0502-Assembly OKs retirement age change, tougher subcontractor protection

The National Assembly on Tuesday approved plans to raise the retirement age to 60, and passed a key economic democratization measure that will bring into force tougher penalties for unfair subcontracting transactions.

The measures are part of economic democratization efforts, which have been strongly opposed by pro-business lobbies that argue the changes will incur significant costs for businesses.

On Monday, the deputy chiefs of the country’s five main pro-business lobbies including the Federation of Korean Industries lodged complaints over related plans to Saenuri Party floor leader Rep. Lee Hahn-koo and other ruling party lawmakers.

As per the revised Fair Transactions in Subcontracting Act, companies inflicting losses on subcontractors through unfair practices will be subjected to fines of up to three times the damages.

Practices that will incur the strengthened penalties include misappropriation of technical data from the subcontractor, and reducing payment, canceling contracts and returning supplied goods without due cause.

Although the changes to the act have been seen as a vital step for so-called economic democratization, a major election pledge of President Park Geun-hye, related measures have raised strong opposition from large businesses.

Aside from the subcontracting act revision, the legislation committee also approved plans to freeze interest on student loans while the borrowers are fulfilling national service.

Ruling and opposition party lawmakers of the legislation committee, however, failed to reach agreement on plans to place heavy fines on companies that illegally dump harmful chemicals. The plans have also been opposed by local businesses.

In contrast, changes to the Restriction of Special Taxation Act and the Restriction of Special Local Taxation Act were processed during Tuesday’s plenary session without much difficulty as part of the government’s real estate market stimulus package.

Under the measures, which will be applied retroactively from April 1, the acquisition tax will be exempted for first-time homebuyers who purchase properties costing less than 600 million won ($545,000).

The measure, however, does not apply to buyers whose annual income combined with that of their spouse exceeds 70 million won.

The measure will last until the end of the year, and no limitation on the size of the property will be imposed.

In addition, residential properties less than 85 square meters or worth under 600 million won will be exempted from capital gains tax when the seller owns only one property. The transfer tax exemption will stand for five years. (cheesuk@heraldcorp.com)

0430-It’s the journey that matters

It’s the journey that matters

Tourist trains showcase beauty of rural Korea


To Koreans, Baekdu-daegan, nicknamed the “spine of the Korean Peninsula,” is not just a chain of mountains running across the country. It is also a symbol of the peninsula’s history, culture and scenery.

In the early 20th century, the mountain range and the surrounding regions not only offered splendid landscapes but also supported the nation’s economic growth, with its rich volume of natural resources.

However, with the decline of the timber and coal industries over the years, the area faded from the public’s attention. Only the decades-long industrial railroad remained as testament to its past glory.

It was here that KORAIL decided to introduce tourist trains, specially developed to explore the mountainous and rural areas.

The state-run rail operator last week launched the “V-train,” an exclusive sightseeing train that passes through the valleys of Baekdu-daegan, shuttling from Cheoram, Gangwon Province, to Buncheon, North Gyeongsang Province.

Passengers enjoy the view from the O-train. (Kim Myung-sub/The Korea Herald)

KORAIL also began service of the “O-train,” which loops around the mountainous regions and connects the country’s three major railways ― the Joongang Line, the Taebaek line and the Yeongdong line.

“The deep gorges of the central inland region offer a unique sight, the true characterisitc of Korea’s eastern provinces,” said a KORAIL official.

“Because of the geographic location and the traffic inconvenience, however, its charms were largely veiled to the public.”

Visitors are often discouraged by the curvy, unpaved roads but on the V-train, they can enjoy the hidden mountain landscapes and the peaceful countryside, as well as the tourist services provided by KORAIL, the official added.

In order to access the V-train, visitors are recommended to first take the O-train, which connects Seoul and Jecheon, and then loops around Jecheon, Yeongju and Taebaek.

Trains depart from Seoul Station at 7:45 a.m. every morning, arriving at the transferring Jecheon Station at 9:55 a.m.

From there, passengers may flag specific stations and routes to reach the valley area and the V-train.

In order to provide a thorough view of the steep ranges and valleys, the V-train operates at an average speed of 30 kilometers per hour in most sections and stops every now and then at photogenic spots.

The close view of the untouched valleys and the tranquil landscape of the rural whistle stops offer an unparalleled experience, not only to senior citizens but also to foreign visitors to Korea, according to the official.

Seungbu Station, for example, is a small wooden building consisting of a single waiting room, just as in old black-and-white movies. Located in the midst of rocky mountains, it is sure to conjure up feelings of nostalgia.

At Cheoram Station, passengers will find themselves encircled by massive coal mines, which acted as one of the key driving forces of the country’s economy long ago.

“In order to boost the synergy effect of our sightseeing train routes, we have worked with local communities to develop unrevealed attractions,” said the KORAIL official.

The most recommended route is to stop at Buncheon Station and follow a newly developed hiking course to the next station. Yangwon Station, too, offers a variety of walking options, including the “Watercolor Road,” leading to the nearby Guam Buddhist Temple and the riverside hiking course following the Nakdong River.

Those who wish to visit neighboring tourist spots may book car sharing programs through KORAIL, which is expected to kick off its new service by the end of this month.

Unlike standard rented cars, which are rented by the day, these KORAIL-affiliated vehicles may be taken by the hour, enabling tourists to take short tours around the station.

Using these transport means, they may choose to visit Bulyoungsa, the Buddhist temple nestled in the Bulyoung Valley in Uljin, North Gyeongsang Province. The area, with its rugged granite cliffs and deep valleys, has long been renowned as a scenic spot, as well as a fishing place.

In the vicinity is a famous colony of Geumgang pine trees. The area covers some 1,800 hectares of land and incorporates some 80,000 trees, most of them over 200 years old.

The history of the pine forest goes back to the late 17th century, when the Joseon Dynasty’s King Sukjong ordered that the area be administered by the central government.

Those who choose to stop at Cheoram Station are likely to visit the “Windy Hills,” a wind power energy complex located at the top of Maebongsan Mountain. The massive wind power mills surrounded by endless highland vegetable farms create a magnificent sight, especially for landscape photographers.

