Monday, December 31, 2007

South Korea and Japan to resume FTA talks

Optimism is in the air that the stalled and deadlocked free trade talks with Japan will see a fresh breakthrough under the economic stewardship of President-elect Lee Myung-bak.

Rosy speculations abound, as the 66-year-old former Hyundai CEO has been stressing improved relations with Japan, while underscoring the importance of "practical diplomacy'' and economic cooperation.Recent remarks by the country's president-in-waiting and Japanese Prime Minister Yasuo Fukuda prioritizing the advancement of pan-Asian ties, will combine to create an even cozier atmosphere for a renewed start of trade talks between the neighboring countries.

Seoul and Japan have so far held six rounds of free trade agreement (FTA) negotiations, but the talks have been at a standstill since November 2004 due to difficulties in bridging the gap over the level of market opening. Korea has called for a high-level opening in the agricultural and fisheries industries, while Japan has demanded only a 50 percent "let-in'' for Korean agricultural imports with a quota on fishery goods.

As the bilateral talks between the world's second and 13th-largest economies continued to go sour, both have been blaming each other for the stalemated.With this Seoul-Tokyo status and further FTA possibilities in mind, Lee, who promised to be an "economy president,'' fronted the free trade agenda as one of his primary campaign pledges.

"The ongoing talks with the European Union will be finalized soon, followed by evaluations and opening of new FTA talks with China, Japan, Russia and other countries,'' Lee said on his campaign trail.

Professor Jeong In-gyo of Inha University, who worked as an advisor for Lee's FTA policies, Tuesday said, "Japan's position regarding an FTA with Korea is showing signs of change,'' according to Yonhap News.

He added that Lee's administration may prioritize finishing off the deal with Tokyo first, before moving onto new accords.

Many factors seem to be driving these efforts, but economic experts and the business circle, which have been strong backers of Lee, were said to have voiced the necessity of the bilateral deal.

The Federation of Korean Industries and the Japan Business Federation jointly agreed last month in Tokyo to push for the conclusion of the Korea-Japan FTA.

And Japan's largest business daily, the Nihon Keizai Shimbun, reported last week that high expectations have been placed on the resumption of the stalled talks, contributing to the optimism.

North Korea set to miss nuclear deadline

North Korea appeared set Monday to miss a year-end deadline to disable a key nuclear reactor and declare all its nuclear programs, key elements of its disarmament as agreed to in an international accord.

The U.S., Japan and South Korea expressed disappointment. But there was no indication that North Korea would immediately face any sanction — suggesting countries involved in negotiating the agreement were reluctant to raise tensions after a year of progress in the long-standing dispute.

The communist country promised in October to disable its main nuclear reactor at Yongbyon, north of Pyongyang, and give a full accounting of its nuclear programs by Dec. 31 in return for energy aid and political concessions.

The North shut down the plutonium-producing facility in July and disablement work is under way in cooperation with U.S. experts.

But diplomats have said the North is likely to miss the year-end deadline for disablement because a key step — removing fuel rods from the reactor — could take several months. South Korean Foreign Minister Song Min-soon has said there would also be problems in meeting the deadline for disclosure.

There was no immediate comment from North Korea on Monday. Last week, a North Korean official complained of delays in the delivery of economic aid and said the country would have no choice but to slow disablement.

Song, however, downplayed the remarks and said the disablement work was going well.

The United States, which has said it was not aware of delays in delivering aid to the North, criticized the country's failure to disclose its nuclear programs.

"It is unfortunate that North Korea has not yet met its commitments by providing a complete and correct declaration of its nuclear programs and slowing down the process of disablement," State Department deputy spokesman Tom Casey said Sunday.

"We urge North Korea to deliver a complete and correct declaration of all its nuclear weapons programs and proliferation activities and complete the agreed disablement," he said.
South Korea's Foreign Ministry pressed the North as well.

"Our government urges North Korea to faithfully declare all nuclear programs at an early date and complete disablement steps without delay," the ministry said in a statement.

