Gyeonggi Prov­ince re­ceived more than 500,000 vis­i­tors at its on­line con­fer­ence on the ben­e­fits of universal ba­sic in­come and how govern­ments can find so­lu­tions for change.


When Gyeonggi Prov­ince Gov­er­nor Lee Jae­myung first dis­cussed in­tro­duc­ing a ba­sic in­come pro­gram in South Korea sev­eral years ago, the idea was dis­missed as far­fetched. But the pan­demic has shifted at­ten­tion to the pro­gram af­ter the Korean cen­tral gov­ern­ment’s one-off cash pay­ment dur­ing the height of the cri­sis re­ceived wide­spread pub­lic sup­port. In mid-Septem­ber, the Gyeonggi Provin­cial Gov­ern­ment hosted a two-day global on­line event to ex­plore ba­sic in­come as a so­lu­tion to in­equity, the largest con­fer­ence of its kind in the world. More than 500,000 peo­ple vis­ited the fair’s web­site, viewed live stream­ing of the speak­ers and dis­cus­sion pan­els on YouTube, and vis­ited the site’s vir­tual in­for­ma­tion booths. That was a 15-fold in­crease in at­ten­dees from last year, ac­cord­ing to Gyeonggi of­fi­cials who or­ga­nized the event. The jump was at­trib­uted to grow­ing pub­lic in­ter­est in universal ba­sic in­come, in part be­cause “disas­ter ba­sic in­come” pay­ments—the first of their kind in Korea—dis­trib­uted to Gyeonggi’s res­i­dents in April and emer­gency disas­ter relief pay­ments of­fered to all Kore­ans in May proved ef­fec­tive in mit­i­gat­ing the eco­nomic im­pact of the Covid-19 cri­sis. In to­tal, 26 re­searchers, econ­o­mists and ac­tivists from 11 coun­tries par­tic­i­pated in the con­fer­ence and voiced their sup­port for ba­sic in­come—pe­ri­odic cash pay­ments to all cit­i­zens—as an op­ti­mal model for the fu­ture. They un­der­lined the need to de­velop the pro­gram from the ex­per­i­men­tal stage to ac­tual pol­icy. In his open­ing ad­dress, Gov­er­nor Lee stressed the im­por­tance of pub­lic sup­port and par­tic­i­pa­tion in the re­al­iza­tion of ba­sic in­come, par­tic­u­larly in a time of rapid change. The tra­di­tional dis­tri­bu­tion struc­ture of in­come to la­bor is dras­ti­cally chang­ing due to the pan­demic-in­duced eco­nomic cri­sis and the de­vel­op­ment of AI and ro­bot tech­nolo­gies, he said. In the first panel ses­sion— mod­er­ated by Ed­uardo Su­pl­icy, Hon­orary Co-Chair of the Ba­sic In­come Earth Net­work (BIEN)—Kim Jae-yong, Gyeonggi’s Se­nior Secretary for Pol­icy Com­mit­ment, noted Korea’s disas­ter ba­sic in­come ini­tia­tive has shown con­crete eco­nomic and so­cial ef­fects. Ba­sic in­come is not just part of wel­fare pol­icy, but also eco­nomic pol­icy, he said, adding, “It is a blue­print for the fu­ture.” He was fol­lowed by Nam Gi-up, Di­rec­tor of the In­sti­tute of Land and Lib­erty of Korea, who dur­ing the sec­ond panel ses­sion sug­gested a ba­sic in­come-type na­tional land hold­ing tax to col­lect un­earned prof­its gen­er­ated by cor­po­rate land own­er­ship to share with the pub­lic. The mea­sure would help pro­mote ef­fi­cient land use and sta­bi­lize prop­erty prices, he said. Dur­ing the third ses­sion, un­der the topic of “Con­tem­po­rary Cap­i­tal­ism and Qual­ity of Life,” Mal­colm Torry, Gen­eral Man­ager of BIEN, pointed out, “In a cap­i­tal­ist so­ci­ety, some pos­sess cap­i­tal or wealth, but some do not. So, it is im­por­tant to im­ple­ment ba­sic in­come schemes that re­duce this in­equal­ity.” Su­sana Martin Bel­monte, for­mer chief econ­o­mist of Rec Moneda Ci­u­dadana in Spain, ob­served in the fourth ses­sion, “In just one year af­ter Barcelona in­tro­duced [real econ­omy cur­rency], the lo­cal mul­ti­plier ef­fect of pub­lic spend­ing in­creased by 54%. Lo­cal cur­rency can be an ef­fec­tive means of pay­ment and also be a tool to strengthen the lo­cal econ­omy.” Dur­ing the fifth ses­sion—mod­er­ated by An­nie Miller, co-founder of BIEN—Lee Se­ung-yoon, an as­so­ciate pro­fes­sor of so­cial pol­icy at Chung-Ang Univer­sity, said, “While a new par­a­digm for the wel­fare state is be­ing de­manded, dis­cus­sion on ba­sic in­come as an al­ter­na­tive to the tra­di­tional wel­fare state needs to be fur­ther ex­panded and ma­te­ri­al­ized as a fea­si­ble pol­icy.” At the event’s close, Gov­er­nor Lee pledged to pro­mote the ba­sic in­come poli­cies dis­cussed at the con­fer­ence and Gyeonggi Prov­ince’s in­ter­na­tion­ally ac­claimed ba­sic in­come model.

