Wednesday, December 9, 2009

Interview: Mr.Yu In-chon, Minister of Culture, Sports & Tourism

Early last year, the Ministry of Culture, Sports & Tourism set three main goals ― give people hope through culture; enhance the economic vitality through cultural contents; and build future-oriented, global Korea ― and suggested 10 tasks to achieve them.  These tasks are intended to give hope and comfort, create more jobs and encourage more investments. In the long term, the goals reflect the government's intention to reinvigorate the social atmosphere. For this purpose, the ministry set aside close to 3 trillion won in creating jobs in the culture, sports and tourism sectors and building culture and arts infrastructures to enhance the local quality of life.
The ministry also promised to establish more culture and sports facilities to live up to the standards of the OECD. On the business side, the cultural contents industry is the driving force of the next generation's economic growth, and the ministry has identified this sector to create quality jobs for young jobseekers through various programs. Furthermore, the production and development of next generation fusion content such as computer graphics will be supported. Future-oriented game technology will also be supported through a global game hub center for content development and experts will be hired to help open new businesses.
All these are just some of the plans that the Ministry has announced. To listen to more of the policy actions and vision of this ministry, I interviewed Minister Yu In-chon. The following are excerpts:
The Ministry’s policy vision is to develop a Happy Korea by expanding the societal and economic values of culture through:
• Resolving imbalance between regions and social classes in the culture, sports and tourism sectors, and spreading culture-sharing programs
• Ensuring the stabilization of the people’s livelihood through developing and spreading programs on adapting to an aging and multi-cultural society as well as programs on enhancing lifestyle such as developing more cultural and sports facilities
• Increasing fundamental investment in culture and arts to establish basis to foster a creative industry, developing contents and creating a business-friendly environment in the era of convergence, and encouraging private investment and facilitating employment in the culture, sports and tourism sectors to fuel national growth
• Planning and implementing symbolic national programs to build a strong national brand and promoting strategic cultural exchanges to ensure continuity of Hallyu
The Ministry’s priority for this year is to overcome the current economic crisis by implementing economic recovery programs that include:
• Instilling hope and courage to the public through culture in order to uplift the dampened public mood caused by the economic crisis
• Expanding employment opportunities and facilitating business investment activities to revive the economy as well as expanding support for export businesses
• Preparing for a low-carbon green growth society and building a stronger national brand
Approximately 14,000 social service jobs were created through early budget execution based on review of past achievements. There are plans to create 3,000 social jobs and develop more than 200 social-purpose enterprises in the culture and arts sector.
Based on expanding investment support in the area of contents and tourism, establishing and operating the global contents center, and pursuing strategic tourism marketing, this resulted in the gaming industry posting export growth of 35% and the number of overseas tourists increased 27% to 3.26 million in 2009 H1 compared to the same period last year.
The implementation of public-wide hope campaigns and programs (e.g. ‘Bokjumeoni Bongsadan’) during the first half of the year supported approximately 470,000 people in the poor and low-income class.
In an effort to establish cultural identity and national brand, the National Brand Committee was organized (Jan. 22), the establishment of the National Modern Museum on the old defense security command site was announced (Jan. 15), and the Steering Committee on Constructing the National Museum of Korea was organized (Apr. 16) in order to record and display the history of Korea’s development.

The economic crisis and the influenza outbreak has had a negative impact on the global tourism industry but in the case of Korea, there was a sharp increase in Japanese tourist numbers based on the foreign currency effect in late 2008 and early 2009.
As of July end, the number of foreign tourists increased 14.1% to 4.4 million compared to the previous year. It is likely that this year’s target of 7.5 million will be reached.
The new government has placed focused on the importance and potential of the tourism industry and is pursuing efforts to attract more foreign tourists by ▲initiating the 2010-2012 Visit Korea Year ▲ easing regulations and improving policies to strengthen competitiveness of the tourism industry ▲ fostering high-value added tourism industries such as MICE and medical tourism ▲ developing more unique Korean-style tourism contents and ▲ improving accommodation & restaurant facilities, tourist information service and visa process. Other ongoing plans will be carried out including efforts to enhance the value of Korea’s tourism brand and improve hospitality service.

As part of the effort to realize low-carbon green growth, the Ministry is in pursuit of facilitating green tourism using Korea’s natural resources and environment, and fostering low-cost high-efficient contents industry.
In order to facilitate green growth, the Ministry is working to develop a high-value added and converged tourism industry (e.g. medical care, MICE, performances and shopping), initiate the cultural eco tour called the ‘Journey of Thousand Miles Project’ featuring various historical and cultural stories, and transform used resources like closed railroads (22 tracks nationwide, 704km) and train stops into theme-type tourism resources.
The Ministry is also working to strategically foster the contents industry by acquiring global competitiveness in core contents (e.g. game, film) and developing next-generation converged contents (e.g. u-learning, virtual world), and strengthening the self-sustaining ability of the contents industry by establishing copyright protection systems and creating an environment of fair copyright usage.
Furthermore, the Ministry’s focus lies on realizing green revolution in everyday life. For example, the bicycle festival was held to encourage the public to ride bicycles, used and closed industrial facilities such as the Gunsan harbor are being transformed into cultural space, and educational-purpose game contents on the topic of climate change are being developed to shift the public awareness.

