Left Flank

Could beef start a war?

As I was sitting here in Busan, working on a paper about natural resources and civil war and listening to news of South Korean protests against the importation of American beef, I discovered the War of the Farrapos. According to the Correlates of War database, this civil war between Brazilians resulted in over 200,000 deaths on both sides and lasted ten years. The cause was trade.

The uprising is believed to have began due to the difference between the economy of Rio Grande do Sul and the rest of the country. Unlike the other provinces, the state economy focused in the internal market rather than exporting commodities, the state's main product, the charque (bovine dried and salted meat), suffering badly from the competition of charque imported from Uruguay and Argentina, which had free access to Brazilian market while the gauchos were charged high tariffs inside Brazil.

Crazy, huh? Maybe, but Seoul Searcher thinks South Koreans are even crazier.

Incidentally, watching and reading about the protests against American beef imports, I was quite mystified by the meek, almost inaudible, protests, much less action, against harmful products imported from China. So many Chinese goods, including foodstuff as well as toys, have been scientifically proven to be toxic and harmful to our health and yet not a «boo» has been uttered against their import.

Does this mean that we, Koreans, are such a gullible people that we can only react when the biased media and some unconscionable politicians and entertainers spread groundless rumors and unalloyed lies? Yes, this, I am afraid, is true to a large extent.

But what makes us so gullible? Are we collectively naïve or stupid so that we can easily be manipulated and swayed by politicians or other interest groups? I don't think so. We may be often blinded by or made to believe in something because of monetary and material greed, but never because of naivety or stupidity.

If anything, Koreans, on the whole, are very emotional and hasty rather than coolly rational and deliberate in making judgments on any social and political issue. And let's face it, we are also a pretty insecure and paranoiac bunch of people as we have long been suffering from an inferiority complex.

Because of these regrettable national traits, we easily become prey to the demagoguery of a few unscrupulous people who have their own ax to grind or political hay to make at our expense. But we are smart enough and are living in an advanced society where we should be able to make our own judgments and decisions based on objective facts, not just listen to other people and follow them blindly.

Yet, USTR Susan Schwab might be the wackiest of all! But, just in case, I'll be looking out for South Korean gauchos!

Image via Wikipedia

The US needs Beijing to tackle the DPRK issue, but not how you might think.

Realizing this, the US, South Korea, and Japan should urge the one state with true leverage of Pyongyang - China - to press its own model of economic reform on the North's leadership.

Two complimentary reasons stand out for this long-term policy course. The first is that, as hinted above, without doing so, there will be little incentive for Pyongyang to cease its involvement in the trade of illicit goods. There is a much greater chance of reigning this activities in if sustainable revenue - with positive consequences for the state that do not threaten its neighbors, international security, or international markets - is a tangible reality for North Korea.

The second is that there is no alternative. A maintenance of the status quo does little to rescue North Korea's incentives to remain mired in the black market. Seeking to choke the regime, as Washington was doing until recently, can only force it into a desperate corner. Moreover, forcing a state collapse in Pyongyang is not, and probably never will be, an attractive or feasible option for a number of reasons. First and foremost, it assumes that Washington is capable of doing so, which in turn assumes that the US has any real leverage over North Korea. This is not the case so long as Beijing remains the regime's true financier and largest external source of goods. Furthermore, North Korea's neighbors have no desire to see the regime collapse anytime soon primarily because they will be the ones tasked with picking up the pieces. China, for instance, already struggles with the flow of refugees from North Korea and knows very well that in the event of a North Korean collapse, those problems will worsen exponentially and might even materialize a host of unknown (and perhaps worse) scenarios. South Korea, for its part, fears a North Korean collapse that would force it to absorb the poverty-stricken Northern state into its territorial protection - an immediate reunification that no one would have anticipated or truly planned for. The result would be a premature merging of the world's twelfth largest economy with one of the world's weakest states. Seoul is not opposed to Korean reunification in principle, but it is not willing to do so at the expense of its own economic growth, hence its emphasis on raising the standard of living in North Korea (something designed to soften the eventual blow, apart from the obvious humanitarian reasons).

