20231013

The K-Pop Mogul Behind BTS Is Building the Next BTS

The band didn’t have a name yet, Bang said, but the project would be called The Debut: Dream Academy. Once formed, the group would be unique in a few ways. Hybe’s other bands have only Asian members and are all based in Korea, except for one in Tokyo. But this group would comprise women from all over the world and be US-based. It would perform in English, not Korean. The biggest difference would be the flow of inspiration. Traditionally, K-pop bands have been inspired, in part, by US pop and hip-hop bands. But bands in Korea go through grueling, yearslong training and development before making a public appearance, unlike the more organic path to fame musicians take in the West. Bang’s new group would go through T&D, as it’s known, for only about a year. Bridging the gap between the Western and Korean approaches, he said, was the realization of his dream.

Bang has introduced hundreds of millions of people to K-pop. BTS was the first South Korean act to top the Billboard charts in the US and the first to sell out stadiums across the world. The group’s success—fueled by catchy beats, a message of empowerment, intense outreach to fans and seven attractive young men—paved the way for acts such as Blackpink and Twice to tour the globe. The popularity of BTS also turned Bang into the most powerful and wealthiest music exec in his home country. His personal fortune is worth about $2 billion, according to the Bloomberg Billionaires Index.

Yet, like many Korean media moguls, Bang is concerned that the hallyu—the Korean wave—could ebb. The growth in K-pop sales outside the US has slowed, he warned in a speech this year. That may be because BTS is on hiatus for at least two years as its members complete their mandatory military service. Bang plans for the group to reunite in 2025, but there’s no guarantee that if or when it does, it will inspire the same devotion among its fans, who spend a lot of money buying music and merchandise and going to concerts. Hybe’s latest hit group, NewJeans, has roughly 24 million monthly listeners on Spotify—not that far behind BTS, with about 32 million—and is the company’s top new act. NewJeans may already be bigger than the Dream Academy-formed band will ever be, but even Bang admits there may never be another BTS.

EK: Pessimistic. NewJeans was ok, but not great.

Kia’s New EV Range Includes Cars That Can Turn Into Bedrooms

Kia Corp. unveiled a compact electric sport-utility vehicle and two concept EVs as it builds out a range of cheaper models to appeal to budget-conscious drivers.

Tesla Inc. started selling its Chinese-made Model Y SUV in Korea earlier this year, priced from about 57 million won ($42,550). With government subsidies, the price drops to about $37,000 in Seoul and as low as $30,000 in some cities that offer extra incentives for EVs.

To meet that target, Kia plans to have eight production facilities by 2025. In Europe, the company will focus on making small and medium-size EVs, while it will produce mid and large-size vehicles in China. In India, it will focus on “strategically designed EV models tailored for emerging markets,” Song said, without elaborating.

EK: The Made-in-China cars have landed.

Sri Lanka Nears IMF Deal on Funding While Debt Talks Proceed

The IMF is assessing Sri Lanka’s progress toward meeting economic targets and reform goals set under the nation’s $3 billion bailout package. A staff-level agreement is the first step needed in order for a second tranche of $334 million in loans to be disbursed.

Sri Lanka needs that deal, as well as separate agreements with its creditors on restructuring terms that also align with the program’s debt sustainability criteria, before the IMF board signs off on the next round of funding.

The debt restructuring talks with creditors from the Paris Club and other lenders are also taking place in Morocco this week at the IMF-World Bank annual meetings. The official creditors committee had aimed to sign a memorandum of understanding with Sri Lanka this week, although an announcement is looking increasingly unlikely, according to people familiar with the situation, who asked not to be identified.

Failure to conclude talks on the debt restructuring this week won’t halt the IMF funding program, although it may delay its progress.

EK: Good luck, Sri Lanka. Restructuring may be good for the economy, after all, although it may widens the income gap among people.

Japan’s Top Banks Pay Women About Half of What Men Earn

Women working for Japan’s top banks earn little more than half the amount of their male colleagues in a stark example of the country’s entrenched gender divide.

While Japan has a relatively high labor participation rate for women, many of the positions they occupy are part-time and have little prospect of better pay or career development. That point was reiterated Monday by Claudia Goldin, who the same day won the Nobel Prize in economics for her research into the factors behind the pay and employment gaps between men and women, in comments picked up by Japanese media.

Female workers earned on average 54.9% of what male workers were paid at the five largest banks in the benchmark Topix index, according to their latest annual statements. The figure came to light after Japan made gender pay gap disclosure mandatory from last year.

Overall, Japan has one of the worst gender pay gaps among nations in the Organization for Economic Cooperation and Development, with the banking sector among the worst offenders, according to an analysis of 2,800 companies by advisory firm WTW and others.

Japan’s ingrained gender norms have resulted in female representation in positions of power in business or in politics significantly lagging other advanced economies. Japan comes 125th out of 146 countries, doing particularly badly in economic participation and political empowerment, according to the World Economic Forum’s 2023 gender gap report.

