The United States maintains about 28,500 troops in the ROK and South Korea is included under the U. S. “nuclear umbrella. ” Second, Washington and Seoul cooperate over how to deal with the challenges posed by North Korea. Third, South Korea’s emergence as a global player on a number of issues has provided greater opportunities for the two countries’ governments, businesses, and private organizations to interact and cooperate with one another. Fourth, the two countries’ economies are closely entwined and are joined by the Korea-U. S.
Free Trade Agreement (KORUS FTA), the United States’ second-largest FTA. South Korea is the United States’ seventh-largest trading partner. The United States is South Korea’s third-largest trading partner. Since late 2008, relations between the United States and South Korea (known officially as the Republic of Korea, or ROK) have been arguably at their best state in decades. Much of the current closeness between Seoul and Washington is due to the convergence of interests between the Obama Administration and the government of former President Lee Myung-bak, who left office at the end of February 2013.
The overall U. S. -South Korean relationship is expected to remain healthy under new President Park Geun-hye, although she has hinted at policy moves that could cause intense bilateral discussions, particularly over North Korea policy and the renewal of a civilian nuclear cooperation agreement. Strategic Cooperation and the U. S. -ROK Alliance Dealing with North Korea is the dominant strategic element of the U. S. -South Korean relationship. The two countries’ coordination over North Korea was exceptionally close under the Lee and Obama Administrations.
Bilateral cooperation is expected to work well under President Park, but it remains to be seen whether her calls for a new combination of toughness and flexibility toward Pyongyang will challenge Washington and Seoul’s ability to coordinate their policies. Perhaps most notably, Park has proposed a number of confidence-building measures with Pyongyang in order to create a “new era” on the Korean Peninsula. Two key questions will be the extent to which her government will link these initiatives to progress on denuclearization, which is the United States’ top concern, and how much emphasis she will give to North Korea’s human rights record.
Likewise, an issue for the Obama Administration and Members of Congress is to what extent they will support—or, not oppose—initiatives by Park to expand inter-Korean relations. Since 2009, the United States and South Korea have accelerated steps to transform the U. S. -ROK alliance’s primary purpose from one of defending against a North Korean attack to a regional and even global partnership. Washington and Seoul have announced a “Strategic Alliance 2015” plan to relocate U. S. troops on the Peninsula and boost ROK defense capabilities.
Some Members of Congress have criticized the relocation plans, and Congress has cut funds for a related initiative that would “normalize” the tours of U. S. troops in South Korea by lengthening their stays and allowing family members to accompany them. In the first half of 2013, the United States and South Korea are expected to negotiate a new Special Measures Agreement (SMA) that includes always-contentious discussions over how much South Korea should pay to offset the cost of stationing U. S. forces in Korea. Developments in Late 2012 and Early 2013 From 2009-2012, U.
S. -South Korea relations were exceptionally strong, as evidenced by close coordination over North Korea policy, by the entry into force of a bilateral trade agreement in March 2012, and by the positive personal relationship forged by Presidents Barack Obama and Lee Myung-bak. It remains to be seen whether this combination of shared interests, priorities, and personal chemistry will continue under South Korea’s new President, Park Geun-hye, who took office in February 2013. Park is scheduled to address a joint session of Congress on May 8, the day after she nd President Obama hold their first summit meeting. 2013 is the 60th anniversary of the U. S. -ROK alliance. Park Geun-hye Wins South Korean Presidential Election In December 2012, South Koreans narrowly elected the 61-year-old Park, the candidate of the ruling conservative Saenuri (“New Frontier”) Party (NFP), as president. She will serve until February 2018. By law, South Korean presidents serve a single five-year term. Park defeated Moon Jae-in, the candidate of the opposition, left-of-center Minjoo (“Democratic United”) Party (DUP), capturing 51. % of the vote, compared with Moon’s 48%. Park not only became the first woman to be elected as South Korea’s president, but also the first presidential candidate to receive more than 50% of the vote since South Korea ended nearly three decades of authoritarian rule in 1988. At nearly 76%, turnout was the highest in over a decade. The substance of the campaign revolved around overcoming South Korea’s economic difficulties and strengthening the social safety net, issues that Park championed in what many analysts regard as a successful attempt to co-opt the DUP’s agenda.
