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UNCLAS SECTION 01 OF 07 SEOUL 000456 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; March 23, 2009 
 
TOP HEADLINES 
------------- 
 
Chosun Ilbo 
Government and Business Officials Close to Taekwang Industrial 
Chairman Park Yeon-cha Found to Have Held 
Several Meetings to Prevent Investigation into Park 
 
JoongAng Ilbo, Hankyoreh Shinmun 
One or Two Influential Politicians under Investigation 
for Receiving Bribery from Park Yeon-cha 
 
Dong-a Ilbo 
Former Gyeongnam Province Governor Kim Hyuk-gyu, 
a Pro-Roh Moo-hyun Figure, Suspected of Receiving Bribery 
from Park Yeon-cha 
 
Hankook Ilbo 
Chief Prosecutor of Jeonju District Prosecutor's Office Accepted 
Bribes from Park Yeon-cha in The Form of 
Luxurious Golfing Trips 
 
Segye Ilbo 
Public Officials' Frequent-Flyer Miles Earned 
on Their Official Trips Left Unused 
 
Seoul Shinmun, All TVs 
Korea Routs Venezuela to Reach WBC Finals; "Great Challenge" Goes 
on 
 
 
DOMESTIC DEVELOPMENTS 
--------------------- 
 
An ROK military source said that two U.S. warships, initially 
deployed for the U.S.-ROK joint military exercises, will remain in 
waters near the Korean Peninsula in preparation for the suspected 
long-range missile launch by North Korea next month. (All) 
 
Gen. Walter Sharp said at a hearing of the Senate Armed Services 
Committee on March 19, "USFK still faces challenges with 
insufficient training range capacity and capability needed to 
maintain the readiness of our air forces in Korea." (Dong-a, Voice 
of People) 
 
 
INTERNATIONAL NEWS 
------------------ 
 
North Korea officially confirmed through its Korean Central News 
Agency report that it was investigating two Americans it detained on 
March 17 for "illegally intruding into its territory," allegedly 
after crossing the border from China. (JoongAng, Seoul, Segye, All 
TVs)  As North Korea seeks to gain as much as possible from this 
incident, the negotiations for the release of the two journalists 
could be prolonged. (Dong-a) The U.S. reportedly has an intention to 
hold "high-level talks" with North Korea for the swift release of 
the two journalists. (Hankyoreh) 
 
A Beijing source on North Korea said on March 22 that North Korean 
leader Kim Jong-il officially invited Chinese President Hu Jintao to 
Pyongyang through North Korean Premier Kim Yong-il, who recently 
visited China. (JoongAng) 
 
Executive Director of the Nautilus Institute in San Francisco Peter 
Hayes said in a March 21 interview with Dong-a Ilbo that "North 
Korea is 'yelling' to seek engagement with the world as an equal 
negotiating partner," adding that all of Pyongyang's recent actions 
can be understood in this context. (Dong-a) 
 
The Japanese Ministry of Land, Infrastructure, Transport and Tourism 
said on March 21 that North Korea informed the International Civil 
 
SEOUL 00000456  002 OF 007 
 
 
Aviation Organization that it will close two of its air routes from 
April 4-8 for its planned rocket launch. (Seoul, SBS) 
 
The Heritage Foundation recommended that the USG should set a 
specific deadline (for the resolution of the nuclear issue) so that 
North Korea may not drag out the nuclear talks. (Segye) 
 
 
MEDIA ANALYSIS 
-------------- 
 
-North Korea 
----------- 
 
All newspapers quoted an ROK military source as saying on March 22 
that two U.S. warships, initially deployed for the U.S.-ROK joint 
military exercise, will remain in waters near the Korean Peninsula 
in preparation for the suspected long-range missile launch by North 
Korea next month. 
 
Right-of-center JoongAng Ilbo said in its inside-page analysis 
report that North Korea's rejection of U.S. food aid is a prompt 
offensive aimed at neutralizing U.S. sanctions which are expected to 
come after the North's missile launch.  The daily also said that 
North Korea is using the detention of U.S. journalists to draw more 
attention to its incoming missile launch. 
 
Conservative Dong-a Ilbo carried its March 21 interview with Peter 
Hayes, Executive Director of the Nautilus Institute in San 
Francisco.  During the interview, Hayes said "North Korea is 
'yelling' to seek engagement with the world as an equal negotiating 
partner," adding that all of Pyongyang's recent moves, including its 
rejection of U.S. food aid and detention of U.S. journalists, can be 
understood in this context. 
 