Tuesday, November 3, 2009

Interview: Mr. Trevor Hill, Managing Director, Audi korea

The Audi AG, one of the world’s most successful car manufacturers in the premium segment, succeeded in maintaining its earning power in the first half of the year, despite the major challenges encountered on worldwide automobile markets and the difficult overall economic situation. In group succeeded in avoiding the effects of the negative overall market trend, and recorded a significant operating profit of 823 million euros. The Audi brand is also hitting its sales targets: in the first six months, approximately 466,000 cars were delivered.
In Korea too, the company has been performing exceedingly well, and is one of the most recognized imported car brands. Audi Korea currently captures about 12.5 percent of all vehicles imported to Korea, having sold 5,280 cars until September this year.
As noted by Mr. Trevor Hill, Managing Director of Audi Korea while the global market is down and the car import market in the country has decreased by 15 percent this year Audi is doing really well, as sales on average are up 40 percent from last year
“Our recent growth is largely the result of the company’s aggressive rollout of new vehicle models and our marketing strategy. Most of our customers are drawn to Audi’s sophisticated urban design, raising its brand recognition and further propping up sales. Audi also has outstanding advanced technologies in this field, including engine technologies and energy management systems,” he told me in an exclusive interview.
Audi’s core marketing strategies include maximizing premium brand image, strengthening dealerships and launching new models.
The Korean consumers identify with Audi’s sophisticated looks and design, and it is the most dynamic prestige brand. Audi vehicles are famous for their world-best design and high emotional quality. The company also has various advanced technologies such as a quattro permanent four-wheel drive system and TFSI engine technologies that enable more dynamic driving, he said.
The models that the company has launched this year include A5, A4, Q5, TTS, A4 2.0 TFSI, Q7 facelift and A6 facelift.
The A5 is equipped with the latest technology from the German carmaker including a driving system that allows the driver to choose from four different driving modes - comfort, auto, dynamic and individual - and adjust the car's performance and handling to fit each driving mode.
The new A4 2.0 TFSI is fitted with eight-speed multitronic step-less transmission. Its speed tops out at 210 kilometers per hour and the official fuel economy is 12 kilometers per liter. Mr. Hill noted that TFSI, a gasoline direct injection engine technology, has increased fuel efficiency up to 15 percent with more power compared to traditional gasoline engines.
Audi TTS comes with a 2-liter TFSI engine that puts out 265 brake horsepower. The coupe model of the vehicle is capable of accelerating to 100 kilometers per hour in 5.2 seconds. The zero-to-100kmh acceleration time is 5.4 seconds for the TTS Roadster. The vehicles are equipped with the six-speed S-Tronic dual clutch transmission.
The new A6 lineup consists of the A6 2.0 TFSI, A6 2.0 TFSI Dynamic, A6 3.0 TFSI Quattro and the A6 3.0 TFSI Quattro Dynamic.
“While most Audi vehicles are achieving good sales numbers, the A4 and A6 have been performing really well in the local market. Korean customers have very sophisticated tastes not only for design, but also for performance and driving pleasure,” he said.
The company has a sales network of 16 showrooms and 14 service centers nationwide. As for dealerships, it recently renovated a showroom in Jeonju, North Jeolla Province, into the first dealership here built as an ‘Audi Terminal.’ Its second will be introduced in Masan, South Gyeongsang Province, later this year, which will be the largesdt showroom in Asia, he said.
The strategy that Audi has adopted is ‘lifestyle marketing’, whereby the company is focusing on customers’ lifestyles rather than just on vehicles. For this reason, the company regularly sponsors VIP events and gives their customers a chance to experience royal treatment.
"We invited the world-famous band Jamiroquai here for Korean customers and also invited our VIP customers to the most famous music festival, the Salzburg Festival. These are the examples of our lifestyle marketing activities, which only Audi customers can experience,” he said.
He also mentioned the company’s activities concerning golf, which have proven to be highly effective marketing instruments. Golf courses have become ideal places of business and have opened the door for talks with existing and potential customers. The Audi Quattro Cup places the relationship between buyer and seller in the foreground.
This year the Quattro Cup finals will be held in New South Wales Golf Club in Sydney, Australia from December 14th–18th, where the team from Korea will be competing.
He said one of the main priorities is to increase Audi’s brand power in Korea. While the company’s brand awareness in Korea has dramatically increased in the five years since the company’s establishment in 2004, the future holds much promise.
In this context, he also mentioned that the EU-Korea FTA negotiations which have been concluded and await ratification would provide a good opportunity for imported car manufacturers to increase their market share.
EU-Korea FTA
As regards cars, the elimination of tariffs will be extended to five years for certain types of vehicles. The EU has rejected Korea's proposal for the immediate abolition of tariffs on small cars. Tariffs on cars with an engine size of more than 2.5 litres would be scrapped within three years whilst tariffs for less powerful cars would be scrapped within five years.
As per the preliminary analysis, the domestic automobile market will experience heated competition due to formidable price competitiveness of EU-made vehicles, especially in the luxury car segment.
In 2008, the EU cars account for 53% of Korea’s import car market and mid- and full-size autos with over 1.5 liter engine displacements, in particular, take up an overwhelmingly large part of the Korea’s imported auto market. Moreover, since tariff on automobiles with over 1.5 liter engine displacements will be the first one to be removed, the EU’s mid- and full-size models will gain recognition earlier than small cars in the Korean car market.
“EU-made cars will also be attractive to consumers who had been buying inexpensive, mid- and full-size Japanese cars. Nowadays, the Korean automakers have been producing new models in the mid- and full-size vehicles in the premium tier, which will intensify the competition much more in the domestic market,” he said.
“However, we have information that some of our concerns regarding the barriers to trade in Korea have not been addressed in the FTA, especially with regard to fuel efficiency standards. That is something we will have to work on,” he said.
Speaking on the opposition to the deal by the European Automobile Manufacturers’ Association (ACEA), which is worried about the “huge influx of Korean exports into the EU market, with little gain in exchange,’ he said that they had valid concerns.
“It will have a serious impact on employment in the European manufacturing sectors and is something that the respective member states will have to prepare for from the beginning,” he said.

