other important headlines_Oct 31

- Based on a survey of 1000 households, Samsung Economic Research Institute said North Korea’s N-test didn’t have much influence on household spending and consumer confidence. Asked whether they will control their spending due to the test, 78.6 per cent said they would not, 20.1 percent said they would a little bit, and only 1.3 per cent said they would do so considerably.

- A person who hacked LG electronics website and leaked applicants’ personal information was arrested. He, a Master’s Degree holder, is said to have failed in the first round of the qualification process. He also hacked websites of Dongbu Group, Posco, and KTF. He said of the reason for the crime, “I thought myself capable enough to make it to the second round, but I failed and I was so upset, that is why.”

- Uri party Rep. Park Young-sun lambasted Industrial Bank of Korea for rehiring retirees in its subsidies. She said 16 IBK retirees moved to subsidies and took executive-level posts. She argued rehiring them was against the sprit of restructuring.

- As the number of children is getting reduced, employment of elementary school teachers is accordingly decreasing. The education ministry revealed the number of new teachers for 2007 is 4,049, far lower than 8,884 in 2003. For graduates from universities of education, automatic hiring as a teacher is becoming a thing of the past.

- President Roo Moo-hyun told members of Rosamo that he opposed to incorporation of Uri party and Democratic party. He is reported to have said “I neither agree with the merge with Democratic party, nor do I want to agree.”

- It is said that the government is likely to join the PSI but make an exception of excluding a North Korean vessel from the search. A government official close to the issue said “terrorist-related vessels except for a North Korean are subject to the PSI but we are considering putting a North Korean vessel under the subject of inter-Korean marine agreement, not the PSI.”

- A revised law which requires a divorced couple to divide their wealth equally will take effect as early as in six months. Along with the law comes a mandatory three-month ‘divorce consideration,’ during which a couple takes time to rethink whether a divorce is the best choice.

local paper headlines_Oct 31

1. Chosun Ilbo

- Some people in Cheong Wa Dae and the ruling party complain that the spy incident is politicized, and the 386 generation is unfairly lumped together. One Uri representative argued that the NIS might make up the spying incident for the sake of the survival of the organization.

- US Ambassador to Korea Alexander Vershbow said in an interview with Chosun Ilbo that some of Korean politicians had absurd misunderstanding that if Korea joined the PSI, it would lead to military conflicts with North Korea. He said so many Korean politicians basically misunderstood the PSI, which was very disappointing.

- Economic Minister Kwon O-kyu’s leadership is now being called into question as various economic policies such as a new city development plan and a pump-priming measure are not properly executed due to miscommunication between government offices. After he became the economic minister, he seldom spends time in networking and goes home around 6-7pm to read books. A government official who knows him well said “before he was very straight-talking and sometimes defiant, but now he seems to change into a ‘good boy’ who listens to what Cheong Wa Dae tells him to do.”

- It is belatedly reported that the NIS and the Ministry of Justice opposed to permit Democratic Labor party leadership to go to North Korea today, but the Unification Ministry approved the visit.

2. Maeil Business Daily

- Economic minister Kwon O-kyu said in the administration audit yesterday “we are considering to sell off a 28 per cent government-held stake in Woori Financial Group possibly within this year.” “We will take time and be very cautious when we hand over management control of the bank to a strategic investor, because it is related to structural changes of the whole financial sector,” he added.

- Lotte Shopping makes inroads into China as the first Korean department store. The company yesterday unveiled the ambitious plan of opening a department store in Beijing in early 2008 joining hands with a local Chinese company.

- Kookmin Bank posted a worse-than-expected third quarter result of a net profit of W678.1 bn, down 12.72 per cent from a quarter ago and 27.75 per cent down from a year ago. Industry experts say the disappointing performance is likely to continue into the first quarter of next year.

- Local online ad is reported to suffer from ‘click fraud,’ which occurs in pay per click online advertising when a person imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating an improper charge per click.

other important headlines_Oct 30

- The North did not properly comply with the sea agreement between the two Koreas which took effect from August last year. According to the agreement, the two should respond to each other’s radio signal when passing by the other’s sea. North Korea, however, failed 22 times to respond to South Korea’s signal.

- Construction Minister Choo Byung-jik, who is under fire for failing to closely consult with relevant government organizations in announcing a new real estate project, stuck his gun by saying it is the discretion of the construction minister to make such as announcement.

- Japanese Kyoto press reported foreign ministers of S.Korea, the US, and Japan agreed not to recognize North Korea as a nuclear power in their meeting held on 19 October in Seoul.

- Monthly fee for DMB service will be down from the current W13,000 to W11,000 from November. A one-year subscriber can use the service for W9,900. The number of available channels increases to 15 from 12.

- Local banks make ambitious moves into Hong Kong for investment banking business. Woori Global Markets Asia Ltd has started its investment banking business in Hong Kong and Shinhan Asia Ltd will be up and running on November 21 also in Hong Kong. Kookmin bank is also reviewing to set up an investment bank in Hong Kong and Industrial Bank of Korea decided to strengthen its IB business through its local subsidiary.

- Peter Beck of the International Crisis Group warned a rush of North Korea defectors can dramatically increase early next year because of aggravated food and economic hardship in the regime. In the interview with VOA, he said in three to four months, food crisis could start in earnest which in turn could lead to a growing number of North Koreans who flees the country.

local paper headlines_Oct 30

1. Chosun Ilbo

- Ilsimhoe, the underground spy group headed by Chang Min-ho, is said to have sent North Korea at least 46 reports which included intelligence on South Korea’s political and military situation. Among those reports contain political responses in the wake up of North Korea’s N-test, the reasons behind the failure to sack Defense Minister Yoon Kwang-ung back in 2005, methods to help Uri party candidate for Seoul mayor be elected in the 5.31 local election, and measures to spread anti-US movement in S.Korea especially using environment groups.

- NIS head Kim Seung-gyu who announced to resign last week said “the spying incident is very shocking.” Asked whether the incident make any influence on his resignation, he neither confirmed nor denied.

- The prosecution is investigating into Uri Party Rep. Chung Dong-chae and Lee Mi-kyung on suspicion that they have received slush funds from illegal gambling stores for business favor.

-GNP committee on North Korean nuclear crisis argued yesterday that most of the $0.6bn South Korea has sent to the North for Kumkang Mount Tour since 1998 landed on the hands of the regime’s worker’s party and military.

- If Korea is hit by ‘three misfortunes,’ namely North Korea’s another nuclear test, a strong won, and high oil prices next year, the economic growth can hit as bottom as 1.9 per cent in the worst scenario, says a report by Korea Economic Research Institute.

2. Maeil Business Daily

- It has been almost four months since Jeju Island was designated as a special administrative region but Jeju local people say they hardly feel any difference or improvement made after the designation. Rather they say changed regulations make things more difficult and inconvenient for them.

- House prices of Kumdan region of Inchoen, which has been named as a new development city by the government a few days ago, went up so high that real estate transactions have virtually all but stopped. Meanwhile the construction ministry and the national tax office will start to clamp down on speculative moves in that area from tomorrow.

- Ambassador to China Kim Ha-joong, Presidential Advisory Council on Democratic and Peaceful Unification chief Lee JAe-joung are the most likely candidates to become the next unification minister. Army Chief of Staff Gen. Kim Jang-soo, former Vice Chief of Staff of the Air Force Bae Yang-il and Uri Party Rep. Chang Young-dal are tipped as the most leading candidate for the next defense minister.

- Samsung Corporation is set to sell Samsung Plaza in Bundang and totally withdraw from the retail business. The company will announce a prime bidder early next month and conclude a contract by the end of next month. Currently Aekyung Group, Samsung Tesco, and Hyundai Department Store are participating in the bidding process, and Aekyung is said to be the most competent bidder with the offered price tag of W560 bn, which the company denied.

- In the year to September, foreign direct investment totaled $0.79 bn, only one quarter that of the same period last year, said the Bank of Korea. Picture is bleaker for indirect foreign investment with foreigners selling off $2.96 bn worth of stocks. Meanwhile overseas investment by locals dramatically increased to $4.97 bn, up 50 per cent from a year ago.

other important headlines_Oct 27

- Christopher Nelson, editor of US intelligence paper Nelson Report, said based on various sources he gathered, Kim Jong il didn’t directly apologize for the test, but he conveyed his apology for putting China in an awkward position.

- The head of the NIS expressed his willingness to resign to the president. An official of the NIS said “Kim Seung-kyu met the president yesterday and said he would step down.” “He doesn’t want to be a liability for the president to reorganize diplomatic and security camp,” he added.

- The GNP urges the Minister of Construction and Transportation to resign over the confusion and speculative moves triggered by the premature announcement of a new city construction.

- Rep. Kim Ae-sil of the GNP revealed the number of female temporary researchers at government-run institute is much higher than their counterpart. In the case of Energy Research Institute, 78.6 per cent of female researchers work on a temporary payroll while there are only 2.9 per cent of male temporary researchers. At the Korea Institute for International Economic Policy (KIEP), 32 per cent of female researchers are temporary compared to only 4.8 per cent for man.

- Seven out of ten Seoul citizens find there is a severe gap between Kangnam and Kangbuk regions. Rep. Choi Kyu-sil of Uri party surveyed 700 Seoul residents and 69.6 per cent of respondents say there is a disproportionate development trend between the two regions.

