Democracy Lab

The Gangnam Phenom

A South Korean video is making waves on the Web. But the West is actually late to the party.

Korean pop culture may not (yet) turn heads in Los Angeles or London, but its impact -- economic as well as cultural -- across the developing world is startling. First taking off in China and Southeast Asia in the late 1990s, but really spiking after 2002, Korean TV dramas and pop music have since moved to the Middle East and Eastern Europe, and now even parts of South America. "Gangnam Style," a music video by the rapper/satirist PSY, has been viewed 292 million times since it was released in July. Since then he's been welcomed with open arms, and has been spotted teaching several celebrities his iconic "horsey dance."

Indeed, the rise of K-Pop is the bellwether of a variety of trends that are changing the global economy (and emerging markets in particular) in fundamental ways. Its success as a product - but, more importantly, as a cultural brand promoting Korean exports ranging from soft drinks to cosmetics to consumer electronics -- suggests that Western countries aren't likely to have a lock on the hearts and wallets of developing countries for long. More generally, it illustrates the new reality that the North-South pattern of trade and cultural exchange that has dominated the world since the ascendance of European colonialism is giving way and making room for unexpected soft power.

South Korea's economy, reclassified by the IMF as "advanced" back in 1997 (along with Singapore and Israel), has doubled in size since then. But unlike most advanced economies, a disproportionate share of its exports (and foreign investment) goes to developing countries. In 2011, Korean exports to China alone totaled $134 billion -- more than U.S. exports to China and about the same as those from the European Union.

Pop culture, in reality, is no more than a blip in the total Korean economy, comprising $137 million in exports out of a $1.5 trillion in 2011. However, while Korea mainly focuses on staying in front of the world's electronics, auto, steel and shipbuilding industries, pop culture has proved surprisingly important to Korea's commerce. A survey of 300 companies by the Korea Chamber of Commerce and Industry found that 52 percent considered the Korea Wave -- the term for the success of Korean popular culture abroad -- influential in increasing exports. Another survey (this one of households across East Asia) by the Korea International Trade Association found that 80 percent of respondents said the Korean Wave led them to buy more Korean goods. "There's a confidence to the ‘made-in-Korea' label now," explained Tyler Brûlé, the editor of Monocle, the London-based lifestyle magazine. "It's fascinating."

So where did all of this come from? Korea made waves in television before music. With the rise of cable and satellite systems, the global appetite for entertainment became insatiable, and American shows were often too expensive for poorer countries to carry. Korea's on-the-make entertainment industry filled the gap in Southeast Asia in the late 1990s with inexpensively produced soap operas akin to the telenovelas sweeping Latin America.

But a good business became a fabulous one only in 2002 with the series Winter Sonata, a twisting, turning tale of lost loves, near-incest, and sudden blindness, all served with a heavy dollop of nostalgia. Regional tourism to Korea spiked, and suddenly all things Korean were cool. Then, a couple of years later, Jewel in the Palace, a historical drama about a common girl with a heart of gold who worked her way up in the royal kitchens through piety and sheer will, did even better.

If soaps represented the gateway drug to Korean culture, pop music, delivered worldwide by the Internet, was the hard stuff. Korean music labels had been trying to penetrate overseas' markets for decades, but with little success. The breakthrough came in the form of SM Entertainment's teen girl star, BoA (no misprint), who made it huge in Japan before conquering the rest of East Asia. Rain (né Jung Ji-Hoon) a singer and actor, followed with the pan-Asian hit soap, Full House, and slew of albums that went platinum.

Each success has made the next Korean entertainer easier to sell in places where many people would have trouble pinpointing the country on a map. But there's no denying that the Korean entertainment industry seems better tuned to the global zeitgeist than any since the rise of Hollywood. "Korean Wave dramas feel very straightforward, emotional, and passionate," explains Kim Jiyoon, of TBWA Korea/Media Arts Lab.

If this story had ended there, South Korea would be an impressive cultural force around Asia. But, bizarrely, programs like Full House, Winter Sonata and Jewel in the Palace kept finding new audiences. They took off in Egypt and Iran, in Turkey and Eastern Europe.

