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Asia Times
3 days ago
- Politics
- Asia Times
South Korea reckons with decades of the foreign adoption scandal
Kim Tak-un was four years old when he was adopted by a Swedish family in 1974. Originally from South Korea, Tak-un had lived with his single father, a laborer who moved frequently for work. One day in the summer of 1974, while staying with his aunt, Tak-un wandered outside and disappeared. Local police considered him abandoned and referred him to an adoption agency, which arranged his adoption to Sweden within five months. When his father realized his son was missing, he searched everywhere, only to discover – too late – that Tak-un had already been sent overseas. Devastated, he demanded Tak-un's return. When the adoption agency failed to respond, he went public with the story. In March 2025, South Korea's Truth and Reconciliation Commission released initial findings from its investigation into the country's 72-year-old international adoption program. The full report is expected in the next few weeks as the investigation is now completed. Based on more than 360 cases submitted by Korean adoptees from 11 countries, the commission uncovered widespread human rights violations, including falsified documents, lack of parental consent and cases of child switching – shaking up adoptees and their families. Since the end of the Korean War (1950–1953), South Korea has sent over 200,000 children abroad, becoming the world's largest country for adoption even as it grew into an advanced economy. Existing studies have shown that international adoption from South Korea began as a response to the large number of mixed-heritage children born to Korean mothers and US soldiers during the war. It is estimated that thousands of such children were born and South Korea's first president, Syngman Rhee, ordered their overseas placement on the grounds that they were 'unfit' for a nation imagined as ethnically homogeneous. However, international adoption did not end once this perceived 'emergency' was over. From the mid-1960s onward, it expanded to include children from other vulnerable backgrounds, including those affected by poverty, family breakdown and out-of-wedlock births. This, and the role of international adoption, is explored in my upcoming book. This was closely tied to the policies pursued by South Korea's military regimes. The most important figure was Park Chung Hee, a military general who came to power through a 1961 coup and ruled until his assassination in 1979. His regime prioritized rapid economic growth, relegating social welfare to the lowest priority. Childcare was treated as an individual, not a state, responsibility. As I point out in my earlier research, public systems to categorize and care for children – whether abandoned, lost, or runaway – were extremely limited, and authorities largely placed the burden on parents to retrieve their separated children. This is probably why, after only cursory checks, authorities referred Tak-un to an adoption agency. Tak-un's case attracted media attention in Sweden as well. However, in an interview with Swedish newspaper Dagens Nyheter, the Swedish national board of health and welfare – which oversaw the Korean adoption program – dismissed the claims, stating they were '99 percent certain' the story was false and insisting that Korean social workers had followed proper procedures. The trust that Swedish authorities placed in South Korean adoption procedures may have been because of the way the Korean social workers presented their work. As the first generation of Koreans trained in US-style professional social work, they framed international adoption as being about the child, the importance of a family, and emotional wellbeing. The research for my upcoming book shows that while they may have genuinely believed in international adoption as a valid form of child welfare, there were also practical reasons why this happened. With virtually no public funding for child welfare, many saw international adoption – where adoptive parents covered the costs of care – as an ideal way to apply their training. In interviews with me, now-retired social workers acknowledged flaws in South Korea's broader child welfare system, such as the inability to verify a child's true status. Yet, without public resources to build a reliable system or prioritize family reunification, they often treated international adoption as a first, rather than a last, resort. Moreover, the prevailing belief at the time that 'normal' middle-class families offered the most stable environment for a child's development provided further moral justification for sending children abroad. Western authorities often interpreted Korean social workers' professionalism as evidence of shared liberal child welfare values and placed strong trust in their procedures. When serious flaws surfaced – as in Tak-un's case – they were frequently dismissed as exceptions rather than signs of deeper systemic problems. Even when the facts were confirmed in 1975, Swedish authorities still refused to return the child. The Swedish consul-general in Seoul at the time, Lars Berg, argued that it was in Tak-un's 'best interest' to remain in Sweden, rather than be sent back to 'an uncertain fate of the father without work and residence.' This reflected, in part, Sweden's domestic realities: Like many Western societies at the time, Sweden faced a shortage of adoptable children, and international adoption had become