Another tourist option is Yongyeon Cave, a 300-million-year-old cave located at an altitude of 920 meters, which is higher than Bukhansan Mountain in Seoul.

“Based on the initial passenger responses, we will develop tourist packages encompassing train tickets, restaurants and lodging reservations, hopefully before the summer holiday season,” said the official.

The O-train tours mountainous areas. (Kim Myung-sub/The Korea Herald)

Tickets for the O-train and V-train may be purchased through KORAIL’s webpage, mobile applications and from train station counters, just like ordinary trains.

The Seoul-Jecheon O-train ticket for adults is 18,900 won during weekends and is offered at a cheaper price for senior citizens and children. Daily free passes will also be available from July, officials said.

For further information, visit www.korail.com or call KORAIL’s service center at 1544-7788.

0429-Forced exercise reduces anxiety, depression... and more

Forced exercise reduces anxiety, depression

Rats forced to exercise in a study were protected against stress and anxiety the same as rats who ran without being forced, U.S. researchers say.

Benjamin Greenwood, an assistant research professor in University of Colorado at Boulder, said there was a question whether people reap the same mental benefits of exercise if they are forced to do -- as is common among high school, college and professional athletes, members of the military or those who have been prescribed an exercise regimen by their doctors.

Greenwood and colleagues, including Monika Fleshner, a professor in the same department, designed a lab experiment using rats. During a six-week period, some rats remained sedentary, while others exercised by running on a wheel.

The rats that exercised were divided into two groups that ran a roughly equal amount of time. One group ran whenever it chose to, while the other group ran on mechanized wheels that rotated according to a predetermined schedule. For the study, the motorized wheels turned on at speeds and for periods of time that mimicked the average pattern of exercise chosen by the rats that voluntarily exercised.

After six weeks, the rats were exposed to a laboratory stressor before testing their anxiety levels.

“Regardless of whether the rats chose to run or were forced to run they were protected against stress and anxiety,” Greenwood said in a statement. “The implications are that humans who perceive exercise as being forced -- perhaps including those who feel like they have to exercise for health reasons -- are maybe still going to get the benefits in terms of reducing anxiety and depression.”

The findings were published in the European Journal of Neuroscience.(UPI)

---------

Clenching can boost memory: study

Clenching one’s fist can boost memory, U.S. researchers claimed in a recent study.

Ruth Propper, an associated professor of psychology at Montclair State University, said that clenching fists while memorizing could improve recall later.

Propper and her colleagues conducted research in which they divided 50 right-handed participants into five groups and asked them to remember as many words as they could after scanning a list of 72 words.

The first group clenched their right hand while memorizing and trying to recall and the second group did so with their left hand. The third and fourth groups clenched one hand -- either left or right -- while memorizing and switched to clenching the other hand while trying to remember the words. The last group didn’t clench at all during the experiment.

The group that clenched the right hand while memorizing and left hand while recollecting it performed best among all groups.

Propper, the lead researcher said, “the findings suggest that some simple body movements -- by temporarily changing the way the brain functions- can improve memory.”

The study was published in the PLoS ONE.

0426-IMF cuts its forecast for global economy in 2013

The International Monetary Fund has lowered its outlook for the world economy this year, predicting that government spending cuts will slow U.S. growth and keep the euro currency alliance in recession.

The global lending organization cut its forecast for global growth to 3.3 percent this year, down from its forecast in January of 3.5 percent. It didn't alter its prediction of 4 percent global growth in 2014.

The IMF expects the U.S. economy to expand 1.9 percent this year. That's below its January estimate of 2.1 percent and last year's U.S. growth of 2.2 percent. Still, the IMF says the U.S. economy is improving and should expand 3 percent in 2014. U.S. job growth has accelerated, the housing market is recovering and banks are more willing to lend.

The IMF predicts that the 17-country eurozone will shrink 0.3 percent in 2013 and grow only 1.1 percent in 2014.

The fund issued its latest World Economic Outlook on Tuesday in advance of the spring meetings of the IMF and World Bank in Washington later this week. Finance ministers from the G-20, a group of developed and large developing countries, will also meet.

On Monday, renewed worries about the global economy contributed to a plunge in the stock market. The Dow Jones industrial average sank 265 points, the biggest one-day decline since Nov. 7. Monday's drop was triggered partly by a report of slower growth in China, the world's second-largest economy after the United States.

Christine Lagarde, the IMF's managing director, said in a speech last week that the agenda for the meetings will include how to accelerate growth, create jobs and reform banking regulations.

The impact of government spending cuts and tax increases in the U.S. and other countries will also likely be a topic of this week's talks in Washington beginning Thursday. During a visit to Berlin last week, U.S. Treasury Secretary Jack Lew urged European officials to focus on policies that would encourage economic growth, rather than simply cutting deficits.

Developing countries may raise concerns at the G-20 about efforts by the U.S. Federal Reserve and Japan's central bank to stimulate their economies by buying more government bonds and other assets. Those moves can lower the value of the dollar and yen, which can make U.S. and Japanese exports cheaper overseas. That prospect has raised fears that other countries will take similar steps.

The IMF said worries about so-called “currency wars” are “overblown.” The world's major currencies aren't excessively undervalued or overvalued, the IMF said in its report.

The developing nations are expected to show the strongest growth over the next two years, according to the IMF forecasts. China is forecast to expand 8 percent this year and 8.2 percent in 2014 to lead all nations. In its previous forecast, the IMF had predicted 8.1 percent Chinese growth this year and 8.5 percent in 2014.

India is projected to expand 5.7 percent this year and 6.2 percent in 2014. Three months ago, the IMF had forecast 5.9 percent growth in India this year and 6.3 percent next year.

The IMF forecasts were issued before China reported Monday that its growth slowed to 7.7 percent in the first quarter compared with the same period a year earlier. That was down from 7.9 percent in the previous quarter.

The growth in the developing world should offset another sluggish year in Europe. The 17-member eurozone, which shrank 0.6 percent in 2012, is expected to continue struggling as governments take steps to reduce their deficits and weak banks reduce lending.

The U.S. economy is projected to grow only modestly. Higher taxes and spending cuts will reduce growth by about 1.75 percentage points, according to Olivier Blanchard, the IMF's chief economist. Given that drag, the IMF's 1.9 percent growth forecast for 2013 is better than it looks, he added.

