S Korea watchdog tries to rein in cartels

By Anna Fifield in Seoul
http://www.ft.com/cms/s/0/00d89e1e-b479-11db-b707-0000779e2340.html
Published: February 4 2007 23:25 | Last updated: February 4 2007 23:25

South Korea’s Fair Trade Commission has pledged to this year take an even tougher line against companies that allegedly abuse their market dominance, focusing on cartels and mergers in particular.

Kwon Oh-seung, the FTC chairman, said companies outside the chaebol conglomerates need a chance to grow. “In the past we have been focusing on unfair practices,” Mr Kwon, who took over leadership of the FTC last year, told the Financial Times. “But from this year we will strengthen our law enforcement on the abuse of market dominance and merger control.”

His vow comes as the National Assembly prepares this month to consider ­government plans to ease restrictions on South Korea’s big businesses, allowing them to invest more in their affiliates. This runs contrary to Mr Kwon’s attempts to impose tougher regulations on cross-investment among chaebol companies such as Samsung and Hyundai, and curtail their ability to control megalithic enterprises with single-digit shareholdings. Instead, Mr Kwon will this year turn to enforcing competition law.

“There is no problem with large companies who have become large through their competitiveness but companies that are dominant in the market should not abuse their dominance. We’re going to strictly regulate or prohibit any anti-competitive practices,” he said.

The watchdog is already active. In the past year it has launched investigations into Qualcomm and Intel, the US technology companies, and forced Microsoft to unbundle the Korean version of its Windows operating system, as well as fining it Won33bn ($31m).

Last month it fined Hyundai Motor Won23bn for violating competition rules by putting excessive pressure on its independent car dealers to promote sales.

Mr Kwon said he saw “some concerning signs” that Hyundai Motor was becoming unfair but the carmaker is already bristling at the FTC’s new-found muscularity.

“These investigations are very intrusive,” said Oles Gadacz, Hyundai spokesman. “How can a government agency decide where we can have distributors?”

Hyundai has been going through a tumultuous period, which will come to a head on Monday when a Seoul court delivers its verdict on chairman Chung Mong-koo, who is charged with embezzlement and breach of trust. Prosecutors are seeking a six-year jail term.

In the 1960s and 1970s, South Korea’s chaebol propelled the then poor country’s explosive growth. Now, South Korea is the world’s 10th largest economy, yet the family-run conglomerates have become what some see as untameable beasts in need of reining in.

Rather than pursue a crackdown on the chaebol, South Korea’s government is pushing a plan to ease the regulations that govern the conglomerates and the often tangled shareholding structures via which their controlling shareholders run vast industrial empires, often with formal shareholdings of 5 per cent or less.

The National Assembly is this month to consider a change that would see the number of companies subject to cross-shareholding restrictions fall from 343 units of 24 chaebol to only 24 companies belonging to seven groups.

The finance ministry says the move is intended to encourage corporate investment, which is forecast to slow sharply because of economic uncertainties caused by the strong won and December’s presidential election.

The view is backed by industry groups. According to the Federation of Korean Industries, the country’s 30 largest business groups expect to invest Won52,000bn this year, only 0.6 per cent more than in 2006.

The finance ministry argues that any efforts to tame the chaebol would potentially halt an already slowing economy. Indeed, within South Korea there is a fear that the country’s GDP would not grow without the chaebol.

But Mr Kwon, whose efforts to push through stricter cross-shareholding limits have been stymied by the government, argues that the new rules will simply help distort the Korean economy further.

Many analysts say it is time for Korea to wean itself off its dependence on both the chaebol and on manufacturing, for it to start developing the service sector, and to allow small- and medium- size enterprises – which employ 80 per cent of the working population – to grow.

Mr Kwon argues that in Korea “power is concentrated in too few hands”, singling out Samsung, Hyundai Motor, Hyundai Group, LG, SK and Doosan as the main offenders.

“When I compare Korea with other countries, like the US, the UK, Germany, I see that large business groups here have the power to hamper the functioning of markets so I am very concerned,” Mr Kwon says.

The chaebol have vehemently resisted attempts to curb their power. Lee Seung-chol of the FKI chaebol club argues that the restrictions on large business that the FTC wants to pursue are simply “wrong”.

“Even though big companies dominate the domestic market they don’t dominate international markets. In a global, open economy, market share does not equate to market power,” he says.

S Korea tries to clip wings of the chaebol

By Anna Fifield in Seoul
http://www.ft.com/cms/s/0/708700b0-b4a7-11db-b707-0000779e2340.html
Published: February 4 2007 23:43 | Last updated: February 4 2007 23:43

In the 1960s and 1970s, South Korea’s chaebol propelled the country’s explosive growth, helping to transform it from one of the world’s poorest countries into an Asian tiger.

Now, South Korea is the world’s 10th largest economy yet the family-run conglomerates have become what some see as untameable beasts in need of reining in.

“The chaebol have become too powerful,” argues Kwon Oh-seung, the chairman of the Korean Fair Trade Commission and the anti-trust regulator leading the charge to stop what he sees as the conglomerates’ distortion of the Korean economy.

But rather than pursue a crackdown on the chaebol, South Korea’s government is pushing a plan to ease the regulations that govern the conglomerates and the often tangled shareholding structures via which their controlling shareholders control vast industrial empires, often with formal shareholdings of 5 per cent of less.

The National Assembly is due this month to consider a change that would see the number of companies subject to cross-shareholding restrictions fall from 343 units of 24 chaebol to just 24 companies belonging to seven groups.

Under the current regulations, chaebol affiliates with assets of more than Won2,000bn ($2.14bn, €1.65bn, £1.09bn) belonging to groups with assets of more than Won6,000bn are prohibited from holding more than 25 per cent of shares in an affiliated company.

Under the proposed revision, only chaebol with assets of more than Won10,000bn will be affected. Furthermore, the cross-shareholding limit will be relaxed to allow companies to hold up to 40 per cent in affiliates.

The finance ministry says the move is intended to encourage corporate investment, which is forecast to slow sharply because of economic uncertainties caused by the strong won and December’s presidential election.

The view is backed by industry groups. According to the Federation of Korean Industries, the country’s 30 largest business groups expect to invest Won52,000bn this year, only 0.6 per cent more than in 2006.

The finance ministry argues that any efforts to tame the chaebol would potentially hobble an already slowing economy. Indeed, within South Korea there is a fear that the country’s GDP would not grow without the chaebol.

But Mr Kwon, whose efforts to push through stricter cross-shareholding limits have been stymied by the government, argues the new rules will simply help distort the Korean economy further. Mr Kwon says the current limits can already see affiliates control 40-45 per cent of a chaebol company while owners technically hold just 5 per cent.

“The affiliates of large business groups can survive even if they are not competitive,” he says. “I wanted to make the market function properly so that all those who make quality goods can survive in the market.”

Many analysts say it is time for Korea to wean itself off its dependence on both the chaebol and on manufacturing, for it to start developing the service sector, and to allow small and medium size enterprises – which employ 80 per cent of the working population – to grow.

The huge size of the chaebol is being called into question, especially as Samsung and Hyundai Motor prepare to install third-generation chairmen, a process aided by complex webs of cross-shareholdings.

Mr Kwon argues that in Korea “power is concentrated in too few hands”, singling out Samsung, Hyundai Motor, Hyundai Group, LG, SK and Doosan as the main offenders.