Conservative Segye Ilbo reported that the Heritage Foundation 
recommended that the USG should set a specific deadline (for the 
resolution of the nuclear issue) so that North Korea may not drag 
out the nuclear talks. 
 
Moderate Seoul Shinmun reported that according to the Japanese 
Ministry of Land, Infrastructure, Transport and Tourism, North Korea 
informed the International Civil Aviation Organization on March 21 
that it will close two of its air routes from April 4-8 for its 
planned rocket launch. 
 
All newspapers reported on Saturday that the ROK will consider 
joining fully the U.S.-led Proliferation Security Initiative (PSI) 
if North Korea either launches a rocket or test-fires a long-range 
missile.  Moderate Hankook Ilbo editorialized on Monday: "The ROK 
should be careful about its full participation in the Proliferation 
Security Initiative (PSI) because it may complicate inter-Korean 
relations further."  Left-leaning Hankyoreh Shinmun went further, 
stating that "It is undeniable that the ROK's full participation in 
the PSI will only increase the possibility of military conflicts 
(between the two Koreas)... Therefore, the ROKG must reconsider its 
full participation in the PSI." 
 
-Detained U.S. Journalists 
-------------------------- 
 
All major newspapers reported that North Korea officially confirmed 
through its Korean Central News Agency report that it was 
investigating two Americans it detained on March 17 for "illegally 
intruding into its territory," allegedly after crossing the border 
from China.   Dong-a Ilbo said that as North Korea seeks to gain as 
much as possible from this incident, the negotiations for the 
release of the two journalists could be prolonged. 
 
Hankyoreh Shinmun said that the U.S. may intend to hold "high-level 
talks" with North Korea, involving U.S. Special Representative for 
North Korea Policy Bosworth, for the swift release of the two 
journalists. 
 
 
SEOUL 00000456  003 OF 007 
 
 
Hankook Ilbo editorialized on Saturday: "If this incident (the 
detention of U.S. journalists) is successfully resolved, it could 
make a breakthrough in the U.S.-North Korea relations and improve 
the image of the North not only in the U.S. but also in the 
international community.  If trust is built this way, it will be 
easy to manage tension after the North's launch of the 
Kwangmyongsong-2 satellite, and it will also lead to the early 
resumption of the Six-Party Talks and the normalization of 
diplomatic ties between the U.S. and North Korea.  We hope that the 
North will not miss this golden opportunity." 
 
-G20 Summit 
----------- 
Professor of international politics at Seoul National University 
Yoon Young-gwan observed in JoongAng Ilbo that: "The key to the 
success of the G20 Summit in London is to coordinate differences 
between the U.S., which argues for the expansion of fiscal spending, 
and Europe, which says that financial reform should come first." 
 
 
OPINIONS/EDITORIALS 
------------------- 
 
This is Not the Time to Talk about PSI Participation 
(Hankook Ilbo, March 23, 2009, Page 35) 
 
North Korea restored the military communication channel that it shut 
off during the U.S-ROK 'Key Resolve' joint military exercises and 
lifted border restrictions.  Also, the North allowed South Korean 
people to depart to and from the Kaesong Industrial Complex. 
Intensified tensions between North Korea and the ROK will unlikely 
abate quickly, however.  Moreover, should North Korea go ahead 
between April 4 and 8 with its planned missile launch, it would 
plunge the Korean Peninsula into turmoil. 
 
Against this backdrop, the ROK's full participation in the U.S.-led 
Proliferation Security Initiative (PSI) would further strain 
inter-Korean relations.  Foreign Minister Yu Myung-hwan said last 
week that if North Korea launches a missile, this would compel the 
ROK to review its full participation in the PSI.  It is not 
unreasonable to argue that the ROK should no longer postpone its 
full participation in the PSI which involves 94 countries, since 
non-proliferation of mass destruction weapons has been emerging as a 
significant issue in the international community. 
 
However, it is not desirable to pursue only a general logic (that 
might apply) for the international community without considering the 
specific conditions of the Korean Peninsula.  The former ROK 
government participated in only 5 of 8 areas of the PSI program 
which began (in 2003) under the Bush Administration.  The ROK 
Government avoided fully participating because of concerns over 
North Korea's opposition and (the perceived) risks of armed clash. 
 
