. The Korean developmental state exerted a strict control and discipline on private capital, the recipient of state support, to let the capital be invested and used in a productive way (Davis 2004). In any country, especially in the early stages of development, capital flight has to be prevented in order to ensure that whatever investible surplus

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is generated in the economy at least stays in the country, before one can contemplate having it reinvested in productive projects. So Korea maintained very strict regimes of capital control until the early 1990s. Every economic transaction involving foreign exchange had to be made through the banks under government ownership and/or control, and there were heavy punishments for those who attempted major capital flight (they could be punished with the death sentence). The state also controlled the investible capital surplus of chaebols so that it could be appropriated in productive investment rather than in consumption. The state imposed heavy tariffs and domestic taxes on — and sometimes even banned the domestic production as well as the imports of — certain “luxury” products, especially in the earlier stages of development. However, the control over luxurious consumption goods was a part of the realm of politics as well as economics. Discipline on the consumption of the privileged class created and enhanced a sense of a national community that shared burdens and fruits equally (Chang 2006, p. 28). This shared conception contributed to political stability and led to an increase in investment. More importantly, the state periodically screened the recipients of its support, mostly chaebols, on the base of individual performance to maintain a minimum, if not a maximum, level of productivity and competitiveness in the market (Lew 2000a). Chaebols that failed in paying their dues were expelled from the market. This competition under the governance of the state was harsher and more ruthless than market competition, as the volatile mobility of the top ten chaebols in the 1960s and 1970s reflects. This is how chaebols played the leading role in the Korean drama that was directed by the state to perform a miracle. The picture of the Korean developmental state suggested above is far from what the World Bank called “free trade” and “getting basic things right”. The state deliberately created oligopolistic or even monopolistic market conditions. There was no market competition among free agents. Neoclassical economists charge that the absence of market competition results in inefficiency, waste of resources, and moral hazard. However, a market is not the only mechanism for the allocation of limited resources. In fact, where there is a failure of coordination, markets cause a more tragic social waste. In the case of Korea, state governance prevented the excessive and destructive competition among rational fools from causing allocative inefficiency and social waste. As a result, the competition mechanism the state created outperformed the market mechanism (Amsden 1989; Chibber 1999; Lew 2000a).

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2.2. Political Dimension Still, in order to intervene in the market through support and discipline, a strong state equipped with a high level of autonomy and capacity is required. However proper and perfect economic institutions and policies may be, they must still be successfully imposed on and penetrated into society. That is why other Asian countries have failed in achieving economic growth and social development despite following industrial policies similar to those used in Korea.2 Without the strong state that can push the capitalist to cooperate with its developmental strategy, support and discipline cannot work properly to extract visible results. Especially regarding the relation between the state and capitalists, many studies stress the importance of state autonomy in the development process and assume that the Korean state was sufficiently autonomous from its capitalist class that it could simply impose a new developmental strategy with little regard for how firms would react (Chibber 2003, p. 52). They never clearly explain how the state could aggressively orchestrate the big firms’ growth and their activities, sometimes even assigning individual firms specific projects to carry out. Some refer to the absence of a domestic bourgeoisie (Hamilton 1985; Amsden 1989, 2000) while others point to the beneficial legacy of colonialism (Kohli 2004) or Confucian culture (Berger 1988; Clegg, Higgins, and Spybey 1990; Appelbaum and Henderson 1992). These perspectives fail to explain why the same continuity or legacy cannot be applied to the Rhee Syngman regime. Chronological continuity may not always result in structural continuity (Lynn 2005). Any account of the developmental state must therefore explain how states acquire power and autonomy, that is, how they originate. To answer this question, this chapter focuses on state capacity. Two dimensions of state capacity can be suggested: the internal and external dimensions of state bureaucracy (Chibber 2002, 2003). The internal dimension means a cohesion among intra-state agencies; the external refers to the state’s disciplinary hold on the dominant extra-state agencies, especially capitalists. In other words, state capacity means the state’s ability to formulate and implement policy in a coherent fashion and to impose discipline on private firms. In addition to the ability to discipline firms, planners also need the capacity to discipline other state agencies. To enhance state capacity, the most critical factor is internal cohesiveness across governmental agencies.3 Internal cohesiveness is generally supplied by the presence of a robust and rule-following, disciplined corps with a “bureaucratic rationality” (Johnson 1982; Evans 1995). However, in order for

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a developmental states to be effective, bureaucratic rationality must also be structured by the appropriate appointment of power among state policy agencies. In this respect, the existence of technocrats during the Korean economic development can be a stereotype of bureaucrats with internal cohesion (Chibber 1999; Kim 2004). The most convincing evidence of enhanced internal capacity would be the launch of a new government organization, the Economic Planning Board (EPB), in 1961 at the top of the state bureaucracy to take charge of the whole process of economic development. While economic policy-making had previously been dispersed across a number of agencies, it now came to be centralized in the EPB (Lew and Wang 2008).4 The EPB quickly became the apex body for economic policy and planning. That was possible because the arrangement of intra-state power relations were transformed to accommodate the mandate given to this new agency. Not only did the EPB exercise direct control over critical elements in the policy process, it was able to command authority over the functioning of other ministries so that they were answerable to it on an ongoing basis (Chibber 2002; Kim 1997).5 This ensured that Korean planners were able to monitor the performance of other agencies and, hence, more effectively oversee the formulation and implementation of policy (Shin and Chang 2003). The series of “Five-Year Economic Development Plans” are just one well-known product of this unit among numerous contributions it made in the subsequent process of Korean development (Lew 2000a). The external dimension of state capacity was structured by another major step taken to firmly institutionalize state control over the economy, namely, the so-called “Illicit Wealth Accumulation Charges” (Kim 2004). It aimed to confiscate illegally amassed fortunes and to prosecute related profiteers. Businessmen, especially the chaebol leaders, who had made their money under the favours of the past regime of Rhee, were arrested and later released in return for their public commitment to “serve the country through enterprise”. Although the charges ended up in compromise and seemed to be a political ritual, an important consequence was brought about. The majority share of the ownership of private banks was nationalized and state-owned banks were subsequently created to give the government rigid regulatory power and dominance over the capitalists (Woo 1998; Lew 2000a; Kim 2004; Davis 2004). In the absence of an alternative route to financial resource mobilization, it gave the state an effective stick to wield against particular firms once the strategy was in place (Chibber 2003, p. 58). Here lie two key elements of political institutionalization: the creation of coherent bureaucrats that can discipline business and the monopolization of

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financial resources as their instrument for disciplining business. With these institutional innovations, Park’s government quickly gained firm control over the economy, and effectively forced business decisions to follow policy recommendations geared for rapid growth. In the process, of course, those who were obedient to state initiatives were rewarded and those who were not were brutally penalized (Chang 2006). The state did not hesitate to use noneconomic means to achieve compliance with policy directives. Under Park, the state’s political favours remained critical in capital accumulation; those who successfully took advantage of these opportunities emerged as the second generation of chaebols (Kim 1997; Lew 2000a). However, this explanation, limited to political institutions, fails to answer the following question: Why did the state bureaucrats not seek their private interests through rent-seeking as other strong states did in those times and what made them head straightforwardly for development? (Kim 2004). In fact, many strong states in underdeveloped countries, based on their high level of autonomy compared to their weak societies, extract the resources of society for their legitimacy or for private interests and thereby degenerate into predatory states (Evans 1995). One proper example is North Korea. The high level of state capacity and autonomy itself can be the condition for either a developmental state or a predatory state if not combined with other factors. We will discuss two factors that determine which path is taken. One is the intra-state factor, that is, a disciplinary ethos. The other (to be discussed in the next section) is the extra-state factor, the presence of a strong society endowed with a diverse stock of social capital and networks (Putnam 1993; Woolcock and Narayan 2000). As mentioned above, the main character of Korean state intervention can be summarized as “support through discipline”. Here, the word “discipline” can be extended to a more comprehensive discourse on “disciplinary ethos”. A disciplinary ethos is “a conception that assumes a certain degree of austerity, self-regulation, and self-imposed personal restraint marshaled in the service of an individual producer’s output or productivity” (Davis 2004, p. 11). If this disciplinary ethos is extended to a whole society from below and above, it can be a “disciplinary regime” (Davis 2004, p. 12). We can call the Korean developmental state a disciplinary regime in the sense that the state’s discipline was not only for capitalists but also for the middle class, labour class, and, more importantly, the state itself. The important thing is how and why the state was charged with a disciplinary ethos. Davis finds the source of this ethos in the “rural-middleclass embeddedness of the state” (Davis 2004, p. 13). The inauguration of Park’s regime meant that, for the first time in Korean history, political leaders

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from the rural middle class held state power. Unlike the former president, Rhee, Park’s regime was supported by the military forces — most of them, like Park himself, were from the rural middle class. Naturally, Park considered the “natural diligence and disciplined life of small peasants” as an ideal and compared it with the “lavishness, excessive consumption, and corruption of the landlords and capitalists” (Davis 2004, p. 104). He thought that the rural middle class was “industrious, selfdisciplined, and capable of restraining consumption” (Davis 2004, p. 105) — core elements of an ethic for developing the economy through savings. Park shared the perception of the rural middle class, that most rural problems were caused by the usurious and import-substituting class (Kim 2004). To amend the behaviour of amoral capitalists, Park thought that the state should have more direct control over resources and redistribute these resources to the rural middle class (Davis 2004, p. 99). “Imposing a ruralbased, disciplinary orientation onto a capitalist class” was the most important way to establish sound state ethics and to achieve the economic development (Davis 2004, p. 108). Furthermore, Park extended this disciplinary ethos to the whole society, including the urban working class as well as landed proprietors and urban capitalists. In particular, this ethos was most strictly imposed on state bureaucrats (Davis 2004, p. 103). In addition, Park’s orientation got wide-ranging support from the rural as well as urban middle class, which constituted the absolute majority of the population at that time.6 The state discipline on bureaucrats was practised in various ways. In particular, Park stressed capacity and efficiency in public administration and service. For him, inefficiency reflected the absence of discipline and commitment to the state, which was morally reproved and harshly punished. At the same time, he employed diverse disciplinary tools to enhance the bureaucrats’ administrative efficiency and rewards based on their performance. With these tools and rewards, the Park regime continued administrative reformation on bureaucratic organization and recruitment (Davis 2004, p. 106). His endless commitment to the disciplinary ethos caused the bureaucrats to internalize this ethos as a viable norm. The bureaucrats could not but discipline themselves for the development of the state and the national community. However, this discipline came not only by the state leader’s coercion, but also from their own conviction that their commitment for self-discipline would increase productivity, which in turn would contribute to the interests of the public as well as the private. Underlying this conviction was the belief that the increase in public interest as a whole would enhance their personal interest and their families’ interest as well. They all shared the statist view that the prosperity of the state would

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extend to individuals (Kim 2004). Based on this shared, normative ethos, the bureaucrats could maintain a high level of internal cohesiveness and autonomy for disciplining the capitalist outside the state (Chibber 1999, 2003). This is why Park’s regime was able to enhance its autonomy and capacity rather than be captured by the urban, import-substituting capitalists’ interests in state favouritism and protection (Evans 1995). Their orientation towards the rural middle class and the resulting support from the majority of the people offered them leverage to control and govern the rent-seeking activities of industrial and financial capitalists. It paved the way for economic development under the guidance and governance of the state. Moreover, it created an articulation between rural and urban economies; this characteristic explains how Korea maintained social integration through a low level of inequality despite rapid industrialization.

2.3. Social Dimension Many studies on the East Asian Miracle highlight only the institutional and formal sector (economy and politics) conducive to economic growth in the region. However, without the important role played by the informal sector, the developmental strategy transplanted from above would have failed (Ley 1996). This chapter will reveal how the actors in informal sectors responded actively and applied themselves to national development projects. It will explicitly show the synergy that the state and the (civil) society brought about (Lew and Chang 1999). Again, institutions and policies are not enough.7 Increasing interest in the concept of “social capital” reaffirms the importance of the informal sector behind the institutional and formal sectors of economic development and political democratization (Putnam 1993; Platteau 1994a, 1994b; Portes 1998; Woolcock 1998). From the point of view of Western civil society and taking a static perspective, Korean society is categorized as a combination of “a weak society and a strong state” (Migdal 1988). This characteristic has been mainly employed to explain why authoritarian regimes are possible in some Asian societies and how the strong state can control resources and extract them from society in a coercive way without social resistance. Korean society is depicted as pre-modern and under-organized so that it does not have an internal and autonomous mechanism for self-organization for the purpose of capitalist production. However, from the point of view of “social capital”, the picture of Korean society becomes drastically different. Putnam refers to social capital to explain “features of social organization, such as trust, norms, and networks that can

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improve the efficiency of society by facilitating coordinated actions” (Putnam 1993, p. 169). Further, he argues that “voluntary cooperation is easier in a community that has inherited a substantial stock of social capital, in the form of norms of reciprocity and networks of civic engagement” (Putnam 1993, p. 167). He goes on to explain that “as with conventional capital, those who have social capital tend to accumulate more” and most forms of social capital, such as trust, have an attribute of “what Albert Hirschman has called ‘moral resources’ — that is, resources whose supply increases rather than decreases through use and which become depleted if not used” (Putnam 1993, p. 169). In his view, this feature of social capital is crucial for economic and political development. It is social capital that makes democracy and markets work. Without social capital in society, economic and political institutions cannot work properly because these institutions need an active participation and cooperation from society at large (Woolcock 1998; Woolcock and Narayan 2000). In other words, the society with rich social capital is a strong society that can make developmental synergy when combined with the strong state. The importance of social capital is widely accepted in economics and institutional studies. For instance, Coleman (1988)’s argument is directly linked to the new institutional economics, which places an importance on “transaction cost” within the market (Williamson 1989). He explains that because those who do not share social capital always face problems of trust, that is, the problem of opportunistic behaviour in the transaction partner, it is necessary to introduce reliable safeguards (for example, insurance or official endorsements). However, if there exists trust between the two participants in a transaction, then safeguards merely become cumbersome formalities that increase the transaction cost in accordance with the contract. Consequently, social capital is an important mechanism for reducing transaction costs (Granovetter 1985). From the point of view of social capital, Korean society has abundant resources for cooperation and development. One of the notable characteristics of Korean society is the intricately webbed nexus among state/non-state and official/non-official sectors (Lew and Chang 1999; Lew, Chang and Kim 2003). These networks are mainly woven through blood relations, school ties, or acquaintanceship. We may call it an “affective network” or, alternatively, yon’go chipdan (
 !).8 The affective network is firmly rooted in Korean society; it is the key to understanding the contemporary Korean society. Most studies on the affective networks of Korea, inspired by the modernization theory which claims that traditional community is weakened as the industrialization process causes social mobility among different social

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strata, simply assume that affective networks would wither away with the advance of modernization (Lee 1999). At the most extreme, they insist that affective networks should be dismantled because they represent underdevelopment or under-modernization.9 The most problematic aspect of affective networks, as many previous studies have pointed out, is that they block outsiders from accessing resources on a fair basis: “As a reciprocity and personal trust created by cliquish connection is accumulated exclusively, trust in others in general outside the group or ‘the rules of the game’ which should generally be applied can be damaged. Such a condition may injure the fairness of competition, diminish the possibility of productive transactions, and eventually bring about inefficiency of distribution of resources” (Lee 1999, p. 49). Others, admitting the prevalence of affective networks, note its positive effect in the process of economic development. According to studies adopting the rational choice theory, trust in private networks rather than in the law and institutions made positive contributions to rapid industrialization. It is argued that an individual’s reliance on the affective network is his or her rationally calculated choice in the sense that it helps reduce uncertainty and transaction costs in a sociopolitical environment of instability and uncertainty: “when uncertainty of system is high, affective networks provide trustworthy membership with predictable behavior. Therefore, people employ networks as a means to reduce an uncertainty” (Kim 1996, p. 106). The preference for affective networks, then, was the result of strategic choices made by rational individuals under particular environmental constraints. Affective networks based on traditional ties can provide the sense of trust essential for the exchange of various kinds of political and economic resources when other institutions are underdeveloped. During social upheavals, the social cost of establishing trust can rise to such levels that the cost of official constraints are higher than those incurred by transactions based on personal trust. Accordingly, people are able to gain access to scarce resources more effectively and efficiently by conducting their transactions through affective networks. However, this perspective also has a limit because it assumes that in the environment of firmly established institutions such as advanced democracy and sound market capitalism, affective networks would not function any longer in the formal sector and would disappear into the informal and private realm. This perspective cannot explain the seeming anomaly: the coexistence of rapid and apparently thorough transition to democracy and capitalism with the continued presence of strong affective networks. Contrary to the common assumption, the affective network does not exist only in a pre-modern, primary group. In the case of East Asia and

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especially of Korea, extensively intertwined traditional affective networks can easily be found not only in the economic sector but also in the bureaucracy of the state or various voluntary groups in civil society (Lew and Chang 1998). In this respect, it is the Western point of view that identifies “the state and market” or “the state and civil society” as dichotomous entities and places them in conflicting relations. In the market relation of Western society, where individualism developed through the Reformation and various civil revolution and has become a basic for free contract, non-economic factors such as human relations or familism in particular do not play an important role. However, in East Asia where the Confucian tradition is prevalent, personal relations such as networks based on blood (family), region, and/or school are closely linked to functions of the market where economic exchanges take place (Lew 1997). Accordingly, more emphasis needs to be placed on how the affective network permeates the market or the state bureaucracy, where competition and achievement are the rules of the game. One study offers clarification on how family ties, the most representative type of affective network grouping, could contribute to the economic development of Korea (Lew, Choi, and Wang 2007). According to this study, an affective network has an internal mechanism for economic development and cooperation. This mechanism reveals the concrete picture of the modernization and industrialization process in Korea.10 For example, Korean businesses are famous for the way in which they organize their production and corporate governance. Most of the largest chaebols, including the most internationally competitive such as Samsung, Hyundai, and LG, are controlled by members of the founder’s family, usually brothers, sons, nephews, and grandsons. The importance of family ties is even greater for smaller companies.11 Whereas the largest chaebols should try to adopt global standards incompatible with familial governance, the smaller companies feel free from such compunction. In these cases, the most important motivation for building and developing their business is to pass it on to their children as part of their “patrimony”. This mechanism can be applied to the various affective groups such as alumni associations of certain schools and hyangwoohoe (
 , social gatherings of people from the same home town) at the same time. Affective networks based on school ties are especially important in government and politics. The graduates of elite schools and universities dominate the political and economic realms to a degree rarely witnessed in other societies. The highest echelons of the Korean bureaucracy have traditionally been occupied by members of the “KS”, which means graduates from a particular elite high school and university.12

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Moreover, regional sentiment based on regional ties has played an increasingly important role in Korean politics. In fact, it could be argued that regional sentiments enabled the first peaceful “turnover” of government to the opposition in the presidential election of 1997, when Kim Dae Jung was elected. If such a change of regime is the essence of democratic consolidation, as it clearly is, then regionalism was a major force behind democratization in Korea. From this perspective, the social capital of affective networks is the backbone of Korean economic and political development. In this context, affective networks should continuously be highlighted as a positive factor for Korea’s success (Lew 2001). Seen from examples above, the mechanism of an affective network facilitates cooperation among members so that individuals can be integrated into the production of public goods. It also prevents the destructive results and social waste that rational fools in pursuit of short-term, private interest can cause. This is why we call the affective network “social capital”. The norms that the affective network groups share in common prevent the selfish and maleficent behaviour of group members and induce them to contribute to the creation of public good. The trust among group members solves the problem of the prisoner’s dilemma and enhances collective action for economic development. Last, networks help to mobilize the resources and channel effective communication. From this perspective, as mentioned earlier, development projects alienated from the informal sector cannot work properly. Likewise, formal institutions do not function in a vacuum but interact with informal institutions or, more broadly, the un-institutionalized realm. In Korea, the key was not proper economic policy or efficient development strategy; it was neither the autonomous bureaucracy nor the state’s disciplinary capacity. The most fundamental core was the articulated match of the strong state and the strong society. The state was able to discipline the society not for its private rent seeking but for the country’s development goal, and the society was able to respond actively to the state’s project by mobilizing its resources and organizing cooperation through social capital. Figure 8.1 sums up the miraculous articulation (embeddedness) of each dimension in the Korean development process. 3. Viability and Replicability of the Korean Development Model

3.1. Viability in the Age of Globalization We have browsed through the long and complicated process of how the Korean developmental state achieved economic development with the

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Social Dimension

Political Dimension

Economic Dimension

Disciplinary Ethos based on Rural Middle-Class Embeddedness

Bureaucratic Coherence

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Norms and Trust

Affective Networks:

Social Capital based on

The State

based on

State Capacity

Economic Policies

Informal Sector

Formal Sector

Figure 8.1 The Articulation of Formal and Informal Sectors in the Korean Development Model

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articulation of economic, political, and social dimensions. However, some would be sceptical about the viability of this model in the future environment of growing globalization. Actually, the current trend seems to decrease any room for the nation-state to manoeuvre in the gradually internationalized or globalized economy. So are we heaping praises on factors that do not stand up against the realities of the present, changing situation in Asia? In particular, this critique is focused on institutional aspects, both economic and political, of the Korean developmental state model. After the crisis in 1997, many argued that the price distortion and moral hazard of state intervention had caused the economic crisis in the region (Krugman 1998). However, contrary to popular perception, industrial policy was largely absent in Korea in the buildup to the 1997 crisis. It is true that up to the mid1980s the country had practised one of the most comprehensive and systematic industrial policies in the world. But slowly from the late 1980s on and very rapidly from 1993, with the inauguration of the Kim Young Sam administration, the Korean Government had dismantled its industrial policy except for R&D support in some high-technology industries (Chang 2006). These acts signalled the demise of “planning” in Korea. Moreover, the rise of neoliberal ideology and the growing power of the chaebols caused the selective industrial policy to wane in importance. In the old regime, the chaebols as a group were preferentially treated, but rarely were any of them regarded as being closer to the government than others. However, the abolition of five-year planning and the serious weakening of industrial policy made it easier to “bend the rules” for political reasons. This meant the end of the “disciplinary” state-business relationship and the rapid rise of a “cronyistic” relationship. Far from the prevailing view, it was during the Kim Young Sam Government that crony capitalism appeared significantly for the first time in Korean history (Kim 1997; Chang 2000). Some neoclassical economists blame state control on finance as the cause of the debt crisis in 1997 because the state did not give sufficient information to the private sector and raised its vulnerability to outside shocks. In the “traditional” system, the government controlled all the internal and crossborder financial flows very tightly. From the early 1990s, the government started to relax its control over the financial sector. The inauguration of the Kim Young Sam Government in 1993 accelerated the liberalization process. The five-year financial liberalization plan aimed at interest rate deregulation, the abolition of “policy loans”, granting of more managerial autonomy to the banks, capital account liberalization, and so on. However, it resulted only in the increase in the share of short-term debt and loans. The chaebols’ unrelated diversification through short-term debt and mutual loans reached its peak in that time.

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In fact, we can go even further and argue that it was actually the demise of industrial policy rather than its continuation that was mainly responsible for the crisis in Korea. It was, for example, the end of the policy of investment coordination that allowed the proliferation of duplicative investment in the key industries that in turn fuelled the massive foreign borrowing over 1993– 97. In addition, the demise of industrial policy, as well as the official end in 1993 of the three-decade-old five-year planning practice, led to the disappearance of the “rational” criteria according to which government supports had previously been allocated and therefore it became easier to gain access to credit for risky ventures through “crony” connections or clever political manoeuvring (Chang 2006). Now it is clear that the Korean development model was not the cause of the 1997 crisis. On the contrary, the crisis was caused by the dismantling of state intervention, not by its persistence. At the same time, we witness several instances in a globalized economy where the nation-state still plays a pivotal role as a representative and responsible actor, such as in FTA negotiations. The role played by nation-states in this process is not confined to the marketmaker role. Moreover, as the U.S. under the Obama’s administration shows, the crisis paradoxically provided an opportunity to strengthen the state’s autonomy and capacity. The state became the only fundamental body responsible for concluding an entente with the foreign organizations and meeting their needs (Shin and Chang 2003). Contrary to the views of those who proclaim the end of the nation-state, the advance of globalization calls for strengthened and more efficient state intervention (Wade 1996; Weiss 1998; Chang 2006).

3.2. Replicability for Southeast Asia Now we may argue that the Korean developmental state model is needed more than ever in the age of globalization. Leaving aside the necessity and efficiency of the Korean development model, many are sceptical about whether other countries could replicate this model. The problem is namely that of initial conditions. Many scholars point out that there are too many historical, geopolitical, and cultural idiosyncrasies that make this model generally inapplicable. In particular, the conditions in economic and political institutions are most different in the two regions under consideration. As many scholars have mentioned, industrial policies and government intervention are weak in Southeast Asia (Kuhonta 2008). Compared to Korea, the extent of industrial policy in Southeast Asia has been rather limited. Thailand has had very little in the way of systematic industrial policy except in the

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agricultural processing industry. Indonesia may have had a little more industrial policy, but many of its industrial policy programmes were haphazard and poorly conceived, especially when compared to programmes in the East Asian countries. Malaysia has had a more systematic industrial policy, but it can hardly be described as the dominant factor in the country’s policy regime in the way of the East Asian countries. According to the World Bank (1993), the Southeast Asian economies are the real textbook for developing countries. They have no government intervention to distort the market price. The minimal institutional arrangements do not need a high level of tax or tariffs to maintain their administrative costs. They are open to inflow and outflow capital following the financial liberalization policy, which is the most favourable climate for attracting FDI and enhancing exports. Moreover, they have abundant natural resources that the rest of Asia envies. So, with such superior and desirable conditions, why did they fail? The contrast between Southeast Asia and East Asia only highlights the fact that initial conditions and economic and political arrangements are not the determinant factors in economic development. Absolutely, Southeast Asia has been blessed with more abundant resource wealth than most of the rest of Asia, Africa, Latin America, and Eastern Europe. However, the absence of such resources is said to have strengthened the first-tier East Asian economies’ imperatives to industrialize, though often at tremendous human cost, especially for industrial workers during the stage of trying to achieve export competitiveness on the basis of cheap labour costs (Jomo 1998). It is often maintained that the East Asian economies progressed rapidly precisely because their lack of natural resource endowments was more than adequately compensated for by the wealth in human resources that was created by deliberate government policies. In contrast, there was less of an imperative to industrialize in Southeast Asia as there were abundant export rents to be captured by extending primary production. In recent decades, agriculture, minerals, forestry, and resourcebased manufacturing have accounted for most of the growth of the economies of Southeast Asia and of their exports in particular. Drawing from this, resource wealth can be both a blessing and a curse insofar as it postpones the imperative to industrialize. Furthermore, the characteristics the World Bank pointed out as ingredients in the recipe for market-friendly development in 1993 turned out to be the miserable factors exacerbating the crisis in 1997. Jomo has traced the 1997– 98 Southeast Asian debacle to poorly conceived and sequenced financial liberalization that resulted in attracting massive but easily reversible inflows

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into the region (Jomo 1997, 1998). Increased capital inflows induced by international financial liberalization raised foreign reserves, domestic credit availability, and exchange. However, this stimulated total spending, consumption booms, and speculative asset (stock or property) price bubbles. Such temporary increases in demand could not be sustained. Worse still, capital flight ensued as the bubbles began to collapse and was accelerated by the panic induced by regional contagion from the fall of the Thai baht. Weakened prudential regulation had increased financial fragility, the manifestations of which encouraged panic, resulting in massive capital flight. It is now more apparent that Southeast Asian economies need stronger industrial policies and government intervention to protect their industry (Felker 2008). However, this problem is a great burden. Most Southeast Asian economies reveal problems of “executive cronyism and nepotism” and a “weak and incompetent bureaucracy” incapable of designing and implementing a coherent and pragmatic industrial strategy (Jomo 1997, p. 151). They already know how to remedy their fragile economies, but what matters is installing such institutions. Some institutionalists would simply say that the initial condition does not matter. Instead, how to elaborate and manipulate economic, bureaucratic, and political institutions is the key for them. In contrast, neoclassical economists claim that building institutions costs more than the Southeast Asian countries can afford. In particular, the Korean developmental model is historically contextualized and cannot be emulated in a short time. Therefore, the only way to achieve economic development in efficiency is to copy the marketcentred Anglo-Saxon model, which is assumed to be ahistorical. However, any model, even the Anglo-Saxon one requiring few institutional devices, has its own set of historical environments — in other words, context. Therefore, installing a certain model without consideration of the original context in which it worked would solve nothing with regard to development. As mentioned above, the consideration of social context is critical in understanding development: that is why we reviewed the role of affective networks in Korea from the perspective of social capital. Still, most people would agree that affective networks have strong effects on present Korean society but disagree on what direction affective networks will take in the era of globalization. Some predict that “a demand for structural clearness and fairness of competition will gradually put pressure for change on existing balance of connection-oriented society. Therefore, market competition will replace existing connection in social and political sectors as well” (Lee 1999, p. 49). On the other hand, however, some insist that a principle of communitarianism that prioritizes groups before individuals and

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thereby “politics for people” (
 ! ) are peculiar “Asian Values” that should be pursued (Lee 1998; Choi 1999; Bell and Hahm 2003). Such conflicting views show that academic orientations centred on “cultural relativism” and “cultural universalism” are sharply opposed in Korean society. However, in spite of such confrontations, we can claim that, realistically, the influence of affective networks in Korean society is not something that may easily be removed through legal or institutional reform. Affective networks should not be underestimated as temporary conditions that will disappear as time passes by. In East Asia, affective network groups do exist as a social and historical reality; some examples here are: How does guanxi (
 ), an organizational characteristic of Chinese business, still keep its power in an open economy? Why has “Japanese management” received so much attention since the 1970s and 1980s? How was Korea’s corporate organizations, called chaebol and acting at the junction of the state and market, able to grow so successfully? How could Malaysia under Mahathir, an active supporter of Asian Values, make an economic recovery without adhering to recommendations from the IMF? These examples show that the social and historical context cannot be easily transformed with the advance of market capitalism and democracy. Rather, they reorganize the mode of operation of the market and the state in their own efficient way (Kuhonta 2008). This may offer some clues for Southeast Asian countries to find their own recipes in their own contexts. Affective social relations are ubiquitous in every society and they have their own positive and negative effects. The problem is how to make use of the positive effects in a productive and cooperative way and minimize the negative effects. To make these relations into social capital in their proper historical context is a critical issue, to blame them for their negative effects and dismantle them is another waste of valuable historical and social resources. 4. Conclusion Crony capitalism, patronage or clientelism, bossism, nepotism, affective networks, Toyota system … these terms explain the universal character of the moral economy or pre-modern economy of Asia. For sure, they have somewhat pejorative or irrational connotations. These words are used to explain why Asian societies tend to be captured by personal and traditional relationships and cannot develop economic rationality and efficiency for the market. So how can we explain the coexistence of such irrational and pre-modern obstacles with the economic miracles in the region? Here, the problem is not the existence of such “obstacles” but their function.

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Many scholars suggest that policies and strategies for development should mainly centre on economic and political institutional arrangements. They gloss over the importance of institutions, mystifying the Western experience and the operation of the depersonalized market. For the worse, the ever-increasing force of globalization urges us to accept their prescriptions for survival. In this respect, the economic success of developmental states in East Asia, especially Korea, reminds us that there is another choice for survival: the importance of informal dimensions. Affective networks in informal sectors make markets and democracy work better. Affective networks can protect individuals from fierce competition in market and provide norms and trust, based on which individuals can cooperate for the enhancement of mutual interests. Also, unlike state-level welfare through tax, informal welfare through affective networks do not cause the rigidity and social waste of welfare states. If we could settle this confrontational relation of state and market by employing the merits of affective networks that contain the essence of Asian values, it could be the best solution, equal to “killing two birds with one stone”. A peculiar form of business organization that led the economic development of East Asia serves as a good example of the potential institutionalization of this type of solution. Needless to say, the development and application of institutional devices as such are possible not only in the business sector but also in other aspects of a modern society, including politics, education, and welfare. We should try to recognize potential benefits that may come from Southeast Asian tradition for mending the shortcomings of institutional devices such as the market and the state. The emergence of indifferent individuals is a reason for us to look into affective networks as a means to tie ourselves together again. As mentioned earlier, communitarian responsibility for members of a group, moral restraint on individual selfishness, and efforts to harmonize the interests of the individual and community are all present in Asian traditional cultures. Certainly, it is hard to claim that the character of the moral economy or pre-modern economy is universal in Asia. However, Southeast Asian societies maintain the very feature of social relations in common with Korean society. We hope the Korean case can offer some clues for Southeast Asian countries to find their own recipes for development utilizing their social and historical contexts. NOTES 1. Wang insists that the role of the Korean developmental state’s intervention “substituted” for that of the market, which depicts the fundamentally different

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2.

3. 4.

5.

6.

7.

feature from the market mechanism in Western capitalism (2004). Likewise, according to Lew (2006), the Korean developmental state created the market through its “rent-granting”, which corresponded to the “rent-seeking” of the private sector. At one extreme, some dismiss the importance of economically rational or technically expedient policies in Korean economic development. They insist that historical serendipity rather than strategic calculation made by autonomous state elites was at play here (Chibber 2003), and scholars would later classify its result as strategically rational and expedient (Davis 2004, pp. 151–52). This agency is conceptualized as a “nodal agency” or “pilot agency” (Wade 1990; Chibber 2002). Under the rule of Rhee, authority over economic policy was shared by the U.S. representatives in Seoul on one side and the local government on the other: within the latter, policy decisions were subject to negotiations among several agencies, chief among them were Rhee himself, the Finance Ministry, the Central Bank, the monetary board, and the legislature (Chibber 2002). The EPB was not only the fount of industrial policy, it also enjoyed supreme control over the annual budgetary process and allocation of credit. This meant that the same agency that made annual plans also made the annual budget without having to get parliamentary permission or the agreement of the Finance Ministry. In fact, the Finance Ministry had no power to override the decisions of the EPB. The nodal agency also had supreme power over the allocation of credit and foreign aid (Woo 1991). Ministries were made responsible for implementing the Board’s decisions, submitting their spending estimates to it for approval, and then also reporting regularly on project implementation. The upshot of this setup was that the different strands of industrial policy were effectively coordinated through the establishment of an agency whose task was to render them consistent and then to enforce them. The key was not that all relevant tasks were the sole provenance of the EPB — that would have most likely been beyond the ability of any bureaucratic agency. The key was that the various units working in the overall field were compelled to submit to its authority and to conform to the overall direction of priorities (Chibber 2002, pp. 75–76). In Korean economic development, an important feature is the social connection between the urban and rural populations. Usually the development and industrialization process breaks up this connection. However, during the compressed process industrialization, the direct social connection between rural and urban was continued. The urban middle class was composed mostly of the rural middle class and they did not have enough time to make their own identity as urban middle class. They still had maintained their rural orientations and their familial connections with the rural. The formation of the urban middle class is a recent phenomenon. Institutions do not function in a vacuum but interact with other institutions

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10.

11. 12.

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(Chang 2007, p. 6). Sometimes, institutions, in order to function, need uninstitutional settings. Yon’go (
 ) refers to interpersonal relations similar to Quanxi (
 ) in China, and chipdan (
 ) means groups. The policy recommendations that have been undertaken since 1997 in South Korea have for the most part focused on dismantling cronyism, that is, another name for the affective network, which permeates the society. The assumption, explicit or otherwise, is that cronyism is not only inefficient but also characteristic of a premodern agrarian society and as such will disappear as modernization and rationalization of the society continues (Lew, Chang, and Kim 2003, p. 201). This mechanism has three dimensions for economic achievement: developmental, successive, and collective pressure (Lew, Choi, and Wang 2007). The first type of pressure shows how Korean families internalize the economic motives among family members as a norm and discipline themselves to enhance their efficiency and productivity for the familial community. The second type of pressure works on how families invest their resources in human capital such as education in the long term and try to appropriate the limited resources not in a myopic but in a long and stable way. The third type of pressure explains how the benefits of economic development and enhancement can be shared among family members providing welfare in the absence of public welfare. This feature is generally found in the Taiwanese way of business organization (Lew 1999). “KS” is the initial alphabet of Kyunggi High School and Seoul National University, which are the most distinguished elite schools. Their graduates are regarded as elites in the social, political, and economic fields.

REFERENCES Amsden, Alice H. Asia’s Next Giant: South Korea and Late Industrialization. Oxford: Oxford University Press, 1989. ———. The Rise of ‘The Rest’: Challenges to the West from Late-Industrializing Economies. New York and London: Oxford University Press, 2000. ———. Escape from Empire: The Developing World’s Journey through Heaven and Hell. Cambridge, MA: The MIT Press, 2007. Aoki, Masahiko, Kim Hyung-Ki, and Okuno-Fujiwara. The Role of Government in East Asian Economic Development. Oxford: Clarendon Press, 1997. Appelbaum, Richard P. and Jeffrey Henderson, eds. States and Development in the Asian Pacific Rim. London and Newbury Park: Sage Publications, 1992. Balassa, Bela et al. The Newly Industrializing Countries in the World Economy. New York: Pergamon Press, 1982. Berger, Peter. “An East Asian Development Model?” In In Search of an East Asian Development Model, edited by P. Berger and H.M. Hsiao. New Brunswick, NJ: Transaction Books, 1988.

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Chang, Ha-Joon, ed. Institutional Change and Economic Development. New York: United Nations University Press, 2007. ———. The East Asian Development Experience: The Miracle, the Crisis and the Future. London: Zed Books, 2006. ———. Kicking Away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press, 2002. Chang, Ha-Joon, Gabriel Palma, and D. Hugh Whittaker. “The Asian Crisis: Introduction”. Cambridge Journal of Economics 22 (1998): 649–52. Chang, Ha-Joon and Ilene Grabel. Reclaiming Development: An Economic Policy Handbook for Activists and Policymakers. London: Zed Books, 2004. Chibber, Vivek. “Building a Developmental State: The Korean Case Reconsidered”. Politics and Society 27, no. 3 (1999): 309–46. ———. “Bureaucratic Rationality and the Developmental State”. The American Journal of Sociology 107, no. 4 (2002): 951–89. ———. Locked in Place: State-Building a Late Industrialization in India. Princeton, NJ: Princeton University Press, 2003. Choi, Seok-Mann. “Theoretical Formation and Methodology for Uniting Confucian Ideas and Democracy” [in Korean]. Thoughts of Eastern Society, vol. 2, 1999. Clegg, Stewart R., Winton Higgins, and Tony Spybey. “ ‘Post-Confucianism’, Social Democracy, and Economic Culture”. In Capitalism in Contrasting Cultures, edited by S.R. Clegg and S.G. Redding. New York: Walter de Gruyter, 1990. Coleman, James. “Social Capital in the Creation of Human Capital”. American Journal of Sociology 94 (1988): 95–120. Davis, Diane. Discipline and Development: Middle Class and Prosperity in East Asia and Latin America. Cambridge and New York: Cambridge University Press, 2004. Doner, Richard F., Bryan K. Ritchie, and Dan Slater. “Systematic Vulnerability and the Origins of Developmental States: Northeast and Southeast Asia in Comparative Perspectives”. International Organization 59 (Spring 2005): 327– 61. Evans, Peter. Embedded Autonomy: States and Industrial Transformation. Princeton, NJ: Princeton University Press, 1995. ———. “Government Action, Social Capital and Development: Reviewing the Evidence on Synergy”. World Development 24, no. 6 (1996): 1119–32. Felker, Greg. “Southeast Asia and Globalization: The Political Economy of Illiberal Adaption”. In Southeast Asia in Political Science: Theory, Region, and Qualitative Analysis, edited by E.M. Kuhonto, D. Slater, and T. Vu. Stanford, California: Stanford University Press, 2008. Fligstein, Neil. “Markets as Politics: A Political-Cultural Approach to Market Institutions”. American Sociological Review 61 (1996): 656–73. ———. The Architecture of Markets: The Economic Sociology of Twenty-First-Century Capitalist Societies. Princeton, NJ: Princeton University Press, 2001.

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Granovetter, Mark. “Economic Action and Social Structure: The Problem of Embeddedness”. American Journal of Sociology 91, no. 3 (1985): 481–510. ———. “Business Groups and Social Organization”. In The Handbook of Economic Sociology II, edited by N. Smelser and R. Swedberg. Princeton, NJ: Princeton University Press, 2005. Haggard, Stephan and Chung-In Moon. “The State, Politics, and Economic Development in Postwar South Korea”. In State and Society in Contemporary Korea, edited by H. Koo. Ithaca, NY: Cornell University Press, 1993. ———. “The South Korean State in the International Economy: Liberal, Dependent, or Mercantile?” In International Political Economy: Perspectives on Global Power and Wealth, edited by J.A. Frieden and D.A. Lake. New York: St. Martin’s Press, 1995. Hamilton, Clive. Capitalist Industrialization in Korea. Boulder, CO: Westview Press, 1986. Hamilton, Nora. The Limits of State Autonomy: Post-Revolutionary Mexico. Princeton, NJ: Princeton University Press, 1982. Johnson, Chalmers. MITI and the Japanese Miracle. Stanford, CA: Stanford University Press, 1982. Jomo, K.S. et al. Industrial Policy and Economic Development in Thailand, Malaysia and Indonesia. Boulder, CO: Westview Press, 1997. ———. Tigers in Trouble: Financial Governance, Liberalisation and Crises in East Asia. London: Zed Books, 1998. ———, ed. Southeast Asia’s Industralization: Industrial Policy, Capabilities and Sustainability. Basingstoke: Palgrave, 2001. ———. Southeast Asian Paper Tigers?: From Miracle to Debacle and Beyond. London and New York: RoutledgeCurzon, 2003. Kim, Eun Mee. Big Business, Strong State: Collusion and Conflict in South Korean Development, 1960–1990. Albany, NY: State University of New York Press, 1997. Kim, Hyung-A. Korea’s Development under Park Chung-Hee: Rapid Industrialization, 1961–79. London and New York: RoutledgeCurzon, 2004. Kim, Yong-Hak. “Network and Transactional Cost” [in Korean]. Social Criticism, vol. 14, 1996. Kohli, Atul. State-Directed Development: Political Power and Industrialization in the Global Periphery. New York: Cambridge University Press, 2004. Kuhonta, Erik Martinez. “Studying State in Southeast Asia”. In Southeast Asia in Political Science: Theory, Region, and Qualitative Analysis, edited by E.M. Kuhonta, D. Slater, and T. Vu. Stanford, California: Stanford University Press, 2008. Krugman, Paul. “What Happened to Asia?” Mimeographed. Department of Economics, Massachusetts Institute of Technology, 1998. Lee, Jae-Hyuk. “Possibility of Dynamic Structural Theory: A Feedback Mechanism between Action and Structure” [in Korean]. In Social Structure of Korea and Local Society. Seoul: Seoul National University Press, 1999.

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Lee, Seung-Whan. Rethinking Confucianism as a Social Philosophy [in Korean]. Seoul: Korea University Press, 1998. Lew, Seok Choon. “Confucian Capitalism: Possibilities and Limits”. Korea Focus 5, no. 4 (1997): 80–92. ———. “The Structure of Domination and Capital Accumulation in Modern Korea”. In Korea between Tradition and Modernity: Selected Papers from the Fourth Pacific and Asian Conference on Korean Studies, edited by Yun-Shik Chang, Donald L. Baker, Hur Nam Lin, and Ross King. Vancouver: Institute for Asian Research, University of British Columbia, 2000a. ———. “ ‘Confucian Capitalism’ and the IMF Bailout in Korea”. Proceedings on the conference on “Economic Crisis in Southeast Asia and Korea: Its Social, Political, and Cultural Impacts”. ASEAN University Network and The Korean Association of Southeast Asian Studies, Bangkok, 16–17 February 2000. ———. “Social Capital in Korea: The Affective Linkage Group”. Korea Journal 41, no. 3 (2001): 216–33. ———. “An Institutional Reinterpretation of ‘Confucian Capitalism’ in East Asia”. Korean Social Science Journal 26, no. 2 (1999): 117–34. Lew, Seok Choon, Woo Young Choi, and Hye Suk Wang. “Confucian Ethics and the Spirit of Capitalism in Korea: The Significance of Filial Piety”. Paper prepared for the section on “Comparative Historical Sociology”. American Sociological Association’s 102nd Annual Meeting, New York, 11–14 August 2007. Lew, Seok Choon and Hye Suk Wang. “Did the Financial Crisis Transform the Developmental State: Focused on the Public Fund in Korea”. Paper prepared for the session on “Development”. American Sociological Association’s 103rd Annual Meeting, Boston, 1–4 August 2008. Lew, Seok Choon, Mi-hye Chang, and Tae-eun Kim. “Affective Networks and Modernity: The Case of Korea”. In Confucianism for the Modern World, edited by D. Bell and C.B. Hahm. Cambridge: Cambridge University Press, 2003. Lew, Seok Choon and Mi-hye Chang. “Functions and Roles of the Nonprofit/ Nongovernmental Sector for Korean Social Development: The Affective LinkageGroup”. Korea Journal 38, no. 4 (1999): 277–99. Leys, Colin. The Rise and Fall of Developmental Theory. Bloomington: Indiana University Press, 1996. Lynn, Hyung Gu. “Book Review: State-Directed Development: Political Power and Industrialization in the Global Periphery”. Pacific Affairs 78, no. 2 (2005): 277– 78. Mann, Michael. “The Autonomous Power of the State: Its Origins, Mechanism and Results”. In States in History, edited by J.A. Hall. Oxford: Basil Blackwell, 1986. Migdal, Joel. Strong States and Weak States. Princeton, NJ: Princeton University Press, 1988. Ostrom, Elinor. Governing the Commons. Cambridge: Cambridge University Press, 1990.

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———. “Crossing the Great Divide: Coproduction, Synergy, and Development”. World Development 24, no. 6 (1996): 1073–87. Platteau, Jean-Philippe. “Behind the Market Stage Where Real Societies Exist — Part I: The Role of Public and Private Order Institutions”. Journal of Development Studies 30, no. 3 (1994a): 533–77. ———. “Behind the Market Stage Where Real Societies Exist — Part II: The Role of Moral Norms”. Journal of Development Studies 30, no. 4 (1994b): 386–422. Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press, 1957. Portes, Alejandro. “Social Capital: Its Origins and Applications in Modern Sociology”. Annual Review of Sociology 22 (1998): 1–24. Portes, Alejandro and Margarita Mooney. “Social Capital and Community Development”. In The New Economic Sociology: Developments in an Emerging Field, edited by M.F. Guillen et al. New York: Russel Sage Foundation, 2002. Putnam, Robert. Making Democracy Work: Civic Traditions in Modern Italy. Princeton, NJ: Princeton University Press, 1993. Rodrik, Dani. “Getting Interventions Right: How South Korea and Taiwan Grew Rich”. Economic Policy 10, no. 1 (1995): 55–107. ———. “The Paradoxes of the Successful State”. European Economic Review 41 (1997): 411–42. ———. One Economics, Many Recipes: Globalization, Institutions, and Economic Growth. Princeton, NJ: Princeton University Press, 2007. Rueschemeyer, Dietrich and Peter Evans. “The State and Economic Transformation: Toward an Analysis of the Conditions Underlying Effective Intervention”. In Bringing the State Back In, edited by P.B. Evans, D. Rueschemeyer, and T. Skocpol. Cambridge: Cambridge University Press, 1985. Skocpol, Theda. “Bringing the State Back In: Strategies of Analysis in Current Research”. In Bringing the State Back In, edited by P.B. Evans, D. Rueschemeyer, and T. Skocpol. Cambridge: Cambridge University Press, 1985. Shin, Jang-Sup. “Globalization and Challenges to the Developmental State: A Comparison between South Korea and Singapore”. Global Economic Review 34, no. 4 (2005): 379–95. ———. “Substituting and Complementing Models of Economic Development in East Asia”. Global Economic Review 34, no. 1 (2005): 99–118. Shin, Jang-Sup and Ha-Joon Chang. Restructuring Korea Inc. London: RoutledgeCurzon, 2003. Sikorski, Douglas. “Southeast Asia’s Misunderstood Miracle”. Journal of Southeast Asian Studies 29, no. 2 (1998): 398–400. Song, Byung-Nak. The Rise of the Korean Economy. Oxford: Oxford University Press, 1990. Suryadinata, Leo, ed. Ethnic Chinese as Southeast Asians. Singapore: Institute of Southeast Asian Studies, 1997.

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Wade, Robert. Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton, NJ: Princeton University Press, 1990. ———. “Globalization and its Limits: Reports on the Death of the National Economy are Greatly Exaggerated”. In National Diversity and Global Capitalism, edited by S. Berger and R. Dore. Ithaca, NJ: Cornell University Press, 1996. Weiss, Linda. The Myth of the Powerless State. Ithaca, NJ: Cornell University Press, 1998. Williamson, Oliver. “Transaction Cost Economics”. In Handbook of Industrial Organization Vol. 1, edited by R. Schmalensee and R. Willig. Amsterdam, NJ: Elsevier, 1989. Woo-Cumings, Meredith. The Developmental State. Ithaca, NJ: Cornell University Press, 1998. Woo, Meredith Jung-En. Neoliberalism and Institutional Reform in East Asia. Hampshire and New York: Palgrave Macmillan, 2007. Woolcock, Michael. “Social Capital and Economic Development: Toward a Theoretical Synthesis and Policy Framework”. Theory and Society 27 (1998): 151–208. Woolcock, Michael and Deepa Narayan. “Social Capital: Implications for Development Theory, Research, and Policy”. The World Bank Research Observer 15, no. 2 (2000): 225–49. Woolcock, Michael and Elizabeth Radin. “A Relational Approach to the Theory and Practices of Economic Development”. In The Handbook of Social Capital, edited by D. Castiglione, J.W. Van Deth, and G. Wolleb. Oxford: Oxford University Press, 2008. World Bank. World Development Report 1991: The Challenge of Development. Washington, D.C.: World Bank and Oxford University Press, 1991. ———. The East Asian Miracle: Economic Growth and Public Policy. Washington, D.C.: World Bank and Oxford University Press, 1993.