Samsung, the biggest chaebol, now has more than 60 affiliated companies – ranging from hotels and a securities trader to shipbuilding and petrochemicals – and accounts for almost a quarter of the Korean stock market’s capitalisation and more than 20 per cent of total exports.

“When I compare Korea with other countries, like the US, the UK, Germany,– I see that large business groups here have the power to hamper the functioning of markets so I am very concerned,” Mr Kwon says.

The chaebol have vehemently resisted attempts to curb their power. Lee Seung-chol of the FKI chaebol club argues that the restrictions on large business that the FTC wants to pursue are simply “wrong”.

“Even though big companies dominate the domestic market they don’t dominate international markets. In a global, open economy, market share does not equate to market power,” he says.

But analysts see logic in Mr Kwon’s calls for stricter monitoring. “The resources that the chaebol can deploy are massive compared with their potential competitors,” says Hank Morris, a business consultant in Seoul. “So it makes sense for the government to play referee and be on the look-out for dirty tricks.”

Lone Star takes KEB dividend

By Song Jung-a in Seoul
http://www.ft.com/cms/s/0/bed3bb0c-b2a7-11db-99ca-0000779e2340.html
Published: February 2 2007 10:38 | Last updated: February 2 2007 10:38

Lone Star, the US private equity fund, will receive an annual dividend of Won416.7bn from Korea Exchange Bank, recouping almost a third of its initial investment in the South Korean lender that the fund has been trying to exit.

KEB, in which Lone Star has a 64.6 per cent stake, will pay Won1,000 a share to stockholders in its first payout in a decade, despite a 48 per cent drop in earnings last year. The resulting dividend yield of 7.6 per cent is the highest for an Asian bank, but still below market expectations.

Lone Star had been widely expected to seek an even higher dividend from KEB after its $7.4bn deal to sell the lender to Kookmin Bank broke down late last year amid an extensive inquiry over its 2003 purchase of the bank. The fund could have pocketed up to $4bn if the deal had been completed. One local analyst suggested a month ago that the dividend could be set at Won2,700 a share.

Seven directors, including two from Lone Star, decided on the dividend payout at a late video conference on Thursday, considering “the bank’s financial health and strong capitalisation,” KEB said.

KEB reported a net profit of Won1,006bn last year, compared with a record high profit of Won1,930bn in 2005. The bank said its profitability continued to improve, excluding one-off gains made in 2005. Its overdue loan ratio improved to 0.77 per cent from 0.93 per cent.

Analysts said Lone Star appeared to have decided on a lower-than-expected dividend, given negative public opinion against it taking profits out of the country and concerns that a higher payout might cut KEB’s value.

“The dividend level seems reasonable. They gave up short-term gains somewhat for longer-term profit,” said Kim Jin-sang at Nomura International. “Excessive dividend-taking at this stage is not good, if they want to sell the bank at a higher price.”

Lone Star will actually receive Won354.2bn as it has to pay a 15.4 per cent tax on the dividend. KEB said its capital adequacy ratio, even after the payout, will remain above 12.4 per cent, higher than the average for Korean commercial banks. The bank had not paid a cash dividend to shareholders since 1996 as it struggled with heavy losses in the wake of the 1997 financial crisis.

Lone Star is expected to resume efforts to sell KEB once the ongoing probe by Korean prosecutors over alleged misconduct surrounding its acquisition of the bank is concluded. Prosecutors indicted Paul Yoo, Lone Star’s head of Korean operations, last week for alleged stock price manipulation and tax evasion.

They are also requesting the extradition of Ellis Short, Lone Star’s vice chairman, and Michael Thomson, general counsel, for questioning over allegations that they conspired with government officials to unfairly take over KEB.

Separately, Shinhan Financial Group, the country’s second-largest lender, reported Friday that its profits last year rose 17.4 per cent to Won1,833bn on the strong performance of its banking and non-banking units. The group is set to take over LG Card, the country’s top credit card firm, this quarter.

Flaws in Korea in spite of a cutting edge

By Anna Fifield
http://www.ft.com/cms/s/1/4e7b6354-b073-11db-8a62-0000779e2340.html
Published: January 30 2007 18:24 | Last updated: January 30 2007 18:24

Diamond Dilemma
Shaping Korea for the 21st Century
By Tariq Hussain
Published in Korean by JoongAng Random House; available in English from www.lulu.com/diamonddilemma, $18.95

One of the biggest surprises when listening to Korean executives discussing business in their country is the level of complacency about the need for further corporate reforms.

“We have changed so much since the financial crisis,” they regularly say, citing the establishment of audit committees and the ap­pointment of outside directors.

It is true that the 1997 crisis and the spectacular collapse of the Daewoo conglomerate preceded wide-ranging improvements in corporate governance practices. At the same time, Korean companies have metamorphosed from copycat manufacturers into world-class producers of mobile phones, computer chips and cars.

But many of the governance changes have been superficial and are aimed at appeasing shareholder de­mands without eroding the founding family’s control.

The continuing shortcomings in corporate Korea have been starkly illustrated just in the past year by scandals at the two largest chaebol conglomerates – Samsung’s chairman is suspected of consolidating family power by illegally transferring equity to his son, and the head of Hyundai Motor is facing prison for operating slush funds.

The chaebol conglomerate groups are the cornerstones of the Korean economy, but if they continue to operate in this way they will soon go from economic champions to economic millstones.

In Diamond Dilemma, Tariq Hussain, a German who speaks fluent Korean and has worked as a management consultant in Seoul for the past decade, acknowledges the significant prog-ress made by corporate Korea since the crisis.

But, as he says in this constructive book, Korea needs continued reform to achieve its “brilliant” potential: “Korea is a diamond. It is small, tough and has proven its potential to shine,” Mr Hussain writes. “However, Korea is still unfinished. It has not yet been cut into its final shape and therefore underestimated by many who do not know it. Korea’s future could be literally bright – or the country could fail to achieve its potential and lose its shine.”

The diamond analogy on which the book, published in Korean last year and now being released in English, is predicated becomes a little strained by the end of the book. But as well as offering a concise, readable history of Korea’s astonishingly fast industrialisation from one of the world’s poorest countries half a century ago to the 10th largest economytoday, it also lays out in broad terms the areas that the nation must focus on if it is to avoid squandering its gains.

“Much of Korea’s dynamism is happening at the edges, and not at the core of the economy,” Mr Hussain says. “Korea Inc is still holding on to its old ways of doing business, and not changing fast enough to cope with necessary changes.”

Government rules and regulation remain too rigid and union militancy is still a major problem; but most of all Korea is too dependent on the chaebol and the few products they make.

If it continues on this path, Korea could fall into a German or Japanese-style rut, Mr Hussain warns. “Korea has emulated the best of Germany and Japan when it rose to prominence – it should avoid learning the worst as well,” he says, adding that Korea is already saddled with the worst aspects of each of those two countries – respectively, rigid labour unions and an overactive government.

To ensure it continues to shine, Mr Hussain says, Korea must be more aware of the threat of China, which is catching up with Korea in almost all industries.

Second, it should stop the chaebol from falling back into their pre-crisis habits and from operating under the assumption that they are too big to fail or be challenged.

Third, Korea needs a new generation of companies that are not dependent on the government or on the chaebol to drive future growth.