- Only 16.3 per cent of people find the public pension fund satisfactory and the younger the respondent, the more dissatisfied with the fund, said GNP Rep. Ahn Myung-ok. Only 8.7 per cent twenty-somethings say they are happy with the current fund.

- A sigh of relief is felt within the government as the visit by John Bolton, US Ambassador to the UN, has been canceled. It has been reported that the government felt pressured by his visit who is known as a hawk within the Bush administration regarding the North Korean issue.

- Lee Myung-bak who is visiting European countries revealed that he would build a city of science and business in a non-metropolitan area in cooperation with other major international cities if he gets elected as next president.

- Bank of Korea governor Lee Sung-tae said in his lecture at Busan Natioanl University “the call rate of 4.5 per cent is pretty low,” indicating a possibility of another raise of the rate.

local paper headlines_Oct 27

1. Chosun Ilbo

- Cheong Wa Dae is said to criticize the Ministry of Construction and Transportation for its early announcement of building a new city, which has already triggered a speculative move in the designated area. An official from the blue house said “there hasn’t been enough consultation between Cheong Wa Dae and the ministry regarding the announcement.”

- US Secretary of State Condoleezza Rice said the US would bring up its own punitive actions separate from the UN resolution.

- China’s foreign ministry spokesman confirmed in his regular press briefing that the two ethnic Koreans who Korean press reported were arrested in China for possessing enriched uranium were really trying to sell a ‘dangerous material.’

- The NIS and the prosecution confirmed that Jang Min-ho, who was investigated on charges of espionage, had been a member of Rodong Party and trained as a spy in North Korea from 1989 to 1993. Jang partially admitted the charges. The prosecution sought arrest warrants for other two people under the same charge.

- Hyundai and Kia Motors have been aggressively seeking to advance into foreign markets, and thereby overseas investment is rapidly increasing. From 2003 to now, the automobile companies have annually poured W2000-3000 bn for new factory construction overseas and will invest more than W1000bn by 2009, however their domestic investment pales miserably in comparison.

2. Maeil Business Daily

- Hynix continues its outstanding performance with its third quarter producing W435 bn or a 23 per cent of net operating profit. The total sale for the third quarter hit a record high with W1966 bn.

- Exporting companies are selling dollars through financial futures contract. Their selling-off triggers appreciation of won. According to the Bank of Korea, they sold $13.5 bn during the third quarter, which is tantamount to 4.7 times of export net profit during the period.

- Industrial Bank of Korea gave up its plan to acquire LIG Insurance due to huge price differences. A high ranking financial official with the knowledge of the process confirmed that the M&A process ended. The bank, however, still seeks to take over an insurance company.

- As part of its restructuring plan, Doosan Co. is due to sell its food business including Chongga Kimchi to Daesang for W120bn. They are expected to conclude the contract today.

- Monorail construction plan of Kangnam ward office is scrapped because the office concluded the economic feasibility of the project is not very good.

other important headlines Oct 26

- The government is reported to be preparing various measures including banning a North Korea person or group who are designated by the UN committee as a subject to sanctions from coming to Korea or having financial transactions with them.

- Rep. Kang Ki-gap of Democratic Labor Party reported this morning that Nonghyup had a total of 127 financial transactions accidents (61 misappropriations, 35 regulation violations, and 30 robberies) since 2003 and the money lost amounts to W61.8 bn. But damage control was not appropriate with punishment for people involved in the cases being very mild.

- Rep. Kim Dong-churl of Uri Party argued that the central investigation division of the prosecution failed to do its job properly. He claims that the number of cases resolved by the division last year was 53, almost half of the 2003 cases of 104. He also raises a question on the division’s efficiency based on the fact that a prosecutor there handles on average 3.5 cases a year compared to 2,732 cases taken care of a prosecutor at a district prosecutor’s office.

- A singer Rain is going to meet UN secretary-general designate Ban Ki-moon at a welcoming party in Chungju this Saturday. Next day, he will attend an event held in the UN headquarters in New York as a singer representing Asia.

- It is reported that the US will open its market to all Korean products immediately without a grace period for tariff elimination.

- The KIDA (Korea Institute for Defense Analyses) predicted in its report, if the PSI starts in earnest, North Korea would suffer a yearly loss of $0.7 -1 bn from reduced earning of hard currency, which translates into 40-50 per cent of the regime’s annual dollar earning. It is assumed that the regime earns $0.4-0.5 bn by selling conventional weapons, $0.3-0.5 bn from drug and counterfeit dealings, and $0.16 bn from inter-Korean economic businesses.

- North Korea’s Rodong Sinmun argued yesterday in its editorial titled ‘two Koreas’ marching with holding hands is the way forward to peace and security,’ “security can’t achieved by depending on the outside force,” and “amid mounting war threat, you can trust only your blood-shared family.”

local paper headlines Oct 26

1. Chosun Ilbo

- The NIS and the Police seeks an arrest warrant for three former 386 activists on charges of espionage. One of them was former member of Democratic Labor Party. The three men are under suspicion that they contacted North Korean spies in March in China.

- Presidential spokesman Yoon Tae-young said of the resignation of Lee Jong-seok that even if the minister changes, there would be no change in policy, emphasizing Lee is not resigning over the failure in North Korean policy but over excessive criticism toward sunshine policy which Lee is representing.

- The Ministry of Science and Technology said yesterday it officially confirmed that North Korea conducted a nuclear test. The ministry said its researchers detected a nuclear material Xenon near a border area of Kangsung in Kangwon-do.

- Uri party again was completely trounced in yesterday’s by-election of which vote turnout was 34.1 per cent.

- North Korea’s ‘Nation Peace and Unification Committee’ warned yesterday “if the South joins in the US-led scheme to impose sanctions on us, we will consider it as a complete disavowal of the 6.15 joint statement by South Korea and as a declaration of confrontation and will thus take necessary measures.” It seems the North warns South Korea not to join in the PSI.

- Park Sam-koo, CEO of Kumho Asiana Group which has recently acquired Daewoo Construction Co. revealed his ambition to buy out the Korea Express Co.

2. Maeil Business Daily

- Bank of Korea said yesterday the Korean economy grew a disappointing 0.9 per cent in the third quarter from previous one and 4.6 per cent year-on-year. Korea’s GDI decreased by 0.2 per cent because of price increase of imported goods and flat prices of export goods.

- Investors are flocking to Kumdan area of Incheon to buy an apartment as the government announced a plan for building a Budang-like new city in that area.

- According to the Ministry of Planning and Budget, the ceiling for the investment into the stock market by the public pension fund will more than double next year. The current ceiling is W6,580 bn but it will increase to W17,260 bn next year.

Important headlines_Oct 25

- Unification Minister Lee Jong-seok, who was regarded as one of the core members of the current government’s engagement policy, issued resignation this morning saying “I think someone more capable should take this job to overcome difficulties at a time when all the efforts and accomplishments we have done or achieved for peace and security on the Korean peninsula and for inter-Korean reconciliation are now being relentlessly questioned after North Korea N-test.” “As a Unification Minister, I don’t think there has been a major setback in the government’s dealing with North Korea, and I am pretty sure about the accomplishment of engagement policy toward the North,” he added. He expressed his willingness to come back to Sejong Institute as a researcher.

- Song Min-soon is to succeed Ban Ki-moon as Minister of Foreign Affairs and Trade. In case of Yoon Kwang-woong who expressed his willingness to resign yesterday will assume a core security role such as presidential advisor for security or the head of NIS.

- Korea’s B-boy teams were awarded second and third position in the Battle of The Year 2006, the so-called ‘world cup for B-Boy.’ The battle was held in Germany on October 21 and ‘Last for One’ which won last year’s battle ranked second, and ‘Drifters Crew’ got the third position. ‘Last for One’ starred in a movie, which depicts lives of B-boys and is produced by an American director. The film will be shown in the Sundance Film Festival next January.

- Kim Kyung-jae, former representative of the Democratic party, who was a staunch supporter for Kim Dae-jung’s sunshine policy, now turns his back on him and lambasted Kim for failing to be tough on North Korean matter. He said “now is the time for Kim to wield a stick and storm at Kim Jung-il.” But he said he didn’t oppose the sunshine policy in itself.

- A parody video clip titled ‘Super Kim’ in which Kim Jong-il is compared to a game character Super Mario takes off among internet users around the world. The clip appeared on U-Tube and was clicked about 10,000 times in just two days. In the clip, Kim Jong-il acquires a nuclear weapon and reinvents himself as Super Atom Kim.

- The next secretary-general of the UN Ban Ki-moon addressed Seoul National University students and said “I expect North Korea to capitalize on me and make a decent decision as early as possible to solve the nuclear problem.”

- A large amount of historic remains were unearthed in part of KTX train construction sites linking Seoul and Busan. The remains date back to the Shilla dynasty. The train route will not be changed despite the discovery and the construction will be resumed after unearthing the relics.

- According to the Agricultural Ministry, the number of foreign women, who married to a Korean man and live in a country side, totals 14,000. The ministry data shows among 8,027 marriages in a rural area last year, 2,885 cases were between a Korean man and a foreign woman, 59 per cent increase from 2004 of 1,814. The ministry will, from next year, dispatch 300 helpers in rural areas to assist foreign women to study Korean. The helpers will visit foreign women three times a week for five months.

