VZCZCXRO1270
OO RUEHGH
DE RUEHUL #0408/01 0760728
ZNR UUUUU ZZH
O 170728Z MAR 09
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3615
RUCPDOC/USDOC WASHDC 8262
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC//DDI/OEA//
RHHMUNA/USCINCPAC HONOLULU HI//FPA//
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC//DB-Z//
RUEHMO/AMEMBASSY MOSCOW 9329
RUEHBJ/AMEMBASSY BEIJING 5409
RUEHKO/AMEMBASSY TOKYO 5516
RUEHGH/AMCONSUL SHANGHAI 0412
RUEHSH/AMCONSUL SHENYANG 4038
RUEHIN/AIT TAIPEI 3029
RUEHGP/AMEMBASSY SINGAPORE 6269
RUCNDT/USMISSION USUN NEW YORK 0652
RUEHGV/USMISSION GENEVA 2037
RUEHLO/AMEMBASSY LONDON 1068
RUEHFR/AMEMBASSY PARIS 1689

UNCLAS SECTION 01 OF 07 SEOUL 000408 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; March 17, 2009 
 
TOP HEADLINES 
------------- 
 
Chosun Ilbo 
Head of the Association of ROK Firms in Kaesong Industrial Complex: 
"No Companies will Survive if North Korea's Ban on Entry of Workers 
and Materials into Kaesong Continues 
for 10 More Days" 
 
JoongAng Ilbo 
Police Raid Homes and Offices of Three Netizens on Suspicion of 
Manipulating "Internet Public Opinion" 
 
Dong-a Ilbo 
Four ROK Tourists Killed in Suicide Bombing Carried Out 
by 18-Year-Old Al-Qaeda Activist 
 
Hankook Ilbo, Hankyoreh Shinmun, Segye Ilbo, 
Seoul Shinmun, All TVs 
Supreme Court Justice Shin Young-Chul Faces Disciplinary Action at 
Supreme Court's Ethics Committee forAttempting 
to Influence Junior Judges in Trials of Anti-U.S. Beef Protesters 
 
 
DOMESTIC DEVELOPMENTS 
--------------------- 
 
North Korea allowed 294 ROK workers stranded in the North to return 
home yesterday, four days after it closed the border. However, 
northbound travel remained closed. (All) 
 
Experts viewed the North's partial opening of the border as aimed at 
diverting criticism at home and abroad that it was "detaining" ROK 
people. (Dong-a, Hankyoreh, Segye, Seoul) 
 
In particular, 10 ROK experts interviewed by Chosun Ilbo expected 
that the North's restrictions on border crossings will continue at 
least until the ROK-U.S. "Key Resolve" military exercise ends on 
March 20. Some of them even speculated that Pyongyang might consider 
the closure of the Kaesong Industrial Complex, with others calling 
the latest North Korean move a scheme to pressure the Lee Myung-bak 
Administration to change its North Korea policy to bring it in line 
with the policies of the former Kim Dae-jung and Roh Moo-hyun 
Administrations. (Chosun) 
 
Foreign Minister Yu Myung-hwan, in a March 16 press briefing, said 
that China also acknowledges that a rocket launch by North Korea is 
a violation of UN Security Council Resolution 1718. (JoongAng, 
Seoul) 
 
Trade Minister Kim Jong-hoon said in a March 13 interview: "If we 
sign the KORUS FTA first, it will put pressure on the U.S. to act 
more quickly. The ruling and opposition parties must ratify the 
trade deal next month." (JoongAng) 
 
U.S. Ambassador to the ROK Kathleen Stephens, in a March 16 
breakfast meeting hosted by the Korean Chamber of Commerce and 
Industry, said that Korea has to give the Obama Administration time 
to think over the KORUS FTA. (JoongAng, Segye, Seoul) 
 
 
MEDIA ANALYSIS 
-------------- 
 
-North Korea 
------------ 
 
JoongAng Ilbo and Seoul Shinmun carried a quote from Foreign 
Minister Yu Myung-hwan, who said in a March 16 press briefing that 
China also acknowledges that a rocket launch by North Korea is a 
violation of UN Security Council Resolution 1718. He was further 
quoted as saying: "Even though there is a slight difference in 
positions between countries, all agree that North Korea's rocket 
 
SEOUL 00000408  002 OF 007 
 
 
launch poses a threat to peace and stability in the region." 
 