 
If North Korea pushes ahead with a missile launch despite stern 
warnings from the international community, it certainly should pay 
for what it does.  But it is not wise for the ROKG to decide to 
participate fully in the PSI, going beyond countermeasures 
(authorized) by the U.N.  The ROK together with Japan recently 
co-sponsored a resolution on North Korean human rights which it 
submitted to the 10th U.N. Human Rights Council.  The ROK carefully 
should contemplate what effects and consequences these series of 
hard-line responses will bring.  The ROK has no reason to provoke 
North Korea, especially with the North already railing against PSI, 
warning that PSI participation by the ROK could set off a war on the 
Korean Peninsula. 
 
 
Calamity of Full Participation in PSI 
(Hankyoreh Shinmun, March 23, 2009, Page 23) 
 
President Lee Myung-bak's administration is considering full 
participation in the United States-led Proliferation Security 
Initiative (PSI) as a response to North Korea's intended launch 
 
SEOUL 00000456  004 OF 007 
 
 
announcement.  "A North Korean missile firing signals that it is 
time for us to consider participation in PSI," said Foreign Minister 
Yu Myung-hwan just days ago.  "With roughly eighty nations around 
the world participating in an international agreement designed to 
prevent the proliferation of weapons of mass destruction, it was 
getting hard to explain to the international community why we, a 
country that should be most concerned about the issue, was not 
participating," said another high-ranking administration official 
under the condition of anonymity.  "The argument that a missile 
firing should be reason for full participation is gaining strength 
within the administration."  Given these statements, the Lee 
Administration has all but declared formally that it will join as a 
full participant in PSI the moment North Korea launches its 
satellite. 
 
South Korea to date has been merely an "observer" to PSI in only 
five of eight areas, out of consideration for relations with the US, 
China, and North Korea.  Up to now Korea completely restricted 
itself from three other programs under PSI:  official participation 
in training maneuvers; material support for interdiction exercises 
within a jurisdiction and material support for interdiction outside 
a jurisdiction. 
 
By the looks of it, the Lee Administration pulled full participation 
in PSI out of its bag of tricks to demonstrate that it will not let 
North Korea's "bad behavior" go without a response.  However, it is 
quite probable the move will only exacerbate problems and deliver no 
benefits.  Administration officials say that since actions can be 
taken only within one's territorial waters, full participation would 
still not create any problems as long as the North moves in 
international waters.  However, officials are in no position to deny 
that there would be a greater risk of an armed clash, and North 
Korea is already saying PSI is "a fuse that could bring flame clouds 
of war over the Korean peninsula." 
 
The Obama Administration is not even finished reviewing U.S. policy 
towards North Korea, let alone its leadership of PSI.  But as seen 
through the U.S.'s recent changes in policy towards Iran, it is 
quite likely policy towards North Korea could turn towards dialogue, 
regardless of whether the North fires a missile.  If the Lee 
Administration gets ahead of itself, it could exacerbate the 
"isolation of South Korea" and the North's approach of "closing up 
to the South and opening up to the Americans" (tong mi bong nam). 
The fact that China, which holds the Chairmanship of the Six-Party 
Talks, is also very negative about PSI will also be a burden for the 
Lee Administration, as it tries to resolve the North Korean nuclear 
issue through the Six Party process. 
 
In conclusion, the Lee Administration should stop thinking about 
Korea's full participation in PSI since it will have a negative 
influence on South Korea and promises uncertain benefits. 
 
 
Bernanke Taking Extreme Step of Buying Long-term Treasury Bonds 
(JoongAng Ilbo, March 23, 2009, Page 46) 
 
Federal Reserve Board (FRB) Chairman Bernanke announced last week 
that the FRB would buy back long-term Treasury bonds.  This has 
rocked the world market.  The dollar's value fell steeply and prices 
of gold and international raw materials surged.  This step by the 
FRB is a last-ditch effort to revive the (U.S.'s) flagging economy. 
The Fed's action will surely lead to low interest rates but will 
also entail inflation.  The world market sees this as a signal that 
the U.S. is abandoning its long-held strong dollar policy to 
stimulate its economy. 
 
This U.S. policy is a gamble.   It brought a sharp fall in the 
interest rates for U.S. Treasury bonds but also produced the side 
effect of a weak dollar.  The U.S. trade deficit is estimated to 
stand at 1.7 trillion dollars.  Last year, the U.S. recorded a 600 
billion dollar trade deficit.  These 'twin deficits' can be made up 
when 6.3 trillion dollars flow in from overseas every day.  However, 
who would make an investment in dollar assets?  This change in the 
flow of money will inevitably trigger upheaval in the world economy. 
 
SEOUL 00000456  005 OF 007 
 
 
 Ominously, in January, 148 billion dollars already flew out of the 
U.S. 
 