Samsung coughed up the promised $1bn donation

Samsung Equal Opportunity Scholarship Foundation’ which has already received the Samsung $1bn donation, had its first board meeting on October 13 and appointed Shin In-ryung, former president of Ewha Womans University, as the head of the foundation.

The office is located in Gateway Tower in Dongja-dong, Youngsan-gu, Seoul and now up and running. The foundation will hold a regular board meeting sometime in November in which it will confirm a business plan for next year. The scholarship program for the underprivileged will start in earnest from next year.

The Ministry of Education announced the list of board members consisted of 10 people: advisor to Bank of Korea Park Churl, former minister of the Ministry of Planning and Budget Kim Byung-il, president of KIST Kum Dong-hwa, former president of Ewha Womans University Shin In-ryung, Ewha professor Lee Hye-sook, former superintendent for educational affairs of Kangwon-do Kim Byung-doo, former president of Kyungbok high school Lee Sang-kap, director of Foundation for Broadcast Culture Lee Ok-kyung, stage actress Shon Sook, and secretary-general of YMCA Lee Hak-young.

other important headlines_Oct 24

- South China Morning Post reported today that a North Korean ship is now being detained by Hong Kong police but no ‘prohibited goods’ was found. It was the first ship interdiction since the adoption of the UN resolution.

- Train fee will increase by 9.3 per cent from next month due to general price rises and rising oil prices. Ticket price for KTX will see the biggest increase of 9.5 per cent, followed by Mugoonghwa of 9%, and Saemauel of 8%.

- According to Uri Rep. Choi Sung who has recently met a high-ranking North Korean official, the North Korea official said if the ruling and opposition parties chooses a bipartisan envoy, North Korea is willing to meet the envoy. Rep. Choi said the official implied Park Geun-hye as a favorable envoy by saying ‘in the case of the opposition party, the former leader’ would be good.

- The eldest son of former Deputy Prime Minister Jin Nyum died from electric shock in the New Malden train station two days ago. Mr. Jin is expected to arrive at London today.

- AhnLab, the nation’s largest computer security provider, rejected M&A rumors. The company said though it reviews various ways for further growth, there hasn’t been anything concretely decided yet. The M&A rumors were triggered by the lab’s appointment of a new CEO from IBM.

- Uri party floor leader Kim Han-kil said the party would participate in punitive actions against North Korea which excludes any military intervention. The party will join the sanctions based on diplomacy in order to get the regime to the negotiation table, but will not participate in any sanction that can trigger military conflicts, he said.

- Shon Seok-hee, professor of Sungshin women’s university, tops this year’s list of ‘who is the most influential in the press sector?’ by Sisa Journal. The second top is Chosun Ilbo’s editor-in-chief Kim Dae-joong. KBS is chosen as the most powerful media (56.5%), followed by Chosun Ilbo(55.6%), MBC(33.2%), Donga ilbo(20.5%), and Joongang Ilbo(19.6%), and Naver(10.0%).

local paper headlines_Oct 24

1. Chosun Ilbo

- As the government doesn’t budge on the controversial issue of wartime command transfer despite North Korea’s N-test, experts point out that security uncertainty on the Korean peninsula is becoming very worrisome. They say the country needs some ‘extra measure’ to fill the ‘security vacuum.’

- Chinese media reported that its police arrested two Chinese men in a hotel in Beijing who tried to sell 1kg of enriched uranium. According to the police, the two men turned out to be ethnic Koreans. The police assumed the final destination of the uranium would be Russia but didn’t rule out a possibility of North Korea.

- The Ministry of Construction and Transportation decided to build a Bundang-like new city in the Metropolitan area in order to solve housing shortage and stave off rises in house price. The Ministry will announce a blueprint for construction as early as the end of this month.

- Samsung Chairman Lee Kun-hee came back to Korea last night after a 40-day overseas staying. Asked what he would do if summoned by the prosecution, he replied after seconds of silence, “I will follow the laws of nature.”

- Hyundai Motor will move its production facility of a small-sized sedan ‘Click’ to India by the end of next year due to worsened profitability over high labor cost and frequent production disruption by militant unions.

2. Maeil Business Daily

- According to the national statistical office, the number of part-timers totals at 1.13m as of August this year, up by 0.32m or 40.64% from 0.87m in 2002. A job portal site ‘Incruit’ found out that 59.8 per cent of 1,028 part-timers say they work on a casual basis since they couldn’t find a regular job.

- National Assembly’s Finance and Economy Committee received a document from Bank of Korea which revealed that about $13m have been wired to an account of Banco Delta Asia since 2001. The committee asked the bank to submit detailed information but the bank rejected the request saying it was illegal to open such information.

- On the first day of the fourth round of Korea-US FTA negotiation, the two countries had difficulties in finding a consensus especially on the date for tariff elimination for products.

- Hana Financial Group CEO Kim Seung-yu said of various M&A rumors surrounding the company as ‘groundless.’ When meeting with reporters yesterday, he said “market always changes so we open the possibility for M&A but there is no on-going plan.”

Controversy over labor cost for wokrer at Kaesung Industrial Park

Details on labor cost at Kaesung Industrial park reported by Chosun Ilbo

1. Rep. Kim Ki-hyun at the GNP party brought up the issue at the inspection of administration by the National Assembly this morning.

2. He argued based on the official report by Ministry of Commerce, Industry, and Energy which was submitted to the Unification Ministry on December 8, 2005;

the half of monthly salary of North Korean workers in Kaesung Industrial Complex actually goes to the Rodong Party,

about $30 among the salary of $57.5 goes to the party,

even among $30, a worker actually gets only $10 and the remainder is spent on other costs including insurance,

$10 can be translated into $0.3 a day, the lowest possible salary in the world, and
the government should think shame to argue “North Korean workers at the park receive more than the average salary of ordinary North Koreans,”

the government should really reconsider the Kaesung project.

[Official statement posted by the Ministry of Commerce, Industry, and Energy]

The ministry has set up a special team for inter-Korean economic cooperation October 28, 2005 and the team suggested studying difficulties that local companies at Kaesung faced.

According to the suggestion, the ministry conducted a research on the hardships and reported them to the Unification Ministry in December 2005.

During the process, a person in charge included the labor cost issue in the report without a proper background check for authenticity. The Unification Ministry rejected the claim ‘groundless’ at that time and didn’t post any official response.

We feel sorry for bringing up such a ‘groundless’ claim without consultation with the department in charge of the Kaesung park.

[Official statement posted by the Ministry of Unification]

Chosun’s today report that only $10 goes to North Korean worker in Kaesung Industrial park is not true.

Korean companies pay a monthly salary of $57.5 including a minimum wage of $50 and a social insurance fee of $7.5. Except for 30% going for ‘social and cultural policy fee,’ all the remainder goes to a worker in the form of either a ration ticket or cash.

On receiving them, workers should sign on the form of confirmation that he or she receives the salary.

The MCIE report was prepared at the end of last year, and we found no ground to support the claim in the paper, which thus we have not taken any measure on the issue.

other important headlines_Oct 23

- Samsung mobile phone’s up-market strategy turns out to take off with a 17 per cent increase in sales in the third quarter. The company’s ultra edition has been sold over 3m in the quarter.

- Lee Sung-tae, governor of BoK, said this morning “the growth rate next year will be below this year’s 5 per cent,” and “we will manage a monetary policy with that in mind.” “But the situation is not something to worry much about,” he added.

- Pantech Group, a handset maker, is having a hard time to survive. Park Byung-yeop, vice president of the company, said “there have been two to three very difficult times in my 15 years of work. I will do my utmost to revive the company with a mindset of ‘if I fail, I will just disappear.’” The company has started a rigorous restructuring plan of voluntary retirement.

-According to the research of 998 office workers by a job portal site Job Korea find out the biggest stressful factor is low income compared to workload (50.8%), followed by heavy workload (39.5%), and conflict with boss (25.3 %). 69.3 per cent say the level of stress goes up this year compared to last year and 96.6 per cent say they are under stress from work at the time of answering.

- Korean companies become growingly the target of a hedge fund especially after the 1997 Asian financial crisis. A fund manager, asked not to be named, pointed out “Korean companies are financially very stable but it becomes more difficult for them to guard their management control than in the financial crisis.” Lee Min-seop of Lehman Brothers Seoul office said “global hedge funds are looking into Korean companies like they look at the menu.”

- Life expectancy of North Korea is the lowest in the world expect for a few African countries. According to the UN, National Statistical Office, and Bank of Korea, the life expectancy of the regime is on average 64.5 with 61.7 for man and 67.5 for woman, the lowest in Asia except for that of Iraq (59.5 for man and 62.5 for woman). Korea’s average life expectancy is 78.2.

- Getting a certificate designed for an office worker is a boom among elementary students. Seven out of ten applicants for ITQ (Information Technology Qualification), a national test for Excel, Powerpoint, and Word, are elementary school students mainly because some of high schools give extra points for a certificate holder.

local paper headlines_Oct 23

1. Chosun Ilbo

- In the 38th annual defense meeting between Korea and the US, the two countries couldn’t hide their differences in position especially over the US provision of ‘nuclear umbrella.’ A US high-ranking official rejected Seoul’s briefing that a strategic order had been issued to Gen. Burwell Bell to begin work on how to specify the US nuclear shield. As a clear sign of the difficulties of the consultation, the agreement came 7 hours and a half minutes behind schedule.