North Korea's partial opening of the border yesterday, four days 
after it closed the border, received wide play.  The ROK media 
reported that Pyongyang allowed 294 ROK workers stranded in the 
North to return home yesterday but that northbound travel remained 
closed.  Experts viewed this North Korean move as aimed at diverting 
criticism at home and abroad that it was "detaining" ROK people.  In 
particular, 10 ROK experts interviewed by Chosun Ilbo expected 
mostly that the North's restrictions on border crossings will 
continue at least until the ROK-U.S. "Key Resolve" military exercise 
ends on March 20.  Some of them were quoted as speculating that 
Pyongyang might consider the closure of the Kaesong Industrial 
Complex, with others quoted as calling the latest North Korean move 
a scheme to pressure the Lee Myung-bak Administration to change its 
North Korea policy to bring it in line with the policies of the 
former Kim Dae-jung and Roh Moo-hyun Administrations. 
 
Chosun Ilbo editorialized: "We can no longer run the Kaesong 
Industrial Complex in a situation where North Korea blocks normal 
border crossings by ROK people and holds them hostage, while 
stepping up political offensive against the ROK.  Unless North Korea 
promises to prevent a repeat (of this kind of situation), the 
inter-Korean industrial complex will have no future."  JoongAng Ilbo 
headlined its editorial:  "Pyongyang Should No Longer Hold Kaesong 
Industrial Complex Hostage." 
 
-Four Korean Tourists Killed in Suicide Bombing in Yemen 
--------------------------------------------- ----- 
 
The ROK media gave prominent play to a report saying that al-Qaeda 
was behind the March 15 suicide bombing in Yemen that killed four 
ROK tourists and wounded three others.  Yemen's official Saba News 
Agency was widely cited as reporting that an 18-year-old who had 
been "tricked by al-Qaeda into wearing an explosives vest" carried 
out the attack.  Most of the ROK media noted that Yemen is the 
ancestral homeland of Osama bin Laden, the leader of the al-Qaeda 
terrorist organization and that there have been several attacks 
targeting foreigners in Yemen.  The media also said that the 
followers of al-Qaeda might well outnumber tourists in Yemen these 
days and that three in four Yemenis are armed with guns. 
 
Chosun Ilbo commented that al-Qaeda might have intended the attack 
to demonstrate that it is "alive and well."  Dong-a Ilbo, meanwhile, 
noted that there were also Italian and French tourists around when 
the explosion occurred, and wondered if the ROK was targeted by the 
terrorist group.  Hankook Ilbo editorialized: "If terrorists, by any 
chance, targeted ROK people, it would be very serious, because it is 
related to changes in the ROK's image in the Arab world.  The ROKG 
should also consider whether the attack might have any connection to 
the deployment of our naval forces to the waters off Somalia which 
is not far from Yemen." 
 
 
OPINIONS/EDITORIALS 
------------------- 
 
North Korea Should No Longer Hold Kaesong Industrial Complex Hostage 
 
(JoongAng Ilbo, March 17, 2009, Page 46) 
 
Yesterday, North Korea allowed over 400 South Koreans, who had been 
stranded at Kaesong Industrial Complex for three days, to return 
home to the ROK.  The North may have been aware of criticism growing 
in the South and abroad.  In addition, by repeatedly opening and 
closing border crossings, it may have the intention of avoiding 
catastrophe while (at the same time) maintaining tension on the 
Korean Peninsula.  This might look plausible for the North, but we 
point out that this is just a "shallow trick." 
 