“Underlying private demand is actually strong,” he said.

The IMF's forecast assumes $85 billion in across-the-board spending cuts will be replaced by Sept. 30, the end of the budget year. If they aren't, growth could be 0.2 percentage points lower, the IMF said.

The IMF criticized the United States for implementing steep spending cuts without a broader plan for longer-term reductions in deficits.

U.S. budget cutting “is too aggressive in the short term and too timid in the medium term. This adds to uncertainty and casts a shadow on the recovery,” Lagarde said last week.

The fund sharply boosted its outlook for Japan, projecting 1.6 percent growth this year and 1.4 percent next year. That is 0.4 percentage point and 0.7 percentage point higher, respectively, than in January. (AP)

0424-[Editorial] Cyber security bill

It took seven months for the police-run Cyber Terror Response Center to confirm that North Korea was behind a cyber attack on the Seoul-based JoongAng Ilbo daily last June. But it took much less time until a joint investigation, led by the National Intelligence Service, determined that it was North Korea again that attacked the computer systems of South Korean television broadcasters and financial institutions on March 20-26.

As the joint investigation proved, a coordinated action involving both the public and private sectors is more efficacious than one taken by a single government agency. That is the reason why one government agency needs to be empowered to coordinate action against cyber terror. But no underlying legislation is forthcoming.

A team of government, military and civilian investigators said Wednesday, three weeks after the initial attack, that North Korea’s military-run Reconnaissance General Bureau was responsible for the cyber attack. As evidence, it presented some of the codes used in the attack, which it said were identical to those used in malware previously linked to North Korea’s military intelligence agency.

The Reconnaissance General Bureau, which has thousands of cyber warfare experts under its wing, appeared to have made meticulous preparations long before the attack. The joint investigation team said the intelligence agency started to infiltrate into the target computer systems for monitoring and data theft at least eight months before it sent out the command to delete data stored on their servers.

Another piece of evidence of careful preparation, the investing team said, was that North Korean hackers had gotten access to the computer systems of the financial institutions on as many as 1,590 occasions when they sent out the attack command. It said that 67 of the 76 codes in malware were used for infiltration and monitoring, with only nine of them used for data deletion.

North Korean hackers are becoming increasingly sophisticated in their attacks on the computer control systems of South Korean government agencies, financial institutions, news media and other organizations. As such, the South’s online infrastructure needs greater protection. But neither the public sector nor the private one is vigilant enough against North Korea’s cyber terrorists.

The government has yet to establish a comprehensive defense against cyber terror. The private sector is not keen on spending on cyber security. Individuals are rarely alert to the possibility of their personal computers being exploited by North Korean hackers mounting an attack on South Korean computer networks.

North Korea has good reason to keep a large elite force of cyber warfare experts ― about 3,000, according to one South Korean estimate. A cyber attack can deal a great amount of damage to South Korea’s vital infrastructure at low cost.

Of course, it is not South Korea alone that is vulnerable to cyber terror. Last October, U.S. Defense Secretary Leon Panetta said: “Foreign cyber actors are probing America’s critical infrastructure networks. They are targeting the computer control systems that operate chemical, electricity and water plants and those that guide transportation throughout the country.”

As he said, cyber terrorists are trying to create sophisticated hacking tools to attack computer networks and “cause panic, destruction and even the loss of life.” Undoubtedly among them are North Koreans who are targeting South Korean infrastructure.

By mobilizing 270,000 “zombie” personal computers in the South in 2009, North Korea launched “distributed denial-of-service” attacks, better known as DDoS attacks, against the presidential office, the National Assembly and other government organizations. Two years later, it also put the computer network of NongHyup Bank into paralysis, causing great inconvenience to its clients.

Now North Korea is widening its targets, as was seen in the March 20 case that involved television broadcasters and financial institutions. It should not come as a surprise if an emboldened Reconnaissance General Bureau attempts to launch online attacks on the nation’s power grids, transportation systems and other vital infrastructure in the future.

Still, no sense of urgency is found among the administration, the legislature and the business community. Each time South Korea was hit by a cyber attack from the North, many voiced a need to give the National Intelligence Agency or any other government agency a mandate to coordinate action for cyber security.

The administration will have to hasten to write a bill giving the mandate to the National Intelligence Agency. No other agency can do the job better than the spy agency, whose main mission is to gather intelligence on North Korea.

0423-Barack Obama is flying blind on drones

As a candidate in 2008, Barack Obama was unsparing in his criticism of President George W. Bush’s anti-terrorism policies. He condemned torture and the infamous detention center at Guantanamo Bay, the lack of transparency and congressional oversight, the dubious legal framework and the blowback that was spawning more terrorists and diminishing U.S. standing in the world.

Bush’s policies “compromised our most precious values,” Obama said then. “We cannot win a war unless we maintain the high ground and keep the people on our side.”

Similar critiques are being heard today, except they are directed at the Obama administration and its extensive use of drones, the armed, unmanned aircraft that have killed much of the al-Qaida leadership in Pakistan.

There is anxiety over the issue in the Obama camp. The president has yet to fulfill his pledge in the Feb. 12 State of the Union speech to provide a rationale and justification for these targeted killings. Congressional challenges and criticisms ― even belatedly from some Democrats ― are mounting. The use of drones has increased sevenfold under Obama and has caused the deaths of thousands of suspected terrorists and at least hundreds of civilians in Pakistan and Yemen.

The adoption of this policy was inevitable given the Democrats’ 2008 campaign pledge: no torture or rendition, and a tougher approach than Bush’s in going after al-Qaida.

In Pakistan, the drone account is run by the Central Intelligence Agency. As the New York Times revealed, this was part of a secret deal with Pakistani intelligence. Even some who believe drones are essential and much less risky than the alternatives are bothered that much of the program has been run by the CIA.

“Drones can be a very important part of our war arsenal if used smartly,” says Frank Wisner, a top diplomat under Republican and Democratic administrations. “As offensive weapons, they should only be part of our intelligence apparatus if they are part of a covert action program and their deniability is essential. The agency should not be a war-fighting instrument.”