Fourth, foreign direct investment remains “woefully low” because of an overactive government, un­welcoming labour unions, and continued scepticism towards foreign companies, Mr Hussain says.

Korea is now at a critical juncture where it must choose between reaching its full potential as an entire economy, rather than just a few outstanding individuals, or carrying on, missing opportunities and facing economic stagnation.

“The new way of thinking will not be about ‘trying harder’ – rather, it will be about trying a different approach: for government, chaebol owners, and labour unions to let go of their grip on the economy and society,” he says. “Only then can Korea’s economy and society overcome its rigidities, factions and pseudo- globalisation.”

Samsung’s chairman Lee Kun-hee once famously ordered his executives to overhaul the electronics company with the directive: “Change everything but your wife and kids” – a lesson the Korean economy as a whole could learn from.

South Korea to encourage investment abroad in bid to curtail rise in won

By Anna Fifield in Seoul
http://www.ft.com/cms/s/0/9d658a58-a506-11db-b0ef-0000779e2340.html
Published: January 16 2007 02:00 | Last updated: January 16 2007 02:00

The South Korean government yesterday unveiled its much-heralded measures to encourage companies to invest more abroad, exempting domestic investors from capital gains tax on overseas equity earnings and easing restrictions on foreign real estate purchases.

Concerned about the impact of the soaring won on exporters such as Samsung Electronics and Hyundai Motor, the central bank has been intervening heavily in foreign exchange markets at the same time as the finance ministry tries to engineer a longer-term solution by encouraging greater capital outflows.

Among the measures announced yesterday, domestic investors will be exempt for three years from capital gains taxes – currently 14 per cent – on earnings from overseas equity investments. Pension funds will be allowed to invest in overseas securities.

The cap on investment in overseas real estate was raised from $1m to $3m (€2.3m, £1.5m), and the finance ministry signalled the limit would be scrapped within three years. To increase financial support for Korean exporters, the state-run Export-Import Bank will issue Won1,700bn ($1.83bn, €1.42bn, £950m) in won-denominated bonds this year.

“We expect a considerable effect,” Kwon O-kyu, finance minister, said of the changes. “The measures will probably lead to an annual outflow of capital worth $10bn to $15bn,” he said, describing this as a conservative estimate.

The won rose by about 9 per cent against the US dollar last year, leading the Bank of Korea to intervene heavily in the currency markets. Its foreign exchange reserves, the world’s fifth largest, rose by $4.7bn last month to $239bn.

South Korea is gradually abandoning its decades-long practice of limiting outbound investment, an attempt to keep its wealth at home but which has contributed to a surplus of foreign currency and exacerbated the recent upward pressure on the won.

“The measures are to maintain a balance of the supply and demand in the foreign currency market by promoting an outflow of foreign currencies and adjusting the inflow to an optimum level,” the finance ministry said.

However, analysts said the package was more limited than hoped and would have little impact in the short term. “This is definitely not a big bang,” said Oh Suk-tae, economist at Citigroup in Seoul. “The main change is in tax exemptions but tax is not the primary concern for investors – the market outlook is much more important.”

Likewise, South Korean real estate investors are most interested in the US market, but are likely to be influenced more by concerns about a housing slowdown there than the easing of restrictions.

For that reason, Mr Oh was sceptical about the finance minister’s estimates of the impact, saying the recent surge in outbound equity investment took the total invested to $12bn last year. The government’s expectation of doubling that looked excessive, he said.

Yesterday’s measures would not offer any immediate respite for South Korean exporters suffering from the strong won, said Lim Ji-won of JP Morgan.

“The mid-term effects are probably quite meaningful but I’m not sure how much short-term impact it will have,” she said. “The Korean won appreciation is driven by exporter-selling so it depends on whether exporters’ expectations of the won’s strength will be undermined by this.”

*US and South Korean negotiators yesterday began a sixth round of talks on a $29bn trade accord after failing to reach an agreement last year and with only a few months left before US authority to deal expires, Bloomberg reports from Seoul.

South Korean imports of US beef, one of the most contentious issues, must be resolved separately, Wendy Cutler, assistant US trade representative, said. Anti-dumping rules, drugs and automobiles also would not be formally discussed.

President George W. Bush’s administration is rushing to reach trade agreements with countries including South Korea before its ability to present Congress with complete deals for approval expires in July.

S Korean farmers look further afield for brides

By Anna Fifield in Yangbuk, South Korea
http://www.ft.com/cms/s/0/cead98f0-7e85-11db-84bb-0000779e2340.html
Published: November 28 2006 02:00 | Last updated: November 28 2006 02:00

Down on his luck and approaching 40, Jang Sae-jong three years ago followed in the footsteps of an increasing number of South Korean men – he boarded a flight to Ho Chi Minh and within a week had a Vietnamese bride.

In a country fast leaving behind its agricultural roots, rural Korean men like Mr Jang are finding it increasingly difficult to persuade upwardly mobile Korean women to choose rural life.

“I was living in a remote village with my mother then I decided to come to open a restaurant here in Yangbuk, but it failed and I lost a lot of money,” Mr Jang says, sitting on the floor of his modest two-room house in the south-east of the country. “At the same time, I was getting old and there weren’t many women around, so I joined a guy from this village who was going to Vietnam.”

With a dozen other men, he went to a hotel in Ho Chi Minh where he was presented with a line-up of 60 potential brides, which he whittled down to three. He asked them about their backgrounds and families, then chose Tran Thi Diem, now 27.

“I didn’t want anyone who was better educated than me because I thought that if she was too smart, she might figure out how to run away,” he says. “And I liked her – she seemed nice.”

The following day he met her family and the day after, they were married in a Vietnamese-style ceremony with the other bride-hunters. The trip to Vietnam, fees to the marriage agency and the wedding cost Mr Jang about $15,000, a third of which he had to borrow. Ms Tran, who had travelled seven hours to Ho Chi Minh, remembers the event in similarly un-nostalgic detail.

“My husband liked the look of me and I liked the look of him, but actually the brides don’t get much choice,” she says.

“I wasn’t thinking about love. My family is very poor and my parents are sick and I heard that Korea was a very wealthy country so I wanted to help them and earn money for them,” she says, their two-year-old twin daughters jumping on her.

In a conservative country fiercely proud of its ethnic homogeneity, marriages like that between Mr Jang and Ms Tran represent a seismic social shift. Indeed, the Korean countryside is fast becoming more globalised than the cities.

Last year 14 per cent of all Korean marriages were to foreigners, up 20 per cent on the previous year, but in rural areas, four in every 10 men married non-Korean Asian women last year.

Many are Chinese or Philippine but men are increasingly opting for Vietnamese women because of their ethnic similarity. Posters on the lampposts in Yangbuk declare: “Get a new life – marry a Vietnamese lady! You can pay later!”

With the birth rate plummeting and farming life on the brink of extinction, local governments are supporting efforts to help men find wives and have children to pass the farm to.

Kyongju City Government, which encompasses Yangbuk, will soon start giving grants of Won5m ($5,000) to help local men find wives. “There are no young people left in the countryside so we have to help the men revitalise rural areas,” says Kim Sang-guk of the Kyongju welfare centre.

The local authority is also trying to help the 450 foreign women, including 282 from Vietnam, in the area, offering Korean language and cooking classes.