Monday, October 19, 2009

Interview: Mr. David-Pierre Jalicon,French architect

Thirteen years ago when Mr. David-Pierre Jalicon, a French architect , visited Korea as part of a French research delegation to help design the KTX bullet train, he hardly hand an inkling that he was destined to stay back in the country. His first trip took him across the length and breadth of the country along the present-day KTX route, when he traveled to better understand the Korean landscape.
During his researching, he landed other projects, including building the French School and French Cultural Center in Seoul. Within a year or so, he became the first and only French architect to own firms in both Korea and France.
Today his firm, D.P.J. & Partners is well known for expressing what French people aspired to in Korea. That aside, he has also completed several projects in Spain, Taiwan and Hong-Kong.
The firm has been certified by the Korean Government for "Off Set" Program as a Korean firm and therefore can participate in big international projects.
His experience spans several areas: architecture, environmental and urban design, interior design for office, residences and luxury brands. For example, he is the main architect for Cartier in Korea and several other Asian countries.
“The characteristic specific to the firm is to be able for each kind of project to provide a strong identity and to be very specific. Therefore through this same approach, the firm is organized around three divisions,” he told Infomag Real Estate.
The Architecture Division handles all kinds of buildings from Musical Theaters to Private Residence. The Interior Design, Renovation, & Decoration Division takes care of different kinds of interior, from Offices space planning to living spaces through shops and corners for the luxurious retail market. The third Division of Urban Art and Environment Design handles projects like bridges and urban plazas.
He noted that architecture should tell a story, reflecting the evolution of culture and tradition in the country. Therefore to better understand Korea and her people, he spent many months researching Korean history and customs. That really paid off, and today he can effortlessly blend traditional architecture and nature with modern constructions.
“What has always fascinated me in Asian architecture is that its construction form is associated with numerous signs and symbols which tell me stories and which project me a concept of the universe (TAO) and a global landscape (Geomancy). So, I try to produce an architecture which re-starts, so to speak, by using signs, symbols and meaning based on the traditional Korean values and philosophy,” he said.
The French School in Banpo, Seoul, was his first major project and it has got a lot of praise. As he notes, he wanted to build a symbol of French education and culture in a foreign country, whose design and details not only embraced the local culture but also created its own strong identity in the so-called French Town in Seoul.
In his words: “The façade screen is animated of little punctures that will not go unnoticed. They are in fact symbols drawn from Pa-Koua (Which can be seen on the Korean flag), that of the East in this case. It represents the energy of this direction where urban constraints and noise had barred any opening. This energy rupture from the East was all the more regrettable as in TAO, it represents childhood and growth. The symbols on the screen are here to regenerate it.”
He noted that the round shape of the building reflects very much the qualities recognized in French education: awakening, openness, movement, interdisciplinary nature and dynamism. It also brings a sense of friendliness to the classroom.
His next project was the French Cultural Center in Seoul, which was also well received. Infact these two projects landed him the Aqua-Art Bridge project that got him even more fame. The 75-meter-long, 4-meter-wide foot bridge features a 28-meter diameter ring structure which harbors a glass panel that runs water streams above a fountain and projects moving images.
The bridge also helped him land an even bigger project nearby. After Kim Sun-gyu, president of Seoul Arts Center, announced his plan to turn an old-fashioned opera house into a high-tech musical theater by 2006, he saw the plans for the Aqua-Art Bridge. Impressed, he and Seocho District Mayor Cho Nam-ho asked Mr. Jalicon for his ideas for the new theater.
They were especially intrigued by his idea of making the bridge a part of the new complex and picked him to head the project, which included transforming the neighboring Mt. Wumyeon and turning more than 10,000 pyeong (33,000 square meters) into a multi-functional cultural complex.
Since then, there has been no looking back. As his reputation grew so did the projects under his ambit.
Some of the other architectural projects that he has undertaken include SK View Oryukdo / Busan, Hoengseong Resort project, Didomi Housing / Kwangju, The World Garden Project / Banpo-dong, Donggeum-do house / Donggeum-do, Kuwait Embassy Residence Extension / Seoul, Louis Vuitton Building Extension, French Embassy Housing Project / Seoul and French Embassy Consular Building.
As regards environmentally friendly work, he undertook “NATURE-TECH ” Bridge in Bucheon, Architecture & Landscaping of Itaewon street, VLF TS Building & Civil Work, / Haenam, “Central Point” Bridge / Sapyoung-lo, Seocho-gu, Seoul, Memorial Hall for the French Soldiers in Korean War / Suwon, The Second Sungsan Bridge “The Four Sails Bridge” / Han river, Sangam millennium city, Seoul and “Memory” Bridge / Suwon, among others.
His interior and renovation work spans the projects of Johnson & Johnson Vision Care Office, BNP Paribas Seoul Office, Oman Embassy Residence Renovation / Seoul, Renault Samsung Motors Kihung Research Center Hall Renovation, Group SEB Korea interior, French Korean Chamber of Commerce & Industry Office / Seoul, Cogema Korea Office / Seoul, Richemont Korea Head Office / Seoul, Hachette Next Media Office / Seoul, Bluebell Korea Office / Seoul, “Cartier” Residence Renovation / Seoul, Daimler Chrysler Office / Seoul, Head Office of Credit Agricole Indosuez Bank / Seoul, - Renault Samsung Motors Head Office / Seoul among others.
As he notes, architecture should be as fluid as the times. It should create a space with a new concept that constantly changes and moves along with people, trends, culture and ideas.