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9

Southeast Asian Migrant Workers in South Korea Yeong-Hyun Kim

An estimated ten million Southeast Asians currently work overseas (Economist 2007); of these just fewer than 200,000 work in the Republic of Korea (hereafter South Korea). As these statistics suggest, South Korea is not yet a major destination for Southeast Asian migrant workers, but these workers account for one-third of the country’s growing migrant population of more than 500,000. The vast majority of these workers are employed in small manufacturing firms, which have suffered from acute labour shortages in recent years. The influx of foreign workers is a relatively new phenomenon in South Korea, long a poor country that had sent emigrants abroad. And, even though the Korean Government is keenly aware of market demands and the need for inexpensive migrant workers, it is concerned about their number and settlement. In 1993, an industrial training programme was created to recruit “trainees” from developing Asian countries for entry-level jobs in manufacturing. While the trainee status meant lower-than-minimum-wage, no-benefits jobs for migrant workers, this now infamous programme brought in almost 200,000 Southeast Asians, including 67,000 Indonesians and 45,000 Vietnamese, before being phased out in 2006. With the sharp increase in the number of illegal migrant workers who overstayed their trainee visas,

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a temporary migrant worker programme was recently introduced to recruit foreign workers on a three-year, non-renewable contract. This new migrant programme includes elements of positive discrimination that favour ethnic Koreans, mostly Korean Chinese returning to their homeland after long exile. Ethnic Koreans are now eligible for work in the service sector, while all “other” unskilled foreign workers of non-Korean heritage are largely limited to jobs in manufacturing. Southeast Asian migrants, along with South Asians, have borne the brunt of a recent upsurge in enforcement against illegal migrant labour, given that they “look different” in South Korea, where native Koreans account for 99 per cent of the total population. Many have endured random stops and I.D. checks without probable cause (Amnesty International 2006). In 2006 alone, nearly 12,000 Southeast Asians were apprehended; 4,500 of them were forcefully deported to their respective home countries (Ministry of Justice 2007). Despite these harsh, punitive measures designed to catch and deport visa overstayers and other illegal migrant workers, Southeast Asians have put down roots in South Korea, proving that a temporary migrant programme will eventually lead to a large gap between policy and reality (Cornelius et al. 2004). Migrant communities are emerging throughout the outer parts of the Seoul Metropolitan Area where a large number of small manufacturing firms is clustered. This chapter examines migrant labour flows from Southeast Asian countries to South Korea, with a particular focus on the South Korean Government’s policy on the unskilled foreign workforce and its effects on Southeast Asian migrant workers and their communities in Outer Seoul. The chapter draws on two major sources: (1) statistical data on migrant workers and foreign residents obtained from the South Korean Ministries of Justice and Labor and official government websites of Seoul and Outer Seoul; and (2) a series of personal interviews, conducted in 2007, with Southeast Asian migrant workers and migrant support non-governmental organizations (NGOs) in addition to government officials in Outer Seoul. 1. South Korea’s Uneasy Transition to a Labour Importing Country For many years, South Korea was a major source of international migration flows. During the first half of the twentieth century when the entire Korean Peninsula was under Japanese rule, nearly four million Koreans migrated, both voluntarily and involuntarily, to China, Japan, and Russia (Bergsten and Choi 2003). An additional million went to the United States during the Cold

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War years following the 1950–53 Korean War. This series of mass movements resulted in an estimated 5.5 million people of the Korean diaspora dispersed throughout the world (Overseas Korean Foundation 2007).1 In contrast to the large number of ethnic Koreans overseas, the foreign population in South Korea is officially estimated at half a million, barely more than one per cent of the country’s total population of forty-seven million. Although this figure is low by international standards, it has increased nearly tenfold in the past decade. To better understand the recent growth in foreign-born residents, it is necessary to examine their absence in previous decades. South Korea was virtually untouched by the several successive waves of transnational migratory movements that affected many parts of Asia during the second half of the twentieth century, including the migrations of overseas Chinese in the 1940s and 1950s, Vietnamese refugees in the 1970s, and overseas Filipino workers in the 1980s and 1990s. The absence of ethnic diversity in South Korea reflects a combination of two issues: its unattractiveness to transnational migrants and its refusal to accept people of other ethnicities as potential members of society. First, South Korea is not Hong Kong, nor is it Singapore — two members of Asia’s newly industrialized countries (NICs) that have been well situated geographically and historically to attract consecutive waves of transnational migrants, sojourners, and expatriates in the region (Findlay et al. 1998; Hugo 2004). It was not until recently, when South Korea received global media attention for its economic success and for hosting international sports events, that the country stood out as a potential destination or transit country for (un)skilled migrant workers. Second, the fact that South Korea is a divided nation — facing North Korea across the armistice line — has made it all the more important for its government to maintain a tight control over all border crossings and immigration (Shin 2006). The perceived and often greatly exaggerated political tension with the North, coupled with a strong sense of ethnic nationalism shared among South Korean natives, has helped the government legitimize its reluctance to open up the domestic labour market to foreign workers or to accept immigrants, refugees, or asylum-seekers. Policy conditions have changed in recent years, however. With a fastageing population, a low birth rate, and a growing aversion to menial, lowwage jobs, South Korea faced growing shortages in the domestic labour market in the early 1990s (OECD 2004). By 1993 the government could no longer ignore the acute shortage of unskilled workers in the smallbusiness sector and began importing a small number of migrant workers on a temporary basis. For fifteen years now, South Korea, a former labour

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exporter, has been importing foreign workers to fill the void left by a shrinking, ageing, native-born workforce. According to the latest official statistics, the number of foreign workers in South Korea, both legal and illegal, is estimated to be a little less than 550,000 (Ministry of Justice 2007). Nearly 95 per cent of these migrants are classified as “unskilled foreign workers” and are employed in low-wage jobs in labour-intensive sectors, while a mere 30,000 workers are employed in highskilled, high-wage jobs, including English-language instruction (see Figure 9.1). Of those unskilled foreign workers, 174,281 people are from Southeast Asian nations, particularly Vietnam, the Philippines, Thailand, and Indonesia. Although this number may seem small, South Koreans view it as significant.

Figure 9.1 Migrant Labour Force in South Korea, 1992–2006

600,000 persons

500,000

400,000

300,000 unskilled 200,000

100,000 skilled 0

1992

1996

2000

2004

Source: Ministry of Justice of Korea (various years).

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“At most 200,000, that is not a big number, but to us it is huge”, an NGO worker says about the recent labour migration flows from Southeast Asia (interview data, 2007). In general, South Koreans are still adapting to the reality that their country is developing into a destination for international labour migration in Asia. In truth, the growing economic connections between South Korea and Southeast Asian nations, as discussed in previous chapters of this book, will continue to heighten the visibility of South Korea as a migration destination throughout the developing Asian region. As such, the emerging labour migration flows from Southeast Asia are likely to continue to grow, and more migrants will settle in South Korea in much the same way that Korean emigrants have settled overseas in past decades. However, South Korean society and its government in particular still view Southeast Asian migrants as temporary migrant workers who should leave upon completion of their contracts. The following two sections examine the government’s labour migration policies to import workers from abroad who would be willing to work for low wages. 2. Southeast Asian “Industrial Trainees” In 1993, departing from its traditional policy that limited the hiring of foreign nationals to high-skilled occupations, the South Korean Government allowed low-skilled, entry-level factory jobs to be filled with recruited foreign workers for the first time in its history. This policy change grew from concerns about severe labour shortages in traditional manufacturing industries and resultant capital outflows to low-wage countries (Korea Labor Institute 2004; Park 1998). South Korea’s manufacturing economy underwent an extensive restructuring in the 1980s when a sustained economic boom, coupled with a series of nationwide labour strikes, resulted in a substantial increase in wage costs. Small manufacturing firms were hit hard by the wage hike and many of them began to explore investment opportunities in China and Southeast Asian countries that had cheap and abundant labour. Fearing the exodus of industrial capital to neighbouring countries, the South Korean Government decided to open its labour market to unskilled foreign workers. Having no previous experience in handling large numbers of migrant workers, the South Korean Government, under the conservative Kim YoungSam administration, believed in controlling labour migration: the more restrictive control measures are, the less likely migrant workers are to cause trouble in the domestic labour market or settle permanently.2 The government approved private companies to recruit and to bring in foreign workers with

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three stipulated conditions: (1) that only small- and medium-sized manufacturing firms be allowed to hire foreign workers; (2) that foreign workers be recruited for “training”, not working; and (3) that the number of trainees be determined on a yearly basis, depending on changes in the domestic labour force. South Korea learned from Japan the trick of admitting foreign workers as trainees. Emulating the Japanese technical intern training programme, South Korea introduced the Industrial Technical Training Programme (ITTP) in 1993 to authorize small manufacturing companies to recruit foreign workers for the purpose of training.3 For the government, trainee status (D-3 Visa) meant that foreign workers would return home after a brief stay in South Korea. For employers, it meant that they were exempted from the minimum wage and other benefits available to full- or part-time employees. Eventually, it became public knowledge that trainees were brought in to carry out lowskilled, labour-intensive jobs that were shunned by domestic workers (Seol and Skrentny 2004; Suk et al. 2003). The annual admissions of trainees began with 20,000 in 1993, but gradually increased to 53,000 in 2003, reflecting the compromise the government had made between socio-political concerns to limit the number of trainees and the business sector’s interest in expanding it. The standard training period was initially set at a maximum of two six-month sessions; it was later extended to a two-year period and then to a three-year period. In April 2000, the three-year training period was restructured into a one-year training programme followed by a two-year employment option (E-8 Employment after Training Visa), which was the first time the trainees were officially recognized for the work that they had been doing for extremely low wages. As shown in Table 9.1, Southeast Asian workers accounted for nearly 50 per cent of all industrial trainees recruited between 1993 and 2006. During the early years of the training programme, ethnic Koreans in Northeast China were the preferred pool of trainees from which South Korean manufacturing firms could draw Korean-speaking workers. As a larger number of ethnic Koreans sought higher-paying jobs at restaurants and construction sites, employers began looking to China and Southeast Asian nations as an alternative pool from which to recruit trainees. While some companies transferred foreign-national employees from their overseas operations to domestic ones under the name of “intensive technical training at the headquarter location”, those without foreign offices relied on private recruitment agencies for prospective trainees (interview data, 2007). Thanks to the growing presence of South Korean multinational firms in Southeast Asian countries, coupled with the global media attention on the

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Table 9.1 Total Admissions of Industrial Technical Trainees to South Korea

trainees, 1993–2006 (%) SOUTHEAST ASIA Indonesia Vietnam Philippines Thailand Myanmar Cambodia

188,649 67,042 45,500 39,142 28,143 5,072 3,750

(49.3) (17.5) (11.9) (10.2) (7.4) (1.3) (1.0)

Ethnic Koreans

32,822

(8.6)

other selected countries China Uzbekistan Bangladeshi Sri Lanka Pakistan

73,612 20,289 15,068 11,188 10,368

(19.3) (5.3) (3.9) (2.9) (2.7)

382,289

(100.0)

Total Source: Ministry of Justice of Korea (various years).

country’s economic success, a large number of Indonesian, Vietnamese, Filipino, and Thai workers responded to recruitment advertisements, wishing to take advantage of the wage differentials between their home countries and South Korea. Certainly, the workers’ migration for training and employment was encouraged by their respective governments, which have been known for their active role in facilitating and promoting labour export (Oishi 2005; Yeoh and Willis 2004). From the very beginning, serious concerns were raised about the exploitative nature of the training programme. These protests grew louder as deeply disturbing stories of trainee mistreatment and abuse were made public (Seol and Skrentny 2004). NGOs and church groups together charged that, by issuing foreign workers trainee visas, the South Korean Government continued to play an integral part in subjecting trainees to exploitation at the hands of their employers (Gray 2006; Lee 2003; Lim 2003). In 1995, the Ministry of Labor supported a new policy that would treat migrant workers as workers, not as trainees. However, this policy initiative was struck down by more powerful sections of the government, including the Ministry of Finance and Economy, which were keen on

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protecting the interest of employers. The slowdown of the South Korean economy in the late 1990s, affected by the Asian financial crisis, added more pressure on the government to tend to the needs of businesses while overlooking those of foreign workers called industrial trainees. Inevitably, both employers and trainees took advantage of the many loopholes in the training programme and thereby forced its demise. A significant number of trainees vanished from their designated workplaces to seek higher-paying jobs in the informal sector. Despite the government’s repeated warnings against the illegal hiring of unauthorized migrants, many employers continued to tap into this pool of “runaway” trainees and visa overstayers. As the number of illegal migrant workers grew quickly, additional problems emerged such as employers who failed to pay workers the wages they were due. Official estimates put the number of illegal migrant workers in 2002 at 289,239, which made up nearly 80 per cent of the country’s unskilled foreign workforce.4 Anxious to bring order to this seemingly chaotic situation, the South Korean Government decided in 2003 to overhaul its migrant policy in two main ways. First, the ITTP would be replaced with the Employment Permit System (E-9 Visa), in which all foreign workers would be recruited by a state agency as temporary contract workers. Second, those who were already working illegally with an expired visa would be legalized and given a new work visa upon review of their application. A total of 256,107 people — more than 90 per cent of the estimated number of illegal migrant workers — took advantage of this legal arrangement. Of those who were legalized, Southeast Asian workers accounted for over 17 per cent, following ethnic Korean workers at nearly 36 per cent and Chinese workers at 23 per cent. This one-time amnesty measure, which was a rather desperate attempt by the government to regain control over migrant labour, reduced the portion of illegal migrant workers in the migrant labour force from a record high of 79.8 per cent in 2002 to 35.5 per cent in 2003. 3. Southeast Asian Migrants for “Unskilled Factory Work” In August 2003, the newly elected Rho administration pushed to pass the Employment of Foreign Workers Act, which had been debated since the mid1990s, particularly during the Kim Dae Jung presidency (1998–2003). The Act, which went into effect in July 2004, centralizes the management of unskilled foreign workers under the Employment Permit System (EPS). By replicating guest worker programmes in Western Europe, the EPS selects employers and gives them permission to employ foreign workers recruited by

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the government. Once selected, these workers are issued with a three-year, non-renewable E-9 visa. Employers are mandated to meet the minimum wage requirements and to pay health and social security benefits for their employees. Foreign workers are effectively tied to their sponsoring employers throughout the duration of their contracts and family members are not allowed to accompany them to South Korea. Compared to the industrial training programme that defined foreign workers as subjects of technical training, this new policy has fairly expanded legal avenues for them (Kim 2005; Lee and Park 2005). Yet, underneath the veneer of improved treatment of migrant workers, there is the South Korean Government’s quest for full control over labour migration and employment (Kim forthcoming). Moreover, a quota system has been introduced to recruit “certain numbers of foreign workers from certain countries for certain sectors” of the South Korean economy (interview data, 2007). Once quotas are allocated to different sectors, needed foreign workers are recruited through official agencies of the selected countries that have signed bilateral migrant labour accords with South Korea — as of 2006, along with Mongolia and Sri Lanka, four Southeast Asian countries, Indonesia, the Philippines, Vietnam, and Thailand, have signed the accord, and a few new countries have been added to the list since 2007. In the first two years of the EPS’s operation, almost all E-9 visas were used to legalize illegal workers who were already in the country. Then in 2006, a little more than 100,000 employment permits were authorized to bring in a new group of foreign workers; the number is roughly the same for 2007.5 As with the industrial training programme, small-scale manufacturing firms have been the primary beneficiary of the EPS, although a small number of permits are now allocated to the agricultural, fisheries processing and construction sectors, which also suffer from a labour shortage. Other typical “immigrant jobs” in the services, such as washing dishes and cleaning hotel rooms, are reserved for ethnic Korean migrants who are recruited and managed separately from all other foreign workers.6 It is clear that this newly enacted migrant scheme includes elements of positive discrimination in favour of ethnic Koreans, mostly Korean Chinese returning from the northeastern region of China, who are eligible for work in agriculture, construction, and services as well as manufacturing. According to the EPS’s 2008 quota allocation, a total of 132,000 employment permits will be issued throughout the year, with 60,000 permits set aside for ethnic Koreans (see Table 9.2). The remaining 72,000 permits will be used to recruit all other so-called “general” foreign workers of nonKorean heritage, the vast majority of whom will work in small factories.

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Table 9.2 Annual Quota of Employment Permits for Unskilled Foreign Workers, 2008

ethnicity

sector

manuagriculture/ construction services facturing livestock

ethnic Koreans

16,000

12,000

all other foreign workers

60,800

6,000

total

76,800

18,000

30,600 400* 31,000

fishery

total

1,000

400

60,000

4,000

800

72,000

5,000

1,200

132,000

Note: * 200 permits for tourist hotels that require English proficiency; the remaining 200 for manufacturing-related service industries, including warehousing and steel recycling. Source: Ministry of Labor of Korea (2008).

Based on personal interviews with both government officials and migrant support groups, many expect this ethnically stratified labour recruitment system to be practised well into the future. Although the South Korean people and their government do not particularly welcome the return of co-ethnic non-nationals from Northeast China, they are “extremely uncomfortable with the idea of South and Southeast Asians coming in and causing changes in the racial and ethnic composition of Korean society”, noted an interviewee (interview data, 2007). In a strange twist of politics, this conservative concern about possible demographic changes in South Korea as a result of labour migration is echoed by many liberalminded Koreans, including NGO workers, who also argue for priority to be given to the ethnic Korean group. They liken the idea of South Korean society embracing the returning émigrés to “preparation for a future meeting with North Koreans”, should the geographical and political separation of South and North Korea be brought to an end (interview data, 2007). Although some employers complain of “bad, socialist attitudes” among ethnic Korean workers, few would consider the practice of recruiting migrant workers by ethnic origin unjust. Given that Southeast Asian workers possess obvious physical differences from native South Koreans, they suffer the brunt of stepped-up enforcement against illegal migrant workers, which tends to become arbitrary and racebased at the street level. Although it is not uncommon to see labourimporting governments develop a stratified system of foreign nationals, using ethnic, racial, and/or national stereotypes in recruiting migrant workers or granting citizenship (Castles 2004; Joppke 2005), Southeast Asian workers are in a disadvantaged position in South Korea’s ethnically stratified migrant labour market.

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Table 9.3 presents a snapshot of the current state of South Korea’s unskilled foreign workforce, both legal and illegal. Certainly, the nationality/ ethnicity composition of the migrant population reflects the terms and conditions of the EPS as well as that of the Industrial Technical Training Programme. Ethnic Koreans from China are the largest group of migrant workers, making up more than one-fifth of the workforce. When the many ethnic Koreans working on the family/relative visitation visa are taken into account, the total population of ethnic Korean migrant workers would be close to a quarter million, if not more. The second-largest group is Chinese workers. These workers had a strong presence in the industrial training programme when many South Korean manufacturing firms recruited trainees through their Chinese operations. But the admission of Chinese workers is likely to decrease dramatically in the next few years due to the recent ending of the training programme and the delayed negotiation between the Chinese and South Korean Governments on temporary migrant workers. With the

Table 9.3 Unskilled Foreign Workers in South Korea, 2006

total (%)

legal workers (%)*

illegal workers (%)**

SOUTHEAST ASIA Vietnam Philippines Thailand Indonesia Myanmar Cambodia

174,281 48,957 46,336 41,298 29,450 4,792 3,448

(34.2) (9.6) (9.1) (8.1) (5.8) (0.9) (0.7)

126,004 35,831 32,101 28,803 23,361 2,931 2,977

(42.4) (12.1) (10.8) (9.7) (7.9) (1.0) (1.0)

48,277 (22.8) 13,126 (6.2) 14,235 (6.7) 12,495 (5.9) 6,089 (2.9) 1,861 (0.9) 471 (0.2)

Ethnic Koreans (Korean Chinese)

109,496

(21.5)

71,776

(24.2)

37,720 (17.8)

93,253 27,237 20,094 16,991 14,387

(18.3) (5.4) (3.9) (3.3) (2.8)

37,628 15,494 7,911 10,034 11,154

(12.7) (5.2) (2.7) (3.4) (3.8)

55,625 (26.2) 11,743 (5.5) 12,183 (5.7) 6,957 (3.3) 3,233 (1.5)

296,919 (100.0)

211,988 (100.0)

other selected countries China Mongolia Bangladesh Uzbekistan Sri Lanka Total***

508,907 (100.0)

Notes: *

combined numbers of visas D-3 (industrial training), E-8 (employment after training) and E-9 (unskilled foreign labour force). ** visa overstayers. *** total of all unskilled foreign workers. Source: Ministry of Justice of Korea (2007).

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window of opportunity closing, many Chinese workers have become illegal by simply overstaying their trainee visas. Meanwhile, E-9 visa-holders from Southeast Asia have quickly gained a presence in the foreign workforce since their respective governments signed bilateral agreements with South Korea at the start of the EPS. The four Southeast Asian countries from which many industrial trainees were recruited — Indonesia, the Philippines, Thailand, and Vietnam — have continued to be the primary source of temporary migrant workers for manufacturing jobs. Unlike many other labour-importing countries, South Korea does not issue work visas for domestic work in private households, the single largest category of occupation for female Southeast Asian migrants, particularly Filipinas and Indonesians (Parrenas 2001). The growing demand for domestic work and home care for the elderly has so far been met by female, ethnic Korean “visitors” who are considered too old to take on physically strenuous occupations, such as restaurant work. By restricting access to foreign workers, the EPS has not only made the domestic work industry the largest employer of illegal ethnic Korean migrants, but has also contributed to the skewed gender ratio of other migrant workers of non-Korean heritage. The feminization of labour migration, long a characteristic of overseas Southeast Asian workers (Huang et al. 2005), does not apply in South Korea. As shown in Table 9.4, the Southeast Asian migrant population is overwhelmingly male-oriented. Although employers, particularly those in the clothing industry, want to hire more female workers, they have a very small labour pool to draw from, because Southeast Asian female migrants tend to Table 9.4 Gender in Unskilled Foreign Workers, 2006

male SOUTHEAST ASIA Vietnam Philippines Thailand Indonesia Myanmar Cambodia Ethnic Koreans China Total*

female

ratio of male to female

140,264 40,405 34,788 31,692 25,959 4,425 2,995

33,773 8,552 11,548 9,606 3,491 123 453

4.2 4.7 3.0 3.3 7.4 36.0 6.6

53,801 56,552

48,046 26,582

1.1 2.1

370,614

138,293

2.7

Note: * total of all unskilled foreign workers. Source: Ministry of Justice of Korea (2007).

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take relatively high-paying jobs in domestic work and entertainment industries in other developed economies in Asia and beyond. 4. Formation of Southeast Asian Migrant Communities in Outer Seoul According to the Korea Immigration Service’s arrival/departure records, a total of 174,281 Southeast Asians are currently working in South Korea, accounting for 34.1 per cent of the country’s still small, but fast-growing unskilled foreign workforce. These statistics include not only those who work with proper documentation in the formal sector, but also the 48,277 illegal migrant workers who are staying beyond their authorized stay. Many of the visa overstayers entered the country as industrial trainees years ago and have gone home for visits — if these workers leave South Korea, they will not be able to re-enter the country. So, understandably, they have established a home away from home in South Korea (Lee 2006). Thanks to their advanced Korean language skills and cultural integration, some of the visa overstayers have played a central role in building community networks for their fellow migrant workers by bridging them with local migrant support and service organizations. This section examines the recent rise of Southeast Asian migrantworker communities in South Korea. During my in-depth interviews in the spring of 2007 with six Southeast Asian former trainees, who were all working illegally at the time and actively participating in migrant-worker organizations, none expressed a wish to settle permanently in South Korea when asked about their future plans; however, they were unable to provide a clear timeline for their departure. In addition to substantial uncertainty about their future, they seemed to live daily in fear of apprehension and deportation. After the introduction of the EPS, indeed, frequent work-site raids have been reported in industrial cities in Outer Seoul, where a large number of small manufacturing firms — the primary employers of illegal migrant workers — have clustered and ethnic shopping centres have developed.7 As their physical appearance marks them as “nonKorean”, Southeast Asian migrants continue to be subject to random stops and I.D. checks both on the streets and in other public places. It is apparent that the fear of apprehension serves as a highly effective means of immigration control, as it severely limits Southeast Asian migrants’ — particularly illegal workers’ — ability to travel long distances by public transportation. Despite the forceful effort by the South Korean Government to prevent their settlement, Southeast Asian migrant communities have begun to form tightly-knit networks centred around migrant support organizations, mostly religious groups, that offer shelters, health clinics, and many other practical

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forms of help for migrants both illegal and newly arrived. For example, a Catholic church at Hyehwa-Dong in Seoul attracts approximately 3,000 Filipino migrant workers every Sunday afternoon (see Photo 1), while a small Presbyterian church at Yongin in Outer Seoul is used as the headquarters of an association of Indonesian migrant workers that has more than 2,000 registered members (interview data, 2007). As discussed in the previous section, the quota system of the EPS has channelled migrant workers of non-Korean descent, including Southeast Asians, into small-scale manufacturing firms. This has resulted in a significant proportion of Southeast Asian migrants living and working in the large industrial cities of Outer Seoul — in contrast, the majority of ethnic Korean migrants reside in Seoul, where opportunities for low-skilled service work abound (Kim 2008). In order to examine the formation of Southeast Asian migrant communities in Outer Seoul, this research uses the city and provincial governments’ data on foreign residents as the Korean Immigration Service does not keep track of the whereabouts of migrant workers once they enter the country. Photo 1 Filipino Workers at the Roman Catholic Church of Hyehwa

Source: Photo taken by the author.

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In 2007, Seoul housed 229,072 foreign nationals, while Outer Seoul, the combined area of Incheon and Kyeonggi Province, was home to 246,262 foreigners, accounting for 1.8 per cent of the total population (see Table 9.5). Seoul has long served as South Korea’s gateway to and from the world and has housed a disproportionate share of the country’s foreign population, however small it might be. With the growing number of migrant workers arriving from developing Asian countries in the past decade or so, however, Outer Seoul now has a larger foreign population than any other place in the country, including Seoul. More importantly, Outer Seoul has a much more diverse stock of foreign-born residents than the central city. While Seoul is characterized by the dominant flow of ethnic Korean migrants, Outer Seoul houses foreign nationals from various countries, including South and Southeast Asian countries. Southeast Asian nationals make up nearly 30 per cent of Outer Seoul’s total foreign population; Vietnamese, Filipino, and Thai workers have established sizeable and visible communities there. In Outer Seoul, no place stands out more prominently than the City of Ansan, with its large demographic concentration of migrant workers. Ansan is an ever-growing industrial city southwest of Seoul with a population of a little more than 700,000 residents. According to the city’s official statistics, it houses 24,256 registered foreign residents — a low figure by international standards, but considering the high level of racial and ethnic homogeneity of the South Korean population, it is viewed by the natives as representing a heavy concentration of foreigners.

Table 9.5 Registered Southeast Asian Residents in Seoul and Outer Seoul, 2007

Seoul SOUTHEAST ASIA Indonesia Myanmar Philippines Thailand Vietnam

Outer Seoul

9,354 618 181 3,921 852 3,782

72,267 10,283 1,421 20,590 17,950 22,023

China (ethnic Koreans incl.)

169,414

108,227

Total*

229,072

246,262

Note: * total of all registered foreigners. Source: Government official websites of Seoul, Incheon, and Kyeonggi Province.

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The heavy settlement of migrant workers in Ansan is essentially linked to the geographical concentration of small, traditional manufacturing firms in the city. Ansan is the site of two of South Korea’s largest industrial complexes, Banwol and Shihwa. These complexes house scores of small manufacturing plants — in fact, many of them relocated from the Guro area of Seoul in the 1980s when the national government encouraged, and often forced, traditional, polluting factories to move out of its capital city. The Wonkok area in the western part of Ansan has emerged as the country’s largest and most talked-about migrant neighbourhood and has often been portrayed in the media as a “non-Korean” space, full of foreign workers and ethnic shops. It is believed that foreigners are indeed the majority population in Wonkok Bon Dong, a small borough where a variety of ethnic restaurants, travel agencies, and multi-unit dwellings continue to alter the look of the neighbourhood (see Photo 2). According to the official statistics, of those foreigners in Ansan, 6,254 people are from Southeast Asia. Yet, city government officials and NGO workers offer a much higher estimate of 20,000 — migrant workers tend to be undercounted in the municipal registry since many take up temporary residence in company dorms or basement apartments, and illegal workers are reluctant to register with a government office (interview data, 2007). Many of the ethnic stores in Wonkok Bon Dong are tailored towards the needs of Southeast Asian male consumers for their social gatherings, shopping, and other recreational activities (see Photo 3). The main commercial corridor in the area is very crowded on weekends when large numbers of migrant workers gather to meet friends. And, as the commercial area continues to spread out into the neighbourhoods, the development of Southeast Asian migrant communities is becoming more visible. Faced with a growing number of foreign residents in the Wonkok area, the city government of Ansan created the Department of Foreigner Health and Welfare in 2005 to mitigate and prevent any conflicts between the natives and migrant workers. Among the many institutions founded and sponsored by the city government are multicultural centres, health clinics designated for foreign residents, Korean language schools, and daycare centres for children of migrant workers. Government officials in that department agreed with the notion of residential citizenship, or local citizenship, for migrant workers during my interviews with them, which is contradictory to the national government’s definition. For the City of Ansan, noted the head of the department, migrant workers, regardless of their legal status or authorization to work, are local residents who “work in locally based factories, shop at local stores, and use public infrastructure provided by the city government” (interview data, 2007). He continued to say that

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Photo 2 Wonkok Bon Dong, City of Ansan, Outer Seoul

Source: Photo taken by the author. Photo 3 Southeast Asian Migrant Workers on a Sunday Afternoon in Wonkok

Source: Photo taken by the author.

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we [city government officials] have come to the terms that, unless these migrant workers get involved in any criminal activities, there is no reason for the city government to drive them out. Indeed, these young migrants work and spend money here in Ansan. They’re no burden on the taxpayer at all, although some of the native residents are very concerned about the rapid growth of the foreign population in their neighbourhoods.

5. Conclusion It has been more than fifteen years since a small number of Southeast Asian migrants started filling low-wage, entry-level factory jobs in South Korea. Although they were all recruited as temporary contract workers, some have continued to stay and work long after their period of authorized stay ended. It seems almost natural that these long-term overstayers have settled in and developed migrant communities around Outer Seoul, where small manufacturing firms and their unskilled foreign workers are clustered. If the conventional wisdom holds true, that temporary migrant worker programmes would result only in large numbers of permanent migrants no matter what governments do to prevent settlement, the Southeast Asian migrant communities in Outer Seoul will grow over time. Their networks and organizations will certainly help and enable new migrants to settle permanently. In the case of Ansan in Outer Seoul, local government offices and business associations, as well as employers, are already recognizing the positive aspects of migrant communities in the city economy, including their vital role in boosting local rental demand and retail sales. It remains to be seen whether other large industrial cities in Outer Seoul, or the entire South Korean society for that matter, will learn from Ansan’s growing experience with and adaptation to migrant workers and their settlement. One thing is clear, however: it will be extremely expensive and highly impractical to turn the tide on the growth of Southeast Asian migrant communities in Outer Seoul. Given the short history of immigration to South Korea, it will be a gradual and painfully slow process for average South Koreans to lose their strong sense of ethnic nationalism and embrace migrant workers of nonKorean descent as potential members of South Korean society. However, the firm belief in the controllability of labour migration that the South Korean Government has held on to needs to be revisited. Its desire to maintain tight control of migrant labour has widened the gap between stated policy goals and actual outcomes. The recent increase in illegal migrant labour has proven the newly enacted temporary migrant worker programme to be a failure. Instead of repeating the empty promise to eliminate the illegal employment

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of migrant workers, the South Korean Government needs to shift attention from its commitment to controlling labour migration towards institutional help for migrant organizations and migrant support NGOs. These organizations play a critical role in the social integration of migrant workers, both legal and illegal, into the hosting communities of Outer Seoul. NOTES 1.

2.

3.

4.

5.

6.

In addition, nearly two million Korean men migrated to the oil-producing countries of the Middle East for construction work during the 1970s and 1980s, but almost all of them returned home upon the completion of their contracts. Castles (2004) calls it “a belief in the controllability of difference”, which is shared by many government officials of the Asian NICs. Given that immigration policies in these countries have been devised to prevent the labour migration process from adding to heterogeneity, Findlay et al. (1998) consider them to be largely racist in their conception and execution. In 1991, the South Korean Government put in place a small-scale employee training programme for local manufacturing firms that ran operations overseas (Korea Labor Institute 2004). Even before the introduction of this programme, some companies were already transferring foreign-national employees from their overseas operations, located mostly in cheap-labour sites, to domestic ones, citing the need of intensive technical training for foreign staff members at the headquarters. This practice was quickly emulated by other firms, as they found the blurred distinction between “training” and “working” highly profitable. Basically, the ITTP expanded the programme eligibility to include all smallsized manufacturing firms, regardless of their experience of overseas operations. For a country in which border security has been an overriding priority for more than half a century, the term “illegal migrant workers” is used for visa overstayers, rather than undocumented workers who entered the country illegally. In the meantime, trainees who ran away from their tied sponsors would not have been included in immigration statistics as illegal migrants, as long as they had not overstayed their visas. Nevertheless, South Korea has “remarkably precise estimates of the number of visa overstayers by matching arrival and departure information” (Skeldon 2006, p. 287). In the meantime, industrial trainees continued to be brought into South Korea until the end of 2006, although the complete phase-out of the training programme had initially been proposed by 2004. Citing the lack of an alternative supply of cheap labour they could draw from, employers lobbied for and won an adjustment period of three years to the EPS. In 2002, the Employment Management System was created to authorize ethnic Korean visitors to work in services and construction as well as manufacturing. A year later, this migrant scheme was incorporated into the EPS and, ever since, employment permits for unskilled service works have been issued to recruit

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7.

ethnic Koreans only. In addition, recent amendments to the EPS have made ethnic Korean migrants eligible for the work permit (H-2 Visa), which no longer ties them to a particular employer, but allows them to change jobs during their three-year stay in South Korea. Outer Seoul is the combined area of Incheon and Kyeonggi-Do. Home to Korea’s largest airport and seaport, the City of Incheon has long served as the gateway for Seoul’s international trade. Seoul is literally surrounded by KyeonggiDo, a province in which twenty-five cities have more than 100,000 residents each. Over the past two decades, Outer Seoul has received a large number of manufacturing firms relocating from traditional industrial districts in Seoul in the wake of deindustrialization and decentralization. Thanks to its geographical proximity to the east coast of China, where a large proportion of Chinese manufacturing production takes place, the southwestern part of Outer Seoul has emerged as a primary site for the small- and medium-sized, export-oriented manufacturing firms in South Korea.

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Joppke, Christian. Selecting by Origin: Ethnic Migration in the Liberal State. Cambridge, MA: Harvard University Press, 2005. Kim, Joon K. “State, Civil Society and International Norms: Expanding the Political and Labor Rights of Foreigners in South Korea”. Asian and Pacific Migration Journal 14, no. 4 (2005): 383–418. Kim, Yeong-Hyun. “Keeping the Gateway Shut: Regulating Global City-ness in Seoul”. In Migrants to the Metropolis: The Rise of Immigrant Gateway Cities, edited by Marie Price and Lisa Benton-Short. Syracuse, NY: Syracuse University Press, 2008. ———. “ ‘The Government Selects and Invites Foreign Workers’: The South Korean State’s Control of Labour Migration and Employment”. International Migration Review. Forthcoming. Korea Immigration Service, Ministry of Justice, Republic of Korea. “Major Policy Guide”, 2006 . Korea Labor Institute. Analysis of the Unskilled Foreign Workforce and Labor Market [in Korean]. Seoul: Korea Labor Institute, 2004. ———. An Effective Long-term Management of the Foreign Labor Market [in Korean]. Seoul: Korea Labor Institute, 2007. Kyeonggi, The Province of. “About Kyeonggi”, 2008 . Lee, Hye-Kyung. “Gender, Migration and Civil Activism in South Korea”. Asian and Pacific Migration Journal 12, no. 1/2 (2003): 127–53. Lee, Minwon. “Invisibility and Temporary Residence Status of Filipino Workers in South Korea”. Journal for Cultural Research 10, no. 2 (2006): 159–72. Lim, Timothy C. “Racing from the Bottom in South Korea?: The Nexus between Civil Society and Transnational Migrants”. Asian Survey 43, no. 3 (2003): 423– 42. Lee, Yong Wook and Park Hyemee. “The Politics of Foreign Labor Policy in Korea and Japan”. Journal of Contemporary Asia 35, no. 2 (2005): 143–65. Ministry of Justice, Republic of Korea. Departure/Arrival Yearly Statistics. Seoul: Immigration Bureau, Ministry of Justice, various years. Ministry of Labor, Republic of Korea. “The Employment Permit System”, 2008 . Moon, Katharine H.S. “Strangers in the Midst of Globalization”. In Korea’s Globalization, edited by Samuel S. Kim. Cambridge: Cambridge University Press, 2000. Oishi, Nana. Women in Motion: Globalization, State Policies, and Labor Migration in Asia. Stanford, CA: Stanford University Press, 2005. Organization for Economic Co-operation and Development (OECD). Ageing and Employment Policies: Korea. Paris: OECD, 2004. Overseas Korean Foundation. “Statistics of Overseas Koreans”, 2007 . Park, Young-bum. “The Republic of Korea: Trends and Recent Developments in

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10

Filipina Wives and “Multicultural” Families in Korea Minjung Kim

1. Background It was a Filipina marriage migrant who delivered a speech on TV supporting presidential candidate Lee in December 2007. It was also a Filipina who was given the third rank candidate seat in the National Assembly for proportional representation of the Renewal of Korea Party in April 2008. Do these events show that monocultural South Korea has been transformed into a multicultural society? Furthermore, does it show that Southeast Asian housewives could politically represent multicultural sectors in Korea? At the least, it presents the situation that “multicultural society” is politically and socially the crucial issue in Korea now. In this chapter, I would like to discuss how “multicultural Korea” began, why marriage-migrant women are highlighted among other groups, and what would be the effect of marriage migration on the patrilineal family system and ethnic nationalism in Korea, based on my existing interview data on Filipina and Korean couples and their family members. With the acceleration of globalization since the 1990s, human interchanges between Korea and Southeast Asian countries have increased in number. In

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1991, 209,747 Koreans — 9.7 per cent of the total number of outbound Koreans — travelled to Southeast Asian countries. However, fifteen years later, in 2005, those numbers had jumped to 1,891,812 and 20 per cent respectively (MOJ 1991, 2005). On the other hand, 117,549 Southeast Asians, or 4.7 per cent of the total number of inbound foreigners, came to Korea in 1991; those numbers had increased to 372,078 and 7.2 per cent respectively in 2005. These figures indicate that more Koreans are going to Southeast Asia than vice versa at the moment. Koreans have already been ranked as the biggest group of visitor arrivals in the Philippines and Cambodia in 2006 (DOT and MOT). The majority of Korean visitors in Southeast Asia are tourists; others are language students, businesspersons, employees of Korean companies, missionaries, retirees, etc. On the other hand, most Southeast Asians in Korea are unskilled migrant workers; others consist of tourists, Koreans’ spouses, university students, invited relatives, etc. So the statistics on long-term sojourners who stay more than ninety days abroad deliver a different message. In 2005, only 5.2 per cent of Korean sojourners abroad were in Southeast Asia; however, 22 per cent of foreign sojourners in Korea were Southeast Asians (NSO 2006). In fact, Southeast Asians make up quite a number of the foreign residents in Korea whose numbers reached one million in 2007. Among them, female marriage migrants from Southeast Asia are not quite as substantial in numbers as compared with other sojourners, especially labour migrants (see Table 10.1). However, the Korean Government, NGOs, and mass media tend to focus their attention on female marriage migrants when discussing the issue of the “multicultural society”, a concept that is quite unfamiliar and even confusing to Koreans. Surely because those Southeast Asian women comprise one-fourth of the foreign wives (see Table 10.2), they are so foreign as to be named “multicultural” and they are expected to play a crucial role in the reproduction of marginalized social groups in Korean society. As Figure 10.1 shows, the decreasing trend of total marriages in Korea has been overlapping in time with the increasing trend of international marriages with foreign females since 2000. With marriage offering almost the only legal way of permanent migration to Korea, the rapid influx of Asian women marriage migrants has been in evidence since the 1990s. From 1990 to 2005, marriages with foreign nationals increased tenfold, making up 13.6 per cent of total marriages in 2005. During the same period, the number of foreign wives increased fiftyfold, making up 72.1 per cent of all international marriages that same year. In rural areas, in particular, around one-third of all marriages are international; in

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Table 10.1 Southeast Asian Immigrants and Female Marriage Migrants from Three Major Countries, 2001–06

2001 Total Inbound Foreigners* Female Marriage Migrants Vietnam Inbound Vietnamese Unskilled Labour Migrants** Female Marriage Migrants Philippines Inbound Filipinos Unskilled Labour Migrants** Female Marriage Migrants Thailand Inbound Thais Unskilled Labour Migrants** Female Marriage Migrants

2002

2003

2004

2005

2006

172,535 170,873 178,251 188,840 266,280 314,677 10,006 11,017 19,214 25,594 31,180 30,208

–

3,236

6,824

7,971

134

476

1,403

2,462

7,781

8,122

10,193

10,212

510

850

944

964

6,721

6,825

7,157

9,748

185

330

346

326

18,168 12,391 5,822

20,150 9,843 10,131

16,667 9,661 997

17,852 12,092 1,157

13,668 11,235 270

15,809 12,193 273

Notes: * inbound foreigners who stayed more than ninety days. ** combined numbers of visas D-3 (industrial trainees) and E-9 (unskilled foreign labour force). Source: Ministry of Justice of Korea and National Statistics Office .

Table 10.2 Number of Marriage Migrants by Nation and Sex (as of December 2006)

Nation Korean Chinese Chinese Vietnamese Japanese Filipino

Number (Male/Female) 35,801 (4,618/31,183) 20,485 (1,944/18,541) 14,831 (63/14,768) 6,546 (569/5,977) 4,324 (138/4,186)

Nation Thai Mongolian Russian Uzbekistani Others

Number (Male/Female) 1,581 (26/1,555) 1,641 (27/1,614) 1,085 (39/1,046) 1,056 (32/1,024) 6,436 (3,502/2,934)

Note: *Naturalized citizens are not included.

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Figure 10.1 Trend of Total Marriages and International Marriages, 2000–06

400,000

Total marriages

350,000 300,000 250,000

Marriages w/ foreigners

200,000 150,000 100,000

Marriages w/ foreign females

50,000 0 2000

2001

2002

2003

2004

2005

2006

Source: National Statistics Office (2007).

2006, half of these international marriages involved Vietnamese, Filipina, and Thai women (MOJ 2006). Studies on female international migration refer to the burgeoning of the “feminization of migration” since the 1990s. This phenomenon implies an increase in the number of migrant women and, at the same time, a continuation or strengthening of particular gender-based divisions of labour, such as “care work”, in “care-drained” developed countries by migrant women of poorer countries (Sassen 2002a; Hochschild 2002, 2003). In Korea, care workers, such as domestic helpers, nurses, and restaurant servers or kitchen staff, tend to be female Korean Chinese who are native Korean speakers and are also legally permitted to be employed in service sectors, whereas female Southeast Asians tend to choose marriage as a migratory route. Although Southeast Asian women take on the positions of wife and mother rather than worker, as pointed out by Piper and Roces (2003), labour and marriage are interlinked as migratory routes and the roles of mother, wife, and daughter-in-law are enmeshed with the role of care worker. Meanwhile, the representation of Southeast Asian wives in Korea has been changing and includes various new images. Early on, they were depicted as “runaway wives” who abused the sanctity of matrimony and family (SBS 2003): a few scandalous cases led to the amendment of the Nationality Act in 1998. Aiming to sustain the system of patrilineal descent, the former Nationality Act allowed only foreign female spouses married to Korean men to be automatically naturalized in Korea by marriage. The new Nationality Act was improved by adopting a bilineal principle in which foreign spouses of

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either sex married to Koreans can obtain Korean nationality. However, it set a delay period of two years as a condition of applying for nationality and forced foreign spouses to be subjugated to inferior working conditions and other civil rights violations during their early residence in Korea. In these circumstances, Southeast Asian wives easily become “trapped women” whose human rights are violated by marriage brokers or abusive husbands (MBC 2003). In most cases of intermarriage through the brokerarranged process, the introductions are more transactional than romantic in nature. In general, the prenuptial period is limited at most to a five-day marriage tour and Korean grooms pay for all the costs (usually US$10,000) of the agency fee, travel expenses, wedding ceremony, etc. In doing so, they attain unconditional rights to choose brides and to plan their lives after marriage. Religious organizations are not so different from commercial agencies in terms of the process and the cost. Some unreliable agencies cheat both Korean grooms and foreign brides. That is why such marriages are regarded by the NGOs as “a kind of human trafficking”. In fact, some Korean husbands and mothers-in-law demand unfair submission from Southeast Asian wives by reminding them of the payment for their marriages. Furthermore, Southeast Asian wives usually go into lower-middle class families with heavy duties of house chores and caring for the young and the old. They are also excluded from free interactions with the outside world because of the lack of language skills and unsympathetic husbands and family members-in-law. On the other hand, the Korean Government, NGOs, and mass media have recently started to call foreign wives “multicultural family members”. Now they represent the new, “multicultural” social sector that will guide local communities towards the globalizing world (KBS1 2005–present; SBS 2008); they are also “new heroes” who will sustain the population and revitalize withering and dying rural communities (Nongmin-shinmun 27 November 2006). Therefore, the topography of intermarriage between Korean males and Southeast Asian females is getting more complicated as the result of dynamic interactions among various sociocultural factors such as gender, race, ethnicity, nation, culture, locality, and social class. In this chapter, I would like to scrutinize the contexts and realities of intermarriage between Filipinas and Koreans on sociocultural, familial, and individual levels. With an emphasis on the contrasting contexts of both sides, I would like to identify how family members try to get along with each other and secure their own positions and identities as well. In the closing part, I will add some critical comments on the reactions of the Korean Government and society towards these families by analysing the current discourse on

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“multiculturalism”. Field data used in this chapter are based on my previous researches in related topics (Kim M. 2003, 2007, 2008; Kim M. et al. 2006; Kim Y. et al. 2006). 2. Intermarriage between Filipinas and Koreans Lacking detailed information on partners in arranged intermarriages, Korean husbands seem to consider the country of origin, along with age, as the foremost criteria for choosing a foreign wife. According to a social worker in Seoul, “Chinese wives have their own outside network, so they tend to be assertive, and women from the Philippines speak English, so they are confident, but other women, like the Vietnamese, are shy about seeking advice and expressing their problems. They tend to be submissive and smile at their in-laws even if there are problems. And one day they’re gone” (New York Times, 30 March 2008). However, the decisions of Korean men are often greatly influenced by bias and the misunderstanding of Southeast Asian cultures and societies. Almost all Koreans are ignorant of bilateral kinship systems or socialist backgrounds that might support relatively equal gender relations or interpersonal values and customs that emphasize indirect conversation, smooth relations, and the role of mediators in Southeast Asian cultures. In general, in the minds of Korean men, “Southeast Asian women” are perceived as: (1) coming from a poorer country and having a lower expectation of men’s economic capacity than Korean women, (2) strangers to Korean culture and language, unlike Korean Chinese, thus, unlikely to run away, (3) from tropical and agricultural regions, (4) having good personalities and being docile and obedient, (5) able to speak English, which is an advantage in the era of globalization (in case of the Philippines), and (6) familiar with Korean patriarchal culture as they are influenced by Confucianism (in case of Vietnam). In particular, Korea and the Philippines have quite different histories and cultural contexts in terms of national identity and international marriage. Koreans are quite a homogenous people, rather discriminatory against foreigners, patrilineally oriented, and as a result tend to discourage intermarriage. In contrast, Filipinos are rather heterogeneous, friendly to others, bilaterally oriented, and encourage intermarriage. These contrasting attitudes on intermarriage in both nations are fundamentally caused by different descent systems — patrilineal descent versus bilateral kinship — and diverse histories of nation-building. One has a homogenous composition with a long history of being one nation-state; the other a heterogeneous

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composition with a long colonial history. Nationality, which often represents an economic rank in the world system consisting of nation-state units, now plays into this historical and cultural construction. When gender hierarchy, a basic component of marital ties, is added to this context, there is the possibility that different spousal hierarchies could be constructed according to various combinations in intermarriage of nation and gender. Class is another variable interacting independently with gender and nationality for the construction of marital structures. The choice of the state of residence made by the newlyweds is also a crucial element in the operation of those combined hierarchies and the formation of transnational processes. In Korea, three types of intermarriage between Filipinos and Koreans are now found. The first type is intermarriage between Filipino men and Korean women whose relationships mostly started in the early 1990s as co-workers in factories, neighbours, or friends in Korea. They could be legally married only after 1998, when the gender-biased Nationality Act was amended, even though they may have lived together for around ten years and may have children together. In most cases, both spouses are working and the wives’ earnings are higher than that of the husbands. In some cases, it can be understood as a choice taken by Korean women who do not want to lose their individuality so they avoid marriage with patriarchal Korean men of their own class (Jo 2000; Kim M. 2003). The second type is between Filipina women and Korean men whose relationship mostly began as English tutors and pupils, assistants and businessmen, or various kinds of brokers and foreign visitors in the Philippines. Most of them are Korean males in their twenties and thirties who met their wives in the Philippines during study abroad, business, or travel. They classify their unions as “love marriages” and differentiate them from the third type of “arranged marriages” through commercial agencies. The last type is also the Filipina-Korean couple, but they met each other for arranged marriages through matrimonial agencies or religious organizations. They are the largest in number and the centre of public attention in relation to human rights and multiculturalism issues, as already mentioned. Most of the Korean bridegrooms are lower-middle class, in their late thirties or older, and in need of housewives who would take care of them, their children from failed former marriages, or old parents. Some even have physical or mental problems that make them difficult to marry. So these marriages are likely to have greater human rights issues. The worst example for Filipinas could be that of Bibi Rey Algana, who was killed on 25 March 2003 in a fall from her tenth-floor apartment after being beaten by her drunken husband (MBC 2003).

