South Korea

North and South Korea stand on ‘the brink of war’

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The confrontaion between North and South Korea has escalated with Kim Jong-il’s regime claiming it was on the ‘brink of war’ after tearing up a non-aggression pact signed in 1991.


North and South Korea stand on the ‘brink of war’ as Kim Jong-il’s tears up the non-aggression pact Photo: REUTERS

In a significant escalation of tensions, North Korea cancelled all military and political agreements after accusing Seoul of aggressive posturing.

Pyongyang’s decision to nullify all accords increases the prospect of an armed confrontation on the Peninsula, where over a million soldiers face each other across the Demilitarised Zone that divides the two Koreas.

North Korea’s Committee for the Peaceful Reunification of Korea blamed the South for pushing the two countries “to the brink of a war”.

Pyongyang said it now regarded the maritime border between the two states as “void”. The last time the two countries clashed militarily was at the disputed frontier in the Yellow Sea, when their navies fought a deadly gun battle in June 2002.

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Seoul earmarks $11bn to stir demand

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South Korea on Monday unveiled an $11bn stimulus package to boost stagnant domestic demand in Asia’s fourth-largest economy as export growth slows amid the global downturn.

Data released on Monday showed that exports, the main growth driver, grew at the slowest pace in 13 months in October, hit by falling demand from China.

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South Korea Backs $100 Billion in Debt to Calm Markets

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Oct. 19 (Bloomberg) — South Korea will guarantee $100 billion in bank debts and supply lenders with $30 billion in dollars to stabilize its financial markets.

The government will provide tax benefits for long-term equity and bond investors, while the Bank of Korea will buy repurchasing agreements and government bonds to boost won liquidity, the heads of the finance ministry, central bank and financial regulator said in a statement from Seoul. Policy makers held an emergency meeting on Oct. 17 to hammer out the plan.

South Korea is struggling with Asia’s worst-performing currency, a shortage of U.S. dollars and a stock market that has lost 38 percent this year. The guarantee on bank debts comes after Standard & Poor’s said last week it may cut the credit ratings of the nation’s largest lenders, which triggered the worst plunge in the won since the International Monetary Fund bailed the nation out in December 1997.

“They have to do that because the market was pushing them by attacking the Korean won,” said V. Anantha-Nageswaran, chief investment officer for Asia Pacific at Bank Julius Baer (Singapore) Ltd., part of Switzerland’s biggest independent money manager for the wealthy. “They know what the stakes are. The currency could completely careen out of proportion.”

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Bush encounters dueling demonstrations in Asia

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President Bush was greeted in Asia with dueling demonstrations by prayerful, flag-waving supporters and raucous protesters doused by police water cannons Tuesday, reflecting sharp political divisions at the outset of his three-nation trip.

The mixed reactions reflected a U.S.-South Korean relationship that has endured volatile moments this year, but is still considered reliable and vital for both sides.

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Bush under fire at Paris climate meeting

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Leading players in talks to forge a pact for tackling climate change took the lash on Thursday to President George W. Bush’s new blueprint for global warming, with Germany mocking it as “Neanderthal.”

At a ministerial-level meeting of major carbon emitters, South Africa blasted the Bush proposal as a disastrous retreat by the planet’s number-one polluter and a slap to poor countries.

The European Union — which had challenged the United States to follow its lead on slashing greenhouse-gas emissions by 2020 — also voiced disappointment.

His proposals “will not contribute to the fight against climate change,” EU Environment Commissioner Stavros Dimas told AFP, adding he hoped the US would “reconsider its options and policies.”

“Time is running out and we have the duty to reach an agreement in Copenhagen in 2009,” said Dimas.

Germany accused Bush of turning back the clock to before last December’s UN climate talks in Bali and even to before last July’s G8 summit.

In a statement entitled “Bush’s Neanderthal speech,” German Environment Minister Sigmar Gabriel said: “His speech showed not leadership but losership. We are glad that there are also other voices in the United States.”

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