- Former President Choi Kyu-hah passed away yesterday at the age of 88 from heart failure.

- According to an official report by Ministry of Commerce, Industry, and Energy, the half of monthly salary of North Korean workers in Kaesung Industrial Complex actually goes to the Rodong Party. The report says about $30 among the salary of $57.5 goes to the party. And even among $30, a worker actually gets only $10 and the remainder is spent on other costs including insurance. A unification official said of the report “even the Unification Ministry doesn’t know exactly, then how come the MCIE knows? “

- Korea turns into an increasingly ageing society as the employment rate of 20-sometings hits a 21-year low. According to the national statistical office, the number of 20-somethings who have a job in the 10 months from January this year is 4.07m, the lowest since 1985 with 4.06m.

- A 70-year-old man who was in the city hall plaza to attend a candlelight vigil against North Korea’s N-test is in a coma after falling from a podium during physical hassle with staff. He is said to go up to the podium to urge to turn off the North Korean Song ‘bankapseupnida.’

2. Maeil Business Daily

- From July next year, ‘m²’ should be officially used instead of widely-used ‘pyong.’ If not abided by, fines up to W500,000 will be imposed.

- Skepticism is arising in the US and Japan over Kim Jong-il’s alleged remark that North Korea would not stage a second nuclear test. US Secretary of State Condoleezza Rice said “Tang didn’t tell me that Kim Jong-il either apologized for the test or said that he would not ever test again.”

- This week will see major companies revealing their quarterly report on earning. The companies include KT$G, SK Telecom, Hyundai Motor, Hana Financial Group, Hynix, Lotte Shopping, Industrial Bank and LG Telecom and so forth.

other important headlines_Oct 20

- Applicants for the so-called ‘god-given jobs’ of state-run banks and government financial institutes due to job security and long working years are busy with study and interview preparation as most of the companies are now hiring new employees. For the Financial Supervisory Service with 40 openings this year, 3,734 people have applied for the job, making the competition rate of 75 to 1. Bank of Korea with the same number of opening, 2,402 people have applied. Korea Exchange has seen the fieriest competition with 100 to 1.

- It is reported that China’s tour service to North Korean has been suspended by Pyongyang due to ‘political reasons.’ A Chinese daily newspaper reported yesterday China’s major tour companies didn’t have North Korea tour programs, but some small ones have been secretly run such programs. Besides the ‘political reasons,’ devastation by flood is assumed to be another reason for the halt.

- President Ron Moo-hyun is reported to have decided to go back to his hometown after resignation. He has bought 8,000 pyong of land and house construction on the site is about to start. The land price is around W150,000 per pyong and the cost for construction will be billed by the president himself.

- Organized crime gangs are most likely seen in Jellabuk-do. According to Kang Chang-il of Uri party revealed that the number of crime organization in the country is 213 with 5,075 members, and 10.3 gangs to every 100,000 people. But in Jellabuk-do, there are 25.3 gangs to every 100,000 people, the highest in the nation.

- One government official is reported to have said yesterday “Korea can make a nuclear weapons within three months,” but declined to offer any ground for the argument. Defense and atomic experts also say “nuclear development technology is not considered high-tech, so it is believed that about 30 countries around the globe have a capability to produce atomic weapons.”

- According to the research by the paper, companies’ intern programs, only except for a few, are not what they claims to be. Interns suffer from low payment and heavy workloads, and their work is usually doing chores such as copying, sending fax, and in some cases even cleaning. Complaints from interns are all over in a bulletin board at job portal sites. Based on date from the Ministry of Labor, 68 per cent of interns among 11,461 people who joined in government’s intern project in 2004, got hired as a regular worker, but it turned out that three quarters quitted the position within two years.

- Ri Chan-bok, the head of North Korea side of Panmunjeom, warned if the US didn’t stop pressing North Korea, a war would be inevitable. In an interview with ABC, he said US President Bush wanted the North to give in to but the North couldn’t do so.

Local paper headlines_Oct 20

1. Chosun Ilbo

- On the recently adopted UN resolution, US State secretary Condoleezza Rice said in her joint press briefing that all UN members had a duty and responsibility to stop the proliferation of weapons of mass destruction and block the inflow of money that was used to make such weapons.

- The national tax office informed Chosun Ilbo for another tax investigation only five years after the last probe in 2001.

- A Chinese diplomatic source said North Korean leader Kim Jong-il told Tang Jianxuan that he would come back to the six party talks if the US lifted financial sanctions on the regime. Kim is reported to have said if the US made some concessions, he was willing to make the same move, be it accepting a bilateral talk or a six party talk. According to the source, Kim delivered an apology for the test to his Chinese counterpart.

- Ri Churl, North Korean Ambassador to the Switzerland, met with ruling party lawmakers at the sideline of the IPU (Inter-Parliamentary Union) in Geneva and complained about the US’s ‘interruption’ into the Kumkang mountain tour. Ruling party representatives said Mr. Lee asked that Seoul should continue its firm position on the tour.

2. Maeil Business Daily

- GNP leader Kang Jae-sup, marking 100 days since he was appointed a leader of the opposition party, said of a possibility of inter-Korean summit as a solution to North Korea nuclear test, “it is very inappropriate.” “A summit meeting is supposed to be held when the mood is good, but right now the relations have become very sour.”

- A number of local economic institutes have been issuing a report that points to a possibility for North Korean economy to contract due to reduced financial assistance from China and South Korea. Korea Institute for Industrial & Economic Trade predicts North Korea would suffer food production shortage of more than 1m ton every year if South Korea suspends it annual 0.35 ton fertilizer shipment. The state-run Korea Institute for International Economic Policy predicts the North Korean economy is expected to post negative growth in 2007, the first time since the economy suffered nine consecutive years of contraction between 1990 and 1998.

- SK Communications Co. has acquired a 24.4 per cent stake in Empass, the country’s third largest portal and search engine by visitors, for W37.2m. SK Communications will also buy a 29.5 per cent stake in Konan Technology Inc. which provides search Know-how to Empas.

- Among executives and CEOs of conglomerates, Yoon Jong-yong, vice-president of Samsung Electronics, receives the highest monthly salary with W2.1 bn. Lee Kun-hee monthly earns W1 bn, the fattest among CEOs, followed by Chung Mong-koo of Hyundai with W0.77 bn.

Tang Jianxuan met Kim Jong-il

[Yonhap 2006-10-19 16:27]

Chinese Foreign Ministry said the country’s State Councilor Tang Jianxuan, who is currently visiting Pyongyang as a special envoy sent by President Hu Jiantao, met Kim Jong-il this morning to convey Hu’s message and talk about the nuclear test.

The press secretary of the ministry said in his regular press briefing that the envoy’s visit to North Korea is “very meaningful to the relations between the two countries.” He said Tang was accompanied by China’s chief nuclear negotiator Wu Dawei and Dai Bingguo, China's Executive vice Minister of Foreign Affairs.

But the press secretary said it was not known what Hu’s message was, how Kim reacted to the message and whether any agreement was reached.

Experts in Beijing interpreted it was very positive that Kim met the delegates much sooner than had been expected.

[Yonhap 2006-10-19 16:40]

It is speculated that China might have given some special ‘presents’ to North Korea. North Korea’s move now depends on what China promised to offer to the regime.

Nam Sung-wook at Korea University said “Kim Jong-il will decide how to react according to what Chinese delegates brought with them,” and “if China failed to persuade North Korea, the North would probably go for a second test, and if the ‘package’ was good, the regime would refrain from doing so and go through internal review on that matter.” “China negotiates in a life-or-death manner and so does Kim Jong-il,” and “having said that, Tang’s visit to North Korea is very crucial and will mark a watershed,” he added.

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Other important headlines_Oct 19

- Lee Heo-chang, former leader of GNP party, said in his lecture this morning organized by ‘Dongkuk Forum’ that the sunshine policy was a complete failure. Lee blamed former president Kim Dae-jung’s argument that the US had responsibility for the current crisis, saying it was an ‘outrageous excuse.’ He lambasted Kim and said “He was the one who gave money to Kim Jong-il and now he passes the buck to the US, which is fallacious.”

- CNN reported yesterday North Korea informed, after its first test, China of its willingness to conduct as many as three more nuclear tests.

- It is said that Uri party representatives asked Kim Geun-tae, the leader of the party, to reconsider his visit to Kaesung Industrial Complex scheduled for October 20. They are said to have urged him not to go by saying the visit by the leader of the ruling party would not go down well with the public especially amid high possibility of a second test. But Kim is said to stick to his decision.

- The Seoul Metropolitan government designated the Seoun district in Jongro as a reconstruction area. A Seoul official said the area would be developed to be greener and more convenient for people to shop. The decade-old Seoun arcade will be demolished by June next year according to the plan.

- TU media, a DMB service provider, resorts to service fee discount from the current W13,000 to W11,000 a month due to a dismal subscription rate. The company sees it difficult to achieve the expected subscription number of 1 m at the end of this year, which is the biggest reason behind the reduced service charge.