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In the Philippines, women’s migration through marriage goes back to the 1970s. According to Tolentino (2001), the motives for Western men marrying Filipina women, often called “mail-order brides”, are two types of a kind of nostalgia. The first type is the fantasy of creating a middle-class nuclear family that was no longer possible with Western women. The second type of nostalgia is that of past colonial rulers, as these men think they are saving Asian women by conquering them. A variation of the first type of nostalgia is played out when Korean men who marry Southeast Asian women expect and hope that they would be able to create a patriarchal family if they can find a woman who can accept their situation and are willing to live abroad. However, when it comes to the second type of nostalgia, South Korea stands in an ambiguous position as a former Third World country that was less developed than the Philippines until the 1960s. Furthermore, the Philippines is a nation that sent troops to Korea during the Korean War. In some aspects, the Philippines also has more “cultural capital” than Korea in such matters as English fluency and American lifestyle and systems. There is, thus, hardly a basis for the colonial fantasy of conquest and salvation in this case, with the exception of the economic gap between the countries. In such a context, these family relations would be not only hierarchical and even exploitative, but also challenging to the homogenous national identity and nationalism of Korean society. In the following I will describe the context and some issues of family relations of both husbands and wives, based on my interview cases, that include various kinds of domestic discord while trying to manage and sustain family relations. 3. Patrilineal and Korean Families? Industrialization and economic development are closely related to the change of women’s roles in family and society. In Korean society today, as in Western societies after the 1970s, an increase of women’s participation in the labour market has had direct effects in the high divorce rate, low fertility rate, and problems in the care of children and the elderly. In a social structure where individual freedom and equality are enjoyed by both sexes and individual success is evaluated on one’s achievement through competition, nothing will push women back to their original place at home. Furthermore, domestic work is being commodified in various ways of outsourcing. Simply finding a mate through marriage is not enough for the formation and maintenance of family as they require special economic conditions. In South Korea, the possibility of marriage is decreasing for lower-middle class men who lack the economic resources to purchase commodified domestic

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work, have the responsibility of taking care of the family as the eldest son, or have a traditional concept of family based on the sexual division of labour. As a result, international marriage with Southeast Asian women such as Filipinas is understood as a means of increasing one’s chances of getting married and increasing one’s status in the era of globalization. In fact, Korean husbands are perceived as burdens by their family or as men who cannot live normally without women. During my interviews, I met a variety of Korean husbands, among them: one who was the only high school graduate among his siblings and who did not get along with other family members due to a bad temper, one who had to look after not only his children from a previous marriage but also the children of a divorced brother, one who was the only person in the family who made a decent living and had to take care of his siblings, parents, and grandmother, one who was the oldest and poorest son with the burden of taking care of an old mother, or who was the second son but a epileptic, and other such cases. Considering that there is an extreme inequality of economic resources between the partners of an international marriage and that marriage expenses are paid exclusively by the husband, it would be very difficult to expect the couple to acquire and share family resources. If the couple jointly spends the money earned by the husband, the husband has almost complete control of the spending. Most wives get only a small amount of allowance, especially in the early stages of marriage. So they are eager to work outside the home to send a remittance to their families in the Philippines and also to be connected with wider society. It is only when the wife starts to bring in income that a new stage of resource sharing and accumulation is possible, such as jointly paying the housing instalments. However, issues such as who will keep and manage the joint account and whose name will be registered on the joint property endlessly come up. This is why Filipina wives realize that forming their own interpersonal network is an absolute necessity and is as important as accumulating economic resources. Most Korean husbands in such marriages seem to share characteristics such as being apathetic, egocentric, hot-tempered, not-family-oriented, and uncooperative in child rearing. They tend to interpret some specific characteristics of their wives as representative of the Filipino national character, probably because they lack proper knowledge of, and attitudes towards other cultures. So once they are ignorant of, or biased against, the Philippines, it has direct effects on interactions with their wives. Husbands tend to evaluate their wives in terms of adeptness in domestic work, mainly in cooking, attitudes towards the in-laws, and child-rearing. On the other hand, wives tend to evaluate their husbands in terms of personality and economic generosity.

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In short, such marriages are based on an implicit contract of exchanging “the status of Korean national and economic power” with “patrilocal residence and housework”. As time goes by, Filipina wives need to consider their own ways to compensate for their unequal position in their conjugal relations. In rural areas especially, most of these couples live together with the husband’s parents or nearby. In the “traditional” Korean patrilineal system, marriage is a process of acceptance not only of wives by husbands but also of daughters-in-law by mothers-in-law. It is not rare to meet a mother-in-law who applies to the agency on behalf of her son and who accompanies her son to the marriage meeting in the Philippines. From her standpoint, once she introduces a daughter-in-law into the family, she might be free from the duty of taking care of her old bachelor son and upgrade her status in extended family relations. Naturally, mothers-in-law take a great part in teaching and training Filipina daughters-in-law how to cook, clean, wash, and to do other housework. So they easily become accustomed to rebuking Filipino-style behaviour and controlling the daily activities of their daughters-in-law. Usually, Korean mothers-in-law are not accustomed to Filipino-style sweet or oily dishes, different methods of cleaning house, and different ways of bathing, clothing, or medicating infants that Filipina daughters-in-law follow. Many Korean mothers also desire to teach proper greetings for elders, body language, and gestures to express respect; they want their daughters-in-law to cook and eat very Korean food like kimchi and soybean paste and speak their own peculiar dialect, even though these things are nowadays quite unfamiliar and difficult to learn even for young Korean women. It is almost impossible for Filipina daughters-in-law to fully understand the exact role of mothers-in-law in patrilineal, extended family relationships. It is natural for them to regard Korean mothers-in-law as their spouses’ mothers and they willingly help them. As a result, Korean mothers-in-law have to develop some strategies to include Filipina daughters-in-law into the Korean style of family relationship. Filipina daughters-in-law hope to keep some distance from mothers-in-law and try to keep a balance of reciprocal relations. Actual relations between Korean mothers and Filipina daughtersin-law are quite various and have been changing over time. In these marriages, the limitations of the lower-middle class exacerbate the problems of patriarchal family relations, partly because some extended families need to live together and have to cooperate under the same roof for economic reasons; this in addition to challenges that would naturally arise from the two women belonging to different nations, cultures, and generations. Here, immigrant wives cannot but choose patrilocal residence in the broad sense. And learning how to live with husbands and in-laws in Korea easily turns into lessons in adjusting to a patriarchal culture.

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4. Bilateral and Transnational Families? In general, in contrast to Korean husbands, Filipina wives are the hope of both families, before and after the marriage. These women try to meet the expectations first of their family back home waiting for remittances and second of the in-laws who want to see their son find a mate to share the burden. By choosing migration and marriage at the same time, these women can dream of rosy futures such as the end of economic hardship, loving a man, forming a family of their own, experiencing a new culture, and so on. Even though there is the risk of being trapped and desperate in the end, they choose their future in South Korea because it is nothing like life in their home country. In other words, they choose an unpredictable future. At least, they may have a chance to work for much higher wages in Korea than in the Philippines and also to invite other family members or relatives from the Philippines to join them. In short, family expectations and hopes — very comprehensive marriage motives — and unpredictable futures become the background of Filipina wives’ marriage. In reality, Filipina wives face problems of economic hardship, familial conflict, and inadequate social protection. In such circumstances, they realize that forming their own interpersonal network is an absolute necessity and is as important as accumulating economic resources. So taking time out from a busy and hectic life to meet people from one’s home village is not for pleasure or to have a good time. It is very practical way to exchange information about job openings, business opportunities, and living in South Korea. From the perspective of Filipina wives, having good relations with the inlaws with the exception of taking up the responsibility of filial piety, seems to be a matter of choice. Usually, relations with the in-laws are obligatory and maintained formally during traditional holidays and family occasions. On the other hand, relations with the wives’ natal families are often practical, as these women invite someone from their family to live with them or nearby. These chain migration patterns of inviting family members to South Korea are done for various reasons: to marry them to Koreans, offer them a chance to study or work, or to ask them to baby-sit while the wives work outside, etc. Whatever the reason, inviting family members becomes more feasible as foreign wives secure their social and familial positions. Bringing her family members to live with the couple is considered as a compensation for her hard work, devotion to the husband, and sacrifices made for her in-laws. However, invited relatives sometimes escape from their registered place of residence and illegally overstay their visas. Meanwhile, the wife’s interpersonal networks are not always negative for the husband; likewise, the husband is not always negative about the wife’s

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management of her networks. Some husbands are open to the possibility that they could move to the wife’s country to retire or for the children’s education because, in the case of the Philippines, it has a lower cost of living and is an English-speaking country. Some husbands utilize the wife’s network to find mates for their siblings and relatives. The demand for international marriage through the introduction of acquaintances is increasing because of the high cost and risk of using marriage brokers. In this context, migrant women in international marriages may become mediators who introduce a different culture, community, and world to their husband and his family. As time passes, family boundaries and relations could become an object of negotiation. In some cases, the family boundary defined by the Filipina is not identical with that defined by her husband or mother-in-law. A newlywed Filipina whom I interviewed in a rural community included the husband’s youngest brother, great-grandparents, and a grandaunt living nearby as part of “her family” in Korea. She also added some remote relatives who were friendly and helpful to “her family”, but subtracted one of her husband’s brothers who disliked her. On the other hand, her mother-in-law considered that her three sons and their families were her family. In rural areas, almost all couples agree on their own family boundaries, which include the husbands’ parents only. However, in the case of a Filipina wife who had severe conflicts with her mother-in-law living under the same roof, she counted only her husband and their two children as her family, although her husband included his mother as part of his family. It implies that Filipina wives tend to perceive family members as the association of individual units and consider family boundaries to be flexible. They include only their procreative family plus certain members of their husbands’ natal families. On the other hand, Korean husbands perceive family members as a group of “all of us here” and consider the family to be defined according to patrilineal stem principles. In the negotiations about family boundaries, children become the centre of family relations. Children of preschool age and under are closely related to the identity and position of the wife, not only in the husband’s family but also in South Korean society. However, when children grow up and begin to receive institutional education upon entering primary school, the position of the mother becomes vulnerable. Filipinas who settled as wives and daughters-in-law in Korean families now need to become parents of a student in Korean society. Their new status requires various new abilities such as vocabulary skills to understand notices and letters from school, participating in parents’ school activities, joining the networks of Korean students’ mothers, and so forth.

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5. The Discourse of “Multicultural” Families It was Hines Ward, a Korean-African-American and MVP of the Super Bowl XL in 2006, who stirred and provoked the South Korean people to reflect on their pride in being a “one bloodline” nation and on their discrimination against “mixed-race” people. However, the majority of mixed-race people in Korea have been the children of Korean women and American GIs, like Hines Ward, and they have been treated as pariahs — shunned, ridiculed, and locked out of normal schools and jobs. Now the children of Korean men and Southeast Asian women are reaching school age in the 2000s and have become the largest majority group of the mixed-race population. According to the patrilineal conception, they should be considered and raised as Koreans but they are “mixed”, which is unacceptable in the context of Korean ethnic nationalism. Even though their naturalized mothers may be considered “foreigners”, these children should never be treated like the previous mixedrace group that Hines Ward represents. South Korea is faced with the reality of a change in social composition, in terms of race, ethnicity, nation, and culture. In this context, it has no choice but to amend its nationalistic attitude in some way or other. From 2006 onwards, honhyeora, a parochial term for “mixed-blood children”, quickly became taboo and was replaced with a new term “children from a multicultural family” (damunwha-gajeong-janyeo). It is a nationalistic belief that “Koreans” (han-kuk-in) are physically of one bloodline (hangyeorae, or dongpo), culturally of one ethnicity (hanminjok), and politically of one nation (hankukmin). It signifies that the Koreans do not have a concrete perception of the nation as civil community as distinct from the nation as cultural community. Furthermore, for the racially and ethnically homogenous Koreans, the category of nation as a cultural community is easily confused with concepts of ethnic group and race. Now the word “culture” in the usage of terms like multiculturalism replaces various categories such as race, ethnic group, and nation in South Korean society. “Multiculturalism” forms the keynote of new policies proposed by various government ministries, mainly the Ministries of Gender Equality and Family (now Gender Equality), Education and Human Resources Development (now Education, Science, and Technology), Health and Welfare (now Health, Welfare, and Family Affairs), Agriculture and Forestry, Culture and Tourism, and Justice. However, “multicultural family” covers a wide range of people: the families of intermarriage couple, legal and illegal foreign migrant workers, Western businesspersons, and (sometimes) families of North Korean defectors.

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The term “children of multicultural families” also covers the mixed-race children of GI couples (the so-called “Amerasian” children), the new type of mixed-race children of intermarriage families (called “Kosian”), foreign migrant workers’ children who have grown up in Korea, and (sometimes) the children of North Korean defectors’ families. In short, “multiculturalism” in Korea is a quite confused and vague concept. Nevertheless, once the mixed-race children became the centre of attention in patriarchal Korean society, the idealized roles of their “foreign” Southeast Asian mothers were conceived as would-be preachers for multiculturalism in the closed and nationalistic local society, or as the re-builders of vanishing rural communities. Filipina mothers have even started to participate in local events, presenting Filipino-style food, clothes, or dances, teaching English as assistant teachers in rural elementary schools, and even applying for jobs in the foreign affairs section of the National Police Agency. However, it is difficult to say that they are the initiators of those activities. Instead, they tend to be represented by local government or NGO officials. It seems it is beyond the capacity of Filipina wives to become mothers of mixed-race children in families firmly based on the sexual division of labour, because it seems almost impossible for them to get acquainted with the language and knowledge needed to assist in their children’s schooling. It is in this context that the government commenced trying to furnish foreign wives with new supportive social systems, in the name of “creating an ‘open or healthy’ multicultural society”. However, the programmes for “foreign” wives are usually aimed at teaching and assimilating them into “Korean” culture, for example, learning to cook Korean traditional recipes, etiquette, folk music and dance, etc. On the other hand, their “half-Korean” children are considered, out of apathy, under the same category of “foreign” children. In fact, “multicultural families” from intermarriage consists of three kinds of Koreans: an unquestionably Korean spouse who is a Korean in terms of race, ethnicity, nationality, and citizenship; a partially Korean spouse who was a foreigner but partly became a Korean in terms of nationality or citizenship; and their children who could be identified as being somewhere in between the previous two kinds of Koreans. 6. Conclusion The socio-politico-cultural configuration of Korea has changed dramatically with the rise of intermarriage between Koreans and Southeast Asians. FilipinaKorean couples are not the biggest group but quite the oldest and are

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increasing. Filipina wives and mothers are the most distinguished and active group in the programmes of new “multicultural” policies, mainly because of the Filipinas’ language skill and their peculiar way of networking. Their historical background of transnational experience may facilitate the globalization of rural and local communities in nationalistic Korean society. However, the present discourse of “multiculturalism” is vague and confused in relation to the overall nationalistic mode and policies. It seems that efforts to broaden the concept of “Koreanness” should take precedence over the introduction of the concept of “multiculturalism”. REFERENCES Constable, Nicole. Romance on a Global Stage: Pen Pals, Virtual Ethnography, and “Mail Order” Marriages. Berkeley: University of California Press, 2003. DOT (Department of Tourism, the Philippines). “Koreans Displace Americans as Top Tourist Arrivals”, 11 July 2007 (accessed 30 April 2008). Ehrenreich, Barbara and Arlie Russell Hochschild, eds. Global Woman: Nannies, Maids, and Sex Workers in the New Economy. New York: Metropolitan Books, 2002. Hochschild, Russell. “Love and Gold”. In Global Woman: Nannies, Maids, and Sex Workers in the New Economy, edited by B. Ehrenreich and A.R. Hochschild. New York: Metropolitan Books, 2002. ———. The Commercialization of Intimate Life: Notes from Home and Work. Berkeley: University of California Press, 2003. Jo, Seong-won. “Oegukin Nodongjawa Nodonggyecheung Hangukyeoseongui Gyeolhonsaryereul Tonghae Alabon Saeroun Maineoritiui Hyeongseong Mit jaesaengsan” [Formation and reproduction of a new minority seen through cases of marriage between foreign workers and working-class Korean women]. M.A. Thesis in Cultural Anthropology, Hanyang University, 2000. Kim, Minjung. “Pillipin Iju Nodongjaui ‘Hanguk Nampyeon’ Doegi” [Being ‘Korean’ husband by Filipino migrant workers]. In Identity in the Era of Transnationalism: Making New Boundaries. The 35th Annual Conference of Korean Cultural Anthropological Society, Jeonnam University, 30 May 2003. ———. “Hanguk Gajokui Byunwhawa Jibang Sahoeui Pillipin Anae” [The Changing Face of Families in Korean Society and Filipina Wives in Rural Areas]. Peminism yeongu (Issues in Feminism) 7, no. 2 (2007): 213–48. ———. “Kugjaegyulghon Gajokgua Janyeui Sungjang” [Living Together as a Family: Ethnic Identities for Children of Intermarriages Between Korean Women and South/east Asian Men]. Hanguk munhwa illyuhak (Korean Cultural Anthropology) 41, no. 1 (2008): 51–89.

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Kim, Minjung, Yoo Myungki, Lee Hyekyung, and Chung Kiseon. “Kukjegyolhon Ijuyeseongui Dillemmawa Suntaek” [Being ‘Korean’ Wives: Dilemmas and Choices of Vietnamese and Filipino Migrants]. Hanguk munhwa illyuhak (Korean Cultural Anthropology) 39, no. 1 (2006): 159–93. Kim, Yiseon, Kim Minjung, and Han Geonsoo. “Yeseong Gyeolhoniminjaui Munhwajeok Galdeung Gyeongheomgwa Sotong Jeungjineul Wihan Jeongchak Gwaje” [Cultural conflicts experienced by female marriage-based immigrants and policy task for promoting inter-cultural communication]. Seoul: Korea Women’s Development Institute, 2006. KBS1. Love in Asia. Weekly evening programme, 2006–present. MBC. “Gukjegyeolhonui Deoche Geollin Yeoseongdeul” [Women trapped by international marriage]. PDsucheop (PD notes), aired on 15 April 2003. Ministry of Justice, Korea. Annual Statistic Report on Immigration, each year . Ministry of Tourism, Cambodia. “Tourist Statistical Report: Executive Summary from Jan-Dec 2006)”, December 2006 (accessed 30 April 2008). National Statistics Office, Korea. Annual Statistics Report on International Migration, each year . “Nongup·Nongchon Chawon Jiwon Mosakhaeya” [Searching for how to support agricultural/rural sectors]. Nong-min-sin-mun, 27 November 2006. Parreñas, Rhacel Salazar. Servants of Globalization: Women, Migration, and Domestic Work. Stanford, CA: Stanford University Press, 2001. Piper, Nicola and Mina Roces, eds. “Introduction: Marriage and Migration in an Age of Globalization”. In Wife or Worker?: Asian Women and Migration. New York: Rowman & Littlefield, 2003. Sassen, Saskia. “Global Cities and Survival Circuits”. In Global Woman: Nannies, Maids, and Sex Workers in the New Economy, edited by B. Ehrenreich and A.R. Hochschild. New York: Metropolitan Books, 2002a. ———. “Countergeographies of Globalization: The Feminization of Survival”. Paper presented at the conference on “Gender Budgets, Financial Markets, Financing for Development”. The Heinrich-Boell Foundation, Berlin, Germany, 19–20 February 2002b . SBS. “Doraoji Anneun Sinbudeul: Gukjegyeolhonui Ggeuneul” [Runaway brides: Shadows of international marriage]. Geugeosi algo sipda (The truth is out there), aired on 8 February 2003. ———. Global jubu (housewives) Quiz Show. Daily morning programme, 2008– present. Tolentino, Rolando B. “Filipinas in Transnational Space”. In National/Transnational: Subject Formation and Media in and on the Philippines, edited by R.B. Telentino. Quezon City: Ateneo de Manila University Press, 2001.

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“Wed to Strangers, Vietnamese Wives Build Korean Lives”. New York Times, 30 March 2008. Yamanaka, Keiko and Nicola Piper. “An Introductory Overview”. Asian and Pacific Migration Journal 12, no. 1–2 (2003): 1–20. Zlotnik, Hania. “The Global Dimensions of Female Migration”. In Migration Information Source, 2003 .

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A Fading Wave, Sinking Tide? A Southeast Asian Perspective 1 on the Korean Wave Pavin Chachavalpongpun

Southeast Asia has in recent years been bowled over by the Korean Wave, the fad for Korea’s popular culture. Known in the local dialect as hallyu, this Korean Wave has been unleashed as the state’s tool in the proliferation of Korea’s cultural influence in the region and beyond. It has also been employed as part of the Korean foreign policy mechanism that was designed to strengthen the country’s political and economic relations with neighbouring states. Hallyu comprises various cultural elements, ranging from films, soap operas, music, fashion, and the country’s cuisine. It plays an important role in building Korea’s presence in Southeast Asia, a presence that had long succumbed to the influence of bigger powers, both within and outside the region, namely of Japan, China, and the United States. For Korea itself, the assertion of hallyu signifies its cultural independence from Asia’s older civilizations, its reconstruction of “Koreanness” in a more modern, sophisticated fashion, and its inclination to take on regional politics through the use of soft power. On the surface, the Korean Wave seems to have been well received by the Southeast Asians who have been searching for alternative cultures to match

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their changing lifestyles and social environment. Looking more deeply however, a sense of discontent among Southeast Asians towards Korea is gradually on the rise, even at the height of the hallyu craze. Korea’s cultural messengers, including tourists, businessmen, and missionaries, have to a large extent misrepresented the state-sponsored hallyu while interacting with Southeast Asians. The Korean Government has also in part been unsuccessful in setting measures necessary to guarantee the enduring impact of the hallyu on this part of the world in the long term. This chapter, therefore, posits that the much-hyped Korean Wave has declining influence in Southeast Asia. It argues this from the perspective of Southeast Asia, especially the way in which the region has perceived and responded to the Korean Wave. 1. Korea’s Role in Southeast Asia Relations between Korea and Southeast Asian nations can be traced back to the dawn of history. Korea’s historical records, for example, show that the first contact between Korea and Siam,2 present-day Thailand, took place in 1391 when Nai Gong, an envoy of the Siamese king, arrived at the capital of Koryo˘ Dynasty (918–1392) in a mission to sound out the Korean market and to confirm the possibility of bilateral trade.3 Ch’oe Sang-su, a Korean historian, also wrote about the visit to the Choson Court (1392–1910) of a Javanese envoy in the fifteenth century.4 It is apparent that the early interactions between Korea and Southeast Asia were mainly stimulated by a thrust to promote bilateral trade and as part of both sides’ aspirations to expand their influence and presence in each other’s territory, but these had made little progress because of the long distance and dangerousness of the sea route between these kingdoms.5 In a broader context, the role of Korea in its early encounters with Southeast Asia was limited because it was largely eclipsed by the overwhelming influence that China and Japan had upon the region. Korea itself was regarded as one of China’s tributary states during the Ming and Qing Dynasties — an argument that has provoked much debate among Korean historians.6 The historical pattern of a regional order in which Korea was perceived to be less dominant when compared with China and Japan has remained almost intact even in the contemporary politics of East Asia. Early contacts between Korea and Southeast Asia fell short in the cultivation of long-lasting and substantial relations as they gradually lost interest in each other. An attempt to resume historical ties was further marred by the advent of colonialism in Asia. Most Southeast Asian states, with the exception of Thailand, succumbed to the European imperialists. Korea, meanwhile, was colonized by its Japanese neighbour. The rekindling of

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contacts was only made possible towards the end of the Second World War and the beginning of the Cold War, when the Korean Peninsula was transformed into a battlefield of ideological conflict. Troops from Thailand and the Philippines were sent to support democratic Korea against the communists in the North. In fact, Thailand was the second country, after the United States, to dispatch troops to Korea during the Korean War from 1950–53. During the Cold War period, Korea and Southeast Asia were preoccupied with rebuilding their respective nations. Tensions on the Korean Peninsula compelled the government in Seoul to devote its foreign policy efforts to the prevention of the potential use of force with its northern neighbour. As a result, the issue of the conflict on the Korean Peninsula inevitably dominated the dialogues between Korea and Southeast Asia during international meetings and bilateral visits. Such geopolitical factors to a large extent slowed down progress and development of real bilateral relations between the two sides. Southeast Asia itself also consumed much of its energy in containing communist threats. In 1967, five Southeast Asian nations — Indonesia, Malaysia, the Philippines, Singapore, and Thailand — agreed to set up a new regional organization designed as a shield against this external menace. The Association of Southeast Asian Nations (ASEAN) has since been assigned a cornerstone of the foreign policy of individual member states. The next few decades witnessed Southeast Asia emerging as a serious player in regional politics. While the United States became directly involved in defence and security arrangements with certain members of ASEAN, Japan, regarded as one of America’s closest allies, began to exert its influence on Southeast Asia on the cultural and economic fronts. China, in the meantime, wanted to reclaim its sphere of influence on the region but this time for different purposes. First, the ideological fallout between China and the Soviet Union prompted Beijing to readjust its foreign policy towards Southeast Asia; it was now not about proliferating the Chinese brand of communism, but preventing communism à la Vietnam, seen as a Soviet proxy, from reaching the shores of Southeast Asia. Second, the overseas Chinese proved to be a valuable foreign policy instrument, especially in the strengthening of Chinese culture that was already deeply rooted in Southeast Asia. The entangled relations between Southeast Asia and major powers left little room for Korea to play a dominant part. Ties between Korea and Southeast Asia were often perceived as less significant and remained the weakest, relative to those between Japan or China and Southeast Asia.7 Today, Korea’s relations with this region seem to be once again put to the test, only this time the hurdles appear to be greater and are presented by the rise of

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China and India. But China and India are not the only two nations whose influence and presence are currently much felt in Southeast Asia. Europe and the Middle East have also competed fiercely with other powers in deepening their ties with Southeast Asia. Yet, the important question here is not about the tireless competition in this regional power politics in winning the hearts and minds of the Southeast Asians. It is about Korea’s capability and willingness to transform its relationship with Southeast Asia into a more meaningful and beneficial one.

1.1. The Magnitude of Korea’s Influence It would be only reasonable to measure Korea against other powers in the region — in this case, Japan and China — in order to evaluate the magnitude of its influence in Southeast Asia. At the peak of the Cold War, while the United States was busy defending democracy in the Asia Pacific, Japan emerged as a regional hegemon through the assertion of its cultural and economic prowess. The Japanese influence permeated everywhere in Southeast Asia and in all important aspects, from commerce, financial aid, and investment to food and fashion. Its economic and cultural influence was aggressively put forward in a manner that compensated for Japan’s inactive defence and military role. Japanese economic dominance in the region was evident, accounting for more than half of the region’s GDP, and three times larger than the Chinese economy. It ranked in the top three trading positions of every nation in the region, including North Vietnam. Japan has also remained the top aid donor to Southeast Asia countries. More concretely, symbols of Japan’s cultural and economic power have been seen throughout Southeast Asian cities since the 1960s. The first foreign department store in Bangkok, carrying a hybrid Thai-Japanese name, Thai-Daimaru, on Rajdamri Road, was established in November 1964.8 The recipe for Japan’s success rests on two important factors. First, although Japan’s outlook on international relations was tightly locked with that of the United States, the government made known its aspiration to formulate a more independent foreign policy, particularly towards Southeast Asia.9 The fact that Japan remained effectively politically neutral in the Vietnam War symbolized the new direction of the country’s foreign policy, that it was not necessarily manufactured to satisfy the American leadership. Second, Japan realized the potential of its soft power and began to exercise it vigorously with Southeast Asian nations in an all-round manner. Japan’s hightechnology products bombarded the regional markets, marking a new dawn of commercial revolution through the Japanese-led internationalization of

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retailing. On the psychological level, the government exported a series of soap operas to Southeast Asian neighbours in which Japan depicted itself as Asia’s centre for a refined lifestyle — modern, yet very Eastern. At the same time, it targeted younger generations with animated programmes and manga, or printed cartoons. Gradually, the wave of Japanese-ness was ingrained in the minds of the local people. Southeast Asia depended heavily on Japan’s material products as well as its cultural innovation. The two elements were packaged as part of Japan’s soft power and cultural diplomacy, which had been consistent but malleable to the changing tastes of Southeast Asians — so intense that they became indispensable in the people’s everyday life. The campaign for Japanese soft power was further initiated to reach out to young leaders of Southeast Asia, such as through the scholarships offered by the Gaimucho, or Ministry of Education, exclusively to government officials and through programmes such as “Ship for Southeast Asian Youth”. The early wave of Japanese influence did not operate without difficulties. During 1970–75, university students in several countries launched antiJapanese demonstrations.10 Japan’s economic and cultural products were boycotted as a consequence of the resurgence of local nationalism. Some Japanese visitors provoked widespread resentment among the Southeast Asians because they were too full of their own identity, to the point of offending what they believed to be the inferior cultures of the locals. Facing such challenges, the Japanese Government recognized the need to implement a broad-based educational policy that would promote a better understanding about the Southeast Asian region, by working closely with available academic institutions, such as the Japan Association of Asian Political and Economic Studies, Centre for Southeast Asian Studies at Kyoto University, and the Japan Society for Southeast Asian Studies.11 In 1977, the Fukuda Doctrine was asserted by the Japanese prime minister Takeo Fukuda, pledging that Japan, a country committed to peace, would never become a military power, would build up relationships of mutual confidence and trust with Southeast Asian countries in a wide range of fields, and would cooperate positively with ASEAN and its member countries in their own efforts, as an equal partner. Surin Pitsuwan, ASEAN Secretary-General, said in his speech at the celebration of the thirtieth anniversary of the Fukuda Doctrine in Singapore that the Japanese pledge to Southeast Asia has become the “edifice” with which all Japanese policies were made and still are.12 As for China, the fact that the Middle Kingdom had long been a domineering power in the entire region is sufficient to justify the magnitude of its ties with Southeast Asia. Patterns of economic and cultural contacts in the historical past, particularly through the tributary system in which the

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Chinese emperors claimed to rule over outlying kingdoms, present themselves as a reflection of a hierarchical relationship between China and Southeast Asia. During the Cold War, China went through different stages and under different guises while interacting with the region, but for the same purpose of maintaining this intimate relationship. From foe to friend, China managed to apply its cultural weapons to achieve its foreign policy goals in Southeast Asia. The achievement was made possible because of a number of reasons, such as geographical proximity, the role of the overseas Chinese, as well as a strategic situation in which China’s influence, both bilaterally and through ASEAN, was forced to come up against U.S. interests in this part of the world.13 The significant number of overseas Chinese in Southeast Asia represents valuable assets for the localization of Chinese culture and traditional practices. Whereas the Japanese were effective in their cultural innovation and association with a modern lifestyle, the Chinese promoted their long-held, cultural values, for example, through the emphasis of filial piety and religious beliefs as a way to market their cultural products. Chinese arts, from opera, dance, painting, and calligraphy to literature and traditional medicine, have remained popular among Southeast Asians because they were made an integral part of local beliefs. But China never disregarded modernity as a component of its cultural outreach. With the help of Hong Kong, Chinese period dramas and movies, mostly projecting the story of human relationships in the royal court, had monopolized daytime television programmes in Southeast Asia, long before the arrival of Korea’s rival soap operas. As in the case of Japan, China’s relations with Southeast Asia were not always stable. The region’s views on China occasionally verged on scepticism over whether Beijing could pose as a threat to peace and security. Certain Chinese moves validated the feelings of Southeast Asia, ranging from the modernization of the People’s Liberation Army (PLA), its territorial ambition in the South China Sea, and, more recently, China’s rapid economic growth that has been perceived as an economic threat to Southeast Asia.14 The region has witnessed anti-Chinese movements since the Cold War period and China’s negative image had still lingered on, at least until 1998 when the anti-Chinese riots broke out in Indonesia. Wang Gungwu, however, argued that China indeed became a diminishing threat to Southeast Asia when it broke with the Soviet Union. It was certainly no longer a threat when it embraced reforms and accepted a high degree of economic dependence on the G-7 powers.15 The Chinese Government aspired to build trust while mending any negative perception, particularly in its relations with Southeast Asia, with the launch of the “peaceful rise” campaign. This is because Southeast Asia figures

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prominently in China’s view of international politics since it is a source of raw materials, a market for its goods and services, and a shipping route for the energy needed to sustain its economy. As a result, China has participated assiduously in the ASEAN-led regional institutions, such as the ASEAN Regional Forum (ARF) and ASEAN Plus Dialogues. China also became the first external signatory to the Treaty of Amity and Cooperation in 2003, an essential symbolic gesture towards its acceptance of ASEAN norms. More importantly, its willingness to negotiate multilaterally with rival Southeast Asian claimants on the territorial disputes in the South China Sea reassured them that Beijing is serious about its “peaceful rise”, at least in the short to medium term.16 What is the place for Korea in the Southeast Asian consciousness? At first glance, Korea seems to have stepped up its game by increasing its involvement and familiarization with ASEAN, as well as with individual members. In November 1989, sectoral dialogue relations between Korea and ASEAN were established. Two years later, at the 24th ASEAN Ministerial Meeting (AMM) in Kuala Lumpur, Korea was accorded Full Dialogue Partner status. As political relations were gradually strengthened through a series of meetings, Korea pushed even more strongly to cultivate its economic presence in the region. Currently, Korea is the fifth-largest trading partner of ASEAN with total two-way trade amounting to US$53.3 billion, trailing only China, Japan, the United States, and the European Union. It enthusiastically takes part in the ARF and the ASEAN+3 framework. In fact, the idea and concept of an East Asia Summit (EAS), with its inaugural meeting in Malaysia in 2005, had originated from the reports of the East Asia Vision Group (EAVG) and the East Asia Study Group (EASG) that were spearheaded by Korea. Additionally, ASEAN and Korea finally completed their Framework Agreement on Comprehensive Economic Cooperation with the signing of the ASEANKorea Investment Agreement, the final key pillar in the historic ASEANKorea Free Trade Agreement in Jeju Island, Korea, on 2 June 2009. Speaking of Korea’s participation in ASEAN, Rodolfo Severino, former ASEAN Secretary-General, emphasized that Korea is one of the easiest nations to deal with in terms of development cooperation within ASEAN: “Korea … focus on a small practical projects, not too much argument, expeditious processing. The Koreans did not promise much, but delivered on what they did”, Severino mentioned.17 At a bilateral level, the Korea International Cooperation Agency (KOICA) has been active in sowing the seeds of friendship with Southeast Asia, more recently with the less developed states in Indochina. Vietnam, Myanmar, Cambodia, and Lao PDR rank among the top twenty largest recipients of Korea’s Official Development Assistance (ODA). Korea concluded a Free

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Trade Agreement with Singapore on 4 August 2005 and signed the Memorandum of Understanding (MOU) on the establishment of a Joint Commission for Promoting Bilateral Cooperation with Indonesia in 2006, which was co-chaired by the foreign ministers of the two countries. To date, Indonesia has been the second most significant destination for Korean foreign direct investment in the region after the Philippines, comprising 3.2 per cent of its total investment overseas. During President Roh Moo-hyun’s visit to Malaysia in December 2005, emphasis was placed upon on furthering bilateral cooperation in the area of SME (Small and Medium Enterprise), the oil industry, geosciences, mineral sources, and new and renewable energy. In fact, during the early 1990s, President Roh Tae Woo paid several visits to Malaysia as part of his attempt to use Kuala Lumpur as a bridge to the rest of Southeast Asia.18 Close bilateral relations were reflected in the implementation of Malaysia’s Look East policy, which took Korea as an economic model to emulate on the path to become an economic powerhouse of Southeast Asia. Thailand, the Philippines, and Brunei also enjoy similar types of cooperation, albeit to different degrees, with Korea. Thailand, in particular, has sought to play an active role in the crisis on the Korean Peninsula and, through cooperation with Korea, the problem concerning North Korean refugees residing in the north of Thailand. Despite its efforts, however, the magnitude of Korea’s influence on Southeast Asia has remained scant. First, in terms of regional politics, Korea is considered a relative newcomer in Southeast Asia whereas Japan and China have been dynamically involved in making of the modern history of the region. Japan was the ruthless colonial power in Southeast Asia in the Second World War. China engaged with Southeast Asia in the Cold War of ideological conflicts, first against the United States and subsequently against Vietnam. Positively or negatively, both powers left profound legacies in their relations with the region. On the other hand, Korea has invested its attention in maintaining stability on the Korean Peninsula at the expense of limiting its own foreign policy objectives. Throughout the latter half of the twentieth century, the tension on the Korean Peninsula effectively determined how leaders in Seoul managed foreign relations with Southeast Asia, on the basis of its traditional realist perspective of security. This perspective did not mesh well with the foreign policy needs of Southeast Asian leaders, who wanted to diversify their relationships with external powers rather than to restrict agendas to defence and security alone. Second, and as a result of its realist perspective on international relations, Korea failed to find a common interest with Southeast Asia on the urgency of revitalizing their relationship. Although ASEAN was concerned about nuclear proliferation, including on the Korean Peninsula, this issue was not a priority when compared with the global

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terrorism that emerged after the 9/11 attack. Today, all parties involved in the solution of the nuclear crisis — North and South Koreas, the United States, Japan, China, and Russia, through the so-called six-party talks — are members of the ARF. However, concerned countries, including Korea, have yet to invite the ARF to play a role in contributing towards regional peace in Northeast Asia.19 To Southeast Asia, Korea is not perceived to be active in regional diplomacy outside of the six-party talks. Economically and culturally, Korea has been imprisoned in the shadow of Japan and China, presumably not because of its lack of potential but rather its lack of will. Two-way trade between Korea and ASEAN is rapidly increasing, but also facing tough competition from China and Japan. None of the Southeast Asian nations have yet to make it into the top five of Korea’s import/export trading partners. Before Korea’s movies and music hit the region at the beginning of the new millennium, Southeast Asia had no clue of what constituted Korean culture and identity, apart from fancy national dress and its image as a “nation of endemic strikes”.20 Since much of its mainstream culture, such as the belief in Confucianism and Buddhism as well as language and arts, were all tremendously influenced by China, Korea’s identity has often as a consequence been overpowered in the region, where major civilizations have interacted and been localized for centuries.21 The difficulty for Korea in penetrating Southeast Asia’s walls of culture and implanting its own brand of civilization stemmed not only from the intense battle against other major civilizations that had taken root in the region, but also from its own elusive process of identity construction. 2. The Korean Wave The strengthening of bilateral ties between Korea and Southeast Asia may have commenced in earnest when Seoul became a member of the ASEAN+3 forum in 1997. But the rise of Southeast Asia’s consciousness of Korean culture was really kick-started at the dawn of the millennium when the Korean Wave, or hallyu, was promoted as part of the country’s search for national identity. Politically, the emergence of Korea’s popular culture was perceived as an outcome of its thriving democracy. Korean democratization began in the late 1980s and unleashed a series of domestic changes. The first civilian president was elected in 1992, ending nearly thirty-two years of military rule. A market economy and progressive industrialization were adopted. Learning from the way Japan broke free from American domination, a newly confident Korea pursued an increasing independent foreign policy to reach out to wider audiences, including those in Southeast Asia. Even in

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sensitive areas, such as national security, Korean leaders changed their viewpoint by reiterating that the key to their country’s military security and international growth would ultimately lie in Seoul, not Washington.22 Several domestic developments followed, such as the abolition of restrictions on travel overseas, the hosting of the Seoul Olympics in 1988 and the co-hosting of the 2002 FIFA World Cup. Social changes that took decades elsewhere were compressed into a few years in Korea. In the aftermath of the Korean War, Korea transformed itself from one of the world’s poorest countries to one of the richest. In the period leading up to the late twentieth century, it had enjoyed one of the highest rates of prolonged economic growth in modern world history. Korea’s GDP per capita had increased from only $100 in 1963 to a record-breaking $10,000 in 1995 and, in less than forty years, to a fully developed $25,000 in 2007. This phenomenon is referred to as the “Miracle on the Han River”, which has continued to this date. As democracy and the economy advanced, Korea’s influence on Asia, until recently negligible, has grown accordingly. Culture and identity-building, once ranked low in national development, were re-emphasized to match the changing political and economic landscape. Korea, as it became more prosperous, was not only looking to craft its own identity as a way to set itself free from the cultural handcuffs of its dominant neighbours, but also aiming to popularize it throughout a wider Asia. The Korean cultural wave, then Foreign Minister Ban Ki-moon said in 2006, has brought his country long-overdue respect. “Everybody knows we are the 11th largest economic power in the world. But we have 5,000 years of culture and this is not well known”, he noted.23 What is the composition of the much-hyped hallyu? Hallyu refers to the phenomenon in which Korean popular culture generates large-scale impacts on neighbouring countries in Asia. The first wave of hallyu reached China in the middle of 1999, with the invasion of Korean television dramas. Initially, it seemed that the boom in Korean entertainment in China was accidental rather than deliberate. China imported Korean dramas because they were affordable and the production was impressive-looking. As their exposure increased, audiences became captivated by them. Series such as Jewel in the Palace, or Dae Jang Geum, and Winter Sonata were so popular that they clocked record television ratings against Chinese series. Even Chinese President Hu Jintao was reportedly a big fan of Dae Jang Geum, which narrated the story of a royal cook that was based on an ethical theme.24 China Youth Daily indicated that Chinese people liked to watch the show to form their dreams and search for the moral values that have been lost in society.25 After China, Korean period dramas were instant,

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runaway hits in Japan, Southeast Asia, the Middle East, and as far as Latin America. Subsequent series such as The Fall Story, Flame, and Stairway to Heaven, as well as movie hits such as Shi-ri and Friends were all well received by Asian audiences. Korean cartoons, namely Rainbow, Little Demon Story, and Big Soldier Guy, also garnered popularity across the region because of their modern design and painting, which greatly appealed to Southeast Asia’s young generation. The 2005 survey conducted by Singapore’s the Straits Times placed Bae Yong Joon, a Korean superstar, as the second most iconic Asian, just behind Aung San Suu Kyi, leader of the National League for Democracy of Myanmar. After his lead role in Winter Sonata, Bae has since become the flag-bearer for Korea’s hallyu.26 Why has South Korea’s popular culture enthralled the hearts of Southeast Asians? First, Korean dramas deal predominantly with Confucian-rooted values that reflect in their emphasis on family relations — the producers recognize that most Southeast Asians enshrine filial piety and solidarity among family members. Moreover, these dramas, in particular, have little sex and violence, which seem to fit with the conservative thinking of the region.27 Besides, they are more realistic and sophisticated and are often based on an urban milieu, thus depicting a similar lifestyle to that of Southeast Asian urbanites. Second, the revolution of new media in Southeast Asia has permitted Korean popular culture to thrive. New television stations, cable channels, and the Internet all produce positive effects on the diffusion of hallyu in the region. Televised dramas were not the only Korean products that conquered Southeast Asian markets. Korean pop stars and their music have been equally successful in making their way into the region. Korea’s best-selling international artists include BoA, Shinhwa, Ivy, Fly to the Sky, Big Bang, Super Junior, and TVXQ. Another rising star, Rain, a singer from Seoul and considered as South Korea’s biggest export, attracted tens of thousands of fans in Japan, Hong Kong, Taiwan, and Beijing at his “Rainy Day” tour in July–December 2005. He held his concert in Bangkok on 25–26 February 2006 and in other major cities in Southeast Asia. Dubbed K-pop, Korea’s popular music hit many Southeast Asian fans with full force, while effectively displacing the once-trendy J-pop, or pop music from Japan. K-pop proved to be an instant sensation because it offered a modern sound and incorporated elements of the American popular musical genres of rap, rock, and techno into its music, which has been designed purely to cater to the younger groups in Asia. It can be observed, however, that the promotion of Korean pop music seems to contradict the state’s original objective of constructing something that was truly Korean. The success of K-pop lies in the fact that its fans are not asked

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to consider too much about its country of origin and are left to enjoy the music for what it is: a cool mix of good looks, powerful songs, and slick dance moves.28 It suggests that the notion of Koreanness, as supposedly embedded in the Korean Wave, is somehow diffuse and highly contestable. An analysis of this particular aspect is to be found in subsequent pages. Korea’s hallyu has also been extended to include items of the material sphere, such as mobile phones, cars, electrical household appliance, and durable goods. In 2002, the Korea Culture and Content Agency was founded to facilitate cultural exports, valued at US$650 million in 2003, because it acknowledged that cultural products could be employed as a primary force for economic growth. A decade before, a drastic makeover was carried out in order to create a significant brand image for the country’s products. Nowadays, Korean chaebols, or business conglomerates, such as Samsung, Hyundai, and LG have edged out some traditional electrical brands that had previously led the Southeast Asian markets, including those from Japan and Europe. The overall Asian automobile market had grown from 5.8 million units in 1995 to 15 million units in 2005. Within this expanding market, Korean automakers have been making rapid advancements; Japanese automakers, which currently occupy over 90 per cent of the ASEAN market, are starting to encounter intense competition.29 The hallyu phenomenon, according to Aaron Han Joon Magnan-Park, signifies an end to Korea’s international invisibility. Here, the dark alley of the Korean Peninsula, obscured in the shadow cast by China, Russia, Japan, and North Korea, harboured the phoenix of a dynamic culture that, with the rise of its economic stature, welcomes the world to partake its cultural pleasures. While the population of ethnic Koreans may be small, the number of cultural Koreans is limitless. This Koreanization of global culture is what hallyu sets in motion.30

2.1. Southeast Asia’s Responses to the Korean Wave The irresistible Korean Wave has, on the surface, been well received by Southeast Asian consumers. The region has come to terms with Korea’s everincreasing power both at the regional and global levels. Korea’s economy is now the tenth largest in the world and the third largest in Asia. In the political arena, Korea has been enthusiastically participating in ASEAN activities, as shown by its cooperation in combating terrorism and the dispatch of its troops to East Timor from 2001–02. Korea also sent its peacekeeping forces to Iraq, a decision deemed to underline Seoul’s devoted ties with the United States. Underpinning these many facets of Korea’s role in Southeast Asia has

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been the magic of hallyu, which the Korean Government has hastened to claim as a part of its foreign policy apparatus. The rapid tide of the hallyu was unstoppable at the beginning of the new millennium. Dramas and music led to an absolute craze for everything Korean, ranging from food, fashion, and cosmetics to language. In Thailand, two universities offer programmes on Korean language — Burapha University and Prince Songkhla University, as well as classes on society, culture, economy, politics, history, and geography. In 2002, sixty-seven students were enrolled in the Korean language degree programme at Burapha University, while around fifty students took the same course at Prince Songkhla University. At Ramkhamhaeng University in Bangkok, where the subject of “Korean Society and Culture” is taught, over 100,000 Thai students have taken this class since it was first offered in early 1995. Young Thais wholeheartedly embraced Korean culture in the wake of hallyu and therefore the desire to learn about Korea, and the Korean language in particular, was prevalent.31 Likewise, the Ministry of Education and Human Resources Development of Korea reported that the number of Vietnamese applicants for the Korean proficiency test had risen to 1,278 in 2005 from 660 the previous year. The outburst of popularity in some ways helped shape a new view of Koreans. Shim Doo-bo, a Korean assistant professor of communications and new media at the National University of Singapore, attested that Koreans living overseas have profited from the popularity of their country’s cultural exports. He interviewed Korean housewives in Singapore and found that, after the immense popularity of Korean televised dramas, they felt that they were better treated by local Singaporeans.32 The popularity of the Korean Wave also produced an increase in numbers of tourists from Southeast Asia to Korea and vice versa. For example, Korean tourists to Thailand continue to rise, totalling over 710,000 in 2002, while Thai tourists visiting Korea similarly surged to 74,000 in the same year.33 In fact, the number of Thai tour groups travelling to Korea has almost doubled in recent years. In the past, Korea drew only about 5 per cent of Thai outbound travellers, compared with top-ranked Hong Kong and Singapore, which accounted for 25 per cent each. Over the past two years, however, the tables have turned. China now tops the must-visit list for Thais, at 35–40 per cent of all overseas trips, followed by Korea (20–25 per cent), while Hong Kong and Singapore have slipped to 15 per cent.34 Encouraged by the mounting interest in Korean culture, the Korea National Tourism Organization declared 2004 as the Year of Korea Rage-Tourism and released publicity marketing commercials featuring Korean movie stars and newly developed attractions, such as the opening of the Dae Jang Geum Theme Park — filming location of the famous drama — which had become a major tourist

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attraction in Korea among Southeast Asian visitors. On top of this, Korea’s Ministry of Culture and Tourism, in cooperation with the Korea Culture and Tourism Policy Institute and Korea Development Institute, organized a programme called “Promoting Cultural and Tourism Development and Exchange with Southeast Asian Countries” from May 2005 to December 2006. The government, since 2005, has set up fifteen cultural centres in Asia, South America, and Eastern Europe to advertise hallyu at the cost of 100 billion won.35 The Korea National Tourism Organization also introduced a new website “hellohallyu.com” to take full advantage of the rise of the Korean Wave in the promotion of the country’s popular culture. The overflowing popularity of Korean culture, although positively received by Southeast Asia at the beginning, became the target of a backlash among Korea’s immediate neighbours, Japan, China, and Taiwan, presumably out of a sense of their own insecurity combined with nationalism. The controversial comic book Ken Kan Ryu, or “Hating the Korean Boom”, published in Japan in 2005, depicted a xenophobic reaction against Korea. A young Japanese woman in the comic book exclaimed that it was not an exaggeration to say that Japan had built the Korea of today. In another passage, the book stated that there is nothing at all in Korean culture to be proud of.36 In the meantime, China and Taiwan, in a moment of rare agreement, threatened to ban or limit Korean television dramas in their prime-time slots from 20.00– 22.00 hours — a move seen as a retaliation against the dominance of Korea’s rising culture. The fear of a Korean cultural invasion into the territories of major powers in the Northeast Asia is understandable. Korea has been perceived as a country culturally influenced by China and once colonized by Japan. The rise of hallyu could therefore be construed as a challenge to the older civilizations of China and Japan and, in many ways, competition from a new Korean cultural imperialist. China, in particular, felt “culturally hijacked” by the way in which the Korean Wave, embedded so profoundly in Chinese culture, had been repackaged as a component of Korea’s own identity. A Chinese journalist said, “Culture is a form of identity for a country. It is very common for a country to create such a cultural influence and phenomenon in neighbouring countries, as was witnessed in history during the Tang Dynasty, when Chinese culture had its impact on Japan, Korea, and Southeast Asia. When the content of the cultural influence is Chinese culture while the player in the centre is Korea, some people feel uneasy and resentful.”37 3. Backlash against Hallyu in Southeast Asia The study by Roald Maliangkay on the myth of Korea’s soft power provides useful methodological considerations in examining the impacts of the Korean

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Wave on Southeast Asia. He argues that the manipulation (of soft power) is becoming more difficult with time while efforts to wield it might prove counter-productive.38 In Southeast Asia, more emphasis has been placed on the end product of hallyu rather than on the process and side effects of the phenomenon. While the Korean Wave has been much celebrated as an alternative culture in the region, a degree of resentment among Southeast Asians is significantly intensifying.