Sumitomo Mitsui Banking Corp. said the two-track system has been a major factor behind the gap, while pointing out that it scrapped the structure in January 2020 and is making efforts to bring more women into managerial roles. Mizuho Bank Ltd. also cited the two-track system as a reason behind its pay gap, saying that men take on far more of the career-track roles that require moving across the country and are paid more as a result.

The dearth of female managers is a trend seen across Japanese businesses beyond the financial sector. Only 12% of managerial positions are taken by women, according to a labor ministry survey for the year ended March 2022. The same survey showed that in about 40% of firms in Japan, only men were hired into career-track roles.

EK: Sounds familiar and predictable. Japan is known for strong gender stereotyping and other gender-related issues. Way to go, Korea, to follow that path.

China Needs to Get Off the Fence in the Middle East

Until now, China’s diplomacy in the treacherous geopolitical terrain of the Middle East had generally been considered a success. Exquisite balancing skills helped China maintain friendly ties with all of the region’s key players — Iran, Saudi Arabia, and Israel — even though they are either rivals or foes.

The tone-deaf Chinese response to the horrifying Hamas attacks in Israel last weekend, however, has displayed none of that diplomatic dexterity. Left uncorrected, it could jeopardize China’s considerable interests in the Middle East.

After Hamas fighters slaughtered over 1,000 innocent civilians and kidnapped more than 100 Israelis as hostages, the Chinese Foreign Ministry’s initial response merely “called on relevant parties to … exercise restraint and immediately end the hostilities.” Although China condemned “acts that harm civilians” a day later, after criticism from visiting Sen. Chuck Schumer among others, it still refused to criticize Hamas by name.

Such fence-sitting is not only morally reprehensible, it is foolish even in purely self-interested terms.

For starters, China’s stance has done enormous damage to its ties with Israel. Although Israel had recently cooled its relations with Beijing due to growing US-China tensions, it still viewed China as a valuable partner. The official visit Prime Minister Benjamin Netanyahu had planned to Beijing now seems unlikely to take place anytime soon. While always a long shot, any chance that China might have been seen as an honest broker as part of a credible peace process with the Palestinians has also now vanished.

EK: Well, China is being start here. Who needs a strong tie with Israel, if it weren’t for Jewish in the U.S.? China may be better off working with the Arabic world in general.

Work Shift: Can Work Resorts Lure People Back to the Office?

At least that’s the idea behind “work resorts,” or offices that are more like boutique hotels than glass-and-steel skyscrapers. Outdoor gardens, cosy seating areas, co-working spaces and more secluded desks — all with a sleek, hotel-like feel — offer something for every type of worker. Art galleries, restaurants and cafes on the ground floor transform the building into a destination for the wider community beyond office workers.

The concept of work resorts is emerging as banks and other large employers are slipping out of aging high-rises in traditional business districts like London’s Canary Wharf or Paris’s La Defense, settling instead into more compact spaces surrounded by shops and cafes. Sticks like strict return-to-office mandates have so far produced mixed results in luring people back to their desks. A recent BCG study found that for firms requiring staff in the office full time, less than 70% of employees complied with the policy. Designers and architects like Hollwich say turning offices into places people actually want to go to will be a successful carrot.

EK: Welcome to the Post-Covid era.

Don’t Expect the Same Raise You Got Last Year

Companies are trimming their budgets for merit raises next year, a sign of belt-tightening that could surprise some employees who had enjoyed two straight years of increases.

Salary increases tied to promotions will also decelerate next year, Mercer found, for the simple reason that companies plan to promote fewer people. During the hiring boom of 2021 and 2022, many companies handed out raises and promotions to white-collar workers, even in the middle of the year, to hold onto their best people. Seven out of ten companies spent more than they had planned on pay adjustments during that period, a survey from workplace consultant Willis Towers Watson (WTW) found.

EK: As a result of inflation. Maybe the companies should cut compensations for top managers. Then there may be some left for lower-tier employees.

UK Investment Industry Faces More Pressure on DEI

A leading body for financial education has urged the investment industry in the UK to sign up to a new code to boost diversity, equity and inclusion across the workforce, just as the City of London faces questions over its efforts to have a more representative workforce.

The voluntary code, published by the CFA Institute on Wednesday, would require signatories to submit an annual report covering six key metrics. This would focus on whether it has a diverse pipeline of potential employees, how it is improving promotion and retention, and if workers from a range of backgrounds can measure their progress.

The charter come as the sector comes under intensified scrutiny for issues relating to the treatment of both women and ethnic minorities. The UK Parliament announced an inquiry into sexism in the City in July after a series of high-profile scandals, and the Financial Conduct Authority last month said it would require banks to set diversity targets in a year when a number of high-profile sexual harassment claims have come to light.

EK: DEI measures to be adopted among firms in non-US context.