Japan also expressed regret that the North appeared set to miss the deadline, and urged the regime to declare its nuclear programs immediately.

"North Korea must provide a complete and accurate declaration of all its nuclear programs at the earliest possible date, and make swift and solid progress in disabling its three nuclear facilities at Yongbyon," Japan's Foreign Ministry said in a statement released Monday.

The nuclear standoff began in late 2002 when the U.S. accused the North of seeking to secretly enrich uranium in violation of a 1994 disarmament deal.

In late 2003, the North began negotiations over its nuclear program with the U.S., China, Japan, Russia and South Korea. As talks stalled, North Korea conducted its first nuclear test, an underground blast, in October 2006.

Renewed talks led to a disarmament deal in February.

Reasons for the delay in declaring the nuclear programs appear related in part to the country's suspected uranium enrichment program. Song has said that more consultation was required on the alleged program. ◦

Thursday, December 27, 2007

Korea's reading and math performance


Wednesday, December 26, 2007

A landslide in South Korea - does a new era beckon?

AS VOTING ended in South Korea’s presidential election, exit polls indicated what most in the country had anyway expected: the opposition Grand National Party’s Lee Myung-bak was to be the country’s president. Mr Lee won a thumping endorsement, securing close to 50% of the vote in a 12-man presidential field. Mr Lee’s victory brightens the conservative GNP's prospects of also winning control of the legislature in elections next April.

So ends a decade of liberal rule by Kim Dae-jung and his successor Roh Moo-hyun. South Koreans are disillusioned with Mr Roh, who talked about improving their lot but failed to deliver robust economic growth. His divisive rhetoric angered many. “A president has to bring the country together,” Hyundai's chairman and a legislator, Chung Mong-joon, suggested. “Roh Moo-hyun divided the country.”

Many South Koreans believe that Kim Dae-jung’s “Sunshine Policy’’ of being friendly towards North Korea, which continued under Mr Roh, brought them little in the way of security. Kim Jong Il’s dictatorship developed and tested nuclear bombs despite it. South Koreans suspect that vast amounts of money have been paid to the north in return for summits with the dictator. Mr Lee wants an end to aid if North Korea does not give up its nuclear-weapons programme. He intends to use six-party talks (with China, America, Japan, Russia and North Korea) to put pressure on the north.

Raised in poverty, like many of his 49m countrymen, Mr Lee has an appealing chutzpah. Voters evidently liked the 66-year-old's strong personal story: he overcame malnutrition, paid his own way through university by working as a rubbish collector, and eventually rose to become the boss of ten Hyundai affiliates. His pragmatism helped, too. He is not an old-guard conservative. He was arrested and jailed during his university days. As mayor of Seoul, the capital, he sought to beautify the city. He planted trees, widened pavements, created green public spaces and improved public transport.

Mr Lee’s last election rally was in the centre of Seoul beside the Cheonggyecheon stream. The revival and beautification of the 5.8km waterway through the city became a symbol of his success as mayor. For many voters his ability to graft a consensus among Seoul’s diverse interest groups, to complete the project, augurs well for his time in higher office.

As president Mr Lee says he will slash taxes and ease regulations in order to boost consumer spending. At a news conference the day before the poll he promised a “new era” of economic growth once he takes office in February. He even made specific predictions, suggesting that South Korea’s main stock index will rise to 3,000 one year into his presidency and will be at 5,000 when his five-year term ends. The Kospi closed at 1,861.47 on the day before the election.

If there is a cloud already on the horizon it concerns corruption. Mr Lee sees South Korea’s chaebol (conglomerates) as important allies in reviving the economy. Thus many suspect he will not press prosecutors to investigate alleged bribery and influence peddling at Samsung. Mr Lee, too, is under investigation for his role in an investment scheme that defrauded thousands. He protests that he “has never been involved in scandal as a CEO or as Seoul mayor” and blames his opponents for spreading propaganda against him. By the time Mr Lee is scheduled to take office, he promises, his name will be cleared.