3.1. Badly Behaved Tourists The exercise of soft power has already proven counter-productive in the hands of Korea’s own cultural messengers who have come to interact with Southeast Asians. In fact, it is more the misuse of this soft power that has caused such fatal damage to Korea’s cultural reputation. In recent years, the so-called “Korean outbound tourism miracle” has been the product of the dramatic and, at the time, painful structural reform in the economy following Asia’s financial crisis of 1997. Over time, as Koreans’ spending power strengthened, so did their resolve to spend it on overseas experiences. As a consequence, the number of Koreans travelling abroad passed the ten million mark for the first time in 2005, growing at a rate of 14.2 per cent for the year. The upturn helped drive arrivals figures to new heights in popular Korean destinations, especially in Asia. Southeast Asia may have had a smaller share of Korean tourists totalling 21.5 per cent of the entire Asian market, compared with China and Japan as combined destinations amounting to 51.1 per cent.39 But the number of Korean visitors arriving in Southeast Asia is rapidly increasing: they wanted to take advantage of the popularity of Korean culture in the region, too. Accompanying the hike in the number of Korean tourists is their outrageous behaviour towards Southeast Asians in the face of the Korean Wave, as reflected in the increased number of cases of misconduct, which show a troubling attitude. “Ugly Korean” has become a new term describing Korean tourists who behave badly while travelling in Southeast Asia. In the Philippines, in particular, where the influx of Korean tourists has been evident in the past few years with over 570,000 visiting in 2006,40 some locals have identified them as ugly representatives of Koreanness. There have been numerous cases of heavy-drinking Korean passengers on flights from Seoul to Manila who caused disturbances upon arriving at the Philippines’ International Airport. One such case was of a drunken Korean tourist who took off his pants at the airport while pounding on the glass door of the VIP lounge. In an equally disturbing episode, a Korean tourist was arrested in Cebu for

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assaulting two waiters in a hotel karaoke bar; apparently, he was under the influence of alcohol. While being escorted to the police station, he kicked the police car door and screamed in Korean. Similarly, four Korean golfers were sent to an immigration detention centre on charges of committing dangerous acts against a local. It is a common occurrence for Korean golfers to drink and then curse at caddies or throw tips in their faces. Such outrageous behaviour is not confined only to the golf course or to the airport. It is reported that 90 per cent of Korean tourists come to the Philippines to experience the local “night culture”. Korean expatriates in the Philippines have pointed out that, as far as incidents and accidents involving Koreans were concerned, there have been many cases of reckless behaviour by Koreans. Some resorts were said to have banned Korean tourists because they left the rooms in such a shambles after their stay. Meanwhile, the Korean Embassy in Manila issued a statement warning that thoughtless acts by Koreans were likely to provoke unnecessary friction with Filipinos and could also damage the prestige of both the entire Korean community in the Philippines and the Korean nation.41 These are not isolated cases of the Korean Wave turning distasteful. In late 2001, in the middle of Indonesia’s Ramadan holiday season, a group of drunken Koreans at a karaoke bar attempted to force the waitresses to engage in sexual acts with them.42 Thailand, welcoming twice as many Korean tourists as the Philippines, totalling over 1.1 million in 2006, has experienced similar instances of Korean men behaving differently from what the Thais had seen in the televised dramas. There has been a report indicating that Korean tourists come prepared with 1.5 litre bottle of soju brought from home. “There are quite a few male tourists who, when riding buses, drink from start to finish and scream boisterously. During the day, they snore away sleeping in their buses — red faced, of course — and at night, they patrol the local bars and karaoke clubs”, it stated.43 The misconduct of Korean tourists seems to be confirmed in another alarming report by Heather Peters, commissioned by United Nations Inter-Agency Project on Human Trafficking in the Greater Mekong Sub-Region (UNIAP) and World Vision in 2007, entitled “Sex, Sun and Heritage: Tourism Threats and Opportunities in Southeast Asia”. Peters reports that in the Greater Mekong Sub-Region, the most visible new visitors are the Chinese, the Japanese, and the Koreans. Particularly in Cambodia’s Siem Reap, the increase of Korean investment and presence is reflected in the names of the hotels, restaurants, massage parlours, and the use of the Korean language on signs. Peters also mentions that another service is emerging to meet the needs of this new group of tourists — the night entertainment venues, which can be translated as commercial sex venues. Siem Reap now has a growing number of commercial sex venues

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linked with its expanding mass tourist industry. An emerging and characteristic feature of both regional and border tourism, especially for the increasing numbers of Asian male tourists, is a preference for young adolescent women — preferably virgins. Although they would not say that they have a predilection for children, by choosing young women, preferably teenagers, they often have sex with a girl under the age of eighteen.44 Korea is also listed as a nation that does not respect the human rights of children in the report on the commercial, sexual exploitation of children, submitted to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) during the November 2004 Meeting in Bangkok.45 Responses from some local Southeast Asians range from expressing anger to violence against the Koreans. In the Philippines’s Angeles City area, the police reported that Chun Ho-sang, a Korean professional golfer, was shot dead by bar employees. To contain the scope of local resentment, the United Korean Community Association in the Philippines launched a campaign in an attempt to repair the country’s image, using such slogans as “Let’s Preserve Our Dignity as Koreans” and “Let’s Become Good Koreans”.46 The attempt, however, addresses only the symptom of the misconduct of Korean tourists rather than the root cause of the problem that has now become associated with the Korean Wave.

3.2. Aggressive Missionaries Christianity has been thriving more in Korea than any other country in the Northeast Asian region. Evangelical Protestantism is a relatively recent arrival in the country, having been introduced to the Koreans only after the Korean War. Currently, 30 per cent of the 45 million people in this traditionally Confucian society profess Christianity. Many of them are passionate evangelists and have enthusiastically engaged in overseas missions to spread the word of Jesus. An estimated 16,000 Korean Christians — the world’s second-largest group of proselytizers after Americans — were working around the world as missionaries in more than 150 countries in 2006. Most Korean missionaries work in China in the guise of researchers or businessmen. Russia, Eastern Europe, and Southeast Asia are also popular destinations for Korean missionaries. Jennifer Veale suggested that the number of Korean missionaries has been on the rise owing to heightening competition among churches in sending congregants on as many overseas missions as possible. New markets and riskier missions tend to garner more publicity, which until now has translated into more kudos and ultimately more money for the pastor and the church.47 The incident in which twenty-three Korean missionaries were

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kidnapped by Taliban insurgents on a road south of Kabul in July 2007 exemplified the willingness of Korea’s Christians to jeopardize their lives in the name of religion. The Korea Presbyterian Mission (KPM) and the Global Christian Fellowship were established in Thailand almost thirty years ago and received funding from the Christian community back in Korea. The role of Korean missionaries in Thailand is concentrated on providing shelters to young homeless children, the elderly, and drug addicts. But their recent involvement with the North Korean refugees in Thailand has generated controversy regarding the real function of these Korean establishments. In the past few years, North Korean refugees who have fled from hunger and repression in their homeland have taken long and dangerous land routes from China to Thailand, Myanmar, Lao PDR, Vietnam, and other countries in Southeast Asia to seek refuge.48 Thailand has been chosen as the favourite destination for North Korean refugees as it has remained the only country in the region that gives North Koreans asylum. “Thailand is probably the best country to go right now”, says Chun Ki-won, a Korean missionary jailed in China in 2001 for his religious work and, currently director of the Durihana Mission group.49 The Durihana Mission group is known for offering assistance and shelter to North Korean defectors in Thailand. The Thai Government has tried to discourage North Koreans from seeking asylum in Thailand, fearing it could disrupt diplomatic relations with the governments in Seoul and Pyongyang. In 2004, it was possible for North Korean refugees to travel to Vietnam from China and fly to Seoul. The number of North Korean refugees reached almost 500 and eventually provoked conflict between the governments in Seoul and Hanoi because, in the end, the Korean authority had no choice but to transport these refugees to Seoul aboard a chartered plane. Viewing it as interference, North Korea suspended inter-Korean relations in retaliation and the Vietnamese route was closed.50 Evidence shows that Korean missionaries have been highly involved in the provision of spiritual and political shelter to North Korea defectors, a fact which has brought discomfort among Southeast Asian governments in dealing with North and South Korea. For example, in 2004, Park Jun-jae of the Durihana Missionary Centre, while trying to shepherd six North Korean defectors across the border from China to Myanmar, went missing somewhere in the steep and rugged terrain.51 Strictly religiously speaking, the spread of Christianity à la Korea has also dismayed many in Southeast Asia. In the Philippines, where the majority of the population is commited to Catholicism, Korean missionaries try hard to break through the protective wall and attract locals to their Protestant

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denominations, an endeavour viewed by local religious leaders with suspicion. Lorna Makil of Silliman University in Dumaguete said, “The poor go to the Korean churches because they give handouts such as warm meals.”52 Korean missionaries tend to use finance to recruit nationals and new converts to work together in evangelizing and establishing churches. However, they may do so at the cost of corrupting these “innocent” people, as more recently seen in the Philippines.53 The tactics employed by Korean missionaries seem to follow the historical pattern of the “rice Christians” that came into existence in China in the late nineteenth century. “Rice Christians” refers to missionaries sent to work in the colonies who would withhold bags of rice if the heathen peasants of China refused to come to church. Their modus operandi was to seek out the most vulnerable people and use power, blackmail, money, and deception to coerce people into leaving their faith.54 The Chinese would crawl to the mission compound and pretend to be converts to Christianity just for a bowlful of boiled rice a day. Joseph Tse-Hei Lee argues that central to the political dimension of Christian missionary movements is the issue of intense competition for power in Chinese grassroots society.55 Certain Southeast Asians have distressingly considered Korean missionaries as threats to their long-held religious beliefs, either Catholic or Buddhist, and to their political relations with North and South Korea with respect to the North Korean refugee issue. The perception of threat is intensified by the fact that the seemingly dubious activities of the evangelical missionaries are going against the wave of Korean culture. At the heart of the problem lies the reluctance and inability on the part of the Korean Government to limit the political role of the evangelical missionaries, a role that could be extremely harmful to the country’s foreign relations. The government has long been known to enjoy harmonious relations with the conservative churches since they both recognize the danger of the political and military power inherent in North Korean communism.56 Good relations that have lasted until now continue to influence the state’s unwillingness to interfere in the churches’ affairs even when they threaten national interests.

3.3. Unruly Businessmen Depraved behaviour on the part of Korean businesses in Southeast Asia is also provoking bad feelings among the locals. Southeast Asia has remained one of the largest recipients of Korea’s foreign direct investment: the Philippines (3.4 per cent), Indonesia (3.2 per cent), Vietnam (2.2 per cent), Malaysia (1.5 per cent), and Thailand (1.4 per cent). But the flood of Korean FDI does not necessarily guarantee the country’s firm footing in Southeast Asia. Korean

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bosses have increasingly become synonymous with fraud, human rights abuse and ignorance of the niceties of local cultures. The Korean House for International Solidarity published a white paper on the human rights conditions of Korean businesses overseas, disclosing that hundred of Indonesian employees at a sewing factory had staged a protest in front of the Korean Embassy in Jakarta when the Korean boss fled without paying them three billion rupiahs in salary. Frauds committed by Korean employers have become more frequent in the past few years. On the bulletin boards of every Korean Embassy in Southeast Asia, there are countless appeals such as “We are looking for Mr X who conned us out of tons of money and fled” and “Please catch Mr Y who embezzled our money and fled”. In some cases, missionaries were also involved in illegal practices. It was reported that thirty-three Koreans who were doing missionary work in the Philippines were barred from leaving Korea and confined at the Immigration Department when counterfeit immigration stamps were found in their passports.57 In Vietnam, a female Korean supervisor at a sports shoe factory in Dong Nai province was prosecuted for ill-treating Vietnamese workers under her care. The court was told of her human rights abuses against local workers, for example forcing fifty-six workers to run a four-kilometre circuit around the factory in the full heat of the sun in punishment for not wearing regulation work shoes. Eight of the women lost consciousness and had to be taken to hospital. After the prosecution, more accusations against the same Korean employer emerged, concerning working conditions of the workers, mainly women, employed at the factory. Accusations included wages below the legal minimum for the first three months of employment, highly restrictive limits on the use of toilets, a limit of two glasses of water per working day, verbal abuse, sexual harassment, and even corporal punishment. In its annual survey of trade union rights violations published in mid-June 1997, the International Confederation of Free Trade Unions (ICFTU) expressed its concern over the violent behaviour, both verbal and physical, of certain South Korean employers in Vietnam. Such behaviour, said the ICFTU, was scarcely mentioned in the local press because the Labor Ministry was instructed by the South Korean companies not to reveal information to the press.58 More cases of human rights violations committed by Korean bosses continue to emerge even while the Korean Wave is in full swing in Southeast Asia. Not long ago, a Korean manager at the Sam Yang Company factory, a subcontractor for Nike, was found guilty of striking his Vietnamese employees over the head with a shoe for making small talk in the workplace. At a handbag factory, also in Vietnam, the Korean vice-president of the company brutally assaulted a doorkeeper because the company’s door was

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not closed properly. Anita Chan’s work on “China’s Workers Under Assault: The Exploitation of Labour in Globalising Economy”, offers a critical finding when she explains that Korean managers have gained a notorious reputation as being among the harshest and most abusive foreign investors in the world. Koreans and other observers have used the term “military culture” to characterize Korean management practices. Back in the 1960s and 1970s in Korea, before the union movement became a force to be reckoned with, beating female workers on the shop floor was part and parcel of the Korean labour scene. Today, such abuse has been transferred to Korean-managed factories in China, Vietnam, Indonesia, and elsewhere.59 Chan also points out that the Korean bosses’ maltreatment of local workers could potentially provoke national outrage and affect international relations. Janelli also argues that Korean bosses tend to be seen as remote and uninterested in subordinates’ concerns or their ability to contribute more than obedience. As Janelli puts it, “Subordinates advanced the view that the company was like the army.”60 There are many places in Southeast Asia where Korean companies are still unable to discard such a pre-modern framework of labour management. Basic labour rights, for example the right to assemble, are frequently ignored. Human rights groups in Korea have even urged their government to correct the situation by surveying human rights violations at Korean companies overseas.61 There are now an estimated 100,000 Koreans living in the Philippines, outnumbering those from other nations in the region including Indonesians and Singaporeans. One characteristic feature of Korean immigrants in Southeast Asia, and elsewhere in the world, is their desire to stay together, actually creating their own enclaves. Korean communities soon begin to take shape with their own supermarkets, restaurants, grocery stores, salons, internet cafés, spas, and churches. Some of local businesses have therefore been shut out by Korean commercial establishments. There have also been complaints about Koreans’ illegal business transactions and practices. In Davao City, the authorities launched an investigation into Korean business practices, claiming that Korean businessmen were setting up illegal businesses and dodging visa regulations. The Bureau of Immigration of the Philippines pointedly warned against foreigners operating retail stores and using Filipinos to front for them. Immigration commissioner Marcelino Libanan said foreigners, most of them Korean, had been violating immigration laws.62 Local resentment is not only against the illegal activities of Korean business, but is also engendered by environmental concerns. In Talisay, a huge controversy now swirls around a Korean company’s plan to construct a spa resort despite local environmental restrictions and a massive protest from hardline environmentalists.

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4. Where Has It Gone Wrong? Can the blame be put on the government for cultural crimes committed by Korean tourists, missionaries, and businessmen? The answer to this question requires a close analysis of the government’s approach towards its soft power, in the form of the Korean Wave, over its neighbours in Southeast Asia, local conditions that have sparked ill feelings towards Korea’s cultural messengers, and the perplexing notion of Koreanness, deemed as the embodiment of the new Korean culture. First, the question of the extent to which the Korean Government has been willing to use the Korean Wave as its foreign policy tool must be tackled. Although the Korean Wave has received much publicity at the state level, it has remained “a low priority” in the current government’s to-do list. During the Roh Moo-Hyun administration, the Korean Wave was not even mentioned in its policy goals.63 On the website of Korea’s Ministry of Foreign Affairs and Trade (MOFAT), key diplomatic tasks are elaborated in length. The mission to promote the Korean Wave is ranked third in the five major national policy objectives. It vaguely says, “With the Korean Wave serving to promote a favorable image of Korea abroad, MOFAT has engaged in cultural diplomacy to lay a valuable basis to strengthen bonds of friendship and cooperation with countries and to make use of this as a means to support the overseas activities of Korean companies.”64 More attention is instead paid to the need to pursue balanced and pragmatic diplomacy for peace and prosperity in Northeast Asia — a task directly related to the government’s cautious relations with North Korea — and to diversify its diplomacy in the international arena, such as engaging in substantial cooperation with Europe, Africa, the Middle East, and Latin America, beyond its usual contacts with neighbours in Asia. Likewise, in a speech by Lee Myung Bak, former mayor of Seoul, delivered on 6 February 2007 at the Seoul Foreign Correspondents Club on the topic “A New Horizon and the Creative Reconstruction of Korean Foreign Policy”, a “Seven Point Plan” was first revealed to the public as a way to renew Korean foreign policy. “Cultural Korea” was ranked the lowest in the Seven Point Plan. Lee said: “Cultural Korea” must be an indelible component of Korea’s foreign policy. We have witnessed the possibilities of cultural globalisation by the overwhelming success of the so-called “Korean Wave.” But there is a cultural divide and it should be properly addressed. The Korean Wave can serve, through its IT competitiveness, as a cultural conduit between East and West and between South and North. We can move closer to peace through mutual understanding of culture.65

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Exactly how the government cooperated with the Korean people in the spreading of the national culture has never been explained. One analyst argued that the hallyu was initially made a government policy following the commercial success of Korea in the region. The emphasis was therefore on the expansion of the Korean business empire in Southeast Asia, not on the Korean Wave. Related government agencies, such as Korea’s Ministry of Culture and Tourism, the Korea Culture and Tourism Policy Institute, Korea Development Institute, and the Korea National Tourism Organisation, may have worked closely together to campaign for the rise of hallyu, but their efforts have seemed to follow economic imperatives while using the Wave to facilitate Korea’s bilateral relationships. There is little to suggest that an increased understanding of Korean culture abroad was ever a major concern of Korean policy-makers.66 Second, the ambiguity of what constitutes Korean popular culture is highly problematic and acts as a major obstacle for the Korea Wave to be properly understood by Southeast Asians. The construction of a national identity, something that is meant to represent a nation in a distinctive and unique way, is an elusive task. Quite often, nations are willing to go as far as depicting others in a negative light so that they can stand out and feel good about themselves. It is all about imagining one’s own identity based on their supposedly unique culture or civilization; there is no exception in the case of Korea. Thus, the process of imagining identity and marketing culture could be a tricky business. The problem with promoting Korea’s popular culture lies in its own dubious status as an autonomous culture since much of its cultural heritage can be traced back to a Chinese origin. It can be argued from this point of view that the increase in the popularity of Korean televised dramas may not have anything to do with something truly Korean, but merely owes to the cosmetic looks of Korean actors and the drama’s fine production. Their claim to fame with Confucian-based storylines further confuses Southeast Asian viewers as to their originality and inherent values. These viewers, consciously or otherwise, tend to be drawn only by the image and pretty faces of the Korean actors, rather than their cultural representation. One good example, as Maliangkay asserted, is that many Japanese tourists travel to Korea to visit key filming locations and sample the culture they have witnessed on screen, but they are unlikely to have developed more than a passing interest in Korea’s cultural heritage.67 Korea has struggled to identify itself culturally, especially in opposition to China and Japan. It in fact becomes more and more culturally dependent on the West, as reflected through Korea’s style of popular music and social etiquette. In the past decade, the Korean cultural outlook has been Westernized

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to the point that being Western in one’s thinking and behaviour could be considered extremely prestigious. There are currently 6.6 million ethnic Koreans spread out across the globe in more than 160 countries; most of them have settled in China. But as this group of Korean-Chinese, or chosunchok, returned home, they were treated as second-class citizens. The chosunchok are known to be involved in “3D” — dirty, difficult and dangerous — jobs shunned by local Koreans. They are seen as uncultured distant cousins to be kept at arm’s length. In contrast, ethnic Koreans from affluent Western countries, such as the United States, Canada, or Britain are more welcome. While chosun-chok-accented Korean invites derision, U.S.-accented English often draws appreciative if not envious looks.68 The content of what is considered Korean culture is hence uncertain. Consequently, Southeast Asians have been unable to determine comfortably what Korean culture is all about. To them, Dae Jang Geum and Rain are the ultimate Korean identities with which they can relate intimately. But these identities are not long-lasting. The Korean Wave, built on a hollow identity, is destined to last as long as the key cultural players — in this case, young faces in the entertainment scene — continue to keep audiences amused with fresh excitement, which must keep pace with the ever-changing taste of Southeast Asian consumers. Unfortunately, the increasingly fast method of consumption mostly allows consumers to enjoy products, including popular culture, for only a brief period of time before conveniently forgetting them again.69 Third, because of the ambiguity of the Korean image and the confusion of its origins, the Korean Wave, being employed at first as a mechanism to boost the country’s foreign trade and subsequently popular culture in the rest of Asia, was not designed as a policy for promoting national identity abroad, but rather as one geared towards Korea’s own domestic consumption. To put it simply, the Korean Wave is propagated as part of internal nationalism, which would in turn render political legitimacy to the ruling elites. The promotion of Korean culture in Southeast Asia and elsewhere in the world, through entertainment, tourism, and cultural exchanges, primarily serves the state’s efforts to heighten nationalism domestically as it fostered praise for the Korean heritage overseas.70 Hence, the intention is to perfect Korean cultural products for a nationalistic purpose rather than to use them to win the hearts and minds of the Southeast Asians. Maliangkay raised a critical question here: Is Korea’s image abroad of less importance than Koreans’ image of themselves? Fourth, since nationalism has never gone out of fashion in international politics, a few Southeast Asian states have also chosen to play a nationalistic card to achieve legitimacy both in domestic politics and in their international affairs. The rising Korean Wave has fallen prey to such nationalistic strategies

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launched by such states in the name of protecting national interests. It is thus ironic that in Southeast Asia, on the one hand, the Korean Wave is received with arms wide open, yet on the other, brutally rejected as a threat to power politics. In 2005, a high-level Vietnamese official threatened to stop broadcasting Korean dramas unless Vietnamese television networks introduced Vietnamese shows on a more equal basis. He even implied that his country’s intention was to impose trade sanctions on other Korean products, citing the imbalance of cultural exchanges. In 2004, Korea’s trade with Vietnam posted a surplus of 2.5 billion won as Korean exports grew to 3.2 billion won. If Vietnam retaliated, Korea would suffer losses of a similar margin.71 Nationalistic fervour in Southeast Asia is not directed only against Korean dramas. The invasion of Korean evangelical missionaries in the region has also met with enmity. In the Philippines, the Roman Catholic clergy expressed their concerns over the activities of Korean missionaries, particularly their attempt to win over the Catholic community with money and other material rewards.72 In Thailand where the majority of the population is Buddhist, the state authority has been promoting a form of Buddhist nationalism over and against other religions. The conflict in the South of Thailand exemplifies how the state selects its political enemies by religion. The impact of Korean missionaries in Thailand might not be forceful at the current stage, but the government has monitored their activities closely to ensure that the Buddhist faith will not melt away, of course as part of the preservation of what is believed to be a Thai national identity. Fifth, the realities of the geopolitical and economic landscape in the region play a critical role in discrediting the work of the hallyu and in some cases even debunking the notion of Korean popular culture. Such regional realities have a tendency to demystify the force of the Korean Wave — whether the hallyu is appreciated or rebuffed by Southeast Asians merely depends on surrounding political and economic conditions. This puts in doubt whether the Korean Wave has really been a cultural renaissance of the East or only a reaction to what has been happening in the region. For example, while the Korean media reported that the number of applicants for the Korean proficiency test had surged to 26,545 in 2004 due to a boom in Korean popular culture in Southeast Asia, little was said about the real issue behind this report. It said that Korea has been making efforts to boost not only the popularity of the Korean language but also Korean culture and, as a consequence, over 1,200 Vietnamese and more than 400 Filipinos took the Korean language tests organized by Korea’s Ministry of Labor. The real reason was that these Southeast Asian applicants, in complying with global immigration regulations, must undergo the proficiency test in order to get

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jobs in Korea under the new work permit system.73 The same rule also applies to any applicants searching for employment in Japan — it is not necessarily about the appreciation of Japanese culture and language. When Korea dispatched troops to Iraq — a move seen as an attempt to prove its genuine alliance with the United States — there were mixed perceptions in Southeast Asia regarding the role of Seoul vis-à-vis the war on terror and its interaction with the Muslim world. In February 2004, the Korean parliament approved a plan to deploy 3,000 troops to Iraq, mostly for security and reconstruction. It was Korea’s largest troop dispatch since the Vietnam War, costing approximately $200 million and making Korea the third-largest contributor to coalition forces after the United States and Britain.74 Many points were raised to support the state’s decision, such as the strengthening of Korea-U.S. alliance, the creation of a new benchmark in Korean foreign policy, and the establishment of Korea’s strong presence in the Middle East, which would contribute to securing greater stability of energy supplies; but Southeast Asia, especially the predominantly Muslim countries, kept a watchful eye on Korea’s movements. Despite not specifically opposing Korea’s deployment in Iraq, Muslim countries such as Malaysia and Indonesia cautioned that any military action would be an illegal act of aggression.75 Meanwhile, Thailand and the Philippines were less vocal regarding Korean troops in Iraq, exactly because they were also allies of the United States. The Philippines also sent its troops to this war-torn nation before withdrawing them in response to domestic pressure. It would be unimaginable to relate the issue of Korean troops in Iraq to the impact of the Korean Wave in the region. However, the adamant decision of the Korean Government might have further reaffirmed the Southeast Asian perception of the extent to which Korea has been involved in war rather than peace, ranging from the Korean War, and the Vietnam War to the war in Iraq. It hearkens back to Korea’s old image as a country obsessed with militarism, which is the exact opposite of the soft side of the Korean Wave. In another regional context, Korea has to compete brutally with other socalled cultural powers in order to perpetuate its influence in Southeast Asia. And its main rival at this hour looks rather familiar — North Korea. Recently, North Korean businesses have made inroads into the heart of Southeast Asia. The Pyongyang Restaurant in Cambodia’s Siem Reap, established in 2003, was so successful that another branch was launched in the capital Phnom Penh a year later. Owned and run by the North Korean Government, the restaurant is famous not only for its cold noodles and barbecue served with kimchi, but also for its talented staff, which when not serving are dancing to traditional Korean tunes played on violins and electric pianos. Bertil Lintner

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reported that, threatened with sanctions, the Pyongyang authorities were able to continue to run a string of small-scale companies and business across the region that kept foreign currency earnings flowing back home.76 In 2006, the owner opened an even bigger restaurant in Bangkok, with all waitresses dressed in traditional costumes known as chima jogoiri and with little Kim Ilsung badges on their blouses. Lintner also mentioned that the choice of Thailand is significant in a sense that the kingdom is currently North Korea’s third-largest trading partner after China and South Korea and of course a favourite destination for North Korean refugees.77 North Korea is not only attempting to establish its presence while opening lucrative businesses in Southeast Asia, but also to reclaim its cultural hegemony from its rival in the south of the Peninsula. North Korea’s cultural presentation has further obscured the outline of the Korean Wave. Southeast Asian countries have already posed a variety of questions. Has the political division between North and South Korea made them think differently in cultural terms? Can certain cultural practices in the North and South Korea be interchangeable? Do differences in political ideologies produce different cultural outlooks? Is North Korea’s cultural impact in Southeast Asia a part of the overall Korean Wave? Who, South or North Korea, has the right to claim the ownership of some cultural practices? Yet, again, the fact that most of these questions remain unanswered is because of the ambiguousness of Korean culture and the inability to define Koreanness. 5. Policy Recommendations It might be observed that the Koreans are becoming the Japanese of the 1960s and 1970s who arrived in Southeast Asia during the peak of Japanese popular culture with a superior attitude towards the locals. As the Japanese have reinvented and educated themselves to become more responsible and better behaved, the Koreans today are partly perceived as substitutes for Japan’s past notoriety — something totally opposite to the supposed good ideals of the Korean Wave. This study suggests that bad hallyu could be mended. The Korean Government should not allow its flaws in policy and certain segments of its own people to misrepresent the Korean Wave and generate long-term damage in Korean-Southeast Asian relations, particularly considering that both sides do not have unpleasant memories of their historical interactions, unlike those between Japan and Southeast Asia. Policy recommendations are therefore offered as a reminder that there is room for improvement in the implementation of the Korean Wave.

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5.1. Initiating a Long-Term Vision vis-à-vis Southeast Asia The Korean Wave policy could be sustainable if the government strives to establish a long-term vision regarding Southeast Asia. The key question is how Korea really perceives Southeast Asia and how this region actually fits in with its current foreign policy objectives and fulfils its national interests. The policy of promoting hallyu needs to be reformulated on the basis of its own values, merits, and relevance. In the past, the Korean Wave was taken merely as a supporting mechanism for policies of a higher priority, for example, a part of commercial marketing or tourism promotion. The government was also too sluggish, perhaps because of the lack of policy direction or its miscalculation of soft power, in responding to the first wave of Korean popular culture when Korean dramas hit Southeast Asian small screens at the beginning of the new millennium. Related government agencies need to pursue a more cohesive approach in their efforts to promote the Korean Wave and to set precise time frames, such as short-, medium- and long-term plans for what they would like to accomplish in Southeast Asia in the cultural arena. Success depends greatly on the ability and courage to address issues detrimental to the Korean image — one of them is the absence of cooperation between the state and the Korean people. So far, the Korean Government has failed to communicate to its own people regarding the seriousness of the Korean Wave campaign and its importance as a national agenda. Korean tourists, missionaries, and businessmen need to know how they might become ambassadors of the Korean Wave when they travel and work in Southeast Asia. Equally important is the need to educate them of the traditions, customs, and other cultural practices of various Southeast Asian nations. They need to learn more about Islamic culture when making contacts with local Muslims in the region. Bilateral programmes such as cultural exchanges between Korea and each individual Southeast Asian nation have for a long time been carried out on a piecemeal basis. There was no joint programme that lasted long enough to create a considerable impact. Moreover, most of the programmes have been conducted at the government level with little initiative from those at the grassroots level. The popularity of the Korean dramas was made possible because they managed to penetrate into every household in Southeast Asia — it was a kind of direct sale from producers to consumers. The immediate task of the Korean Government is to “privatize” those official programmes, translating myths and abstract beauties found in Korean dramas into something more tangible and educational, rather than prizing them purely for their entertainment value, in order to maintain the people’s interest in the long run.

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5.2. Setting the Right Priority It is logical that, owing to geographical reasons, Korea’s main concern in its international affairs has been inexorably entwined with security on the Korean Peninsula. Stable relations with North Korea are imperative for continued growth in the South. After all, the two countries were once one, separated by war over half a century ago and suffering the resulting impact of the Cold War. Today, priority and attention is still devoted to North Korea, especially when the issue of nuclear proliferation is intensifying. Right after being elected as Korea’s new president, Lee Myung-bak declared enthusiastically that there would be a new Korea — very global in its attitude and approach. He made his position clear on two important points: getting tough with North Korea and maintaining the country’s good ties with the United States.78 It is ironic that at a time when Korean culture is enjoying a boom in popularity in Southeast Asian countries, the new government has chosen to concentrate on realpolitik issues while bypassing the role of soft power. Korea had been active in regional politics since the establishment of the ASEAN+3 forum in 1997. Despite such a positive trend, Korea has remained an underachiever in Southeast Asia in certain respects. In the past few years, most of the economic and social initiatives and programmes have emanated either from China or Japan. Korean leaders need to recalculate that a “Global Korea” should not mean moving closer to the West only but also includes an improvement in relations and cultural interaction with Southeast Asia by utilizing the Korean Wave as a guiding light.79

5.3. Remoulding the Identity that Makes Impacts Many Koreans would argue that the hallyu is a point of national pride for the country. After having been colonized or overshadowed by its neighbours — Japan and China — for centuries, the country finally has a chance to outdo them on the cultural stage.80 Suffering from the lack of a unique national identity, Korea has been grappling with what would be the best way to symbolize itself in the cultural context, sometimes strictly confining itself to Eastern philosophy, sometimes overtly embracing Westernized values. The success of the Korean Wave will rest on the extent to which it is able to lodge itself in the perceptions of the Southeast Asians. In achieving this, the Korean Wave needs to be remoulded, through a more consistent approach. The Korean Government’s announcement of “Dynamic Korea” as its catchphrase for the tourist industry could systematically be expanded to complement the hallyu. Dynamic Korea could be transformed into a new image of a cool and fashionable nation, which would effectively distinguish Korea from others in

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the region. If Japan is coldly efficient, like Germany, and China is a traditionalist nation turned hungry capitalist, then Korea could shine as a country of urban elegance and cultural accessibility. Cultural accessibility is in fact more important than culture per se. On this point, Korean authorities have not done enough and in a more persistent manner to fill the cultural gaps in Southeast Asia, where, despite its own rich civilizations, cultural development still lags behind economic advancement; the region is therefore consistently looking for alternative cultures to match its material affluence. Furthermore, the Korean Wave also has to undergo an extreme makeover in the sense that it must depart from the old mentality of serving primarily to promote domestic nationalism rather than as a soft power in international relations. The hallyu should not be treated merely as the reminder of the Korean image for the Korean people, otherwise it would become increasingly inward-looking and might generate negative reactions when applied as a part of foreign policy. Outward-looking Korea could be made a new national image and a quintessential component of the Korean Wave.

5.4. Rising above the Rivalry between Two Regional Powers Korea has lost many opportunities to reassert itself in Southeast Asian politics and failed to make the most of the existing rivalry between China and Japan. Korea has been taking for granted what it could achieve in the absence of harmony between the two powers in Southeast Asia. The question of who should lead regional cooperation in East Asia in recent years has been imminent. With China and Japan fiercely engaging in historical reinterpretation, Korea, as a middle, non-hegemonic power, possesses the potential to take the lead in regional initiatives — its intentions are less likely to provoke suspicious resistance.81 It could therefore put itself in a position to build a bridge for major powers in East and Southeast Asia.82 Korea could also enhance the role of ASEAN in breaking through the security deadlock on the Korean Peninsula through frameworks such as the ARF. It would represent a win-win situation for both Korea and ASEAN to work closely together, overcoming common threats while strengthening bilateral ties. Outside the security scope, Korea could fill the gaps of cultural competition among actors and powers in Southeast Asia, including North Korea. This could be achieved by considering how to effectively exercise Korea’s ODA and in what particular areas in order to create cultural and political impacts. It is true that Korea’s technical assistance in recent years has been much offered to less developed countries, such as Cambodia, Lao PDR, Vietnam, and Myanmar. Korea, however, cannot afford to overlook establishing such cultural and

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technical links with more developed states in the region. These links could be put forward in a “mature” way through exchange programmes, rather than one-sided contributions.

5.5. Opening Up the World of Korean and Southeast Asian Studies Early studies on the obstacles for developing Korean studies in Southeast Asia and vice versa have shown the lack of strategic planning for the sustainable growth of Korean and Southeast Asian studies, of cooperation among institutes in Korea and Southeast Asia, of substantial publications on Korea and Southeast Asia and their relations, of lecturers and experts especially in Korean studies in Southeast Asia, and of job opportunities for graduates in Korean language and studies in Southeast Asia.83 Korea needs to work together with its Southeast Asian neighbours to open up the intellectual space so that they can understand each other better, politically, economically, and culturally. Success should not be merely measured in terms of figures — such as how many students are enrolled and how many courses offered — but more on the quality of the programmes. To widen the impact of the Korean Wave, the government may wish to invest in certain academic projects, such as setting up funds for the translation of books from Korean into Southeast Asian languages. Finally, permanent networks of Korean specialists should be created and maintained across university boundaries. The Thai academic Damrong Thandee suggested that, for example, a “Thai-Korean Scholars Association” should be established by the embassy or the KOICA to draw up strategic plans for promoting Korean studies in Thailand.84 One of the most effective ways to regionalize the Korean Wave would be to allow the Southeast Asians to experience it through their own critical thinking and through necessary educational networks. NOTES 1. The author would like to thank Professor David I. Steinberg for his valuable comments on this chapter. 2. The name of the country was changed from Siam to Thailand in 1939 during the military government of Field Marshal Phibun Songkram. 3. Cho Hungguk, “Early Contact between Korea and Thailand”, in Korea Journal 35, no. 1 (Spring 1995): 107–11. 4. See Ch’oe Sang-su, “Korea-Indonesia Relations: Visit of a Java Envoy in the 15th Century”, in Korea Journal 23, no. 4 (April 1983): 71–72. 5. Cho, “Early Contact between Korea and Thailand”, p. 114. 6. The website in China reported in 2004 that Korea was a tributary state of China during the Ming and Qing Dynasties, which sparked

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serious repercussions from Korea over Beijing’s distortion of the history. See Hwang Yoo-Seong, “Chinese Magazine Claims Korea Was Tributary State to China During Ming and Qing Dynasties”, . This view belongs to Carolina Hernandez, chair of the board of directors of the Institute of Strategic and Development Studies of the Philippines, during her presentation at the International Conference on “Strengthening KoreaASEAN Relationship”, jointly organized by the Institute of Foreign and National Security of Korea and the Institute of Southeast Asian Studies, Singapore, 14– 15 September 2005. Jirapar Tosonboon, “The Impact of World Class Distributors on the Retail Industry in Thailand”, in The Internationalisation of Retailing in Asia, edited by John Dawson, Masao Mukoyama, Choi Sang Chul, and Roy Larke (London and New York: RoutledgeCurzon, 2003), p. 80. Donald C. Hellmann, “Japan and Southeast Asia: Continuity amidst Change”, in Asian Survey 19, no. 12 (December 1979): 1189–98. In the 1980s, the leaders of Indonesia and the Philippines also complained about American pressure upon Japan to expand its military defence force and strategic power in the region. In In Search of Southeast Asia: A Modern History, edited by David Joel Steinberg (Honolulu: Hawaii University Press, 1987), p. 446. See Shiro Saito, Japanese Contributions to Southeast Asian Studies: A Bibliography of English-Language Publications 1945–1991, Southeast Asia Paper no. 36 (Honolulu: University of Hawaii, 1992). Speech of Surin Pitsuwan, ASEAN Secretary-General (in waiting at the time), on the topic, “Fukuda Doctrine: Impact and Implications on Japan-ASEAN Relations”, at the International Conference on the “Fukuda Doctrine and the Future of Japanese-Southeast Asian Relations”, Singapore, 3 November 2007. John Peffer, Shifting Gears, China Wins Influence in Southeast Asia, . An excellent analysis of China’s economic threat to Southeast Asia can be found in John Ravenhill, “Is China an Economic Threat to Southeast Asia”, in Asian Survey 46, no. 5 (2006): 653–74. Analysis of data on flows and stocks refutes the argument that China and Southeast Asia are engaged in a zero-sum competition for foreign investment. Although Southeast Asia appears to have lost out to Chinese-manufactured exports in global markets, this has been balanced by substantial increases in exports of components to China itself. Wang Gungwu, “China and Southeast Asia: Myths, Threats and Culture”, EAI Occasional Paper no. 13 (Singapore: Singapore University Press, 1999), p. 18. Evelyn Goh, China and Southeast Asia (Silver City, NM and Washington, D.C.: Foreign Policy In Focus, 12 December 2006), . Rodolfo Severino, Southeast Asia in Search of an ASEAN Community: Insights from the Former ASEAN Secretary-General (Singapore: Institute of Southeast Asian Studies, 2006), p. 307.

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18. Korea in the Pacific Century: Selected Speeches, 1990–1992 of Roh Tae Woo, President of the Republic of Korea (Lanham, MD: University Press of America, 1992). 19. In several conversations with Dr Surin Pitsuwan, ASEAN Secretary-General Designate (at the time), in December 2007. 20. New York Times, 17 January 1997, quoted in Hagen Koo, Korean Workers: The Culture and Politics of Class Formation (Ithaca: Cornell University Press, 2001), p. 2. 21. Chinese culture influenced Korea more heavily than any other region, even though indigenous dynasties continued to rule the peninsula for much of the post-classical period. The people who inhabited the Korean Peninsula were different ethnically from those who came to consider themselves Chinese. Historically, a Han Dynasty emperor conquered the Korean kingdom of Choson and settled Chinese colonies in Korea. These Chinese colonies provided the conduit through which Chinese culture was transmitted. Peter N. Stearns, Michael Adas, Stuart R. Schwartz, and Mark Jason Gilbert, “The Spread of Chinese Civilisations: Japan, Korea and Vietnam”, in World Civilisation: The Global Experience (New York: Pearson Longman, 2004), pp. 286–311. 22. Doug Bandow, Tripwire: Korea and U.S. Foreign Policy in a Changed World (Washington, D.C.: CATO Institute, 1996), p. 13. 23. Pavin Chachavalpongpun, “The ‘Hallyu’ is Riding on the Korean Wave”, The Nation, 19 March 2006. 24. Lukun Yu, The Secret Formula of the Korean Television Drama Dae Jang Geum, . 25. Ibid. 26. Lee Sze Yong, “Signs of Our Times”, Straits Times, 4 December 2005. The survey revealed the top ten Asian icons as follows: (1) Aung San Suu Kyi, leader of the National League for Democracy of Myanmar, (2) Bae Yong Joon, Korean superstar, (3) The Dalai Lama, Tibetan religious leader, (4) Kim Jong Il, North Korean ruler, (5) Bruce Lee, Hong Kong action star, (6) Lee Kuan Yew, Singapore’s Minister Mentor, (7) Mahatma Gandhi, Father of India, (8) Mao Zedong, China’s Great Chairman, (9) Osama bin Laden, Al-Qaeda founder, and (10) Yao Ming, basketball player. 27. Lance Dickie, “The Korean Wave”, Seattle Times, 4 June 2006. 28. Nissim Kadosh Otmazgin, “Contesting Soft Power: Japanese Popular Culture in East and Southeast Asia”, International Relations of the Asia-Pacific 8, no. 1 (January 2008): 73–102. Quoted in Roald H. Maliangkay, The Myth of Soft Power: Selling Korean Pop Music Abroad, paper presented at a conference on “Image-Making in Asia: Branding, Commercialisation and Product Penetration of Popular Products across Asia”, organized by the Institute of East Asian Studies, University of California Berkeley, Berkeley, CA, United States, 5 October 2007, p. 5. 29. “The Strategies of Japanese Automobile/Parts Companies in Asia & Competition

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32. 33. 34. 35. 36. 37. 38. 39.

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with European, American and Korean Manufacturers”, in 1996/97 Asian Automotive Industry (Nagoya: Fourin, Inc., 1997), p. 28. Aaron Han Joon Magnan-Park, “Remember Me, Remember Us, Remember Korea: Hallyu, Flashbacks and the Transformation of South Korea into an Unforgettable Nation”, in Towards Sustainable Economic and Security Relations in East Asia: US and ROK Policy Options, Joint U.S.-Korea Academic Studies (Washington, D.C.: Korea Economic Institute, 2008), p. 213. Damrong Thandee, Current State of Korean Studies: Thailand, Centre for Korean Studies, Ramkhamhaeng University, . “Asia Goes Crazy over Korean Pop Culture”, Chosun Ilbo . Information from the Ministry of Foreign Affairs of Thailand. “Visit to Dae Jang Geum Theme Park”, Bangkok Post, 15 April 2006. Andy Ho, “Korean Drama Serials: Sappily Ever After”, Straits Times, 30 January 2008. Norimitsu Onishi, “Ugly Images of Asian Rivals Become Best Sellers in Japan”, New York Times, 19 November 2005. Yu, The Secret Formula of the Korean Television Drama Dae Jang Geum. See Maliangkay, The Myth of Soft Power: Selling Korean Pop Music Abroad. The statement of PATA (Pacific Asia Travel Association) Director-Strategic Intelligence, Mr John Koldowski. Quoted in “The Korean Outbound Tourism Miracle”, . Jet Damazo, “For Koreans, the Philippines is the new Florida”, (accessed 11 July 2007). Pak Min-seon, “Drunken Misconduct Abroad Gave Rise to the ‘Ugly Korean’ ”, . Ibid. Ibid. Heather A. Peters, Sex, Sun and Heritage: Tourism Threats and Opportunities in Southeast Asia (United Nations Inter-Agency Project on Human Trafficking in the Greater Mekong Sub-Region (UNIAP) and World Vision, 2007), p. 19. The report focuses on the case of Kiribati, a small Pacific island nation that has barely 100,000 people, where Korean fishermen are paying girls around the age of eighteen for sex. The girls are called “KoreKorea” — some of them have had children with Korean fishermen. See “The Shame on KoreKorea”, The Hankyoreh, 9 July 2005. Pak, “Drunken Misconduct Abroad Gave Rise to the ‘Ugly Korean’”. Jennifer Veale, Korean Missionaries Under Fire, .

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48. Alisa Tang, “North Korean Defectors Detained in Thailand”, Associated Press, 24 October 2006. 49. “North Korean Refugees Redux”, Asia Times, 20 September 2007. 50. Benjamin Yoon, “Thailand is Final Life Line for North Korean Refugees”, Chosun Ilbo, 30 April 2007. Yoon is secretary-general of the Citizens’ Alliance for North Korean Human Rights. 51. Lee Wonhee, “Laos is Now a Major Transit Point for North Korean Defectors”, . 52. Quoted in Ronald Meinardus, “The Korean Wave in the Philippines”, Korean Times, 15 December 2005. Meinardus is the resident representative of the Friedrich Naumann Foundation in the Philippines and a commentator on Asian affairs. 53. A. Scott Moreau, Evangelical Dictionary of World Missions (Michigan: Baker Books, 2000), p. 546. 54. Varsha Bhosle, Stories They Don’t Want Told, . 55. Joseph Lee Tse-Hei, The Bible and the Gun, Christianity in South China, 1860– 1900 (New York, London: Routledge, 2003), p. xviii. 56. Kang Wi Jo, Christ and Caesar in Modern Korea: A History of Christianity and Politics (New York: State University of New York Press, 1997), p. 97. 57. Pak, “Drunken Misconduct Abroad Gave Rise to the ‘Ugly Korean’ ”. 58. “South Korean Supervisor Found Guilty by Court”, ICFTU Online, 27 May 1997. 59. Anita Chan, China’s Workers Under Assault: The Exploitation of Labour in Globalising Economy (New York: M.E. Sharpe, 2001), p. 56. 60. Quoted in Richard Whitley, Divergent Capitalisms: The Social Structuring and Change of Business Systems (Oxford: Oxford University Press, 1999), p. 146. 61. “Oppression of Overseas Workers by Overseas Korean Corporations”, The Hankyoreh, 5 September 2007. 62. Damazo, “For Koreans, the Philippines is the new Florida”. Damazo also concluded that the complaints, however noisy, were so far minor and it seemed unlikely that the perpetually cash-strapped Philippines was going to turn away Korean money any time soon; indeed it was just the opposite, with the government aggressively promoting tourism and education to Koreans. 63. Roh Moo-Hyun, the President of the Republic of Korea: Toward an Age of Peace and Prosperity (Korean Overseas Information Service and Government Information Agency, 2003), pp. 14–19. 64. . 65. A speech by Lee Myung Bak, former mayor of Seoul, at Seoul Foreign Correspondents Club, on the topic, “A New Horizon and the Creative Reconstruction of Korean Foreign Policy”, 6 February 2007. 66. Maliangkay, The Myth of Soft Power: Selling Korean Pop Music Abroad, p. 1. 67. Ibid, p. 3. 68. Lee Tee Jong, “In South Korea, Blood is Thinner than Culture”, Straits Times, 10 February 2008.

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69. Maliangkay, The Myth of Soft Power: Selling Korean Pop Music Abroad, p. 4. 70. Ibid, p. 2. 71. “South Korea in Trade Flap with Neighbour”, (accessed 12 November 2005). 72. See the study by Lorna Makil of Silliman University who conducted a field research on the Korean population in the town of Dumaguete. Exploring Transnational Communities in the Philippines, edited by Virginia A. Miralao and Lorna P. Makil (Quezon City: Philippine Migration Research Network and Philippine Social Science Council, 2007). 73. “Korean Language Gets Popular in Asia”, Korea Times, 13 September 2005. 74. Balbina Y. Hwang, “South Korea Troops to Iraq: A Boost for US-ROK Relations”, (accessed 13 February 2004). Hwang is a policy analyst at the Asian Studies Centre at the Heritage Foundation. 75. “Asia-Pacific Split over War in Iraq”, (accessed 19 March 2003). 76. Bertil Lintner, “Dining with the Dear Leader”, (accessed 15 May 2007). 77. Ibid. 78. “Lee to Get Tough on North Korea”, The Nation, 21 December 2007. 79. “A Global Korea: Is it Possible?”, The Nation, 22 December 2007. 80. “Asia Goes Crazy over Korean Pop Culture”, Chosun Ilbo. 81. Nack Young An, “Korea in East Asian Dynamic”, in Korea and the World: Strategies for Globalisation, edited by Shin Eui Hang and Kim Yun (Columbia, SC: Centre for Asian Studies, The Richard L. Walker Institute of International Studies, University of South Carolina, 1995), p. 227. 82. The opinion of Edy Prasetyono, head of the Department of International Relations, Centre for Strategic and International Studies (CSIS), Indonesia, during the International Conference on “Strengthening Korea-ASEAN Relationship”, Singapore, 14–15 September 2005. 83. Damrong Thandee, Current State of Korean Studies: Thailand. 84. Ibid. REFERENCES “Asia Goes Crazy over Korean Pop Culture”. Chosun Ilbo. . Bandow, Doug. Tripwire: Korea and U.S. Foreign Policy in a Changed World. Washington, D.C.: CATO Institute, 1996. Bhosle, Varsha. Stories They Don’t Want Told. . British Broadcasting Corporation. “Asia-Pacific Split over War in Iraq”, 19 March 2003 . Chachavalpongpun, Pavin. “The ‘Hallyu’ is Riding on the Korean Wave”. The Nation, 19 March 2006.