But almost all of the women struggle with their new lives. “This is not the Korea I imagined. I had heard that Korea was a wealthy nation and I wasn’t expecting to be out here in the countryside,” says Ms Tran. “But even though I didn’t love my husband when we got married, since I had my babies I’ve grown to love him.”

But the biggest problem has been the language barrier – she says she still often has to rely on sign language to communicate.

While Ms Tran seems to accept her new life, Mr Jang, who flits between temporary agricultural or building jobs, is not so happy. “It’s quite a burden to send money to Vietnam because I don’t earn much,” he says.

But it is the relationship between his wife and his mother that causes him the most headaches. “My mother speaks very fast and gets angry when my wife can’t understand her. My mother once yelled at my wife to go home to Vietnam and my wife cried a lot.”

“Now I’m opposed to international marriage,” he says in front of his wife, who is distracting herself with an imaginary spot on the floor. “If I get married again I won’t go to Vietnam, I’ll look for a bride in Korea.”

New life for an old way of building

By Anna Fifield
http://www.ft.com/cms/s/0/80473f90-5496-11db-901f-0000779e2340.html
Published: October 6 2006 12:17 | Last updated: October 6 2006 12:17

Walking the streets of Bukchon, it’s hard to believe you’re in the middle of one of the world’s most populous cities. Located only a short walk from Jongno, Seoul’s central drag, where neon competes with carbon monoxide in the pollution stakes, the neighbourhood embodies the Korea of five centuries ago. Rows of hanok, Korea’s traditional houses, with their wooden lattice windows and patterned brick walls, line quiet narrow streets where cats prowl and birds flit across the sloping tiled roofs. One could easily imagine aristocrats being ferried past on carriages held on men’s shoulders.

Such areas are rare in Seoul because construction of new hanok stopped in the 1960s when industrialisation began. Those that already existed were flattened during the Korean war or bulldozed to make way for faceless, functional apartment tower blocks.

Now, however, Korea is a developed country and its citizens are increasingly valuing form as much as function. Many are restoring old hanok or building new ones. And Bukchon, a neighbourhood that is nestled between two of Seoul’s biggest Chosun-era royal palaces, which is said to have the best feng shui in the capital, is a hub for such activity.

“There is definitely a hanok restoration boom going on,” says Lee Moon-ho, an architect who specialises in renovating the old houses. “As soon as [one] is put on sale in this area, it is snatched up. As a hanok architect, I feel very proud of this. As every day goes by, new renovated hanok pop up in this area.”

Although Bukchon lost about 600 hanok when local building restrictions were lifted in the early 1990s, there is now a concerted effort to preserve the remaining 920 and ensure that new construction is in keeping with the traditional aesthetic. Five years ago the Seoul metropolitan government started offering up to Won30m (about $30,000) to any hanok owner wanting to restore his or her home and so far about 250 have been remodelled. Officials have also promoted broader initiatives, burying cables underground and relaying plumbing works, as well as tightening restoration and new construction rules, spending about Won41bn in total.

“Korea developed at breakneck speed after the Korean war,” says Kim Woo-sung, of Seoul’s urban design team. “Because of that rapid expansion, the government could not set a long-term city plan like European cities have. But now we are setting out a long-term plan.”

The government’s efforts have been successful in drawing new residents to the area. Lee Myung-bak, the former mayor of Seoul who advanced the “greening” of the capital through projects such as the rebuilt Cheong-gye-cheon stream through the city centre, is just one of the people who recently moved into Bukchon, as did this correspondent.

Park Jong-duck from Daesung Real Estate, an agency that specialises in hanok, reports a steady rise in inquiries since the restoration craze started. And “prices are rising steadily,” he adds. “There are some people who want to buy just an ordinary house near hanok village. The area is developing day by day so they expect the overall house prices in the neighbourhood to go up.”

Hanok prices vary wildly depending on proximity to Bukchon’s main road and the state of repair. A house on a small narrow street can cost only Won9m per pyong (3.3 sq metres) while a renovated property in a convenient area can cost as much as Won50m per pyong. This compares with an average price of Won14m for an ordinary apartment in Seoul. Building a hanok from scratch usually costs Won13m per pyong on top of the Won10m-15m one might pay for the land.

According to Korean tradition, all buildings are regarded as parts of a wider environment, so houses are typically positioned based on the principle of baesan-imsu – having a mountain at the back and a river in the front. Hanok usually face south to expose the living areas to the sun and are built as a series of inter-connecting rooms opening up to a central courtyard – to allow the energy to flow through the house. They are single-storey with stone foundations, wooden frames and soil in the walls and on the roof for insulation.

Heating and cooling is achieved through ondol, a system of ducts carrying hot air from the kitchen stove (or more likely a boiler nowadays) to the stone floors of the house in winter, which conversely helps aerate the rooms during the oppressive summers while the stones keep the floor cool. (This is one of the reasons why Koreans habitually sit on the floor.) Hanok also have glorious curved roofs made of tiles with edges that are engraved with patterns, usually of flowers, animals or insects, particularly spiders. They are useful as well as beautiful, further protecting the house from the sun’s heat.

“In this area, the hanok are very old so it is difficult to renovate them partially, so most of the time I rebuild them from scratch,” says Lee, the architect. “The rule that I try to follow is to build in a traditional way. You have to follow certain rules – the house should face south and everything in the bedroom should be low to make sure the energy does not drain from your body. According to Korean beliefs, when your bedroom is low, you sleep very soundly. I use Korean woods and try to make modern facilities, such as heating and air-conditioning systems, inconspicuous.”

Although hanok are widely admired for their quaintness, most Koreans still think consider them to be inconvenient for modern living, especially when compared with standard high-tech apartments. In most restored houses, the walls and roofs are still made of earth and air-conditioning units are embedded into the ceilings so not so as to not be too obtrusive.

But residents of Bukchon – such as restaurateur Choi Mi-kyoung who lives in a newly built hanok on a quiet alley with her Swedish husband and their two teenage sons – are proving that it’s possible to marry traditional character with contemporary comfort. The design of the house, which she worked on with an architect, is traditional; the living room opens out onto the courtyard, complete with wooden shutters that can be hung from the eaves while the doors are open. But the stainless steel kitchen is ultra-modern and downstairs, where the boys’ bedrooms and workroom are located, is all Swedish minimalism. Construction took 11 months.

“My husband has lived here for 20 years and likes Korean-style houses very much,” Choi explains. “Our friends think it would be uncomfortable to live in a hanok but they are envious.”

She acknowledges that life in Bukchon can be slightly inconvenient – there is no parking and few shops – but says the family enjoys their modern-traditional home. “It feels so peaceful and like we are close to nature because we have a garden and there are always birds flying around but actually we are in the middle of Seoul,” she says.

Next door is a hanok that serves as a guest house for visiting suppliers to Casamia, a ritzy Korean furniture company. As in Choi’s house, old blends with new. Interconnecting living rooms circle a garden but also lead to a huge modern kitchen. The minimalist bathroom with its square, inset tub is more boutique hotel than bygone house.

As with any project involving historic buildings, the rejuvenation of Bukchon’s hanok is not without its controversies. Families who have lived in the area for decades complain about noisy development and unwanted trendiness, while traditionalists complain that many new houses are built with modern materials and are not complying with tradition. But Kim argues that the transformation will allow Koreans to pass on an appreciation for indigenous architecture to future generations.