This argument sounds familiar! Didn't a Heritage or AEI fellow characterize DPRK as a failed Stalinist state that needed to return to orthodoxy, by abandoning the quirky leader cult and military-first policy?

One of the reasons this site was down was, because I was celebrating my mother-in-law's birthday at a Korean-style sashimi place down the hill from our house. BTW, it's my favorite meal (and, obviously my mother-in-law likes it, too!) A few photos were lost to the...ahem! drunkenness of photographer, including the last hour at a nearby pub with family and friends. A big messy table full of side dishes, soju and beer, and raucous conversation-that's a Korean-style birthday!

With the recent disclosures about DPRK-Syria cooperation at al-Kibar, context is a rare commodity, and The Economist delivers.

Judging by its past behaviour, North Korea would do pretty much anything for cash; there are suspicions that it helped the Khan network supply nuclear material to Libya. That said, providing engineers and designs for Syria's reactor may chiefly have been meant to tweak America's nose, says Michael Green, a former Bush administration official now at the Centre for Strategic and International Studies, a think-tank in Washington, DC.

The Bush administration and North Korea fell out badly in 2002 over charges that Kim Jong Il's regime had secretly been trying to enrich uranium (also a potential bomb ingredient) while plutonium production was frozen by a previous agreement. The following year North Korea privately threatened to expand its «deterrent», test it (which it later did) and even sell it. With little to export beyond counterfeit currency, drugs and crises, says Mr Green, North Korea used Syria to up the ante—and the expected compensation for later agreeing to desist.

Now America and Mr Kim are negotiating again as part of a six-party deal (also including South Korea, Japan, China and Russia) to tempt him to give up his bombs. Senior American officials last week acknowledged that they had debated whether to try a combination of diplomacy and threats to end the Syrian project. For Israel, however, the Syrian reactor was an existential threat-in-the-making. There was no green light from the United States, the officials said: «none was asked for, none was given.»

Hoping to avoid retaliation, and to head off the risk of a wider Middle East war, Israel wanted the intelligence that led to the bombing kept secret. Worried that wider disclosure would sink the six-party effort too, America briefed only a score of senior members of Congress at the time.

But now the administration needs Congress's support for a controversial deal that could fall significantly short of the prize that the six-party negotiations were supposed to deliver: that, in return for oodles of energy aid and a lifting of some key sanctions, North Korea would first provide a full and accurate accounting of its nuclear past and later dismantle all its nuclear programmes. Instead it has merely declared a rather modest stockpile of plutonium and dug its heels in. Trying to move talks forward, American diplomats have struck a tentative deal that would allow North Korea to «acknowledge» American «concerns» about uranium and proliferation activities, in return for better verification of Yongbyon's plutonium haul. But the backtracking led Congress to demand the facts on Syria first.

George Bush said this week that by going public, America wanted to press North Korea's (notoriously impervious) Kim Jong Il into fuller disclosure, and send a message to proliferators everywhere. But the Syrian pictures may just as easily lead Congress to demand that America adopt a tougher stance in the six-party talks.

Another casualty could be the NPT itself. The IAEA's boss, Mohamed ElBaradei, says inspectors should have been given information about the Syrian reactor sooner by America and Israel. Yet Syria, had it not chosen to deny all, could have claimed that technically it was doing nothing wrong. Building a nuclear reactor is not against NPT rules, unless done with weapons intent—and that is hard, if not impossible, for inspectors to prove, says Henry Sokolski of the Non-proliferation Policy Education Centre in Washington. However, under a 1992 rule accepted by Syria, it should have alerted the IAEA to its reactor plans before construction started. North Korea, Iran and now Syria. The NPT seems there for the breaking.

Firstly, comes NPT reform and a proper way to share intelligence. And then, the US can deal with its armistice with the DPRK. In that order!

I never thought I'd give chaebol, or Korean conglomerates, a kind word. Yet, Dani Rodrik links to and highlights an argument for fair play.