Monday, December 24, 2007

Baby girls now welcome in South Korea

When Park He-ran was a young mother, other women would approach her to ask what her secret was. She had given birth to three boys in a row at a time when South Korean women considered it their paramount duty to bear a son.

Park, a 61-year-old executive, now gets a different reaction. "When I tell people I have three sons and no daughter, they say they are sorry for my misfortune," she said. "Within a generation, I have turned from the luckiest woman possible to a pitiful mother.

"In South Korea, once one of Asia's most patriarchal societies, a preference for baby boys is receding. And that has led to what seems to be a decrease in the number of abortions performed after ultrasounds that reveal the gender of a fetus.

According to a study released by the World Bank in October, South Korea is the first of several Asian countries with large gender imbalances at birth to reverse the trend, moving toward greater parity between the sexes.

Last year, the ratio was 107.4 boys born for every 100 girls, still above what is considered normal, but down from a peak of 116.5 boys born for every 100 girls in 1990. The most important factor in changing attitudes toward girls was the radical shift in the country's economy that opened the doors to women in the work force as never before and dismantled long-held traditions.

Demographers say the rapid change in South Koreans' feelings about female babies gives them hope that gender imbalances will begin to shrink in other rapidly developing Asian countries -- notably China and India -- where the same combination of a preference for boys and new technology has led to the widespread practice of aborting female fetuses.,0,390019.story

Wednesday, December 19, 2007

Ex-Hyundai CEO wins South Korean Presidency

A former Hyundai CEO known as "The Bulldozer" for his determination to get things done rolled over all opposition and financial fraud allegations to win South Korea's presidency Wednesday, ending a decade of liberal rule.

A day after his landslide victory, Lee Myung-bak pledged to work for a nuclear-free Korean peninsula and strengthen Seoul's alliance with the United States.

"The most important thing is for North Korea to get rid of its nuclear weapons," he told a news conference Thursday.

Lee, who turned 66 on election day Wednesday and has also served as the mayor of Seoul, earned his win on a wave of discontent with incumbent President Roh Moo-hyun, whom many believe bungled the economy and dragged down the country's rapid growth.

The National Election Commission said Lee had 48.7 percent of the vote after all ballots were counted. Liberal Chung Dong-young was a distant second with 26.1 percent.

It was the biggest margin of victory in any South Korean presidential election. The candidate with the most votes wins and there are no run-offs. Turnout was a record low 63 percent of 37.7 million eligible voters.

South Koreans apparently wanted change so badly that they were willing to overlook accusations of ethical lapses that dogged Lee throughout his campaign.

Just days before the election, parliament approved an independent counsel investigation into allegations that Lee manipulated stock. The investigation is to be completed before the Feb. 25 inauguration, and Lee has said he will step down if found at fault.

"After all, the people chose the economy over morality," the Maeil Business Newspaper wrote in an editorial for its Thursday editions.

Lee's conservative Grand National Party asked for a veto of the independent counsel bill. "What I'm asking for President Roh to do is veto such legislation before he leaves office for the sake of the national unity," Kang Jae-sup, chairman of the Grand National Party, told KBS radio Thursday.

Presidential spokesman Oh Young-jin responded by saying Roh had earlier expressed his intention to sign the investigation bill.

Lee emphasized the economy in his campaign with a "747" pledge — promising to raise annual growth to 7 percent, double the country's per capita income to $40,000 and lift South Korea to among the world's top seven economies. He also proposed a "Grand Canal" linking Seoul to the southern port city of Busan that would improve transport and be a tourist attraction.

"Today, the people gave me absolute support. I'm well aware of the people's wishes," Lee told supporters at his party's headquarters. "I will serve the people in a very humble way. According to the people's wishes, I will save the nation's economy that faces a crisis."