“Because people’s lifestyles have changed, it is inevitable that hanok will change,” he says. “Cultural heritage is not something that should only be protected. Preservation should be protection plus evolution. We live in modern times so we have to accept changes and that’s why we need boilers or air conditioners in hanok.”

Lee, the architect, agrees. “I think reinvigorating this area is much more important than reviving Cheong-gye-cheon [the Won330bn ($330m) stream reconstruction] because there is no culture in Cheong-gye-cheon but there is here,” he says. “You should feel a human, natural and ecological touch. I believe this area will become the Montmartre of Seoul.”

Room for One More

http://www.ft.com/cms/s/0/de165a7c-0cb9-11db-84fd-0000779e2340.html
By Anna Fifield
Published: July 7 2006 13:12 | Last updated: July 7 2006 13:12

When Shin Dong-jin first started turning up in South Korean country villages in 1968 at the age of 22, he wasn’t always made to feel terribly welcome. He was not an unruly young man. At one time, he had ambitions to be an accountant. But instead he became an educator with the Korean Planned Parenthood Federation, and the reason he went to the villages was to tell farmers’ wives not to have any more babies.

“It was weird from their point of view,” says Shin, sitting in his Seoul office, where the walls are covered in family planning posters. “This green, single guy who still smells of his mother’s teats would come up to them and talk about family planning. It was like trying to write in front of Confucius.

“Talking about sex at that time was extremely taboo. To even look at a woman’s calf was extremely arousing – when [singer] Yoon Bok-hee wore a miniskirt the whole of Seoul flipped.”

It wasn’t just the women who had their doubts; their husbands were also suspicious. Shin often found himself sitting around a lantern drawing pictures for a group of women to explain how contraception worked. Occasionally the men of the village, curious about the tall young stranger, would peep through the paper doors and see him holding up graphic pictures to their wives. “All hell would break loose,” says Shin, who is now 60. “The village leader would try to convince them that it was all right, but sometimes I had to flee from the village in the middle of the night.”

Shin persevered with his job, in part because he was “completely mesmerised” by the over-population problem then facing Korea’s 30 million mostly rural people. The birth rate – the average number of children per woman – was 4.53 and it was Shin’s job to explain the economic damage this was likely to have on Korea, then one of the world’s poorest nations.

“Daughter or son, stop at two and bring them up well,” said the posters he used to hand out. And that is exactly what people did. So much so that today Shin is still working at the planned parenthood federation, but instead of trying to persuade people to stop reproducing, he is desperately trying to get them to start.

In the 38 years he has been at the federation, Korea’s birth rate has plummeted to just 1.08 – the lowest in the developed world. The economic think-tank, the Korea Development Institute, estimates that the country’s economy will start slowing by 2010 unless the birth rate begins to rise. The situation has become so grave that the median age of the Korean population is forecast to rise from 31.8 years in 2000 to 50.9 by 2040, which means that more than half the population will be over 50 within a generation, and there won’t be enough younger people to support them.

So these days Shin is in charge of encouraging Koreans to have more babies. His latest leaflets say: “Get pregnant within a year of marriage and have two children by 35.” This complete U-turn underlines the astonishing pace at which Korea has developed. When Shin started working, it was an agrarian nation where 75 per cent of the population lived on farms and children were considered a source of both labour and wealth. At that time, the average annual income was $250 and official figures forecast that each percentage point increase in the population would slow economic growth by 3 percentage points. Park Chung-hee, the authoritarian president who masterminded Korea’s economic development during the 1960s and 1970s, set about trying to lower the birth rate.

But his policies, which made it economically disadvantageous to have more than three children, coincided catastrophically with Korea’s rapid industrialisation. When companies such as Samsung, Hyundai and Daewoo started hiring for factories, Koreans increasingly abandoned their farms and moved to the cities, where they didn’t need children to help in the fields and didn’t have as much space to house a big family. The average income grew to $16,300 and Korea is now the world’s 10th biggest economy, renowned for making cutting-edge mobile phones and specialised shipbuilding.

All this was unimaginable to the young Shin when he first joined the planned parenthood federation in the late 1960s. “It was April 1968,” he says. “I thought, wow, this is really a big international problem, and in Korea the problem was even bigger. So it was a really important issue and if I was going to do something good for our society, then family planning was really something worth dedicating my life to.”

After a brisk two-week training course he was dispatched to the villages. The villagers may have been shocked to hear Shin’s frank reproduction advice, but he was comfortable with the subject. “At high school I studied stockbreeding,” he says. “It wasn’t people, but sexual reproduction issues were familiar so the job was quite apt for me.”

He began by forming “mothers classes” of 20 or so wives in each village. “We just talked about life, like the flood last year, how difficult it is to make a living… how we are short of rice, how good it would be if we had a good harvest,” says Shin. Many families said they were having a hard time, that they were “living because we can’t die”.

“Then I’d say that a good harvest was not the only way out – we could instead reduce consumption. In Korea there is an old saying: ‘Instead of trying to cultivate the paddy field right in front of our gate, it would be better to reduce the number of mouths.’”

The women would often tell him that having children was “up to the skies”, whereupon Shin would open his bag full of condoms, contraceptive pills and vasectomy information. Explaining the nitty gritty to even the willing listeners was not always easy. The villagers often had strong Shamanistic traditions and superstitious beliefs.

“When we talked about condoms, we would show how to use them on a stick,” says Shin, grabbing the golf club from the corner of his office to demonstrate. “But one day I went to a village and there were these condoms hanging on the fence posts. So I asked why they were there. The woman replied that after they had finished doing ‘what married people do’, they had put the condoms on the sticks as contraception.

“At that time, people were very spiritual so they thought it was some kind of Buddhist good fortune tag or something. I couldn’t even laugh,” he says, laughing uproariously now.

At other times, husbands would complain to Shin that their wives had still become pregnant even though the men had been conscientiously taking the pill every day.

Shin was certainly a true believer. In 1979, when he was 33, his wife gave birth to their daughter, Jung-a. “I was crazy about family planning – you could say that my face was a family planning advertisement – so about three months later I told my wife that one daughter was quite enough and I was having a vasectomy,” he says. “The next day I went to work and suddenly my mother popped in for a visit in the office. She grabbed hold of my tie and shouted ‘you’re going to have a vasectomy? Let us both die then!’”

The next day he was summoned to see his father-in-law. “It’s just not right!” the older man shouted, as Shin knelt before him on the floor for more than an hour.

“Eventually, because my knees hurt so badly, I had to give in and agree to have more children,” he says. Two years later they had a son.

In the rest of Korea, Shin and his family- planning colleagues were having great success. By the 1980s, the birth rate had dropped to 2.83 and the government announced it wanted it to fall to 2.1 by 1990.

To help speed the process, those who agreed to have a contraceptive operation received a Won100,000 ($165 at the time) payment and priority to buy apartments. Parents who had more than three children lost government refunds for money spent on their children’s education. Men could even trade some of their army reserve training days for time off to have a free vasectomy. By 1988, to Shin’s disbelief, the ministry of statistics declared that the target had been achieved. But he was too successful. What appeared to be a gentle reduction in the number of births turned out to be steep, exacerbated by migration into the crowded cities, women’s greater participation in the workforce and rapidly increasing living costs.