The administration is considering transferring all drone responsibility to the military, which now runs the program in Yemen. Leon Panetta, who served as both CIA director and defense secretary under Obama, says this is desirable.

“To move these operations to the military and with greater transparency makes sense,” Panetta said in an interview.

Obama’s approach points to a question that was first raised about Bush’s policies: “Are we creating more terrorists than we’re killing,” Defense Secretary Donald Rumsfeld once asked in the context of Iraq.

Few dispute the Obama administration’s claims to have wiped out much of al-Qaida’s leadership in Pakistan, lessening the prospects of a repeat of the Sept. 11 attacks. There is much evidence, however, that the drone strikes are creating more terrorists.

In a report this year for the Council on Foreign Relations, the national security scholar Micah Zenko said that in Yemen, the Pentagon has conducted dozens of drone strikes, killing more than 700 people. In 2009, the Obama administration said there were “several hundred” al-Qaida members in that country; by 2012, the group had “a few thousand members.”

When the Pew Research Center carried out polling on the drone attacks in 20 major countries last year there was majority support for the policy only in the U.S. In most other countries, there was overwhelming opposition. A recent Gallup poll in Pakistan showed attitudes toward U.S. leadership are more negative now than during the Bush years.

“The resentment created” by drone strikes “is much greater than the average American appreciates,” General Stanley McChrystal, the former top commander in Afghanistan, told Reuters in January. Drones add to “the perception of American arrogance that says, ‘We can fly where we want, we can shoot where we want, because we can.”’

The U.S.’s near monopoly on these weapons won’t last. Dozens of other countries, including Russia and China, are rushing to develop armed drones. The Council on Foreign Relations report warns that if the U.S. doesn’t establish a coherent legal and policy rationale for its use of drones, they could become “an unregulated, unaccountable vehicle for states to deploy lethal force with impunity.”

In a recent op-ed column, John Podesta, the White House chief of staff under President Bill Clinton, criticized the Obama administration for not providing to Congress the appropriate legal opinions and memorandums governing targeted killings. Keeping both Congress and the public “in the dark,” he wrote, isn’t a sustainable policy. The article is said to have infuriated the president.

However, the policies may be exceeding the authority granted by Congress after the Sept. 11 attacks that allows the president to go after those who were responsible or who were likely to attack the U.S. again.

Last week, the McClatchy newspapers, after reviewing intelligence reports, concluded that U.S. drones were killing hundreds of low-level militants in South Asia, contrary to the president’s assurances that the strikes targeted only top al- Qaeda leaders.

This suggests Obama is “misleading the public about the scope of who can legitimately be targeted,” Zenko said. Other sources said some of these strikes killed militants who weren’t affiliated with al-Qaeda at the behest of Pakistan.

There are the stirrings of a full-fledged debate. That would be healthy, one expert argues: “This genie is out of the bottle and there has to be greater transparency. We should welcome this debate.” That’s former CIA and Pentagon chief Panetta.

By Albert R. Hunt

Albert R. Hunt is a Bloomberg View columnist. The opinions expressed are his own. ― Ed.

(Bloomberg)

0422-KT employs more foreigners

Telecommunications giant KT is hiring more foreign employees under Chairman Lee Suk-chae, the firm said Monday.

As of the end of March, KT had 26 foreign employees on full-time contracts, compared to three in 2010 and only one foreigner in 2009.

Sixteen are American, followed by three British, two Canadians, two Indians and one each from Japan, Russia and New Zealand.

The firm said it is going to be more aggressive in increasing its number of non-Korean staff as it pushes to diversify its business structures and become truly global.

“Over the last few years, KT has been consistent in hiring more non-Koreans as we believe foreigners will significantly help us effectively push for globalization,” a company spokesman said.

The foreign employees are currently involved in the company’s key projects and their role is expected to expand as KT becomes less reliant solely on the local market.

Frank Trevino is team leader at the Americas/Network Business Department inside KT’s Global Business Unit. His main job is to handle KT’s global alliance management-related projects. Devendra Katiyar, who holds a management position, runs its U-Cloud software development.

KT runs a system to help foreign employees settle into the company, offering relocation assistance and a help line service.

These are mostly aimed at helping foreigners working at the company to proceed with their work with stability and to better understand the corporate culture, which is considered critical for those who have little previous knowledge of Korean firms.

KT Chairman and CEO Lee is investing more to find new business chances overseas. The company is the nation’s dominant fixed-line operator and runner-up to the market leader SK Telecom in mobiles.

South Korea is one of the most-wired societies in the world with Internet literacy exceeding over 93 percent, according to data from the Korea Communications Commission (KCC), the country’s top telecom regulator.

But the local market is saturated, meaning there is little room for the nation’s three telecom companies to find lucrative new business chances.

By the time that Lee took over the top job a few years ago, KT had too many employees focused on local business. Lee believed the company needed to become a trendsetter if it wanted to prosper.

“To shake things up, Lee enhanced management efficiency and ordered Korean managers to find proven talent from multinationals worldwide, regardless of their nationality,” said a company spokesman.

KT has been collaborating with multinational giants such as Microsoft for the joint development of competitive content and is also eyeing Africa, the former Soviet bloc and Southeast Asia as its next target markets.

0419-Legendary Cho Yong-pil bounces back after a decade

The 63-year-old Cho Yong-pil has returned to the music scene with his first single in 10 years, titled “Bounce.” The track is a prerelease single from his upcoming 19th album “Hello,” which will be unveiled next week.

“Bounce,” released on Tuesday, was ranked in the top 10 on all the major local music singles charts, including Bugs and Soribada charts where it overtook Psy’s global hit “Gentleman” and claimed the No. 1 spot.

The versatile artist showed a completely different side of himself with his new release: a modern, upbeat bubble-pop track with the English chorus line, “Baby you’re my trampoline, you make me bounce, bounce.”

Cho first debuted as a musician in 1968 performing for the U.S. Army with his country band Atkins. Two years later he joined the rock ’n’ roll band Kim Trio, which inspired Cho to pursue rock music.

His first commercial single “Come Back to Busan Port” was released in 1975 and launched him into national fame. Five years later he released his first album titled “The Woman Outside the Window” and in the same year, he became the first Korean pop singer ever to perform at Carnegie Hall in New York City. In 1994, Cho became the first artist to sell 10 million album copies in Korea. Throughout his career spanning more than 40 years, Cho has released 18 full albums, the last one released in 2003.