Pyongyang should first remember that those in the ROK who have tried 
to understand North Korea are now turning their back.  North Korea 
probably thought that if it intensifies threats against the South, a 
voice calling for a "change in North Korea policy" will grow in the 
 
SEOUL 00000408  003 OF 007 
 
 
South.  However, this is a misjudgment.  Now that North Korea's 
threat on the Kaesong Industrial Complex has increased to the extent 
that South Koreans were "detained," the ROK society is denouncing 
the North with one voice, rather than splitting (into factions). 
 
The North should tread carefully and think about the historical 
behind the opening the Kaesong Industrial Complex.  As a symbol (of 
inter-Korean reconciliation,) the Kaesong Industrial Complex brought 
a turning point in inter-Korean ties.  The reason why the Pyongyang 
leadership went so far as to pull its military units from the areas 
near the Military Demarcation Line in order to build the industrial 
complex may be because it had high expectations.  And we think that 
the results over the past five years met those expectations.  As 
much as 3 million dollars a month is provided to the North in the 
form of wages for over 40,000 employees at the complex.  This is a 
substantial contribution, considering that North Korea's exports 
were worth only 1.1 billion dollars last year.  Above all, North 
Korea can seek economic revival by connecting itself with the 
international community through the Kaesong Industrial Complex.  In 
this context, isn't the North seeking the normalization of relations 
with the U.S.? 
 
We urge the North once again not to damage the Kaesong Industrial 
Complex with the political and military intent to increase tension 
on the Korean Peninsula.  It is absurd to block traffic to and from 
the Kaesong Industrial Complex due to the South's military drills, 
which are not occurring for the first time.  Among other things, it 
is morally wrong for Pyongyang not to consider the position of its 
South Korean business partners at all.  Despite the resumption of 
traffic across the border, if the overall operation of the Kaesong 
Industrial Complex is not normalized, no one will consider providing 
support to the North or investing in the North any more.  We hope 
that (the North) will leave the Kaesong Industrial Complex intact as 
the last bastion to overcome division and confrontation with the 
South and (in order to) pursue joint development. 
 
 
Getting past the limitations surrounding Kaesong 
(Hankyoreh Shinmun, March 17, 2009, Page 23) 
 
North Korea began allowing South Koreans to return to the South from 
the Kaesong Industrial Complex on Monday, having prohibited them 
from doing so beginning Friday.  The move appears to be aimed, on 
the one hand, at avoiding further criticism for keeping Southerners 
against their will, while, on the other hand, still using the 
industrial complex as leverage against the South. By all 
appearances, the situation is going to continue until March 20, when 
the joint South Korea-U.S. Key Resolve military exercises come to a 
close. 
 
The North is in the wrong here.  Failing to guarantee free passage 
to and from Kaesong for both people and goods is going to seriously 
hurt business activity at the industrial complex.  Many companies 
are already having problems with production, and it won't be easy 
for things to return to normal there, as if nothing was ever the 
matter at all, even if the North later allows for smooth passage. 
We hope the North takes a good look at the damage it is doing. 
 
The biggest problem is attitude of the North in thinking that it is 
okay to shut down normal operations at the Kaesong Industrial 
Complex for political and or military reasons.  Even considering the 
great influence which the military has within the North Korean 
government, unless Pyongyang guarantees that this kind of 
nonsensical episode is never going to happen again, South Korean 
companies in Kaesong are going to remain nervous about staying 
there.  Therefore, there needs to be several mechanisms in place, 
backed by absolute guarantees from an authoritative entity in the 
North, to ensure that Kaesong operations, including free passage, go 
smoothly. Pyongyang also needs to work to prove that the principle 
of separation of politics and economics does not end up being an 
empty slogan. 
 