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Lee, Wonhee. “Laos is Now a Major Transit Point for North Korean Defectors”. . Lintner, Bertil. “Dining with the Dear Leader”. (accessed 15 May 2007). Magnan-Park, Aaron Han Joon. “Remember Me, Remember Us, Remember Korea: Hallyu, Flashbacks and the Transformation of South Korea into an Unforgettable Nation”. In Towards Sustainable Economic and Security Relations in East Asia: US and ROK Policy Options. Joint U.S.-Korea Academic Studies. Washington, D.C.: Korea Economic Institute, 2008. Meinardus, Ronald. “The Korean Wave in the Philippines”. Korean Times, 15 December 2005. Miralao, Virginia A. and Lorna P. Makil, eds. Exploring Transnational Communities in the Philippines. Quezon City: Philippine Migration Research Network and Philippine Social Science Council, 2007. Moreau, A. Scott. Evangelical Dictionary of World Missions. Michigan: Baker Books, 2000. Nack, Young An. “Korea in East Asian Dynamic”. In Korea and the World: Strategies for Globalisation, edited by Shin Eui Hang and Kim Yun. Columbia, SC: Centre for Asian Studies, The Richard L. Walker Institute of International Studies, University of South Carolina, 1995. “North Korean Refugees Redux”. Asia Times, 20 September 2007. Onishi, Norimitsu. “Ugly Images of Asian Rivals Become Best Sellers in Japan”. New York Times, 19 November 2005. “Oppression of Overseas Workers by Overseas Korean Corporations”. The Hankyoreh, 5 September 2007. Otmazgin, Nissim Kadosh. “Contesting Soft Power: Japanese Popular Culture in East and Southeast Asia”. International Relations of the Asia-Pacific 8, no. 1 (January 2008): 73–102. Pak, Min-seon. “Drunken Misconduct Abroad Gave Rise to the ‘Ugly Korean’ ”. . Peffer, John. Shifting Gears, China Wins Influence in Southeast Asia. . Peters, Heather A. Sex, Sun and Heritage: Tourism Threats and Opportunities in Southeast Asia. United Nations Inter-Agency Project on Human Trafficking in the Greater Mekong Sub-Region (UNIAP) and World Vision, 2007. Pitsuwan, Surin. Speech on the topic, “Fukuda Doctrine: Impact and Implications on Japan-ASEAN Relations”. International Conference on the “Fukuda Doctrine and the Future of Japanese-Southeast Asian Relations”, Singapore, 3 November 2007. Prasetyono, Edy. International Conference on “Strengthening Korea-ASEAN Cooperation”, Singapore, 14–15 September 2005. Ravenhill, John. “Is China an Economic Threat to Southeast Asia”. Asian Survey 46, no. 5 (2006): 653–74.

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Roh Moo-Hyun, the President of the Republic of Korea: Toward an Age of Peace and Prosperity. Korean Overseas Information Service and Government Information Agency, 2003. Saito, Shiro. Japanese Contributions to Southeast Asian Studies: A Bibliography of English-Language Publications 1945–1991. Southeast Asia Paper no. 36. Honolulu: University of Hawaii, 1992. Severino, Rodolfo. Southeast Asia in Search of an ASEAN Community: Insights from the Former ASEAN Secretary-General. Singapore: Institute of Southeast Asian Studies, 2006. “The Shame on KoreKorea”. The Hankyoreh, 9 July 2005. “South Korea in Trade Flap with Neighbour”. (accessed 12 November 2005). “South Korean Supervisor Found Guilty by Court”. ICFTU Online, 27 May 1997. Stearns, Peter N., Michael Adas, Stuart R. Schwartz, and Mark Jason Gilbert. “The Spread of Chinese Civilisations: Japan, Korea and Vietnam”. In World Civilisations: The Global Experience. New York, Pearson Longman, 2004. Steinberg, David Joel, ed. In Search of Southeast Asia: A Modern History. Honolulu: Hawaii University Press, 1987. “The Strategies of Japanese Automobile/Parts Companies in Asia & Competition With European, American and Korean Manufacturers”. In 1996/97 Asian Automotive Industry. Nagoya: Fourin, Inc., 1997. Tang, Alisa. “North Korean Defectors Detained in Thailand”. Associated Press, 24 October 2006. Thandee, Damrong. Current State of Korean Studies: Thailand. Centre for Korean Studies, Ramkhamhaeng University. . Tosonboon, Jirapar. “The Impact of World Class Distributors on the Retail Industry in Thailand”. In The Internationalisation of Retailing in Asia, edited by John Dawson, Masao Mukoyama, Choi Sang Chul, and Roy Larke. London and New York: RoutledgeCurzon, 2003. Veale, Jennifer. Korean Missionaries Under Fire. . “Visit to Dae Jang Geum Theme Park”. Bangkok Post, 15 April 2006. Wang, Gungwu. “China and Southeast Asia: Myths, Threats and Culture”. EAI Occasional Paper no. 13. Singapore: Singapore University Press, 1999. Whitley, Richard. Divergent Capitalisms: The Social Structuring and Change of Business Systems. Oxford: Oxford University Press, 1999. Yong, Lee Sze. “Signs of Our Times”. Straits Times, 4 December 2005. Yoon, Benjamin. “Thailand is Final Life Line for North Korean Refugees”. Chosun Ilbo, 30 April 2007. Yu, Lukun. The Secret Formula of the Korean Television Drama Dae Jang Geum. .

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The Korean Wave: Korea’s Soft Power in Southeast Asia Joong Keun Kim

The slang word ttan ttara is pervasively used in Korea, describing popular artists such as pop singers, actors, and actresses on stage and on film. The term may be derived from the rhythmical sound of “ttan/ttan/tta-ra/tta-ra”, that spontaneously comes out of your throat when you follow the rhythm of dance music. And yet, the word has a negative connotation. Many Koreans, especially intellectuals in their fifties and over, have had a disparaging attitude towards them. They were of the opinion that popular culture was “lowly” and “vulgar” and were taught from early childhood to focus on more intellectual activities. Until the nineteenth century in Korea, popular entertainers were usually perceived and treated as lowly people. Even though such perceptions may not have been unique to Korea, it was especially prevalent in Korea’s Confucian society until the early twentieth century. In recent times, however, popular artists in Korea have been very successful domestically and abroad, especially in East Asia, transforming the image of the country in a way that the government and its diplomats have been unable to do on their own.

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In the last few decades, despite its stories of economic success and political achievements, South Korea has often been depicted by foreigners as a problem-ridden nation characterized by conflicts with the North, violent anti-government demonstrations, and hardline trade union movements. However, Korean popular culture in the form of pop songs, movies, television serials has lent the country a more positive appeal. Let me tell you the story of Candy Shu, a twenty-two-year-old Malaysian girl. Candy was shopping in a video store in Kuala Lumpur when she told a Korean lady there that she and her parent had become enthusiasts of Korea after watching Korean television serials. She stated that her image of Korea had changed from that of a feudalistic and patriarchal county to an open and democratic society.1 This is just one of many such instances. From the late 1990s, the winds of Korean popular culture have been blowing over East Asia; now, strong gusts are moving across the Pacific, the Indian Ocean and the Takla Makan Desert and stirring interest in Central Asia, North Africa, and even Latin America. This phenomenon, known as the Korean Wave, refers to the recent surge of popularity of Korean popular culture abroad, especially in East Asia. Though Korean pop music, movies, and TV serials ignited the Korean Wave, it is now a worldwide cultural phenomenon encompassing all forms of Korean pop culture such as music, movies, TV serials, fashion, games, animation, hairstyles, and so on. Enthusiasm for Korean pop culture has encouraged foreigners to learn the Korean language and to appreciate Korean cuisine. 1. The Scenes of the Korean Wave The Korean Wave first captured the people’s attention in the mid-1990s in China, when Korean pop music gained popularity among Chinese youth. In mid-1997, a Korean television serial ignited the Korean boom in China. CCTV Channel 1 telecast a Korean television serial entitled What is love, though? (Sarang-i-meo-gilae? in Korean) The TV drama was aired for two hours every Sunday morning for six months. The serial attracted 150 million viewers and won the second-highest viewing rate among imported foreign TV serials of the year. Due to a volley of fervent requests, CCTV Channel 2 replayed it for three months in 1998 at prime time (9:00 p.m.–10:00 p.m., Tuesdays through Saturdays).2 According to an analysis, the serial gained popularity among the young and middle-aged alike, but for different reasons. Some modern elements of the serial, such as its sleek and sophisticated feel, the refined fashion of the characters on screen, and their high material living standards attracted

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youth and made them connect to the show. In contrast, middle-aged people connected to the show because many Korean TV serials upheld the ideals of pure love and Confucian family order that modern Chinese society was perceived to be losing. The Korean Wave is also referred to as hallyu, from the Korean pronunciation of the term. The term was coined in China by the People’s Daily in its edition of 30 September 2000, when it carried the news about a grand performance by Korean pop music stars. Given that the newspaper is the most influential publication in China, its use of the word hallyu means that the enthusiasm over Korean pop culture had started to take root in China at the time.3 From the late 1990s the Korean Wave spread to Taiwan, Hong Kong, Japan, and most of the Southeast Asian countries. By 2000, the wave was in full swing and had reached Latin America, Central Asia, North Africa, and even Eastern Europe. However, the wave has not yet reached North America and Western Europe, probably due to differences in culture, tradition, ways of thinking, and standards of living between the East Asian and Western countries. Only certain Korean movies were screened and some Asian television channels showed Korean television serials in the United States and Canada. In 2003 and 2004, another Korean television serial was introduced in East Asian countries. The drama Winter Sonata swept the whole region, especially Japan. It was a story of pure love that Japan had buried in its collective memory. Middle-aged women and men in Japan were able to find their own forgotten selves in the drama and remember their youth. They gave Japan’s highest honorary title sama to the drama’s lead actor, Bae Yong Joon, and called him Yong-sama. When he arrived at Haneda Airport in April 2004 and Narita Airport in November 2004, each time more than 5,000 enthusiastic fans for Yong-sama crowded the airports and traffic was brought to a standstill. Associated Press and Reuters described the scene with the headline, “Arrival of Yong-sama Made Fans Crazy”. Nippon Hoso Kyokai (NHK) first aired Winter Sonata through satellite in April 2003 and replayed it in December. The reaction of viewers was so enthusiastic that it telecast the drama terrestrially in April 2004. Even though it was aired at midnight, it took the country by storm and viewing rates were well over 20 per cent.4 The impact of the drama was not limited to Japan. It gained remarkable popularity throughout East Asia and other regions. For example, the viewing rate in Uzbekistan was up to 60 per cent in 2005. When Bae Yong Joon visited the Botanic Gardens in Singapore in 2004, the Garden named a new species of orchid Dendrobrium Bae Yong Joon. In a big poster for the Garden entitled “Orchid Family”, you can see Bae’s picture holding his pink orchid.

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Beside his picture, you can also find familiar faces — Queen Elizabeth, Emperor Akihito, Margaret Thatcher, Nelson Mandela, Jackie Chan, and Ricky Martin — touching orchids named after them. Winter Sonata contributed to changing the image of Korea and Koreans in a favourable way among Asians, especially the Japanese. The Nation, Thailand’s English newspaper, carried an article titled “The ‘Hallyu’ is Riding on the Korean Wave”. It started with “Think of an Asian icon? The older generation would have thought about Bruce Lee or Dalai Lama. They are assets of the past. A recent survey conducted by Singapore’s the Straits Times places Bae Yong Joon, a Korean superstar, as the second most iconic Asian, just behind Aung San Suu Kyi.5 In 2004 and 2005, another blockbuster TV serial swept across East and most of Southeast Asia. The Jewel in the Palace (Dae Jang Geum in Korean) was first telecast by Gala Television (GTV) of Taiwan in 2004 and gained the highest viewing record of the year. In Hong Kong, when it was introduced by Television Broadcasts Limited (TVB), it gained tremendous popularity and recorded an unprecedented viewing rate of 47 per cent.6 The Jewel in the Palace is currently the world’s most recognized Korean TV serial. Recently, it has also been aired on television in India, Egypt, Mexico, Germany, Iran, and so on. When I visited Hanoi and other capital cities in Southeast Asia in 2006, it was Lee Young Ae, lead actress of the drama, who greeted me first at the airports. Ms Lee had become the most popular advertising model in East Asia. Her smiling face on advertising banners greeted arriving passengers at major airports in East Asia. Other supporting actresses of the drama were also as phenomenally acclaimed as Ms Lee in Southeast Asia. When supporting actress Yang Mi Kyung, playing Lady Han in the drama, visited the Philippines and Brunei in March 2006, she paid a courtesy call on the acting Foreign Minister in Manila. She was also received by the Minister of Culture, Sports and Youth in Bandar Seri Begawan. In June 2006, when she visited Cambodia, the Deputy Prime Minister and Foreign Minister welcomed her in his office.7 The total amount of export revenue from the drama has been estimated at well over US$4 million as of early 2005.8 The Jewel in the Palace is a story about a female traditional medical practitioner and chef who served the Korean royal family in the sixteenth century. How did such a drama attract a global audience? The success of the show has been commonly attributed to the gourmet cuisine so beautifully depicted, the regal clothing, the personal success of the heroine, and the plot itself. However, what is particularly interesting for us is the fact that interpretations of the underlying story of the drama vary from country to country.

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A Chinese critic attributed its success to its underlying lesson about the triumph of morality. Elsewhere, a producer at NHK found in it the art of managing oneself in social competition. The Korean Embassy in New Delhi interpreted it as a female’s success story. Korean scholars commonly found in it a plot of competition and confrontation. These various interpretations show us that Chinese society may be preoccupied with a morality complex, the Japanese with the complex of management of social life, Indians with a female complex, and Koreans with a competition complex.9 Interpretation of the drama also varied from individual to individual. A Singaporean cabinet minister told me that the drama was a must-see for politicians, given that it subtly described the undercover political struggle in the palace. Vietnam is generally recognized as a key country in Southeast Asia infused by the Korean Wave. A Korean TV serial entitled Son and Daughter was exported to Vietnam in the late 1990s, drawing the attention of the Vietnamese. Other serials such as Brothers from a Medical Family and The Last Face-off were also regarded as milestone products. Jang Dong Geon and Kim Nam Ju, starring in Brothers from a Medical Family, were treated as national heroes in Vietnam. In 2000, more than half of all imported foreign movies in Vietnam were of Korean origin. Korean TV serials made up a record 40 per cent of all occupancy rate in the overall body of drama programmes being aired by the broadcasting stations in Vietnam. One has to wonder why Korean popular cultural products enjoy this kind of popularity in Vietnam. Cultural similarity based on Confucian values may be one factor determining the popularity of Korean cultural products in Vietnam.10 The Korean dramas espouse Confucian ideals, both in terms of their actual content as well as the collective manner in which they are watched by Vietnamese families. In Vietnam, where community bonds are still strong, the popularity of Korean dramas goes hand-in-hand with the fact that they are made for the whole family. Family members can get together at the dinner table after a long day’s work and watch Korean dramas with shared laughter and tears. Furthermore, the plots of Korean TV serials and movies reward good behaviour and penalize the bad, while placing a high value on harmonious relationships among family members. This reaffirms Confucian ideals for the Vietnamese viewers.11 In addition, the sponsorship of Korean dramas by Korean companies investing in Vietnam might have contributed to the expansion of the Korean boom. Korean companies have benefited in turn by employing popular hallyu stars as advertisement models. The popularity of the Korean TV serial dramas has fed into East Asians’ interest in Korean movies. Korean movies have also contributed to the Korean Wave’s impetus, although their impact has been less explosive than that of the TV serials. In richer economies such as Japan, Hong Kong, and

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Singapore, Korean movies were introduced in advance of Korean TV serials. The Korean movie Shiri opened the floodgates of the Korean Wave to Singaporeans in 2000. It amassed box-office profits amounting to S$300,000 (US$207,000). A local newspaper dispatched a reporter to Korea to cover the movie’s success story in more depth. At the beginning of 2001, three Korean movies were released at all the first-run movie houses at the same time. Since then, Korean movies have found a steady following amongst Singaporeans. In 2007, Two Hundred Pounds Beauty, a comedy about an obese girl turned into a beauty through plastic surgery, drew crowds of Singaporeans. Box-office profits accumulated to more than S$600,000 in just three weeks. Most recently, November 2008 saw seven films being released to headline the Korea Film Festival in Singapore. All tickets on offer were subsequently sold out. However, here in Singapore as elsewhere, it has been TV serials such as Winter Sonata and The Jewel in the Palace that have maintained the momentum of the hallyu boom. When we mention hallyu, we can hardly fail to mention the popularity of Korean pop singers. Let me just take the case of Rain, a world-famous pop star who was chosen by Newsweek magazine as one of the 100 most influential figures of the world in 2005. When he performed in a concert in Singapore in January 2007, the Singapore Indoor Stadium was fully packed. The most expensive seats, priced at S$499 (US$345), were all sold out. Most recently in November 2008, the Korean Embassy in Singapore organized Korea Festival 2008, which attracted more than 40,000 Singaporeans. Spread over three weeks, the festival showcased the staples of Korean pop culture such as K-pop songs and dances, films, food, as well as “fine art” offerings in the areas of traditional dance, contemporary arts, and classical music. The festival was organized around the theme of “Communication and Sharing”, which was meant to resonate with the values of multiracialism and multiculturalism that form the basis of societal harmony in Singapore. For example, the opening ceremony of the festival consisted of a collective bibimbap-making session in public (bibimbap is Korean white rice with a wide variety of pre-sautéed vegetables stirred in together with generous dollops of chilli paste). After the various ingredients were mixed together in a giant bowl by participating guests, the dish was shared around and consumed with relish by the attendant audience. Other events evoked similar communal feelings from both Koreans and Singaporeans, bringing them closer through common participation and shared experiences, such as kimchi-making lessons, taekwondo performances, star-studded K-pop concerts and so on. As a form of active outreach by the Korean community, the festival was organized for the mutual benefit of both Koreans and Singaporeans alike. It appears to have achieved its aims in this respect.

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The success of Korea Festival 2008 reaffirmed the popularity of the Korean Wave with Singaporeans and their neighbours alike. The festival also suggested important aspects to note when promoting the soft power of Korea abroad. First, the exhibition of Korean contemporary art attracted a fairly large audience of intellectuals when it opened in early November 2008. This fact strongly suggests that Korean classical culture, too, can be successful abroad. Second, even Korean traditional dance can successfully appeal to a foreign audience if the choreography is modified to cater to foreigners’ tastes. Third, a benevolent and socially conscious image can be successfully cultivated through philanthropy and community-oriented actions. During Korea Festival 2008, donations totalling tens of thousands of dollars were collected via a meticulously organized charity golf game and dinner. These donations were channelled to a local charity foundation, which in turn promoted a good image of the Korean community in Singapore among locals. 2. Causes of the Surge of the Korean Wave Until I arrived in Singapore in March 2007 for a new assignment, I did not know that the Korean Wave had been so deeply absorbed by Singaporean society. Since my arrival, whenever I have had long talks with Singaporeans, in many cases the topic of the day has moved spontaneously to the affection for Korean Wave pop stars and/or Korean food. I can recall a variety of smiles expressed on the faces of ladies, young and old, when they talk about their favourite heroes or heroines.

2.1. How is it possible for the Korean Wave to have swept the whole of Asia? First, most East Asian countries share a similar culture and traditions based on Confucianism. In that sense, it is not a mere accident that the Korean Wave was ignited in China, Japan, Taiwan, and Hong Kong — spheres of Chinese culture like Korea — subsequently spreading to Vietnam, Singapore, and other Asian nations. Confucian values place a greater emphasis on communal human relations than on the individualism of Western culture. Confucianism also values filial duty, family bonds, patriarchal family relationship, and the order of rank. Such values generally form the basis of Korean TV serials and movies. Therefore, East Asians feel comfortable about the development of the story and sympathize with the characters. Moreover, the Korean Wave evokes memories for the older generation in East Asia, especially in Japan. Yoshinori Fujiyama, cultural attaché at the Japanese Embassy in Seoul, mentioned at a conference in 2006 that Korean

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movies and TV serials awaken a sense of nostalgia in the Japanese. The Japanese miss the traditional values that are perceived to be rapidly disappearing from their society. As Japanese society becomes more individualistic and competitive, people have become more alienated, yearning for lost values and idealized traditions. Korean TV serials and movies usually do well in portraying the subtle feelings and compassion occurring in human relations. Compassion, affection, and care for others have stimulated the sensibilities of the Japanese.12 Second, Korean pop culture can be likened to a cultural cocktail. As a consequence of the rapid economic, social, and political development of Korean society, younger generations have been extensively exposed to Western cultures and are influenced by them. Therefore, this amalgamated Korean pop culture appeals to youngsters in Asia who desire a release from social yokes and the restrictions of traditional authority. The social standing of women in Korea has been elevated very recently. Asian women can easily find in movies and TV serials Korean girls who wield power over their boyfriends and are respectfully treated by them. Watching Korean pop products, Asian women may empathize with the Korean girls on screen and even feel a sense of positive catharsis when they see the portrayal of Korean girls as independent and respected figures. Additionally, the modern dynamism of Koreans and Korean society has attracted people in Asia, especially those living in developing countries. A pretty young girl from a lowly family background overcomes severe adversity and finally marries a handsome young rich man. This is the familiar story arc of many modern Korean TV serials and movies. The portrayal of a rags-to-riches Korean society where anyone can become somebody offers hopes to the oppressed and stressed people of Asia. Many Korean pop products describe the process of the marginalized gaining access to the mainstream. That is the dynamism of Korea. That is the reason why women, youngsters, the poor, and people under stress love Korean pop culture. Third, in recent times the quality of Korean pop products has been further enhanced and refined. They have the advantage of solid narrative frameworks, photogenic characters, lyrical background music, brilliant performances by actors and actresses, and so on. With regard to plotlines, in comparison to Hong Kong movies, they deal with a variety of subjects such as youngsters’ love stories, discord and troubles among family members, complications in social life, working professionals’ career lives, and historical materials. As Korea has become a fully fledged democratic country, freedom of expression and a large variety of contentious themes can be guaranteed. The development of the IT industry in Korea has also contributed to the

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upgrading of cultural products. For the last decade, many Korean movies, directors, actors, and actresses have won awards at renowned international film festivals, including the Cannes Film Festival, Berlin Film Festival, and Moscow Film Festival. Three television stations — KBS, MBC, and SBS — have poured lots of money into the production of better quality serials. Their increasingly large investments in production expenses have earned considerable returns from cultural exports to foreign countries. Korea started to export broadcast content in the early 1990s and first registered a surplus in 2002. Since then, its export levels have grown rapidly, from US$2.9 million in 2002 to US$162.6 million in 2007.13 Fourth, technological advancements, liberalization of the media, and improvements in material living standards in East Asia have contributed to the expansion of the Korean Wave. On the demand side, China and most Southeast Asian countries started implementing cable and satellite television services in the 1990s and early 2000s, thus creating a steady demand for broadcast content. In the early days, the service stations imported comparatively cheap but good quality Korean contents. Audience reactions were better than they expected and imports from Korea subsequently increased. On the supply side, the introduction of cable television services in Korea in the 1990s, and the lifting of the ban on the import of Japanese pop cultural products in 1998, contributed to enhancing the quality of Korean pop cultural products and reinvigorating the Korean popular culture industry. The Korean cable television stations needed more content. In order to survive, producers had to make high-quality content to compete with imported Hollywood and Japanese feed. This was the basis for the surge of the Korean Wave in East Asia. Fifth, Korean cultural products attracted Southeast Asians who had grown jaded with Hong Kong and Japanese broadcast content. When asked about the reasons for the surge of the Korean Wave, a senior Singaporean journalist told me that many Singaporeans were fed up with Hong Kong content, which consisted of stories of violence that lacked variety. He continued to say that Japanese content had once appeared fresh to Singaporeans, because the plotlines, ways of expression, and refined cinematography were different from products of China, Hong Kong, and Taiwan. However, some of the Japanese content showed complicated and even weird development of stories, excessively obscene love affairs, and aesthetics based on atrocities, effectively alienating audiences. On the other hand, Korean contents were comfortable for them, because most of the stories were about love, families, human relations based on the Confucian value system, and concluded with a happy ending, which is consonant with the optimism of Chinese people. Thus,

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Korean content filled the empty space that Hong Kong and Japanese content had left behind. Korean pop culture is based on hybrid values. Due to the diverse characteristics of the Korean Wave, East Asians can find it alluring in their own particular ways. Historically and biologically, the hybrid is stronger and more beautiful than the pure. In the global age, communication and exchange can make development possible in any field. Korean popular culture has absorbed foreign elements, while keeping its own traditions and values. This underlying dynamic may be what is powering the Korean Wave forward. Korean society has boasted of being homogenous. How then has this society moved on to becoming a more multicultural one? A novelist, Gong Jiyoung, succinctly asserted the reason in a TV talk show in Japan, saying “Korea is a place where the issues of the entire world meet”. She continued: Every part of our life is related to historical experiences all over the world. The fact that we have the memory of being underdeveloped makes it possible for us to share sentiments with certain marginalized countries in Southeast Asia or Africa, as well as India or China. We can also share the experience of human alienation that comes with drastic economic development as is presently the case with Vietnam and eastern China. The fact that we sexually exploit women from underdeveloped countries with the pecuniary power is in line with Japan’s past; that we took part in the Vietnam War as cannon fodder for the government is an experience that can be shared with a certain generation in the United States; and that the reality of elites having been inclined toward the left after decades of resistance against authoritarianism, who now find themselves in a state of collapse as they face frustration with their own internal falsehoods, is something that can be shared with the ’68 generation in Europe. Also, that the emergence of a new generation after everything has passed, a generation that is rather light-hearted, weary, non-philosophical, and focused on consumption, is an experience that can be shared with all other developed countries. Of course, the fact that information technology (IT), a leading technology of the world, has permeated deep into everyday life, cannot be left out. Such entangled and complicated issues are those of our daily lives and we have experienced all of them within the three generations that live under the same roof. To us, these were not mere historical issues, but those of our family; and it was therefore inevitable that we made efforts to solve them. Such efforts continue today and I believe that the power of our literature and art comes from none other than this contradictory power.14

As Ms Gong explained, the fact that Korea has experienced the same issues that other countries are currently undergoing might be the very reason for the

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emerging Korean Wave in those countries. This is why Korean popular culture touches the heartstrings of those who empathize with the characters in hallyu works. 3. Impact on the Relationship between Korea and Southeast Asia Pavin Chachavalpongpun, a researcher at the Institute of Southeast Asian Studies, wrote an article for The Nation in March 2006. In it, he argued that the Korean Wave has changed the image of Korea and Koreans in Southeast Asia: Many Thais think of South Korea as a male-dominated, fiercely nationalistic and parochial society. But the Korean wave of popular culture that has recently struck the kingdom has helped soften South Korea’s image and bridge the gap of misunderstanding. Thai viewers have been exposed to Korea’s modern lifestyles through its arts and entertainments, thus inducing a desire to learn more about the country and language.15

The Straits Times carried a two-page article comparing the lifestyles of Japan and Korea entitled “Japan vs. Korea” on 26 March 2006. It started with, “When it comes to what’s hot, hot, hot, South Korea has emerged to dethrone its traditional — and bigger — rival Japan. In Singapore, and all over Asia, people are embracing Korean music, TV stars, technology and fashion faster than you can say kimchi.” Here are a few more choice quotations: When it comes to ‘soft power’, South Korea is muscling in on the turf of traditional rival Japan. LifeStyle compares both countries’ pop culture offerings, and our results showed that Japan is still ahead — but not by much. I don’t know of any Korean animation but I hope if they do start producing them, they will not be as weepy as their drama serials. (Japan fan Anthony Lim) … Japanese guys are gorgeous — but Korean guys are seen as gorgeous AND romantic (Korea fan Linda Lee).

The Korean Wave of popular culture has made great strides in improving the image of Korea in ways that the Korean Government and its diplomats could never have done on their own. Let me give some examples. A Korean TV serial What is love, though? (Sarang-i-meo-gilae in Korean) is reputed to be a medium bridging the Chinese and Korean peoples during the initial period of their establishment of diplomatic relations in the early 1990s. The Chinese got to know a new

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friend — Korea — better through the television screen. On the part of Koreans, they were pleased to see the Chinese being enthusiastic about a Korean TV drama series. Through the drama, the television audiences on both sides of the Yellow Sea got to know that they could share common values and interests and could easily get closer to each other. Winter Sonata offered an opportunity to help Japanese and Koreans eliminate some of the prejudices deposited at the bottom of their minds. After Korea’s independence from Japan, both countries have admitted that the other is the geographically closest neighbour, but paradoxically also the most distant one in other ways. The Japanese people saw Korea and Koreans as their own mirror-image, based on experiences during the colonial period and by the reports that their media carried. Japanese popular perceptions towards Korea and Koreans were often negative, because they used to judge Korea and Koreans by their past experience in the colonial era and because recent Korean history has been marked by negative incidents and affairs, including the Korean War, the military dictatorship, anti-government demonstrations, and hardline labour union movements. But Winter Sonata changed perceptions considerably. Japanese youth especially began to perceive Koreans as romantic, handsome, courteous, independent, caring for their women, and respecting traditional values, and Korea as a modern, clean, and naturally scenic country. Such an image of Koreans and Korea also prevailed in other countries through the drama serials, especially in China, Hong Kong, Taiwan, and most Southeast Asian nations. The Jewel in the Palace (Dae Jang Geum in Korean) created a great sensation in the whole East Asian region. Especially in Taiwan, it played a decisive role in rekindling the Korean Wave there, which had began to ebb at that time. It contributed to making the Taiwanese more favourable towards Koreans and filling up the emotional gap between the two economies since Korea unilaterally broke diplomatic relations with Taiwan in 1992. Right after the Korean boom revisited Taiwan, both sides agreed to resume the regular direct airline service that had been suspended since 1992.16 In this respect, we can argue that the Korean Wave contributed to resolving the longstanding, pending issue between the two governments. The Korean Wave triggered the Korean boom in East Asia and other regions. Their love for Korean pop culture brought them to love something more about Korea — Korean language, Korean food, and travels to Korea. Let me just take some cases from Singapore. I invited directors of six private Korean language institutes in Singapore for a lunch in December 2007 and asked them the reasons why Singaporeans learned the Korean language. Was it because Singaporeans were trying to increase their chances of getting

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a well-paid job in Korea or a Korean company operating in Singapore? To my surprise, the directors told me that the most important reason given by the students was “to enjoy Korean dramas and movies more accurately”. With the rise of Singaporean interest in the Korean language, the National University of Singapore has opened a Korean language course in its extension school since 2005 and has also established a regular Korean language class in September 2008. The drama serials have also contributed to boosting the popularity of Korean food in East Asia. The number of Korean restaurants in Singapore has increased rapidly over the last few years from fewer than ten in 2004 to more than thirty in 2008. The names of popular Korean food items such as kimchi, bulgogi, galbi, bibimbap, samgyetang, and soju have become proper nouns, commonly used without translation in Korean restaurants in East Asia. The Korean Wave has also contributed to the tourism industry back in Korea. According to the Korea Tourism Organization, Japanese tourist visits had been on the decrease for a few years until 2003, but in 2004 when Winter Sonata syndrome spread throughout the country, tourist visits from Japan to Korea increased by 35 per cent.17 The main purpose of Japanese trips to Korea was said to be to visit Nami Island and the Yongpyung ski resort, the locations at which Winter Sonata was shot. The numbers of foreign tourists visiting Nami Island were 111,000 in 2003 and 268,000 in 2004.18 The Jewel in the Palace also had some effect on tourism. Large numbers of foreign tourists from China, Taiwan, Hong Kong, and Southeast Asia, visited the serial’s studio settings, located in Yang Ju, Kyeonggi Province. Total figures for visitors were 190,000 in 2005, 240,000 in 2006, and 120,000 in the first half of 2007. The Korean Wave has also significantly contributed to the advanced development of the popular culture industry in Korea. Let me cite some examples: 1) Boa, a pop singer who made her debut in Japan in 2000, had sold more than 10 million copies of her twenty-seven records as of 2007. The total amount of sales reached about US$3 million. World-renowned pop singer Rain made US$10 million for his guarantee in his 2006 world tour. Park Jin Young, manager of Rain, told the audience in a public lecture at Harvard University that the total revenue generated by Rain in 2006 was about US$20 million. 2) According to the Bank of Korea, the popular Korean science fiction movie D-War (Legend Dragon) attracted 13 million viewers in Korea and the United States in 2007. Its total profit was equivalent to the sales

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profit of 5,600 units of the Hyundai Sonata NF, a medium-sized passenger car. D-War was exported to the United States and made US$11 million from screenings in August 2007 and US$5.4 million from DVD sales in just the month of January 2008. It earned US$2 million in nine days in Russia. 3) The online game Maple Story has 15 million members in Korea, which means that one-third of all Koreans have joined. It also has 76 million registered players in fifty-eight countries including Japan, China, and the United States. The number of gamers online at any one time amounts to 200,000. The game was developed in 2004 and recorded more than US$200 million for three years. Maple Story is a One Source Multi-use product and has created 7,000 character items. The sale of Maple Story comic books amounted to 7 million copies as of January 2008. 4) The comic performance Jump was conducted at 16 overseas locations including in theatres in Broadway and West End.19 The cultural industry, which includes publications, movies, TV programmes, games, music, advertisements, animations and characters, is a fast-growing industry. The sale of Japanese animation is quadruple that of its steel exports to the United States. PricewaterhouseCoopers, the world’s largest public accounting firm, forecasts that the global annual growth rate of the cultural contents industry will be 6.6 per cent, and in Asia 9.2 per cent, from 2005 to 2010. In Korea, the industry has achieved an average annual growth of 21 per cent from 2000 to 2005 and the market size has increased from US$18 billion in 2001 to US$55 billion in 2005.20 Even though the Korean Wave has contributed to the development of the cultural contents industry in Korea and increased the export volumes of its products, the most important benefit of the Korean Wave is the fact that it has changed the image of Korea and Koreans abroad in a more favourable way. Thanks to the Korean Wave, the images of male-dominant, fiercely nationalistic, rough and tough Koreans and a divided and politically troublesome Korea have been turned on their heads. Ttan ttara, the Korean slang word looking down upon popular entertainers, has accomplished a great deal that the Korean Government and its diplomats could not do for the last half a century. 4. The Future of the Korean Wave The Korean Wave has been expanding even to the remote corners of the globe like Latin America, Central Europe, and the Middle East. However, the Wave

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seems to have stagnated for the last couple of years. In some areas such as China and Taiwan, antipathy to the Wave has even been perceived. In the early stages of the Korean Wave, the Chinese Government encouraged the import of Korean media in order to balance the influx of pop cultural contents from Taiwan and Hong Kong. But now wary of the great demand for Korean pop culture by the public, it restrained the broadcast duration of foreign TV dramas in 2005. In Taiwan, the government considered curbing the volume of imported Korean TV serials and curtailing its broadcast duration in 2005. Some Taiwanese media cynically called Korea a “great nation of plastic surgery”, alleging that beautiful Korean women were merely the products of plastic surgery.21 There are a few reasons for the recent stagnation of the Korean Wave. First of all, the Korean popular culture industry failed to meet the demands of foreign consumers, whose expectations of K-pop were already elevated. Even though total Korean cultural exports have increased, there have been no serial blockbusters after Winter Sonata and the Jewels in the Palace in the last couple of years. The more serious problem is that mass-produced, low-quality K-pop works have disappointed hallyu fans abroad. For example, the background music of some exported products was different from that used in the original ones due to problems associated with music copyright. Second, the price of TV dramas has risen rapidly. While the average export price of a TV serial was US$840 in 2001, it became US$4,921 in 2005.22 Although this seems inexpensive compared with Hollywood contents, it may be burdensome for some developing countries. Even though there appears to be antipathy and a sense of fatigue towards the Korean Wave in the Sino-cultural region and Japan, the Korean Wave still allures people in Southeast Asia and other regions. In some countries such as Singapore, there is an idea that they should emulate the Korean Wave and create their own pop culture. Dr Andy Ho, a journalist at the Straits Times, supported the idea of futurist Peter Schwartz, a member of the Research, Innovation and Enterprise Council that Singapore’s Prime Minister Lee Hsien Loong chairs. Inspired by the Korean Wave, Andy Ho suggested that Singapore re-brand itself with blockbuster movies and television serials. His arguments were carried in the front-page column of the Straits Times.23 His colleague criticized the suggestion by arguing that South Korea is a sophisticated nation with an advanced economy, cool people, and a few millennia of culture, while Singapore was saddled with a history of just four decades. Another colleague protested by saying that the romantic portrayals of South Koreans in their TV serials were far from their own humdrum reality. Dr Ho refuted the criticisms one by one with his own arguments and proposed that

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young, energized Singaporeans empowered to market local pop culture must take the lead, not the government. To sum up the status of the Korean Wave today: there seems to be two different phenomena. One is stagnation in the Sino-cultural region and Japan. The other is liveliness in Southeast Asia and some other regions like Latin America, Central Asia, the Middle East, and Russia. Why did the phenomenon of fatigue over and even antipathy to the Korean Wave occur only in Greater China and Japan, yet not in Southeast Asia at the same time? First of all, because the Korean Wave began in the former group of countries, the phenomenon of fatigue would come first there. However, we may need some imagination to surmise the second reason. China, Japan, and Taiwan are Korea’s nearest neighbours. All four share complicated histories and there are still sensitive present-day issues pending between Korea and each of these countries. Their sentiments towards one another may be so complex that, if the Korean Wave is too strong, negative reactions can generate a rapid backlash. The Korean Wave is at a crossroads. Whether Korean pop culture will be loved by many peoples around the world for a long time is questionable. If Koreans want sustained popularity, they must carefully manage it. The tastes of consumers can be so fickle that their love can easily change into hatred or indifference. For the continuity of the Korean Wave in wider regions, first of all, the Korean pop culture industry should carefully produce contents to meet and cater to consumers’ delicate tastes. Furthermore, the Korean Government and the Korean private sector should make efforts to exchange notes on cultural activities with each other. A one-sided cultural flow does not last long, just as one-sided love cannot bear any real fruit. If Koreans want hallyu to flourish in Southeast Asia in the longer term, they should introduce or readily accept the cultures of Southeast Asia into Korean society. 5. Soft Power and the Korean Wave The term “soft power” was coined by Joseph Nye in Bound to Lead, a book he published in 1990. The term was extensively used after he published the book entitled Soft Power in 2004. What is soft power, then? It is the ability to get what you want through attraction rather than through coercion or payment. It arises from the attractiveness of a country’s culture, political ideas, and policies. When our policies are seen as legitimate in the eyes of others, our soft power is enhanced. Nye argues that that seduction is always more effective than coercion, and that many values such as democracy, human rights, and individual opportunities are deeply seductive.24

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Everyone is familiar with hard power. We know that military and economic might is often used to get others to change their position. Hard power can rest on inducements (“carrots”) or threats (“sticks”). Traditionally, Professor Nye explains, power in world politics was seen in terms of military power: the side with the larger and stronger army was likely to win. But even in the past, that was not enough; after all, the United States lost the Vietnamese war and the Soviet Union was defeated in Afghanistan. Sometimes you can get the outcomes you want without tangible threats or payouts. The indirect way to get what you want has sometimes been called “the second face of power”.25 That is soft power. Soft power does not depend on hard power. The Vatican has soft power despite Stalin’s mocking question “How many divisions does the Pope have?” The Soviet Union itself once had a good deal of soft power, but it lost much of it after the invasion of Hungary and Czechoslovakia. Soviet soft power declined even as its hard economic and military resources continued to grow. Because of its brutal policies, the Soviet Union’s hard power actually undercut its soft power.26 However, soft power that is not supported by hard power can guarantee nothing. To paraphrase a well-known maxim of Theodore Roosevelt: at the negotiation table, we should come with a strong stick. Soft power becomes credible when there is hard power behind it. In this regard, the Center for Strategic and International Studies (CSIS) recently established a Commission on Smart Power that will formulate a more strategically focused vision for guiding United States foreign policy in the years ahead. According to the Report of the Commission, smart power is the skilful combination of hard and soft power to address current and future challenges to the United States.27 The foreign policy of Korea has focused almost only on hard power for the last half-century. That is quite understandable, given that Korea, a developing country, has been worried about the threats from the North. Now, in the twenty-first century, security threats do not only come from the North. The new challenges exist at an international, transnational, and global level. Korea, too, can encounter faceless threats — energy insecurity, global financial instability, climate change, and pandemic disease — that know no borders. It should prepare for the possibility of its people being threatened by non-state actors such as terrorists. The kidnapping of twentythree Korean Christians by Taliban insurgents in July 2007 is a case in point. Therefore, Korean policy-makers should draw up a fresh foreign policy that meets the new environment in the decades ahead based on hard and soft power together. The soft power of a country rests primarily on three resources: its cultural values (in places where it is attractive to others), its political values (when it

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lives up to them at home and abroad), and its foreign policies (when they are seen as legitimate and having moral authority).28 Culture has many manifestations. It is common to distinguish between high culture such as literature, art, and education, which appeals to elites, and popular culture, which focuses on mass entertainment. Here, I will discuss the soft power of Korea and how Korea can make use of the Korean Wave to enhance its soft power. In terms of hard power, the Republic of Korea may have at least the fifth to tenth strongest military force in the world, depending on the criteria of assessment used. Korea is also known as the thirteenth largest economy in the world. Does Korea really have soft power, though? If so, what is the soft power of Korea? Koreans have a tendency to underestimate themselves. It might be the extreme humility or self-mockery that was derived from its distressed history. For a few millennia, Korea endured a great number of invasions by China, Mongolia, and Japan. More recently, the twentieth century has seen the United States and Russia joining in the struggles on the Korean Peninsula. Living squarely in the arena of competition among the major powers of the world, Koreans are in danger of losing self-confidence and self-respect and consequently underestimate their abilities. But recently it has emerged as a middle power of the world. Korea is virtually the only country in the world to have successfully transformed itself from a poverty-ridden, war-torn country to the status of an advanced country, achieving both economic growth and democracy in a remarkably short period of time. Furthermore, it has its own unique traditions, culture, and heritage. Summing up, we can say that Korea now has substantial soft power: its economic success story, democratization, unique cultural heritage, and the Korean Wave of popular culture. Korea’s soft power mentioned above — economic development, democratization, and culture, especially popular culture — tend to be more or less appealing to the middle ranks of developing countries, not to major powers, because Korea can be seen by developing countries as a role model for future development.29 Since Korea has had, until recently, the same problems that they have now, they can be encouraged by the success story of Korea and have hopes for their future through the mirror of Korea. Until now, Korean diplomatic efforts were concentrated mainly on the four major powers surrounding the peninsula. However, in the age of globalization, Korea’s security and prosperity are directly and indirectly affected by most countries and even non-state actors as well. Therefore, Korea should expand the boundary of its diplomatic activities. Its efforts to develop close friendships with others can bear fruit if and when it makes good use of its soft power. Countries other than the four major powers are geographically far more distant than the four major powers surrounding

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Korea. As Korea cannot become a hegemonic power by nature, hard power — especially military power — is almost useless as a way to get what Korea wants from them. Rather, attraction is the most powerful resource for getting what Korea wants. To attract a broad range of states and transnational actors, Korea can offer them its culture, humanitarian assistance, and opportunities for education. When Korea increases the provision of such resources, given its own financial limits, cultural exchange is the most plausible and effective way to attract them. Since the Korean Wave of popular culture is already attracting some of these countries, it is especially important to ensure that the Wave takes firm hold there. In this regard, the Korean Government should examine ways to make good use of the Korean Wave for the purpose of strengthening its public diplomacy. It was thus quite opportune that the Institute of Foreign Affairs and National Security, an organization affiliated to the Ministry of Foreign Affairs and Trade, hosted a workshop on “The Korean Wave and Korea’s Public Diplomacy” in October 2005. At the workshop, the organizer argued that exchange and cooperation between both the private and public sectors can lay the foundation of regional cooperation in East Asia. He continued to say that the Korean Wave can be a vehicle of exchange and cooperation. The government should also review ways to help and nurture its pop culture industry to make good quality pop products. It must tap into and harness the soft power resources in the private sector and civil society. Moreover, the government ought to encourage exchange of popular culture between Korea and the countries where the Korean Wave is booming. Koreans should keep in mind that no country likes to feel manipulated, even by soft power. The Korean pop culture industry should not be blinded by the lure of money. If the Korean Wave continues to be the one-way communication channel it is at present, it will wither quickly. Korea needs to make efforts to import pop cultural products from other countries as well. For this reason, the Korean Embassy in Singapore arranged to broadcast some activities of Korea Festival 2008 and to introduce Singapore to Korean viewers back home through SBS and MBC. Southeast Asian countries are Korea’s nearest neighbours after China and Japan; they share a similar cultural background with Korea. Therefore, in the course of expanding Korea’s diplomatic arena, they should be Korea’s top priority. If Korea fails to develop close friendships with them, where else can Korea succeed? The economic and political relations between Korea and ASEAN countries have developed tremendously since the establishment of the dialogue partnership in 1989. However, there is still enormous room for Korea and ASEAN countries to upgrade their relationship to a higher level. In pushing

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forward the development of relations, Korea should keep in mind that the relations ought to be a two-way street. The fact that Japan’s uni-dimensional presence, focusing on economic benefits in ASEAN countries, provoked criticism and cautiousness, is very much instructive for Korea. Korea should not forget that it can be a friend of neighbours when international economic and political development keeps pace with the revitalization of social and cultural exchanges. In doing so, the relationship of Korea and ASEAN countries can be maintained on mutually beneficial and complementary terms. Korea’s soft power, especially the Korean Wave of pop culture, can be helpful for the peoples of both parties to better understand and get closer to each other. We are living in an era of soft power, where making friends across cultures is perhaps the key element to better bilateral relations. NOTES 1. Im Mi Bang, a Korean resident in Kuala Lumpur, through Naver café (accessed 1 March 2008). 2. Nam Jong Ho, Hankook University of Foreign Studies, through Naver Knowledge iN (accessed 1 March 2008). 3. Ibid. 4. Lee Tae Moon, “TV Drama and Hallyu”, Institute of Humane Studies, Kyungsang University, 20 February 2007, pp. 113–16. 5. Pavin Chachavalpongpun, “The ‘Hallyu’ is riding on the Korean wave”, The Nation, 19 March 2006. 6. Park Jae Bok, “Hallyu, Cultural Competitiveness in the Global Age”, Samsung Economic Research Institute, June 2007, p. 31. 7. Various reports of the Korean Embassies. 8. Park, “Hallyu”, p. 28. 9. Cho Jeong Rae, “TV Drama and Hallyu”, Institute of Humane Studies, Kyungsang University, 20 February 2007, pp. 176–77. 10. Park, “Hallyu”, p. 25 11. Bak Won Dam, “Hallyu”, Pentagram, 12 September 2005. 12. Kang Cheol Geun, “The Story of Hanryu”, Yichae, June 2006. 13. Korea Broadcasting Institute, Press Release, 7 August 2008. 14. Gong Ji-young, “Thoughts on a Literary Hallyu”, presentation at the Hallyu Day Symposium, Seoul, Kyung Hee University, 27 July 2007. 15. Chachavalpongpun, “The ‘Hallyu’ is riding on the Korean wave”. 16. Park, “Hallyu”, p. 33. 17. Ibid., p. 35. 18. Samsung Economic Research Institute, CEO Information 503, 1 June 2005, p. 12. 19. KOREA PLUS Magazine, p. 53.

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20. Ibid, p. 54. 21. Samsung Economic Research Institute, CEO Information 503, 1 June 2005, p. 7. 22. Korea Broadcasting Institute. 23. Andy Ho, “Creating a Singapore Wave: Seoul cool to copy?”, Straits Times, 17 October 2007. 24. Joseph S. Nye, Jr., Soft Power (New York: Public Affairs, 2004), pp. ix–xi. 25. Ibid., p. 5. 26. Ibid., p. 9. 27. Richard L. Armitage and Joseph S. Nye, Jr., A Smarter, More Secure America: Report of the CSIS Commission on Smart Power, CSIS Panel Report (Washington, D.C.: Center for Strategic and International Studies, 2007), p. 7. 28. Nye, Soft Power, p. 11. 29. Park Jong-Dae, from an unpublished report of a Korean foreign service officer. REFERENCES Armitage, Richard L. and Joseph S. Nye, Jr. A Smarter, More Secure America: Report of the CSIS Commission on Smart Power. CSIS Panel Report. Washington, D.C.: Center for Strategic and International Studies, 2007. Bak, Won Dam. “Hallyu”. Pentagram, 12 September 2005. Cho, Jeong Rae. “TV Drama and Hallyu”. Institute of Humane Studies, Kyungsang University, 20 February 2007. Chachavalpongpun, Pavin. “The ‘Hallyu’ is riding on the Korean wave”. The Nation, 19 March 2006. Gong, Ji-young. “Thoughts on a Literary Hallyu”. Presentation at the Hallyu Day Symposium, Kung Hee University, Seoul, 27 July 2007. Ho, Andy. “Creating a Singapore Wave: Seoul cool to copy?” Straits Times, 17 October 2007. Kang, Cheol Geun. “The Story of Hanryu”. Yichae, June 2006. Korea Broadcasting Institute. Press Release, 7 August 2008. KOREA PLUS Magazine, p. 53. Lee, Tae Moon. “TV Drama and Hallyu”. Institute of Humane Studies, Kyungsang University, 20 February 2007. Nye, Joseph S., Jr. Soft Power. New York: Public Affairs, 2004. Park, Jae Bok. “Hallyu, Cultural Competitiveness in the Global Age”. Samsung Economic Research Institute, June 2007. Park, Jong-Dae. From an unpublished report of a Korean foreign service officer. Samsung Economic Research Institute. CEO Information 503, 1 June 2005.