Cho, who is being likened to the British singer David Bowie for his long-lasting power, versatility and a successful comeback album after a decade, will be performing a special premiere showcase at Seoul Olympic Park on April 23, the night his new album is to be revealed.

The showcase will be streamed live and can be viewed online through Naver starting at 8 p.m. local time. The rocker will also kick off his “Hello” nationwide tour with three concert performances in Seoul from May 31 to June 2 at the Gymnastics Stadium at Olympic Park.

0418-Parties hope to bring corporate crimes to heel with tougher laws

The political parties’ push for tougher regulations on misdeeds by large companies and executives are ruffling feathers in the business community.

As part of economic democratization, lawmakers from both the ruling Saenuri Party and the main opposition Democratic United Party are proposing revisions stipulating tougher punishments for corporate crimes and illegal trades among group affiliates.

Rep. Won Hye-young of the DUP and Rep. Min Hyun-joo of Saenuri are leading a revision bill for the Act on the Aggravated Punishment etc. of Specific Economic Crimes, calling for a drastic increase of jail terms given to conglomerate chiefs who make large financial gains through illegal means.

Under the proposed revisions, those who make illegal gains of more than 30 billion won ($26.8 million) could receive between 15-year and life sentences. For crimes leading to gains between 500 million won and 30 billion won, prison sentences ranging from three years to more than 10 years have been proposed.

In addition, Rep. Oh Jae-sae of the DUP has proposed to revise the Amnesty Act that will limit the president’s authority to pardon economic criminals.

Along with these, the parliamentary National Policy Committee is reported to be planning a revision of the Monopoly Regulation and Fair Trade Act.

According to reports, the committee’s plans will ban anticompetitive trade between affiliates in most cases, and the ceiling on the fines issued to such companies at 5 percent of their sales.

Large companies giving work to affiliates is a long-established practice in Korea, with as much as 14 percent of top 42 conglomerates’ annual sales being accounted for by such in-house contracts.

According to a recent data released by the Board of Audit and Inspection, some of the country’s largest conglomerates have used in-house dealings to support companies owned by relatives of the largest shareholders.

The data showed that Hyundai Motor Group directed a large part of its logistics needs to Hyundai Glovis, more than 80 percent of whose annual sales were accounted by services provided to the group.

Lotte Group’s retailer Lotte Shopping also engaged in similar practices, contracting companies with ties to itself to run confectionary stands at 47 of its 50 cinemas.

Companies will be exempted when the services or materials purchased in a transaction cannot be provided by non-affiliates, and when the contract is granted through open bidding.

In addition, companies suspected of unfair trading practices will become responsible for disproving allegations. At present, the Fair Trade Commission is charged with proving the guilt of companies suspected of anticompetitive transactions between affiliates.

There are, however, calls for caution within the political arena.

“It may be understandable during elections, but (the parties) should be careful not to break businesspeople’s drive by making it appear as though there are big problems with conglomerates and others without due cause,” Rep. Lee Hahn-koo, Saenuri Party floor leader, said at Monday’s supreme council meeting.

“Economy is an organism, and a characteristic of an organism is that it is easy to kill but difficult to revive.”

0417-Venture ecosystem

Government agencies are competitively pouring out measures geared toward venture companies. Economy-related ministries invariably present plans aimed at supporting venture businesses when they report their 2013 business plans to President Park Geun-hye.

The policy focus on venture companies is natural as Park’s vision of building a “creative economy” cannot be attained without a prosperous venture sector.

A creative economy is driven primarily by a brisk commercialization of innovative ideas, a job that is best done by venture entrepreneurs willing to take risks.

Yet the government’s zeal to foster venture firms is reminiscent of the venture boom a decade ago. At the time, the government rushed to support venture businesses in a desperate effort to lift the nation from a devastating economic crisis. Yet the boom was short-lived; it ended when the dot-com bubble burst in 2003.

To be sure, the new government’s approach is more refined than the one used a decade ago. But policymakers appear to have forgotten one of the key lessons of the dot-com debacle.

The venture policy of the early 2000s failed not because funding from the government was insufficient. The boom was unsustainable because it was not underpinned by a viable venture ecosystem.

Ten years on, the ecosystem for venture firms still remains fragile and lacks some of the essential elements. For instance, there are not enough angel investors in Korea. Angel investment plunged from 97 billion won in 2006 to about 14 billion won last year.

In this regard, it is inevitable for the government to play a role in the ecosystem. Otherwise, the system would not function in the first place. But the government should limit its role to catalyzing private investment and focus more on cultivating private players that can take its place.

One government agency that needs to bear this point in mind is the Financial Supervisory Commission, which unveiled a wide array of measures Wednesday.

The commission said it would set up funds designed to provide financial support to venture companies at each stage of their growth from pre-start-up preparations to initial public offering.

State-run funds can play a role in supporting venture companies. But they cannot be a substitute for private investment.

One drawback of public funds is that once they start to support a company, they tend to continue to do so, regardless of its viability. This is why there are so many zombies among small and medium enterprises in Korea.

The FSC should focus on creating a vibrant capital market instead of seeking to expand the provision of taxpayers’ money to venture companies.

0416-Laughter the best medicine

http://www.koreaherald.com/view.php?ud=20130405000587

0415-Return of statues

Koreans tend to eschew rational reasoning to make a special case in controversial matters with Japan. It may be somewhat understandable that they often become emotional when it comes to dealing with their former colonial ruler. Recent moves by Japan’s right-wing government to dilute its wartime atrocities and strengthen its claim to a group of islets controlled by Korea has exacerbated the public sentiment here.

Amid this antagonistic atmosphere, however, Koreans need to be cautioned against their emotional tendency. If not, they would find it difficult to attach convincing moral justification to their demands that Japan should face up to historical truth and repent for the suffering it inflicted on its neighbors. In this sense, it is undesirable that emotional approaches seem to prevail over logical reasoning in handling the issue of two ancient Korean Buddhist statues stolen from Japan last year.