Lee heads to office amid progress in the long-running standoff over North Korea's nuclear weapons program, fostered by U.S. political and economic concessions to Pyongyang.

The president-elect is expected to tie aid to continued compliance with international demands in the atomic dispute in line with Washington's wishes, but was not expected to make any dramatic change in assistance while the North remains on the path to disarmament.

"The North's abandonment of its nuclear programs is the way for the North to develop" its economy, Lee said in his comments to reporters Thursday.

Lee said he would not shy away from raising the North's shortcomings. "I think unconditionally avoiding criticism toward North Korea would not be appropriate."

On relations with Seoul's key Washington ally, Lee said he would "renew the common values and peace based on trust."

The Bush administration congratulated Lee on his victory, saying it expected close cooperation with his government over the North Korean nuclear dispute.

"We have a long history of cooperation and friendship with South Korea and fully expect that'll continue with this new government," said State Department spokesman Tom Casey.

Hundreds of supporters watching the results on a giant TV in front of the Grand National Party's headquarters burst into song Wednesday evening as Lee's victory became clear.
"I am very happy and it is like retaking democracy after a decade" of liberal rule, said Park Mi-won, a housewife in her 50s.

Lee rose from the poverty that gripped the peninsula after the 1950-53 Korean War and worked as a janitor to put himself through college.

He first gained prominence as head of Hyundai's construction unit, which symbolized South Korea's meteoric economic rise in the 1960-70s. As Seoul's mayor from 2002-2006, he undertook beautification projects in the city that earned him environmental credibility and were viewed as redemption for earlier eyesores he built with Hyundai in the country's haste to develop.

It was during his three decades with the Hyundai Group that Lee earned the nickname "Bulldozer" for his drive to push through challenges. In one instance, he completely took apart a bulldozer to study its mechanism and figure out why it kept breaking down.

"I feel good that the right person was elected. I voted for him because he is an economic president," said Lee Myung-ja, 60, a housewife who was among crowds gathered to watch vote results near a restored stream in central Seoul that was Lee's landmark project as mayor. "I hope President Lee Myung-bak will focus on economic growth so as to make the people better-off."

Taking the luster off Lee's victory were lingering allegations of involvement in a stock manipulation case in which a former business associate faces criminal charges for illegal gains of millions of dollars. A video released Sunday by his liberal rivals showed Lee saying in 2000 that he founded the firm at the center of the case.

Lee has said the taped comments were taken out of context and denied the allegations, but consented to the independent counsel to clear his name. He is the country's first president-elect to face a criminal probe.

By South Korean law, a president-elect can be prosecuted but he would receive immunity from most criminal lawsuits after inauguration.


Sunday, December 16, 2007

Daewoo in deal with Paramount for theme park

Daewoo Auto Sales and Paramount Pictures of the United States signed a contract yesterday to build a 1.5 trillion won ($1.6 billion) theme park in Songdo by 2010.

The attraction will be in an area where the Korean government has been building an economic zone to attract foreign investors and companies. The deal comes as a number of Korean companies and provincial governments are scrambling to make deals with foreign entertainment groups to revive the fortunes of the regional economy and lure more foreign tourists.

Daewoo Auto Sales said in a statement yesterday that the two companies would kick off construction of the project in July 2008. It is expected to create 13,000 jobs and spur new economic activities worth about 1 trillion won by the time it is completed in late 2010, the company said.

Daewoo Auto Sales, established in 1993 by the now-defunct Daewoo Group, has recently expanded its business portfolio from car sales and parts production to car rental and construction.

“We estimate the new movie theme park will attract about five million people or more annually and post annual sales of 1.1 trillion won,” Daewoo Auto Sales said in a statement.

The movie theme park, to be erected on a 50-hectare site, will feature a 3D simulation studio to allow visitors to experience movies produced by Paramount Pictures like “Transformers.” There will be a water park, a kids’ studio featuring animated film characters like SpongeBob SquarePants and a hotel, according to Daewoo.