Back in 2007, I received an email from a woman in Egypt thanking me for blogging about the singer Rain and other K-pop subjects. Winter Sonata's theme of "innocent love matches our culture and customs," she wrote. "After watching those heart-touching dramas, I got back to writing poetry."

Which gets at one major reason Korean culture has found a home in so many places. Contemporary American pop culture strikes much of the world as cynical and harsh; Korea's, by contrast, features family, strong social connections and innocent love, all in an aspirational, modern package. The fantasy world of K-pop includes the newest smartphones and luxury cars, but it is still strongly rooted in a safe morality. "Korea has a way to promote very clean-cut and very beautiful artists who are considered ‘non-problematic' by adults," said Charlotte Naudin, a prominent Korean drama fan from Paris.

The unintended consequence of all this -- indeed, the mighty tail that wags the K-pop dog -- is the impact on the marketing of Korean products. Product placements are rife in Korean programming, with stars wearing sponsors' clothes and flaunting corporate logos, with pictures and links on the programs' websites. Cosmetic exports have been a big winner, up 35 percent last year (reaching $805 million), thanks in large part to the glamorous images of Korean actresses from the popular dramas. And, of course, it works for more familiar Korean exports like computers, phones and flat-screens. K-pop "opens doors to pockets of audiences who may not have considered LG before," said Kenneth Hong, director of international communications at LG Electronics.

"Even though the stars become commercial, fans see such trends as another chance to feel a sense of kinship," said Moon Soomee, global PR manager at Cheil Worldwide, the Seoul-based advertising agency. She points out that Korean artists have exploited new technology to achieve a remarkable degree of intimacy with ordinary people in dozens of countries. "By using these social/digital media, K-pop stars become someone like me, someone very approachable, someone who's very close to me."

One striking example was how JYP Entertainment's 2pm worked with water purifier company Woongjin-Coway to create a YouTube video with simple dance moves, asking viewers to record and upload their own. Scores of fans from Vietnam, Indonesia, Brazil and more obliged. Or how cosmetics chain Etude teamed up with YG Entertainment's 2NE1 (a four-girl hip-hop group) to "leak" a teaser for a music video and let their frenetic supporters embrace it as their own. All told, K-pop fan clubs (outside Korea) have some 3.3 million members -- and that figure pre-dates "Gangnam Style."

K-pop's latest conquest: South America. U-Kiss had a concert in Colombia in May. Big Bang (one of the most popular groups in Korea) has added Peru and Brazil to its tour, heading there this November after two shows in the United States. Even Drunken Tiger, Korea's most respected hip hop artist -- but too old and edgy for your usual K-pop--has developed a following in Brazil.

While it's difficult to isolate the factors affecting Korean brand acceptance, the numbers following the Korea Wave have been gratifying. In 2006, according to one survey of 15,000 people around the world, consumers faced with a choice of an American or German product and the Korean equivalent required a 34 percent discount to buy the latter. Five years later, that discount had narrowed to 23 percent.

The Korean Ministry of Culture, Sports and Tourism is certainly doing its best to exploit the positive spillovers to commerce. It is expanded the number of Korean Cultural Centers in foreign cities (to 28 by the end of 2012), and it has teamed up with the Federation of Korean Industries to form the Bureau of Culture Diplomacy that explicitly uses soft power to push Korean exports.

Linkages between popular culture and commerce are hardly a novel phenomenon. What is new is the evidence that a relatively small country with a language nobody else speaks could become so trendy so quickly, and convert the new image to soft economic power so effectively. It's become a cliché that digital technology smashes barriers of all sorts. Korea's dazzling success with pop culture suggests we're not even close to understanding the breadth and depth of the impact on global commerce.

Photo by Sara Kauss/Stringer/Getty Images

Democracy Lab

In Georgia, Two Machines Are Better Than One

The run-up to Georgia's October 1 election has been dirty, demeaning, and rife with abuses of power and allegations of corruption. It’s also the best thing to happen to Georgia in a long time.