an important way to meet the wishes of prospective parents. In the early 1970s, nearly half of all internationally adopted children arriving in Sweden came from South Korea. This meant that when issues like Tak-un's emerged, Swedish authorities prioritized the rights of adoptive parents, framing their defense in the language of child welfare. Sweden's Adoption Commission has just released its own report on June 2, examining the country's international adoption practices, including those involving South Korea. Echoing my research findings, it recommended an end to allowing Swedes to adopt children from abroad. So, what became of Tak-un? Ultimately, South Korean officials acquiesced to the Swedish authorities, and the Korean adoption agency was cleared of any wrongdoing. Tak-un never returned. The last trace in the archives is his birth father's plea to hear from him. I located Tak-un, who now goes by his Swedish name and lives in a small town in Sweden. Despite attempts to reach him, he didn't respond. It remains uncertain whether his father's message ever reached him or if he knows anything about his early life in Korea. This silence is not merely personal. A system that claimed to act for the child's welfare instead routinely erased adopted children's pasts, ignored their birth families and decided their futures for them. Tak-un's story isn't just a painful exception – it is a haunting reminder of what was lost in the name of care. Youngeun Koo is an assistant professor at the Centre for East and South-East Asian Studies, Lund University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
Yahoo
29-03-2025
- Business
- Yahoo
Inside the Klarna-Affirm Rivalry Reshaping One of the Biggest Fintech IPOs
(Bloomberg) -- Even by Sebastian Siemiatkowski's standards, it's been a wild month. Gold-Rush Fever Returns to Historic New Zealand Mining Town Why Did the Government Declare War on My Adorable Tiny Truck? How SUVs Are Making Traffic Worse Trump Slashed International Aid. Geneva Is Feeling the Impact. These US Bridges Face High Risk of Catastrophic Ship Strikes The chief executive officer of buy now, pay later giant Klarna Group Plc started March on a high when he formally filed to list his 20-year-old company. Days later, he edged out longtime rival Affirm Holdings Inc. when he landed a deal with a fintech backed by the biggest retailer on the planet, Walmart Inc. What should have been good news, though, soon turned to bad: The announcement put pressure on Affirm's shares, which are considered a key benchmark for Klarna's own offering. Within a week, Klarna was also the subject of widespread scorn online after touting a new tie-up with food-delivery service DoorDash Inc. Siemiatkowski will have to shrug that off as he hits the road in the coming days to court legions of new investors to buy up shares in the company's listing, which is due in April and is expected to be one of the year's biggest IPOs. He'll be going up against a precarious dealmaking environment: already this week the cloud-computing provider CoreWeave Inc. was forced to downsize its own offering as stock market volatility hurt demand for the highly-anticipated listing. 'What we're seeing with Klarna is, this is the talisman,' said Nigel Morris, a Capital One Financial Corp. co-founder-turned-fintech investor. His firm, QED Investors, was an early backer of the Swedish buy now, pay later app. 'This is going to be the reference point for this next cohort of fintechs going public.' Walmart Deal For Siemiatkowski, clinching the Walmart deal was his latest chance to put his brand in front of more US consumers. When the 43-year-old founder first flung open Klarna's US doors in 2015, he'd filled his calendar with sales meetings with potential merchants his firm was wooing to overtake competitors Afterpay and Affirm. Siemiatkowski would personally fly to meetings with retailers and did whatever it would take to get their business. His firm brought on Snoop Dogg and Lady Gaga as brand ambassadors, and crucially, had the backing of Silicon Valley king-maker and Sequoia juggernaut Michael Moritz. Klarna's main sell to retailers was that using buy now, pay later would increase basket sizes because customers would be more inclined to buy more items when they spread out the cost as well as boost repeat purchases. The upstart would also offer joint marketing campaigns, or provide a discount to retailers to allow clients to access the interest-free loans. In Europe, whenever Klarna was pitching for the most prized retail opportunities, the firm would offer the crown jewel of options: shares in the privately-held company. When it was pursuing Hennes & Mauritz AB, for instance, it gave the Swedish fast-fashion giant a stake in exchange for making Klarna an option at checkout. 