The Obama Administration's series of policies seem to be reminiscent 
of Japan's 'lost decade.'  Japan wasted time without liquidating 
poor-performing financial companies.  Now, ailing U.S. financial 
companies keep receiving public funds. 
 
To overcome these problems, the international community should 
bolster cooperation.  Cash-rich countries such as China, Japan and 
oil-producing countries should keep investing in the U.S. even at 
risk of their losses.  While these efforts shore up the dollar's 
value, the U.S. economy may turn around.  However, such chances are 
slim.  China called on the U.S. to guarantee safety of its assets 
invested in the U.S.  Meanwhile, Middle East countries show signs of 
halting their investment in the U.S. 
 
The ROK should prepare against a worst scenario.  A plunge in the 
dollar's value will hinder the recovery of the world economy, 
potentially prompting serious inflation.  The world as a whole may 
undergo super-stagflation for the first time.  There are pessimistic 
views that the dollar as a key currency may topple.  (On the 
positive side,) a weak dollar may decrease the chance that the ROK 
suffers a foreign currency crisis.  However, the ROK economy, which 
is heavily dependent on the foreign economy, will be hit hard if the 
world market flounders again.  Unfortunately, it seems that time is 
approaching for us to face a 'sink-or-swim' choice. 
 
 
Don't Push That Button 
(JoongAng Ilbo, March 21, 2009, Page 34) 
 
South Korea's consideration to become a full-fledged member of the 
U.S.-led anti-proliferation treaty to counter the persistent missile 
and nuclear threat from the North has rekindled a fierce debate. 
 
First, the act could provoke North Korea.  Once South Korea becomes 
a full member of the Proliferation Security Initiative, or PSI, 
South Korea will have to take an active part in sea surveillance of 
North Korea's trade in weapons of mass destruction. 
 
Our society has been divided and hesitant on officially taking part 
in the PSI framework for fear of the potential consequences.  But if 
the North goes ahead with its plan to shoot off what it calls a 
"satellite," suspected to be a long-range missile test, sentiment 
could still unite against it.  Seoul joining the PSI will likely 
garner greater support if opinion favors a more aggressive position 
against Pyongyang. 
 
The consequences of a possible North Korean missile launch and of 
the South becoming a PSI member are a grave concern.  Officials in 
Pyongyang should seriously consider their options before pushing the 
button. 
 
The South has already laid the PSI card on the table.  Defense 
Minister Lee Sang-hee last month said the time has come for South 
Korea to review joining the PSI since North Korea was continuing 
with its missile and nuclear development.  Foreign Minister Yu 
Myung-hwan also said if North Korea proceeds with the missile 
launch, it will provoke fears of proliferation and pave the way for 
South Korea's consideration of the PSI option. 
 
Already 94 countries worldwide take part in the campaign to stop the 
development of weapons of mass destruction.  But even with the 
North's nuclear ambition, we have so far refrained from taking an 
active role.  South Korea, as an observer, has been participating in 
just five PSI activities. 
 
Full membership could translate into a potential inter-Korean sea 
clash or provoke the North to irreversibly unbalance the tightrope 
walk that is the relationship between the two Koreas. 
 
But the North leaves the South with little option if it goes on with 
the missile launch despite international warnings.  Pyongyang has 
 
SEOUL 00000456  006 OF 007 
 
 
been testing Seoul's patience by opening and closing the Kaesong 
Industrial Complex as it pleases. 
 
Entrance to the joint industrial site was impaired yesterday even 
after the Korea-U.S. joint military drills ended.  North Korea 
should not be so foolish as to wipe out what's left of South Korea's 
patience with the missile launch.  That would be a provocation 
capable of putting the entire Korean Peninsula in jeopardy. 
 
(This is a translation provided by the newspaper, and it is 
identical to the Korean version.) 
 
 
FEATURES 
-------- 
 
Ambassador Stephens: U.S. is Contacting North Korea Through Various 
Channels 
(Hankyoreh Shinmun, March 21, 2009, Page 2) 
 
Gore requests assistance from Secretary of State Clinton 
 
U.S. Ambassador to the ROK Kathleen Stephens said on March 20 that 
the U.S. government is trying to identify what exactly happened to 
the two U.S. journalists detained by North Korea and under what 
conditions they are being held.  She added that the U.S. Department 
of State has no higher priority than the safety of U.S citizens 
overseas. 
 
Ambassador Stephens told reporters after giving a lecture to the 
Korean Council on Foreign Relations that Washington, through the 
Swedish Embassy in Pyongyang is working (for the release of the 
detainees).  She noted that related diplomats are collecting 
information through various methods including counterpart contacts. 
 
