S. Korean shipyards should halt capacity build-up: think tank

SEOUL, Dec. 23 (Yonhap) -- South Korean yards should halt efforts to build up capacity as a way of dealing with the current global economic slump, which could seriously affect future demand, a state-run think tank said Tuesday.

The Korea Institute for Industrial Economics and Trade (KIET) said in a report that the current crisis may drag on for some time, making it imperative for local shipbuilders to reduce their vulnerability.

"New yards have employed a strategy of securing orders based on future capacity, which is raising risks for such companies," the report said.

It said that in certain instances, in may be necessary to engage in restructuring smaller local yards to help them cope with the current drop in orders and cancellations of existing deals.

The KIET based its calls on industry predictions claiming South Korea's total shipbuilding capability will rise 42.9 percent in 2012 compared to this year. Such an expansion in the face of a drop in demand will result in serious overcapacity.

The country is already the world's No. 1 shipbuilding country, with yards like Hyundai Heavy Industries Co., Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering Co. dominating the commercial shipping market.

The think tank added that with some small yards, it may be necessary to cancel orders that may pose risks down the road or renegotiate the time of delivery so companies can use existing facilities instead of building new docks.

There has been a rush to open new yards with the boom in the shipping industry in recent years, but such developments have resulted in many of these companies facing difficulties in the face of a liquidity crunch.

Related to the KIET's report, government policymakers have hinted in the past that two or three companies may have to close since it is impossible to help all companies facing hard times.




Hyundai Motor's U.S. output nearly halves on economic woes

SEOUL, Dec. 23 (Yonhap) -- Production at Hyundai Motor Co.'s lone U.S. plant fell by nearly half in November, hit by the worst industry downturn in 25 years in the world's largest auto market, industry data showed Tuesday.

Hyundai, South Korea's top automaker, built some 11,000 vehicles at its Alabama plant, compared with the 21,503 vehicles it produced a month ago, according to data collected by the Korea Automobile Manufacturers' Association.

Hyundai saw its sales in the U.S. plunge about 40 percent from a year ago last month. The U.S. is Hyundai's largest overseas market.

The automaker idled the Alabama plant last Friday and will suspend operations until Jan. 4. Analysts say the company has been hit by cooling demand in the U.S.

Officials at Hyundai's public relations team were not immediately available for comment.

On Tuesday, Hyundai and its affiliate Kia Motors Corp. said they had adopted an "emergency management scheme" at all of their plants to cope with a widening economic downturn.

The carmakers said they have frozen salaries for office managers and cut combined sales targets this year by 12.5 percent.

Hyundai and Kia, which dominate the South Korean market, aim to sell a combined 4.2 million vehicles worldwide this year, down from an earlier target of 4.8 million units.

In the first 11 months of this year, Hyundai sold 2.56 million vehicles while Kia sold 1.28 million vehicles, the two firms said early this month.





S. Korea remains 5th biggest buyer of U.S. defense goods: report

By Hwang Doo-hyong
WASHINGTON, Dec. 22 (Yonhap) -- South Korea was the fifth biggest client of U.S. defense goods on a government-to-government contact basis in 2007, a congressional report shows.

South Korea purchased US$1 billion worth of defense products from the U.S. last year, according to a Congressional Research Service report, "U.S. Arms Sales: Agreements with and Deliveries to Major clients 2000-2007," released on Nov. 26.

South Korea follows Israel ($1.4 billion), Poland ($1.3 billion), Egypt ($1.2 billion) and Saudi Arabia ($1 billion), the report said.

For the years 2004-07, according to the report, South Korea bought $2.8 billion in U.S. arms. That also is the fifth biggest account, after Israel's $5.7 billion, Egypt's $5.5 billion, Saudi Arabia's $4.4 billion and Taiwan's $4.3 billion, the report said.

Japan came in sixth with $2.3 billion, Poland seventh with $2.3 billion, Australia eighth with $1.7 billion, Greece ninth with $1.7 billion and Britain 10th with $1.5 billion.

South Korea has purchased $6.9 billion worth of defense goods from the U.S. on a government-to-government foreign military sales (FMS) basis over the past decade.

South Korea, meanwhile, purchased $1.52 billion worth of defense goods from the U.S. on a commercial basis in fiscal year 2007.

The U.S. Congress passed legislation in September to grant most preferential treatment in FMS to South Korea.

The legislation provides South Korea with the same status as members of the North Atlantic Treaty Organization (NATO), Japan, Australia and New Zealand regarding FMS, under which Congress is required to review proposed arms sales worth over US$25 million to South Korea within 15 days.

Without the legislation, the U.S. government had to get permission from Congress for the sale of defense goods worth over $14 million within 30 days.

South Korean President Lee Myung-bak met with U.S. President George W. Bush at Camp David in April to agree on the upgrading of South Korea's FMS status.

In approving the legislation, Congress cited the need to enhance compatibility of weapons of the South Korean military and the 28,500 U.S. troops stationed in South Korea as a legacy of the 1950-53 Korean War.

hdh@yna.co.kr
(END)






S. Korea aims to become top-three nanotech leader by 2015

SEOUL, Dec. 23 (Yonhap) -- South Korea is aiming to become one of the top three nanotechnology industry leaders by capturing 15 percent of the global market in the next seven years, the government said Tuesday.