Friday, September 11, 2009

Interview: Minister of Strategy & Finance Yoon Jeung-hyun

The Ministry of Strategy and Finance (MOSF) was established in March 2008 when the Ministry of Finance and Economy and the Ministry of Planning and Budget were merged to establish fair tax systems and efficient fiscal/economic policies. As the ministry that oversees the daily economics of the public, it is committed to the advancement of the domestic economy and establishment of growth dynamics through effective policy coordination, fair tax systems, public enterprise reform, systematic distribution of national resources, efficient budget management and active international cooperation. Playing a pivotal role in the Korean economy, the MOSF has to lead the way in the recovery from the current economic difficulties.
I interviewed Minister Yoon to find out his priorities.
The following are excerpts:
The fundamentals of Korea's economy are sound compared to other economies. Korea's financial sector is relatively healthy and measures for bank nationalization have not been taken. The nation holds sufficient foreign reserves and external debt structure is improving since September, 2008. As of the end of June 2009, Korea holds $ 231.7 billion, equivalent to the amount of current payment for 7.4 months, exceeding $ 185.8 billion of current foreign debt (as of the end of the 1st quarter of ‘09). External debt has also decreased from $ 422.5 billion in Sept. '08 to $ 380.1 billion in March '09. Plus, Korea is more fiscally sound than major economies.
At the same time, the Korean government is carrying out corporate restructuring in the public and the private sectors to address remaining unsoundness and inefficiency. It is too early to tell when the Korean economy will make a full recovery as uncertainty remains high. But we predict that the economy will grow further from previous quarter in the second half of this year and post growth rate close to the potential growth rate next year.
Although the Korean economy is projected to grow in the second half of this year, uncertainty remains high. There is a possibility that international financial market could slip into instability again and fiscal space could shrink along with exchange rate and oil price volatility and H1N1 pandemic. Under these circumstances, the Korean government is committed to making every effort to keep robust growth in the second half of this year.
First, until the economy makes a visible recovery, the government will maintain its expansionary macroeconomic stance while aggressively responding to negative factors such as real estate market.
Second, to secure a steady economic recovery driven by the private sector, the Korean government will continue to stimulate private consumption and investment.
Currently, we are exerting strenuous efforts to promote the domestic tourism market, draw more inward tourists, improve business environment and boost investment in R&D and new growth engines.
Third, for job security, Korea is doing its part to raise effectiveness of job policies including job creation in the service industry, start-up promotion and manpower training to meet industry demand.
Fourth, to ease the burden on low-income earners and small business owners who are hit hardest by the economic recession, the Korean government will continuously support them.
Although we experienced economic downturn in the 4th quarter of last year due to the global economic crisis, the economy is now bouncing back faster than other countries. Once recording negative growth in the fourth quarter of last year, Korea's economic growth turned positive in the first quarter of this year. Further, the economy increased 2.6% from previous quarter in the second quarter of this year. However, it is the government driving the economic growth through expansionary fiscal and easy monetary policies, while consumption and investment in the private sector remain sluggish.
The government will maintain its expansionary macroeconomic stance for a while, but private consumption and investment will be the key to steady economic growth. And I think this applies to other countries around the globe, too.
Therefore, to stimulate private consumption and investment, the government will create more jobs, support people's livelihoods, improve business environment and streamline regulations.
With foreign investment facilitation high on the agenda, the Korean government is establishing and carrying out measures needed to achieve the agenda. The aim is threefold: to improve investment environment, to upgrade incentive systems and to strategically draw foreign investment. First, to improve investment environment, Korea will foster a pro-business environment and provide more comfortable living conditions for foreign investors.
Currently, the government is implementing "3-Year Plan for Foreign Investment ('08~'10)," which is aimed at easing regulations on land use, adjusting the taxation system to the global standards and building more schools and clinics for foreigners.
Second, for foreign investors to use them more effectively and efficiently, we will upgrade existing three key incentive systems (e.g. tax cuts and exemption, financial benefit and support for land use).
Third, to strategically draw foreign investment, we will focus on industries such as high-value added industries including green growth industry and new growth engines.