The voting revealed stark demographic schisms in South Korean society, with voters over 50 overwhelmingly choosing Park and those under 40 favoring Moon by a wide margin. In general, Park’s victory makes it more likely that South Korea-U. S. relations will remain relatively strong. Moon had advocated a number of policies that would likely have placed South Korea and the United States at odds. In particular, he had called for renegotiation of provisions of the KORUS FTA and for South Korea to return to a policy of largely unconditional engagement with North Korea.
On most major issues Park generally appears to have a similar outlook to the Obama Administration, although as discussed in the North Korea and civilian nuclear agreement sections below, there are some areas in which the two sides are expected to take different approaches. Park is the daughter of the late Park Chung-hee, who ruled South Korea from the time he seized power in a 1961 military coup until 1979. State of the Alliance and Outlook Under Park During Lee Myung-bak’s term, the U. S. ROK alliance came to be labeled by U. S. officials as a “linchpin” of stability and security in the Asia-Pacific. This designation reflected an overall deepening of defense ties and joint coordination, particularly in response to provocations from North Korea. Joint statements issued from a series of high-level meetings emphasized the commitment to modernize and expand the alliance while reaffirming the maintenance of current U. S. troop levels on the peninsula and the U. S. security guarantee to protect South Korea.
In 2012, these occasions included a June “2+2” meeting of the foreign and defense ministers from both countries and a follow-up U. S. -ROK Security Consultative Meeting between Defense Secretary Leon Panetta and his counterpart. Considered by most analysts to be a strong supporter of the alliance, Park is expected to continue close defense coordination with the United States despite her campaign promises to engage North Korea more than her predecessor. For both sides, however, the alliance faces a range of budgetary issues.
The new budget approved by the South Korean National Assembly in January 2013 cut proposed defense procurement funding in order to pay for social programs that Park had pledged to establish during her campaign. The vote drew complaints from outgoing Lee Administration security officials and could hinder some cooperative efforts with the United States. The U. S. Congress has also voiced concern about the price tag for the troop relocation and tour normalization plans; the FY2012 and FY2013 National Defense Authorization Acts freeze funding for tour normalization. For more, see the “Security Relations and the U. S. -ROK Alliance. ”) In addition, budget constraints could intensify upcoming negotiations for Korean cost- sharing; the current Special Measures Agreement expires on January 1, 2014. In April 2013 the Senate Armed Services Committee issued a report that examined U. S. costs associated with the American military presence overseas, including in South Korea. 13 The report was critical of the has been fabricated into fuel or irradiated in a reactor with U. S. technology.
The majority of South Korea’s spent fuel would need U. S. consent before it could be reprocessed. U. S. -South Korea Relations rising costs of relocation plans, as well as the South Korean contribution to those costs. It also found weak oversight of the projects, due to limited review by the Army, the Pentagon, and Pacific Command, in addition to no authorization from Congress. Background on U. S. -South Korea Relations Overview While the U. S. -South Korea relationship is highly complex and multifaceted, ive factors arguably drive the scope and state of relations between the two allies: •the challenges posed by North Korea, particularly its weapons of mass destruction programs and perceptions in Washington and Seoul of whether the Kim Jong-un regime poses a threat, through its belligerence and/or the risk of its collapse; •the growing desire of South Korean leaders to use the country’s middle power status to play a larger regional and, more recently, global role; U. S. -South Korea Relations •China’s rising influence in Northeast Asia, which has become an increasingly integral consideration in many aspects of U.
S. -South Korea strategic and (to a lesser extent) economic policymaking; •South Korea’s transformation into one of the world’s leading economies—with a very strong export-oriented industrial base—which has led to an expansion of trade disputes and helped drive the two countries’ decision to sign a free trade agreement; and •South Korea’s continued democratization, which has raised the importance of public opinion in Seoul’s foreign policy. Additionally, while people-to-people ties generally do not directly affect matters of “high” politics in bilateral relations, the presence of over 1. million Korean-Americans and the hundreds of thousands of trips taken annually between the two countries has helped cement the two countries together. Members of Congress tend be interested in South Korea-related issues because of bilateral cooperation over North Korea, a desire to oversee the management of the U. S. -South Korea alliance, South Korea’s growing importance on various global issues, deep bilateral economic ties, and the interests of many Korean-Americans.