As seen once again, there are limits to the effectiveness of the Lee 
Myung-bak Administration's response, because there are no effective 
 
SEOUL 00000408  004 OF 007 
 
 
tools to get the North to take action when inter-Korean relations 
are currently so poor.  Instead of just saying that it does not want 
to see business at Kaesong suffer, it should plot a fundamental 
change in policy so that substantial progress in inter-Korean 
relations can be achieved.  Responding to situations after they 
erupt is not going to provide for stability in Kaesong or for the 
political situation on the Korean Peninsula as a whole. 
 
The Kaesong Industrial Complex is an example of inter-Korean 
economic co-prosperity.  Naturally, therefore, both sides need to 
refrain from behavior that hurts either one.  The North, for its 
part, needs to make a clean break with the temptation to shake up 
the industrial park with other goals in mind.  And it needs to 
realize that there are no companies in any country that are going to 
want to do business there once Southern companies write Kaesong off 
as a "non-investment grade" endeavor. 
 
* This is a translation provided by the newspaper, and it is 
identical to the Korean version. 
 
 
No Future for Kaesong without North Korean Pledge 
(Chosun Ilbo, March 17, 2009, Page 35) 
 
After effectively holding around 720 South Korean workers prisoner 
in the Kaesong Industrial Complex since Friday, North Korea on 
Monday allowed 453 of them to return home.  But there have been 
major difficulties in running the industrial complex as North Korea 
prohibits the entry of South Korean workers and raw materials and 
other goods.  If the situation persists until Friday, when the "Key 
Resolve" joint military exercises between South Korea and the United 
States comes to an end, 90 percent of the factories in the complex 
are expected to shut down.  North Korea has used the joint military 
drills as an excuse to impose the unilateral ban. 
 
Construction on the Kaesong Industrial Complex began in 2003 on 3.3 
million sq.m. of land and was completed in 2006.  Starting in April 
of 2004, 15 companies began producing products there, with 
accumulated output surpassing US$500 million in November of 2008. 
Out of that amount, products valued at $96 million were exported. 
The number of companies manufacturing products at the Kaesong 
Industrial Complex has risen to 93, employing around 39,000 North 
Korean workers and a little less than 1,000 (workers) from the 
South.  The average monthly salary of a North Korean worker at the 
Kaesong Industrial Complex is $73, with the total payroll for the 
39,000 North Koreans employed there around $2.8 million.  That adds 
up to around $34 million a year.  North Korea pocketed $16 million 
for renting out the land for 50 years.  North Korean authorities 
collect the wages of workers in a lump sum in U.S. dollars from 
South Korean companies and pay them in the form of North Korean won 
and goods.  Considering that North Korea's exports totaled $900 
million in 2007, the Kaesong Industrial Complex generates a 
tremendous amount of U.S. dollars for the communist country. 
 
Yet North Korea's sudden treatment of South Korean officials as 
hostages, taking issue with a joint South Korea-U.S. military drill 
that has been taking place annually for a decade, raises serious 
questions whether it can be treated as a reliable business partner. 
The head of one South Korean business in the complex lamented in a 
media interview, "We are not toys North Korean authorities can play 
with."  It is outrageous of North Korea to use the Kaesong 
Industrial Complex as leverage to exert political pressure on South 
Korea. 
 
Even when North Korea launched a missile and tested a nuclear device 
in 2006; when the U.S. government took issue with the influx of 
dollars into the communist country; and even when a South Korean 
tourist was shot and killed in the Mt. Kumgang resort, the Kaesong 
Industrial Complex operated normally.  Despite mounting criticism 
from within, the South Korean government kept the complex open, 
since it symbolized cooperation between the two Koreas. 
 
But now that North Korea has demonstrated that it can exert 
unreasonable political pressure on the South by blocking entry into 
 
SEOUL 00000408  005 OF 007 
 
 
the complex and taking our citizens hostage, things have to change. 
With the fate of 93 South Korean businesses at stake, extra caution 
must be taken in making any decisions, but our government must come 
up with a fundamental plan of action for the future of the complex. 
We cannot indefinitely entrust North Koreans with the safety and 
lives of our citizens there.  As long as there is no pledge from 
North Korea that such an incident will not be repeated, it will be 
difficult to promise that it will continue. . 
 