- As the fourth round of Korea-US FTA negotiation is slated to be held in Jeju Island from next week, optimistic opinions are gaining ground that the negotiation is likely to be successful given the fact that South Korea now needs firmer alliance with the US. Some Uri party lawmakers content the FTA should be concluded for the shake of the national security. Their logic is if the deal is signed, the US will provide South Korea with stronger nuclear umbrella. People against the deal concern that the political factor weighs into the economic field.

Local paper headlines_Oct 19

1. Chosun Ilbo

- The government is said to decide to halt financial assistance to Mount Kumkang tour in line with the UN Resolution. A government official close to the matter said yesterday “Mount Kumkang tour is a very symbolic business of inter-Korean relations and is a private business so the government can’t stop the business.” “But we decided instead to stop the assistance after we had collected public opinion that the government subsidies shouldn’t continue.”

- Ri Geun at North Korea’s Foreign Ministry said yesterday in an interview with an ABC anchorwoman Diane Sawyer, “a second nuclear test is a natural thing,” and “it is nothing to be surprised with.” Mrs Sawyer is the only western reporter to be allowed in to the reclusive regime among many who applied for it after the nuclear test.

- Cheong Wa Dae security advisor Song Min-soon said in his lecture at ‘The 21 Century North-east Asia Future Forum,’ “the US is the country who went through so many wars and Korea, left in the ‘security irregularities structure,’ is the biggest loser by war.” “We should take these factors into consideration and harmonize two countries’ policies toward North Korea.”

- North Korea Rodong Sinmun reported yesterday that Kim Jong il had said “revolution is about belief, willingness, and gut. You can’t achieve revolution which requires you to go through so many hardships unless you have gut and firm belief to win.” But the paper didn’t specify when and where Kim made such remark.

- Foreign investors who bought stocks on the news of North Korea’s nuclear test are now selling off their stocks for five consecutive days. In the stock market yesterday they sold W185.6 bn worth of company shares.

2. Maeil Business Daily

- An official at the Industrial Bank said “a few big companies suspended their plan to borrow in overseas capital due to North Korea’s N-test,” and “if the nuclear crisis continues, borrowing from overseas can be more difficult and even if possible, they have to pay higher interest rate.”

- It is reported that US Congressional Research Service (CRS) came to Korea to conduct an investigation into the two inter-Korean economic projects whether these two are contradictory to the recently adopted UN resolution.

- Lee Jung-sik, president of LG Powercom, said “LG Group has no plan to acquire Hanaro Telecom.” Rumors have been spreading that Hanaro Telecom will be bought by either SK Telecom or LG Group.

- Big companies are increasingly set their eyes on small venture Kosdaq-listed companies in order to make inroads into a new niche market with less risk by acquiring companies with proven technology. In October, three small ones have been merged.

- Doosan Liquor BG expands its production facility for its ‘Cheumcherum’ soju to meet increasing demands. A Doosan official assumed the national market share of its soju to be about 11.3 % and expected it to increase to 12% by the end of this year.

other important headlines_Oct 18

- North Korea Central News Agency reported Kim Jong-il attended the army concert in his first appearance after the nuclear test. The agency didn’t reveal the date but the date is speculated to be yesterday which marked the 80th anniversary of a communist group established by Kim Il-sung.

- Lee Kyung-tae, president of Korea Institute for International Economic Policy, said if the North conducts the second test, the government should signal a clear sign to the market by introducing an aggressive macroeconomic policies such as interest rate reduction and spending expansion.

- According to local banks, private banking clients didn’t budge on the news of North Korea’s N-test and rather seemed to see the crisis as an opportunity. Some of the clients signed up for a new fund.

- US NBC News quoted an anonymous US official as saying North Korea informed China of its second test.

- There is an increasing trend that office workers turn an avid student after work to prepare for a national exam to become lawyers, accountants, or doctors. According to data, last year 23 per cent of applicants who wanted to enter a special graduate school to become a doctor were over 30 years old.

- According to the US House Intelligence Committee, Kim Jong-il’s private asset is estimated to be around $4 bn. Kim spends $0.72 m every year to buy Hennessy, a French cognac and he possesses 200 Benz S classic.

- Korea Deposit Insurance Corporation warned the management of Woori Bank for giving special ‘encouragement bonus’ to its employees on April 3 just a few days after it had sent out W47.4 bn in incentives on March 27, saying the give-out was against the MOU for management normalization. An official from the KDIC said “it shows moral hazard of Woori Bank, which had received pubic funds.”

Local paper headlines _Oct 18

1. Chosun Ilbo

- As signs are pointing to a second nuclear test by North Korea, it is reported that the US and Japan will come up with a sterner resolution than the Resolution 1718 if the communist regime turns its word into action.

- US government officials reveal their skepticism toward Korea’s economic engagement policy toward North Korea. US chief nuclear negotiator Christopher Hill said of Mount Kumkang Tour, “[it] seems to be designed to give money to the North Korean authorities.” US Secretary of State Condoleezza Rice said to a question about the economic projects “I suspect that a lot of it has to do with what North Korea does.”

- In a first official statement after the unanimous adoption of the UN resolution to punish North Korea, the regime denounced the resolution as a ‘declaration of war led by the US’ and announced it would take necessary measures in accordance with what the US does.

- The KDI (Korea Development Institute) expected yesterday that the economic conditions will deteriorate and the growth rate will be around a disappointing 4.3% next year.

- A Cheong Wa Dae official said yesterday Kim Byung-joon, who was forced to resign August amid the plagiarism controversy of his thesis, is reinstated in the position of policy adviser to president.

- Since the nuclear test by North Korea, Lee Myung-bak’s approval rating has seen the increase the most among presidential hopefuls, said the opinion survey of 700 adults conducted by Research & Research. Former Seoul mayor Lee Myung-bak earned 29.5 % of support followed by Park Geun-hye with 24%, and Ko Kun with 17.8%.

2. Maeil Business Daily

- George Soros, who are staying in Seoul to attend World Knowledge Forum, said “North Korea’s nuclear weapon development is a known fact, and foreign investors are not going to sell stocks because it is not known that the regime has succeeded in the experiment.” “I see North Korea nuclear problems much more positively than the Iraqi issue, and it is possible to solve the [North Korea] problem peacefully.”

- Lotte Shopping eyes on the takeover of C&M, the number two in the MSO (Multi System Operator). According to industry experts, the discussion has began in earnest between the two companies and the price tag is predicted to be about W1,200 bn.

- Former president Kim Dae-jung is recommended by many lawmakers of the ruling as well as opposition parties as a special envoy to North Korea. Rep. Chung Hyung-keun of GNP party said “former president Kim is the one who knows Kim Jong-il well.” Kim, however, rejects the suggestion saying “a special envoy should be someone in the level of minister or prime minister of the current government.”

- The prosecution raided in Citi Group’s Global Market Securities Seoul Office yesterday in connection with the KEB sale to Lone Star. The group acquired Salomon Smith Barney (SSB), the securities firm which managed the merger between KEB and its credit card unit 2003.

other important headlines_Oct 17

- Uri Party lawmaker Park Young-sun argued that Samsung Group had ordered to scrap its internal document in the face of the 1999 investigation by the FTC into unfair internal trading with its affiliates.

- According to data prepared by the Unification Ministry, it is projected that an average $9.94m will be wired to North Korea for labor cost for Kaesung Industrial Complex when the construction of the park is completed in 2012. Among the money, goes the argument, only 30 per cent will actually go to North Korean laborers.

- GNP lawmaker Choi Kyung-hwan said cash transfer from the South to the North has totaled to W3,500 bn since the Kim Dae-jung government. He argued that “if we include some off-the-books money, the flow of cash to North Korea is beyond imagination.”

- GNP lawmaker Lee Han-koo said the money that South Korea has invested into the two inter-Korean economic projects is W236.8 for Kaesung Industrial Park, and W276.8 for Mt. Kumkang tour, and if the UN urges Seoul to stop these projects, it would be nearly impossible to retrieve most of the investment. He urged the government to come up with necessary measures to deal with such a problem.

- US presses quoted some intelligence sources as saying North Korea was preparing the second nuclear test. ABC reported about unusual car moves near the first nuclear test site and NBC also reported that US surveillance satellite spotted some moves of cars and people which might be connected to the second test. A high-ranking US government official familiar with the matter told to Yonhap “the US and Korea consider there is a possibility for another nuclear test by North Korea at any time,” but “there hasn’t been a clear indication for the second test yet.”

- Domestic MP3 player makers make a desperate effort to compete against Apple’s i-pod by introducing an aggressive low price marketing strategy.

- A Cheong Wa Dae official said of a possible second nuclear test by North Korea, “I can’t confirm whether the government spotted any clear sign,” but he didn’t reject the possibility. He said “the government is running a beefed-up surveillance system including information sharing with the US.”

Local paper headlines_Oct.17

1. Chosun Ilbo

- Since North Korea’s N-test, major banks in China is reported to partially block or restrict remitting money to North Korea, especially in Dandong area, where trade between China and North Korea is very active. A Chinese source says “I don’t think the Chinese government ordered banks to do so, I think banks are voluntarily starting to restrict transactions with North Korea.”

- Cheong Wa Dae decided to stick to its economic engagement with North Korea considering that if it stops the two projects namely Mt. Kumkang Tour and Kaesung Industrial Park, it could have negative impact on foreign investors, said Moon Jung-in, a professor at Yonsei University.