In keeping with those changes, Koreans started placing more emphasis on education, much of which was done at expensive private cram schools. A decade ago, the average Korean family spent Won183,000 – about 8 per cent of average household income – on private education for each child per month. Now it spends Won310,000 – 14 per cent – a month.

By 1990, the birth rate had fallen to 1.59, creating the fastest ageing society in the world, and Shin’s job description was rewritten. “Before, I was working to restrain population growth. Now it is completely the opposite,” he says. “I focus on pro-marriage education programmes for teenagers, also pro-birth programmes, and then supporting married couples that are infertile.”

But again, Shin’s own family is evidence of the struggle he faces. His daughter Jung-a, now 28, is in no hurry to contribute to population growth, much to her father’s disappointment. “My job title is the director of the low population department, so I establish pro-marriage programmes and I tell young married couples to have children quickly. But I can’t even convince my own daughter to get married,” he says, taking out his key ring which has a photo of his daughter on it that he shows to potential sons-in-law.

“She herself has doubts about whether marriage is really necessary… so I feel like dying,” he says, adding with relief that his son “is up for marrying” once his income is more stable.

To counter women’s increasing participation in the workforce and concerns about the cost of schooling, the government introduced a range of measures such as 90 days’ guaranteed paid maternity leave.

Meanwhile, the federation recently started a more emotional campaign to encourage Koreans to have more babies.

“It doesn’t work if you just say ‘Let’s have babies!’” says Shin. “We’re showing lots of images of people happy because they have a baby and the preciousness of children and family, to touch their emotions.”

The government is now making aggressive efforts to encourage more births. It announced last month it would spend more than Won30,000bn over the next five years to try to raise the birth rate. About 80 per cent of families with children under the age of five are due to receive childcare allowances. The number of nursery schools will be doubled and state schools will receive funding to run their own after-school classes.

The private sector is joining the effort. The Korea Stock Exchange, for example, gives employees a Won5m bonus when they have a third child.

Shin is optimistic that he and his colleagues will be able to convince Koreans to have more babies, just as they persuaded them to have fewer in the 1980s. They are looking to France, which he says has been the most successful at boosting its birthrate.

“They created an environment conducive to having children through education and welfare policies,” says Shin. “Also, their policy was implemented over a long time so there was no immediate financial burden,” he says.

One cause for optimism is that the expected number of births in Korea is relatively high. A survey by the Korean Women’s Research Institute last year found that the average number of children that Koreans want is 2.2.

“So, people are getting married late and even when they do, they’re not having enough babies but that doesn’t mean I’m pessimistic about the future. I still have hope,” he says. “Why? Because of Korean culture – this is a culture where one’s family and family name is important. The second reason is that when we say ‘let’s do something’, we’ll do it. Look at our family planning policy in the past, the speed at which it was achieved was unprecedented.”

Then he puts his key ring back in his pocket and mutters, “If only I could convince my daughter to get married.”

Can you share soup on a first date?

By Anna Fifield
http://www.ft.com/cms/s/0/17ccd8cc-f81a-11da-9481-0000779e2340.html
Published: June 10 2006 03:00 | Last updated: June 10 2006 03:00

Seoul is a city of paradoxes. Aconcrete-block industrial powerhouse encircled by rocky mountains, home to leather-skinned old men dragging newspaper-laden carts between impossibly beautiful girlstoting Gucci bags and metrosexual boys watching TV on their mobile phones.

It often seems that you can witness the past, present and future of this rapidly changing country on just one Seoul street.

But I don’t always love Seoul. When I’ve got sore ribs from being elbowed by the fierce ajuma (housewives) who fight their way through the hordes in Lotte department store, or when it takes 45 minutes to drive 2km, it can be hard to dredge up affection for this city.

And I’m not going to pretend Seoul is a cosmopolitan place – good food and wine are not impossible to come by but the exorbitant prices tend to overwhelm any culinary pleasure. Nor would I suggest it is aesthetically pleasing – the functional apartment blocks and the jogging track beside the Han river have all the atmosphere of an industrial estate. My unscientific calculations suggest there is one tree for every 500,000 residents.

Nevertheless, over the 18 months that Seoul has been my adopted home, I feel pleasantly comforted, my heart breathing a happy sigh, when the plane’s wheels hit the runway at Incheon airport after travelling abroad. I can’t wait to return. And when I’m in London or Wellington or Hong Kong I break out in a smile when I see Korean barbecue restaurants or hear the soothing yos at the end of Korean sentences.

Seoul for me is a vibrant city, a place where it is impossible not to feel alive – and on Saturdays in particular. Apart from going to a palm-fringed beach, it seems there is nothing I can’t do within 30 minutes of leaving my apartment.

I can climb Bukhansan, the rocky mountain in the northern part of the city that is seemingly conquered by all 20m residents of greater Seoul each weekend. Or I can wander around one of the beautiful Chosun dynasty era palaces – such as Deoksugung and Kyungbokgung – in the heart of the city. Or go to Insadong, the artsy area populated with galleries and quaint tea houses. Or survey the works by artists including Mark Rothko, Andy Warhol and Lee Sang-beom at the Samsung-owned Leeum museum.

For some glitz, there is swish Apgujong, where edgy twenty-somethings park their BMWs, then drink martinis in bars that would not be out of place in Manhattan. For cool, there is Hongdae, the university area renowned for its hip music clubs. And for a shopping adventure, there is no beating markets such as Namdaemun, where you can buy everything from writhing eels and whole ginseng roots to reflexology slippers and fake Louis Vuitton bags, all offered with ear-splitting commentary.

But for me, there are two things that make Seoul even more of a fun place to live: the Korean love of eating together and the Korean love of heat.

Food is such an integral part of social interaction that the Korean way of inquiring after someone’s well-being is not to ask “how are you?” but instead to say “have you eaten?”. You can barely walk 50m in Seoul without passing yet another restaurant – often specialising in stews, bulgogi barbecue, ribs, fish or crabs – that at noon and 7pm each day is invariably full.

Walk into any average Korean restaurant and sit on the floor (heated in winter) and the table will automatically fill with panchan, the complimentary side dishes that can include spicy kimchi cabbage, pickled radish, dried fish, sweet potatoes, acorn jelly and vegetable roots that almost make a meal in themselves.

Eating is a communal activity – everyone dips into the bowls with their chopsticks, an activity thattriggered anxieties about hygiene when I first arrived but that I have now embraced. Good friends even slurp soup from the same bowl, a rather intimate form of eating. I sometimes ponder whether it would be OK to share soup on a first date?

After eating panchan, soup and the restaurant’s speciality – often meat cooked in barbecues set into the table – and just at the stage when unwitting foreigners are feeling stuffed, the waiter will ask “And what would you like for your meal?” No Korean eating session is complete without a rice or noodle dish.

There are two stereotypical comparisons made about Koreans. The first – that they are the Italians of Asia – is supported by this love of food and spending time together at the table. The second – the Irish of Asia – is demonstrated through conviviality that is an integral part of socialising.

To shouts of “bottoms up”, you are urged to empty your glass of soju, the Korean rice liquor, then hold it out to be refilled. The drinking inevitably progresses to the consumption of poktanju or bomb drink – a small glass of soju or whisky plopped into a larger glass of beer. By 10 each night, the restaurants and bars of Seoul are filled with the tinkling sound of a small glass rattling within a larger one, the sign that someone has just downed another poktanju.