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13

The Republic of Korea in Southeast Asia: Expanding Influences and Relations Tae Yang Kwak

1. Background In culture, religion, and history, the Koreans and Vietnamese share a greater affinity with each other than with any other nation in the world. Although in pre-modern times little exchange existed between Korea and Vietnam, in modern history the two nations have been inexorably linked. In 1884, the Qing navy was destroyed early in the Sino-French War (1884–85), directly resulting in the French annexation of the whole of Vietnam and contributing to Qing China’s defeat in the Sino-Japanese War (1894–95), which ultimately led to Japanese annexation of Choso˘n Korea (1910). After World War I, both Korean and Vietnamese anti-imperialists were inspired by Wilsonian liberalism and looked to the United States for assistance in overthrowing their colonial masters. Both groups were frustrated. In response, some nationalists in Vietnam as well as in Korea turned to the Soviet Comintern for moral and material

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assistance. For both colonized nations, the colonial experience proved intensely divisive, as cleavages emerged among the spectrum of collaborators, accommodators, militants, leftists, and internationalists. Both Korea and Vietnam were liberated from Japanese rule in 1945. Both were divided by external powers; both suffered millions of casualties as the battlegrounds for the global Cold War that defined the late twentieth century. As deep and as meaningful as these commonalities may be, the two nations have had starkly different historical trajectories since World War II. The Vietnamese were the agents of their own liberation, not once but twice, against two of the greatest powers in world history. Divided Vietnam was ultimately unified under a communist flag. Koreans, on the other hand, were liberated by outsiders and, even after a devastating civil war, remain politically divided and psychologically anxious. North Korea has become increasingly isolated and poorer, whereas South Korea has achieved great economic success. In hopes of emulating the latter, the Vietnamese Communist Party has inaugurated economic reforms under the Ñoåi Môùi initiative. The Vietnamese are essentially reviving a century-old Asian response to Western imperialism, namely, adopting Western methods while preserving their traditional values.1 The Republic of Korea’s contemporary role as the leading foreign investor in the Socialist Republic of Vietnam is certainly significant, but this newfound role is often overemphasized and overshadows more profound opportunities and hazards. The developing and deepening ROK-Vietnamese relations since the Vietnam War have already begun to transform, materially and physically, both Korea and Vietnam. How these two nations critically reassess their postcolonial attitudes towards economics, ideology, and racial nationalism may have overwhelming consequences for their external standing, as well as their internal social stability. On the one hand, Vietnam, poised for economic take-off, can greatly benefit from South Korea’s financial investment and development model. However, the increased economic ties and social exchange between the two countries have begun to expose some old wounds and potential crises. South Koreans owe much of their economic success to the exploitation of the Vietnam War. Some 326,000 South Korean troops fought in Vietnam in exchange for over eight billion dollars in grants, loans, subsidies, technology transfers, and preferential markets provided by the United States during the war. Furthermore, South Koreans abandoned tens of thousands of VietKoreans in Vietnam after the war. More recently, the normalization of South Korean and Vietnamese relations has encouraged enormous numbers of Vietnamese migrant labourers and immigrants through marriage. If Koreans re-evaluate and expand their current ideas about racial identity and ethnic

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nationalism, bicultural and biracial Koreans such as the Viet-Koreans will become important assets in an increasingly globalized world. Otherwise, within fifteen to twenty years, South Korean society will be plagued by divided loyalties and minority agitation. More than a century ago, Yu Kilchun (1856–1914), a Korean observer of the modern world, wrote about the hierarchy of nations and their respective “Levels of Enlightenment”.2 By Yu’s own criteria, Choso˘n Korean society was unsophisticated and at best only “semi-enlightened”. In fits and starts Korean leaders aspired to modernize Korea, to enlighten its people, to bolster its polity, and to guarantee its sovereignty. This course, however, was interrupted, and for the last century Koreans have struggled with economic dependence, political authoritarianism, and ethnic nationalism — products of and reactions to dynastic failure and colonial exploitation. Today South Korea is economically prosperous but ideologically insubstantial. However, genuine modernity is within reach; the ROK-Vietnamese relationship is and will be a test of South Korea’s maturity as a modern nation. 2. Militarism and the Korean Development Model The “Korean development model” has been heralded as the most appropriate model for developing Southeast Asian economies, particularly Vietnam, to emulate.3 The structural parallels are certainly striking. In recent history, South Koreans escaped from economic stagnancy and dependency by adopting the well-documented strategy of a state-commanded, export-oriented, heavy industrial economy characterized by weak labour and authoritarian government. Additionally many observers note that Vietnam and the successful economies of East Asia, including Japan and South Korea, share a postWeberian, “neo”-Confucian (not Chu Hsi but Ezra Vogel) culture that facilitates rapid industrial development by promoting a productive work ethic, privileging education, and idealizing group welfare over individualism.4 However, the critical obstacle in implementing the “Korean development model” for any country is the plain but often disregarded fact that the model and its mechanisms alone do not adequately explain nor fully describe South Korea’s economic success. The Park Chung Hee regime (1961–79) may have maximized and manipulated available resources, but war profiteering was an essential component of the “Miracle on the Han”. Historically, war profiteering was also an essential component of American industrial recovery during World War II and, as Park himself was acutely aware, the Japanese and West German recovery during the Korean War. For South Korea, the war of opportunity was the Vietnam War. On 30 April 1975, when the North

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Vietnamese Army concluded their decisive victory over South Vietnamese forces, Park Chung Hee reflected in his private diary: The Republic of Vietnam has surrendered unconditionally to the Communist forces. Truly, I cannot restrain my bitterness. For eight years 300,000 of our young soldiers went there and fought to safeguard the Vietnamese people’s freedom. Now that nation has fallen, and the “Republic of Vietnam” has been erased from the face of the earth … With our own eyes, we have witnessed the historical lesson that a country will fall into pathetic ruin if its people are dependent on outsiders to preserve their country.

Park’s private thoughts show little insight into Vietnam, but reveals a great deal about his own world view. A more magnanimous observer might have been more impressed with the victory of resolute nationalists over the world’s mightiest military power and her allies. But Park saw the world as a battleground where anarchic states competed in a Darwinian struggle for survival. Military self-reliance was paramount. Imperialism was death and communism was slavery. After his coup d’état in 1961, Park proclaimed that his ultimate objective was the reunification of Korea. His strategic model was late nineteenth-century Meiji mercantilism, with a strong dose of midtwentieth century Sho– wa anti-communism, fuelled by the military spending of the occupying U.S. Army. Park was no free-market capitalist and certainly did not pursue economic prosperity as an end in and of itself. In fact, Park viewed affluence and civil liberties as corruptive and counter-productive. Park pursued economic growth only as the first stage in building an autonomous, military-industrial capacity that could overwhelm North Korea.6 This was a remarkably ambitious and exceedingly long-term plan since South Korea at the time was almost completely dependent on American aid for its government and military budget. Park was not the first Korean president to try and leverage Korean troops in Southeast Asia in order to reverse American policy in Korea. President Syngman Rhee had famously refused to sign the armistice agreement that effectively ended the Korean War in July 1953. Determined to conquer North Korea, Rhee made multiple, unsolicited offers to the Dwight D. Eisenhower administration in early 1954 to dispatch up to 60,000 Korean troops to support the American-funded French War in Indochina (1946–54) in exchange for a total mobilization of Korean manpower on the peninsula. Eisenhower seriously considered the option, but ultimately rejected it since Rhee’s quid pro quo required American sponsorship of a renewed war on the Korean Peninsula.7 The Eisenhower administration had poured billions of

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dollars in economic and military aid to support South Korea and South Vietnam, but throughout the 1950s Eisenhower was continually frustrated by the corruption, obstinacy, and ineffectiveness of both Syngman Rhee and his South Vietnamese counterpart, Ngô Ñình Diê.m. Faced with the fiscal and manpower constraints of the global Cold War, the incoming John F. Kennedy administration had planned to phase out economic aid to South Korea by the mid-1960s. They planned to dovetail American disengagement with increased Japanese commitment following a normalization settlement. In a restoration of the Greater East Asia Co-Prosperity Sphere, agrarian and light industries in South Korea were meant to complement Japan’s advanced industries and support Japan’s role as capitalist paragon of Asia. In the early 1960s, the Kennedy administration had absolutely no interest in funding a heavy industrial complex in South Korea. In addition to relieving America’s fiscal burden, forestalling heavy industries in South Korea diminished the capacity of the South for renewing peninsular hostilities. Like his predecessor, Park also resorted to leveraging Korean troops to support American interests in Southeast Asia in an attempt to reverse American policy. Unlike Rhee, who demanded that the Americans directly sponsor an invasion of the North, Park required indirect sponsorship of South Korean industry, which in turn could be utilized as the basis for an autonomous military complex. During Park’s state visit to the White House in 1961, Park surprised Kennedy with an unsolicited offer to deploy South Korean troops to fight for American interests in Vietnam.8 In exchange, Park requested increased American economic aid for South Korea in order to pursue the heavy and chemical industries that would serve as the basis for an autonomous military complex. As Park left Washington, he “reiterated his offer of ROK troops for Vietnam or guerrilla wars elsewhere”.9 Kennedy did not live long enough to witness the full scale of the Vietnam War, but the Lyndon Johnson and Richard Nixon administrations desperately needed international support for an unpopular war in Vietnam.8 Johnson and Nixon, in turn, abandoned existing, long-term policies for Korea and allowed the exigencies of the Vietnam War to determine ad hoc packages in exchange for the commitment and maintenance of South Korean troops in Vietnam. Ultimately, Park dispatched 326,000 Korean soldiers and 100,000 Korean civilian workers to Vietnam in exchange for over eight billion dollars in grants, loans, subsidies, technology transfers, and preferential markets.10 Yi Tong-wo˘n (ROK Minister of Foreign Affairs, 1964– 66), who had negotiated the Brown Memorandum that served as the basis for American concessions to South Korea throughout the war, describes Korean participation in the Vietnam War in his memoir as “Digging for Gold in the Jungles of Vietnam”.11

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Korean participation in the Vietnam War was merely a means to an end; Park wanted an extended war in order to maximize Korean gain. According to Kim So˘ng-u˘n (ROK Minister of National Defense, 1963–68), the Park administration was not concerned with the ultimate fate of Vietnam: “From the beginning Korean decisionmakers were not deeply concerned who would win the war. To the Korean leadership, the Vietnam War was the one and only golden market for the Korean Government to export its unemployed men and manufactures … The longer the war, the better for the Korean economy.”12 Throughout the war, Park vigorously campaigned for prolongation and wider escalation whenever American-North Vietnamese diplomatic efforts seemed to be gaining traction. Korean participation in the Vietnam War was not only an essential factor in the “Miracle on the Han” but crucial in facilitating and prolonging authoritarianism in South Korea. During the war, American military aid to South Korea had increased dramatically. Park’s ambitious industrialization programme was inextricably dependent on American trade promotion and revenues from ventures in Vietnam. Furthermore, Park’s fragile hold on elected leadership was principally propped up by South Korea’s economic performance and political bolstering by American officials during the escalation period of the war. Signs that the Vietnam War was coming to an end were direct threats to Park’s hold on power. The 1970 Symington Subcommittee Hearings had exposed the South Korean commitment to Vietnam as a mercenary venture, exposing genuine doubt about U.S. Congressional support for South Korea. In 1971, America’s military commitment and Nixon’s $1.5 billion military modernization package was contingent upon U.S. Congressional approval. Furthermore, Nixon’s policy of general American retreat from Asia, and particularly his rejection of a meeting with Park before Nixon’s Beijing visit, also exposed signs of waning American regard for Korea. Park responded to these crises of 1971 by turning to formal dictatorship in Korea and launching a clandestine, influencebuying campaign in the United States. The often lauded, often envied, and often mysterious “East Asian growth miracles”, particularly those of Korea and Japan, cannot be studied outside the context of war and militarism. The Vietnam War was to South Korea as the Korean War to Japan — watershed moments in each country’s ultimate economic success. In 1954, following the loss of millions of Korean souls and epic destruction on the peninsula, Japanese Prime Minister Yoshida Shigeru compared American Special Procurements in Japan during the Korean War (1950–53) to “a gift from the gods” for Japanese industrial recovery.13 South Korea similarly exploited a war that consumed millions of Vietnamese lives. However, unlike Japan, Korea’s profits also involved the conscious sacrifice of

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its own young men on distant shores. Unfortunately, these costs have been almost completely ignored. The macroscopic structure of rapidly industrialized economies such as South Korea are well documented. But historically, the “Korean development model” cannot be divorced from the context of war. Without extensive military expenditures, the success of export-oriented, authoritarian, command economies are uncertain. However, the Korean model does present a certain liability in the form of intensified authoritarianism. The implementation and context of South Korea’s development strategy legitimized an enduring series of military dictatorships. It was not until 18 December 1992, four days before the ROK-Vietnamese normalization agreement was signed, that South Koreans elected their first civilian president since 1960. 3. Memory and the Wounds of History On the legacy of global imperialism, Samuel Huntington wrote, “The West won the world not by the superiority of its ideas or values or religion (to which few members of other civilizations were converted) but rather by its superiority in applying organized violence. Westerners often forget this fact; non-Westerners never do.”14 However, in developing, post-colonial countries, there exists a direct conflict between ressentiment and politico-economic expediency. In the decades immediately following the war, both the South Korean and Vietnamese Governments simplified the other as “puppet regimes” of American or Soviet masters. Such propaganda obfuscated any real objective consideration or understanding. The 1992 normalization of state relations between South Korea and Vietnam, as well as the subsequent increase in bilateral cultural and economic exchange, represents an unprecedented second chance at genuine reconciliation. However, the Vietnamese Government, wary of offending potential investors, seems intent on censoring its own citizens from criticizing the Koreans, particularly with regard to charges of civilian massacres. South Korea’s role as former enemy and belligerent is complicated by the fact that, in the last twenty years, South Korea has been the leading foreign investor in capital-hungry Vietnam. South Korean investments account for more than 16.9 per cent of the total foreign investment in Vietnam since 1988 (see Table 13.1). There is every indication that South Korea and Vietnam will develop stronger commercial, cultural, and social connections for the indefinite future. Can either state afford to ignore their shared history for long? Fifty years after the fact, Koreans are angry with the United States for civilian massacres committed during the Korean War, despite the billions

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Table 13.1 Cumulative Foreign Direct Investment in Vietnam, 1988–2007

Rank

Country

Investment Capital (USD)

1 2 3 4 5–82

South Korea Singapore Taiwan Japan Others

14,398,138,655 11,058,802,313 10,763,147,783 9,179,715,704 39,657,028,715

(16.93%) (13.00%) (12.65%) (10.79%) (46.62%)

Number of Projects 1,857 (21.38%) 549 (6.32%) 1801 (20.74%) 934 (10.76%) 3,543 (40.80%)

Source: Foreign Investment Agency, Ministry of Planning and Investment, Socialist Republic of Vietnam (accessed 31 May 2008).

of dollars that the American Government and American businesses invested in Korea. A hundred years after the fact, Koreans are still bitter about the colonial experience, even though the South Korean Government legally absolved Japan of all liability with the 1965 normalization and reparations. As the rapidly growing Vietnamese economy becomes less and less dependent on South Korean investment, will the Vietnamese people remain silent about the past? If the South Korean and Vietnamese Governments continue to suppress their people’s need to express and process their shared past, they are openly jeopardizing a genuine future partnership in favour of superficial, short-term profit. The wounds of history may be ugly and painful, but they must be exposed and reconciled. Kept hidden and obscured, these wounds will only fester with time. Throughout the war, the Park regime had maintained the propaganda about heroic Korean volunteers being equal allies of the Americans, supporting grateful Vietnamese anti-communists in a righteous struggle in which they would achieve inevitable victory. However, the true nature of Korea’s deployment of troops was in contrast to such rhetoric. But, for both Johnson and Park, such rhetoric served as an important selling point directed at both the American and the Korean peoples, the majority of whom were weary of war and its traumas and among whom the prospect of fighting and dying in a foreign war was extremely unpopular. For American hawks, such sentiment was a welcome salve for the wounded ego of a costly stalemate in the Korean War. One anonymous South Korean marine, interviewed by Young Soon Yim during the war, candidly stated, “Many Americans died for us, now it is our turn to die for them.”15 No matter how many individual Koreans or Americans eventually came to believe this, sentimentality does not determine foreign policy in the world of realpolitik; each party seeks to gain maximum benefit

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with the commitment of minimal sacrifice, especially in the calculus of lives and dollars. On the issue of procuring South Korean troops in exchange for financial concessions, Ambassador Winthrop G. Brown (U.S. Ambassador to ROK, 1964–67) wrote to the U.S. State Department in 1965, “It is fair to say to Korea … that she can afford the men … and that it can save us a great deal in blood and treasure.”16 Since the “Fall of Saigon” in 1975 until the Vietnamese Government inaugurated the Ñoåi Môùi initiative in 1986, there was virtually no contact between Seoul and Hanoi. The Park regime’s censorship policy in South Korea during and after the war was so extensive that even Korean casualty figures were censored from the public. Mutually attracted by Korean investment capital and cheap Vietnamese labour, relations began to thaw in the late 1980s and early 1990s. But decades of neglected history began to resurface as bilateral governmental and non-governmental groups began laying the foundation for normalization. After decades of censorship by authoritarian governments, 1992 was the watershed moment for renewed Korean interest in the Vietnam War. In February, South Korean investigative journalists forced their government to release Korean casualty figures for the first time. On the fourth of July, White Badge premiered in Korean theatres. The film adaptation of Ahn Junghyo’s semi-autobiographical novel of the same name deals explicitly with Korea’s mercenary role, civilian massacres, and posttraumatic stress.17 On 29 February 1992, the ROK Ministry of National Defense (MND) released Korean casualty figures from the Vietnam War for the first time. The figures were released only in response to breakthrough Korean media reports claiming that there were three Korean MIAs still alive in Southeast Asia.18 Significantly, the 1992 MND figures included as MIAs only those three men that journalists had independently discovered. The Korean media immediately challenged the government’s figures as preposterous: “Americans reported 1 out of 1,000 soldiers MIA, while Korea maintains that only 1 out of 100,000 are MIA.”19 Official releases of casualty figures remain inconsistent, leading to continued suspicion about their accuracy. Although the total figure for fatalities (including both combat and non-combat deaths) has gone up in subsequent official releases (5,051 to 5,077 to 5,099 in the 1992, 1994, and 2004 MND releases respectively), the number “killed in action (KIA)” has fluctuated (4,687 to 4,597 to 4,601 respectively). The 1992 MND release reported approximately 5,000 Koreans wounded in Vietnam and the 2004 MND release reported 11,232 wounded Korean veterans. However, even the newer official figure does not include tens of thousands of Korean veterans still suffering from dioxin poisoning, particularly the

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long-term effects of exposure to defoliants such as Agent Orange during the war. Over 11 million gallons of Agent Orange — a mixture of herbicides 2,4-D and 2,3,4-T containing the dioxin TCDD, one of the most toxic chemicals known to man — were sprayed over 4.5 million acres of Vietnamese jungle and farmland. Because the South Korean Government refused to support their case, Korean veterans were excluded from the 1984 class action settlement by American dioxide manufacturers. Only American, Australian, and New Zealand veterans are eligible to draw from the $240 million settlement.21 Many observers speculate that the reason Korean veterans were exempt from the settlement is because “[their] military government … deliberately suppressed information to avoid having to make large medical payments”.22 Further, the “Korean government says it will not assist them [Korean veterans] in efforts to qualify for the compensation.” Veterans exposed to Agent Orange exhibit “higher rates of numerous cancers, neurological and reproductive damage, and cardiovascular disorders”. After decades of futility, a class action case that eventually drew 20,615 Korean veterans was finally settled in January 2006, when the Seoul Appellate Court ordered Dow Chemical Co. and Monsanto Co. to pay $63 million to 6,795 veterans and second-generation victims.25 Dow and Monsanto are fighting the settlement and it may be years before the first payments are made, but it is an important symbolic victory nonetheless. Despite political liberalization, the Korean Government seems equally disinclined to revisit the past. As recently as 1995, the Minister of Education, Kim Suk-hu˘i, was fired by President Kim Young Sam for her address at the National Defense College, in which she claimed that “the 25th June war [Korean War] was a fratricidal war and that participation in the Vietnam War lacked justification since the Korean soldiers participated as hired troops [yongbyo˘ng].”26 But government censorship alone cannot explain Korean reluctance in examining its role in the Vietnam War. There is a popular sense of shame and indignity about the fact that Koreans served as mercenary pawns to an American hegemon and that Korean troops committed atrocities against Vietnamese civilians during the war. Following revelations about American atrocities in Vietnam, the international press occasionally reported on Korean massacres of Vietnamese civilians. In 1975 Diane and Michael Jones of the American Friends Service Committee in Philadelphia painstakingly documented and corroborated dozens of Korean atrocities, including thousands of murders.27 More recently, in the spring and summer of 2000, amidst fevered controversy over Korean accusations of American atrocities committed in Nogu˘n-ri, a Korean village caught up in the Korean War, the liberal Hankyoreh newspaper and its subsidiary Hankyoreh 21 began publishing a

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series of articles describing Korean “slaughter of innocent people” (yangmin haksal) in Vietnam, based on interviews with Korean veterans. In abstract terms, history itself has been a casualty of the war and its aftermath. Without an informed opinion about contemporary Korean history, the Korean leaders of tomorrow will have little hope of creating a truly robust democracy or of ultimately achieving reunification. Since the Korean War, Korean participation in the Vietnam War has had the single greatest impact in forging the defining characteristics of contemporary Korea — its chaeboldominated economy, the overcentralization of politics, and the hardening of the inter-Korean division. If Korea is to have a better future, both the positive and negative legacies of its participation in the Vietnam War must be fully understood. It may be a daunting task, but one thing is certain: the defeatist attitude some Koreans maintain, that Korea has perennially been the victim of greater powers, is unjustified. Park, by militarily supporting the American war effort in Vietnam, was able to contradict American aims for Korea. Perhaps a confidence in this sense of self-determination, tempered by a genuine appreciation of the human costs of success, might be a starting point for a Korean examination of the Vietnam War that is long overdue. Since liberation, ethnic nationalism has been the primary motivation supporting the impetus for Korean reunification. But more than six decades later, substantial progress in inter-Korean reconciliation has failed under the weight of history, ideological conflict, and growing material inequity. However, despite similar obstacles, South Koreans have become leading investors in not only Vietnam but the People’s Republic of China as well. Both communist countries have liberalized their economic policies and are actively soliciting investments from capitalist countries such as South Korea despite historically recent conflicts. The Chinese suffered nearly a million casualties in the Korean War, while tens of thousands of Vietnamese soldiers and civilians died at the hands of South Korean troops in the Vietnam War. These former Cold War rivals are willing to cooperate in creative and unprecedented ways for their mutual economic benefit. Perhaps the lessons and precedents of reconciliation between South Korea and Vietnam might be positively applied toward inter-Korean reconciliation. 4. Identity and the Crisis of Ethnic Nationalism In both Vietnam and Korea, “internationalization” or “globalization” has been much heralded, particularly since the late 1980s. The diplomatic normalization between anti-communist South Korea and communist Vietnam in 1992 was certainly a progressive step for both countries. But in addition to

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the much anticipated, mutual, commercial opportunities, the normalization has exposed an unanticipated social crisis. Part of the social crisis is one of identity. Since the early twentieth century Korean identity has been focused almost exclusively on a narrow understanding of racial identity. In Korea Between Empires, Andre Schmid convincingly argues that, before colonization, there were a number of potential foci for the modern Korean identity, including political, geographical, ideological, and racial. As historical circumstances (dynastic disintegration, territorial annexation, and ideological bifurcation) made the alternatives less viable, Koreans increasingly looked to race — specifically a mythical, patriarchal, and genealogical race — as the focus for modern Korean nationalism.28 But race is far from uncomplicated. It is an essentialistic and unscientific construct. As South Korea matures and globalizes, the inherent contradictions of race are increasingly exposed and this threatens to undermine Korean nationalism unless the criteria for Korean identity can be rationalized and broadened. In September 1989, Nguyen Quyen Sinh, Director of Vietnam’s National Tourism Administration, visited Seoul and expressly emphasized that there was “no ban on Korean visits to Vietnam”, and encouraged “Koreans who lived in Vietnam” to seek their wives and children.29 The Vietnamese Ministry of Labor estimates that there are between 7,000 to 15,000 VietKorean offspring of Vietnamese mothers and Korean veterans of the war. The Vietnamese call them lai Daihan. “Daihan” is the Vietnamese pronunciation of the Korean “Taehan”, meaning Korea or Korean, and “lai” means half-breed. Some new estimates put the number of lai Daihan as high as 30,000.30 These Viet-Korean lai Daihan undoubtedly suffer from a similar stigma borne by Amerasians: “Most Amerasians are poorly educated, and despised in Vietnam as the half-caste offspring of prostitutes and foreigners.”31 Unlike the French and American Governments, the South Korean Government has made no effort to assist or repatriate these children and their families. Following normalization, there were scattered stories of reunions between Korean fathers and their abandoned children, but these exceptional stories have disappeared from media coverage.32 In March 1993 the Korean Government pledged $3 million over ten years to sponsor a Korean-Vietnamese Vocational Training Center in Ho Chi Minh City.33 The amount pales in comparison to the billions of dollars Koreans earned from the Vietnam War or the billions of dollars of direct investments that have made South Korea the leading foreign investor in Vietnam. Some Korean labour activists, familiar with the exploitation of domestic and migrant labour by state-sponsored chaebol in Korea, have criticized such token gestures by the Korean Government

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and point out that their government is further victimizing these mixed children who graduate from these vocational centres to work long hours for little pay in Korean-owned factories in Vietnam. In any case, these Viet-Korean children of war are no longer children. They are in their mid-thirties to mid-forties and many have children of their own. Repatriation may no longer be an option, but certainly some meaningful, inclusive gesture towards Viet-Koreans would be a positive contribution for long-term Korean-Vietnamese relations. The Viet-Korean challenge to Korean identity is no longer an “offshore” issue that can be ignored. As of 2007, almost 70,000 Vietnamese were living in South Korea. As the economy matures, South Korea is becoming increasingly dependent on cheap foreign labour to maintain its manufacturing sector. The nearly 30,000 Vietnamese workers represent the largest group of all foreign labourers in Korea, but a significant number of Vietnamese are also immigrating to Korea through marriage.34 Since liberation, almost all international marriages in Korea were between American men and Korean women. Because of the nature of ethnic nationalism, biracial Koreans have been severely discriminated against and treated as pariahs. But a confluence of gender selection, urbanization, inequitable income distribution, and liberalization of international relations has resulted in a spectacular rise in international marriages in South Korea. The rate of international marriages has grown from 4 per cent in 2000 to 14 per cent of all marriages in 2005.35 Today, most of the international marriages in Korea are between middle-aged Korean men and twentysomething Asian women, primarily from China (52 per cent) and Vietnam (35 per cent). Although the marked increase in international marriages is a national phenomenon, it is particularly conspicuous in rural Korea, where the proportion of international marriages has represented nearly half (more than 40 per cent) of all marriages since 2006. This trend is almost certain to grow indefinitely since the root causes are systemic. Of the rural, international marriages in Korea, two-thirds (68 per cent) were between Korean bachelors and Vietnamese brides, far exceeding the number (20 per cent) of Chinese brides, including ethnic Koreans (Choso˘njok) from China.36 The proportion of Korean marriages to Chinese spouses has been declining, whereas the proportion of Vietnamese spouses has shows a markedly increasing trend. There is some indication that international marriages result in higher rates of divorce than the national average.37 Beyond the typical issues, successful international marriages must overcome cultural differences, as well as age differences in many cases. But there have been widespread allegation of domestic abuse of foreign brides as well as corrupt financial and sexual practices in the lucrative matchmaking industry that facilitates the majority

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of these international unions. Already there is an entire generation of VietKoreans being raised in bicultural sub-communities throughout South Korea. They face daunting challenges, particularly of racial discrimination. Furthermore, most second-generation Viet-Koreans are being born and raised in superannuated, rural Korea where educational and employment opportunities are so abysmal that most young rural Koreans have long since fled to the cities. As second-generation Viet-Koreans come of age, significant numbers of them will no doubt be driven to the cities in search of opportunity. South Koreans pride themselves on being worldly, modern, and “globalized”. Seoul is certainly a premier international city, financially, linguistically, and culturally. But South Korea has always been more cosmopolitan than many Koreans have cared to recognize. The Korean diaspora reaches far further than North America and Japan. There are significant Korean populations in Central Asia, Russia, China, Europe, and South America. Within Korea, there have always been tens of thousands of bicultural and biracial Koreans. For most of modern Korean history, politics and prejudice have rendered these Koreans marginal or invisible. But South Korea is no longer in an inferior relationship with Japan, or America, or any other country in the world. In fact, South Korea has become a model for many still developing countries. It is now time for Koreans to break away from the inferiority complex and insecurities of the past. An important component of this transition is a reevaluation of what it means to be Korean, to broaden the narrow and exclusive constraints of an antiquated ethnic nationalism that emerged during a period of crisis and weakness. Viet-Koreans are the latest but fastest-growing bicultural population in Korea. Many advanced capitalist nations are crippled by intractable minority conflict. With a fifth of all new marriages in Korea being international and as the general birth rate in South Korea continues to dwindle, South Koreans are now at a crossroads where they must choose either to continue alienating bicultural groups as peripheralized “minorities”, or include them in a more broadly and inclusively defined national identity. In the early Choso˘n era (fifteenth and sixteenth centuries), the neoConfucian Choso˘n Government increased land usage and consequently the tax base by encouraging immigration from China, Japan, Mongolia, even Tibet and Central Asia.38 These immigrants were lured to the peninsula with incentives of free land and tax exemptions. Before the seventeenth century, there was little or no concept of “race” in Korea. National identity was cultural and political. When the descendants of these immigrants paid their taxes to the Choso˘n Government, and when they invariably started to dress, and talk, and eat like other Koreans, they became Korean. Based on a revival

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of such traditional, precolonial values, Koreans could adopt a national identity that is inclusive, versatile, and durable. Based on idealized traditional values such as Confucian principles of reciprocity, meritocracy, and universal civilization, Koreans could adopt a national identity rooted in moral leadership, social equality, and social justice. Not only is South Korea a small country, but it faces a rival Korean regime to the north, an alarmingly low birth rate, a numerical gender disparity, and the reality of a rapidly growing bicultural population. Instead of a nationalism based on a mythical genealogy and ethnic homogeneity that will create and exacerbate social cleavages, Koreans can adopt an ideologically based identity that will help overcome its current limitations and obstacles to ensure continued security and prosperity. Many people in the world admire, even envy, South Korea’s economic success, but few people admire or respect South Korea’s personality-driven politics or ethnic chauvinism. To be a truly modern nation requires more than a “rich country with a strong army”. It requires a durable ideological foundation. 5. Conclusion The attraction of the South Korea’s economic development model to the Vietnamese is related to the extraordinary popularity of Korean pop culture (hallyu). There is a perception on the part of the Vietnamese that they share a cultural, institutional, or psychological connection or commonality with Koreans, while at the same time the Koreans have something different and desirable, such as material success or social liberty. As both development model and economic resource, South Korea also offers an important and attractive alternative to Japan. For most of the twentieth century (albeit in different ways before and after the American occupation), Japan seemed to be the only “advanced” Asian country in terms of the strength and sophistication of its sovereignty and modernity. But in most of Asia, including Vietnam, Japan had been an imperialist aggressor and still remains intimidating and threatening. South Korea is in transition from a developmental state to a more modern nation and its continued multi-level relationships with Vietnam will challenge both nations to be more than they are, but this will only be possible if the two countries honestly confront the history that they share. If, despite the considerable obstacles, Vietnam is successful in adapting and implementing the “Korean development model”, then there is certain potential for the emergence and growth of a politically significant middle class in Vietnam. Desperate people will endure dictatorship (they may even prefer an absolute sense of direction), but a genuine middle class will ultimately agitate against authoritarianism. When that phase comes, will Korean companies

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and investors adapt to, or perhaps even encourage, political liberalization in Vietnam, or will they react against liberalization and demand economic protection from the Vietnamese Government? Yu Kilchun pointed out that it is the mark of the “semi-enlightened society … [to be] content[ed] with only minor achievements; a sense of self-satisfaction without a long-range strategy …” A fully “enlightened society” looks beyond short-term benefit: “Innovation is attempted at all times … There is no discrimination among the people based on position or circumstances.”39 In any country, and particularly in non-democratic countries, the interests of the state and the interests of the nation may not be congruent. The South Korean Government, Korean entrepreneurs, and the Korean people at large must be sensitive to this distinction in the long term. Considering their own developmental experience, will Koreans choose to be a mature ally of the Vietnamese people with whom they share so many historical and cultural affinities? Or will Koreans ultimately choose to compound the legacy of inequity by making a neo-colonial adversary of the Vietnamese people for short-term profit? NOTES 1. The principle was articulated with little variation in nineteenth-century China, Japan, and Korea, where they were, respectively, zhongti xiyong (ˁᝃпΈ ), wakon yohsai ( ֝ᄦ‫ޝ‬ʽ ), and dongdo so˘gi ( ‫س‬ཤпወ ). 2. Yu Kilchun, So˘yu kyo˘nmun [Observations on a journey to the West], 1889. 3. See Chapter 8 in this book by Seok Choon Lew, “Korean Development Model: Lessons for Southeast Asia”. 4. Ezra Vogel, Four Little Dragons: The Spread of Industrialization in East Asia (Cambridge, MA: Harvard University Press, 1991). 5. Cho˘ng Chae-gyo˘ng, ed., Pak Cho˘nghi silgi: haengjo˘k ch’orok [Park Chung Hee chronicle: Summary of his life’s record], translated by the author (Seoul: Chimmundang, 1994), pp. 474–75. 6. According to Kim Cho˘ng-nyo˘m (presidential chief of staff, 1969–78), “President Park formulated a reunification policy in the belief that reunification was the most urgent agenda for modern Koreans. He believed that the path toward reunification had three stages: economic development, accumulation of national power, and finally actual reunification.” Kim Cho˘ng-nyo˘m, Policymaking on the Front Lines: Memoirs of a Korean Practitioner, 1945–1979 (Washington, D.C.: World Bank, 1994), p. 116; Han’guk kyo˘ngje cho˘ngch’aek 30-yo˘nsa: Kim Cho˘ngnyo˘m hoegorok [Thirty years of Korean economic policy: Memoirs of Kim Cho˘ng-nyo˘m] (Seoul: Chungang ilbosa, 1990), p. 426. 7. Tae Yang Kwak, “The Anvil of War: The Legacies of Korean Participation in the Vietnam War” (Ph.D. dissertation, Harvard University, 2006).

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8. Memorandum of Conversation, Park Chung Hee, John F. Kennedy et al., 14 November 1961, Secret, in United States Department of State, Foreign Relations of the United States 1961–1963, vol. 12 (Washington, D.C.: Government Printing Office, 1996), p. 536. 9. Ibid., p. 539n. 10. Memorandum, United States Department of Defense, “Consideration of the ROK Offer to Send a Division to Indochina”, 1 March 1954, Pentagon Papers [DoD version] (1971): Item no. 56, 9.2: 261; Memorandum, James S. Lay, Jr. (NSC Executive Secretary) to National Security Council,“Proposed ROK Offer of Troops to Laos”, 2 March 1954, Top Secret, Foreign Relations of the United States 1952–1954, 15.2 (1984): 1755; S. Everett Gleason (NSC Deputy Executive Secretary), Memorandum of Discussion at the 187th meeting of the NSC, 4 March 1954, Top Secret, Eyes Only, Ibid., pp. 1756–57; “Further Exchange of Letters between President Eisenhower and President Rhee” (NSC 170/1), 23 March 1954, Ibid., pp. 1774–75. 11. Yi Tong-wo˘n, Taet’ongnyo˘ng-u˘l ku˘rimyo˘ [Longing for the president], translated by the author (Seoul: Ch’opan, 1992), pp. 103–58. 12. Kim So˘ng-u˘n, interviewed by Choi Dong-Ju on 24 August 1993 (Seoul) in “The Political Economy of Korea’s Involvement in the Second Indo-China War”, by Choi Dong-Ju (Ph.D. dissertation, University of London, 1995), p. 151. 13. Woo Jung-en, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991), p. 55; “The popular Japanese phrase was tenyu˘ shinjo, literally ‘heavenly aide, divine help’. Another catchphrase for the [Korean] war was ‘revival medicine’ ”. John W. Dower, Embracing Defeat: Japan in the Wake of World War II (New York: W.W. Norton & Co., 1999), pp. 541, 647n. 14. Samuel Huntington, The Clash of Civilizations: Remaking of the World Order (New York: Simon & Schuster, 1996), p. 51. 15. Lee Eun Ho and Young Soon Yim, “Military and Civic Actions of South Korean and South Vietnamese Forces in the Vietnam Conflict, 1955–1970”, Korea Observer 13, no. 1 (Spring 1982): 26. 16. Embassy Telegram, Seoul 40, 10 July 1965, Secret, Priority, Limdis, in United States Department of State, Foreign Relations of the United States 1964–1968, vol. 29 (Washington, D.C.: Government Printing Office, 2000), p. 122. 17. An Cho˘ng-hyo, Hayan cho˘njaeng [White war], 3 vols. (Seoul: Koryowo˘n, 1983); White Badge: A Novel of Korea (New York: Soho Press, 1989); Hayan cho˘njaeng, DVD (Seoul: Vanguard Cinema, 2001). 18. Kim Tang, “Beil-e ssain ‘hayan cho˘njaeng’ ” [‘White war’ concealed under veil], Sisa jo˘no˘l, 7 May 1992. 19. “Han’guk ‘MIA’ nu˘n tan 3 myo˘ng ppun?” [Only three Korean MIAs?], Sisa jo˘no˘l, 7 May 1992. 20. Peter Korn, “The Persisting Poison”, The Nation, 8 April 1991.

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21. Vera Haller, “Federal Judge Gives Settlement Money to Australia and New Zealand”, Associated Press, 22 July 1988; Vera Haller, “First Grants Awarded from Settlement Fund”, Associated Press, 30 March 1989. 22. Leslie Helm, “S. Korea Reviews Vietnam War Role”, Los Angeles Times, 22 August 1992. 23. James Sterngold, “South Korea’s Vietnam Veterans Begin to Be Heard”, New York Times, 10 May 1992. 24. “Korean Vets Wage War on Defoliant”, Chicago Tribune, 28 September 1992. ˘n-jin, “ ‘Koyo˘bje p’ihae Mi-jejosa ch’aegim’ p’an’gyo˘l” [American 25. Sin U manufacturers responsible for defoliant afflictions’ verdict], Choso˘n ilbo, 27 January 2006. 26. Text of KBS Radio Broadcast, Seoul 3:00 GMT, 12 May 1995, cited in “President Kim Dismisses Education Minister”, BBC Summary of World Broadcasts, 15 May 1995; Yu Yong-wo˘n, “6·25 nu˘n myo˘nbun yakhan tongjok sangjan Wo˘llamjo˘n en yongbyo˘ng u˘ro ch’amjo˘n” [Korean War, immoral fratricidal war; Vietnam War, dispatched as mercenaries], Choso˘n ilbo, 12 May 1995. 27. Diane Jones and Michael Jones, “Allies Called Koreans: A Report from Vietnam”, in America’s Rented Troops: South Koreans in Vietnam, by Frank Baldwin, Diane Jones, and Michael Jones (Philadelphia: American Friends Service Committee, 1975). 28. Andre Schmid, Korea Between Empires, 1895–1919 (New York: Columbia University Press, 2002). 29. “South Korea: Vietnam Tourist Chief Urges Koreans to Visit”, Korea Economic Daily, 8 September 1996. 30. Kim Jae-young, “What Can We Do for Education of Racially Mixed Children?” Korea Focus, 27 March 2006. 31. “Home to America, If Not to Daddy”, The Economist, 19 May 1990. 32. “Bridges to Vietnam”, Korea Herald, 12 December 2007; “Feature: Korean Father, Vietnamese Son Reunite after 22 Years”, Xinhua News Agency, 6 February 1994. 33. Reuters Library Report, “Seoul Sponsors Training for Viet-Korean Youth”, 22 March 1993. 34. Cho Ji-hyun, “Vietnamese Brides Struggling in Korea”, Korea Herald, 15 November 2007. 35. Norimitsu Onishi, “Korean Men Use Brokers to Find Brides in Vietnam”, New York Times, 22 February 2007. 36. Kim Chul-kyoo, “Social Changes in Korea (4): Changing Rural Communities”, Korea Herald, 5 November 2007. 37. Shin Hae-in, “Mixed-Race Marriages Surge”, Korea Herald, 16 April 2007. 38. John Duncan, “Hyanghwain: Migration and Assimilation in Choso˘n Korea”, Acta Koreana 3 (2000): 99–113. 39. Yu Kilchun, “Levels of Enlightenment”, translated by Kim Han-Kyo, in Sourcebook of Korean Civilization, Volume 2: From the Seventeenth Century to the Modern Period, edited by Peter H. Lee (New York: Columbia University Press, 1996), p. 342.

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REFERENCES An, Cho˘ng-hyo. Hayan cho˘njaeng [White war], 3 vols. Seoul: Koryowo˘n, 1983. “Bridges to Vietnam”. Korea Herald, 12 December 2007. Cho, Ji-hyun. “Vietnamese Brides Struggling in Korea”. Korea Herald, 15 November 2007. Choi, Dong-Ju. “The Political Economy of Korea’s Involvement in the Second IndoChina War”. Ph.D. dissertation, University of London, 1995. Cho˘ng Chae-gyo˘ng, ed. Pak Cho˘nghi silgi: haengjo˘k ch’orok [Park Chung Hee chronicle: Summary of his life’s record]. Seoul: Chimmundang, 1994. Dower, John W. Embracing Defeat: Japan in the Wake of World War II. New York: W.W. Norton & Co., 1999. Duncan, John. “Hyanghwain: Migration and Assimilation in Choso˘n Korea”. Acta Koreana 3, 2000. “Feature: Korean Father, Vietnamese Son Reunite after 22 Years”. Xinhua News Agency, 6 February 1994. Haller, Vera. “Federal Judge Gives Settlement Money to Australia and New Zealand”. Associated Press, 22 July 1988. ———. “First Grants Awarded from Settlement Fund”. Associated Press, 30 March 1989. Han’guk kyo˘ngje cho˘ngch’aek 30-yo˘nsa: Kim Cho˘ng-nyo˘m hoegorok [Thirty years of Korean economic policy: Memoirs of Kim Cho˘ng-nyo˘m]. Seoul: Chungang ilbosa, 1990. Hayan cho˘njaeng. DVD. Seoul: Vanguard Cinema, 2001. Helm, Leslie. “S. Korea Reviews Vietnam War Role”. Los Angeles Times, 22 August 1992. “Home to America, If Not to Daddy”. The Economist, 19 May 1990. Huntington, Samuel. The Clash of Civilizations: Remaking of the World Order. New York: Simon & Schuster, 1996. Jones, Diane and Michael Jones. “Allies Called Koreans: A Report from Vietnam”. In America’s Rented Troops: South Koreans in Vietnam, by Frank Baldwin, Diane Jones, and Michael Jones. Philadelphia: American Friends Service Committee, 1975. Kim, Cho˘ng-nyo˘m. Policymaking on the Front Lines: Memoirs of a Korean Practitioner, 1945–1979. Washington, D.C.: World Bank, 1994. Kim, Chul-kyoo. “Social Changes in Korea (4): Changing Rural Communities”. Korea Herald, 5 November 2007. Kim, Jae-young. “What Can We Do for Education of Racially Mixed Children?” Korea Focus, 27 March 2006. Kim, So˘ng-u˘n. Interviewed by Choi Dong-Ju on 24 August 1993 in Seoul. Kim, Tang. “Beil-e ssain ‘hayan cho˘njaeng’ ” [‘White war’ concealed under veil]. Sisa jo˘no˘l, 7 May 1992. “Korean Vets Wage War on Defoliant”. Chicago Tribune, 28 September 1992.

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Korn, Peter. “The Persisting Poison”. The Nation, 8 April 1991. Kwak, Tae Yang. “The Anvil of War: The Legacies of Korean Participation in the Vietnam War”. Ph.D. dissertation, Harvard University, 2006. Lee, Eun Ho and Young Soon Yim. “Military and Civic Actions of South Korean and South Vietnamese Forces in the Vietnam Conflict, 1955–1970”. Korea Observer 13, no. 1 (Spring 1982): 26. National Security Council. NSC 170/1. “Further Exchange of Letters between President Eisenhower and President Rhee”, 23 March 1954. Dwight D. Eisenhower Presidential Library. ———. Memorandum of Discussion at the 187th meeting of the NSC, 4 March 1954. Dwight D. Eisenhower Presidential Library. Onishi, Norimitsu. “Korean Men Use Brokers to Find Brides in Vietnam”. New York Times, 22 February 2007. Park, Chung Hee, John F. Kennedy et al. Memorandum of Conversation, 14 November 1961. Secret. In United States Department of State, Foreign Relations of the United States 1961–1963, vol. 12. Washington, D.C.: Government Printing House, 1996. Reuters Library Report. “Seoul Sponsors Training for Viet-Korean Youth”, 22 March 1993. Schmid, Andre. Korea Between Empire, 1895–1919. New York: Columbia University Press, 2002. Shin, Hae-in. “Mixed-Race Marriages Surge”. Korea Herald, 16 April 2007. ˘ n-jin. “‘Koyo˘bje p’ihae Mi-jejosa ch’aegim’ p’an’gyo˘l” [American manufacturers Sin, U responsible for defoliant afflictions’ verdict]. Choso˘n ilbo, 27 January 2006. Sisa jo˘no˘l. “Han’guk ‘MIA’ nu˘n tan 3 myo˘ng ppun?” [Only three Korean MIAs?], 7 May 1992. “South Korea: Vietnam Tourist Chief Urges Koreans to Visit”. Korea Economic Daily, 8 September 1996. Sterngold, James. “South Korea’s Vietnam Veterans Begin to Be Heard”. New York Times, 10 May 1992. Text of KBS Radio Broadcast. Seoul 3:00 GMT, 12 May 1995. Cited in “President Kim Dismisses Education Minister”. BBC Summary of World Broadcasts, 15 May 1995. United States Department of Defense. Memorandum. “Consideration of the ROK Offer to Send a Division to Indochina”. 1 March 1954. Pentagon Papers [DoD version], 1971. Item no. 56, 9.2: 261. United States Department of State. Foreign Relations of the United States 1952–1954, vol. 15, pt. 2. Washington, D.C.: Government Printing Office, 1984. ———. Foreign Relations of the United States 1964–1968, vol. 29. Washington, D.C.: Government Printing Office, 2000. Vogel, Ezra. Four Little Dragons: The Spread of Industrialization in East Asia. Cambridge, MA: Harvard University Press, 1991.

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White Badge: A Novel of Korea. New York: Soho Press, 1989. Woo, Jung-en. Race to the Swift: State and Finance in Korean Industrialization. New York: Columbia University Press, 1991. Yi, Tong-wo˘n. Taet’ongnyo˘ng-u˘l ku˘rimyo˘ [Longing for the president]. Seoul: Ch’opan, 1992. Yu, Kilchun. “Levels of Enlightenment”, translated by Kim Han-Kyo. In Sourcebook of Korean Civilization, Volume 2: From the Seventeenth Century to the Modern Period, edited by Peter H. Lee. New York: Columbia University Press, 1996. ———. So˘yu kyo˘nmun [Observations on a journey to the West], 1889. Yu, Yong-wo˘n. “6·25 nu˘n myo˘nbun yakhan tongjok sangjan Wo˘llamjo˘n en yongbyo˘ng u˘ro ch’amjo˘n” [Korean War, immoral fratricidal war; Vietnam War, dispatched as mercenaries]. Choso˘n ilbo, 12 May 1995.

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14

Korea’s Preparation for Southeast Asia: Research and Education on Southeast Asian Studies in Korea Seung Woo Park

1. Introduction Over the last two decades, particularly in East Asia, we have witnessed great change in everyday life as well as change in the socio-economic and natural environment. Under the banners of “globalization” and “regionalization”, not only commodities, factories, and money but also people, such as businessmen, students, scholars, tourists, and migrant workers, cross national borders. This new trend of people-to-people exchange is so extensive that Korea, once regarded as one of the most homogenous nations in terms of ethnic composition, is now entering an era of being a multi-ethnic and multicultural nation.

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Southeast Asia plays a greater role than any other region in the transformation process that Korea is currently undergoing. As of September 2007, more than one million foreigners resided in Korea, with Southeast Asian countries contributing approximately one-fifth of that number. The number of foreign migrant workers is reportedly 400,000, of which more than 30 per cent are Southeast Asian workers (Immigration Bureau 2007). It is expected that these numbers will increase as Korea is one of the world’s fastest-ageing societies. This change in Korea’s demographic structure will lead to a demand for an economically active population,1 which will probably come from foreign countries and, in particular, from Southeast Asia. As a consequence, Korea will become over the next two or three decades a nation that feels most keenly the impact of “globalization and regionalization”. Southeast Asia, as the neighbouring region, will play an important role in the process of change. In this regard, more attention needs to be paid to how and to what extent Korea is preparing for change. This study forms part of the project to answer this question. First, it attempts to examine what Korean researchers who specialize in the study of Southeast Asia are doing and have done as part of their research. In particular, researchers’ socio-demographic characteristics, academic backgrounds, research interests, and research activities will be examined. The study also attempts to investigate the current situation, at the tertiary level, of Korean education about Southeast Asia. It focuses on how well Korean universities prepare their programmes and curricula in Southeast Asian studies and language education. The postgraduate careers of the college students who have been trained in this programme are then analysed. 2. Korean Researchers in Southeast Asian Studies There are many Korean researchers who are currently engaged in the discipline of “Southeast Asian Studies”. The exact number of researchers is not known as it is difficult to identify those who are specialized in this field of study and those who are not. The number of Southeast Asian area specialists, or “Southeast Asianists”, currently in Korea can be roughly estimated at 160 (Park 2008).2 The history of Southeast Asian Studies in Korea can be roughly divided into two periods: the earlier period until the late 1980s and the more recent from the 1990s. Korean Southeast Asianists can also be categorized into two groups or generations. The first generation of Southeast Asianists began their academic careers as researchers in Southeast Asian studies prior to the late 1980s, with the second group/generation beginning their academic research careers after that period (Cho 2001; Park 2008; Shin and Rhee 1996).

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Previous studies on the history of “Southeast Asian Studies in Korea” (Cho, Oh, and Park 1998; Jeon 2006; Oh 2007) identify that very little research was carried out during the 1960s and 1970s, apart from a few studies in the disciplines of history, language, and literature. Serious research began only during the 1980s, with Vietnam and Thailand emerging as the main areas of investigation. During this time textbooks about Vietnamese and Thai history were published, while many political scientists wrote papers on issues such as “political systems”, “political change and democratization”, as well as “the military and politics” in Thailand, Indonesia, Vietnam, and the Philippines. It was also during this period that a younger generation of promising students with keen interest in Southeast Asia started their graduate studies. The 1990s brought new horizons for Southeast Asian Studies in Korea. Many foreign-educated researchers who either specialized in Southeast Asian Studies or took an interest in the various facets of the region returned home with their Ph.Ds. Local universities also turned out large numbers of Southeast Asian specialists during the late 1980s and early 1990s. Many were able to find full-time jobs in either local universities or research institutes and began their research in earnest. The interest of government and the public in “international area studies” also increased during this period. A significant amount of funding from a variety of sources was poured into research in “international area studies”, thus encouraging researchers to spare no effort in this field. The Korean Association of Southeast Asian Studies (KASEAS) was established in 1991 and its official publication, The Southeast Asian Review, came into existence the following year. Researchers were able to find their own niche during the 1990s and now, in the twenty-first century, there is a proliferation of studies in the field of Southeast Asian studies. The foregoing, general overview of the recent history of Southeast Asian studies in Korea is reflected in the survey results of the current study. The data are collected from the Korean Researchers’ Information (KRI) database provided by the Korean Research Foundation (KRF), the major governmental funding agency for Korean academia. However, data for some researchers are either not available or are confidential, so the analysis is for a total of 102 academic researchers. The following is an analysis of the demographic characteristics, academic background, research interests, and research activities of the “second-generation” Southeast Asianists in Korea.