Monday, September 7, 2009

Interview: Lars Vargo, Ambassador of Sweden to Korea

On 1st July 2009, Sweden took over the Presidency of the EU. This means that for six months, Sweden is leading the EU's work and is responsible for moving important EU issues forward.
The Presidency of the European Council rotates between the Member States on a half-yearly basis. The country presiding over the Council functions as the driving force in the EU's legislative and political decision-making process.
This time around, it is a unique opportunity for Sweden to lead and influence work on important EU issues. At the same time, the country holding the Presidency must be flexible and prepared to deal with unexpected issues.
With the EU-Korea FTA agreement having been announced during the Swedish Presidency, I caught up with Lars Vargo, Ambassador of Sweden to Korea to for his views on the important tasks ahead.
First and foremost, he noted that there are many challenges during Sweden's presidency. The economic downturn still lingers with a high rate of unemployment. Moreover, in reaction to the threat of climate change, the world is expecting to gather in Copenhagen in December to discuss the post-Kyoto Protocol scenario.
“The financial and economic crisis has hit Europe and the rest of the world hard. At the same time, it is the Presidency’s task to represent the EU in the fight against global climate change,” he noted.
In addition, discord on the EU structure among the 27 member states makes the future a little unclear. A referendum will take place in Ireland in October, which many hope will lead to ratification of the Lisbon Treaty, an agreement on a new working system within the EU.
The Treaty is an international agreement signed in Lisbon on 13 December 2007 that would change the workings of the EU. It has not yet been ratified by all EU member states.
Prominent changes include more qualified majority voting in the EU Council, increased involvement of the European Parliament in the legislative process through extended co-decision with the EU Council, eliminating the pillar system, preventing the provision in the Treaty of Nice reducing the number of commissioners, and the creation of a President of the European Council with a term of two and half years and a High Representative for Foreign Affairs to present a united position on EU policies. If ratified, the Treaty of Lisbon would also make the Union's human rights charter, the Charter of Fundamental Rights, legally binding.
The stated aim of the treaty is "to complete the process started by the Treaty of Amsterdam and by the Treaty of Nice with a view to enhancing the efficiency and democratic legitimacy of the Union and to improving the coherence of its action."
Negotiations to modify EU institutions began in 2001, resulting first in the European Constitution, which failed in 2005 due to rejection by French and Dutch voters. The Constitution's replacement, the Lisbon Treaty, was originally intended to have been ratified by all member states by the end of 2008, so it could come into force before the 2009 European elections. However, the rejection of the Treaty on 12th June 2008 by Irish voters means that the treaty cannot currently come into force.
The Swedish Presidency will therefore be closing monitoring the situation.
The most important thing is to ensure that we will be able to gather the EU together to respond to the challenges that people care about and where strong European cooperation can make a difference.
“Together we must deal with the financial crisis and tackle the rising unemployment that is currently affecting the whole of Europe. We must also bring together the whole world to tackle climate change. These two priorities will dominate the Presidency,” he stressed.
But there are also other challenges facing Europe that the Swedish Presidency will be taking on. One is the development and strengthening of EU cooperation on justice and home affairs in the Stockholm Programme. Another task is to adopt an EU strategy for the Baltic Sea region, in order to deal with environmental problems and increase the region's competitiveness, along with continuing the work to develop the European Neighborhood Policy and EU enlargement.
EU expansion is also on the agenda, as Croatia and Turkey have shown interest in joining. Ambassador Vargo said they are welcome as long as they meet the standards of the EU as a prerequisite.
In addition, Iceland applied to join the European Union on 16th July 2009. The application was accepted by the European Council on 27th July and referred to the Commission to analyze Iceland's preparedness for negotiations. Iceland's government has a target date of 2012 for joining the bloc, which will be subject to a referendum in Iceland.
As part of the European Economic Area, Iceland is already a member of the EU's single market. It is also a member of the Schengen Area which removes border controls between member states.
To become a member of the EU, a country must first apply, and then the country must be recognized as a candidate country. For that to happen the country must fulfill the first of the Copenhagen criteria: the candidate country must be a politically stable democracy that respects human rights. Then a negotiation will take place which will consider the country's fulfillment of economic criteria, the country's degree of adoption of EU legislation, and whether there shall be any exceptions.
Ambassador Vargo said that the negotiations on an accession treaty would take less than a year, because Iceland has already adopted two-thirds of EU legislation in relation to the EEA. In any case the Presidency will prioritize Iceland's EU accession process, he said.
The Swedish Presidency will also work to strengthen the EU’s role as a global actor with a clear agenda for peace, development, democracy and human rights.
“We hope that together we can advance the EU’s agenda in an open, efficient and results-oriented manner during the next couple of months,” he said.
As part of the projects that have been planned in Korea for the Swedish Presidency, he said that the Embassy is working to publish a collection of European short stories in Korean, sometime in September.
Speaking specifically about the EU-Korea FTA, Ambassador Vargo said that the agreement would send strong signals against the use of protectionism throughout Europe and the rest of the world. It will bring new opportunities to both the economies.
In this present time of economic downturn it is more important than ever to make real progress on important trade issues, he said.
Ambassador Vargo noted that since the deal has effectively been announced, only the legal process remains now. It is unlikely to be derailed by the separate national parliaments. Every member state has had an opportunity to raise all its concerns throughout the negotiation process, and the final announcement was made when no one had any more objections. Also, the EU’s Article 133 Committee, in charge of the bloc’s trade policies, has cleared it, he said. It is a very important step in our relationship and indicates the dawn of a new partnership,” he said.
Although there is always some adjustment cost, FTAs are ultimately beneficial to both sides and there is a strong economic rationale. If one looks at the trade figures before and after trade agreements are negotiated, one can find that there is generally a very substantial increase in trade that takes place. Korea and the EU share a very dynamic business relationship with large investments on both sides and large amounts of goods traded, he noted.
Referring to the significance of the FTA in the context of the WTO Doha Development Agenda, he said that multilateral processes are essential to the world trade system and are not contradictory with bilateral processes. Both can go forward at the same time. Even though the EU is conducting bilateral agreements with many countries, it is also very keen to conclude multilateral agreements.

Monday, August 17, 2009

Interview: Mr. Constant Van Aerschot, Co-Chairman, Energy Efficiency in Buildings (EEB) project of WBCSD