The view from billionaire Bidzina Ivanishvili's über-modernist palatial home and business center is unparalleled, giving him a clear line of sight to the giant statue of Mother Georgia, the Mtkvari River, and another large steel and-glass structure at the top of a different hill: President Mikheil Saakashvili's palace. These dueling monuments to gargantuan egos, while betraying the two men's similar taste in architecture, also embody the current melodrama that has enveloped the country. These men despise each other. On October 1, they will also lead their respective party coalitions to the first parliamentary election since the August 2008 war with Russia. Ivanishvili is the first major threat to Saakashvili's power since he took over in the 2003 Rose Revolution.

The conventional wisdom has it that less corruption is always better. Recent history shows, however, that corruption concentrated in the hands of a country's ruler can be an invitation to authoritarianism. Saakashvili, while rebuilding the Georgian state and reducing low-level corruption, has also constructed a vast pyramid of power with himself at the top. Independent analysts have noted his increasingly authoritarian tendencies, and many have speculated about his plans to "pull a Putin" and anoint a loyal successor to the presidency after his constitutionally mandated exit in 2013.

Enter Ivanishvili, a multi-billionaire of Georgian birth who earned his fortune in Russia. Last year, Ivanishvili created a new coalition, Georgian Dream, which has benefited from the participation of former officials alienated by Saakashvili. It also enjoys healthy financial backing, from Ivanishvili alone. The new challenger is vague about his plans for the country and, like many of the super-rich in Russia, undoubtedly has plenty of skeletons in his closet (not to mention a pet zebra). He has already brought Georgia a valuable and unexpected gift: the possibility of a competitive election. But it's not pretty to watch.

It's important to note that elections don't have to be free and fair in order to be competitive. Whereas "competitive" simply means the opposition has a legitimate chance at winning an election, freedom and fairness refer to the quality of the electoral process (i.e., that there's a level playing field). Saakashvili's United National Movement (UNM) Party has worked to ensure that the field in this election will be tilted against Georgian Dream, employing schemes straight out of the post-Soviet autocrat's playbook. Its tactics have included detaining activists, fabricating criminal charges, restricting attendance at rallies, intimidating voters, levying fines for contrived offenses, and using the state-controlled media to boost the UNM's popularity.

Perhaps the most egregious abuse of state power was to strip Ivanishvili of his Georgian citizenship on the grounds that he was already a citizen of France, which would have made him ineligible to hold public office. After an international outcry, parliament, where the UNM currently holds 119 out of 150 seats, passed a law allowing EU citizens who have lived in Georgia for five years to hold public office. But the lawmakers didn't forget to include a poison pill: The law expires on January 1, 2014. As a result, even if Ivanishvili becomes prime minister or wins the presidency in next year's election, he is likely to face a very short term in office -- or a new constitutional crisis.

Besides selectively applying election laws, the ruling party has run an old-fashioned dirty campaign. Ever since Ivanishvili announced his political ambitions, Saakashvili has insinuated that Georgian Dream is a proxy for Moscow's interests -- a serious allegation in a country that was routed in a war with Russia only four years ago. In fact, "Boris" (as he was known while living in Russia) Ivanishvili spent over two decades in Russia, an experience that has presumably left him with many influential friends there (though there is as yet no evidence of a secret plan to undermine Georgian sovereignty). Nonetheless, the ruling party has used the specter of Russian intrigue as a further pretext for harassing the opposition.

Under normal circumstances, the UNM at this point would have already reduced the opposition to a mere nuisance, while blithely fantasizing about how to use its parliamentary supermajority. But thanks to Ivanishvili's well-financed political machine and his willingness to test the limits of legality, this election looks to be a closer -- if not quite fair -- fight.

One case in point: the media. To counter the dominant pro-Saakashvili spin of state-controlled television, which Ivanishvili has called propaganda, he decided to create his own propaganda outlet: TV9. Because the station was not carried by local cable companies, Ivanishvili decided to distribute thousands of free satellite dishes to poor Georgians to increase his audience (and potential electorate). While he claimed this was a philanthropic gesture, the government objected -- and fined him $45 million. In the spirit of the "October surprise" (though this time it was sprung in September),TV9 aired a video last week exposing systematic torture in a Georgian prison, causing a major domestic and international scandal and prompting the resignation of the interior minister.

