Disaster Strikes Diplomacy and Economy in 2019

      December 31, 2019 08:40

      The year 2019 brought huge new insecurities for South Korea as it found itself trapped between an erratic and demanding U.S. and an increasingly assertive China, each leaning on the small Northeast Asian country to jump this way or that in their tug-of-war over regional dominance. Amid a sputtering economy, relations with neighbor Japan also plummeted to an all-time low and put more pressure on South Korea's already strained business sector. 

      ◆ Hopes Fade for N.Korean Denuclearization

      U.S.-North Korea relations, which warmed significantly in 2018, were dealt a severe blow in February after a summit in Hanoi, Vietnam collapsed. In April, North Korean leader Kim Jong-un set a year-end deadline for the U.S. to ease sanctions and broke off contact with South Korea, telling President Moon Jae-in to mind his own business and stop trying to mediate. The North even refused to accept aid shipments from the South and to cooperate in dealing with an epidemic of deadly swine fever.

      Instead, Pyongyang conducted 13 missile and long-range artillery tests since May and threatened in October to tear down facilities built by the South in the scenic Mt. Kumgang resort. After working-level talks with Washington broke down in October, Pyongyang hinted at ending its nuclear and missile test moratorium, and U.S. President Donald Trump cast about elsewhere for foreign-policy point-scoring.

      ◆ S.Korea-Japan Relations Sour

      Diplomatic relations between Seoul and Tokyo chilled to freezing point after the Supreme Court here ruled that South Korean victims of forced labor during World War II can sue their Japanese employers for compensation. Lower courts authorized the seizure of assets these Japanese businesses hold here when they refused to comply with compensation orders.

      When Seoul rejected calls by Tokyo to form a joint mediation committee, Japan announced restrictions on July 1 on the exports of key high-tech materials to South Korea. Samsung and SK Hynix went into crisis-control mode, while South Korean consumers started boycotting Japanese products. In retaliation, the government here threatened on Aug. 22 to scrap a bilateral intelligence-sharing pact, though heavy pressure from the U.S. forced it on Nov. 22 to extend it conditionally.

      But bilateral relations remain chilled as the year ends, and most thorny issues between the two perpetually squabbling neighbors remain unresolved.

      ◆ S.Korea-U.S. Alliance Faces Crisis

      The U.S. stepped up pressure on South Korea to pay for more of the costs of maintaining 28,500 American troops here even as the two allies drastically scaled down annual joint military drills. Anti-American sentiment here grew when the U.S. demanded an exorbitant hike in South Korea's contribution to US$5 billion, more than five times the current amount, and at the same time leaned on Seoul to join its military adventures in the Persian Gulf and boycott of China's Huawei.

      There are also signs that the U.S. wants to deploy mid-range missile aimed at China here after Washington withdrew from the Intermediate-Range Nuclear Forces Treaty with Russia. The U.S.' demands are part of its new "Indo-Pacific Strategy" and have put the Moon Jae-in administration in a difficult spot.

      ◆ Economy Sputters, Real Estate Prices Soar

      The South Korean economy worsened even further in 2019, with economic growth at barely two percent and consumer price growth at the lowest rate ever. Exports declined in the double digits for the first time in a decade, making the country's goal of achieving US$600 billion in exports became unattainable.

      The government blamed external factors like the U.S.-China trade war and falling semiconductor prices, but economists pointed out that failed government policies such as the drastic minimum-wage hike and mandatory cap on the working week made matters worse in already strained circumstances.

      The real estate market reeled as the government tried and failed to rein in soaring property values with tougher regulations and increased housing taxes. Instead, apartment prices surged in affluent areas like Seoul's Gangnam and remain high due to fears of a sharp decrease in housing supply.

      On Dec. 16, the government announced its 18th set of real estate regulations with even tougher measures to contain prices, but experts said trying to suppress demand for apartments was precisely the wrong way to go in the circumstances.

      ◆ Fly-By-Night Justice Minister Indicted for Corruption

      A confirmation hearing of justice minister nominee Cho Kuk brought up multiple allegations of corruption and nepotism in his family, prompting prosecutors to launch an investigation just 18 days after he was nominated for the position, but Cheong Wa Dae still pushed his appointment through.

      Cho finally resigned amid massive street protests and only after three members of his family had been arrested on charges of corruption involving his daughter's university admissions, insider trading and fraud in operating an academic foundation run by Cho's family. He lasted just long enough in the job to make reporting of the scandal surrounding him more difficult under the guise of prosecution reforms.

      ◆ Serial Killer Finally Caught After 30 Years

      The Hwaseong serial killer who went on a murder spree targeting women from 1986 to 1991, was finally identified after haunting public consciousness for three decades. Lee Chun-jae (56), already jailed for life for killing his sister-in-law since 1994, had lived near the scenes of the grisly murders south of Seoul. DNA traces found on evidence gathered from the crime scene led to his unmasking.

      During questioning, Lee admitted to four more murders on top of 10 known killings in Hwaseong attributed to him. A fact-finding attempt by police revealed serious flaws in the initial investigations, and a 52-year-old man who was imprisoned for 20 years after being falsely accused of a murder committed by Lee is seeking a retrial.

      ◆ Director Bong Joon-ho Bags Global Awards

      Bong Joon-ho's "Parasite" won the prestigious Palme d'Or at this year's Cannes Film Festival in France in May, making him the first Korean director to win the accolade. That was just the beginning of a string of international film awards. The movie drew more than 10 million viewers in Korea and rave reviews worldwide. "Parasite" has been nominated for the Golden Globe award for best director, best screenplay and best foreign film and even shortlisted for best original songs and best foreign film at next year's Academy Awards. 

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