The Ministry of Knowledge Economy said in a public hearing that nanotechnology holds limitless potential because it can improve existing products, help create new markets and offers leaders a chance to dominate the growing field.

South Korea poured 1.9 trillion won (US$1.4 billion) into the sector in the last eight years, with 1.3 trillion won going into research and development, 441.5 billion into building infrastructure and a little over 101.2 billion to educate and train qualified personnel.

As of 2005, the country ranked fourth in terms of nanotechnology proficiency after the United States, Japan and Germany.

It said the market is attractive for South Korea since it encompasses the future direction of the country, which is striving for eco-friendly, sustainable growth.

The ministry said that besides nabbing a sizable proportion of the projected US$2.95 trillion market by 2015, the country will acquire at least 30 core, world-class technologies and help set up 500 related companies.

It said to meet such a goal, emphasis will be placed on developing nanoelectronics, nanomaterials, nanoprocessing and manufacturing, and energy and biomedical areas that make extensive use of nanotechnology.

yonngong@yna.co.kr
(END)





Gov't pushing for large-scale management shakeup in public companies

SEOUL, Dec. 22 (Yonhap) -- The government is pushing for a large-scale shakeup of senior managers in public companies as part of its efforts to enhance accountability and cut waste, officials said Monday.

The Ministry of Knowledge Economy, the Ministry for Food, Agriculture, Forestry and Fisheries and the Ministry of Land, Transport and Maritime Affairs said reshuffling and laying off manager-level officials is a necessary step to deal with inefficiency and moral hazards that have been cited in the past.

Public companies make up a sizable part of the national economy and workforce, but have been criticized for weak overall performance and their inability to produce tangible results.

"There are no set timetables, but the shakeup should proceed rapidly, with guidelines having been sent down to individual companies," said an official from the Knowledge Economy Ministry.

For public companies under the ministry, the guidelines call for at least half of all senior managers to be replaced, he said.

Executives at the Korea Electric Power Corp. and Korea Gas Corp. have tendered their resignations en masse, with other utilities companies following suit.

The farm ministry also said that 19 senior officials at the scandal-plagued National Agricultural Cooperative Federation (Nonghyup) have said they will resign as reform measures are underway to drastically limit the power of the chairman.

The past three heads of the 2.4-million-strong cooperative have gone to jail for corruption, with the last being implicated in illegal kickbacks involving the brother of former President Roh Moo-hyun.

It said the size of Nonghyup's headquarters will be cut by 20 percent, with wide-ranging reform measures to be pursued for the National Federation of Fisheries Cooperative and the National Forestry Cooperative Federation.

Other state-controlled companies pushing for shake-ups are the Korea Railroad Corp. (Korail), the Korea Highway Corp. and Incheon International Airport Corp. under the transportation ministry.

The measures to revamp top managerial posts at public companies come as senior officials at the prime minister's office, the National Tax Service, and education and agriculture ministries said they will resign.

The moves are in response to efforts by the presidential office and the ruling camp to tighten up bureaucracies that have been slow to implement measures for change.





S. Korean shipyards should halt capacity build-up: think tank

SEOUL, Dec. 23 (Yonhap) -- South Korean yards should halt efforts to build up capacity as a way of dealing with the current global economic slump, which could seriously affect future demand, a state-run think tank said Tuesday.

The Korea Institute for Industrial Economics and Trade (KIET) said in a report that the current crisis may drag on for some time, making it imperative for local shipbuilders to reduce their vulnerability.

"New yards have employed a strategy of securing orders based on future capacity, which is raising risks for such companies," the report said.

It said that in certain instances, in may be necessary to engage in restructuring smaller local yards to help them cope with the current drop in orders and cancellations of existing deals.

The KIET based its calls on industry predictions claiming South Korea's total shipbuilding capability will rise 42.9 percent in 2012 compared to this year. Such an expansion in the face of a drop in demand will result in serious overcapacity.

The country is already the world's No. 1 shipbuilding country, with yards like Hyundai Heavy Industries Co., Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering Co. dominating the commercial shipping market.

The think tank added that with some small yards, it may be necessary to cancel orders that may pose risks down the road or renegotiate the time of delivery so companies can use existing facilities instead of building new docks.

There has been a rush to open new yards with the boom in the shipping industry in recent years, but such developments have resulted in many of these companies facing difficulties in the face of a liquidity crunch.

Related to the KIET's report, government policymakers have hinted in the past that two or three companies may have to close since it is impossible to help all companies facing hard times.





Seoul shares open lower on Wall Street losses

SEOUL, Dec. 23 (Yonhap) -- South Korean stocks started lower Tuesday as investor sentiment was dented by overnight falls in U.S. markets, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 10.81 points, or 0.92 percent, to 1,168.8 in the first 15 minutes of trading.

U.S. stocks closed lower Monday as investor sentiment was hurt by the news that Japanese automaker Toyota Motor Corp. cut its earnings outlook and is expecting to post an operating loss for the 2008 fiscal year. The Dow Jones industrial average shed 0.69 percent and the tech-dominated Nasdaq composite index fell 2.04 percent.