Attracting theme parks has become something of a fad here. In November, Gyeonggi Province signed a memorandum of understanding with Universal Studios for a 2.9 trillion won attraction in Hwaseong, 25 miles south of Seoul, by 2012. The city government of Siheung, Gyeonggi, is also negotiating with Disney and MGM Studios for a park.

Friday, December 14, 2007

Elections in South Korea - 19 Dec 2007

NOT many people can realistically hope to be elected president on their birthday. But December 19th is not only election day in South Korea but also the 66th birthday and 37th wedding anniversary of the runaway favourite, Lee Myung-bak. Mr Lee is a former mayor of Seoul who has led the opinion polls throughout the year by a country mile. This month prosecutors absolved him of involvement in an investment fraud, seemingly clearing away his last hurdle before the vote.

Yet few seem to muster much enthusiasm for the birthday boy. At his campaign rallies supporters clad in blue sweatshirts bearing his likeness try to galvanise onlookers with chants, dance routines and a throbbing, disco-like campaign song. The crowds remain desultory. In one stop outside Seoul earlier this month, the biggest cheer was for a group of children who waved at the candidate from the open windows of their school.

This is odd. Presidential elections used to arouse paroxysms of emotion in South Korea. If Mr Lee were to win, he would bring an end to a decade of rule by two presidents, Kim Dae-jung and Roh Moo-hyun, who were liberal in the Korean sense (that is, slightly less pro-business and pro-American). His party represents the conservative old guard, though he himself is not a member of the traditional elite, nor does he hold their hardline views about North Korea. Whoever becomes president, moreover, will take over at a time when relations between the hermit kingdom and the rest of the world have reached a delicate point, with the rest still unsure about whether the North will give up its nuclear weapons.

Why then has the 2007 campaign ignited so little passion? Perhaps because Mr Lee has enjoyed a lead in the opinion polls for so long (in the week before the vote, he was over 20 points ahead of his main rivals, who seem almost to have given up). Perhaps because no one else has caught the public's imagination either. The main challengers include a disaffected former leader of Mr Lee's Grand National Party, Lee Hoi-chang, who has twice failed to win the presidency. The leading liberal candidate, Chung Dong-young, is a former television anchorman who has turned off voters with his personal attacks on Mr Lee.

And perhaps because of the man himself. Raspy-voiced, with a reputation for being aloof and prickly, Mr Lee is not a natural politician. He refuses to appear on South Korea's main commercial broadcaster, MBC, because he accuses it of bias. Every day ranks of police officers guard the main entrance of MBC as Mr Lee's supporters denounce its journalists. But like the presidential campaign itself, the protests lack numbers and fire.

Ordinarily, his opponents might have been able to exploit Mr Lee's stilted manner. Instead it has become an advantage. Koreans care mainly about the economy. They want a competent manager and Mr Lee seems to fit the bill. As a child, he helped his mother sell popsicles and seaweed rolls. He put himself through university by working as a rubbish collector. He rose through the ranks of Hyundai to become chief executive of ten different affiliates. Lingering suspicion that his business dealings may not have been pristine has been overlooked. South Korea is going through a period of relative economic malaise and voters want faster growth than the 5% achieved last year under President Roh, the best showing of his presidency.

Rising property prices have pushed workers in Seoul, home to half the population, far away from the capital, causing endless commutes to 12-hour-a-day jobs. Parents who pay for private classes so their children can keep up in pressure-cooker schools want changes to the education system. Many Koreans demand a comprehensive social-security system, as befits the world's 13th largest economy. The next president will also have to ensure it is not business as usual between his office, the Blue House, and the country's conglomerates. The biggest, Samsung, stands accused by a former executive of widespread bribery, including of politicians.

Mr Lee is responding to these varied demands with a comprehensive—even grandiose—list of promises. He says he can get growth up to 7% a year, bring average incomes up to $40,000 a year and make South Korea the world's seventh-largest economy by 2017. All this is to be achieved by cutting taxes, trimming public spending by 10%, easing the burden of regulation, improving the efficiency of medical spending and building a giant canal system through the middle of the country to create jobs and cut pollution. He is not promising to make pigs fly.