To me, this kind of typical restaurant experience sums up everything – at the risk of stereotyping – that I love about Koreans: the friendliness, the rowdiness, the tendency to extremes. No Korean goes to a bar for just one drink – it’s all or nothing.

A Korean friend recently explained this tendency to me by reference to the weather – the country’s almostarctic winter, then an unbearably humid summer led Koreans to extremes of emotion, he said.

But to balance out all this drinking and eating, Koreans head to the mountains or to the jimjilbang – a kind of living-room-cum-sauna. In these ubiquitous public resting places, people in unflattering T-shirts and shorts (usually pink for girls, blue for boys) lie around in various hot rooms – charcoal, yellow mud, oxygen – reading, napping or chatting. There are also normal rooms where you can watch DVDs, surf the internet, have massages or eat.

The idea is that you sweat out the stress – and the soju and the kimchi you’ve probably eaten three servings of that day – or let the ions recalibrate your body. Then there is the sauna area where, after washing yourself thoroughly, you sit in the pools or steam room letting the excesses evaporate from your body.

My favourite part of visiting the sauna is the demiri or body scrub, which is not for the faint-hearted (or the modest).

To one side of the sauna, there is usually an area where you can lie naked on a plastic table while a woman (in the women’s sauna, that is) essentially sandpapers your entire body, an experience in which the discomfort is easily trumped by the invigoration.

The first time I had one of these body scrubs I opened my eyes during the sloughing to see what appeared to be long rolls of grey plasticine on the table next to me. It took me a couple of minutes to realise that it was, in fact, rolls of my skin.

These scrubs vary from sauna to sauna but during the process it is not uncommon to have green tea paste or mulched-up cucumber applied to your face, your hair washed, or a person walking along your back.

After being steamed and scrubbed to within an inch of my life, I am almost literally a whole new woman as I walk out, relaxed, on to a cacophonous Seoul street, ready for another round of soju and kimchi.

Ancestor worship

By Y. Euny Hong
http://www.ft.com/cms/s/2/0f721f38-ebb4-11da-b3e2-0000779e2340.html
Published: May 26 2006 15:28 | Last updated: May 26 2006 15:28
hong1
My parents have a very large, very ugly framed photo hanging in their living room. It was snapped by King Gustav VI Adolf of Sweden on one of his famed archaeological visits to Asia in the 1950s and depicts a prehistoric cave drawing of a dragon near the border of China and North Korea. The king presented the photo to my grandfather as a diplomatic gesture. It has been touted as material evidence of the splendour that was my family. I have always found this story odd, but my family has been in decline for more than five centuries, so it is important to cling to these things. This isn’t exactly what one would call raging against the dying of the light.

I can trace my ancestry 28 generations on my father’s side and 26 on my mother’s; in both cases the progenitors were Korean feudal monarchs. Here’s what the family is up to now. An uncle, who was in medical school 40 years ago, is a waiter in a restaurant, as is his son. A cousin began his career as a brilliant architect, but was unwilling to compromise with contractors and clients. While still in his 30s, he gave up on working altogether; he is now an amateur water-diviner. A beauteous aunt, banished by the family for some vague malfeasance that can only be described as excessive commonness, became a hand model in New York before falling in with some dubious rich fellow. She died in a fire in her hotel room. As I grew into adulthood, I came to suspect that she had lit it on purpose. It seems a fitting end for a goddess in her twilight: setting Valhalla aflame and going down with it.

In the US, where I have spent much of my life, most people imagine that the Old World aristocrats living among them lead fabulous lives; that they are like the most popular clique in high school. It was not like that at all for my family or for any of their fellow expat Korean bluebloods who lived here. Most of the ones I know are not gregarious at all; they are antisocial, often agoraphobic.

In his book The Periodic Table, Primo Levi compares his relatives to inert gases, remarking that such gases are also known as “noble” gases – so dubbed because they were thought not to react to things around them; to resist change. Perhaps the metaphor requires updating: noble gases do not live in mortal fear of contamination, whereas noble people do.

Most parents place restrictions on the kinds of friends their children are allowed to have, but few took it to the extremes that my parents and their friends did. From the day I was born until the day I left home for Yale, I never had a friend over at my house for dinner, unless of course their parents were friends of my parents, and they had been dragged along. Birthday parties were one of only a handful of exceptions. My parents’ unimaginative explanation was that they didn’t have liability insurance.

To avoid having to return invitations, they forbade me, on pain of thrashing, to eat or drink anything other than water at a friend’s house. Anyone who started to become close to me was put off sooner or later by my coldness and inability to give or receive hospitality. But no matter, because by early adolescence I had been fully indoctrinated in the belief that anyone outside my family was second-rate. My relatives were my only friends.

I didn’t spend too much time worrying about my future because I was too stupid to understand that while my family might have been symbolically important, it was no longer influential.

Contrary to the common stereotype that all Asian families want their children to become medical doctors, my father instilled in me and my sisters the belief that medicine was a manual trade and therefore far beneath us. He once sniped at his brother-in-law, a physician, “an MD isn’t a real doctor”. By this he meant that only academics should bear the title, as is the case in some parts of Europe. Recently, one of my sisters, somewhat estranged, called my father crying; a debt collector had threatened her with legal action. He bailed her out, as he always did, then wrote to all three of his daughters expressing deep regret for any inculcation on his part that discouraged us to learn a trade.

Upon graduation from Yale with a degree in philosophy, I found myself deeply in debt and, for a good while, unemployable. Reluctant to learn a trade, I often fantasised about being a 19th-century French courtesan, thinking that it was the only profession for which my upbringing, languages and knowledge of opera would not go to waste. Happily, I never pursued that scenario.

It is especially depressing to be an immigrant blueblood in the US if one also happens to be from an ethnic minority. The latter status always trumps the former; a price most of my family were unwilling to pay. My parents first settled here in the late 1960s to pursue their doctorates. They had three daughters, of whom I, at 33, am the eldest. When my parents saw that they had grossly overestimated their ability to live without a sense of entitlement, we moved to Korea. I was 12; my sisters were 10 and eight, respectively. It was a decision that brought extreme misery to us all. My sisters and I all fled to the west at our first opportunity, when it came time to go to university, and to the great disappointment of my father, we never resettled in Korea.

Many of my parents’ high-born Korean colleagues who had emigrated to the US as students repatriated to Korea shortly after we did, out of similar disgust.

Having at one time lived in Germany for several years as a freelance journalist, I find the continentals much more accommodating than Americans of minority bluebloods. Though Europeans are often defensive on this matter, they still take for granted the difficulty of changing one’s status, for good or for ill. They accept, with surprisingly little paranoia, that my background, education and so forth entitle me to certain privileges and opportunities, irrespective of race. Especially indulgent are the French, who coo over the fairy-tale exoticism of a petulant young Korean woman speaking their language. Not that Europeans are less racist than are Americans, mind you; but they have very small east Asian populations; I am never mistaken for a cab-driver, a job-stealer or a terrorist.