In October, a Korean crime ring stole the statues from temples on the Japanese island of Tsushima and brought them here months later in a botched attempt to sell them to local private collectors. The police arrested eight of the nine thieves, retrieving the statues.

A local court approved jurisdiction applied for by a Korean temple to ban the return of one of the statues, which is presumed to have been taken from it by Japanese pirates in the 14th century. The other ― there has been no clue to how it was taken to Japan ― is also being held by the Cultural Heritage Administration of Korea pending a final decision on whether to send it back.

Raising a more reasonable voice, a local civic organization has argued that the statue kept by the cultural agency should be immediately returned to its Japanese owner as there is no suspicion that it was acquired in an unjust way. The group held a news conference Monday to press its argument, which we support as appropriate and sensible. The group’s leader, who is a Buddhist priest, correctly noted that sending back the stolen statue would help open a new horizon in efforts to retrieve Korean cultural assets plundered by Japan, particularly during its 1910-45 colonial rule of the Korean Peninsula. It should be realized that the issue of retrieving cultural properties abroad cannot be solved by an emotional approach lacking historical, moral and logical grounds.

In this sense, it is right to return the other statue to the Japanese temple, which had cherished it for centuries. A document discovered inside the statue revealed it had been placed at a Korean temple in 1330, raising the possibility that it was taken away by Japanese pirates, who frequently looted the western and southern coastal areas of the peninsula at that time. Though many Koreans may feel disappointed and displeased, the record itself falls short of being the explicit evidence that the statue was plundered by Japanese raiders. It can also be hardly expected that the upcoming trial requested by the Korean temple to reclaim the Buddhist sculpture will figure out exactly what happened nearly 700 years ago.

Neither can the historical presumption be allowed to mitigate the theft by Korean thieves. There needs to be caution not to give, if inadvertently, the impression of encouraging or justifying the stealing of Korean cultural properties abroad.

Both of the stolen statues should be given back to their Japanese owners. It is only then that consideration may be given to asking for their return, especially the 14th-century sculpture, to Korea ― in a cordial and sincere manner. It would have made such a request more persuasive to send them back as soon as they were retrieved from the thieves without taking the legal step.

From a spiritual viewpoint, Buddha will certainly not mind where his statue is placed as long as it is viewed by his worshippers.

0412-[New York Times Editorial] An illegal cellphone search

A student called G.C. at Owensboro High School in Kentucky had a thick file of disciplinary infractions: tardiness, fighting in the locker room, walking out on a meeting with the school’s prevention coordinator and more.

But in September 2009, when he was caught sending text messages in class and school officials took his cellphone and read the messages, the conflict escalated. The school superintendent barred G.C. from school. G.C. sued in federal trial court and lost.

On appeal, a three-judge panel of the United States Court of Appeals for the Sixth Circuit last month correctly ruled that G.C. was improperly denied a hearing required by a Kentucky statute before he was expelled and that school officials violated his rights when they read text messages on his phone without reasonable suspicion.

The first issue was straightforward: G.C. did not get the hearing required by law. The second issue was knottier. Even under what the court called the Supreme Court’s “relaxed” standard for searches in a school setting, the lawfulness of a search depends on whether it was reasonable. The Sixth Circuit wisely interpreted that to mean the search is justified “if there is reasonable suspicion that a search will uncover evidence of further wrongdoing or of injury to the student or another.” There is no unlimited right to search any content on a phone.

In G.C.’s view, the school had no basis for searching his phone. The school claimed the search was partly for his own good because there were confessions of drug use in his file and the school said it wanted to make sure he did not intend to hurt himself or engage in illegal activity.

But the appeals court found “no evidence in the record” that “the school officials had any specific reason” to believe that G.C. was about to do anything else wrong. He was texting and simply got caught.

0411-Probe Finds N. Korea Behind Mar. 20 Cyber Attack ... and more

Probe Finds N. Korea Behind Mar. 20 Cyber Attack

Anchor: The South Korean government has concluded that North Korea was behind last month’s massive cyber attack that brought down the networks of major South Korean media and banks. Our Bae Joo-yon has more.

Report: A joint civilian-government-military probe team announced on Wednesday that it was North Korea’s Reconnaissance General Bureau that orchestrated the cyber attacks against South Korean institutions last month. Broadcasters KBS, MBC and cable news channel YTN as well as Shinhan, Jeju and Nonghyup banks were paralyzed by the attacks.

During a news briefing at the Ministry of Science, ICT and Future Planning, the investigation team said it concluded North Korea was behind the attack after analyzing 76 traits of malicious code and computer access records collected from the affected networks. It noted of the 76 codes discovered, 30 were reused from previous attacks.

The latest probe was also based on materials that the National Intelligence Service and military had accumulated on North Korea’s cyber attacks against the South in the past.

The team found that at least six personal computers located within North Korea were utilized in planting malicious codes in South Korean financial institutes through one-thousand-590 connections since June 28th of last year. Those computers also stole information from the personal computers of South Korean financial institutions.

So far, the investigation team has traced 25 access routes at home and 24 abroad. It said that 18 of the routes in South Korea and four overseas are the same IP address the North previously used in cyber attacks against the South since 2009.

Investigators said the hackers infiltrated the personal computers or servers of the targeted South Korean institutions at least eight months beforehand and found weak spots in their computer networks.

The government will convene on Thursday a national cyber safety strategy meeting chaired by the head of the National Intelligence Service. The meeting will see the attendnace of officials of 15 government agencie and will discuss ways to prevent the recurrence of such attacks.

Seoul to Pressure, Persuade North through Global Cooperation

Anchor: Foreign Minister Yun Byung-se announced the government's plan to restrain North Korea’s tension mongering through cooperation with members of the six-party talks, the European Union and the Association of Southeast Asian Nations (ASEAN). He also said the North Korea issue will be discussed when he meets U.S. Secretary of State John Kerry in Seoul Friday.
Our Kim Soyon reports.

Report: Seoul's Foreign Minister Yun Byung-se said South Korea will seek to suppress North Korea’s tension building tactics and additional provocations through "pressure and persuasion" in cooperation with the international community.

Speaking at the National Assembly Foreign Affairs and Unification Committee on Wednesday, the minister said the government maintains a consistent and unified response posture against the North’s provocations and threats.