The 112th Congress held over 15 hearings directly related to South and North Korea. Since late 2008, relations between the United States and South Korea have been arguably at their best state in decades, if not ever. Coordination over North Korea policy under the Obama Administration and the former government of Lee Myung-bak was particularly close, with one high-level official in late 2009 describing the two countries as being “not just on the same page, but on the same paragraph. 18 At a summit in June 2009, the two parties signed a “Joint Vision” statement that foresees the transformation of the alliance’s purpose from one of primarily defending against a North Korean attack to a regional and even global alliance, in which Washington and Seoul cooperate on a myriad of issues, including climate change, energy security, terrorism, economic development, and human rights promotion, as well as peacekeeping and the stabilization of post-conflict situations. Much of the U. S. South Korean closeness was due to the policies of President Lee, including his determination after assuming office in 2008 to improve Seoul’s relations with Washington. However, by the end of his term, there was considerable dissatisfaction in South Korea with many of Lee’s policies, and he exited office with public approval ratings in the 25%–35% level. On North Korea, for instance, the United States and South Korea often have different priorities, with many if not most South Koreans generally putting more emphasis on regional stability than on deterring nuclear proliferation, the top U. S. riority. These differences have been masked by North Korea’s general belligerence since early 2009 and to a large extent were negated by President Lee’s consistent stance that progress on the nuclear issue is a prerequisite for improvements in many areas of North-South relations. As mentioned above, while bilateral coordination over North Korea policy is expected to remain strong under President Park, it remains to be seen whether she will maintain the same linkage. Moreover, while large majorities of South Koreans say they value the U. S. -ROK alliance, many South Koreans are resentful of U. S. nfluence and chafe when they feel their leaders offer too many concessions to the United States. South Koreans also tend to be wary of being drawn into U. S. policies that antagonize China. These critiques are particularly articulated by Korea’s progressive groups, who bitterly opposed much of President Lee’s policy agenda and his governing style. They can be expected to have the same attitudes toward President Park. Historical Background The United States and South Korea have been allies since the United States intervened on the Korean Peninsula in 1950 and fought to repel a North Korean takeover of South Korea. Over 33,000 U.
S. troops were killed and over 100,000 were wounded during the three-year conflict. On October 1, 1953, a little more than two months after the parties to the conflict signed an armistice agreement, the United States and South Korea signed a Mutual Defense Treaty, which provides that if either party is attacked by a third country, the other party will act to meet the common danger. The United States maintains about 28,500 troops in the ROK to supplement the 650,000- strong South Korean armed forces. South Korea deployed troops to support the U. S. -led military campaign in Vietnam. South Korea subsequently has assisted U.
S. deployments in other conflicts, most recently by deploying over 3,000 troops to play a non-combat role in Iraq and over 300 non- combat troops to Afghanistan. Beginning in the 1960s, rapid economic growth propelled South Korea into the ranks of the world’s largest industrialized countries. For nearly two decades, South Korea has been one of the 18 December 2009 CRS interview in Seoul. United States’ largest trading partners. Economic growth, coupled with South Korea’s transformation in the late 1980s from a dictatorship to a democracy also has helped transform the ROK into a mid-level regional power that can influence U.
S. policy in Northeast Asia, particularly the United States’ approach toward North Korea. Security Relations and the U. S. -ROK Alliance The United States and South Korea are allies under the 1953 Mutual Defense Treaty. Under the agreement, U. S. military personnel have maintained a continuous presence on the peninsula since the conclusion of the Korean War and are committed to help South Korea defend itself, particularly against any aggression from the North. The United States maintains about 28,500 troops in the ROK. South Korea is included under the U.
