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Tensions rise on Korean Peninsula

As the U.S. and South Korea performed annual military exercises, Pyongyang threatened to launch a "communications satellite." Meanwhile, South Korea loses to Japan in World Baseball Classic finals.

Top News: A barrage of threats and rhetoric from Pyongyang made headlines almost every day for the past two weeks. The escalated tension came from two major factors: Pyongyang’s ambition to launch a rocket which most outsiders believe is a long-range missile, and the annual U.S.-South Korea joint military exercises.


North Korea has made it a habit of displaying strong opposition towards the joint drills each year, arguing that they are preparations for attacking the North. However, this year, it took some unprecedented moves of cutting off the military hotline running through North and South Korea on the day the exercises began. As a result, some hundreds of South Koreans working in the North Korea Gaesong industrial complex were unable to travel back and forth across the border.


 Some politicians condemned Pyongyang of holding South Koreans hostage, while business owners with factories in the industrial complex staged protests in the South demanding the North open its borders. Pyongyang temporarily opened and closed the borders throughout the training period, March 9 to 20, but only after the exercises were over did it reinstall the communication lines.


In the midst of this disruption, the North informed two UN agencies of its plans to launch what it calls a communications satellite between April 4 and 8. According to information released by the International Civilian Avian Organization (ICAO), the rocket is expected to fall within two marked danger zones: one in the ocean east of the Korean peninsula, the other in the middle of the Pacific Ocean east of Japan.


 The U.S. and South Korea have expressed concern over the North’s plans, saying that regardless of Pyongyang’s official notice of the launch, it would still be considered a violation of a 2006 UN Security Council resolution.


 North Korean watchers believe Pyongyang is planning on launching a long-range missile, Taepodong-2, that could reach parts of Alaska if successful. The U.S. says that it is ready to intercept the rocket if it crosses into its airspace, and has stationed two warships, which had initially been deployed for U.S.-South Korean training purposes, in the waters near the Korean Peninsula.


 Pyongyang received strong criticism from the international community in 1998, when it test-fired Taepodong-1 over Japan, without any warning. The North attempted firing Taepodong-2 in 2006, but it blew up 40 seconds after its launch.


Money: The South Korean government has proposed a supplementary budget of 28.9 trillion won ($20.6 billion) that includes a $12.6 billion stimulus package to boost spending in the local economy which the parliament will vote on in April.


The extra budget is the largest ever, equivalent to 3 percent of the nation’s gross domestic product (GDP).


As Asia’s fourth-largest economy, highly dependent on exports, the country fears it will be hit especially hard by the global economic slowdown. The South’s No. 1 state research agency predicted earlier this year that the country’s economy will only grow by 0.7 percent in 2009.


The supplementary budget will also include a 3.5 trillion won plan for job creation with the government aiming to create 550,000 new jobs. It will also boost support for local companies that try to avoid layoffs by providing financial support that mounts up to 365.3 billion won from the current 58.8 billion won.


Elsewhere: Tears and sighs of disappointment flooded the peninsula after the South Korean baseball team lost the World Baseball Classic (WBC) finals to its rival Japan, the champion of the first title.


Office buildings exploded with roars and cheers during the match which Koreans hoped would open a new chapter in its baseball history. Crowds flocked around television sets during lunch breaks, and people froze in their tracks to watch the live broadcast booming from huge flat-panels hovering above the streets of central Seoul.


The national baseball team had become a sensation when it won the gold medal in the 2008 Beijing Olympics, but Japan defended its championship 5 to 3, after an intense 10 innings.


Despite the loss, many see this as an opportunity for the South Korean players who have a short history of playing in Major League Baseball in North America. Only 13 South Korean-born players have ever played in the league so far, but an increasing number of major league scouts are said to be visiting the peninsula in search of new talent.