He said Seoul will exert joint pressure on Pyongyang together with the United Nations and key members of the international community including the EU, ASEAN and parties to the six-nation dialogue.

He noted that the government is also continuing efforts to persuade Pyongyang through cooperation with Beijing and Moscow.

With regards to Washington, Yun said high-level collaborative channels have all been activated and that strategies on North Korea will be discussed in depth when he meets U.S. Secretary of State John Kerry in Seoul on Friday. The meeting is expected to pave the way and fine tune Seoul and Washington’s stances on North Korea and other pending issues before the South Korea-U.S. summit to be held in the U.S. next month.

Before meeting Yun, Kerry is expected to make a courtesy visit to President Park Geun-hye. Kerry will also meet with Defense Minster Kim Kwan-jin during his trip.

0410-Ex-British PM Margaret Thatcher dead at 87: spokesman

Published : 2013-04-08 21:01
Updated : 2013-04-08 21:20

LONDON  (AFP) - Former British prime minister Margaret Thatcher, the "Iron Lady" who shaped a generation of British politics, died following a stroke on Monday at the age of 87, her spokesman said.

"It is with great sadness that Mark and Carol Thatcher announced that their mother Baroness Thatcher died peacefully following a stroke this morning," Lord Tim Bell said, referring to Thatcher's children.

Britain's Queen Elizabeth II was saddened to hear of her death, Buckingham Palace said.

"The Queen was sad to hear the news of the death of Baroness Thatcher. Her Majesty will be sending a private message of sympathy to the family," it said.

The former premier, who led Britain from 1979 to 1990, suffered from dementia and has appeared rarely in public in recent years.

She was last in hospital in December for a minor operation to remove a growth from her bladder.

The former Conservative Party leader remains the only female premier in British history and was the 20th century's longest continuous occupant of Downing Street.

Her daughter once revealed that the former premier had to be repeatedly reminded that her husband Denis had died in 2003.

She was told by doctors to quit public speaking a decade ago after a series of minor strokes.

Michael Howard, Conservative leader 2003-2005, told Sky News television: "It's terribly sad news. She was a titan in British politics.

"I believe she saved the country, she transformed our economy and I believe she will go down in history as one of our very greatest prime ministers."

Right-wingers hailed her as having hauled Britain out of the economic doldrums but the left accused her of dismantling traditional industry, claiming her reforms helped unpick the fabric of society.

On the world stage, she built a close "special relationship" with US president Ronald Reagan which helped bring the curtain down on Soviet Communism. She also fiercely opposed closer ties with Europe.

0409-IMF Head: Global Economy Better than a Year Ago .... and more

IMF Head: Global Economy Better than a Year Ago

The head of the International Monetary Fund says a substantial portion of the world economy appears better-off now than a year ago.

At this year’s BOAO Forum for Asia in the southern Chinese province of Hainan, IMF Managing Director Christine Lagarde said growth continues to strengthen and expand among emerging and developing economies. She said the U.S. recovery is also gaining momentum.

Citing her agency’s World Economic Outlook report due next week, Lagarde the euro zone crisis remains a risk for global economic recovery.

More Cases of Avian Flu Reported in China

Two more Chinese people were found to have contracted avian influenza strain H7N9 in China, bringing the total count of cases to 16.

Beijing News reports the new strain was detected in a 61-year-old woman and 79-year-old man living in Nanjing.

Chinese officials were reported saying avian influenza is being contracted by humans from fowl sporadically, and there have been no cases where the disease was spread by human contact.

Ryu Scores First Major League Win

South Korean pitcher Ryu Hyun-jin of the Los Angeles Dodgers clinched his first victory Sunday in U.S. Major League Baseball.

In his second career start at Dodger Stadium against the Pittsburgh Pirates, Ryu allowed just two runs on three hits and two walks. Despite a shaky start in the first and allowing a two-run homer, he went on to strike out six batters.

Ryu left the mound after six and one-third innings with the Dodgers up 4-2 ahead of LA's 6-2 victory.

0408 - Samsung, LG Cut Smartphone Prices over Subsidy Regulations...and more

(1) Samsung, LG Cut Smartphone Prices over Subsidy Regulations

Samsung Electronics and LG Electronics have decided to slash factory prices of their smartphones as the government ramps up regulations on smartphone subsidies.

Samsung Electronics lowered the factory price of its Galaxy Note 2 to 990-thousand won from one-million-89-thousand won. The price of Samsung’s Galaxy S3 was cut from 890-thousand won to 790-thousand won.

LG Electronics lowered its factory price of both the Optimus G and the Optimus View 2 by 150-thousand won to 250-thousand won from one-million won.

Manufacturers say the price cuts were put in place due to the strengthened regulations on government subsidies to consumers that have eroded sales of high-end smartphones. Also, the industry assesses that the prices were adjusted before new smartphone models are released on the market, including Samsung Electronics’ Galaxy S4.

(2) Gas Prices Fall for Fourth Consecutive Week

Gasoline prices have fallen for the fourth straight week in South Korea.

The Korea National Oil Corporation said prices at the pump stood at an average one-thousand-970-point-five won per liter this week, down seven-point-three won compared to a week ago.

Diesel also fell nine-point-six won to an average one-thousand-765-point-four won per liter while kerosene was sold at one-thousand-392 won per liter, down four-point-two won.

The oil corporation said it expected prices to ease further in the coming weeks since local refineries lowered their supply prices after mid-March.

0405-SUVs are more likely to be mobilized in war

As North Korean threats worsen, car-owners are increasingly getting worried that they might see their cars used as government property.

In emergencies, the government and the military can mobilize the cars in the country and use as they see fit, according to the Emergency Resource Management Law.

When ordered, car owners will receive a mobilization warrant, and must turn over their cars to designated places.

If not, they will face fines up to 20 million won, or prison sentence of up to seven years.

The computer system selects the cars randomly, according to the military official. However, SUVs and newer models are more likely to be mobilized, he said.

“Gyeonggi and Gangwon Province residents may be high on the list, since those are the places bordering North Korea.

And the younger the car owner is, the more likely they have to give up their car,” he added.

Many car owners are getting frustrated over the possibility. “The car dealer never told me about this. If the government takes away cars of a specific model, I think it’s unfair.”