The World Business Council for Sustainable Development (WBCSD) is a CEO-led, global association of some 200 companies dealing exclusively with business and sustainable development. The Council provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations.
Members are drawn from more than 35 countries and 20 major industrial sectors. The Council also benefits from a global network of about 57 national and regional business councils and regional partners.
The $15 million four-year Energy Efficiency in Buildings (EEB) project of WBCSD is the leading industry-only group that envisions a world where buildings consume zero net energy. The project is chaired jointly by Lafarge and United Technologies Corporation and has 12 other members.
On a recent visit to Seoul, Mr. Constant Van Aerschot, co-chairman of the project, who is also Director, Construction Trends, Lafarge gave me a few insights into the latest report that has been issued by the Council. The following are excerpts from the interview.
Saving energy is the lowest cost way to cut greenhouse gases. Much building energy is wasted because of poor design, inadequate technology and inappropriate behaviors. Businesses need to apply expertise and finance to develop and promote new approaches to energy efficiency, but transformation will not be achieved through the market alone.
Building professionals, owners and users do not grasp the urgency and remain unmotivated to act. Government action is necessary to improve the transparency of energy consumption in buildings and to stimulate the transformation of business models to quickly change energy consumption throughout the building sector – in every country, in existing buildings as well as new ones and in residential as well as commercial property.
All building sector stakeholders need to adopt a sense of urgency and a new mindset in which building energy is a top priority. Businesses will only succeed if they align with a sector transformation, adopting disruptive technologies and business models. Policy-makers need to introduce strong regulatory frameworks that support the market transformation.
New modeling by the WBCSD shows how energy use in buildings can be cut by 60 percent by 2050 - essential to meeting global climate change targets - but this will require immediate action to transform the building sector.
Buildings worldwide account for a surprisingly high 40% of global energy consumption, and the resulting carbon footprint, significantly exceeding those of all transportation combined. Large and attractive opportunities exist to reduce buildings’ energy use at lower costs and higher returns than other sectors. These reductions are fundamental to support achieving the International Energy Agency’s (IEA) target of a 77% reduction in the planet’s carbon footprint against the 2050 baseline to reach stabilized CO2 levels called for by the Intergovernmental Panel on Climate Change (IPCC).
At the same time, substantial investments will be required to achieve this target. These will require the combination of actions called for in this report, including building energy codes, investment subsidies, labeling and reporting mechanisms, increased and trained workforce capacity, and evolving energy-efficiency designs and technologies. All are intended to raise energy awareness globally and influence consumer and investor behavior and choice.
The study’s recommendations are based on a unique data inventory of the building stock in six of the world’s largest economic regions (Brazil, China, EU, India, Japan and USA) accounting together for 70% of the world’s GDP, and divided between residential and commercial and existing and new building types. Financially driven behaviors against energy-efficiency technologies were modeled to show costs and savings under multiple scenarios. This degree of data and sophistication has never been achieved before.
EEB modeling shows that increasing the price of energy or carbon only slightly increases the implementation of energy efficiency in buildings. At today’s energy prices, carbon footprint reductions would only increase from 52% to 55% with an incremental carbon cost of $ 40/ton.
“We value human life to an extraordinary degree and have put in place building life safety codes and inspection mechanisms over a century or more. The experience in the United States has been that these add 5% to building costs, and we should think comparably about building energy codes and related mechanisms worldwide.
Strong barriers exist in the building sector. Removing them will reduce climate policy costs overall and will be particularly important in alleviating the impact on consumers.
EEB has considered high-level scenarios but has taken a bottom-up, market-driven approach to understanding the barriers to lower energy use, based on the most detailed view ever of the current state of energy demand in the building sector. The project developed a unique computer model that simulates decisions about energy investments in a specific building subsector to identify the likely mix of design and construction options under alternative policy packages.
To achieve an energy-efficient world, governments, businesses and individuals must transform the building sector through a multitude of actions, which include increasing energy awareness globally, he said.
The study and analysis modeled three scenarios for the world’s response to the climate challenge in buildings:
• Complacency and inaction leading to a failure to tackle climate change
• Inadequate action resulting in only incremental improvements in energy efficiency and a substantial failure to curb climate impacts
• Coordinated, intensive action that transforms the building sector and contributes proportionately to solving climate change.
The third scenario is understandably the only option that can result in the energy and carbon footprint reductions needed. A mix of measures tailored to specific geographies and building subsectors, including increased energy awareness globally, is required for a complete solution. Additional approaches include building energy codes, labeling and reporting mechanisms, appropriate energy prices and carbon costs, investment subsidies, increased and trained workforce capacity, and evolving energy-efficient designs and technologies that use passive and active approaches.