- From next year, woman and man can get legally married when they turn 18 years old (20 in Korean age). The current law allows a woman to marry at 16 and a man at 18, but the law is to be revised due to sex discrimination.

- North Korean defector Ahn Myong-churl said political offenders had been mobilized to construct underground tunnel near Mt. Mantap in Hamkyungbuk-do where North Korea is believed to have conducted a nuclear test. He worked as a security guard in a concentration camp for political offenders in Kyungsung (경성)and Heoryung(회령) and from 1987 young and healthy inmates of the camp had been mobilized under the name of “great construction,” which he believed was the construction of nuclear underground tunnel.

- Chosun survey of executives at 20 big domestic companies shows that 90 per cent of respondents think increasing uncertainty is the biggest problem since the nuclear test. Asked whether they will change business plan for next year due to the test, 50% say they will make ‘a little adjustment’ while 45% say they don’t have such plan. Of the question on how much the test influences the economy, 65% say it is premature to tell the impact and how the whole situation plays out is more important for the future economy. Half of the respondents consider the government’s response to the test as ‘a bit inappropriate’ and 10% say ‘very inappropriate.’

2. Maeil Business Daily

- The price of won increased to a eight-year-and-11-month-high against the Japanese yen, closing at 798.71 won against 100 yen yesterday, up 1.42 from a day ago, which can make exporting companies feel hard-pinched.

- Samsung Electronics is predicted by the securities sector to continue its high operating profits in the fourth quarter as well due to the expected increase in Nand Flash price and buoyant LCD sales.

Overseas travel ban can be imposed on Kim Jong-il

According to the resolution adopted yesterday, there is a possibility that Kim Jong-il and his close aides might be restricted to go overseas and Kim’s family members who are staying in a foreign country can also be affected.

Domestic law experts said “if a UNSC restriction committee, expected to be established soon, designates Kim Jong-il as a person who is involved in the development of WMD, Kim is not allowed to go overseas including China.”

The UN resolution stipulates “all member nations should take necessary steps to block people who are responsible for North Korea’s policy towards WMD from entering into or transit through their countries.” Kim Chan-kyu, emeritus professor at Kyunghee University, said “there is no question about the fact that Chairman Kim is the ultimate person in charge of North Korea’s WMD,” and “he can be a subject to such restrictions as a direct as well as general person in charge.”

Professor Paek Jin-hyun at SNU and prof. O Byung-sun at Sogang University also interpreted that sentence as such. Government officials close to the matter did not articulate on that matter saying “all depends on the decision by the committee.”

Experts expect the committee will not immediately single out Kim considering a possible repercussion. Prof. Che Sung-ho from Joongang University said “I expect the committee to toughen up its pressure according to North Korea’s response.” On the UN inclusion of ‘family members of person related to WMD’ in the list of subjects to restriction, Prof. Lee Yong-ho at Youngnam University said “if Kim is listed, his family in Europe will be affected as well,” expecting a possibility for European countries to expel those family members.

other important headlines_Oct. 16

- The government is said to suffer severe internal discord as to the level of response to North Korea it would take. A unification official reaffirmed to stick to the two inter-Korean economic businesses but officials from MOFAT and the Defense Ministry contend it is inevitable either to downsize or to stop the businesses in order to effectively press North Korea.

- North Korea experts say the regime will intensify tension in north-east Asia to have bigger leverage and is not going to easily give in to the international pressure. As it pronounced, there is high possibility for the North to conduct either another nuclear test or Taepo-dong missiles launches. The re-launch of Taepo-dong missiles can evoke a bigger repercussion since, if successful, it means the North loads nuclear warhead onto the long-range missile.

- After the N-test by North Korea, China has set up a wired fence alongside its border with North Korea which is believed to block North Koreans from secretly coming to China. On October 13, according to business men who operate trading companies with North Korea, Bank of China’s Dandung branch rejected their request to wire money to North Korea without offering a proper reason.

- Ban Ki-moon revealed at his meeting with Japanese reporters in New York he is willing to meet Kim Jong-il. He also made clear his position that he would progressively react to North Korea nuclear problems, and would appoint a special envoy in charge of the matter.

- It is reported that 34.9 per cent of officials who have been caught receiving slush funds since 2000 turned out to be court officials.

- According to Pyong Hwa Motor operating in North Korea, the most popular car in the reclusive regime are a SUV and a pick-up truck. The company sells about 400 cars a year and has four different cars. The most popular car is Bbokkugi III, a pick-up truck, amounting to 40 per cent of the last year’s whole sale.

- Money in dormant bank accounts is reported to total about W343.7 bn as of August, but only 1.69 per cent of the money has been retrieved. Kookmin bank has the biggest sleeping accounts which amount at W81.2 bn.

- The increasing number of household is cut off electricity and gas due to deferred bills, reflecting the widening trend of families with economic hardship. As of June, 135,000 households, 1.2 per cent of the whole number, are cut off gas and 3,065 are cut off electricity.

Local paper headlines_Oct. 16

1. Chosun Ilbo

- The UN Security Council unanimously agreed to adopt a resolution containing strong economic and diplomatic sanctions against North Korea for its N-test, which, however, ruled out any military intervention. Pak Gil-yon, North Korean ambassador to the United Nations, countered North Korea “strongly rejects the resolution,” and “if the US mounts its pressure on North Korea, we will regard it as a declaration of war and continue ‘physical’ countermeasures.”

- According to the resolution adopted yesterday, there is a possibility that Kim Jong-il might be restricted to go overseas and Kim’s family members who are staying in a foreign country can be also restricted to move around.

- Korea’s second satellite Arirang II which was launched in July is reported to have failed to spot any unusual move in North Korea regarding the nuclear test. The satellite was cost about W266.3 bn and government officials once said it could be used for military purposes.

- The number of emigrant is increasing, up 20.7 per cent from 2002. The most popular destination is the US with 17,308 cases last year from 11,175 the previous year. Australia turned out one of the most-want-to-live countries with 1,761 last year from 673 the year before.

- The resolution can damage Kim Jong-il’s luxurious life style. Kim is said to enjoy expensive wines and exotic food made of caviar, lobster, and shark’s fin. He employed a Japanese cook for sushi and invited an Italian cook for pizza. A Japanese cook who once worked as a cook for Kim said “10,000 bottled wines were stockpiled in his private wine house and he ate shark’s fin soup every week.”

2. Maeil Business Daily

- The government concluded that the UN resolution 1718 has nothing to do with Mt. Kumkang tour and Kaesung Industrial Complex. A unification official said in his unofficial remark, “the freeze on capitals and assets are related to WMD but these two projects have nothing to do with that.”

- Domestic companies are at pains to design a business plan for next year largely due to uncertain factors such as North Korea, the exchange rate, oil prices, and the world economy.

- According to a report prepared by GNP representative Kwon Young-se, China has been providing North Korea with $910 m in conditional or unconditional assistance for the last five years.

Opinion survey regarding NK N-test

The following opinion survey was conducted by Korea Society Opinion Institute on 700 adults on October 10 the next day NK tested its nuclear.

1.Opinion on the government North Korean policy

- Fundamental review is necessary 54.3% (29.8 % in July)

- Partial review is necessary but its direction should be in place 35.9% (58.4% in July)

- Current policy should continue 7.8% (10.3% in July)

2.The factors that people feel most uneasy about after NK’s N-test

- Capital outflow to overseas, inflation, and overall economic crisis (36.7%)

- US’s possible military intervention (19.2%)

- North Korea’s possible nuclear strike at South Korea (15.7%)

- Possible Nuclear arm race among neighboring counties (14.9%)

- Intensifying tension between the South and the North (11.8%)

3.What the government should do to solve the nuclear problem

- More focus on inter-Korean dialogue (51.2%)

- More focus on cooperation with the US (45%)

Among the progressive: More focus on inter-Korean dialogue (68.3%)/ More focus on cooperation with the US (29.5%)

Among the conservative: More focus on inter-Korean dialogue (39%)/ More focus on cooperation with the US (57.7%)

other important headlines_Oct.13

- A total of 77 Uri party lawmakers released a statement in the press conference today to oppose Korea’s expanded participation in the PSI and urge the government to stay firm on the engagement policy with North Korea.

- Robert Joseph, US Under Secretary of State for Arms Control and International Security, canceled his planned visit to Korea. Government officials explained the cancellation is because a UN resolution hasn’t been out yet, but domestic blame on the US for North Korea’s N-test can be one of the reasons.

- According to the NIS and the Police, two diplomats in one in Asia and another in Africa have been blackmailed by North Korean agents into handing out confidential information including code-breaking of telegraph text. The diplomats are said to have been threatened that their family members could be killed if not cooperating.

- An increasing number of female workers join the ranks of ‘battery people’ which refers to people who voluntarily quits a job and recharge themselves for another work. Yoon Jeong-sook, CEO of a recruiting company, The HR, said “men hardly quit a job because most of them are in charge of dependent family but women increasingly choose recharging.” “’Battery’ women are often found in the field of PR or marketing.”

- The Defense Ministry estimates that North Korea has spent about $290-764m for its development of nuclear weapons since 1979 when it began in earnest the development.