Another man said, “If a war breaks out, I would need my car to move away with my family. The government taking away civilian cars is too much of a burden on people.”

The government official was reluctant to confirm even the likelihood.

He said, “We can’t tell you for sure the models or the number of the cars to be mobilized. That’s confidential.”

0404-South Koreans numb to NK aggressions

Le Monde, the leading media in France, reported April 2 that while North Korea has been building up its military power, the South Korean public is not showing any type of serious response of concern.
In an interesting article, Le Monde dedicated a full page on evaluating the North Korean threat and responses in the South.
The article quoted a Cho Ji-hoon, a 28-year-old employee of an automotive parts company, as saying that talks of war have been around for decades and that it will blow by in time.
In the South Korean capital of Seoul, which has a population of some 15 million, the threats of aggression from North Korea is generally ignored and they are living their lives as usual.
The shopping district of Myeong-dong in downtown Seoul is busy with local and foreign visitors and people on subway trains are relaxing while watching dramas on their smartphones, the report said.
“It is apparent that South Korean have become numb to threats from North Korea. This is rather surprising,” said musician Hahn Dae-soo.

0403-Sailors’ sacrifice

South Korea marked the third anniversary of the sinking of its warship Cheonan in the West Sea, Tuesday. We mourn the loss of 46 sailors who were killed by a North Korean torpedo attack and Han Joo-ho, the late Navy warrant officer who died during rescue operations. Their sacrifice for the nation should never be forgotten.

Although the Stalinist regime denied its involvement in the tragic incident, science has revealed the truth. Most lamentable, however, is that some people in the South still don’t acknowledge that the brutal act was perpetrated by the North.

The most valuable lesson from the disaster is that peace and stability on the Korean Peninsula is never a matter of course and we must always stay on high alert around the clock. The military said it beefed up its security posture fully after the incident but we call for the nation to further enhance military preparedness against Pyongyang’s possible provocations.

Delivering a speech during a ceremony to mourn the victims Tuesday, President Park Geun-hye urged North Korea to abandon its nuclear weapons and take a path toward change. We strongly support Park’s argument that “North Korea must immediately abandon its thinking that nuclear weapons will protect its regime.”

On the contrary, however, the isolationist country has been ramping up its belligerence in recent weeks, even threatening to use nuclear weapons. But Pyongyang’s hostile rhetoric is no more than an expression of its deepening internal crisis.

What’s clear is that Seoul should strike back at the origin of the enemy’s provocation and commanding forces in the event of fresh provocations, as Defense Minister Kim Kwan-jin warned. This is because strong retaliation is the clearest deterrence against provocations.

In this regard, the recent Seoul-Washington pact on a joint operational plan will be quite instrumental in deterring North Korean aggression, especially localized provocations. So far, American engagement has been possible in the event of a full-scale conflict on the peninsula but the new agreement will allow the allies to jointly respond to the impoverished regime’s limited attacks, with Seoul taking the lead and Washington in support.

Fear is growing that the North will unleash new types of provocations at any time to catch the South off guard, but this is not the time for Pyongyang to escalate tensions. Rather, the North should give up on its brinkmanship and return to the negotiating table.

President Park’s “trustpolitik” or confidence-building process is a good chance for the reclusive regime to end its long-running isolation and move toward reform and openness.

This is The Korea Times editorial for Wednesday, March 27, 2013.

0402-Two-track policy

Show firmness on security, but start building trust

With nearly one month in office, President Park Geun-hye appears to be far from a “prepared” leader. The President’s personnel appointment in particular was little short of disastrous, as six of her nominees have either bowed out or failed to pass confirmation hearing. Nor have voters seen yet the substance of “Geunhye-nomics,” Park’s economic policy aimed at both growth and better redistribution.

A silver lining in the dark cloud of Park’s first-month performance was her handling of inter-Korean affairs.

“We simply can’t go on with the North’s nuclear weapons constantly on our minds,” Park said last week, in a succinct summing-up of South Korea’s resolve not to tolerate Pyongyang’s playing with atomic fire. On Sunday, Seoul and Washington agreed to jointly hit back at North Korea military provocations, even limited ones such as those in the West Sea three years ago.

These are not just necessary but vital precautionary steps to keep the hawks on the other half of this divided peninsula from staging reckless military adventures.

Two days earlier, on the other hand, the Park administration also allowed the Eugene Bell Foundation to send 678 million won ($600,000) worth of tuberculosis medicine to North Korea, in the first such approval of humanitarian aid to the impoverished state since Park took office.

The amount involved was rather insignificant, but the decision was not an easy one, considering the current tension surrounding the Koreas, especially Pyongyang’s increasingly frantic anti-Seoul propaganda. The Ministry of Unification hinted at additional permission for aid projects by private groups, taking the effects of such assistance and transparency in distribution into account. We hope this is the beginning, though small, of Park’s moves toward the process of building trust between the Koreas.

North Korea should respond in kind. Pyongyang’s young new leader has disappointed all peace-loving people in the world by going further in his nuclear brinkmanship even than his father and grandfather. Kim Jong-un must realize the meaning of the U.N.’s decision last week to create a commission to look into allegations of human rights violations in his isolated regime, including food deprivation, labor camps for political prisoners and torture. Whatever Kim might say about external threats, a country and a leader that cannot protect its own people’s basic rights can have no excuses.

Kim must not mistake Seoul’s olive branch as a sign of weakness or yielding to its threats. Only the stronger side of the two warring parties can make concessions.

President Park is advised to continue her two-track policy toward the reclusive regime. Most of her predecessors made clear their zero-tolerance stance on the North’s nuclear programs, but the key lies in ‘how.’ It has become apparent sanctions and isolations alone can’t solve the problem. The hawks’ eye-for-an-eye tactics is irresponsible at best and calamitous at worst, considering accidental brushfires can escalate into a full-scale clash. Hard-liners in both Koreas will not be able to avoid responsibility to history for any further large-scale military conflict on this peninsula.

Both conservatives and liberals in the South need to form a consensus at least in inter-Korean issues. And President Park should stand at its vanguard.

This is The Korea Times editorial for Tuesday, March 26, 2013.