S. “nuclear umbrella,” also known as “extended deterrence” that applies to other non-nuclear U. S. allies as well. In an October 2011 visit to South Korea, Secretary of Defense Leon Panetta reassured South Korea and Japan of the strength of the U. S. security commitment amidst uncertainty over the size of possible cuts to the U. S. military budget. Among other items, Panetta reiterated the Obama Administration’s commitment to maintain the current U. S. troop level in Korea. Since 2009, the two sides have accelerated steps to transform the U. S. ROK alliance, broadening it from its primary purpose of defending against a North Korean attack to a regional and even global partnership. At the same time, provocations from North Korea have propelled more integrated bilateral planning for responding to possible contingencies. Increasingly advanced joint military exercises have reinforced the enhanced defense partnership. According to U. S. officials, defense coordination at the working level as well as at the ministerial level has been consistent and productive. In June 2012, the two sides held their second so-called “2+2” meeting between the U. S.
Secretary of State and Secretary of Defense and their South Korean counterparts. Among other policy areas, the joint statement emphasized new initiatives on cyber security and missile defense, and the United States reiterated its commitment to maintain current troop levels. The first ever “2+2” meeting in July 2010, which featured a visit to the Demilitarized Zone (DMZ) by Secretary of State Hillary Clinton and Secretary of Defense Robert Gates, commemorated the 60th anniversary of the Korean War. The massive joint military exercises held immediately after the U. S. -South Korea Relations meeting, featuring a U.
S. aircraft carrier and F-22 aircraft, signaled to North Korea and others that the American commitment to Korea remains strong. In the past, issues surrounding U. S. troop deployments have been a flashpoint for public disapproval of the military alliance. Recently, however, analysts point out that even potential irritants to the relationship have been dealt with skillfully by the military officials in charge. In 2011, United States Forces Korea (USFK) and South Korean environmental officials worked expeditiously to address public concern about buried chemicals on U. S. military bases from the post-Korean War era.
Also in 2011, the USFK handed over a U. S. soldier accused of raping a South Korean woman to the Korean authorities, in addition to issuing high-level apologies and pledging full cooperation. Although both of these examples have drawn criticism and sparked renewed interest in revising the U. S. -ROK status of forces agreement (SOFA), it appears as though officials on both sides have been able to quell distrust of the U. S. military among the Korean public. Budgetary and Operational Challenges Despite these indicators of strength, the alliance faces a host of significant challenges in the months and years ahead.
Delays and increasing price tags have slowed the implementation of agreements to relocate the U. S. troop presence in South Korea. (See “U. S. Alliance and ROK Defense Reform Plans” below. ) Differences over burden sharing remain, but analysts note that these issues tend to be prevalent in all alliance relationships. Although the political atmospherics of the alliance have been positive, defense analysts note that the Lee Administration slowed significantly the defense budget increases planned under the earlier Roh Administration. U. S. Alliance and ROK Defense Reform Plans
Current security developments are taking place in the context of several concurrent defense plans. The June 2009 Obama-Lee summit produced the broadly conceived “Joint Vision for the Alliance,” which promised to enhance and globalize future defense cooperation. After the decision to delay the transfer of wartime operational control (Opcon) from U. S. to ROK forces, the operational “Strategic Alliance 2015” roadmap (announced in September 2010) outlined the new transition, including a path forward for improvements in ROK capabilities and changes U. S. troop relocation and tour normalization.
The U. S. military is also undergoing a broad transformation of its forces in the region; the 8th Army is moving toward becoming a war fighting headquarters that can deploy to other areas of the world while still serving as a deterrent to any possible aggression from North Korea. Meanwhile, South Korea’s Defense Reform 2020 bill passed by the National Assembly in 2006 laid out a 15-year, 621 trillion won (about $550 million) investment that aimed to reduce the number of ROK troops while developing a high-tech force and strengthening the Joint Chiefs of Staff system.
In addition, a plan known as “Defense Reformation Plan 307,” is intended to enhance collaboration among the ROK military branches. Driven by the North Korean provocations in 2010, the new “proactive deterrence” approach calls for a more flexible posture to respond to future attacks, as opposed to the “total war” scenario that has driven much of Seoul’s defense planning in the past. However, political wrangling in the National Assembly blocked the passage of a set of defense reform bills in April 2012, leaving the future of reform unclear.