The local currency was trading at 1,316.05 to the U.S. dollar as of 9:15 a.m., down 7.05 won from Monday's close.




Hyundai Motor's U.S. output nearly halves on economic woes

SEOUL, Dec. 23 (Yonhap) -- Production at Hyundai Motor Co.'s lone U.S. plant fell by nearly half in November, hit by the worst industry downturn in 25 years in the world's largest auto market, industry data showed Tuesday.

Hyundai, South Korea's top automaker, built some 11,000 vehicles at its Alabama plant, compared with the 21,503 vehicles it produced a month ago, according to data collected by the Korea Automobile Manufacturers' Association.

Hyundai saw its sales in the U.S. plunge about 40 percent from a year ago last month. The U.S. is Hyundai's largest overseas market.

The automaker idled the Alabama plant last Friday and will suspend operations until Jan. 4. Analysts say the company has been hit by cooling demand in the U.S.

Officials at Hyundai's public relations team were not immediately available for comment.

On Tuesday, Hyundai and its affiliate Kia Motors Corp. said they had adopted an "emergency management scheme" at all of their plants to cope with a widening economic downturn.

The carmakers said they have frozen salaries for office managers and cut combined sales targets this year by 12.5 percent.

Hyundai and Kia, which dominate the South Korean market, aim to sell a combined 4.2 million vehicles worldwide this year, down from an earlier target of 4.8 million units.

In the first 11 months of this year, Hyundai sold 2.56 million vehicles while Kia sold 1.28 million vehicles, the two firms said early this month.





(2nd LD) Lee indicates sweeping overhaul of bureaucracy

By Yoo Cheong-mo
SEOUL, Dec. 22 (Yonhap) -- President Lee Myung-bak said on Monday that his bid for economic reform and change won't be hindered by the ongoing economic difficulties, urging ranking civil servants to follow his administrative vision and philosophy in weathering the unprecedented financial crisis.

Meeting with top officials of the land, agriculture, public administration and environment ministries over their key policy goals for 2009, Lee warned that some reform-resistant bureaucrats, who gained rapid promotion under the previous liberal administration, are still passive in enforcing his reform and stimulus measures.




"Civil servants have to take the lead (in overcoming the crisis). If some of them fail to keep up with the speed (of reform and change), all progress will be slowed," said Lee.

"Civil servants are required to firmly establish their own state vision so that they can help overcome the crisis and make preparations for the new era. Their unified attitudes will help the nation upgrade its global competitiveness."
According to political watchers, Lee's remarks may be a signal of an upcoming sweeping shakeup of reform-shy ranking officials at major ministries, who are blamed for failing to faithfully carry out the conservative president's reform policies.

Over the past week, all "Grade One" officials at half a dozen ministries, including education, foreign affairs, agriculture and unification, have offered to resign, as the conservative Lee administration strived to further distance itself from policies devised by his liberal predecessor, Roh Moo-hyun.

Following the upcoming replacement of top government officials, Lee is expected to conduct a Cabinet reshuffle early next year to revamp the overall administrative atmosphere ahead of his first inaugural anniversary in February.

Over the weekend, the Lee government announced an ambitious plan to shed 19,000 jobs in the public sector, with 69 major state-run corporations slashing 10 percent to 37.5 percent from their current payrolls in the coming three to four years.

"Economic circumstances are worsening. But we will never slow our efforts for changes and reforms. All civil servants have to join forces to revitalize the economy and implement reforms," said the president.

He instructed the four ministries to execute their 2009 budget spending "swiftly and efficiently," to deepen inter-ministerial cooperation in major public works projects and minimize waste of taxpayer money.

According to deputy presidential spokesperson Kim Eun-hye, Lee instructed his Cabinet ministers to take deregulatory measures to prevent a steep fall in property prices.

"A decline in real estate prices is a worldwide trend. But a hard landing should be averted, considering Japan's 'lost-decade' experience," the president was quoted by Kim as saying.

"Deregulation won't lead to a rise in real estate prices. From now on, the real estate market should be regulated by lending and interest policies."
Meanwhile, the Ministry of Public Administration and Security reported to the president that the government will introduce a so-called "two-strike out system" for all ranking civil servants above Grade Three starting next year, in a bid to promote a competitive atmosphere and weed out incompetent officials.

Under the system, any officials who rank in the bottom for two consecutive years in the annual job performance assessment will be dismissed. In South Korea, a civil servant's job has been traditionally called an "iron rice bowl" because of its solid job security.

The Ministry of Environment unveiled a plan to create 43,000 new jobs through expansion of basic environmental facilities and implementation of various public projects related to green growth and the fight against climate change.

The Ministry of Land, Transport and Maritime Affairs reported that it will spend 65 percent of the 23.4 trillion won (US$18.2 billion) earmarked for various infrastructure expansion projects next year in the first half in accordance with the government's economic stimulus measures.

The Ministry for Food, Agriculture, Forestry and Fisheries also disclosed its own budgetary front-loading, allocating nearly 10 trillion won to improve rural infrastructure and create about 32,000 new jobs in the agriculture and food sectors.





