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Despite an emergency Security Council meeting, the Korea Composite Index rallies after the rocket test. The government responds to an asbestos in cosmetics scandal, raises debt to fund stimulus, and offers incentives for car trade-ins. Meanwhile, the South beats the North in World Cup qualifier, and national sweetheart Kim Yuna shatters figure skating record.
Top News: North Korea tested a long-range rocket on Sunday April 5, in spite of strong warnings from the U.S., South Korea and the rest of the international community.
Shortly after the launch the U.N. Security Council convened a special emergency meeting. Japan had said it would seek sanctions against Pyongyang, but the first meeting ended without substantial results. Most believe it is unlikely that the international body will be able to take strong measures against the North, due to resistance from China and Russia.
Although many on the streets of Seoul gathered around large flat screen TVs and radios to tune into the breaking news, most remained calm after the event and went about their daily routines. South Koreans have lived through a number of unwarned missile tests and even a nuclear test in 2006. While citizens aren’t quite callous to news about the North, they have learned to coexist with the country.
The markets in Seoul reflected these sentiments as they opened Monday unscathed by the rocket reports: the Korea Composite Index (KOSPI) reached its highest level since October of last year.
The Korea Food and Drug Administration banned asbestos-tainted cosmetics from sales April 6, and said it would withdraw the contaminated products from the market. The products are all from a local cosmetic company and are mostly used for powdering the face. The ban came after an environmental organization exposed to the public that some baby powder products had higher levels of asbestos than allowed. The civic group is expected to prepare to file a class action suit against the manufacturers and the Korea Food and Drug Administration, which they deem responsible for endangering the well-being of product users.
Money: South Korea state debt will jump 19 percent due to an increase of bond issuance to fund its 28.9 trillion won supplemental budget to revive the economy.
The country had announced it would issue 2.7 trillion won ($2.06 billion) in three-year treasury bonds April 6, an increase from its 2.28 trillion won in bonds the previous month. This will bring state debt to roughly 366.9 trillion won ($269.6) this year, equivalent to about 38.5 percent of gross domestic product.
The South Korean government will offer tax incentives for auto owners who trade in their old cars for new ones, in an attempt to bolster the auto industry, which has been hit hard by the sluggish local economy. The incentives will offer a 70 percent discount on purchasing and registration taxes for people who buy new automobiles in exchange for their old cars registered before the year 2000.
South Korea’s biggest landline provider, KT Corp., announced plans to merge with the country’s second largest mobile phone company, KTF, after winning approval from its shareholders on March 27. By combining landline and mobile operations KT hopes to bounce back from its poor performance, which has largely been caused by the dominant use of mobile networks and a slowdown in high-speed Internet installation due to market saturation.
Elsewhere: South Korea moved one step closer to the 2010 South Africa World Cup after winning a closely watched match with the North Korean national team held in Seoul. The South won 1–0. The two teams had tied their last five matches. The game came amid rising tensions on the peninsula as the proposed dates for North Korea’s rocket launch approached. The political tensions, nonetheless, did not spill over, with most people agreeing that “sports is sports” and nothing more.
South Korean figure skating queen Kim Yuna left the country in awe by grabbing the gold at the International Skating Union World Figure Skating Championship with record-breaking scores. The 18-year-old college freshman has become a source of national pride for most Koreans, who are increasingly seeking a refuge from the sagging local economy and their empty pockets.
The teenager has attained national sweetheart status, appearing in many television advertisements for air conditioners, milk, and even cars. Broadcasters pumped out 20-minute special reports on her performance after her win.
Kim became the first female skater to score higher than 200 points under the new ISU scoring rules, and easily beat her archrival Asado Mao from Japan, who is the same age. South Koreans are hoping Kim will win the country another gold, this time at the Vancouver 2010 Winter Olympics.