* This is a translation provided by the newspaper, and it is 
identical to the Korean version. 
 
 
FEATURES 
-------- 
 
Experts: "Pyongyang Even Considers Shutting Down Kaesong Industrial 
Complex"... "It Might Be Brinkmanship Tactics" 
(Chosun Ilbo, March 17, 2009, Page 4) 
 
By Reporter Lim Min-hyuk 
 
Ten experts look at North Korea's intentions behind border closure 
 
Why did North Korea start earnestly to "tighten the noose" (around 
the ROK) by repeatedly opening and closing the border? 
 
With the ROK and the U.S. conducting the Key Resolve joint military 
drill, experts said, "North Korea has the intention of using the 
Kaesong Industrial Complex to maintain military tension on the 
Korean Peninsula," adding, "North Korea will repeat this behavior at 
least until the end of Exercise Key Resolve on March 20."  Some 
predicted, "North Korea may even consider shutting down the Kaesong 
Industrial Complex." 
 
Prof. Kim Geun-sik of Kyungnam University, noted, "It seems that 
North Korea intends to attract attention from inside and outside by 
maximizing military tension caused by the ROK-U.S. military 
exercise.  Internally, Pyongyang provided justification (for its 
behavior), saying that because the South kicked off war games, the 
situation has now changed. 
 
 
Prof. Yoo Ho-yeol of Korea University said, "North Korea has the 
intention of creating an environment where the ROK public opinion 
denounces the ROKG and pressures it to change its North Korea 
policy," and Prof. Kim Sung-han of Korea University commented, 
"North Korea has the intention of pressuring (the Lee Myung-bak 
Administration) to promise that its basic stance (on the North) will 
be the same as that of the Kim Dae-jung and Roh Moo-hyun 
Administrations." 
 
Dr. Jeung Young-tai of the Korea Institute for National Unification 
said, "(North Korea) intends to draw the U.S. into negotiations from 
a broader perspective."  Chung added, "North Korea is trying to tell 
U.S. officials that carrying out the ROK-U.S. military drills would 
break peace."  Experts remarked, "The reason why the North allowed 
South Koreans to return home on March 16 was to prevent the spread 
of the perception that 'North Korea is detaining civilians.'" 
Former Vice Unification Minister Lee Bong-jo said, "North Korea had 
no choice but to open and close the border repeatedly in order not 
to fall into a dilemma where it would have to take responsibility 
for suspending the operation of the Kaesong Industrial Complex." 
 
The experts had different opinions on North Korea's long-term 
intentions.  Prof. Kim Sung-han said that so far North Korea has 
made it a 'major premise' not to give up the Kaesong Industrial 
Complex.  He added that now it seems that North Korea is 
fundamentally reviewing the major premise.  Prof. Nam Joo-hong of 
Kyonggi University said that North Korea needs to establish its 
succession system internally, and the late North Korean leader Kim 
Il-sung left teachings that the country should never lose the 
self-respect of "Juche Chosun" to the ROK.  He noted that therefore 
North Korea would go so far as to forgo economic benefits for this 
 
SEOUL 00000408  006.2 OF 007 
 
 
purpose.  Prof. Lee Jo-won of Chung-Ang University observed that as 
for the Kaesong Industrial Complex, North Korea adopted the 
principle of separation of economics from politics.  He went on to 
say, however, that it seems that the North abandoned the principle 
since its current priority is to raise tensions in order to have a 
bargaining chip in negotiations with the U.S. 
 