LEAD) Assembly speaker to invoke arbitration authority to break impasse

SEOUL, Dec. 22 (Yonhap) -- South Korea's National Assembly speaker said Monday he will use his authority to arbitrate between rival parties to break an ongoing legislative impasse, a move that may help advance a free trade pact with Washington but trigger more anger from opposition parties.

The parliament has been paralyzed since the ruling Grand National Party (GNP) unilaterally introduced the Korea-U.S. free trade agreement (FTA) to the legislature last week, with the largest opposition party boycotting sessions and occupying committee rooms.

An ugly brawl took place during the session, with some lawmakers hammering down the door in an attempt to stop the submission of the controversial bill, only to be stopped by security officers who sprayed them with fire extinguishers to break up the scuffle. The opposition filed a constitutional petition to nullify the GNP's vote.

"I will impose compulsory arbitration on the parties if they fail to make peace voluntarily," Assembly Speaker Kim Hyong-o said Monday. "This should not, and shall not go on."
The main opposition Democratic Party (DP) said there was "little room for peacemaking."
"The Assembly speaker must not get distracted by the government, the president and his party," said DP spokesman Choi Jae-sung. "There won't be any peacemaking until the ruling party makes an official apology, nullifies its unilateral vote (on the FTA bill) and gives its word not to use its numerical dominance in bypassing opposition parties."
President Lee Myung-bak's GNP, controlling a comfortable majority of 172 seats in the 299-member parliament, is determined to approve the bilateral deal before the end of this year despite objections from local farmers and civic groups.

The conservative party believes the U.S. Congress -- split over pending free trade deals with South Korea, Peru, Panama and Colombia -- will speed up ratification following Seoul's lead. Its opponents call Lee's party "naive" and want to take time and observe changes in Washington.

The GNP said it will keep trying to induce dialogue with the opposition but with a deadline.

"We will seek dialogue until Christmas on Thursday, but that is all that we can offer," said party leader Park Hee-tae. "More than 100 bills must be settled by next week. Please, let's all come to our senses."
Ratification of the FTA deal with Washington, struck in June of last year, has been among the thorniest issues dividing South Korea's polarized political climate, with Democrat Barack Obama's election victory last month intensifying the debate.

Obama has repeatedly stated his negative views on the deal with South Korea, describing it as being flawed, especially with regard to the auto trade sector.

The bilateral deal is the single biggest trade pact between the two longtime allies and is expected to boost two-way trade, which totaled US$79 billion in 2007, by as much as $20 billion in the coming years.

While business groups here want early ratification of the agreement, farmers are demanding sufficient countermeasures for fear they will not be able to compete with cheaper imported products.

hayney@yna.co.kr



http://news.search.naver.com/search.naver?where=news&query=kim+jong+chang&sm=top_hty&frm=t3&fbm=0


Hyundai Motor's U.S. output nearly halves on economic woes

SEOUL, Dec. 23 (Yonhap) -- Production at Hyundai Motor Co.'s lone U.S. plant fell by nearly half in November, hit by the worst industry downturn in 25 years in the world's largest auto market, industry data showed Tuesday.

Hyundai, South Korea's top automaker, built some 11,000 vehicles at its Alabama plant, compared with the 21,503 vehicles it produced a month ago, according to data collected by the Korea Automobile Manufacturers' Association.

Hyundai saw its sales in the U.S. plunge about 40 percent from a year ago last month. The U.S. is Hyundai's largest overseas market.

The automaker idled the Alabama plant last Friday and will suspend operations until Jan. 4. Analysts say the company has been hit by cooling demand in the U.S.

Officials at Hyundai's public relations team were not immediately available for comment.

On Tuesday, Hyundai and its affiliate Kia Motors Corp. said they had adopted an "emergency management scheme" at all of their plants to cope with a widening economic downturn.

The carmakers said they have frozen salaries for office managers and cut combined sales targets this year by 12.5 percent.

Hyundai and Kia, which dominate the South Korean market, aim to sell a combined 4.2 million vehicles worldwide this year, down from an earlier target of 4.8 million units.

In the first 11 months of this year, Hyundai sold 2.56 million vehicles while Kia sold 1.28 million vehicles, the two firms said early this month.



South Korea to Help Restructure Builders, Shipbuilders, FSS Says


©2008 Bloomberg News


By Bomi Lim
Dec. 23 (Bloomberg) -- South Korea’s government will focus on facilitating restructuring of construction companies and small-sized shipbuilders to help creditor banks stem defaults.
Creditor banks will lead the restructuring of those corporate clients, Kim Jong Chang, governor of the Financial Supervisory Service, told reporters today in Seoul.

(서울=연합뉴스) 김문성 기자 = 김종창 금융감독원장은 23일 "금융 불안과 실물경기 침체의 영향을 가장 크게 받아 유동성 애로(자금난)를 겪는 건설업체와 중소 조선사에 대해 내년 초부터 구조조정에 착수하겠다"고 밝혔다. From the early next year, construction and small and medium sized shipbuilding companies which are seen to be suffering from credit squeeze are going to be under restructuring process.