My friend Harold (not his real name), a fellow Korean-American, is distantly related to the last Korean royal line. His family is very well known in Korea, and is far more illustrious than mine. His entire family prepped at Andover (the school that moulded the Bushes) and attended Ivy League universities; they are financially comfortable but discreet about it, genteel and well-mannered. Harold now lives in Manhattan. A few years ago he entered a friend’s office building and was stopped by the concierge, who assumed that he was a Chinese-food delivery boy and told him to re-enter the building through the back door.

Families like mine and Harold’s are approaching obsolescence in our home country as well. My family’s heyday, in fact, had ceased by the time the last Plantagenet breathed his last.

It’s not modernity’s fault that my family has a poor work ethic. And despite all my father’s claims, there was never a time in the history of the world when our way of doing things would have fallen into the category of how ladies and gentlemen should behave. My family is belligerent with subordinates; we make waitresses cry.

After my family lost their feudal monarchies hundreds of years ago in some sort of skirmish with rival lords, they became court advisers to subsequent kings. Confucianism, which was in full swing by the 16th century, was the second big blow to my family line. Confucianism heavily emphasised scholarship, and consequently government posts were determined by exams. Fortunately for my ancestors, it was not a true meritocracy: one had to be of noble birth to sit for the exams. So my family was still protected, somewhat. Within a very rarefied environment, they were able to survive.

When the Japanese colonised Korea in 1919, it was not by invasion. At the time Korea was being courted by several world powers simultaneously, it had to choose one coloniser, or have the choice made for them. People like my ancestors advised the Korean royal family to hand the country peaceably over to Japan. Many Korean nobles believed they stood a better chance of retaining their power under the Japanese than the west. The Japanese government rewarded my relatives by giving them positions as viceroys, legal advisers and so forth, but with greatly limited autonomy.

When, at the end of the second world war, Japan relinquished Korea, the latter formed an independent republic. The new regime branded many of my ancestors as traitors; some were hanged, lynched or kidnapped. Very fortunately for me, my paternal grandfather was just unimportant enough to survive. Under the Japanese he had been a viceroy for a remote province in what is now North Korea; offing him just wasn’t worth the bother.

My grandfather had a stroke of luck. The purging left few people qualified to run a government, so imperial loyalists like him had to be given posts in the new government (a fate that also befell post-Third Reich Germany). He became a presidential cabinet minister.

Still, democracy proved the bluebloods’ greatest nightmare. My mother’s family lands were seized by the government and redistributed to the poor. Faced with the prospect of competing with the public at large, my family found itself unequipped for the battle of life.

My father failed two classes at the elite Seoul National University. The way he tells the story, he did it deliberately. “It was called a double-holster,” he would say. It was a way of distinguishing himself from the common upstarts who had been admitted to university based entirely on their exam scores. Those poor slobs would have to endure the humiliation of interviews with strangers in order to get jobs; my father and his family had never had a job interview in their lives.
hong2
There was just one problem: he wanted to go on to graduate school in the US. He was rather shocked to learn that the Americans did not recognise the symmetry and sublime gentility of two “F”s. American brahmins did have a tradition known as the “Gentleman’s C”, but it didn’t apply to foreigners, and at any rate an F is not a C. With some dues-paying, he got his doctorate and became a reasonably successful economist, first in the US, then in Korea. Still, he has always considered himself a failure. He is inconsolably upset that he can’t have the words “cabinet minister” chiselled into his tombstone after he’s dead.

Which brings us to the present day: we are finished.

Korea is now in its Fifth Republic, though it has only been a democracy for two decades.

An uncle in Seoul continues to wear a tiepin with the logo of his elite secondary school, though the school has long ceased to exist; it is his defiant “piss off” to the changing world around him. But he, like the rest of us, is a museum piece.

The Korean presidential election of 2002 was the most recent, and possibly final, cut of all. Lee Hwe-Chang, the fellow who lost, had gone to the same schools as my father. In fact, my father served as an ancillary adviser to Lee during his campaign. The Korean people, however, found Lee too patrician. When he lost, it was the shot heard round the world. Around my family’s world, at any rate.

President Roh Mu-Hyun, who won and who still occupies that post, is a man of the people. He very nearly wants to tar and feather families like mine. He has suggested dismantling Seoul National University, the school that educated most of my family for generations, on the grounds that it fosters an oligarchy. If he gets his way, the school will be split up and lose its grande-ecole status, as it were. My father saw the new regime as a sign of our family’s permanent disenfranchisement. He fell into a deep depression from which neither he nor the rest of my family will recover. To fill the void, he took up and dropped various hobbies. At one point, he suggested to my mother that the two of them fill their lives by taking in foster babies. (My mother’s horrified response: “We’re too old.”) He finally got out of his funk by burying himself in the writing of an economics textbook.

Still, we will never be the same. Evidence of my family’s acceptance of defeat is that no one seems to care any longer whether any of the family newborns are boys. My eldest male cousin, who would have been the head of the family for my generation, died of cancer 10 years ago. His father had placed many of the family holdings in this son’s name, because this practice seemed to have the magical effect of making the properties rise in value; using any of his other children’s names seemed to make prices stagnate. Because of a legal technicality, and the Korean tradition of honouring common law over personal wills, my cousin’s widow received a great deal of my family’s property, including the family cemetery. This would not be such a serious problem except for the fact that she has cut herself off from the Hongs. She eventually ceded the cemetery, after my father gave her a very hard time. So occasionally, the family bullying tradition does have its merits.

Still, having the cemetery is less important to my father’s generation than ensuring that someone will maintain it and organise the rituals of ancestor worship. There’s no one left. The next male in line is the aforementioned water diviner, who seems to have become Christian, which precludes it. The male after that is from yet another estranged branch of the family; the father-son waiter duo. The rest of my cousins are in the US. As for my generation, everyone keeps popping out girls – which, some say, is what happens to the weak. Our family line, in many ways, is finished.

In theory, the way our family has handled such tragedies is by convincing itself that bad luck was somehow a good thing. Whenever I have a setback of any kind, my parents repeat a fable they have been repeating since I was a child. The story tells of a farmer with a wife and son. One day a beautiful stallion wandered into their grounds; they kept it, and the villagers cried, “How lucky you are!” Then one day, the farmer’s son fell from the horse and was crippled, and the villagers cried, “How unlucky you are!” But soon a rival feudal lord came around to the village to recruit all able-bodied men into his army. Because the farmer’s son was crippled, he was left alone. “How lucky you are!” the villagers cried. The story has no end, in theory. Its veracity was borne out by several family anecdotes.

One of these is the aforementioned story of how my grandfather’s low bureaucratic rank under the Japanese prevented his execution in the subsequent Korean republic. Another is the fact that my father missed out on speculative investments in Korea for which his friends got in on the ground floor. This distressed him greatly; he blamed my mother for delaying our repatriation to Korea; if not for her, we would be making a killing, he said. It turned out, however, that the investments were fraudulent, and some of his friends are now in prison.

The lesson that my sisters and I were taught to draw from this are: (1) only idiots get excited about things, for good or for ill, and (2) good luck is actually bad luck, and vice versa.

So what happens when good luck is really bad luck, and fair is foul, and foul is fair? All words are emptied of meaning. A family can only pretend for so long that it has a healthy appetite for the absurd; soon indifference begets the desire to cease to be, and then the noble really do become inert.

Y. Euny Hong’s first novel, “Kept: A Comedy of Sex and Manners”, based partly on her family, will be published in the US by Simon & Schuster later this year.