Worst Drought: Gangneung’s 75% Water Rationing.

• 75% water rationing means only a trickle, just 25%, comes out of the tap.
• Obong Reservoir’s water level has fallen below 15%.
• Yesterday, 71 fire trucks transported water across the Seoul metropolitan area and Gyeongbuk.
• Up to 100mm of rain is expected nationwide by tomorrow, but Gangwon-do will only see 5-10mm.

Anti-Trump Alliance.

• Yesterday, the Shanghai Cooperation Organization summit took place in Tianjin, China. Xi Jinping (Chinese President), Vladimir Putin (Russian President), Narendra Modi (Indian Prime Minister), Masoud Pezeshkian (Iranian President), and Recep Tayyip Erdoğan (Turkish President) gathered.
• On the 3rd, China will hold a military parade for the 80th anniversary of Victory Day. Kim Jong-un (North Korean Chairman) is likely to sit to the right of Xi Jinping. Speculation suggests he will depart by train today.
• A North Korea-China-Russia summit, if held, would be a first.
• The BBC analyzed, “It will be quite the photo-op and could serve as diplomatic leverage for Xi Jinping against the U.S.”
• Related Link.

What Matters Now.

Shall We Debate Prosecutorial Reform?

• Lee Jae-myung (President) said, “I might preside over the debate myself.”
• Jeong Seong-ho (Minister of Justice) and the Democratic Party seem to be at odds.
• The Democratic Party’s reform proposal involves splitting the prosecution into the Serious Crimes Investigation Agency and the Prosecution Agency, with the former under the Ministry of the Interior and Safety.
• Jeong Seong-ho believes investigation and prosecution should be separated but remain under the Ministry of Justice. He insists the Prosecution Agency should have supplementary investigative powers. (The name, whether Prosecution Agency or Prosecution Office, is yet undecided.)
• Min Hyung-bae (Democratic Party lawmaker) remarked, “The Minister seems to have overstepped.” Jeong Cheong-rae (Democratic Party leader) said, “If we don’t pedal the reform now, the bicycle will fall.”
• Chu Mi-ae (Democratic Party lawmaker) pointed out, “There’s even a fear that the prosecution’s mentality has been tainted through the prosecutorial regime.”
• The Cho Kuk Innovation Party claims, “Supplementary investigative powers are essentially direct investigative powers.” Hwang Un-ha (Cho Kuk Innovation Party lawmaker) criticized it as “not even worth mentioning, utterly anti-reform.”
• Related Link.
• Related Link.

Im Eun-jung’s Five Prosecutorial Villains.

• Bong Wook (Presidential Office Senior Secretary for Civil Affairs), Lee Jin-soo (Vice Minister of Justice), No Man-seok (Deputy Chief of the Supreme Prosecutors’ Office), Seong Sang-heon (Director of the Prosecution Bureau, Ministry of Justice), Kim Soo-hong (Director of the Prosecution Division, Ministry of Justice).
• Im Eun-jung (Chief Prosecutor of Seoul Eastern District) remarked, “Even the Minister of Justice is dominated by the prosecution,” adding, “It seems like they’re just trying to increase the number of chief prosecutors, which is disheartening.”
• A Presidential Office official warned, “You shouldn’t engage in debates targeting specific individuals,” clearly aimed at Im Eun-jung.
• Gong Bong-sook (Prosecutor at Seoul High Prosecutors’ Office) posted on the internal network Epros, “I acknowledge the need to reduce investigative powers due to human rights violations from excessive prosecutorial actions,” but also pointed out, “However, saying prosecutors should not investigate at all is akin to abandoning truth discovery and victim protection.” The implication is that anyone who has worked as a prosecutor would never say such a thing.
• Related Link.
• Related Link.

Lee Jae-myung’s Approval Rebounds.

• According to a Korea Gallup poll. After the pardon of Cho Kuk (former leader of the Cho Kuk Innovation Party), his approval rating, which had dropped to 56%, has recovered to 59%.
• 58% said the Korea-U.S. summit benefited national interests. Among Democratic Party supporters, 86% agreed, while 55% of People Power Party supporters disagreed.
• Support and opposition for the Yellow Envelope Act were 42% and 38%, respectively. 69% of Democratic Party supporters were in favor, while 77% of People Power Party supporters were against it.
• Related Link.

Deep Dive.

Yoon’s Tax Cuts Leave Burden Unchanged.

• It is expected to remain at 18.7% next year, following 18.6% this year. The OECD average is 25%.
• Taxes cut by Yoon will reduce revenue by about 80 trillion won over Lee Jae-myung’s five-year term.
• If the tax reform bill passes, revenue will increase by over 35 trillion won, but it won’t restore previous levels.
• Kang Byung-goo (Professor at Inha University) pointed out, “A long-term roadmap to increase the tax burden is necessary.” Jung Se-eun (Professor at Chungnam National University) emphasized, “Structural reforms like pensions are urgently needed.”
• Related Link.