Local paper headlines_Oct.13

1. Chosun Ilbo

- Worries are mounting whether the government can effectively handle a crisis after it has shown confused attitudes towards North Korea’s nuclear test. The issues on which the government hasn’t clearly decided its stance varies from the PSI participation, inter-Korean summit, Kaesung Industrial Park & Mr. Kumkang tour, and its engagement policy.

- The 38th annual ROK-US Security Consultative Meeting, slated to be held on 20th in Washington, is expected to change its focus from wartime command transfer to North Korean nuclear issues. A high-ranking defense official said “it is expected that US provision of nuclear umbrella to Korea will be discussed comprehensively.” Another official said “the two countries haven’t had any concrete consultation on more advanced provision of nuclear umbrella yet.”

- A group of former defense ministers released a statement yesterday condemning North Korea’s N-test. The statement includes the overhaul of security policy, scrap of wartime command transfer, re-positioning of US strategic nuclear weapons in Korea, the write-off of inter-Korean businesses and assistance to North Korea, and the construction of nuclear shelter.

- The Unification Ministry is reported to have prepared a confidential internal report in preparation for a possible nuclear test by North Korea. According to the report, the government would stop its assistance to Kaesung and Mt. Kumkang businesses. When the North actually launched its underground test, the measure was put on hold by President Roh and Unification Minister Lee Jong-seok. Lee told to the National Assembly “the two big businesses are still necessary for us, and if we stop the businesses, private companies related to the projects will have heavy losses and the security conditions will further de-stabilize.” “We should be very cautious on the matter until the UN Security Council strictly urges us to abandon the projects.”

2. Maeil Business Daily

- Though North Korea’ N-test has left real estate transactions in Northern Metropolitan area frozen for a while, the Kangnam region seems unaffected by the test. According to ‘Serve,’ real estate information agency, the price for apartment which is soon to be reconstructed, has been on the rise for five consecutive weeks, topping W30.8 m per pyong on October 4.

- The biggest ever US economic mission of 200 entrepreneurs and state representatives will visit Korea to attend a meeting for improving Korea-US economic cooperation which is to be held on 15-16 in Seoul.

- In a lecture on North Korean nuclear problems organized by Democracy Politics Philosophy Research Institute, Hwang Jang-yeop said “North Korea has stockpiled as many nuclear weapons as possible, which is what I understand” He said “Kim Jong-il said to me ‘I have succeeded in making nuclear weapons,’ before the year 1993 when the North’s refusal to accept nuclear inspection broke out.”

other important headlines_Oct. 12

- The Bank of Korea freezes its call rate at 5% taking into consideration uncertainty in the economy after the nuclear test by North Korea. The market is now interested to know when the bank lowers the rate. Lehman Brothers in it recent report said “given the stable inflation and signs of economic slowdown, the current rate is too high,” suggesting a possibility for a rate lowering.

- Park Byong-won, first vice minister at MOFE, said in his regular briefing “ the ministry sees some short-term impacts of the test on the Korean economy can materialize.” But he assured “any repercussion in the wake of the test is getting disappeared and we think there has been no specific impact on the real economy so far.”

- In an phone interview with a local radio show, Kim Myong-churl, often called as ‘unofficial press secretary for Kim Jong-il,’ said of North Korea’s additional ‘physical response,’ “the North might conduct a bigger nuclear test or hydrogen bomb.” He said a further nuclear test can be bigger in scale.

- Despite a series of government strong measures to stabilize the property market, it is reported that the nation’s land price has been increasing by more than W270000 bn each year since the current government took power.

- The Korean Army turns out that it has been conducting military drills in preparation for a possible nuclear war on the Korean peninsula since February 2005 when North Korea declared it became a nuclear power.

- Kim Jong-il again repeats his old habit of disappearing after a world-shocking stunt. His disappearance has been believed that he feels insecure about the situation surrounding his regime. North Korea media is also very quite compared to the responses by the stunned outside world. The North might have judged if it repeatedly reported on its test, there would be more loss than gain.

- Japanese Yomiuri Simbun quoted a source from Seoul as saying that a train tunnel near a supposed nuclear test site has been collapsed. The Baek-am tunnel is located 50km northwest from the believed test site of Sangpyong-ri, Kinchaek-si in Hamkyungbuk-do.

- North Korea’s Rodong Sinmun strongly called for the US to scrap its plan to establish an air force command center under the Pacific Command, saying that such a move aimed at preemptive strikes against North Korea.

Local paper headlines_October 12

1. Chosun Ilbo

- The government is said to have decided not to stop inter-Korean business of Kaesung Industrial Park and Mt. Kumkang tour even if the US-led UN resolution to punish North Korea is adopted. A government official close to the issue said “the draft resolution prepared by the US bans transferring to the country assets, money, goods, and technology related to the WMD, but Kaesung Industrial Complex and Mt. Kumkang tour have nothing to do with them.”

- A series of statements urging the scrap of sunshine policy as well as on-going consultation with the US for wartime command transfer are released in the wake of North Korea’s nuclear test. A group of 100 people comprised of former government officials, teachers, and journalists announced a statement at Seoul Press Center yesterday, asking for the dismantlement of Kim Jong-il regime and Roh’s resign. Hwang Jang-yeop also joined in the group.

- The government starts reviewing pump-priming measures, marking a turnaround from its existing position that it doesn’t introduce any artificial economy stimulating measure despite economic slowdown. Officials at the MOFE said North Korea’s nuclear test influenced the changed position but basically the time had come to come up with some measures to revive the slow economy. A MOFE official said “without North Korea’s nuclear test, it is inevitable for the government to change our policy for economy revival.”

- Economic experts in Wall Street think two Korea’s unification after the regime collapse, rather than a nuclear test, will have more bad impact on the Korea economy. John Chambers at S&P said in an interview with Bloomberg that North Korea’s nuclear test was already reflected on the Korea’s credit rating and if North Korea collapsed, Korea would have to take serious financial burden.

2. Maeil Business Daily

- The government seems confused how to deal with North Korea. The government and the ruling party don’t see an eye to eye on whether to join in the PSI. Unification Minister Lee Jong-seok said he didn’t recognize the existence of nuclear weapons whereas Defense Minister Yoon Kwang-woong said he personally believed North Korea proved itself to be a nuclear power. Regarding the engagement policy, it also shows confusion whether to stick to the policy or overhaul it.

- Hyundai Group CEO Hyun Jung-eun said in a meeting with President Roh that the Mt. Kumkang tour would continue even if there was only one tourist.

- 48.2 per cent of Mt. Kumkang tourists canceled their trip today. The cancellation rate is on the rise ever since the nuclear test announcement with 6.1 per cent on the first day of the test and 31.3 per cent the next day.

DEVELOPMENTS October 11, 2006

- Prime Minister Han Myeong-sook said "the government is thinking about sending a special envoy to North Korea or having an inter-Korean summit meeting in order to solve the issue." Asked what she considers the most important to solve the issue, she answered "the government regards a UN resolution as very important. And the government is also contemplating how to change or make amendment in various engagement policies we have been taking after collecting different opinions from people."

- Yoo Myung-hwan, deputy Foreign Minister, said "the government is considering taking part in the Proliferation Security Initiative (PSI) partially or on a case-by-case manner. But Unification Minister Lee Jong-seok said "the government has never reviewed whether to join in the PSI since there has been no official request from the US."

- Economic institutes begin readjusting their growth projection for next year in the wake of North Korean nuclear test. LG Economic Institute was supposed to release its figure yesterday but postponed the announcement to next week, after considering that the growth figure can fall to 2-3% due to security instability. Korea Economic Research Institute, which expected the growth rate to be 4.1%, will also revise the figure and project the rate to be around 2-3% in worst case.

- Asked what he thinks about Roh's yesterday remark that he wants to suggest to take time to figure out the causal relationship between the engagement policy and the nuclear test, Han Seung-joo said "the engagement policy is necessary and based on people's consensus. But when we say 'engagement,' that means we engage North Korea, not accepting its nuclear weapons or missiles. The government has been so obsessed with the policy and that it missed out the substance of the nuclear problem. I mean, the government was too 'generous' on the problem."

- Some of ruling party lawmakers stirred controversy by saying North Korea's development of nuclear weapons did not aim at South Korea. Uri floor leader Kim Han-kil said "exaggerating what is happening now as if North Korea was going to stage a nuclear war against us is only making people uneasy." Kim Gen-tae said "North Korea pulled the trigger at the international community." Uri party lawmaker Lee Mok-hee said "North Korea's nuclear development is not designed to attack South Korea," and "nuclear weapons are the problem between the North and the US."

- Rep.Lee Seok-hyun of Uri Party said "[North Korea's test] did not result from sunshine policy failure but from the failure of US hawkish stance toward the North."

- Han Sung-ryol, North Korea's ambassador to the UN, said October 9 "when the US lifts its financial sanctions, there will be some changes in North Korea's nuclear issue." "US financial sanction and antagonistic behaviors are the basic reason behind North Korea's development of nuclear weapons."

- On the second day into the North Korea's provocative test, dollar buying is increasing at local banks. According to Korea Exchange Bank, people bought a total of $11.3m. A source from Shinhan Bank said "whenever tensions are escalating on the Korean peninsula, inquires for buying dollar is increasing. This time, given that the volume of request is a lot more than before, I think clients feel ever more anxious."