김 원장은 이날 기자 간담회를 갖고 "이를 위해 주요 은행의 해당 업종 담당자와 회계법인, 신용평가사 직원 등 7명 내외로 태스크포스(TF)를 오늘 설치해 연말까지 업종별 신용위험평가 기준과 세부절차를 마련할 계획"이라고 말했다.
Kim said at the press conference, “ For the sake of this, major bank’s related sectors’ official, accounting firm and credit rating firms are going to draft detailed measures.”
그는 "이 절차에 따라 주채권은행이 재무상황과 산업전망 등을 반영한 신용위험 평가를 해 업체별 구조조정 방향을 결정할 것"이라며 "유동성 애로에 직면하거나 경영 악화가 예상된다고 주채권은행이 판단하는 업체가 먼저 대상이 될 것"이라고 설명했다.
In line with procedures, credit bank is going to decide the each company’s restructuring direction reflecting on the credit risk factor.
김 원장은 "기본적으로 자금 지원과 워크아웃(기업개선작업)을 통한 기업 살리기에 중점을 두되 회생 가능성이 불투명한 기업은 본격적으로 과감하게 정리하겠다"며 "구조조정의 시한은 두지 않고 상시 추진하겠다"고 강조했다.
We will focus on revitalizing companies by providing funds and leading a restructuring process, but for those seen to be having no possibility of back on their feet are forced to be letting go.
채권단은 신용위험 평가를 통해 기업을 4개 등급으로 분류해 일시적 유동성 부족 기업(B등급)에는 채권단의 신규 자금을 지원하는 대신 자구 노력을 담은 양해각서(MOU)를 맺는다.

부실징후 기업(C등급)은 채권단의 신규 자금 지원과 자금관리인 파견이 이뤄지며 경영정상화 이행약정을 체결해야 한다. 부실기업(D등급)은 자금 지원이 없기 때문에 스스로 살길을 찾아야 하며 그렇지 못하면 퇴출당한다.

김 원장은 "수출 선박을 건조하는 중소 조선사 26개 가운데 자금사정이 어려운 곳과 금융권의 신용공여액 500억 원 이상인 건설사에 대해 신용위험 평가가 이뤄질 것"라고 설명했다.

그는 "주채권은행이 이미 대주단(채권단) 협약 적용을 승인한 건설업체의 경우 금융채무의 만기 연장이 무조건 지속되는 것은 아니며 신용위험 평가 대상이 될 수 있다"면서 "그 결과 D등급 판정을 받으면 유동성 지원이 중단될 수 있다"고 말했다.

그는 "은행들의 신속지원프로그램(패스트트랙)을 적용받고 있는 중소 조선사가 거액의 신규 자금 지원을 요청하면 외부전문기관의 정밀 실사를 받아야 한다"며 "그 결과 부실징후 기업 등으로 판정되면 구조조정의 대상이 될 수 있다"고 밝혔다.

김 원장은 "반도체와 자동차 업종에 대해서는 지식경제부 등 관련 부처가 모니터링하고 있고 채권단도 개별 회사의 자금 사정을 점검하고 있다"며 "문제가 깊어지면 개별 기업 중심으로 금융지원과 구조조정을 병행하겠다"고 말했다.

한편 김 원장은 담보인정비율(LTV) 등 주택담보대출 규제의 완화 여부에 대해 "현재로선 완화할 계획이 없다"고 밝혔다.


(LEAD) S. Korea to revamp non-viable builders, shipbuilders

(ATTN: MODIFIES lead, para 2; ADDS more details throughout)
SEOUL, Dec. 23 (Yonhap) -- South Korea's financial watchdog said Tuesday the government plans to restructure non-viable builders and small-sized shipbuilders to prevent them from collapsing, which would weigh on the economy.

"Starting early next year, the country plans to begin overhauling construction firms and smaller shipbuilders suffering from a liquidity squeeze, hit by financial turmoil and the slowing economy," Kim Jong-chang, governor of the Financial Supervisory Service (FSS), told a press conference.

Creditor banks plan to assess the credit risks of those companies which are facing a credit crunch or will suffer the worsening business conditions and will lead the overall revamp process, the FSS added.

The slowing economy has resulted in a huge number of unsold apartments, many cash-strapped small and mid-sized construction companies are struggling to service debts taken out during the 2005-2006 housing boom.

South Korea, home to seven of the world's top 10 shipyards, secured record orders in recent years due to strong demand for crude carriers and offshore exploration equipment amid high oil prices.

But the slumping economy and a sharp decline in new orders, along with foreign exchange losses, are eroding local shipbuilders' profitability with some smaller shipyards facing a severe liquidity squeeze.

"This is the time to weed out non-viable firms," Kim said. "Basically, the government will focus on salvaging local firms through fund injections or bank-led debt rescheduling programs, but it plans to boldly weed out unhealthy firms."
Regarding local chipmakers and automakers, Kim said that if their problems become serious the watchdog plans to provide funds and pursue an overhaul for them as well.

S. Korea completes world's biggest oil storage facility

By Lee Joon-seung
SEOUL, Dec. 23 (Yonhap) -- South Korea's state-run oil company said Tuesday that it has completed construction of the world's single largest oil bunker as part of its efforts to transform the country into a Northeast Asian storage hub for the vital resource.