Sunday, August 16, 2009

Interview: PCNC Chairman Kang Man-soo

The Presidential Council on National Competitiveness focuses on heading regulatory reform and deregulatory measures to create a business-friendly environment for both domestic and foreign companies, strengthening Korea's economic growth potential, and expanding social capital.
Amid falling inbound investment due to the global financial crisis, the Korean government is taking steps to attract more foreign direct investment (FDI). A couple of months ago, the PCNC, presided over by President Lee Myung-bak, announced new measures aimed at attracting more FDI. The new measures include increasing the size of the government's cash grants to foreign investors and temporarily removing the minimum investment requirements imposed on those wanting state subsidies.
Under the current law, the current level of cash grants equals about 5 to 10 percent of total funds invested by a foreign company. Also, to be eligible for cash grants, foreign firms need to have invested $10 million or more.
The government will scrap these rules in order to offer benefits to more firms and will increase the cash grants to account for about 10-30 percent of total funds invested by foreign firms.
To strategically attract those foreign firms that will also benefit the Korean economy better, the government will first select 100 foreign firms that are “strategically important” to the Korean economy and offer them incentives in return for investing here.
Meanwhile, cash grants for firms that have or plan to build research centers here will also be expanded. FDI has long been an important means to help the domestic economy and create employment. With these steps, the PCNC is sending out clear signals that foreign investors are welcome in Korea.
To understand more about the Council’s work and the impact of its policy decisions, I interviewed Mr. Kang Man-Soo, Chairman of PCNC. The following are excerpts:
Korea has a brilliant track record of economic growth. However, we are experiencing low investment associated with decelerated growth of below 5% since 2000's. Subdued employment and rapid population ageing have also become major challenges to mid- and long-term prospects of the Korean economy. Moreover, underlying but significant issues such as strengthening the rule of law, expanding social trust, improving the productivity of the public sector, and promoting productive labor relations need to be addressed. In this context, the PCNC was established along with the inauguration of President Lee Myung-bak in February, 2008 as a key advisory body to the President.
PCNC focuses on heading regulatory reform and deregulatory measures to create a business-friendly environment for both domestic and foreign companies, strengthening Korea's economic growth potential, and expanding social capital by making advancements in laws, regulations and institutional infrastructure based on global standards. I was appointed as the Chairman in February of this year, following my term as the Minister of Strategy and Finance.
PCNC is comprised of government members; heads of business associations; representatives from the ruling party, labor unions, consumer groups; foreign business leaders; and experts from various sectors of the economy. In particular, we value the representation of foreign businesses at the PCNC, and the President of the EUCCK is also a member of the PCNC.
Since the establishment of the PCNC, meetings attended by the President have been held every month. During these meetings, new institutional reform and deregulatory measures are presented and discussed among its members and relevant government ministers.
PCNC has about 30 members representing all sectors of the economy. In addition to the monthly plenary meeting, 4 sub-councils in the areas of regulatory reform, legal and institutional advancement, industrial competitiveness, and public sector reform, were created to promote in-depth discussions. PCNC members participate in one of these sub-councils, and conduct studies on key national competitiveness issues in the respective areas.
In addition, PCNC is able to operate advisory committees for selected issues that require more expertise, continuous feedback and review. Such committees invite experts from various sectors outside PCNC members. One of them is the Advisory Committee on the Romanization of Korean. It was established to revise the current romanization system which is seen by most foreign businesses in Korea as being complicated and misleading. Measures for adopting a more internationally recognized Romanization system was recently discussed at the PCNC meeting and work is in progress.
The vision of the PCNC is to build a first class advanced country. To do so, we will strengthen competitiveness for a new economic paradigm by expanding domestic demand, maintaining a current account surplus, and strengthening economic potential.
In order to achieve this vision, the PCNC identifies 5 key missions, which are: tackling the crisis, sustaining growth, promoting future growth engines, mobilizing global capacity, and accumulating social capital.
History has shown us that countries that have equipped themselves with new innovative ideas have always come out of crises more competitive than before. The PCNC will continue to implement measures to overcome the challenges of the global economic crisis, and prepare for the dawning of a new post-crisis economic paradigm.
This unprecedented global economic crisis has left us in a survival game filled with doubts and uncertainty. International organizations such as the IMF and OECD project the Korean economy to recover faster than other countries. In addition, recent quarter-on-quarter growth is showing signs of recovery. However, I believe that we have yet to be fully optimistic for recovery, and outlooks on the aspects of recovery and duration of crisis are still uncertain.
We have to be very cautious about prospects of the Korean economy since fiscal stimulus such as massive tax cuts and front-loaded spending are major engines of recovery. The stimulus measures are not able to replace private spending and investment on a sustainable basis. In particular, Korea's economic outlook will depend highly on the recovery of the global economy including the EU and the US, due to our high dependence on the external sector such as exports.
Therefore, the Korean government will focus on policies to sustain the recent trend of economic recovery, while preparing a "Plan B" for the worst case scenario.
The government plans to continue implementing efforts to expand domestic demand, restoring growth and economic vitality. Such efforts will include, among others, continued deregulation and tax cuts to promote private investments, corporate and financial restructuring, and job creation and sharing.
Although it is unclear when we will fully recover from the crisis, I want to emphasize that Korea has always taken crises and turned them into opportunities.

Friday, June 26, 2009

Interview: Mr. Byun Moo-keun, Commissioner of Defense Acquisition Program Administration

The Defense Acquisition Program Administration (DAPA) was launched on January 1st, 2006 in order to perform more transparent and systematical tasks in defense capability improvement programs, defense industry promotion and defense material procurement. Since its establishment the execution of defense programs in Korea has become more transparent, credible and predictable by the law of the defense program.
I recently interviewed Mr. Byun Moo-keun, Commissioner of DAPA. The following are excerpts:
One of the main objectives of establishing the administration is defense industry product export. DAPA will be the forerunner for the economic rescue and the green growth policy. It will improve the systems in all areas by regulation reformation, expanding investment in the national defense R&D, nurturing and supporting advanced small/middle sized defense companies, and maximizing defense industry exports.
“DAPA plans to foster pan-governmental international cooperation along with a market expansion system to increase export. It will also support the export marketing departments of each defense industry enterprise as well as promote association with the KOTRA. The National Assembly, the government, the armed forces, and industry will concentrate all their efforts and seek distinctive export revitalization methods for each country.”
To promote an effective defense industry, DAPA operates the Integrated Project Team (IPT) which is meant to manage projects efficiently through centralized planning, budgeting, quality assurance, and technology management. A project manager is responsible for all the processes after a decision on a particular requirement until the completion of the program.
DAPA manages contract related business by making a matrix of check lists for procedures and steps from the beginning of a project as well as reinforce a follow-up management system on domestic and international acquisition to ensure the supply of quality products in an appropriate time period.
He noted that the existing test and evaluation system had inadequate legal regulations, had a vague locus of responsibility on test and evaluation for each acquisition step, and voluntarily performed test and evaluation jobs based on standards set by subjective. Therefore, it was not possible to test and evaluate all major projects in the acquisition process.
DAPA is seeking to efficiently promote the defense industry by strengthening the test and evaluation procedures for each acquisition. By establishing related statutes and support so that projects can be smoothly carried out DAPA will strengthen the objectivity and reliability of tests and evaluations.
“We operate an appointment qualification system in order to ensure the expertise of defense acquisition personnel. This system ensures that only experts find their way to each position,” he said.
"In order to sustain economic growth and develop our country's national competitiveness in this ever competing world, we should develop domestic technology first. Therefore, the Defense Acquisition Program Administration, to effectively perform industry creation, production, and acquisition, will first adopt civil standards when there are two different standards between national defense and civil groups and find a way to use national defense and civil technologies in a cooperative fashion."
“What is more, by pursuing the development of joint technology of national defense and civil groups at a pan-government level, it will maximize the synergistic effect of research and development and raise the effectiveness of technology investment,” he said.
Because of recent changes in the domestic and international defense industry environment, the Defense Acquisition Program Administration will abolish it policy of defense industry protection and nurturing, he said.
“This policy weakens the competitiveness of the existing defense industry and abolishing it will help develop a reasonable defense industry based on competition.”
However, in the event that the current system becomes extremely competitive, DAPA will encourage the industry not to hoard their know-how and invested facilities. In that situation, DAPA will also establish a system that will protect small and medium enterprises with relatively weak competitiveness and duplicated investment due to over-heated competition.
He said the basic direction of the Defense Acquisition Program Administration regarding information-orientation is: to create a foundation for information-orientation to achieve the mission and vision of the Administration, to pursue the information-orientation plan of the Administration in relation to electronic government roadmap promotion, and to build a systematic and effective information system.