2.1. Socio-Demographics and Academic Background The field of Southeast Asian Studies is male-dominated as are other activities in Korea: eighty-four (82.4 per cent) are male, while only eighteen are female

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(17.6 per cent) (see Figure 14.1). The age range of the researchers does not identify anything unexpected: 35.3 per cent (n=36) of the scholars are aged 50–54 years; 24.5 per cent (n=25) are 45–49 years. Thus, these two groups account for the majority of the Southeast Asianists in Korea (see Figure 14.2). Next, occupational status and institutional affiliation were examined. The Figure 14.1 Sex Ratio

Female 18 (17.6%)

Male 84 (82.4%)

Figure 14.2 Age Group Composition

65–69 60–64 6 (5.9%)

2 (2%)

30–34 1 (1%)

35–39 10 (9.8%)

55–59 6 (5.9%)

40–44 16 (15.7%)

50–54 36 (35.3%) 45–49 25 (24.5%)

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majority (69.7 per cent) — sixty-nine out of ninety-nine of those whose occupation was identified — are full-time university professors, while the next largest occupational group, (16.2 per cent, n=16), is made up of parttime lecturers, researchers, and research professors who are affiliated with universities. The number of full-time researchers in both public and private research institutes is only 9.1 per cent (n=9) (see Table 14.1).

Table 14.1 Occupation and Institutional Affiliation

Occupation/Institutional Affiliation

No.

%

Full-time university professor Part-time lecturer, researcher, and research professor in university Researcher in research institute (both public and private) Other

69

69.7

16

16.2

9 5

9.1 5.1

Total

99

100.0

Data not available

3

Academic backgrounds were analysed by examining both the schools attended and the major in which they specialized. The analysis is performed at three levels: undergraduate, master’s, and doctoral levels. At undergraduate level, almost all of the Korean Southeast Asianists were graduates from local universities, while only two are foreign school graduates (see Table 14.2). Hankuk University of Foreign Studies (HUFS) produced the largest number of graduates (n=33, 34 per cent), followed by Seoul National University (SNU) with twenty-one graduates (21.7 per cent). Korea, Yonsei, and Sogang Universities produced nine, eight, and seven graduates respectively that related to the particular field of study. Their undergraduate majors were also analysed and shown in Table 14.2. Southeast Asian language and literature majors (Malay-Indonesian, Thai, and Vietnamese) came out on top, with thirtythree graduates each, while political science and anthropology majors have twenty-three and ten graduates respectively. The number of people who pursued studies abroad was larger in number at the master’s level (see Table 14.3). Those who studied in Southeast Asian countries and the United States for their master’s degrees numbered seventeen

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Table 14.2 Undergraduate Schools and Majors

School

No.

%

Major

No.

%

HUFS* SNU** Korea Yonsei Sogang Sungkyunkwan Other local universities

33 21 9 8 7 5

34.0 21.7 9.3 8.3 7.2 5.2

12

12.4

2

2.1

Language and Literature Malay-Indonesian Thai Vietnamese Others Political science Anthropology History Economics Sociology Law Others

33 13 9 7 4 23 10 7 6 6 3 6

35.1 13.8 9.6 7.5 4.3 24.5 10.6 7.5 6.4 6.4 3.2 6.4

Total

94

100.0

Foreign universities

Total

97 100.0

Data not available

5

Data not available

8

Notes: *HUFS: Hankuk University of Foreign Studies. **SNU: Seoul National University.

Table 14.3 Graduate Schools and Majors (Master’s Level)

School

No.

%

Major

No.

%

Local schools HUFS SNU Sogang Korea Yonsei Sungkyunkwan Others Foreign schools Schools in SE Asia* Schools in USA Schools in Europe Schools in Japan School in Australia

57 17 12 8 7 5 3 5 38 17 16 2 2 1

60.0 17.9 12.6 8.4 7.4 5.3 3.2 5.3 40.0 17.9 16.8 2.1 2.1 1.1

Political science Area studies (Southeast Asia or Asia) Southeast Asian languages and linguistics Southeast Asian literature Anthropology Economics Sociology History Others

29

33.7

16

18.6

6 2 9 8 8 4 4

7.0 2.3 10.5 9.3 9.3 4.7 4.7

Total**

95 100.0

Total**

86

100.0

Data not available**

16

Data not available **

20

Notes: * Schools in Southeast Asia include Universitas Gadjah Mada and Universitas Indonesia in Indonesia; Universiti Malaya in Malaysia; AIT, Chiang Mai University, Chulalongkorn University, Prince of Songkhla University, and Thammasat University in Thailand; University of the Philippines, University of Santo Tomas, and De La Salle University in the Philippines; and Hanoi University of Education and Vietnam National University-Ho Chi Minh City in Vietnam. ** Total does not add up to 102 because some people received two master’s degrees and some of them in two different majors.

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and sixteen respectively. However, leading local universities, such as HUFS, SNU, Sogang, and Korea, still assume important positions by producing a significant number of graduate students in this field. Political science is the most dominant major at the master’s level. At the doctoral level, however, foreign schools are prominent as the main producers of those with Ph.Ds (see Table 14.4). The proportion of those who gained doctorates in this field from a foreign university rather than a local university is 64 per cent (n=64). Of those, twenty-six received their Ph.Ds from American universities while twenty-two people acquired their doctorates from universities in Southeast Asian countries such as Indonesia, Vietnam, Malaysia, the Philippines, Thailand, and Singapore. Political science is also the most popular major for those with Ph.Ds as almost four out of ten (40 per Table 14.4 Graduate Schools and Majors (Doctoral Level)

School

No.

Local schools 36 HUFS SNU Korea Sogang Others Schools in Southeast Asia* 22 Indonesia Vietnam Malaysia Philippines Thailand Singapore Schools in other areas 42 USA Europe Australia Others Total**

9 7 4 4 12 6 6 4 3 2 1

No.

%

Political science Anthropology Economics Sociology Southeast Asian languages and linguistics Southeast Asian literature History Area studies (Southeast Asia or Asia) Others

39 12 10 8

39.4 12.1 10.1 8.1

8 7 7

8.1 7.1 7.1

4 4

4.0 4.0

Total

99 100.0

26 7 7 2

100

No degree**

Major

3

No degree

3

Notes: * Universitas Gadjah Mada (3), Universitas Indonesia (2), and Jakarta National Normal College (1) in Indonesia; Hanoi National University (3), Vietnam National University-Ho Chi Minh City (2), and Hanoi University of Education (1) in Vietnam; Universiti Malaya (3) and Universiti Kebangsaan Malaysia (1) in Malaysia; University of the Philippines (2) and University of Santo Tomas (1) in the Philippines; AIT (1) and Srinakharinwirot (1) in Thailand; and National University of Singapore (1) (The numbers in parenthesis are those of the Ph.Ds produced.) ** Total does not add up because one person received two doctoral degrees.

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cent) majored in this subject. Anthropology and economics are the next most favoured majors. Although only nineteen had Southeast Asian Studies majors (including languages/linguistics and literature majors), most people had included some type of research subject relating to Southeast Asia in their dissertation, irrespective of their major. This will be further discussed later in this chapter.

2.2. Research Activities Undertaken This study also examines when second-generation Korean Southeast Asianists first started their academic career as “Southeast Asian area specialists”. For most researchers, the year they received their Ph.D. degree is regarded as the time when they first ventured into the field of Southeast Asian studies, while for others the beginning of their research careers is considered to be after they had published three or more articles in major journals. Out of the 102, fourteen received their doctoral degrees, or began their career as Southeast Asianists, in the late 1980s and twenty-two began in the early 1990s. During this period many of the new students in graduate programmes, both abroad and at home, had an interest in this new field of study. Over the following years more new scholars entered the field of Southeast Asian studies. The increased numbers during the past decade means there is a lot of promise in the future for Southeast Asian studies in Korea (see Figure 14.3). Figure 14.3 The Year When They Started Their Academic Career as Southeast Asianists

N/A 3 (2.9%) 1986–90 2006–07

14 (13.7%)

5 (4.9%)

2000–05 1991–95

29 (28.4%)

22 (21.6%)

1996–2000 29 (28.4%)

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Next, the research subjects people chose for their Ph.D. dissertations are examined (see Table 14.5). For those who are non-Ph.D. degree holders their final theses, or master’s theses, are examined. In particular, it is interesting to ascertain whether, and to what degree, their theses are related to the geographic regions of Southeast Asia. Most Ph.D. or final theses (83 per cent, n=83) dealt with the Southeast Asian region in some way. The majority chose one Southeast Asian country (44 cases) or its language and literature (14 cases) as their research subject, whereas others (17 cases)

Table 14.5 Main Themes in the Doctoral or Final Thesis

Theme

No.

Thesis dealing with Southeast Asia Single country case study Indonesia Vietnam Malaysia Thailand Philippines Cambodia Myanmar SE Asian language and literature Malay-Indonesian language/literature Vietnamese language/literature/linguistics Thai language/literature Myanmar language/literature Comparative study Comparison between SE Asian country(es) and Korea Comparison among SE Asian country(es) Comparison between SE Asian country(es) and country(es) in other regions Others Southeast Asian region in general ASEAN-Korean relations ASEAN

44 11 11 10 8 2 1 1 14 6 4 3 1 17 9 4 4 8 5 2 1

Sub-total

83

Thesis dealing with other regions and/or issues Korea Other issues

17

Total

10 7 100

No data

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carried out a comparative study. The comparison was either between/ among Southeast Asian countries, or between a Southeast Asian country(es) and a country(es) in another region(s). Some (8 cases) worked with the Southeast Asian region as a whole. Indonesia and Vietnam seem to be the most popular countries chosen for investigation for Ph.D. dissertations, followed by Malaysia, Thailand, and Indonesia. For the seventeen who showed no interest in researching the Southeast Asian region for their final theses, their academic interest in the region seems to have developed more recently, after gaining their academic qualification. Finally, the particular research topics the Korean Southeast Asianists devote efforts to are examined. A maximum of three main topics are identified for each researcher. Table 14.6 provides a full list of the research topics that Korean researchers specialize in. It shows that Indonesia and Vietnam are the most popular countries that researchers focus on. The next most popular are Malaysia and Thailand. In recent years new research issues have been emerging. They include: economic cooperation and integration in East Asia and Southeast Asia; ethnic problems in Southeast Asia; regional integration and East Asian community; and regional governance with nontraditional and human security. Increasing numbers of people are becoming interested and involved in these issues.

Table 14.6 Main Topics of Research Interests

Topics

No.*

Cambodia-Lao PDR Politics in Cambodia Society and culture in Cambodia and Lao PDR Indonesia Politics in Indonesia Political economy of Indonesia Society and culture in Indonesia Religion (esp. Islam) in Indonesia Malaysia Economy of Malaysia History of Malaysia Politics in Malaysia Society and culture in Malaysia Religion (esp. Islam) in Malaysia Ethnic groups in Malaysia

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2 1 1 14** 7 4 4 4 11** 1 1 7 2 1 3

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Malay-Indonesian language and linguistics Malay-Indonesian literature Myanmar Politics in Myanmar Society and culture in Myanmar Myanmar literature Philippines History of the Philippines Politics in the Philippines Political economy of the Philippines Society and culture in the Philippines Singapore Politics in Singapore Society and culture in Singapore Thailand Culture of Thailand History of Thailand Politics in Thailand Thai language Thai literature Vietnam History of Vietnam Politics and diplomacy of Vietnam Political economy of Vietnam Society and culture in Vietnam Vietnamese language Vietnamese literature Southeast Asia in general Southeast Asian economy Economic cooperation and regional integration in Southeast Asia Political system and political economy in SE Asia (comparison) International relations in Southeast Asia (incl. ASEAN) Religion in Southeast Asia (Buddhism) Ethnic Chinese in Southeast Asia Ethnic problems in Southeast Asia History of Southeast Asia City planning in Southeast Asia Other topics Relations between Southeast Asia and Northeast Asia (Korea, China, etc.) Regional integration in East Asia and East Asian community

3 5 4 1 1 2 10** 2 6 3 4 4 2 2 14** 3 1 6 3 2 20** 4 4 3 4 3 3 12*** 7 3 8 3 1 5 1 3 1

5 10

Notes: * Number of topics adds up to more than the total number (102) of researchers, since we identified one to three topics of interest for each person. ** These numbers do not indicate the sum of topics, but the number of researchers. ***This is the number of researchers whose research topics are related to the Southeast Asian region as a whole, without having a specific country as his/her specialty area.

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3. Korea’s Tertiary Education on Southeast Asia

3.1. Undergraduate Programmes and Curricula Hankuk University of Foreign Studies (HUFS) has undoubtedly played a pioneering role in Korea’s study of Southeast Asia in education at the tertiary level. HUFS began to teach the languages and literature of Southeast Asian countries in its undergraduate programmes during the early 1960s, when it opened departments of Malay-Indonesian, Thai, and Vietnamese in 1964, 1966, 1967, respectively. Pusan University of Foreign Studies (PUFS) followed suit. Inaugurated in 1982, PUFS began to offer undergraduate programmes in Southeast Asian languages when it started departments in Thai and MalayIndonesian languages and then in 1991 and 1992 Vietnamese and Myanmar languages. Both HUFS and PUFS remain the mainstay in tertiary education on Southeast Asian languages and literature in Korea. Their programmes devote entire courses to the teaching of Southeast Asian languages, literature, history, culture, and other related subjects. Other undergraduate programmes with similar curricula can be found in the Vietnamese Department at Chungwoon University and the Department of Asian Business at Youngsan University, the latter of which offers two language training modules — in Malay-Indonesian and in Vietnamese. The language and literature departments in HUFS and PUFS have quite similar curricula.3 The curricula of certain selected undergraduate programmes are shown in Table 14.7. Each institution offers many language courses in reading, grammar, listening, conversation, and composition at elementary, intermediate, and advanced levels. Some also offer practical language training courses such as business Malay-Indonesian/Thai, practice of language through the internet, and language practice through watching movies or satellite TV. They also offer courses in modern and contemporary Malaysian/Indonesian/Thai literature, history of Malay-Indonesian literature, Thai poetry, and modern and contemporary Thai novels. Most programmes also offer a variety of courses in the politics, economy, society, culture, and history of the respective Southeast Asian country. Chungwoon and Youngsan Universities also provide similar undergraduate programmes. Some undergraduate programmes, including Chungwoon’s Vietnamese Department, Youngsan’s Asian Business Department, and PUFS’s Department of Malay-Indonesian, also offer local internship courses, which give students the opportunity to have real-life experiences in the respective country. The curricula of those programmes, although not shown in Table 14.7, are very similar in structure and content.

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Table 14.7 Curriculum of Some Selected Undergraduate Programmes for Southeast Asian Studies Courses Language & Literature

Politics, Economy, Business, & Political Economy

Department of Malay-Indonesian HUFS College of Oriental Languages* Audio-visual MalayMalay politics & Indonesian language 1, 2 economy Elementary Malay-Indonesian 1, 2

Indonesian politics & economy

Elementary MalayIndonesian grammar 1, 2

Society, Culture & History

History & culture of Indonesia

International relations of Malay-Indonesia

History of Malay-Indonesian History of Malay-Indonesian literature Intermediate Malay-Indonesian conversation & composition 1, 2 Readings in Malay-Indonesian 1, 2 Practical Malay-Indonesian Advanced Malay-Indonesian conversation & composition 1, 2 Comparative Studies of Malay-Indonesian Indonesian contemporary literature Malaysian contemporary literature Business Malay-Indonesian Readings in Malay-Indonesian literature 1, 2 Practice of Malay-Indonesian interpretation & translation Social linguistics in Malay-Indonesian Department of Thai PUFS College of Oriental Studies** Basic Thai 1–4 Thai lab 1–4 Basic Thai conversation 1, 2 Thai conversation 1–4 Basic Thai composition 1, 2

Modern politics of Thailand Seminar in the economy of Thailand

Malay-Indonesian current information

History & culture of Malaysia Literature & Society of Malay-Indonesia

Elementary Malay-Indonesian conversation & composition 1, 2

Others

Indonesian regional studies Malaysian regional studies

Malaysian religion & society Indonesian religion & society Society & language of Malay-Indonesia Malay-Indonesian culture in Malay language History of Malaysia and Indonesia

Chinese society in Indonesia Chinese society in Malaysia Studies of MalayIndonesian overseas Chinese

History & culture of Thailand Introduction to Theravada Buddhism in Southeast Asia

Introduction to Thai studies Seminar in Thai studies

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Table 14.7 — cont’d Language & Literature

Politics, Economy, Business, & Political Economy

Basic Thai readings 1, 2 Introduction to Thai literature Intermediate Thai composition 1, 2 Intermediate Thai readings 1, 2 Current Thai affairs by internet Business Thai writing [Practice of Thai by watching] Thai movies Practice in Korean-Thai translation & interpretation 1, 2 Department of Myanmar PUFS College of Oriental Studies Elementary Myanmar 1–4 Intermediate Myanmar 1–4 Myanmar conversation 1–4 Myanmar practice with digital data 1, 2 Myanmar writing workshop 1, 2

Society, Culture & History

Commercial practice & marketing in Thailand

Society & women in Southeast Asia

Politics of Myanmar

History of Myanmar 1, 2

Investment environment of Myanmar

Social studies of Myanmar

Myanmar for reading Intensive current Myanmar Myanmar translation practice Advanced Myanmar conversation Advanced Myanmar practice Department of Vietnamese Studies Chungwoon University College of Humane & Social Science Studies*** Elementary Vietnamese 1, 2 Vietnamese Society & culture Vietnamese conversation 1–8 economy of Vietnam Visual Vietnamese 1–8 Intermediate Vietnamese 1, 2 Vietnamese literature 1, 2 Vietnamese composition 1, 2 Current affairs in Vietnamese 1, 2 Vietnamese linguistics Practice in Vietnamese interpretation

Others

Introduction to Myanmar studies 1, 2 Introduction to Southeast Asian studies Myanmar studies on internet

Introduction to Vietnamese studies Seminar in Vietnamese studies 1, 2 Cultural internship in Vietnam

Vietnamese politics Ancient & & diplomacy medieval History of Vietnam Business Modern & investment in contemporary Vietnam 1, 2 History of Vietnam Society & culture Indochinese of Southeast Asia regional brief

Notes: * The undergraduate programme of the Department of Malay-Indonesian Interpretation & Translation, College of Interpretation & Translation in HUFS at Yongin Campus has an almost identical curriculum. The Department of Malay-Indonesian in the College of Oriental Studies at PUFS also has a similar curriculum. Malay-Indonesian module in the Department of Asian Business at Youngsan University, on the other hand, offers a more compact curriculum with fewer courses. ** The undergraduate programmes of the Department of Thai at HUFS-Seoul Campus and the Department of Thai Interpretation & Translation at HUFS-Yongin Campus have very similar curricula. *** Departments of Vietnamese in both HUFS College of Oriental Languages and in PUFS College of Oriental Studies also have undergraduate programmes in Vietnamese, but with more comprehensive curricula. Youngsan University’s Department of Asian Business, however, provides a programme in Vietnamese on a much smaller scale.

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Other universities, with the exception of the four mentioned above, offer a limited number of selected courses on Southeast Asia in their departments and programmes (see Table 14.8). Some of the courses deal with particular issues on Southeast Asia: e.g., “Southeast Asian Politics” in the political science departments at HUFS, Ajou, Chosun, Dong-A, Inha, Sogang, and Sungshin Women’s Universities; “Southeast Asian Economy” in the international economy and trade-related departments at HUFS, Inha University, Pusan National University (PNU), and PUFS; and “Southeast Asian History” in (Asian) history departments at Inha, Korea, and Yonsei Universities as well as Seoul National University (SNU). Some universities offer general courses on Southeast Asia: e.g., “Southeast Asian Studies” or “Understanding Southeast Asia” in Changwon National, Gyeongsang National, Sookmyung, and Yonsei (Wonju Campus) Universities. Some universities offer courses that embrace broader issues in which they devote part (or most) of the teaching time and effort to the Southeast Asian area. Some of the courses are: “East Asian Politics and Culture” at Chonbuk National University, “Third World Politics” at Kangwon National University, “International Relations in the Asia-Pacific” at both PNU and PUFS, “Comparing Political Regimes in East Asia” at Sungkonghoe University, “Foreign Area Studies” at Yeungnam University, and “East Asian International Relations” at Yonsei University. SNU also offers many courses that fall into this same category (e.g., “Art and Civilization in Asia”, “Buddhist Art of Table 14.8 Other Undergraduate Programmes with Course(s) in Southeast Asia University

College/Division

Department/Major

Course

Ajou University

College of Social Sciences

Dept. of Pol. Sci. & Diplomacy Dept. of Missiology

Southeast Asian Politics

Dept. of Int’l Relations Dept. of Pol. Sci. & Diplomacy

Southeast Asian Studies

Asian Center for Theological Studies and Mission Changwon National University Chonbuk National University Chosun University

Dong-A University

College of Social Sciences College of Social Sciences Courses for General Education College of Foreign Studies College of Social Sciences College of Social Sciences

Dept. of English Dept. of Pol. Sci. & Diplomacy Dept. of Pol. Sci. & Diplomacy

Study on the Southeast Asian Countries

East Asian Politics & Culture Understanding Vietnam Basic Vietnamese 1, 2 Vietnamese Culture Southeast Asian Politics Southeast Asian Politics

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Table 14.8 — cont’d University

College/Division

Department/Major

Course

Gyeongsang National University Hankuk University of Foreign Studies (HUFS)

Division of Pol. Sci. & Public Admin Courses for General Education

Major in Politics and Diplomacy

College of Business & Economics College of Social Sciences College of Econ & Int’l Trade College of Humanities

Dept. of Int’l Economics & Law Dept. of Pol. Sci. & Diplomacy Dept. of Int’l Trade & Regional Studies Dept. of History

Studies on Southeast Asia Practical MalayIndonesian 1, 2 Practical Vietnamese 1, 2 Southeast Asian Society & Culture Southeast Asian Economy Southeast Asian Politics

College of Social Sciences

Dept. of Pol. Sci. & Diplomacy

Inha University

Kangwon National University Korea University Kyung Hee University Mokpo National University Pusan National University Pusan University of Foreign Studies (PUFS)

Sangmyung University

Seoul National University

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College of Social Sciences

Dept. of Cultural Anthropology Dept. of Pol. Sci. College of Liberal Arts Dept. of History College of Pol. Sci. School of Int’l Business & Economics & Trade Division of History Major in Cultural & Culture Anthropology College of Business Division of Trade & Int’l Studies College of Social Dept. of Pol. Sci. Sciences & Diplomacy Courses for General Education

College of Business Division of Trade and Int’l Studies College of Social Dept. of Pol. Sci. Sciences & Diplomacy Division of Major in Int’l Trade Economics & & Business Int’l Trade Courses for General Education

340

Southeast Asian Economy Introduction to Southeast Asian History Understanding Historical Primary Texts 2 Vietnam: History & Heritage Southeast Asia & World Politics Southeast Asian Politics Southeast Asian Culture & Society Third World Politics Southeast Asian History Studies on China, Japan & Southeast Asia Peoples & Cultures in Southeast Asia Southeast Asian Economy Int’l Relations in the Asia-Pacific Culture of Myanmar Region Culture of Vietnam Introduction to Thai Culture Understanding of MalayIndonesian Culture Southeast Asian Economy Int’l Relations in the Asia-Pacific Comparative Analysis for Asian Culture Economies of Asian Countries Art and Civilization in Asia Historical Development of Modern East Asia

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Seoul National University

341

College of Engineering College of Humanities

Architecture Major, Dept. of Architecture Dept. of Archaeology & Art History Dept. of Asian History

College of Social Sciences

Dept. of Anthropology Dept. of Economics Dept. of Pol. Sci.

Sogang University

Division of Social Sciences Sookmyung College of Social Women’s University Sciences Sungkonghoe University Faculty of Social Science Sungshin Women’s College of Social University Sciences Woosong Courses for General Education

Dept. of Pol. Sci. & Diplomacy Dept. of Pol. Sci. & Diplomacy

School of Railroad Transportation

Dept. of Railroad Business & Management

Yeungnam University Yonsei UniversitySeoul Campus

College of Liberal Arts College of Liberal Arts College of Social Sciences Underwood International College

Yonsei UniversityWonju Campus

College of Gov’t & Business

Dept. of Sociology Dept. of History Dept. of Pol. Sci. & Diplomacy Int’l Studies Major Pol. Sci. and Int’l Relations Major Dept. of Int’l Relations

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Language and Culture of Malay-Indonesia Reading of East Asian Classics Southeast Asia & the Maritime Silk Road The Third World Literature Understanding Asian Philosophy Asian Architecture & Urbanism Buddhist Art of Asia History of Ceramics in East Asia & Korea General History of Vietnam Modern Southeast Asia & Imperialism Southeast Asian History & Maritime Trade Understanding Southeast Asian Culture East Asian Economy Understanding of Southeast Asian Politics Understanding Southeast Asia Comparing Political Regimes in East Asia Politics of Southeast Asian Countries Malay Conversation 1–4 Malay Reading 1–4 Vietnamese Conversation 1–4 Vietnamese Reading and Writing 1–4 Practical MalayIndonesian Intensive Course 1, 2 Practical Vietnamese Intensive Course 1, 2 Practical Malay-Indonesian Specialized Course 1, 2 Practical Vietnamese Specialized Course 1, 2 Foreign Area Studies History of Southeast Asia Capitalist Development in North & Southeast Asia East Asian Int’l Relations Capitalist Development in North & Southeast Asia Southeast Asian Studies

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Asia”, “East Asian Economy”, etc.). Chosun and Woosong Universities, on the other hand, teach Southeast Asian languages (e.g., some Vietnamese language courses at Chosun and some Malay-Indonesian and Vietnamese courses at Woosong), which seems to be a rare practice for the universities that are not specialized in foreign language education. Finally, it is also worth noting that HUFS, PUFS, and SNU offer several “general education” courses on Southeast Asia.

3.2. Graduate Programmes and Curricula Education on Southeast Asia at the graduate level began in 1966 with HUFS Graduate School opening its M.A. degree programme in the Department of Asian Area Studies. But the first full-scale graduate programme for Southeast Asian languages started in 1984 with HUFS’s M.A. degree programmes in Malay-Indonesian and Thai languages. By integrating the two M.A. programmes in 1996, and adding Vietnamese and Hindi language programmes, HUFS Graduate School established the Department of South and Southeast Asian Languages and Literature. It consists of four M.A. degree programmes, including three Southeast Asian language programmes, and offers diverse courses in Malay-Indonesian, Vietnamese, and Thai languages and literature. Its comprehensive curriculum includes linguistics courses such as dialectology, etymology, morphology, phonetics, phonology, semantics, syntax, etc. in Malay-Indonesian, Thai, and Vietnamese. It also offers many courses in literature, from ancient to contemporary, for each of the three countries including poetry, novels, and drama.4 HUFS’s Graduate School of International and Area Studies (GSIAS) was established in 1997 and provides a very different M.A. programme through its Department of South and Southeast Asian Studies. Instead of focusing on languages and literature, its curriculum includes diverse subjects from the social science disciplines. The list of courses on Southeast Asia currently offered in this programme is shown in Table 14.9. Sogang University started its first M.A. programme in Southeast Asian studies around the same time as HUFS. Sogang’s Graduate School of Public Policy (GSPP, established in 1988) opened its Department of Southeast Asian Studies in 1995 — the first graduate programme solely devoted to Southeast Asian studies. Sogang GSPP’s graduate programme offers a comprehensive curriculum with a wide range of courses (see Table 14.9), although not all of them are taught every semester due to lack of faculty and student enrolment. Finally, Table 14.10 shows the curricula of the graduate programmes in all the other graduate schools. These schools offer one or several courses on

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Table 14.9 Two Selected Graduate Programmes with Southeast Asian Studies Curriculum Courses Language & Literature

Politics, Economy, Business, & Political Economy

Society, Culture & History

Department of South & Southeast Asian Studies HUFS-GSIAS (Graduate School of International & Area Studies) Malay-Indonesian 1, 2 Political Change in A Study of SE SE Asia Asian History Vietnamese 1, 2 Political Economy Social Change in of SE Asia SE Asia Thai 1, 2

Others

Seminar in SE Asian Region Seminar in Application of SE Asian Area

Trade in SE Asia FDI in SE Asia

Traditional Culture & Religion in SE Asia NGOs and IOs in Advanced SE Asia Theory of SE Asian Area Banking & Finance Gender & Migrant Research in SE Asia Labour of SE Asia Method in SE Asian Studies Int’l Relations of Mass culture in SE Asia SE Asia ASEAN Economy Regional Conflict & SE Asian and FTA Social Stratum in Development SE Asia Studies Political Culture Culture Transmission of SE Asia & Education in SE Asia

Department of Southeast Asian Studies Sogang University-GSPP (Graduate School of Public Policy) Readings in Malay-Indonesian SE Asian SE Asian Literature Politics History SE Asian Society & Culture Economy in SE Asia Readings in Vietnamese Literature Readings in Thai Literature Readings in Philippine Literature

Int’l Relations in SE Asia Political System & Change in SE Asia

Ancient & Medieval History of SE Asia Modern History of SE Asia

Revolution in SE Asia Communism in SE Asia

Social & Economic History of SE Asia Cultural History of SE Asia

Korea & SE Asia SE Asia during the Japanese Occupation ASEAN & Regional Cooperation SE Asia & China

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Table 14.9 — cont‘d Courses Language & Literature

Politics, Economy, Business, & Political Economy

Readings in Southeast Asian Literature Foreign Policy of SE Asia Diplomatic History of SE Asia The States of SE Asia

Society, Culture & History

Others

History of Mainland SE Asia History of Island SE Asia

SE Asia & Japan SE Asia & the United States Ethnic Chinese in SE Asia

Soc. Structure & Soc. Change in SE Asia Modern Economic Religion in History of SE Asia SE Asia Development Agrarian Society & Strategies of Peasantry in SE Asia SE Asia Economic Ethnicity in Cooperation SE Asia in SE Asia Languages in Resource SE Asia Economy of SE Asia Transnational Social Problems in Corporations in Contemporary SE Asia SE Asia Labour Relations Nationalism in in SE Asia SE Asia Regional Conflicts in SE Asia

the Southeast Asian area through their various social science departments and majors. Some programmes of note are those provided by the graduate schools of SNU, Sungkonghoe, and Yonsei Universities. For instance, at SNU a variety of Southeast Asia-related courses are taught not only by social science departments but also by diverse units such as the Departments of Art History, Architecture, Asian History, Law, and the College of Fine Arts. Approximately ten M.A. courses are offered by Sungkonghoe University’s Graduate School of NGO Studies and they spend part of the time on the Southeast Asian area and related issues. Yonsei University’s Graduate Programme in Area Studies deserves special mention as it has an independent Southeast Asia major. Lastly, PUFS also has a graduate programme related to Southeast Asian studies in its Graduate School of International Management and Area Studies. Its M.A. programme majoring in “International Management in ASEAN Area” offers several courses on Southeast Asia.

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Table 14.10 Other Graduate Programmes with Course(s) in Southeast Asia University

Unit

Department/Major

Courses

Chonbuk National University Chosun University

Graduate School

Dept. of Pol. Sci. & Diplomacy Dept. of Pol. Sci. & Diplomacy Major in Int’l Relations Dept. of Int’l Affairs

Political Economy of East Asian Development Study of SE Asia Regions SE Asian Politics

Gyeongsang National University Hankuk University of Foreign Studies (HUFS)

Graduate School Graduate School Graduate School

Dept. of Int’l Economics & Law Dept. of Pol. Sci. & Int’l Relations Dept. of Pol. Sci. & Diplomacy

Inha University

Graduate School

Kangwon National University

Graduate School

Pusan National University

Graduate School of Int’l Studies (GSIS)

Pusan University of Foreign Studies (PUFS)

Graduate School of Int’l Management & Area Studies

Major in Int’l Management in ASEAN Area

Seoul National University

Graduate School

Art History Major, Dept. of Archaeology & Art History College of Fine Arts

Dept. of Cultural Anthropology Dept. of Pol. Sci. Major in Int’l Area Studies

Dept. of Anthropology Dept. of Architecture Dept. of Asian History

Seminar on Pol. Economy of ASEAN Regions Int’l Relations of East Asia Research on the Economy of ASEAN Regions East & South Asian Economy Study Topics on East & South Asian Economy Study Proseminar: Government and Politics in SE Asia Int’l Relations of SE Asian Countries Political Economy of Third World Area Study of SE Asia SE Asian Politics SE Asian History, Society & Culture Politics and Economy of SE Asia Special Studies of SE Asia Malay-Indonesian Myanmar Thai Vietnamese Issues in ASEAN Pol. Economy Business Practice in ASEAN Investment Strategy for ASEAN Case Study of ASEAN FTAs Topics in SE Asian Art Seminar in East Asian Ceramics Studies in Contemporary Asian Arts Anthropology of SE Asia Seminar in History of Asian Architecture Seminar in SE Asian History

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Table 14.10 — cont’d

University

Unit

Department/Major

Dept. of Law Dept. of Pol. Sci.

Graduate School of Int’l Studies Sogang University

Graduate School

Sungkong-hoe University

Graduate School of Int’l Studies Graduate School of NGO Studies

Sungshin Women’s University Yonsei University

Yonsei UniversityWonju Campus

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Graduate School Graduate School

Graduate School

346

Programme in Comparative Literature Area Studies Major, Dept. of Int’l Studies Dept. of Pol. Sci. East Asian Studies Programme Dept. of NGOs

Courses Studies in Vietnamese History Studies in Modern Vietnamese History Studies in Oriental Legal History Seminar in Area Studies: Government & Politics Comparative Studies in the Third World Literature Society & Culture of SE Asia Industrialization & Development in SE Asia SE Asian Politics Topical Analysis in Comparative Politics 2 Topical Seminar on SE Asia

Asian Civil Society & NGO Asian Civil Rights & Democracy Master of Arts in Democratization in Asia Inter-Asia NGO Studies IR and Peace Issues in Asia (MAINS) Programme Development & Social Changes in Asia Gender in Asia Globalization & Ecology in Asia Globalization & Migration in Asia Emerging IR in SE Asia Religious Dialogue in Asian Context Dept. of Pol. Sci. Politics of SE Asian Countries & Diplomacy Area Studies on SE Asia Graduate Programme SE Asian Economy in Area Studies SE Asian Politics (SE Asia Major) SE Asian Society SE Asian Society & Culture Special Course on SE Asian Culture SE Asian History Int’l Relations in SE Asia Understanding of ASEAN Special Topics in SE Asia 1–4 Dept. of Int’l Political Systems of SE Asia Relations

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3.3. Problems and Limitations Regretfully, other than around nine undergraduate programmes in “Southeast Asian language education”, in Korea there is virtually no independent department or programme at the undergraduate level that is solely devoted to Southeast Asian studies.5 None of the major universities in Korea have such programmes. Even those universities with colleges specializing in “international and/or foreign area studies” (usually with such names as “College/Division/ School of International Studies”) — Ewha, Hanyang, HUFS, Keimyung, Korea, Kyung Hee, Yonsei, etc. — lack an independent Southeast Asian studies department or major. For example, the “Divisions of International Studies” — at Ewha Women’s University’s Scranton College, at HUFS, at Korea University, and at Kung Hee University’s College of Global Management — all focus attention on international business and diplomacy rather than on international area studies. Their curricula offer such subjects as “international business and economy”, “international relations and cooperation”, and “international security”, without a single course focused on Southeast Asia. There is not much difference at the graduate level. Only HUFS, Sogang, and Yonsei have graduate programmes or majors in Southeast Asian studies.6 In Korea many graduate schools, one of which is HUFS’s GSIAS, specialize in international and area studies. Most of these graduate schools were founded in the late 1990s with government assistance.7 But all of the Graduate Schools of International Studies (GSISs) (except HUFS’s GSIAS) lack a department/major or programme for Southeast Asian studies. For example, Korea University’s GSIS has two departments: one is the Department of International Studies and, ironically, the other is the Department of Korean Studies. The curriculum of the former focuses on international commerce, finance, and security, without any consideration for international area studies. Sogang University’s GSIS has two graduate programmes: the Area Studies programme and the East Asia programme. The former focuses on Europe and the latter on three Northeast Asian countries including Korea. At Yonsei University, the GSIS has five different programmes (at M.A. and/or Ph.D. levels): (1) international cooperation, (2) international trade and finance, (3) international management, and (yet again) (4) Korean studies as well as (5) an M.A. programme in area studies. The M.A. programme in Area Studies, has three sub-programmes — American, Japanese, and Chinese Studies that do not consider other “minor” areas such as Southeast Asia. It is rare for Korean graduate schools to offer Southeast Asia-related courses, let alone have an independent Southeast Asian studies programme or major. Of more than a dozen GSISs in Korea, only four — HUFS, PNU,

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SNU, and Sogang University — have any course(s) related to Southeast Asia. Jeon and Lee (2007) observe with regret that international area studies in Korea would have fared better if the government had established, in the late 1990s, a single, state-financed research institute (i.e., National Institute of Foreign Area Studies) incorporating a graduate-level educational programme, instead of distributing small amounts from the fund among nine GSISs. The author of this work agrees with them. 4. Postgraduate Careers: A Preliminary Observation In spite of the problems and limitations, some of the above-mentioned educational programmes on Southeast Asia have produced a significantly sized pool of graduates with great potential. In particular, the undergraduate programmes of Southeast Asian languages and literature at HUFS and PUFS have succeeded in training many promising, young students, who are entering the labour market fully prepared with useful language skills. However, the analysis identifies that the Korean educational programmes on Southeast Asia have both positive and negative outcomes. In this section the graduates of Pusan University of Foreign Studies (PUFS) are presented as typical exemplars.8 There are four undergraduate departments in the College of Oriental Studies at PUFS: Departments of Thai, Malay-Indonesian, Vietnamese, and the Myanmar language. Each year thirty-five to fifty students are admitted to each of these departments, and for the last three years approximately 100–150 students have graduated from them.9 Approximately half these graduates have been able to find jobs. Table 14.11 shows the various categories of occupations and workplaces of the “working graduates” — those who graduated from the above-mentioned four departments and were successful in finding jobs. Most graduates (approximately 70 per cent) found a job in a small or medium-sized business enterprise. Only a small proportion of students found a job in a large corporation or in the public sector. About 5 to 10 per cent of the working graduates are in the private education sector as instructors in hakwon, small private institutes, and teach elementary, middle, and high school students on an extracurricular basis. An important point is whether, and how much, the occupations of these working graduates and the activities they undertake in their workplaces are closely related to — and reflect — the training they received during their college years. In other words, do they fully utilize their language skills and knowledge, gained as Southeast Asian studies graduates, in their jobs? Although it may not be possible to give a definitive answer to this question from the

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Table 14.11 Postgraduate Careers of PUFS Graduates*

Category

Dept. of Thai

Occupation Employees of small & medium-sized business enterprises Employees of large business enterprises Employees of government & public institutions Employees of formal educational institutions (incl. colleges) Employees of hakwon (small private institute for informal education) Self-employed or others Location of workplace Local Foreign (mostly SE Asia) Total

Dept. of Dept. of Dept. of MalayVietnamese Myanmar Indonesian

50

39

51

38

8

4

5

4

1

7

9

2

3

2

5

3

4 3

6 1

4 5

5 2

36 33

39 20

61 18

43 11

69

59

79

54

Note: *Those who graduated during the period between August 2004–February 2007 and succeeded in finding jobs after graduation are under investigation. For the Department of Thai, however, the analysis is done for those who graduated during February 2005–February 2008. Source: Law data are provided by the Department of Thai at Hankuk University of Foreign Studies (HUFS).

available data (i.e., the data on PUFS graduates), the following inferences can be drawn: first of all, the data show that a large number of graduates are working in an environment in which they can apply their language skills and knowledge. Many of the graduates from the four departments of PUFS are working abroad and most of them are believed to have jobs where they can use the language training received in college. Compared to other majors, the proportion of graduates working abroad is high, from 20 per cent (Myanmar major) to 48 per cent (Thai major). A significant number are either working in Southeast Asian countries or carrying out work closely related to their college majors. For instance, many graduates from the Department of Thai are currently working for Korean corporations in Thailand (e.g., LG Electronics, CJ Logistics, Haesung Thailand, etc.), Thai corporations in Korea (e.g., Thai Airways Pusan office), local airline companies (e.g., Korean Air and Asiana

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Airlines), or other business corporations in the travel and tourism industries both in Thailand and at home (e.g., hotels, tourist agencies, etc.). It is estimated that more than 30 per cent of the graduates utilize their language skills on the job. The same goes for the Malay-Indonesian language majors. A similar proportion of graduates are working abroad at either Malaysian and Indonesian corporations or at the overseas offices of Korean corporations (e.g., FNS Logistics, Hansoll Hyun I’sia, LG Corporation, LG-Philips LCD, PT Agulatex, PT HIT Electronics Indonesia, PT Indonesia, PT Rira Indonesia, etc.). They are very likely to be using their language skills in their jobs. The job situation is slightly different for graduates of the Department of Vietnamese. Many (n=9, 11 per cent) work as translators or interpreters in either private corporations or public agencies. Compared to other majors, more graduates work in government and public institutions (n=9, 11 per cent) such as the Ministry of Labor’s Regional Labor Office, Korea International Labour Foundation, and Korea Trade-Investment Promotion Agency (KOTRA). Still others are working for Korean corporations on foreign soil and may somehow utilize their knowledge of Vietnamese. Overall, it is the Vietnamese graduates, approximately 35 per cent, who seem to be using their language skills on the job. For the Myanmar majors, however, the job market is less favourable. Only a small proportion of the graduates seem to have found jobs that require these language skills. This is likely a reflection of the fact that the Myanmar language is less in demand in the labour market than other Southeast Asian languages. The above observations of the postgraduate careers of the PUFS graduates shows on the whole that they have been fairly successful in finding an occupational niche where the knowledge and skills acquired during their college years are not wasted. The situation may not be so different for the graduates of HUFS and other Southeast Asian language programmes, although a more detailed analysis — using more extensive data — is necessary. Yet, we should not overgeneralize from the case of PUFS and there is still further to go with the job market for, and the postgraduate careers of, the Korean college students who are majoring in Southeast Asian studies and language/ literature. Firstly, the majority of the college graduates who majored in Southeast Asian languages and literature are still experiencing difficulties in finding jobs in which they can fully utilize their language skills. Second, the changing socio-economic environment due to globalization and regionalization in this region of East Asia has resulted in a strong demand for talented young people fully equipped with not only language skills but also in-depth knowledge and understanding of the culture, history, people, and society of foreign

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countries and, in particular, of Southeast Asian countries. In order to produce these talented people it is necessary, as previously mentioned, to create new, independent programmes of Southeast Asian studies at the major universities and/or Graduate Schools of International Studies (GSISs) in Korea. These independent programmes should provide a high standard of education on Southeast Asia in various disciplines of the social sciences. 5. Summary and Recommendations This study has shown that Korea has a strong pool of researchers in the field of Southeast Asian studies. Korean Southeast Asianists form a viable and vibrant academic community and have good prospects for further development. Not only do they demonstrate records of achievement in their research, but they are also enthusiastic about forming an interactive academic group of their own. All of them join at least one of the several academic associations or networks of scholars dedicated to the promotion of Southeast Asian studies, one of which is the KASEAS. In particular, the membership of KASEAS (more than 300 at present) includes not only most of the Korean Southeast Asianists but also many other scholars and researchers who take an academic interest in the area of Southeast Asia. Most Southeast Asianists in Korea meet regularly at the annual meetings of the association and frequently submit papers for publication. Future prospects are also positive, since new, young, and promising scholars are continuing to join the field of Southeast Asian studies in increasing numbers. It is foreseeable that in the near future there will be a third generation of Korean Southeast Asianists who will propose new theories, impart new perspectives, carry out new research agendas, and think of new subjects. However, the picture of education in Southeast Asian studies is not so bright. As mentioned above, there are many problems and limitations. More effort is needed to promote public awareness of Southeast Asia and its importance, as well as enhance the education of college students about Southeast Asia and its people, history, culture, and society. To remedy these problems, the following recommendation could be appropriate. Every effort needs to be made to link research and education in order to stimulate the interest of young people and the general public in Southeast Asia. There are several measures that can be used to tap into the strong pool of researchers and their knowledge in order to promote Southeast Asian studies. Firstly, as already suggested, the best way to promote Southeast Asian studies in Korea is the creation of independent educational programmes or

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units (departments/majors) at some of the major universities and GSISs. The government can also play a major role in this by setting up a state-sponsored institution of research and education that could be named the National Institute of Southeast Asian Studies or NISEAS.10 Another way to accomplish this is to establish a network of Southeast Asianists in Korea for the education of college students. First, the researchers and scholars engaged in Southeast Asian studies at various universities and research institutions could form a network and develop a common teaching programme and curriculum with diverse courses on Southeast Asia. The Korean Institute of Southeast Asian Studies (KISEAS),11 or the abovementioned NISEAS, could act as a coordinating organization. Another option is to use the newly established Korean-ASEAN Centre, as it could be an excellent means of coordinating and supporting the network of Korean Southeast Asianists. Any universities interested in the programme could join, accredit it, and then allow their students to take the courses for credits. A third alternative is to form a consortium of universities and schools, particularly major universities or GSISs with international and area studies majors or programmes or who have Southeast Asian specialists as full-time faculty members. The universities and schools that are part of the consortium could develop a common educational programme to train students interested in Southeast Asia. Setting up a formal consortium has several advantages. One advantage is that the participating universities and schools would have no difficulty in finding capable teachers because they can easily use the Southeast Asianists within the consortium. A quality teaching programme with enthusiastic students can also attract excellent people with knowledge of Southeast Asian studies from outside the consortium. NOTES 1. The proportion of the elderly (aged sixty-five and over) to the total population in Korea was around 10 per cent in 2007. It will increase to 24.3 per cent in 2030 (Korea National Statistical Office 2008). To keep the balance between the economically active population and the “dependent population” (the elderly over sixty-five plus infants and children under fifteen), Korea might have to import several million young people from abroad. 2. The definition of “Southeast Asianist” is not easy to determine. However, I regard a person as a Southeast Asianist if he or she meets one or more of the following criteria: first, he or she should have a Ph.D. degree with a dissertation specializing in the Southeast Asian area or on related issues. Second, he or she should have published more than two articles on Southeast Asia in high-quality academic journals. Third, also included are full-time faculty members of four-

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4. 5.

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year universities with departments or programmes majoring in Southeast Asian languages or studies. They are the following seven departments: the three departments of MalayIndonesian, Thai, and Vietnamese in HUFS College of Oriental Languages; and the four departments of Thai, Malay-Indonesian, Vietnamese, and the Myanmar language in PUFS College of Oriental Studies. HUFS in Yongin Campus also offers Malay-Indonesian and Thai language programmes in its College of Interpretation and Translation, but they have not been treated as separate programmes, but as part of the respective language programmes in HUFS Seoul Campus. The lack of space in this chapter does not permit me to present a comprehensive table of their curricula. Chungwoon University Department of Vietnamese Studies can be regarded as the only programme where the entire curriculum consists of courses on Southeast Asian studies. Chungwoon’s curriculum is still limited in scope and highly skewed towards language training courses. HUFS’s GSIAS and Sogang’s GSPP have Southeast Asian studies departments and offer a full range of courses on Southeast Asia (see Table 14.9). Yonsei Graduate School also provides a major in Southeast Asia (see Table 14.10). Both Kim Young Sam Government (1993–97) and Kim Dae Jung Government (1998–2002) made “globalization” one of their national agendas and contributed approximately 100 billion won, over five years from 1997, to academia to nurture international area studies at the graduate level. Nine graduate schools of international studies nationwide were thrilled by the magnanimous financial assistance (kindly but carelessly) rendered by government. (Some of the schools had existed for several years and some were newly founded for the funding.) Judging from the perspective of the “promotion of area studies”, however, the project can be judged as a clear failure. Data for this section are provided by PUFS. I would like to express my sincere gratitude to Professor Kim Hong-Koo in the Department of Thai at PUFS for his help in acquiring the data. The numbers of students to be admitted are forty for the Departments of Thai and Malay-Indonesian, fifty for the Department of Vietnamese, and thirty-five for the Department of Myanmar. This institute is supposed to be a compound organization that can perform the following functions: first, it should be a research institution with more than a minimum level of research manpower in some essential research areas. Second, it should be a hub organization to play the role of a coordinator for the network of Korean Southeast Asianists. Third, it should operate a graduate-level educational programme to teach students about Southeast Asia and to train the future generation of Southeast Asianists. The KISEAS, an interdisciplinary research organization established in 1992, is the only research institute of Southeast Asian studies in Korea.

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REFERENCES Cho, Hung-guk. “Problems and Perspectives of South East Asian Studies in Korea” [in Korean]. International Area Studies Review 5, no. 1 (2001): 47–67. Cho, Hung-guk, Oh Myung-seok, and Park Sa-Myung. “The Present Status and Future Tasks of Southeast Asian Studies in Korea” [in Korean]. In The Present Status and Future Tasks of Foreign Area Studies in Korea, edited by Yi Sang-seob and Kwon Tae-hwan. Seoul: Seoul National University Press, 1998. Immigration Bureau, Republic of Korea Ministry of Justice. “Status Report on Foreign Residents and Immigrant Workers by the Origin of Countries”, 2007. Jeon, Je Seong. “Dyanmics and the Future of Southeast Asian Studies in Korea: Waiting for a Manifesto of the ‘Third-Generation’” [in Korean]. East Asian Studies 50 (2006): 109–40. Jeon, Je Seong and Lee Jaehyon. “Critical Analysis of the Educational Process on Southeast Asian Studies in Korea” [in Korean]. Paper presented at the Annual Fall Conference of the Korean Association of Southeast Asian Studies, Seoul, 27 October 2007. Korea National Statistical Office. “Population Projection”. (accessed 1 March 2008). Oh, Myung-seok. “Anthropology and Southeast Asian Studies in Korea”. Paper presented at the Annual Fall Conference of the Korean Association of Southeast Asian Studies, Seoul, 27 October 2007. Park, Seung Woo. “Korean Researchers in Southeast Asian Studies: Who They Are and What They Do”. Paper presented at the International Workshop on “Korean Studies in ASEAN and Southeast Asian Studies in Korea”, Universiti Sains Malaysia, Penang, Malaysia, 15–16 June 2004. ———. “Southeast Asian Studies in Korea: An In-depth Analysis of the Secondgeneration Southeast Asianists in the Field of Social Sciences and History” [in Korean]. Paper presented at the Annual Spring Conference of the Korean Association of Southeast Asian Studies, Jeonju, Korea, 4–5 April 2008. Shin, Yoon Hwan and Rhee Sung-Hyong. “The Present Status of and Future Challenges for the Foreign Area Studies in Korea” [in Korean]. National Strategy 2, no. 1 (1996): 155–87. Catalogues, Bulletins, and Course Descriptions provided by universities in Korea. Data collected from the internet homepages of universities in Korea.