The facility located in Yeosu, 455 kilometers south of Seoul, can hold 49.7 million barrels of oil with the completion of the tunnel-type, underground holding bunker, the Korea National Oil Corp. (KNOC) said. The total is enough to meet the country's normal oil demand for 23 days.

At present the Geoje Island bunker on the south coast is the largest, with a capacity of 47.5 million barrels, followed by the Tomakomai storage tanks in Japan with 40.0 million barrels.

The government announced in August that concerted measures will be taken to turn the country into regional "oil hub" that will mirror operations taking place on Singapore's Julong Island.

Becoming an oil hub can also strengthen the country's ability to cope with instability in international oil prices and emergency situations.

The KNOC said the new underground bunker -- which is 30 meters high, 18 meters wide and 14 kilometers long -- can hold 19.0 million barrels of oil and will augment an existing tunnel oil tank built in 1999 that can hold 30.7 million barrels.

The oil company currently operates nine oil storage facilities that can hold 138.0 million barrels of oil. It is building two more bunkers that can increase overall storage to 146.0 million barrels by late 2009.




Parliament wraps up rice subsidies probe without clear conclusion

By Shin Hae-in
SEOUL, Dec. 23 (Yonhap) -- An independent parliamentary probe into a government subsidy scandal involving lawmakers and public officials ended with a whimper on Tuesday, leaving more questions than answers.

The 44-day inquiry into the corruption scam, which involved thousands of government officials including the former vice health minister, opened with a bang last month. Farmers who remained unconvinced that legal authorities would conduct a transparent investigation had requested a separate probe by legislators.

But the National Assembly probe was hardly productive, with parties spening most of their time wrangling over which administration was more to blame for the holes in the system. They failed to reveal exactly how much of the subsidies had gone to ineligible recipients over the past years and how many state workers were involved in the case.

The government pledged to return the misplaced funds to their rightful owners by the end of this year, but the process will most likely be delayed as the investigation drags on.

The rice farming subsidy system was established in 2005 under the administration of then President Roh Moo-hyun to support low-income farmers who would be hurt by the opening of the Korean rice market to cheaper imports. Only those who actually produce rice -- excluding those who simply own rice paddies -- are eligible for the state subsidies.

The scandal first made headlines in October after then vice health minister Lee Bong-hwa was found to have applied for the money by falsely claiming she farmed rice. She was replaced soon after, making her the fourth Cabinet member to step down since President Lee Myung-bak took office in February.

"The two parties were supposed to form one investigative team, but ended up working separately," said Kim Woo-nam, a lawmaker of the main opposition Democratic Party (DP) and member of the parliamentary investigative team. "I admit we have failed to come up with much results."
Running out of time, Kim's party on Monday requested the prosecution to expand its ongoing investigation into 2,882 state employees.

The main opposition claims at least 4,200 public workers sidestepped regulations to pocket nearly 200 billion won (US$152 million) of the 4 trillion won that was spent since the subsidy system was established.

The ruling Grand National Party (GNP) calls the claim "skewed."
"It is not an official result of the parliamentary probe," a ruling party official said.

The ruling GNP appeared less active during the probe, especially after some of its lawmakers were found to have received the rice funds. They claimed they were rightful recipients as their parents farmed rice, but refused the opposition party's demand to appear before the parliamentary hearing.

According to state data revealed by the DP, 170,000 among the 283,000 subsidy recipients have occupations other than farming. Of those, 334 are court officials, 250 are prosecution staff and 51 are legislators. The audit board refused to make their names public, citing their right to privacy.

The main opposition party has not been free from criticism either, as the former Roh government has been held accountable for failing to address the errors in the subsidy system earlier.

Many of the ranking officials under suspicion are said to have worked for both Roh and Lee administrations, implicating involvement on both sides of the political divide.

Observers say officials and legislators who own land likely applied for the subsidies in order to evade heavy property taxes, rather than for the subsidies themselves.

Under the country's tax law, individuals must farm the land for at least eight years to receive tax deductions on their property. As the government does not require proof that applicants are actual farmers, non-farmers are able to abuse the system.





South Korea to Help Restructure Builders, Shipmakers (Update1)


©2008 Bloomberg News


(Adds FSS governor’s comments in fourth paragraph.)


By Bomi Lim
Dec. 23 (Bloomberg) -- South Korea will help construction companies and small-sized shipbuilders restructure their businesses as the government seeks to mediate between borrowers and creditors to stem defaults, the watchdog agency said.
Major creditor banks will form a task force today to come up with guidelines for analyzing companies’ credit risks and determining how to restructure them, Kim Jong Chang, governor of the Financial Supervisory Service, told reporters in Seoul today. Restructuring can begin early next year, he said.
“We will make a clear distinction between companies that can be saved and those that cannot,” Kim said. South Korea’s semiconductor-makers and automakers don’t face “imminent problems that are big enough to require restructuring,” he said.
The worst global financial crisis since the Great Depression has dried up capital markets, making it harder for construction companies to get loans. New shipbuilders are facing cash problems as the first contraction in global trade in almost three decades slackens demand for new vessels.
Global trade may shrink 2.1 percent next year because of the crisis, the first contraction since 1982, the World Bank forecast earlier this month. The Bank of Korea has said South Korea, Asia’s fourth-largest economy, may expand at the slowest pace in 11 years in 2009.