The bills, which focused on overhauling the military command system, have been pending in the parliamentary body for over a year. In addition, the budget passed by the National Assembly in January 2013 cut proposed funding for military procurement but still raised the overall defense budget by 3. 8% over 2012 levels. The “proactive deterrence” posture—in other words, a greater willingness among South Korean leaders to countenance the use of force against North Korea—has made some analysts and planners more concerned about the possibility that a small-scale North Korean provocation could escalate.
Former President Lee has said that after the Yeonpyeong-do attack, he asked China to tell North Korea that Seoul would respond to a future attack by mobilizing its military and by retaliating against North Korea’s supporting bases, not just the source of the attack. Lee also U. S. -South Korea Relations relaxed the rules of engagement to allow frontline commanders greater freedom to respond to a North Korean attack without first asking permission from the military chain of command. U. S. defense officials insist that the exceedingly close day-to-day coordination in the alliance ensures that U.
S. -ROK communication would be strong in the event of a new contingency. In July 2011, General Walter Sharp, then-U. S. commander of the Combined Forces Command (CFC) in South Korea, confirmed to press outlets that the alliance had developed coordinated plans for countermeasures against North Korean aggression. Economic Relations South Korea and the United States are major economic partners. In 2012, two-way trade between the two countries totaled around $100 billion (see Table 1), making South Korea the United States’ seventh-largest trading partner. For some western states and U. S. ectors, the South Korean market is even more important. South Korea is far more dependent economically on the United States than the United States is on South Korea. In 2012, the United States was South Korea’s third-largest trading partner, second-largest export market, and the third-largest source of imports. It was among South Korea’s largest suppliers of foreign direct investment (FDI). As both economies have become more integrated with the world economy, economic interdependence has become more complex and attenuated, particularly as the United States’ economic importance to South Korea has declined relative to other major powers.
In 2003, China for the first time displaced the United States from its perennial place as South Korea’s number one trading partner. In the mid-2000s, Japan overtook the United States, and since that time South Korean annual trade with the 27-member European Union has caught up with ROK-U. S. trade. In October 2011, the House and Senate passed H. R. 3080, the United States-Korea Free Trade Agreement Implementation Act, which was subsequently signed by President Obama. 4 The law authorized the President to implement the KORUS FTA by an exchange of notes with South Korea, after he determined that South Korea had taken the necessary measures to implement its obligations under the agreement. On March 6, 2012, the President issued a proclamation ordering federal agencies to implement the KORUS FTA, and the agreement entered into force on March 15, 2012. The George W. Bush and Roh Administrations initiated the KORUS FTA negotiations in 2006 and signed an agreement in June 2007. Implementation of the KORUS FTA Upon the date of implementation of the KORUS FTA, 82% of U.
S. tariff lines and 80% of South Korean tariff lines were tariff free in U. S. -South Korean trade, whereas prior to the KORUS FTA, 38% of U. S. tariff lines and 13% of South Korean tariff lines were duty free. By the tenth year of the agreement, the figures will rise to an estimated 99% and 98%, respectively, with tariff elimination occurring in stages and the most sensitive products having the longest phase-out periods. Non-tariff barriers in goods trade and barriers in services trade and foreign investment are to be reduced or eliminated under the KORUS FTA.
At the time of this writing, the KORUS FTA had been in force for just over one year; therefore it is too early to ascertain its impact on U. S. -South Korean bilateral trade. Nevertheless, Table 1 53 Iran data from Economist Intelligence Unit, Iran Country Report, April 2012. 54 The House vote was 278-151. In the Senate, the vote was 83-15. U. S. -South Korea Relations below presents U. S. -South Korea merchandise trade data for selected years, including the first 11 months of 2012 (the latest data available) and comparative data for the corresponding period in 2011. The data indicate that total trade grew by 1. % in 2012 from 2011, continuing a trend that began in 2010 as the United States, South Korea, and other major economies recovered from the global downturn. U. S. exports to South Korea declined by 2. 8% during that period, while U. S. imports increased by 4. 1%. As part of the implementation process, 19 binational committees and working groups were formed to implement the various chapters of the agreement. About one half of those bodies have met at least once since the March 15, 2012, entry-into-force date. The committees on pharmaceuticals and medical devices and the committee on small and medium-sized enterprises have met twice. Autos
A major issue in the negotiations leading up to the KORUS FTA concerned access to the South Korean market for exports of U. S. -made cars. Under the agreement, the U. S. tariff of 2. 5% on South Korean cars will be eliminated in the fifth year of the agreement. The South Korean tariff of 8% was reduced to 4% when the agreement entered into force and will be eliminated completely in the fifth year of the agreement. South Korea also agreed to allow U. S. -based car manufacturers to sell in South Korea up to 25,000 cars per year per manufacturer as long as they met U. S. safety and environmental standards. This concession addressed U.