For more in­for­ma­tion, please con­tact: Gyeonggi Provin­cial Gov­ern­ment: 2020 Korea Ba­sic In­come Fair Of­fice: https://ba­sicin­come­ kr/2020_en/ TEL +82-(0)70-7722-7010



—F.C. Yee

scent wire­less tele­com com­pa­nies in the late 1980s and early ’90s, get­ting a ground-floor view of the huge eco­nomic and so­ci­etal changes com­ing as cell­phones grew ubiq­ui­tous. In 2001, she moved to New York–based Al­lianceBern­stein as chief in­vest­ment of­fi­cer for the­matic port­fo­lios. But the 2008 fi­nan­cial cri­sis ush­ered in an era in which ac­tive man­agers un­der­per­formed the S&P 500 and tril­lions flooded into low-cost in­dex funds. Wood de­cided a fresh ap­proach was needed. In 2012, she pro­posed putting ac­tively man­aged port­fo­lios of in­no­va­tive com­pa­nies in­side an ETF struc­ture. The idea got nowhere at Al­lianceBern­stein.

Two years later, she launched Ark in New York. Suc­cess wasn’t im­me­di­ate. In the firm’s first two years, its flag­ship fund placed in the bot­tom quar­tile of its peer group, ac­cord­ing to Morn­ingstar. By the end of 2016, Wood had at­tracted just $307 mil­lion in as­sets, and Ark’s 0.75% man­age­ment fee wasn’t cov­er­ing over­head. To keep go­ing, she dug deep in her sav­ings, sold mi­nor­ity stakes and struck part­ner­ships with larger firms to build dis­tri­bu­tion. Ja­pan’s Nikko As­set Man­age­ment and the mu­tual fund firm Amer­i­can Bea­con now own 39% of the com­pany. Al­most 10% is owned by the firm’s two dozen em­ploy­ees.

In 2017, Ark took off, buoyed by surg­ing prices for stocks like Net­flix, Sales­force, DNA se­quencer Il­lu­mina, dig­i­tal-pay­ments pro­ces­sor Square and dig­i­tal health provider Athenaheal­th. As­sets rose ten­fold, and Ark be­gan to build its brand on the back of bold pre­dic­tions, an ac­tive Twit­ter pres­ence and the free re­search it put on­line. (It also at­tracted no­tice for a cryp­tocur­rency fund avail­able only to ac­cred­ited in­vestors; Wood started buy­ing Bit­coin, which she calls an “in­sur­ance pol­icy” against in­fla­tion, in 2015 at $250 a coin.)