If he wins, Mr Lee will face divisions in both country and party. Since the end of the Korean War, South Korea has been split along regional lines. The eastern part, Gyeongsang, has traditionally produced the country's leaders (Mr Lee grew up there, though he was born in Japan). They have tended to favour their hometowns at the expense of the south-west Jeolla region.

The Grand National Party is also beset by internal rifts, notably between Mr Lee and Park Geun-hye, the daughter of a former military dictator, Park Chung-hee. Ms Park wants to run for president in five years' time. She also wants a hand in picking the party's candidates for parliamentary elections due in April 2008. If they cannot work together, Mr Lee's proposals may face an icy reception in parliament.

Mr Lee has few specific ideas about getting North Korea to give up its nuclear weapons, beyond making aid and investment conditional on disarmament. “North Korea must take steps to demonstrate it wants peace before there is widespread economic assistance or investment by South Korea,” says one of his closest foreign-policy advisers. In Mr Lee's view, the last two presidents have weakened South Korea's military alliance with America, and he promises to reinvigorate it. He also plans a range of co-operative economic agreements with Asian neighbours—and with Russia, in the hope of securing long-term oil and gas contracts in eastern Siberia. In short, all things to all countries.

Many South Koreans have been disappointed by the decade-long rule of liberal presidents who promised much but failed to deliver either strong growth or uncorrupt leadership. They were also put off by President Roh's inability to create more jobs and reduce social inequality. In contrast Mr Lee's record as mayor of Seoul suggests he can get things done. But if he does win, he will do so partly because he has raised expectations—and will suffer all the more if he cannot live up to them. ◦

Tuesday, December 11, 2007

Cargo trains begin service between the two Koreas

The first cargo train providing regular service across the border between the two Koreas in more than a half-century left Tuesday for the North. The 12-car train carrying construction materials will cross through the heavily fortified Demilitarized Zone dividing the peninsula on its journey to the North Korean border city of Kaesong, where the two Koreas operate a joint industrial zone. It was to cross back later Tuesday.

The service is one of the tangible results of an October summit between North Korean leader Kim Jong Il and South Korean President Roh Moo-hyun that outlined a series of joint projects. It comes months after the two sides conducted a one-time test run of passenger trains on two reconnected tracks on the western and eastern sides of the peninsula.

The cargo train will make a 10-mile round trip every weekday to North Korea.

It remains unclear whether regular passenger train service will start anytime soon, but one of the train's engineers was hopeful Tuesday.

"I expect a day will come when South Koreans visit North Korean tourist attractions freely by train," Shin Jang-chul, whose parents are from what is now North Korea, told reporters before departing.

South Korea hopes the inter-Korean railway will ultimately be linked through North Korea to Russia's Trans-Siberian railroad and allow an overland route connecting the peninsula to Europe — significantly cutting delivery times for freight that now requires sea transport.

The cargo rail service is likely to give a further boost to the sprawling Kaesong complex, which marries South Korean technology and management expertise with North Korea's cheap labor.
Currently, 64 South Korean companies operate factories there, employing about 21,600 North Korean workers and producing a range of goods including watches, clothing and shoes.

South Korea hopes the Kaesong project will encourage isolated North Korea to reform its centrally controlled economy and eventually open up to the outside world.

The rail lines between the Koreas were severed shortly after the outbreak of the 1950 Korean War. The conflict ended in a 1953 cease-fire that has never been replaced by a peace treaty, leaving the sides technically at war.

Already, dozens of cars, trucks and buses regularly cross the border between the two Koreas via reconnected roads both to the Kaesong complex and also to a tourism resort at North Korea's Diamond Mountain.

The transport links between North and South were reconnected after the first-ever summit between leaders of the divided nation in 2000.