Ivanishvili also borrowed from Saakashvili's playbook as he sought to blunt the UNM's edge in international support. Saakashvili, a charismatic, U.S.-educated lawyer who sought to reorient his country's foreign policy away from Russia and toward the West, has many friends in Washington, especially among conservatives. The Rose Revolution that brought him to power occurred just as the Bush Administration was touting the knock-on effects of its Iraq invasion. Saakashvili's eagerness to align his country with Bush's "freedom agenda" earned him a visit from the American president in 2005 and John McCain's now-famous expression of solidarity after the 2008 war: "[T]oday, we are all Georgians."

Ivanishvili has worked to counter the unrestrained love shown to Saakashvili in policy circles the way any self-respecting billionaire would: by buying his own supporters. The oligarch has reportedly been spending $1 million a month to retain lobbying firms to influence elite opinion in the U.S. and Europe. This strategy has paid some dividends, including the introduction of the Republic of Georgia Democracy Act of 2012, which would have conditioned U.S. aid to Georgia on its holding free and fair elections. Of course, the UNM has never underestimated the importance of navigating the corridors of Congress, and has spent millions on its own lobbying campaigns. While Ivanishvili hasn't made a major dent in the support Saakashvili has built up over the years, he has certainly raised awareness about the election in the U.S. and challenged the presumption that there is no alternative to Saakashvili.

Ivanishvili has also campaigned the old-fashioned way, pressing the flesh, making populist campaign promises, and allegedly buying votes. He has proven able to bring out large numbers in election rallies across the country.

Ivanishvili's ability to mobilize the public is an important weapon in Georgian politics, but not for the usual reasons. Although election rallies are used to generate excitement and publicity as in U.S. elections, in Georgia they also serve as a warning of how the opposition might react in the case of plausible election fraud. This is no idle threat. It was a precisely a rigged election that led to the Rose Revolution, not to mention similar regime changing events in Ukraine and Kyrgyzstan.

Given all of the above, a neutral proponent of democracy might be tempted to throw in the towel and seek out more promising cases. But this reaction would be a misreading of Georgian politics, and of post-Soviet political development more generally.

A survey of post-Soviet regimes reveals two types: strong, centralized regimes like Belarus, Azerbaijan, and Russia under Putin; and raucous and competitive but highly corrupt ones like Ukraine, Kyrgyzstan, and Russia under Yeltsin. Sometimes states oscillate between these types in a cyclical pattern.

Until recently, it appeared that Georgia had transcended its Soviet past to embody a third type: a democratic regime with a strong state and little corruption. In fact, though, over time it has come to increasingly resemble the first type. A smooth, non-competitive election that entrenched the UNM's dominance would lessen its accountability to society and make it even harder for others to peacefully secure a share of power.

This is where Ivanishvili comes in. It is unlikely that the Georgian Dream will win a majority in parliament, as the latest polls show the UNM with a sizeable lead (although unlike in the U.S., over 40 percent gave noncommittal responses two months before the election). But Ivanishvili's bloc presents an obstacle to the concentration of state power more generally. A constitutional change engineered by the ruling party in 2010 transferred most executive powers to the prime minister. Saakashvili subsequently picked his right-hand man, former Interior Minister Ivane Merabishvili, for the job. Assuming the UNM wins a parliamentary majority, whoever wins the presidency in January 2013 will be in the crucial position of balancing or enhancing Merabishvili's power. Ivanishvili, assuming he can keep his diverse coalition intact, will have several months to deploy his vast war chest in various ways -- in parliament or on the streets, legally or not -- to act as a counterweight to the UNM's dominance.

The epic clash of egos that Georgians are witnessing today, discomfiting as it is, might ironically end up rescuing the country's flagging democracy. The lesson may be that the best way to weaken a power-hungry regime is not the soft incremental reforms advocated by Western governments, which typically work through the formal institutions of government usually by passing new laws. Yet authoritarian leaders are notoriously skilled at failing to implement laws on the books or applying them selectively. Instead, the surefire way to get an authoritarian's attention is to marshal countervailing power -- which may require the participation of strong-willed and wealthy narcissists who do not like losing. Ironically, building democracy may sometimes require leaders with authoritarian instincts -- as long as they aren't on the same side.

Photo by ILMARS ZNOTINS/Stringer/AFP/Getty Images