- The most popular item among foreign investors who, contrary to Korean investors, bought stocks on news of a nuclear test by North Korea, has been POSCO, followed by Kookmin Bank, Kepco, Woori Investment Securities Co., and Samsung Electronics.

- Ban Ki-moon said this morning "the government will decide its stance whether to join in the PSI in line with consultation with UN Security Council." "We have been having enough consultation with the US and have the same principle and direction on that matter," and "due to unique characteristics of inter-Korean relations and situation on the Korean peninsula, we have been partially participated in the PSI."

- Former President Kim Dae-jung said "the Sunshine policy could not lead to a complete success due to obstacles arising from relations between North Korea and the US, but given what it has achieved so far, I think the policy is a success between the two Koreas." He emphasized "in the past, people must have been so panic because of fear but now we are so calm," and "international credit rating companies announced that there will be no major change on the security of the Korean peninsula despite the nuclear test." "The nuclear test can never be accepted and is an act that can doom the fate of Korean people, so the North should immediately give up its nuclear program." "But the test is tantamount to the failure of US policy toward the North."

Today's Development in the wake of NK nukes test

1.Roh said he would closely look at whether North Korea’s nuclear test has any influence on wartime command transfer. He also said it is true that North Korea’s test created a situation where we have to reconsider our engagement policy but we have to be very careful to conclude that the engagement policy resulted in the nuclear test.

Roh pointed out the effectiveness of the engagement policy, saying the policy helped lessen people’s anxiousness and stabilize the economy by easing off tensions between the two Koreas.

He didn’t clarify his position on whether to continue Mt. Kumkang tour and Kaesung business.

2. Most ruling party leaders say Kaesung and Mt. Kumkang business should continue. Meanwhile GNP leaders argue that the two businesses should be put on hold because the businesses practically provide hard currency to the North.

3. President Roh met with ruling and opposition party leaders and agreed to respond to the crisis in a bipartisan manner.

4. Asked whether North Korea’s nuclear test was successful, Song Min-soon said it would take two weeks to make a final conclusion.

5. The Ministry of Science and Technology is said to revise the earthquake magnitude from 3.58 to 3.9. The Ministry, however, still sees the scale a bit small for a nuclear test explosion.

6. The Grand National Party blamed the test on government’s weak stance toward the regime, asking Roh’s apology and step-down of the cabinet members. Party leader Kang Jae-seop asked for a whole new North Korean policy with the reshuffle of current security officials. “We have given North Korea more than W6000 bn in assistance but the North responded to that with firing missile and the nuclear test.” He also argued to stop all exchanges with North Korea including humanitarian aids.

GNP floor leader Kim Hyung-o said it was absolutely wrong to blame the US for the nuclear crisis, and it was North Korea’s responsibility, not the US’s responsibility. “North Korea’s nuclear test clearly shows the government’s engagement policy is flawed so we have to immediately suspend all inter-Korean economic cooperation until the North gives up nukes.”

7. Calls are coming to local banks from anxious clients asking whether the current situation has any impact on their assets in the bank. However local banks say there is not much actual change in capital flow.

8. Rodong Sinmun, North Korea’s party paper, didn’t mention on its nuclear test on its editorial of October 10, marking the 61st anniversary of Rodong Party.

9. Uri Party leader Kim Geun-tae said it would be wrong to give up engagement policy, clearly signaling his opposition to a proposed whole new North Korean policy. “Mt. Kumkang tour and Kaesung business shouldn’t be suspended.” “North Korea’s nuclear test is wrong and unacceptable….but inter-Korean exchange and cooperation should be separated from the current situation.

10. Kwon O-kyu said, “the implication of North Korea’s nuclear test on our economy could be more serious than we thought depending on course of events including possible punitive measures by the US and the UNSC.” “The government is trying to stabilize economic sentiment by showing a swift response and running a special force to take care of economy.”

11. As of 10:00 am this morning, the Korean stock market came back to normal with the Kospi index of 1325.67, up 6.27 from yesterday and the junior retail-driven Kosdaq index of 547.27, up 8.17 from a day earlier. Retail investors, however, still continue their selling spree by getting rid of W53.2 bn worth of shares while foreign investors and institutions are buying out stocks.

12. Former President Kim Young-sam argued to scrap sunshine policy as well as engagement policy and to stop all inter-Korean economic cooperation projects with North Korea.

13.‘People for Peace and Unification,’ a progressive group, held a press conference to strongly protest against NK nuclear test. However the group voiced concern over a possible sanction on North Korea, saying “US and Japan-led sanctions on North Korea will intensify the crisis on the Korean peninsula and in northeast Asia by extension,” and “the prime reason for North Korea’s test is US’s hostile policy toward the North.”

14. Defense Minister Yoon Kwang-woong said “we have a very tough way to go before we can solve North Korea nuclear problems and we should make a consistent effort to solve the problems.”

15. The Korea Institute of Nuclear Safety in Daejon is running 37 monitoring stations nationwide which are operating around the clock to check out any nuclear leakage. The automatic monitoring system is checking up the radioactive level in every two minute.

16. The Council of Companies in Kaesung Industrial Park urged the government to actively provide safety measures to ensure business as usual. It said all businesses in Kaesung should not be affected by any political factors and the production system should continue.

17. The government announced that there is no significant movement spotted in the economy including the financial sector, export, price of raw materials and commodities after carefully monitoring overall economic conditions in the wake of yesterday’s test.

Local paper headlines_October 9

- Chinese President Hu Jintao and Japanese Prime Minister Shinzo Abe at their summit meeting in Beijing yesterday expressed concern over instability on the Korean peninsula and promised to coordinate their efforts for North Korean denuclearization and peace and stability on North East Asia.

- Shoichi Nakagawa, Japan's minister of agriculture, forestry and fisheries, said of North Korea’s warning of a possible nuclear test Japan might carry out a North Korean vessel inspection and impose an outright ban on imports and exports with North Korea. He said if North Korea forged ahead with the plan, the regime would be further isolated.

- The number of member teachers of the Korean Teachers & Educational Worker's Union decreased by 5500 since the Roh government took office in 2003. The reason behind the dropping number seems to be that the increasing number of teachers is dissatisfied with the way the group is run.

- Jang Seong-taek of North Korea is reported to have had a car accident last month in Pyongyang. According to North Korean sources, his Benz was hit by a truck in broad daylight in Moranbong district, causing him lower back injuries and leaving his car severely damaged. Rumors have it that it was an attempt to assassinate him.

- Chosun Ilbo survey found out that while 68 per cent of female executive-level employees say they are satisfied with their work, 76 per cent of female executive-level employees see it practically impossible to become CEO.

- Appearing on Talk Asia, former President Kim Dae-jung said that the US should talk to North Korea and give the regime another chance. He stressed China could exert influence on North Korea to some extent but couldn’t control the regime and US talk with North Korea was the most important and China and South Korea came the next.

- The sale-off of Hyundai Construction Co. is expected to be delayed due to disagreement between creditors over the sale process.

- Korea Exchange reported that listed companies have bought out W5,840 bn worth of their own company stock as of September, 29.52 per cent up compared to the same period last year. Samsung Electronics has been the biggest buyer with W1807.4 bn worth of buy-out, followed by KT&G with W850 bn, and KEPCO with W654.9 bn.

- [Seoul Sinmun] Robert Joseph, US Under Secretary of State for Arms Control and International Security, is going to visit Seoul this weekend to discuss how to handle North Korea’s planned nuclear test with Foreign Minister Ban Ki-moon, Defense Minister Yoon Kwang-woong, and Presidential security advisor Song Min-soon. He is understood to ask South Korea to join in the Proliferation Security Initiative (PSI).

- [Money Today] Samsung Chairman Lee Gun-hee chose Dubai as his third leg of overseas business trip to visit the construction site of Buz Dubia, the world’s tallest building that Samsung Corporation is currently constructing. He is said to urge the Samsung leadership to benchmark creative management style of Sheikh Mohammad, the Crown Prince of the country.

- [Yonhap] The volume of overseas order passed $ 20bn for the first time in history. The Ministry of Commerce, Industry, and Energy reported the volume doubled that of the same period last year, totaling $20.9 bn.

- [Dailian] South Korean musical Yoduk Story, which ran for four days from October 4 in the US, touched many Americans. US local presses widely reported the success of the musical that attracted more than 4,000 audiences. Jay Lefkowitz, Special Envoy on Human Rights in North Korea, said President Bush felt very sorry for North Koreans’ suffering and the international community should try hard toward North Korea’s democratization.

- [Yonhap] A high ranking government official said the government received intelligence saying North Korea had its nuclear test this morning. President Roh is said to open an urgent security meeting with relevant ministers.

- [Newsis] Korean Air ranks first in two sectors, namely First and Business Class, and Mileage Program in TIME Readers Travel Choice Award.

-[Yonhap] Korean and Japan are expected to have separate press briefing after the summit meeting between President Roh Moo-hyun and Japanese Prime Minister Shinzo Abe. Cheong Wa Dae said of the reason that there was no such rule that the two should hold joint press conference.

- [Money Today] Hyundai Asan said there will be no change in Mt. Kumkang tour despite North Korea’s nuclear test. An official from the company said “if the both governments officially want to stop the tour, we will comply with the measure, but before that we will continue the tour service.” The company, however, will refund the prepaid money if a tourist wants to give up the tour for security reason.