S. manufacturers’ concern that having to meet South Korean standards added costs to the production of cars for the South Korean market, placing them at a price disadvantage vis-a-vis domestic producers. In 2012, sales of U. S. -made cars in South Korea increased sharply. For example, in 2012, sales of cars made by Ford increased 22. 5%, sales of cars made by Chrysler increased 24. 3%, and sales of manufacturing equipment; specialized cars made by Cadillac increased 32. 4%, compared to sales in 2011. 55 It is not clear to what degree the increases in sales can be attributed to the KORUS FTA or to other factors.
The American Chamber of Commerce in Korea has claimed that lower tariffs and consumption taxes on U. S. cars and the concession on safety and environmental standards have allowed manufacturers to reduce prices on their cars in the South Korean market, making them more competitive. Two auto-related issues have emerged as the two sides implement the KORUS FTA. In one case, the South Korean government has proposed introducing new safety regulations for replacement parts even if the cars in which they would be used have qualified under the 25,000 equivalency concession.
Assistant USTR (AUSTR) Wendy Cutler indicated that the issue is the subject of discussion between the two sides. In the second case, the South Korean government has proposed to introduce a program to reward South Korean buyers of low-emission vehicles with a tax credit and to penalize buyers of high-emission vehicles with a tax penalty (the so-called “bonus-malus” system). U. S. and European car manufacturers claim that this tax program would make it more difficult for them to sell their cars in South Korea and would undermine the benefits that were negotiated under the KORUS FTA and the Korea-EU FTA, which went into effect in 2011.
According the AUSTR Wendy Cutler, South Korea agreed to a two-year grace period and to consult further on the issue. Pharmaceuticals and Medical Devices Under the KORUS FTA, South Korea agreed to form an independent review board (IRB) that would allow appeals from pharmaceutical and medical device manufacturers on South Korean government policies pertaining to reimbursement under the government health insurance program. South Korea has established an IRB. However, the government was going to allow up to 60 days for the review.
The government had indicated that the window would apply to all decisions, including reimbursement prices for individual medicines. U. S. manufacturers said that 60 days would be too long and could inhibit their ability to market their products. South Korea agreed to make the decision period 20 days on individual pricing decisions and 60 days for decisions on overall reimbursement policies. The issue remains the subject of additional discussions. Other Issues Both South Korea and the United States have made it a priority to ensure that small- and medium- sized companies are able to take advantage of the KORUS FTA.
They have formed a binational committee to explore efforts to do so. U. S. officials will be monitoring South Korea’s implementation of a provision under the KORUS FTA that allows for the transfer of financial and other data freely from one country to the other. This provision is to go into effect two years after the agreement entered into force (i. e. , March 15, 2014). In 2011 and 2012, members of South Korea’s largest opposition party, the Democratic United Party (DUP) called for renegotiating parts of the KORUS FTA.
The most prominent issue for the DUP was the agreement’s investor-state dispute provisions. 60 However, the push to renegotiate this and other parts of the KORUS FTA appears to have faded significantly following Park’s defeat of the DUP’s presidential candidate in December, combined with the DUP’s disappointing showing in parliamentary elections earlier in the year. Some analysts have called on South Korea to join the 11-nation Trans-Pacific Partnership (TPP) free trade agreement negotiations, in which the United States is participating.
The TPP talks are a key element of the Obama Administration’s strategy of “rebalancing” to Asia by pushing for more internationally-based rules and norms in the region. To date, South Korea has not indicated a desire to join the talks, preferring to concentrate on implementing the recently enacted FTAs with the United States and European Union, and on negotiating a bilateral FTA with China and a trilateral FTA with China and Japan. South Korea’s Economic Performance South Korea has recorded relatively strong economic growth since the global financial crisis began in late 2008.
