B-1B Crosses the Northern Limit Line
On Sept 23, US B-1B Lancers crossed the Northern Limit Line (NLL). Two B-1B Lancer bombers started off in Guam escorted by F-15C Eagle fighters from Okinawa and flew in international airspace over waters east of DPRK. It is the first time since 1953 that a US bomber flew this close to the North Korean airspace.
The maneuver was executed just before the North Korean Foreign Minister Ri Yong-ho’s speech at the UN General Assembly. Ri stated that North Korea will shoot down the American bombers even if it does not cross North Korean airspace. He also added that North Korea will not hesitate to take preemptive actions.
However, North Korea refrained from issuing an official statement through its news agency. Experts suspect that the regime did not want its people to discover that the country did nothing while the US bomber crossed the NLL. The South Korean Intelligence Agency reported that the North Koreans could have been unaware that the B-1B was flying into their airspace. There were reports in Seoul that the US carried out the recent maneuver without prior consultation with the South Korean government. The Blue House denied these claims. The incident is fueling suspicion that the US may be planning a preemptive military action against North Korea.
Investigation into the National Intelligence Service (NIS) and Lee Myung-bak
The investigation into the NIS is closing in on the former President Lee Myung-bak. Charges include allegations of political interference, blacklisting artists, and electoral sabotage. In July, the NIS Reform Development Committee created a task force to investigate these allegations. Won Sei-hoon, the former NIS director is being investigated by the prosecutor for being in charge of these operations. Former Minister of Defense, Kim Kwan-jin is also prohibited from leaving the country and is expected to be extradited.
The opposition (i.e. Liberty Korea Party (LKP) and Bareun Party) condemned the investigation accusing the Blue House of playing politics. The LKP is fighting back by threatening to open a special investigation into the former President Roh Moo-hyun. According to a poll conducted by Hankook Research, the public appears to favor the investigation into the NIS and former President Lee (in favor: 77.9%, oppose: 18.5%).
The United States Trade Representative Robert Lighthizer and the South Korean Trade Minister Kim Hyun-chong began the renegotiation of the KORUS FTA on Oct 4 in Washington DC. While details are unknown, experts predict that the US is likely to demand the immediate elimination of tariffs on 547 US agricultural products.
The Moon government faced harsh criticism from the opposition parties for the government’s dealing of the KORUS FTA. Park Ji-won, the former leader of the People’s Party, claimed that the current government was too complacent on its response to the renegotiation talks. Hong Joon Pyo, the leader of the LKP, denounced President Moon and the ruling party for opposing the KORUS FTA. Bareun Party demanded an apology from President Moon for falsely assuring the Korean public that there would be no renegotiation of the FTA.
Kakao Bank Continues Strong Performance
Internet banking service Kakao Bank, which first launched on July 27, recorded KRW 2.5 trillion (~USD 2.2 billion) in lending and KRW 3 trillion (USD 2.6 billion) in saving deposits. Kakao Corporation is known for its popular messaging service, Kakao Talk. Since Aug 27, 3.9 million new customers joined Kakao Bank, continuing the explosive growth it enjoyed during the first month with 3.07 million registered users. The spokesperson for Kakao Bank commented that the company expects continued growth.
Internet banking services like Kakao Bank and K-Bank (by the telecom company KT) usually attracts customers with higher credit rankings, with 87.5% of its clientele in the top three credit categories. This may be in part because these financial institutions offer lower interest rates on loans (3.39%) for upper-tier credit rated customers than other commercial banks (3.71%). Potential borrowers with lower credit ratings face slightly higher interest rates (4.79%) than commercial banks (4.51%).
The popular feature of Kakao Bank is its 24-hour service, allowing potential customers to create an account, make foreign remittances, or take out a loan at any time of the day. Foreign remittance is especially popular as Kakao Bank charges 90% lower on fees for this service than several commercial banks.
One Year After the Anti-Graft Law
Sept 28 marks one year since the implementation of the Improper Solicitation and Graft Act. The Act places stringent financial limitations on honoraria, contributions, and discretionary spending in application to all public and some private institutions.
One impact of this change has been a decline in corporate card expenditures by 9% or KRW 44.8 billion (USD 38.9 million). Since the Act was first implemented, the Anti-Corruption and Civil Rights Commission (ACRC) received 47,000 complaints of which the ACRC investigated 16,000 claims. The law is likely to undergo some future changes due to the administrative burden, overbearing regulation, and deflationary impact on certain commercial sectors.
1 “’죽음의 백조’ B-1B 랜서, NLL 북쪽 공해상서 무력시위… 美폭격기로는 64년만”, 조선일보, 2017년 9월 24일.
2 “B-1B전략폭격기 원산 앞바다 위협 비행 북, “추호도 묵과할 수 없는 반공화국 도발””, 중앙일보, 2017년 9월 29일.
3 ““美 B-1B 한반도 출격, 北 김정은 참수작전 예행연습””, 동아일보, 2017년 9월 27일.
4 “’MB·원세훈 국정원’ 의혹 수사…검찰, 숨고르기 후 몰아친다”, 연합뉴스, 2017년 10월 3일.
5 “[사설]국정원 ‘적폐청산 리스트’… 조사 자체가 정치 개입 아닌가”, 동아일보, 2017년 7월 13일.
6 “홍준표 “640만 달러 뇌물 혐의, 권양숙 여사 고발 검토”,” 한겨레, 2017년 9월 29일.
7 Hankook Research. Date: Sept 29-30; sample size 1,000; margin of error: +3.1 at the 95% confidence level.
8 “박지원 “FTA재협상 없다더니…文정부 대응 너무나 안일”,” 중앙일보, 2017년 10월 7일.
9 “홍준표 ‘한미FTA 반대한 민주당·문대통령, 국익 시험대 올랐다’,” 조선일보, 2017년 10월 6일.
10 “[화제의 SNS] 야권 “한미 FTA 재협상 철저 대비해야”,” 동아일보, 2017년 10월 7일.
11 “카카오뱅크 두 달 만에 대출 2조5천억 돌파” 매일경제, 2017년 9월 28일.
13 “카카오뱅크·케이뱅크, 일반 은행보다 더 고신용자 고객 중심,” 연합뉴스, 2017년 9월 21일.
14 “카카오뱅크의 배신?” 조선일보, 2017년 9월 2일.
15박영선 “상반기 유흥업소 ‘법카’ 9%↓…룸살롱 16%↓,” 연합뉴스, 2017년 9월 28일.
16 “청탁금지법 1년… 공직자 자진신고율 높아,” 매일경제, 2017년 9월 28일
Contributing Staff: Kim Seonkyung, Lee Soo-hyun
Editor: J. James Kim