The full interview can be read here.

Tuesday, June 23, 2009

Interview: Mr. Lee Young-hee, Minister of Labor

In 2008, the new government of President Lee Myung-bak caused a paradigm shift in labor policy. The new paradigm aims to pursue growth and employment simultaneously by supporting economic revival and job creation to make Korea a leading advanced nation. This means pursuing economic growth and job creation at the same time by boosting market economy, developing human resources and achieving active welfare.
But now with the Korean economy facing a serious crisis, it has even more challenges. Falling exports and shrinking domestic demand are expected to lead to negative growth and the employment situation is deteriorating rapidly. There is even a possibility that the current economic crisis could become a disaster never experienced before in terms of its scale, duration and impacts. Moreover, this crisis is under way not just in Korea but also all over the world, so it cannot be easily overcome by the government's efforts alone without cooperation from other social partners.
I caught up with Mr. Lee Young-hee, Minister of Labor to give me an insight into the government plans on the labor front. Especially since the “strike season” is due to start soon.
The following are excerpts:
“With the release of the ‘Agreement between Labor, Management, Civic Groups and the Government to Overcome the Economic Crisis" on February 16th, the spirit of labor-management cooperation is spreading. Nevertheless, the possibility for labor-management conflicts remains concerning issues including corporate workforce reduction and improvement in labor laws and systems.”
The major contents of the agreement were that labor unions will restrict strikes and freeze, return or cut pay according to companies' conditions in the course of overcoming the economic crisis. The management will root out unfair labor practices, and maintain existing levels of employment.
“The government will actively support the efforts to retain and share jobs for sharing burdens by labor and management. It will expand the social safety net, and come up with protection measures for non-regular workers and the small-scale self-employed,” he said.
For the faithful implementation of the agreed matters, all sides will establish and operate an implementation checkup unit, Minister Lee added.
Speaking on the policies that the ministry will pursue this year, he noted that steps will be taken to minimize unemployment of employed workers. Voluntary labor-management cooperation for minimizing lay-off, refraining from wage increase and improving productivity, voluntary cooperation and concession by labor and management are spreading.
“The ministry will actively provide employment retention subsidies, when labor and management take job stability measures through closedown and suspension from service. For the suspension and reduction of work to be an opportunity for better productivity, we will encourage enterprises to conduct vocational training rather than simple suspension of business and lay-off,” he said.
For SMEs whose training capacities are not sufficient, support will be given through training consortium projects, etc. Support for skills development will be strengthened for vulnerable workers, including non-regular workers.
Intensive employment assistance through vocational counseling for people who face difficulty in landing a job, the MOL will establish individual action plan (IAP) for employment support and provide intensive services.
The MOL will also expand training projects for the unemployed and offer loans for living expenses during training period. Support for job transfer will be activated through joint re-employment support center for labor and management.
“We will also expand the scale of programs. More than 50% of all social service jobs will be allocated to vulnerable groups, including low-income unemployed people, with the aim of responding to the crisis.”
The ministry will activate the system of paying allowances to workers whose employment is maintained or extended under a wage peak system. The government subsidies for hiring the disabled will be expanded and skills development of the unemployed disabled will be strengthened according to the type of disability.
Centering on the five sectors of auto, public, finance, health and construction, the ministry will operate the ‘Industrial Relations Task Force in Vulnerable Industries’ with the aim of supporting dispute resolution.
“We will select and intensively manage core establishments with big implications and establishments vulnerable to labor disputes. We will continue to enhance policy predictability by maintaining its policy direction towards laws and principles. At the same time, it will help labor and management to resolve conflicts on their own.”
In terms of illegal actions, the ministry will take a strict action no matter whether it be labor or management. Correction guidance will be provided for illegal actions, including unfair labor practices, occupancy of production facilities and political strikes. At each regional labor office, a ‘Team for Preventing Illegal Actions’ will be run with the aim of guiding the compliance with laws.
Concerning the permission of multiple trade unions, Minister Lee said that the MOL will improve the bargaining system and wage payment to full-time union officials. Through discussions at the tripartite commission, efforts will be made to reach an agreement during the first half of this year. Based on discussions, the MOL will pursue measures to submit a legislative bill, prepare subordinate laws and lay the foundation for administrative support.
For those who are interested, the full interview can be read here.