'Sebastian was smart in coming up with deals and so all parties felt they were winning,' said former Klarna UK CEO Alex Marsh, who had spent time criss-crossing the UK with Siemiatkowski to pitch the largest British companies. He used that similar playbook with Walmart. As part of the deal announced this month, Klarna entered into an arrangement that would allow OnePay, which is backed by the retailer, to buy 15.3 million shares in the Swedish company. In exchange, Klarna will be the exclusive fast credit provider on the OnePay app. That's a big deal for Klarna. Currently, Walmart customers still can't check-out with Apple Inc.'s popular Apple Pay service in their stores — they can, however, check-out with the OnePay wallet. Walmart also plans to abandon its partnership with Affirm entirely in favor of OnePay's Klarna-powered offering, according to people familiar with the matter. It's a 'credibility stamp' from the retailer, just before Klarna's long-awaited IPO, said Georgetown University finance professor Reena Aggarwal. Industry Rivalry The deal put the long-simmering tensions between Siemiatkowski and Max Levchin, the founder and CEO of Affirm, on public display. The two were first introduced in Klarna's earlier days. Levchin, one of the founders of PayPal Holdings Inc., had spun out a few companies since leaving the payments firm, including social network Slide and data analytics startup Hard, Valuable, Fun, but nothing that had quite taken off. Siemiatkowski was excited to meet the payments veteran. He laid out his business model and tried to recruit Levchin to the board, he claimed in a 2022 Bloomberg Television interview. Affirm later said that wasn't true. Levchin founded Affirm in San Francisco in 2012, which would go on to offer US customers a similar proposition to Klarna's payment plans across installments — but without the fees, a premise the company proudly advertises. Siemiatkowski's competition with Levchin bubbled and was brought up in board meetings. The Klarna founder pored over charts that benchmarked his firm's performance against its rival, according to people familiar with the matter, who didn't want to be named discussing private company affairs. While Klarna continued gaining market share in Europe, Affirm carved out its niche in the US of partnering with merchants rather than going direct to consumers, scooping up deals with Shopify Inc., Inc. and Target Corp. Affirm's revenue exploded during the pandemic-era e-commerce boom, and the company listed in 2021 with a $12 billion valuation. Meanwhile, Jack Dorsey's Block Inc. acquired Afterpay Ltd., an Australian BNPL provider prevalent in America, for $29 billion. In those earlier years, Siemiatkowski privately fumed that he hadn't made the leap to the US earlier, one of the people familiar with the matter said. He even publicly responded in a post on Twitter, now X, implying Levchin had stolen his business idea. 'Sebastian has made past claims to intellectual ownership of the idea of point of sale lending,' said Matt Gross, an Affirm spokesperson. 'At Affirm, we think the Sumerian Civilization (c. 3000 BC) has first dibs on the idea.' Siemiatkowski is no stranger to controversy. The year leading up to Klarna filing for its IPO was marked by a clash of the firm's co-founders, boardroom mudslinging involving the fintech's most hallowed investor, a plunge into AI that allowed the company to shed hundreds of jobs and a series of arcane deals designed to bolster capital and get the company IPO ready. Shortly after Klarna announced it had beat out Affirm for the OnePay business — sending Affirm's shares down nearly 16% — Affirm countered in a filing saying that the Walmart deal's contribution to its bottom line was minimal. In the last six months of 2024, Affirm said, Walmart purchases made up 5% of its gross merchandise volume and only 2% of its adjusted operating income — figures the company achieved after six years, over a period of consistent US consumer spending. 'Leaving aside Klarna's apparently dubious logic of highlighting an economically questionable contract that pressures its closest comparable's valuation in advance of an IPO, we think investors worry that a price war has been launched, imperiling BNPL industry value,' William Blair fintech analyst Andrew Jeffrey said in a note to investors. 'We do not hold this view,' he said, citing the 'one-off' nature of the deal that'll boost Klarna's US brand and help Walmart advance its consumer fintech ambitions. Growth at All Costs A hyper-fixation for both firms, but particularly for Klarna, has been gross merchandise volume, a metric tracking the total dollar amount of transactions processed through each platform. Globally, Klarna is ahead with $105 billion moving through its business last year through December, compared to Affirm's $27 billion for the year through June. It's a fact Siemiatkowski historically hasn't been afraid to flaunt. In a 2022 X post, he boasted that Klarna's volume was five times that of Affirm's, and that they were 'outpacing them for growth in their home market' in the US. Klarna's focus on volume driven through its platform likely spurred it to aggressively pursue its deals with OnePay and DoorDash. To be sure, these partnerships may get IPO investors excited and boost brand awareness among consumers, but if the merchant terms are too favorable then their potential to bring in significant revenue for Klarna would be in doubt. Another risk is that the volume flees to another platform if Klarna decides that they want to raise the merchant fees, according to Logan Allin, founder of fintech investment firm Fin Capital. That growth-at-all-costs mindset won't come without criticism. Klarna's partnership with delivery app DoorDash was widely ridiculed online as people joked about defaulting on burrito loans. For social media users who witnessed the 2008 financial crisis, it had all the uncomfortable markings of a 'recession indicator.' Business Schools Are Back Israel Aims to Be the World's Arms Dealer Google Is Searching for an Answer to ChatGPT Trump's IRS Cuts Are Tempting Taxpayers to Cheat A New 'China Shock' Is Destroying Jobs Around the World ©2025 Bloomberg L.P. Sign in to access your portfolio