'One might have expected a louder hue and cry against hedge funds that were speculating in financial markets and obtaining credit at easy terms from lenders when the current crisis unraveled. Instead we have witnessed unprecedented liquidity being pumped into the markets at non-distress rates, essentially blurring the difference between illiquidity and insolvency. We have seen the world's central banks provide enormous amounts of credit to avoid larger scale collapse. What is not so clear is the real economic benefit that the speculating hedge funds were generating. At least in the case of Korea, there were real economic benefits to be generated, employment to be created, and international markets to be penetrated. This is not to absolve some chaebols of their misdeeds -- pledging poor collateral, cross ownership among chaebol affiliates, use of cheap government credit and the like -- yet there does seem to be a double standard in the way the international community is dealing with the current crisis caused by excessive and under-regulated leveraging and the way in which Korea was pilloried in the aftermath of the 1997 crisis.'

As I'm in the process of reading Stiglitz's insider account of the '97 IMF debacle, this conclusion has a good deal going for it.

Actually, this was an active day trip. with frequent stops and tight schedules. All that was missing was the sun for most of the day and an airplane to bypass the evening traffic returning to Busan.

Starting from Boseong to breathe in the tea-scented air and climb the terraced hill, we bought green tea. Oddly enough, my wife and I were only one of two customers for tea. Mostly, mothers bought tea-flavored candy, treats, and ice cream for the kids. The green tea is excellent, BTW. Then it was on to an organic farm to pick strawberries. After lunch at Nakan Folk Village we toured what my wife called «Korea's Williamsburg». Laypeople can sleep for a night within this actual village where the venue workers actually live. Note: the brown stuff is bondaegi (boiled silkworm larvae). They're quite good, but very rich-flavored.

Lastly, we went to Sonam Temple, one of the oldest-standing Buddhist temples to survive the Japanese invasion of the 17th Century.

I told my wife, instead of planning trips around battlefields (obviously not my appealing to my wife) we should tour tea plantations. And, if there's a battlefield nearby, so much the better!

My wife and I will head to Boseong in South Cheolla province for a day-long tour of the tea plantations and a folk village. I'm sure to return with lots of green-hued pictures of well...tea.

Enjoy your Saturday!

Which one of this paragraphs is closer to the mark, the first, or the second?

Alongside Mr Lee's resignation, and those of other managers, Samsung announced a series of reforms. It will donate a large sum to «a good cause», undo some labyrinthine cross-shareholdings, and (to assuage concerns about its dominance) will not enter the retail-banking market when it is opened up later this year. Samsung's strategic planning office, which concocted a variety of dodgy schemes, will be closed. The younger Mr Lee, who was not charged, resigned as a senior executive at Samsung Electronics and will move to a different role in the group, based abroad.

By South Korean standards these are drastic moves, and may represent an acknowledgment that corporate-governance reforms are needed. But sceptics wonder whether the changes are merely cosmetic. The Lee family will still be Samsung's largest shareholder, and many of its loyal lieutenants remain in senior positions. Although Mr Lee technically faces a life sentence, few believe he will spend time in jail. He will not be replaced as chairman, and it is assumed that his son will return home after a couple of years to take up the post, once public anger has dissipated. That could prove to be the real test of how much things have changed.

Businessweek:

Some activists argue the reforms fall short of guaranteeing the prevention of the family's return. «The problem is the son can always be elevated to the chairman and assume near-absolute control unless a system is built to guard against such practices,» says Korean National Open University economist Kim Ki Won, who has studied the chaebol for two decades. «My hunch is that there's only a 30% chance of Samsung achieving a good governance system in view of the lack of reference to the son's illegally earned benefits.»

Others, though, are more hopeful. «I respect today's move by Chairman Lee, who unlike other chaebol chiefs, personally took responsibility for wrongdoings,» says Jang Ha Sung, dean of Business Administration College at Korea University and a longtime promoter of shareholder rights. «What's still needed is to build a sustainable system enforcing transparency and accountability.»

...and Bloomberg echo the «standing at the crossroads» vs. «business as usual» predictions.

While Lee's indictment last week on charges of breach of duty and evading about $113 million in taxes blunted his ethics push, the announcement yesterday that he and other top Samsung executives will step down puts more at stake. The