South Korea to Increase Fuel Import Tariffs to 3% From 1%


©2008 Bloomberg News


By Shinhye Kang
Dec. 23 (Bloomberg) -- South Korea, Asia's third-biggest crude-oil buyer, will increase the tariffs on fuel imports as inflation slows and global oil prices fall.
The import tax on crude oil, gasoline, diesel, kerosene and fuel oil will rise to 2 percent in February and increase to 3 percent in March from the current 1 percent, the Ministry of Strategy and Finance said in an e-mailed statement today.
Oil in New York has plunged 73 percent from July's record of $147.27 a barrel, giving South Korea room to increase fuel import levies to help bolster government revenue. Inflation has moderated from a 10-year high in July as energy prices decline.
The tariff increase is likely to raise gasoline prices by 10 won (1 cent) a liter, the ministry said.
Crude oil for February delivery traded at $39.68 a barrel at 9:45 a.m. local time on the New York Mercantile Exchange. South Korea's consumer prices rose 4.5 percent in November, the least in seven months, compared with 5.9 percent in July.
The import tax on liquefied natural gas will be maintained at 1 percent next year, the ministry said.
The government cut import tariffs on crude oil in April 2004 and on oil products in April this year to curb inflation stoked by record raw-material prices.
In November, South Korea unveiled a stimulus package worth 14 trillion won for 2009 to revive an economy that expanded last quarter at the weakest pace since 2004. The government has also been pumping money into the financial system to boost liquidity.




A parents` group is set to boycott a nationwide test for middle school students next week despite the recent dismissal of unionized teachers who allowed them to do so in October.

The Egalitarian Education Advocacy Group said they will take students to an art gallery on Dec. 23 instead of having them take the exam, which they say will lead to excessive competition among schools or regions in order to climb in national rankings. The group had taken about 100 students to a botanical garden on test days in October.

Under revised rules, local education authorities are required to disclose the student evaluation results, including the share of those falling behind basic levels. The test results are expected to reveal a regional gap in students` proficiency levels.

Seoul City education authorities last week fired seven unionized teachers for letting their students go on field trips instead of taking the test, stoking controversy over its fairness. Last year, a teacher who sexually harassed students was suspended for three months. A principal who took bribes from a food vendor was suspended for a month.

Members of the Korean Teachers & Education Workers` Union and parents who have opposed the universal tests said the authorities` high-handedness won`t stop them.

"We won`t yield to the threats of Seoul City education authorities," said Chung Kyung-hee, a member of the parents` group.

"We are not refusing the test itself, but respecting the parents and students` right to choose," said Kim Min-seok, a senior member of the KTU.

The KTU headquarters sent out notes to its members to give permission for field trips on Dec. 23, when first-year and second-year middle school students will be tested on Korean, social studies, math, science and English.

By Kim So-hyun


One revision regarded a U.S. Army's decree during its administration of Korea from 1945 to 1948. The new textbook described it as ``a delivery of messages Korean citizens needed under the reality of the military administration.'' However, on a Soviet Union decree, the textbook noted that it was ``propaganda of their ideology through eloquent vocabulary.'' It also scrapped some of the phrases that were seen as friendly to the North.
A passage introducing a North Korean boy with the goal of going to university and becoming a labor party staff member was scrapped. Instead, the following description was added: ``Following graduation from middle school, one could go to university, serve in the military or get a job. However, only 10 percent manage to receive higher education and one cannot choose an occupation or workplace.''

The new textbook also illustrates North Koreans' eroded confidence in communism. Added in the textbook is the following sentence, ``After the North suffered from severe economic difficulties in the late 1990s, popular belief in the North Korean regime's ideology was called into doubt.''

While for pro-Japan collaborators people were dubbed as traitor not purged following liberation from Japanese colonial rule, the new book said ``Punishment for such people was not fully meted out.''

It also put a greater focus on the positive side of tycoons. Phrases highlighting the side effects of former President Park Chung-hee's New Community Movement for modernization and industrialization through the 1960s and 1970s were played down.

Descriptions toward unification changed dramatically. ``The June 15 inter-Korean summit in 2000 ignited nationwide craving for unification'' was rewritten to ``The two Koreas held a summit on June 15, 2000.''

Five of the textbook's authors filed a suit against publishing firm Kumsung Monday for the publisher's attempt to modify content, which they claim goes against copyright law and infringes upon academic freedom as stipulated in the Constitution.




Among many revisions, Kumsung changed one section that used to read, “Korea’s liberation from Japan... was the starting point of the ordeal for real independence,” into: “Though liberation was not the starting point of real independence, it was a very historic moment.”

“The modifications were made without democratic procedures and I, as a history teacher, feel very sad,” said Yoon Jong-bae, head of the Association of Korean History Teachers.



현직 군 법무관들이 국방부의 불온서적 지정은 위헌이라며 헌법재판소에 헌법소원심판을 청구했습니다.

박 모 씨 등 군 법무장교 7명은 헌법재판소에 낸 헌법소원심판청구서를 통해, "국방부의 불온서적 지정을 규정하고 있는 군인법무규율이 표현의 자유와 양심의 자유, 행복추구권 등 군인의 기본권을 광범위하게 침해한다"고 밝혔습니다.