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Conclusion David I. Steinberg

Korea’s involvement in Southeast Asia has had considerable effects on all the societies involved. It is obvious that Korea’s economic impact on the ASEAN region has been profound, both in terms of trade and investment. Even in foreign economic assistance, where Korea is still a modest donor in comparison to its economic standing in the world, its impact is significant, especially in the field of training. But perhaps Southeast Asia’s effects on South Korea has been the deeper of the two-way relationship even if its economic impact has been less than Korea’s on the region. Although the ASEAN region ranks third in South Korea’s economic ties, and the cultural impact of the West, China, and Japan (even though it is unlikely to be admitted in nationalistic circles in Seoul) far more prolonged and extensive, Korea has been affected both directly and more obliquely by the enhanced multiple patterns of changing relationships with the ASEAN region. That there is now a significant body of Korean scholars and researchers concerned with the area, while there is no equivalent group individually or cumulatively in the countries of the region, is partial evidence for this conclusion. More basically, Korea is moving from a supposed but in part mythic (though in comparative terms generally accurate), officially sponsored ideal of conceptual cultural homogeneity that has been a hallmark of policy, perhaps in part to emphasize the importance of eventual unification with North Korea. Now, official publications discuss Korea as a “multicultural”

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society. This is a monumental shift in policy and official attitudes and has been a product of Southeast Asian impacts. In an immediate sense, the Korean Government has awakened to the present reality of Southeast Asians settling into Korean society and of Koreans’ extensive intermarriages with foreigners. In a longer-range perspective, the Korean Government is preparing for the infusion of non-Koreans (and Koreans from China) into the labour force, since the dependency ratio of workers to the ageing and retired population is rapidly increasing. The extended family and clan associations that in effect provided social security for the population have eroded as Korea has shifted from a rural society to an urbanized one. This gap, together with the social and economic demands of the people, will have to be closed by the Korean Government with the establishment of safety nets for the burgeoning elderly population. This will put strains on the state that will be difficult to meet without an infusion of new labour. The economic demands of the increasingly socially sophisticated population, the rising expectations of the middle class, and the expansion of advocacy and civil society organizations, will make meeting these issues inherently political and thus unavoidable. The loosening of extended family and clan ties in spite of continuing traditional Confucian beliefs has meant that the government’s task to provide alternatives will be more difficult without the infusion of a new tax base. The opening of the ASEAN Centre in Seoul is not only a template for future relations with the region. Equally important, but perhaps overlooked in the diplomatic niceties of its establishment, are the patterns to which Korea must adapt if this relationship with the ASEAN states is to prosper in terms of the national interests of all those concerned countries. The presence of some hundreds of thousands of Southeast Asians who work and reside in Korea, and the far fewer but still significant numbers of Koreans who live and study in Southeast Asia, for the first time are causing Korea to reconsider its own identity. This process is furthered by the burgeoning numbers of Koreans who travel to the ASEAN region. Although the Korean cultural debt to China is singular, in the modern era Chinese cultural influences permeated the Korean base in terms of social usage (perhaps only one or two per cent of Koreans consider themselves Confucian by religion, but most continue to conform to important Confucian social patterns), but did not linger in terms of transnational marriages. Chinese-Korean marriages in the modern era have not been common, although we may be on the cusp of a major increase because of the large numbers of Koreans now studying in China and of Korean businessmen living there. Previous intermarriages between Chinese and Koreans, because of Chinese troops in Korea over the centuries, have been

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lost in antiquity. Contemporaneously, Chinese-Korean marital links are generally with Koreans who are Chinese citizens (as of March 2008, there were 367,147 Chinese of Korean ancestry living in Korea and registered with the Korean Ministry of Justice, but there are likely to be many more), and although this has created a number of serious problems, it has not affected the concept of Korean identity. There seems to be a relatively small number of Japanese-Korean marriages among those Japanese now living in Korea,1 although there are obviously more among those resident in Japan because of the large Korean minority there. Western-Korean marriages often result in emigration. A concept of multiculturalism reflects the changing reality in Korean society. There are said to be 1.14 million foreign residents in Korea (2 per cent of the population) and this is expected to rise to 2.9 million (5 per cent) by 2020.2 There are some 496,000 foreign workers, 50,000 foreign students, 30,000 highly skilled professionals, among others. International marriages in Korea rose from 3,315 in 2004 to 8,828 in 2007. In 2007, 40 per cent of Korean men working in agriculture, forestry, and fisheries married foreign wives. Although there are a wide range of programmes, each run by separate ministries and not coordinated with one another, “Experts warn that the policies could eventually backfire because they do not genuinely promote ‘multiculturalism’ but centre on making immigrants ‘unilaterally assimilated’ into mainstream society.”3 Korean-Southeast Asian marriages and workers have contributed to that pattern. Many reside, legally or illegally, in Korea, congregating in areas that have become enclaves of foreign culture. Adjustments have often been difficult, discrimination prevalent, and rights have been challenged. The Ministry of Justice in 2008 has allocated some US$18.2 million for educational assistance to immigrant spouses and some 6,000 adults received Korean language training that year.4 For decades, the modern Korean governments have played up the ethnic and linguistic unity of the Korean people, denying substantive foreign impact on the fabric of society although admitting its more superficial effects. It is not simply focused on the unity of the peninsula, but the state has used the cultural and linguistic homogeneity as an element of mass mobilization and nationalism, equating nation with the family of Koreans, the single “blood” line, societal cohesion, and by implication “we Koreans against the world”. It is not insignificant that some years ago, an expatriate poll by the Far Eastern Economic Review considered Korea the most nationalistic country in the Asian region.5 Racial prejudice has been real and “mixed blood” children severely discriminated against and diminished.6

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There is no doubt that among all the sizeable states in the world, Korea is probably the most culturally and linguistically homogenous. This is a remarkable advantage in mobilizing the society towards state-determined goals. But the situation has now changed, and the stimulation for that change has been the increasing role of Southeast Asians within Korea. Globalization has profoundly affected Korea, for the economic expansion of Korea’s role worldwide has brought with it cultural and social change. Although Koreans and various Korean governments have sought to expand Korea’s global influence through, for example, enhanced English language instruction at all levels of education, as well as attempts to make Korea a regional hub of business, industry, and transportation, Korean identity was never seriously threatened, although some old patriarchs may have felt this was so.7 Korea has now officially embraced a “multiracial society”, and this is progress, because over time it will diminish the prejudice against too close relationships with foreigners that is so prevalent internally and externally. As a government fiat, this is positive change.8 Yet this cannot but create substantive trauma for many Koreans who, having been exploited by their neighbours for a couple of thousand years, naturally responded by pointing out the distinctive unity of the Korean people as a defence against assimilation and absorption. It seems evident that Korean-Southeast Asian relations will become increasingly important. Korea has recognized its strategic interests in the region as a whole, with special reference to Indonesia, as exemplified by the signing of a new agreement with that country in August 2007. Although both ASEAN and its component states have quietly sought to limit the impact of a “rising China” on the region (thus the entry into ASEAN in July 1997 of Myanmar), even in spite of excellent relations with China and deft Chinese diplomacy in the area (such as delaying important and complex disputes about the sovereignty of the gas-rich South China Sea), some of the states may be attempting to limit their exposure to China and Chinese economic influence, which in any case is bound to be profound, by encouraging an enhanced role for Korea in Southeast Asia. If Korea is to play such a positive role, it needs to increase its competence in the region both in policy terms and in the capacity of its businesses and civil society proactively to understand the complexities of the various societies and cultures of ASEAN in all aspects of Korea’s relations and to respond to the justified concerns of these states. Just as Professor Lew (see Chapter 8) has analysed the special characteristics that made Korea an economic success and not a wholesale model for Southeast Asian development, so too Korea must understand that each of these states is different and Korea must respond to them individually. It has not yet done so.

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It is important for Korea to consider lessons from the Japanese experience in Southeast Asia. In World War II, Japan was often first greeted as the liberator of some of the areas from European colonial rule. This positive attitude soon disappeared as the Japanese treated the peoples of the region with both condescension and disdain. Recent evidence from tourism, business, and the missionary movement already indicate danger signals of which the Korean Government should be aware. These have been expressed privately, though clearly, by officials of some of the governments concerned.9 The memorandum of understanding on the ASEAN Centre may be a profoundly positive force for improving Korean-Southeast Asian relations if imaginatively pursued. Below are positive suggestions related to it and based on some of the conclusions coming from the conference and the ensuing chapters. These are made in the interests of furthering the positive aspects of South Korea’s foreign policy in that region and are personal suggestions, although I believe they are supported by a number of the chapters in this book. Although the Centre will naturally concern itself with trade and investment issues, the Memorandum is so worded that a variety of cultural and other programmes could be pursued under its broad rubric. The following is an initial listing of suggestions for the government of the Republic of Korea. •

•

•

•

Enhance the capacities of the universities in Korea to train students on aspects of Southeast Asia, including language, cultural, political, and socio-economic issues. Such education, although it exists in a few universities, is virtually lacking in all the major universities in Seoul — the sources of many of those recruited in governmental service. Consciously recruit into the Ministry of Foreign Affairs and Trade, KOICA, and other governmental organizations that deal with the ASEAN region those who have been trained in aspects of the region, as well as sending abroad officers for advanced work on Southeast Asia (Thailand has such a programme). Provide proper cones of advancement within governmental institutions for such specialized individuals and not just in those concentrating on the major international centres of power. Although the life blood of Korea is trade and investment, and these should be pursued, attention should also be given to cultural aspects of these multiple relationships. This goes beyond the admitted attractions of hallyu (the Korean Wave) to a more permanent understanding of Korea in the region. The Korea Foundation has been carrying out such

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•

•

•

•

•

•

•

•

programmes in a variety of countries and they have been important but could be expanded. Training Southeast Asian officials, diplomats, and scholars in Korea in the graduate programmes on international affairs and on Korea that are taught in English at some of the major universities in Seoul. Encourage business, both the chaebol and smaller firms, to hire or train existing staff in the history and cultures of the ASEAN states. There is little cultural sensitivity in such quarters and Korea’s reputation has suffered because of insensitive managers. We must remember that Japan lost much of the goodwill it had in that area because of a sense of cultural arrogance. Korean tourists have become a problem in a variety of ASEAN countries because of the virtual exclusive use of Korean businesses and cultural insensitivity. Korean tour companies need to train its tour leaders and staff on ASEAN ways and to impart such sensitivity to their tour groups. Korea has pledged to expand tourism in that region, but without better training the results could be detrimental to the Republic. Korean Christian missionaries have become very aggressive in some areas and this is often in conflict with social customs and even laws in some societies. The Korean Government could warn the sponsors of such activities that their roles often hurt the reputation of the Korean nation. Korea can work with the ASEAN countries to establish regional mechanisms for financial regulation and stabilization in times of financial crises. Korea could assist ASEAN states in the development of their civil society sectors that have proven to be so valuable in Korea for creating space between the state and the society. Korea could establish training institutes to lessen the gap between the Indochina members of ASEAN (including Myanmar) and the other members, based upon Korea’s experience. Korea could work with the ASEAN states and the secretariat in developing acceptable, cross-cultural labour standards that would both diminish Korea’s unfavourable reputation in the region and increase the relationships between Korea and the ASEAN nations.

There have been some welcome reforms on the status and conditions of Southeast Asian workers in Korea and, the government should be commended for taking such actions. More activities are needed, however. These include: •

Developing a health support system for migrant workers from Southeast Asian nations. The migrant workers, both legal and illegal, do not get

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proper health care and medical treatment, mainly due to the language barrier. More careful monitoring of businesses that legally employ such workers to ensure that their rights are not violated. An amnesty for illegal workers who have indicated preparations to contribute productively to Korean society and government-sponsored efforts to integrate them into Korea.

Southeast Asian states also need to improve the atmosphere for Korean and other businesses. Korea officials and businessmen in that region have commented on some of the following problems. Individual Southeast Asian nations should: • • • • •

Simplify procedures for foreign investment. Increase efforts to control and monitor corruption. Improve labour standards and promulgate such regulations to foreign investors, with stringent enforcement. Help develop centres of competence on Korea at appropriate academic institutions and think-tanks. Provide avenues of training and advancement for officials who specialize in Korean affairs.

ASEAN itself as an institution needs to take action: •

• •

To make the ASEAN Regional Forum into an effective mechanism for dealing with the non-traditional crises that could have an impact on Korea and Northeast Asia. Ensure that ASEAN+3 (Korea, China, Japan) play a proactive role in mitigating disputes among the three and with the Southeast Asian region. Consider how the ASEAN Charter’s provisions for human rights might be instituted involving the ARF and ASEAN+3.

The relatively short period of intense Korean-Southeast Asian relationships has been fruitful for both parties, as reflected in the new ASEAN Centre in Seoul. This is, however, simply a beginning to move beyond the extensive economic ties that bind the region into a more mutually beneficial set of relationships that play to the relative strengths of each country and diminishes their deficiencies. This book is a modest attempt to move the processes forward and it is to that end that this book is dedicated.

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NOTES 1.

2.

3.

4. 5. 6.

7.

8.

9.

“Admixture [between Koreans and Japanese] was exceedingly small, and all but a very small number of Japanese wives of Koreans were repatriated by 1947.” Gregory Henderson, Korea: The Politics of the Vortex (Cambridge: Harvard University Press, 1968), p. 19. These and the following figures are taken from “Korea Grappling with Multicultural Society”, Korea Herald, 22 June 2008. See also Lee Chan-young, op. cit., for more precise figures. As of March 2008, there were the following number of resident foreigners in Korea: Vietnam, 74,564; the Philippines, 50,894; Thailand, 46,858; Indonesia, 26,076; Cambodia, 5,912; Myanmar, 4,101. Korean Immigration Service, Ministry of Justice, quoted in Kim Eun Mee, “Korea’s Multicultural Experiment Foreigner Villages”, Koreana 22, no. 2 (Summer 2008). See Choe Hyun, “The Challenges of Korea to Become a Truly Multicultural Society”, Koreana 22, no. 2 (Summer 2008). Of all the 250 columns that I published under the “Stone Mirror” column in the Korea Times, the article on this issue drew most reader comments. See Shin Gi-Wook, Ethnic Nationalism in Korea: Genealogy, Politics, and Legacy (Stanford: Stanford University Press, 2006). “Analysis of survey data confirm that common blood and ancestry are defining features of South Korea’s national identity”, p. 201. In 2006, Koreans spent US$15.6 billion on English language tutoring, and 19 per cent of all those taking the TOEFL examination in 2004–05 were Korean. In 2006, there were 29,511 Korean primary and secondary students studying abroad and a total number of Korean students of 496,050. See S.J. Chang, “A Cultural and Philosophical Perspective on Korea’s Education Reform: A Critical Way to Maintain Korea’s Economic Momentum”, Academic Paper Series, vol. 3, no. 2 (Washington, D.C.: Korea Economic Institute, March 2008): 157–77. For example, see the Korea Herald editorial “Multicultural Society”, 14 June 2008, and the Chosun Ilbo editorial of 21 July 2008, “Koreans Should Embrace Multiculturalism”. Personal interviews with various Southeast Asian leaders, 2007.

REFERENCES Chang, S.J. “A Cultural and Philosophical Perspective on Korea’s Education Reform: A Critical Way to Maintain Korea’s Economic Momentum”. Korea Economic Institute, Academic Paper Series, vol. 3, no. 2 (March 2008): 157–77. Henderson, Gregory. Korea: The Politics of the Vortex. Cambridge: Harvard University Press, 1968. Hyun, Choe. “The Challenges of Korea to Become a Truly Multicultural Society”. Koreana, vol. 22, no. 2, Summer 2008.

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Kim, Eun Mee. “Korea’s Multicultural Experiment Foreigner Villages”. Koreana, vol. 22, no. 2, Summer 2008. “Korea Grappling with Multicultural Society”. Korea Herald, 22 June 2008. “Koreans Should Embrace Multiculturalism”. Chosun Ilbo, 21 July 2008. Lee, Chan-young. “Korea’s Economic Challenges: Attracting the Right Kind of Foreign Workers”. Korea Herald, 27 August 2008. “Multicultural Society”. Korea Herald, 14 June 2008. Shin, Gi-Wook. Ethnic Nationalism in Korea: Genealogy, Politics, and Legacy. Stanford: Stanford University Press, 2006.

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vi

00_Prelims.indd 6

3/2/09 4:16:29 PM

Index

365

Index A Abu Sayyaf, 63 Aceh, 63 affective network, 187, 188, 189, 190 role in informal sectors, 197 social capital perspective, 195 Africa assistance from Korea, 159 Agent Orange, 313 American Friends Service Committee, Philadelphia, 313 American Special Procurements, Japan, 309 Amkor Anam number of employees, 146 Anam Industries, 131 Ansan, 222 demographic concentration of migrant workers, 219, 220 Aristotle, 25 arranged marriages, 233 ASEAN+1 Summit, 105 ASEAN+3, 24, 53 establishment, 272 ASEAN+3 Economic Ministers Meetings, 172 ASEAN Centre, Seoul, 18 ASEAN Charter, 57

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ASEAN Economic Community (EAC), rationale for, 34 ASEAN Free Trade Agreement, 112 ASEAN Free Trade Area, rationale, 34 ASEAN Regional Forum (ARF), 9, 25, 53 ASEAN Secretariat 2007, External Trade Statistics, 110 ASEAN Security Community, 63 ASEAN Statistical Yearbook 2005, 84 ASEAN Summit (13th), 3 ASEAN Way, 61, 64 ASEAN-6, Korean FDI, 35 ASEAN-China Free Trade Agreement, 112 ASEAN-China Free Trade Area (AFCTA), 62 ASEAN-China Strategic Partnership for Peace and Prosperity, Joint Declaration, 62 ASEAN-ISIS, initiatives, 65 ASEAN-Korea Centre, 172 Memorandum of Understanding, 3 ASEAN-Korea dialogue processes, 42 ASEAN-Korea Free Trade Agreement, 155, 172 ASEAN-Korea Special Cooperation Fund (SCF), 164

1/15/10, 10:12 AM

Index

366

ASEAN-ROK Summit (10th), 3 Asia, third pillar of global economy, 74 Asia Foundation, Seoul office, 14 Asia Pacific Economic Conference (APEC), 25 Asia-Europe Meeting (ASEM), 25 Asian Community, 61 Asian Development Bank (ADB), 159 Asian financial crisis, 4, 51, 80 cause of, 193 Asian People’s Anti-Communist League, 5 Asian security community, 61 cumulative rise in capablities, 52 key drivers, 52 key trends, 51–54 “Rubik’s Cube”, 48–57 strategic management, 73–79 Asian Supercomplex, 53 Asian values affective networks, 197 Asianization, 54 Association of Southeast Asian Nations (ASEAN) Framework Agreement, 2 Dialogue Partnership, 3 economic relations with Korea, 81– 105 commodities traded, 88, 89 enlargement, 73 exports and imports, 85 FDI destination, 107 foreign direct investment by source country, 94, 95 foreign policy of members, 246 founding of, 56 gap between Indochina members and other members, 43 grant of aid to, 164–68 interdependency of countries, 110 investment in Korea, 99–100

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366

investments by Samsung Electronics, 133 investments in electronics industry, 128 investments in Korea, 96 Korean FDI, 91 Korean sectoral investment, 99 main econonomic indicators, 142 major markets, 86, 87 multilateralism, limitations, 63–65 need to attract foreign direct investment, 151 principles non-interference, 57 non-use of force, 57 security community, 61 Astra International, 127 Aung San Memorial, 6 B Bae Yong Joon visit to Singapore Botanical Gardens, 285 balance of power, shifting, 50 Bali bombings, 63 Ballistic Missile Defence (BMD) system, 51 Ban Ki-moon, 253 Bangkok, Korean restaurants, 15 Berlin Film Festival, 291 bilateral assistance, 158 bilateral kinship systems, 232 bilateral relations element for improvement, 302 bilateral security alliances, 54 birth rates declining, 59, 207 Boa, 295 Brazil, oil consumption, 66 Brown, Winthrop G., 312 Brunei, bilateral FTA with Japan, 113 Buddhist-Confucianist value systems, 37

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Index

367

bureaucratic rationality, 182 bureaucrats, state discipline, 185 business associations, promotion of industrial peace, 44 Buzan, 53 C Cambodia assistance from Korea, 159 invasion by Vietnam, 76 largest group of visitors from, 228 Canada, oil consumption, 66 Cannes Film Festival, 291 Centre for Southeast Asian Studies, Kyoto University, 248 Centre for Strategic and International Studies (CSIS), 299 Chachavalpongpun, Pavin (Dr), 17, 293 chaebols, 192 arrest of leaders, 183 capital surplus, 181 control by family members, 189 recruit, 9, 18 second generation, 184 Chan, Anita, 264 Chile, free trade agreement with, 2 chima jogoiri, 270 China, 108–09 admission to WTO, 107 antipathy to Korean Wave, 297 challenging Japan’s economic hegemony, 55 export market, 107 footprints, increasingly robust, 52 foreign policy, 54, 69 historical influence in Southeast Asia, 4 ideological fallout with Soviet Union, 246 improved relations with Korea, 111 industrialization, 107 Korean pop culture, 284

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367

labour-intensive manufacturing, 109 movement of labour intensive industries into, 8 normalization of relations with Korea, 80, 90, 108 oil consumption, 66 participation in ASEAN dialogues, 250 relations with Southeast Asia, 249, 250 relations with Taiwan, 50 rivalry with Japan, 272 shift away from alliance with North Korea, 72 strategic forays, 68–70 trade with Japan, 70 trading partner, as, 3 Chinese Communist Party (CCP) monopolization of political power in China, 68, 69 Chinese culture, influence of, 276 Chinese grassroots society, 262 Ch’oe Sang-su, 245 Choson Court, 245 Choson Korean society, 306 Christensen, Thomas, 69 Christian missionaries, 260–62 Chun Doo Whan (President), 6 CIA World Handbook, 67 Cirebon Coal-Fired Power Plant, 103 civil societies, 44 CLMV countries, 156 post, see post-Cold War era Cold War dynamics, 32 collective pursuits, rationale for, 31 Commission for Smart Power, 299 Conformity Assessment Development Programme in Industrial Standards, 172 Confucian culture, 182 Confucian principles, 318 Confucian society, 283

1/15/10, 10:12 AM

Index

368

Confucian values, 287 Confucius influence of, 232 construction activities, 103–06 ASEAN countries, 103–04 construction projects, overseas, 104 consumer electronics, 129, 141 demand from high-level income countries, 151 export-oriented strategy, 144 contracts, standardization of, 44 Control Data, 123 cooperative security, 49 copyright, issues with, 297 corporate tax rates, ASEAN countries, 142 Council on Security Cooperation in Asia Pacific (CSCAP), 65 Country Assistance Strategy (CAS), 162 cronyistic relationships, 192 dismantling of, 199 cultural exchanges, 271 Cultural Korea, 265 cultural relativism, 196 Cultural Revolution, 49 cultural universalism, 196 D Dae Jang Geum, 267, 294 Theme Park, 256 Daewoo Business Group, 131 offshore gas exploration, 15 defence spending, 67 Democratic People’s Republic of Korea (North Korea), 5 Deng Xiaoping, 69 Department of Foreigner Health and Welfare, Ansan, 220 Development Assistance Committee (DAC), 171 development model, 310, 318 economic dimension, 178–81

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368

formal and informal sectors, 191 political dimension, 182–86 replicability for Southeast Asia, 193–96 social dimension, 186–90 importance of family ties, 189 rational choice theory, 188 transaction cost, 187 Southeast Asia, lessons for, 176–204 support for economic policies, 179 sustainability in globalization, 177 viability in age of globalization, 190–93 Development Project Loan, 168 Dialogue Partners, 25 Digital Power Communications (DPC), 129 diplomatic efforts, Korean peninsula, 300 divorce rates, 234 Doi Moi, Vietnam, 305 domestic work, 234 visas for, 216 double standards, application by Western nations, 59 Dow Chemicals, 313 Durihana Mission, 261 Dynamic Korea, 272 E E-8 Employment after Training Visa, 210 East Asia community building process, 45 geostrategic feature, 32 sense of community, 42 East Asia Community (EAC), 33 East Asia Economic Community (EAEC), 25 East Asia Study Group (EASG), 250 East Asia Summit (EAS), 250 East Asia Vision Group (EAVG), 250 East Asian Community, 45

1/15/10, 10:12 AM

Index

369

East Asian Summit (EAS), 62 launch of, 56 East Germany, 5 East Timor, despatch of troops, 255 East-West Economic Corridor (EWEC), 116 Economic Cooperation Development Office, 169 Economic Cooperation Headquarters, 168 Economic Cooperation Planning Office, 169 Economic Development Coopertion Fund (EDCF), 10, 156, 157 projects by country, 168–69 receipt by ASEAN members, 169 Economic Planning Board, 183 industrial policy, 198 economic policies, Asian states, market friendly, 73 electoral process, peaceful, 2 Electrolux, 129 electronics industry characteristics, 123–26 choice of investment location, 142 composition, 121 consumer electronics, see consumer electronics current investments in, 126–32 direct investment, 141 export competitiveness, 145 exports by Korea, 125 integration of ASEAN, 148 internalization, 141–42 investment in ASEAN, 128, 130 investment in Southeast Asia, 118– 54 management control, 141–42 number of people employed, 145, 146 ownership advantage, 139–41 Samsung, 132–39 share in manufacturing industry, 120

16 Korea_CRSEA Index

369

Southeast Asia, 143 employment creation, 145–47 export creation, 145–47 technology transfer, 147–48 structural changes, 119–23 sub-groups divisions, 120 Electronics Industry Promotion Law, 123 Employment of Foreign Workers Act, 212 Employment Management System, establishment of, 223 Employment Permit System (E-9 Visa), 212 channelling into small-scale manufacturing firms, 218 quota allocation, 213 quota for unkilled foreign labour, 214 Equipment Loan, 168 Ethane Separation Plant, 103 ethnic diversity, absence of, 207 ethnic nationalism, 222 resistance to opening to foreign labour, 207 exclusive eonomic zones (EEZs), overlapping, 57 Export-Import Bank of Korea (EXIM Bank), 157 exports, ASEAN, to, 82, 83 extended family relationships, 236 evangelical missionaries, dislike for, 268 Evangelical Protestantism, 260 F family ties, importance of, 189 Federation of Korean Trade Unions, 7 female international migration, studies, 230 female marriage migrants, 229 female migrants, 228, 229 fertility rate, low, 234 Filipina wives, 227–43

1/15/10, 10:12 AM

Index

370

inadequate social protection, 237 interpersonal networks, 236, 237 relations with in-laws, 237 Filipino workers, 219 Filipinos heterogienity, 232 marriages with Koreans, 232–34 financial liberalization plan, five-year, 192 Five-Year Economic Development Plans, 183 flying-geese model, 106, 107 foreign assistance, concerns over, 10 foreign direct investment inflows to ASEAN, by economic sector, 97 outflows by size of firms, 102 Vietnam, in, 90, 311 foreign labour, 105 foreign residents, 115 foreign workers, unskilled, 215 France, oil consumption, 66 free trade agreements (FTA) negotiations with ASEAN, 104–05 Fujiyama, Yoshinori, 289 Fukuda Doctrine, 28, 248 Fukuda, Takeo, 248 Fukuyama, Francis, 53 Fund Management Council, 169 Future Oriented Cooperation Project (FOCP), 164 G Gadjah Mada University, funding from Korea Foundation, 11 Gae-Sung industrial complex, 105 Gaimucho, 248 gender hierarchy, 233 Germany, oil consumption, 66 Global Christian Fellowship, 261 globalization, 29, 37 impact on development model, 190 Goh, Evelyn, 58

16 Korea_CRSEA Index

370

Gold Star, 121 Goldman Sachs, 55 Gong Ji-young, 292 government support, targeted industrial sectors, 180 Great Leap Forward, 49 Greater East Asia Co-Prosperity Sphere, 13, 308 Gross Domestic Product, ASEAN countries, 142 H Hallstein Doctrine, 5 hallyu, 28, 285 backlash against, 257–64 definition, 244, 253 remoulding identity, 272 setting right priority, 272 xenophobic reaction against, 257 Hang Nadim Airport, 103 Hankook Ilbo, survey, 40 Hanoi Electric Corporation, 132 Harmonized System (HS) classification, 85 heavy and chemical industries, 98 High Voltage Transformers (HVTs), 129 high-technology industries, 192 Hirschman, Albert, 187 Hitachi, 130 Ho, Andy (Dr), 297 Ho Khai Leong, 38 Hong Kong, 207 honhyeora, 239 human empowerment, 29 human resources development programme in ASEAN, 156 role of Korea, 170 human rights child rights, 280 human security, 29 Hundred Years of Conflict, 74 Huntington, Samuel, 310

1/15/10, 10:12 AM

Index

371

hyper-nationalism, 66 Hyundai Construction Co., 103 I IBM, 123 Illicit Wealth Accumulation Charges, 183 import-substituting class, 185 interests, 186 import-substitution policy, 5 imports, ASEAN, from, 82, 83 India, oil consumption, 66 individualism, developed through reformation, 189 Indo-Pakistani nuclear standoff, 61 Indonesia, 177 agreement with Korea, number of visitors to Indonesia, 12 assistance from Korea, 159 bilateral FTA with Japan, 113 bilateral migrant labour accord, 213 industrial policy, 194 investment by Korea, 90 investment by Samsung Electronics, 135 investments by Korean electronics firms, 128 Japanese occupation, 35 Joint Defence Logistic and Industry Committee, 16 negative image of Korea, 40 security relationship with Korea, 16 security ties with U.S., 54 technology transfer in electronics industry, 147 visa-holders from, 106 Indonesians, working in Korea, 14, 218 industrial peace, promotion of, 44 industrial policies from market-friendly to marketsubstituting, 178 selective, 180

16 Korea_CRSEA Index

371

Industrial Technical Training Programme (ITTP), 210 industrial trainees, 209–12 concerns over exploitation, 211 phase out of programme, 223 runaway trainees, 212 treatment as workers, 211 Institute of Foreign Affairs and National Security, 301 Institute of Southeast Asian Studies, 14 Intel, 130 intermarriages, 14 Filipinos and Koreans, 232–34 rising trend, 316 International Confederation of Free Trade Unions (ICFTU), 263 International Crisis Group, report (2005), 56 International Development Cooperation Committee (IDCC), 160 International Development Exchange Programmes (IDEPs), 157 international families, Korea, 317 International Financial Institutions Division, Ministry of Finance and Economy, 168 international marriages, rising trend, 228 international migration, female, 230, see also female international migration intra-ASEAN trade, increase, 116 intra-regional competition, 58 intra-regional trade, growing, 52 Iraq, peacekeeping forces to, 255, 269 Islamic culture, need to learn more about, 271 J Jakarta Stock Exchange, listing of Jeewon Jaya Indonesia, 127

1/15/10, 10:12 AM

Index

372

Jalad ad-Din Rumi, 30 Japan annexation of Korea, 65 cultural diplomacy, 248 decline of influence, 111 economic dominance, 56 economic hegemony, challenge posed by China, 55 economic partnership agreements, 113 economic slowdown, 109, 110 electronics industry, 126 expansionist policies, early twentieth century, 1 free trade agreements, 112 industrial hollowing, 110 influence in Southeast Asia, 247 Meiji reforms, 32 normalization of relations with Korea, 3, 311 oil consumption, 66 Peace Constitution, 69 post-war recovery, 73 rivalry with China, 273–74 Self Defense Forces, 67 technical intern training programme, 210 trade with China, 70 Japan Association of Asian Political and Economic Studies, 248 Japan International Cooperation Agency (JICA), 10 Japan Society for Southeast Asian Studies, 248 Japanese annexation, 302 Japanese firms investment in ASEAN, 148 overseas production bases, 109 Japanese management, 196 Japanese pop culture, lifting of ban on, 291 Japanese tourism, 12 Japanese tourists, Korea, in, 266

16 Korea_CRSEA Index

372

Jeewon Industrial Company, investment in Indonesia, 127 Johnson, Lyndon, 308 K Ken Kan Ryu, 257 Kim Dae Jung (President), 6, 9, 190 Kim Joong Keun, 17 Kim Woo-sang (Prof), 25 Kim Young Sam, 192 administration control of labour migration, 209 Knowledge Partnership Fund, 159 Koh, David, 16 Korea ageing population, 207 American military occupation, 1 annexation by Japan, 65 competitive advantages over Southeast Asia, 45 development model, see development model diplomatic relations with Taiwan, 294 economic relations with ASEAN, 81–105 annual trend, 81–84 commodities traded, 88 composition of exports and imports, 84–89 economic relations with Southeast Asia, 80–117 commodities traded, 89 economic-related relations with ASEAN, 103–06 construction activities, 103–04 FTA negotiations, 104–05 labour migration, 105–06 electronics industry, see electronics industry engagement with Southeast Asia, 250, 251 foreign direct investment, 39 flows to and from ASEAN, 91

1/15/10, 10:12 AM

Index

373

hosting of FIFA World Cup, 253 improved relations with China, 111 independence, ill conceived, 1 investments in ASEAN annual trend, 90–98 FDI by size of firm, 100 sectoral distribution of FDI, 93– 100 investments in China, 93, 109 labour practices, 8 as middle-level OECD country, 155 military coup (1961), 2 Ministry of Justice, 105 Ministry of Trade and Industry (MTI), 84 nationalism, role in foreign policy, 41 nature of state intervention, support through discipline, 184 normalization of relations with China, 90 Official Development Aid (ODA), see Official Development Aid outward foreign direct investments, 80 perceptions on Southeast Asia, 40– 42 rate of marriages, 13 relations with ASEAN, Dialogue Partner, 35 relations with Philippines, 4 relations with Southeast Asia affinities, 36–37 closing the gap, 42–45 current state, 33–34 deepening partnership, 31–47 gap, 34–42 perceptions, 38–40 relations with Thailand, 4 renewed foreign policy, 265 role model for ASEAN, 300 Soviet occupation of north, 1 trade surpluses, 90

16 Korea_CRSEA Index

373

Korea Culture and Content Agency, 255 Korea Culture and Tourism Policy Institute, 257 Korea Development Institute, 257 Korea Export-Import Bank Statistics, 90 Korea Foundation, 3, 11 Korea Immigration Service, records, 217 Korea International Cooperation Agency (KOICA), 157, 250 capacity-building programmes for NGOs, 168 grant aids by country, 166 operations through NGOs, 167 refugee assistance, 167 representative offices, 165 sectoral priority, 165 Korea Labor Institute, 106 Korea National Tourism Organization, 256 Korea Presbyterian Mission, 261 Korea Tourism Organization, 295 Korea-ASEAN Centre, Seoul, 25, 113 Korea-ASEAN Free Trade Agreement, 25, 105 Korean, currency revaluation, 7 Korean Association of Southeast Asian Studies, 4, 14 Korean businessmen, unruly, 262–64 Korean Chinese, 106 as migrant workers, 215 return of, 213 status, 267 Korean Christians, kidnap of, 299 Korean culture, popularity, 36 Korean development model, 2 Korean Electric Power Corporation, 16 Korean families, 234–37 Korean Festival, Singapore, 301 Korean films, popularity, 36

1/15/10, 10:12 AM

Index

374

Korean House for International Solidarity, 263 Korean Institute of Southeast Asian Studies, 4 Korean language learning, 39 Thai universities, 256 Korean management practices, 264 Korean National Assembly, 11 Korean Overseas International Cooperation Agency, 10 Korean patriarchal culture, 232 Korean Peninsula, 51 conditions for unification, 71 last Cold War frontier, 55 South-North competition, 50 Korean popular culture examples, 295, 296 hybrid values, 292 impact of, 284, 290 Korean proficiency test, 268 Korean studies, opening up of, 274 Korean television series, 253, 254, 266, 285 impact of, 286, 287 impact on prejudices, 294 Korean tourists, badly behaved, 258–60 Korean War, 5, 67 “Forgotten War”, 1 Korean Wave, 17, 244–82, 252–57 changing of image of Koreans in Southeast Asia, 293 current status, 298 policy recommendations, 270–74 question regarding its use as foreign policy, 265 Southeast Asia’s response, 255–57 stagnation, 297 Korean-Southeast Asian relations, 4 Korean-Vietnamese relations, 315, 316 Korean-Vietnamese Vocational Training Centre, Ho Chi Minh City, 315

16 Korea_CRSEA Index

374

Koreanology, 39 Southeast Asian universities, 40 Koreans homogeneity, 41, 232 Korloa company, 15 Koryo Dynasty, 245 Kyunggi High School, 199 L labour costs, 7 feminization, 216 industrial trainees from Southeast Asia, 209–12 migration control of, 209 practices, 8 labour-importing country, transition into, 206–09 labour-intensive consumer products, 120 labour-recruitment system, ethnically stratified, 214 Lao PDR, assistance from Korea, 159 Least Developed Countries (LDCs), 160 Lee Hsien Loong, 297 Lee Myung-bak, 272 Lee Young Ae, 286 Lew Seok Choon (Prof ), 17 LG Electronics, 121, 122 LG Mitr Electronics, 127 liberalization process, 7 Libya, sanctions, 13 liquid crystal display technology, 118 love marriages, 233 Ly Long Tuong, 34 M Mahathir Mohamad, 196 Mahbubani, Kishore, 58 mail-order brides, 234 Malacca Straits, 9

1/15/10, 10:12 AM

Index

375

Malaysia, 177 bilateral FTA with Japan, 112 industrial environment, role of, 143 industrial policy, 194 investment in Korea, 99 investments by Samsung Electronics, 134 semiconductor industry, 119 technology transfer in electronics industry, 147 Maliangkay, Roald, 257, 266, 267 Manila, Korean Embassy, 259 manufacturing, investment in ASEAN, 98 market-driven security paradigm, 52 marriage brokers, 231 marriage migrants, 229 marriages, types, 233 matrimonial agencies, 233 Matsushita Electric, 129 Maxon Telecom, 126 MIAs, 312 mid-term strategic partner countries, 162 migrant labour accords, labour, for, 212 migrant support group organizations, 217 migrant workers, 13, 205–26 E-8 Employment after Training Visa, 210 illegal, 205 amnesty measure, 212 enforcement against, 214 possibility of staying on in Korea, 222 Southeast Asian communities, formation of, 217–22 Southeast Asian industrial trainees, 209–12 temporary programme, 206 unskilled, 208 unskilled factory work, for, 212

16 Korea_CRSEA Index

375

migrant-worker organizations, 217 migrants, for marriage, 228, 229 Ministry of Culture and Tourism, 257, 266 Ministry of Education and Human Resources Development, 256 Ministry of Finance and Economy, (MOFE), 157 Ministry of Foreign Affairs and Trade (MOFAT), 157, 171 Ministry of Justice, 105 announcement on foreign residents numbers, 115 Ministry of Labour, 268 Vietnam, 315 Ministry of National Defense (MND), 312 missionary activities, overseas, 12 mixed-blood children, 239 mobile phones, Samsung’s strategy, 141 modernization programmes, 180 Mongolia, bilateral labour accord, 213 monopolistic market conditions, creation of, 181 Moscow Film Festival, 291 Motorola, 123, 130 multicultural families, 227–43, 239– 41 multiculturalism, 239, 240 multilateral assistance, 157 increase in spending, 158 Multilateral Debt Reduction Initiatives (MDRI), 159 multilateralist tradition, 53 Muslim societies, 9 Myanmar, 13 N Nahdlatul Ulama, fatwa against building of nuclear plant, 16 Nami Island, 295

1/15/10, 10:12 AM

Index

376

National Police Agency, 240 National Tourism Administration, Vietnam, 315 National University of Singapore, 256 funding from Korea Foundation, 11 Korean language centre, 295 nationalism, promotion of, 273 Nationality Act, 230, 233 newly industrialized countries, 207 Nippon Hoso Kyokai, 285 Nixon, Richard, 308 Non-Aligned Movement, 5 growing strength, 61 non-governmental organizations (NGOs) capacity-building programmes by KOICA, 168 partnership with KOICA, 167 non-traditional security (NTS) issues, 54 within ASEAN, 62 Nordpolitik, 7 normalization of relations, Japan, 311 North Korea aid to, 171 isolation, 305 nuclear issue, 55, 66, 70, 71 nuclear test (2006), 72 “purity” of culture and people, 21 refugees, 10 Sunshine Policy towards, 9 trading partner with Thailand, 270 North-South Highway, Kunming to Bangkok, 116 Northeast Asia catalyst for armed conflict, 68 entrenched parallelism, 66 future, 65–74 linkages with Southeast Asia, 54–57 security dynamics, 48–79 security issues, 9 sources of instability, 67–68 Nye, Joseph, 298

16 Korea_CRSEA Index

376

O Obama administration, 193 Official Development Assistance (ODA), 36, 155, 273 aid volume and allocation, 157–59 bilateral assistance, 158 geographical distribution, 159–60 history, 156–57 main categories, 158 multilateral assistance, 157 recent developments, 160–63 recipients of bilateral assistance, 161 Southeast Asia, trends, 163–64 Ogilvie-White, 64 oil consumption, 66 Olefins Petrochemical Plant, 103 oligopolistic market conditions, 181 Olympics, Seoul (1988), 7 one bloodline nation concept, 239 Opium Wars, 65 Orion Hanel Picture Tube Co., 132 Outer Seoul, 224 overseas construction projects, 104 Overseas Economic Cooperation Fund (OECF), 10 P Pacific Century Institute, 14 Panasonic, 131 Paris Declaration, 162 Park Bun Soon, 141 Park Chung Hee, 4, 5, 307 assasination, 6, 18 regime, 306 Park Seung Woo (Prof ), 5, 18 Pasir Panjang Terminal, 103 patrilineal families, 234–37 patrimony, 189 peacekeeping forces, 2 Penang Bridge, 103 Peters, Heather, 259 Philippines Abu Sayyaf, 63

1/15/10, 10:12 AM

Index

377

alliance with United States, 37 bilateral FTA with Japan, 113 bilateral migrant labour accord, 213 foreigners operating retail stores, 264 investment by Maxon Telekom, 131 investment by Samsung Electronics, 135, 136 Korean War, 1 largest group of visitors from, 228 relations with Korea, 4 security ties with U.S., 54 training of English language, 15 visa-holders from, 106 visits by Koreans, 11 Philips, 129, 130 Plaza Accord, 119, 126 policy loans, abolition of, 192 political power, transfer, 2 politico-military stability, 53 Posco Co., 116 post-Cold War era, 54 poverty reduction, Korea’s increasing role, 169–71 product differentiation, 129 Project Preparation Loan, 168 protectionism, developed countries, 118 P.T. Gold Star Astra, 127 Public-Private Assistance Partnership Forum, 167 Pyongyang, 50 nuclear test (2006), 50 Pyongyang Restaurant, Cambodia, 269 Q Qing Dynasty, 65 R RADIX Communication Inc., 131 Rain, 295 rational choice theory, 188 rationalization programmes, 180

16 Korea_CRSEA Index

377

RCA, 129 regional dynamics, 31 regional identity, 49 regional interdependency, 64 regional security complexes (RSC), 53 regional terrorism, 64 regionalism, Southeast Asia, 45 religious organizations, marriage brokers, as, 233 Republic of Korea, 2 Research, Innovation and Enterprise Council, Singapore, 297 Rhee Syngman regime, 182 rice Christians, 262 Roh Tae Woo, 7 “Rubik’s Cube”, 57 Asian security, 48–57 runaway wives, 230 Russia influence in East Asia, after World War II, 32 oil consumption, 66 rejuvenation of armed forces, 67 S saegyehwa, 18 Saemaul Movement (New Village Movement), 6 Sahapathana, joint venture with TSE, 136 Sam Yang Company, 263 Sammi Sound Tech, 126 Samsung, 15 Samsung Electro-Mechanics Co., 131, 138 Samsung Electronics, 121, 122 ASEAN subsidiaries, 134 entry in ASEAN, 133 investment in Indonesia, 135 investment in Malaysia, 134 investment in Philippines, 135, 136 investment in Thailand, 133 investments, 132–39

1/15/10, 10:12 AM

Index

378

market share in Thailand, 137 number of employees, 145 ownership advantage, 138–39 production complex in Malaysia, 131 Seremban Complex, 128 Value Management Innovation (VMI), 139 Samsung Group Asian strategy conference, 135 intra-regional network, 148 Sanyo, 121 SARS, 54 Schmid, Andre, 315 School of Foreign Service, 14 Schwartz, Peter, 297 sea lanes, protection of, 16 security issues non-traditional, 43, 49, 50 see also non-traditional security (NTS) issues security mechanism, multilateral, 61 self-reliance, military, 307 semiconductor industry, 118, 119 decrease in prices of goods, 124 Seoul Foreign Correspondents Club, 265 Seoul Metropolitan Area, 206 Seoul National University, 199 sexual exploitation, minors, of, 260 Shanghai Five organization, 92 Sharp, 131 Shigeru, Yoshida, 309 Siemens, 129 Signetics, 123 Sihanouk (King), 27 Singapore, 207 bilateral FTA with Japan, 112 destination of Korean tourists, 37 free trade agreement with, 2 investment by Korea, 90 investment in Korea, 99 Korean Festival, 288, 289, 301 Ministry of Trade and Statistics, 144

16 Korea_CRSEA Index

378

security ties with U.S., 54 semiconductor industry, 119 Six-Party Talks, 27, 28, 53, 70 small and medium enterprises, 101 social capital, 186, 190 importance of, 187 soft power, 298 Korea’s substantial source of, 300 SONY, 131 South China Sea, 51 Southeast Asia assistance from Korea, trends, 163– 64 cable and satellite television services, 291 challenges, 42 China’s historical influence, 4 economic relations with Korea, 80– 117 electronics industry, 143–45 initiating long-term vision in relation to, 271 Koreans firms, presence of, 119 migrants, 229 migration flows from, 209 military cooperation with U.S., 37 official development assistance, 155 problem of cronyism and nepotism, 195 regionalism, 45 role of Korea, 245–52 magnitude of influence, 247–52 securitization record, 60–65 security dynamics, 48–79 source of unskilled labour to Korea, 208 tourist destination, 11 Southeast Asia Treaty Organization (SEATO), 5 Southeast Asian migrant communities, formation, 217–22 Southeast Asian residents, registered, 219

1/15/10, 10:12 AM

Index

379

Southeast Asian studies, opening up of, 274 Spratly Islands, 70 Sri Lanka, bilateral migrant labour accord, 213 state autonomy, importance of, 182 Sunshine Policy, 9 Surin Pitsuwan, 248 Symington Subcommittee hearings (1970), 309 Syngman Rhee, 307 T Taiwan, 177 antipathy to Korean Wave, 297 Taiwan Strait, 51 Takashima, 3 Takla Makan Desert, 284 Taliban insurgents, kidnap of Korean Christian missionaries, 299 technical cooperation, 158 projects, 171 technology transfer, electronics industry, 147–48 telecommunications equipment, 141 telecommunications industry, 126 Tellis, Ashley, 68 temporary migrant worker programme, 206 Thai-Daimaru, 247 Thai-Korean Scholars Association, 274 Thai Samsung Electronics (TSE), 136–38 production sharing, 149 Thailand, 177 alliance with United States, 37 bilateral FTA with Japan, 113 bilateral migrant labour accord, 213 despatch of troops for Korean War, 246 destination of Korean tourists, 37 entrance of LG and Samsung, 130

16 Korea_CRSEA Index

379

fall of baht, 195 Korean Christian missionaries in, 261 Korean pop culture, 286 Korean tourists, 256 Korean War, 1 North Korea’s trading partner, 270 relations with Korea, 4 Samsung’s investment in, 128 Samsung’s market share, 137 security ties with U.S., 54 visa-holders from, 106 visits by Koreans, 11 “theater peer”, 50 Thomson, 130 Tokdo, 3 trade unions, violation of rights, 263 trainee visas, overstaying on, 205 transactions cost, 187 transnational families, 237–39 Treaty of Amity and Cooperation (TAC), 63 tsunami, 54 Tsushima Straits, 3 ttan ttara, 283 Two-step Loan, 168 U United Nations inter-agency project on human trafficking in Greater Mekong Sub-region, 259 Secretary-General, 2 United States assistance from, 304 defence planners, “theater peer”, 50 East Asia after World War II, 32 economic aid to Korea, 308 free trade agreement with, 2 industrial recovery during World War II, 306 oil consumption, 66 universities, academic programmes, 9

1/15/10, 10:12 AM

Index

380

University of Brunei, funding from Korea Foundation, 11 University of Malaya, funding from Korea Foundation, 11 University of the Philippines, funding from Korea Foundation, 11 V Veale, Jennifer, 260 Vietnam assistance from Korea, 159 bilateral migrant labour accord, 213 destination of Korean tourists, 37 Doi Moi initiative, 312 engagement with, 15 establishment of stock exchange, 170 foreign direct investment in, 311 invasion of Cambodia, 76 investment by Korea, 90 investment by Samsung Electronics, 135 investments of Korean electronics firms, 132 Ly dynasty, 34 political liberalization, 319 relations with, 305 visa-holders from, 106 visits by Koreans, 11 Vietnam War, 5 Japan’s neutrality, 247 participation of Koreans, 35, 309, 313, 314 Vietnamese Communist Party, 305 Vietnamese workers, ill-treatment of, 263

16 Korea_CRSEA Index

380

W Ward, Hines, 239 Washington Consensus, adoption by Korea, 18 West Germany, 5 Whirlpool, 129 women, social standing of, 290 Wonkon Bon Dong, 220, 221 work-permit visas, 105 work-site raids, capture of illegal workers, 217 World Bank differentiating between first-tier and second-tier countries, 177 East Asian Miracle study, 178 recipe for market-friendly development, 194 report on East Asian miracle, 176 World Trade Organization (WTO), China’s admission, 107 X xenophobia, 56 xenophobic reaction, hallyu, against, 257 Y Yahuda, Michael, 49 Yangon University of Foreign Languages, funding from Korea Foundation, 11 Yi Tong-won, 308 Yomiuri Shimbun, survey, 40 Yu Kilchun, 306, 319 Z zero-sum security calculations, 32

1/15/10, 10:12 AM