 
On March 20, CNN quoted a high-ranking official of the U.S. 
Administration who stated that former Vice President Al Gore, a 
co-founder of Current TV - the network for which the detained 
journalists work -- requested Secretary of State Hillary Clinton's 
assistance (in securing the journalists' release).  The official 
said that Secretary Clinton is closely watching this incident 
develop.  The official also hinted that the U.S government is paying 
special attention to the unexpected incident, which broke out amid 
heightened tensions between the U.S. and North Korea due to the 
U.S.-ROK joint military drills, 'Key Resolve' and the North's 
announcement of its planned satellite launch. 
 
 
¶N. Korea 'Yelling' to Seek Equal Footing in Talks 
(Dong-a Ilbo, March 23, 2009, Page 8) 
 
By Reporter Lee Jeong-eun 
 
An American expert on North Korea says North Korea is "yelling" to 
seek engagement with the world as equal negotiating partner, adding 
all of Pyongyang's recent moves can be understood in this context. 
 
Peter Hayes, executive director of the Nautilus Institute in San 
Francisco, told Dong-A Ilbo in an interview Saturday that "The North 
is doing preparatory work to get what it wants," referring to the 
North's preparation for a missile launch, rejection of U.S. food 
aid, and the detention of two American journalists. 
 
Nautilus has participated in energy aid projects to the North since 
¶1992.  Hayes recently visited South Korea to prepare for the 
establishment of a Nautilus branch in Seoul and give a lecture at 
the Graduate School of North Korean Studies. 
 
"Considering past precedents, it might take at least one to two 
weeks or several months for the two American journalists detained by 
Pyongyang to be released," he said.  "The incident is too small to 
have a major impact on North Korea-U.S. relations at this point." 
 
 
SEOUL 00000456  007 OF 007 
 
 
On the North's rejection of American food aid and forcing out of 
international relief workers, Hayes said, "The North intends to send 
a clear signal to the Obama Administration that Pyongyang is not a 
regime that implores the international community for food aid, and 
that food is a separate issue from the North Korean nuclear 
program." 
 
"The North's move entails too much cost from the humanitarian 
perspective.  It is really sad for Pyongyang to make such a 
decision." 
 
On the North's announcement of a purported missile launch, he said, 
"If a tough regime like Pyongyang makes such preparations in the 
military aspect, it is really difficult to block them in the 
interim." 
 
Authorities can easily confirm if the projectile the North plans to 
fire is a missile or a communications satellite through analysis of 
the angle and direction of the rocket and technology applied, he 
said. 
 
"The technological gap used in a missile and a communication 
satellite is as huge as the difference between a high-speed train 
and a bicycle," Hayes said.  "Whether Pyongyang's claim is true or 
not will be revealed instantly." 
 
On the Obama Administration's North Korea policy, he said, "Since 
the U.S. has so many urgent diplomatic agenda items, Washington 
cannot continue to show patience for long." 
 
"In times of change to come, North Korea might see an opportunity 
and must not miss the chance as it did during the Clinton 
Administration." 
 
Hayes said the North should note growing pessimism in Washington 
about a reconciliatory North Korea policy. 
 
He said, however, "Considering the Obama Administration's realism, 
things can be resolved promptly if conditions are met.  If the North 
gives up its nuclear weapons and keeps its promises with the 
international community, a North Korea-U.S. summit could take place 
within four years." 
 
On whether the North can give up nuclear weapons then, Hayes said, 
"It will be very difficult but not totally impossible." 
 
The North has been using nuclear weapons as a bargaining chip, but 
they have been gradually changed by the Kim Jong-il Government into 
a means to sustain the communist regime's legitimacy amid its 
dispute with the Bush Administration, he said.  The cost which will 
need to be incurred for the North to abandon nuclear weapons has 
also increased as well. 
 
If Washington and other major governments treat Pyongyang as a 
sincere negotiating partner, however, the North will no longer need 
to seek recognition through nuclear weapons, Hayes said. 
 
"Considering Pyongyang's psyche, if it shuts off all dialogue 
channels, it really intends to go to war, but despite a flurry of 
recent announcements, it is keeping diplomatic dialogue channels 
open," he said.  "After all, Pyongyang is ready to be engaged by the 
international community." 
 
"Since opportunities still remain, the future direction of North 
Korean issues is up to Pyongyang." 
 
(This is a translation provided by the newspaper, and it is 
identical t 
 
 
STEPHENS