이들은 또 "해당 규율이 지나치게 추상적인 '불온'의 개념을 적용해 헌법의 과잉금지원칙에 어긋나며, 불온 서적을 취득한 경우 신고 의무까지 규정하고 있어 사전•사후 검열 금지 원칙에도 위배된다"고 밝혔습니다.

국방부는 뒤늦게 헌법소원심판이 청구된 것을 알고 긴급 회의를 소집해 현역 군인 신분인 이들이 헌법소원을 제기한 것이 위법한 지에 대해 검토하기로 했습니다.

국방부는 앞서 지난 8월 '나쁜 사마리안들'과 '우리들의 하느님', '삼성왕국의 게릴라들' 등 23권을 불온서적으로 지정했습니다.
국방부 지정 ‘불온서적 목록’ 23권 논란
국방부가 각 군에 불온서적에 대한 군대 반입을 차단하는 공문을 발송해 논란이 일고 있다.

31일 국방부에 따르면 이상희 국방부 장관의 지시에 의해 지난 22일 각 군에 불온서적 군대 반입 차단 공문을 발송했다.

국방부는 해당 공문에서 “불온서적 무단 반입시 장병의 정신전력에 저해요소가 될 수 있어 수거를 지시하니 적극 시행하라”며 북한 찬양, 반정부-반미, 반자본주의 등 세 분야로 나눈 23권의 ‘불온서적’ 목록을 첨부자료로 명기했다.

각 군은 다음 달 8일까지 이들 ‘불온서적’에 대한 반입 실태를 점검, 8월 11일까지 결과를 취합, 국방부에 보고할 계획인 것으로 알려졌다.

이런 국방부 방침에 대해 민주당 최재성 대변인은 이날 국회 브리핑을 통해 “십수만권이 팔린 베스트셀러까지 불온서적 딱지를 붙여버렸다”며 “전경들의 개인 우편물까지 확인하는 등 불온서적 차단에 주력하고있다. 내용을 보면 기가 차서 말이 안 나온다”고 꼬집었다.

최 대변인은 “정말로 이런 불순한 발상을 한 사람이 도대체 누구인가”라며 “이런 발상을 하는 세력이야말로 불온세력 아닌가?”라고 반문했다.

국방부가 지정한 23권의 불온서적 목록에는 한나라당 임태희 정책위의장이 최근 탐독한 것으로 알려진 장하준 교수의 ‘나쁜 사마리아인들’도 포함된 것으로 확인됐다.

-국방부가 규정한 불온서적 목록-

북한찬양 분야 불온서적 -‘북한의 미사일 전략’, ‘북한의 우리식 문화’, ‘지상에 숟가락 하나’, ‘역사는 한번도 나를 비껴가지 않았다’, ‘왜 80이 20에게 지배당하는가?’, ‘북한의 경제발전 전략’, ‘통일 우리 민족의 마지막 블루오션’, ‘벗’, ‘미국이 진정으로 원하는 것은’, ‘대학시절’, ‘핵과 한반도’

반정부.반미 분야 불온서적- ‘미군 범죄와 SOFA’, ‘소금 꽃나무’, ‘꽃 속에 피가 흐른다’, ‘507년, 정복은 계속된다’, ‘우리 역사 이야기’, ‘나쁜 사마리안인들’, ‘김남주 평전’, ‘21세기 철학이야기’, ‘대한민국사’, ‘우리들의 하느님’

반자본주의 분야 불온서적 -'세계화의 덫', '삼성왕국의 게릴라들'


1. One revision regarded a U.S. Army's decree during its administration of Korea from 1945 to 1948. The new revised textbook described it as ``a delivery of messages Korean citizens needed under the reality of the military administration.'' However, on a Soviet Union decree, the textbook stated that it was ``propaganda of their ideology through eloquent vocabulary.''

2. A passage introducing a North Korean boy with the goal of going to university and becoming a labor party staff member was scrapped. Instead, the following description was added: ``Following graduation from middle school, one could go to university, serve in the military or get a job. However, only 10 percent manage to receive higher education and one cannot choose an occupation or workplace.''

3. The new textbook also illustrates North Koreans' eroded confidence in communism. Added in the textbook is the following sentence, ``After the North suffered from severe economic difficulties in the late 1990s, popular belief in the North Korean regime's ideology was called into doubt.''

4. While for pro-Japan collaborators people were dubbed as traitor not purged following liberation from Japanese colonial rule, the new book said ``Punishment for such people was not fully meted out.''

5. It also put a greater focus on the positive side of tycoons. Phrases highlighting the side effects of former President Park Chung-hee's New Community Movement for modernization and industrialization through the 1960s and 1970s were played down.

6. Descriptions toward unification changed dramatically. ``The June 15 inter-Korean summit in 2000 ignited nationwide desire for unification'' was rewritten to ``The two Koreas held a summit on June 15, 2000.''

7. Kumsung changed one section that used to read, “Korea’s liberation from Japan... was the starting point of the ordeal for real independence,” into: “Though liberation was not the starting point of real independence, it was a very historic moment.”