Meanwhile, Dr. Jeung Young-tai said that the North will engage in a 
tug-of-war with (the U.S. and the ROK) until March 20 when the 
ROK-U.S. Key Resolve military exercise ends.  He added that North 
Korea will not scrap the (Kaesong Industrial) Complex but maintain 
it in order to use it as leverage.  Prof. Kim Yong-hyun observed 
that the Kaesong Industrial Complex is a lucrative project, unlike 
the Mt. Kumgang tourism business, and North Korea is not likely to 
give it up. 
 
 
¶S. Korea in Bind over Border Closure, Academics Say 
(Chosun Ilbo, March 17, 2009, Page 4) 
 
By Reporter Ahn Yong-hyun 
 
Experts agreed Monday that the biggest problem South Korea faces 
with North Korea's random closures of the border is that Seoul lacks 
decisive means or leverage to prevent them. 
 
"We must keep trying to talk to North Korea behind the scenes," said 
Prof. Nam Joo-hong of Kyonggi University.  "If direct contract is 
difficult, we must try to find out what the North wants through 
either China or the United States."  Prof. Kim Yong-hyun of Dongguk 
University said, "We have to try and get China to persuade the 
North."  And Prof. Yoo Ho-yeol of Korea University said, "We should 
open dialogue with the North by taking advantage of the current 
situation involving the joint Kaesong Industrial Complex." 
 
Over a solution to the problem of the Kaesong industrial park issue, 
they were divided into two groups; one calling for a review of the 
whole project, the other warning that threatening to close what is a 
significant cash cow for the North could make things worse. 
 
If North Korea decided to close the Kaesong complex, there is 
nothing the South could do about it, said Prof. Nam.  He called for 
preparations to withdraw South Korean companies operating there and 
suspend exchanges. 
 
Prof. Kim Sung-han of Korea University suggested a step-by-step 
approach depending on the attitude of North Korea.  A basic review 
of the industrial complex is needed, he said, if South Koreans 
working there are again effectively detained after the joint South 
Korean-U.S. military drills end on Mar. 20.  If a South Korean firm 
in the industrial park has to suspend operations because accords 
between the North and South Korean authorities are not observed, it 
is eligible for compensation of up to W5 billion (US$1=W1,440.) 
 
Meanwhile, former vice unification minister Lee Bong-jo said 
Pyongyang has made it clear that the border is closed until Mar. 20, 
when the military exercises end.  "We have to deal with the 
situation calmly without aggravating it," he added.  Kim Yeon-chul, 
the head of the Hankyoreh Foundation for Reunification and Culture, 
called for a change the government's North Korea policy. 
 
* This is a translation provided by the newspaper, and it is 
identical to the Korean version. 
 
 
U.S. Ambassador Says That ROKG Should Give Obama Administration Time 
to Think over FTA 
(JoongAng Ilbo, March 17, 2009, Page 10) 
 
By Reporter Kim Pil-gyu 
 
U.S. Ambassador to the ROK Kathleen Stephens said, "I urge our 
Korean friends to give our new team in Washington some time to get 
in place, and suggest that in the meantime, we resist the temptation 
 
SEOUL 00000408  007.2 OF 007 
 
 
to politicize this situation."   She made these remarks in a March 
16 breakfast meeting hosted by the Korean Chamber of Commerce and 
Industry.  She added that the Korea-U.S. Free Trade Agreement (KORUS 
FTA) has the potential to offer much to citizens of both countries. 
 
 
The U.S. Ambassador pointed out that the delay in ratification of 
the FTA by the U.S. Congress stems from the global economic 
slowdown, a political transition in Washington and turmoil in the 
U.S. auto industry.  She said, "Ratifying a large trade agreement 
like the FTA is a complex process, and we should be patient and 
pragmatic."   As if conscious of some views among Koreans that the 
Obama Administration has a negative opinion of the KORUS FTA, she 
said, "Everyone who has spoken about the agreement from the new 
administration has noted its vast potential."  She also noted that 
social, cultural and people-to-people ties enrich society and are of 
immeasurable value. 
 
 
STEPHENS