After GDP real growth declined to 0. 2% in 2009, the South Korean economy roared back and grew by 6. 2% in 2010. Initially, the crisis hit the South Korean economy hard because of its heavy reliance on international trade and its banks’ heavy borrowing from abroad. The Lee government took strong countermeasures to blunt the crisis’ impact, engaging in a series of fiscal stimulus actions worth about 6% of the country’s 2008 GDP, by some measures the largest such package in the Organization for Economic Cooperation and Development (OECD) group of industrialized countries.
The Bank of Korea (BOK) also acted aggressively, lowering interest rates from over 5% to a record low 2% and engaging in a range of other operations, estimated by the OECD to be worth over 2. 5% of GDP, designed to infuse liquidity in the Korean economy. The BOK negotiated currency swap agreements with the United States, Japan, and China. 61 The South Korean won, after depreciating to around 1,500 won/dollar—a fall of nearly one-third from early 2008 to early 2009—has gradually strengthened against the dollar, to the 1,000-1,100 won/dollar range.
The won’s depreciation in 2008 and 2009 helped to stimulate South Korea’s economic recovery by making its exports cheaper relative to many other currencies, particularly the Japanese yen. Since the second half of 2010, South Korean real GDP growth has slowed, in part due to a slowdown in its foreign trade and the won’s appreciation. South Korea’s economy is highly dependent upon capital inflows and exports, the latter of which are equal to around half of the country’s annual GDP.
Thus, South Korean officials have expressed concern that their country could be hit hard by a recurrence of a major European debt crisis, the possibility of a “double- dip” recession in the United States, and a slowing of growth in China. GDP growth in 2011 was 3. 6% and is estimated to have fallen close to 2% for 2012. 60 Similar to other U. S. FTAs, the KORUS FTA establishes procedures for the settlement of investor-state disputes involving investments covered under the agreement where the investor from one partner-country alleges that the government of the other partner-country is violating his rights under the FTA.
The FTA stipulates that the two parties should try to first resolve the dispute through consultations and negotiations. But, if that does not work, the agreement provides for arbitration procedures and the establishment of tribunals. 61 The October 2008 swap agreement with the U. S. Federal Reserve gave Bank of Korea access to up to $30 billion in US dollar funds in exchange for won. Although South Korea’s economic performance may look favorable to many around the world, former President Lee’s handling of economic issues has come under criticism from many inside South Korea.
Complaints have risen in recent years that only Korea’s rich individuals and large conglomerates (called chaebol) have benefitted from the country’s growth since the 2008-2009 slowdown. The 2012 presidential election was largely fought over the issues of governance (in the wake of a number of corruption scandals), social welfare, and rising income inequality. Leading figures in both parties, as well as President Park and former President Lee, have proposed ways to expand South Korea’s social safety net. Growth is expected to be in the 3% range for 2013.
As mentioned above, South Korea’s 2012 presidential campaign focused on economic and social welfare issues. Park Geun-hye has made economic democratization and raising South Korea’s science and technology “to world-class levels” two of her priorities. South Korean Politics A Short History of South Korean Presidential Changes For most of the first four decades after the country was founded in 1948, South Korea was ruled by authoritarian governments. The most important of these was led by Park Chung-hee, a general who seized power in a military coup in 1961 and ruled until he was murdered by his intelligence chief in 1979.
The legacy of Park, President Park Geun-hye’s father, is a controversial one. On the one hand, he orchestrated the industrialization of South Korea that transformed the country from one of the world’s poorest. On the other hand, he ruled with an iron hand and brutally dealt with real and perceived opponents, be they opposition politicians, labor activists, or civil society leaders. For instance, in the early 1970s South Korean government agents twice tried to kill then- opposition leader Kim Dae-jung, who in the second attempt was saved only by U. S. intervention.
The divisions that opened under Park continue to be felt today. Conservative South Koreans tend to emphasize his economic achievements, while progressives focus on his human rights abuses. Ever since the mid-1980s, when widespread anti-government protests forced the country’s military rulers to enact sweeping democratic reforms, democratic institutions and traditions have deepened in South Korea. In 1997, long-time dissident Kim Dae-jung was elected to the presidency, the first time an opposition party had prevailed in a South Korean presidential election.