Wood takes a top-down ap­proach to build­ing port­fo­lios, first iden­ti­fy­ing dis­rup­tions by any means pos­si­ble, in­clud­ing crowd­sourc­ing—she even opens the firm’s Fri­day af­ter­noon re­search meet­ings to out­siders, who can call in via Life­size. Eco­nomics is cen­tral. Wood is most bullish on in­no­va­tions if she be­lieves their costs will de­cline over time, creat­ing real de­mand. When scor­ing po­ten­tial hold­ings, Ark looks at cor­po­rate cul­ture and man­age­ment ex­e­cu­tion on growth ini­tia­tives. Only at the end of the process does Wood value a com­pany, re­fus­ing to buy any­thing she doesn’t ex­pect will rise by 15% an­nu­ally over five years, Ark’s min­i­mum ex­pected hold­ing pe­riod.

The tu­mult of 2020 has been good for Ark. In March, when the pan­demic emerged and stocks plunged, Wood cor­rectly pre­dicted fast-grow­ing tech com­pa­nies would lead the world (and fi­nan­cial mar­kets) to re­cov­ery. She con­cen­trated Ark port­fo­lios in Tesla and other top picks (see ta­ble, p. 44) in­clud­ing ed­u­ca­tion-soft­ware com­pany 2U and real es­tate plat­form Zil­low. Then, in late sum­mer, when Tesla soared, she trimmed her hold­ings and built a large po­si­tion in the bat­tered shares of Slack.

With all suc­cess­ful in­no­va­tions, of course, come copy­cats. Gim­micky themed ETFs have pro­lif­er­ated in ev­ery­thing from pets to sports gam­bling to work-from-home. Fund giants Di­men­sional Fund Ad­vi­sors, Fi­delity In­vest­ments and T. Rowe Price have all re­cently launched their own slates of ac­tively man­aged ETFs.

An op­ti­mist by na­ture, Wood none­the­less of­fers some un­set­tling pre­dic­tions for the next five years. She ex­pects a broad swath of large in­dus­tries—bank­ing, en­ergy, trans­porta­tion, health care—to be dis­rupted by tech­no­log­i­cal change, with many work­ers dis­placed. The re­sult, she be­lieves, is that eco­nomic growth, in­fla­tion and broad mar­ket in­dexes will all fall per­sis­tently short of ex­pec­ta­tions, pro­vid­ing an op­por­tu­nity for ac­tive man­agers to pick the in­no­va­tive win­ners that will con­tinue to drive mar­ket-cap gains.

“I think the benchmarks and the in­dexes are go­ing to go through a ter­ri­ble pe­riod. We’re al­ready see­ing it,” she says. “We be­lieve they are be­ing in­creas­ingly pop­u­lated by value traps.”

Does she think the mar­ket is now in a bub­ble? Nope. Uncer­tainty over the pan­demic and the elec­tion (Wood sup­ports Pres­i­dent Trump “un­abashedly”) means money has been flow­ing out of stocks and into the safety of bonds, she notes. “The fact that peo­ple are fear­ful now that we’re back at the S&P 500 trad­ing at 25 times earn­ings tells me that we are not in a bub­ble at all.”

 ??  ?? Gyeonggi Prov­ince Gov­er­nor Lee Jae­myung at the launch­ing cer­e­mony of the Lo­cal Gov­ern­ment Coun­cil on Ba­sic In­come.
Gyeonggi Prov­ince Gov­er­nor Lee Jae­myung at the launch­ing cer­e­mony of the Lo­cal Gov­ern­ment Coun­cil on Ba­sic In­come.
 ??  ?? The sec­ond an­nual Gyeonggi Prov­ince Ba­sic In­come In­ter­na­tional Con­fer­ence
The sec­ond an­nual Gyeonggi Prov­ince Ba­sic In­come In­ter­na­tional Con­fer­ence

Newspapers in English

Newspapers from USA