In December 2002, Kim was succeeded by a member of his left-of-center party: Roh Moo-hyun, a self-educated former human rights lawyer who emerged from relative obscurity to defeat establishment candidates in both the primary and general elections. Roh campaigned on a platform of reform—reform of Korean politics, economic policymaking, and U. S. -ROK relations. He was elected in part because of his embrace of massive anti-American protests that ensued after a U. S. military vehicle killed two Korean schoolgirls in 2002.
Like Kim Dae-jung, Roh pursued a “sunshine policy” of largely unconditional engagement with North Korea that clashed with the harder policy line pursued by the Bush Administration until late 2006. Roh also alarmed U. S. policymakers by speaking of a desire that South Korea should play a “balancing” role among China, the United States, and Japan in Northeast Asia. Despite this, under Roh’s tenure, South Korea deployed over 3,000 non-combat troops to Iraq—the third-largest contingent in the international coalition—and the two sides initiated and signed the KORUS FTA.
In the December 2007 election, former Seoul mayor Lee Myung-bak’s victory restored conservatives to the presidency. During the final two years of his presidency, Lee’s public approval ratings fell to the 25%-35% level, driven down by—among other factors—a series of scandals surrounding some of his associates and family members, and by an increasing concern among more Koreans about widening income disparities between the wealthy and the rest of society.
Since the end of military rule in 1988, every former South Korean president has been involved in scandal and in some cases criminal investigation within several months of leaving office. It remains to be seen if the abuse-of-power allegations that have swirled around some of Lee’s family members and supporters will expand to include Lee himself. By law, South Korean presidents serve one five-year term. The country’s next presidential election is to be in December 2017. Parliamentary elections are scheduled for April 2016.
This Assignment comprise of a short Case.
Assignment is to be submitted by each student individually.
Assignment Purposes/Learning Outcomes:
After completion of Assignment two students will able to understand the following LOs:
LO3: To demonstrate a thorough understanding of an HR Strategic planning which includes effective job analysis, recruitment and selection strategies.
LO4: To have the ability to deliver and communicate HR policies messages in coherent and professional manner.
Read the case given and answer the questions:
Back Space (BS) was well-regarded as an employer of choice for many years before missing out on a Best Employers list they were used to appearing on. The experience prompted them to return to their core values and regularly measure their performance to ensure their actions were delivering results. People who work at BS are called partners. They believe that great guest experiences begin with great partner experiences. The partner experience is one of the key success indicators for the company. Employee engagement, leadership, enablement, alignment, and development are measured. They seek feedback frequently because the feedback helps drive their business strategies. Past survey feedback has contributed to company initiatives and programs like Vision Goals (a goal setting and personal development program), guest experience training delivered via eLearning, and changes to their compensation and benefits program. “The BS Experience is about leadership, it’s about people, it’s about development and growth, and we have fun,” says Kareem, Senior Manager of Strategy at Back Space. “Our company’s soul is to live a large, purposeful life filled with fun, and so we try to inject that through all our communications, training programs, and make sure it’s integrated into everything we do at BS.” BS conducted a pulse survey specifically for their kitchen partners. They had been getting some feedback that front-of-house employees were getting a lot of training and back of-house partners wanted that as well. With the survey, BS was able to ascertain those employees needed to feel more connected to their culture, as well as what was needed in terms of training and development. This feedback would help mold future programs and initiatives that have a direct impact on kitchen partners. The surveys would also help garner feedback regarding new programs. Back Space launched a new guest experience training program that was provided to all their front-of-house partners. In the past, it was face-to-face training that took place in the store when a partner was first hired. Later, the course was shifted to a combination of face-to-face training and eLearning. Having not done a lot of eLearning, BS designed a survey to see how effective the new training was and how they could improve it.
Assignment Questions: M.M.10
1. What is the role of training for employees in the above case?
2. How did the feedback system in the above situation generate benefits for Back Space?
3. “Do training impacts employee development” Comment
4. According to your views do you find Kareem committed to Employee Development? (1.5Marks)
5. Point out any two major differences between training and development