National Debt Hits 1,301 Trillion Won.

• Next year, interest payments alone will be 34 trillion won. By 2029, it is expected to reach 1,789 trillion won.
• Government spending will rise from 673 trillion won this year to 728 trillion won next year.
• Revenue growth is sluggish. It increases from 652 trillion won to 674 trillion won.
• The national debt-to-GDP ratio is 51.6% as of the end of this year.

Why Low Debt Ratios Can Still Be a Problem.

• Korea is not a reserve currency country like the US or Europe.
• Japan is different because 90% of its national debt is held by its own citizens and financial institutions.
• In Korea, foreigners hold 24%.
• If national debt increases, it could lead to a credit rating downgrade, potentially causing a decline in the won’s value, foreign investor withdrawal, weakened investment sentiment, and a vicious cycle of slowed growth.
• There is no fixed standard, but the OECD and IMF recommend 60%. The Seoul Newspaper pointed out, “Household debt is more dangerous.” As of the end of last year, it was 75.3%.
• Related Link.

Trap of Prolonged Low Growth.

• Next year doesn’t look promising either. At this rate, the economic growth rate will lag behind inflation for five consecutive years. This surpasses the record of the second oil shock from 1978 to 1981.
• A lower growth rate than inflation means real income is stagnant.
• The OECD predicts South Korea’s potential growth rate for next year at 1.8%. Falling short of this potential growth rate indicates a failure to fully utilize economic resources like labor and capital.
• Related Link.

Did They Sell Positions for Gold?

• There was more than just bags, shoes, and watches. Evidence shows Lee Bae-yong (Chairperson of the National Education Commission) handed a 10-don gold turtle to Kim Kun-hee. The special prosecutor only indicted Kim Kun-hee on the ‘Do Myung-gun’ charge first. This refers to the Deutsche Motors, Myung Tae-kyun Gate, and Geonjin Monk cases. The issue of selling positions hasn’t even been touched yet. The second round awaits with the Yangpyeong Expressway, Butler Gate, and Sambu Construction.

Like Moonlight Shining Brightly.

• Kim Geon-hee said this to her lawyers right after being indicted and detained.
• “Just as moonlight shines brightly on the darkest night, I too will endure this time by looking at my truth and heart,” she said.
• Yoon Seok-yeol (former President) also once spoke of the moon during his impeachment trial.
• “Looking at this case, it feels like chasing the moon’s reflection on a lake, with talk of orders given or received when nothing actually happened,” he said.
• Related Link.

Another Take.

Can Lee Jin-sook Complete Her Term?

• If the amendment to the Broadcasting Act proposed by the Democratic Party passes, she must step down.
• The Presidential Office is considering dismissing Lee Jin-sook (Chairperson of the Korea Communications Commission) due to a warning she received from the Board of Audit and Inspection. The Board found her appearance on a YouTube broadcast, where she criticized a specific political party, to be a breach of political neutrality.
• The Chosun Ilbo pointed out, “The Board’s warning does not equate to a disciplinary request.”
• Lee Jin-sook’s term lasts until August 2026.
• Woo Sang-ho (Senior Secretary for Political Affairs) remarked, “There are rumors of her running for Daegu Mayor,” adding, “If she plans to run, shouldn’t she resign?”
• Park Sung-hoon (Spokesperson for the People Power Party) argued, “By the same standard, Lim Eun-jung should have already been dismissed.”
• Related Link.
• Related Link.

Special Court for Rebellion Proposed.

• Kim Yong-min (Democratic Party lawmaker) argued, “We cannot entrust rebellion cases to a court that has lost trust.”
• Chosun Ilbo criticized in an editorial, saying, “This is about Democratic Party prosecutors investigating and Democratic Party judges ruling to produce verdicts that perfectly suit the party’s tastes.”
• JoongAng Ilbo pointed out, “There is no precedent except for the special courts after the 1948 Anti-Communist Committee and the 1961 fraudulent election following the April 19 Revolution.”
• Related Link.
• Related Link.

Trump’s SOS: Religion Moves Him.

• Trump’s comment before the summit, claiming “a purge or revolution is happening in Korea,” is not something to overlook. The ‘Yoon Again’ faction in Korea might have fed Trump misinformation through America’s MAGA channels.
• Moon Byung-ki (Donga Ilbo Political Editor) spoke with a diplomatic source who noted, “The mood seems to have shifted as impeachment opposition groups use religious freedom as their banner.”
• Moon Byung-ki emphasized, “We must actively respond before the cultural war clouds swallow the Korea-U.S. alliance.”
• Related Link.

The Fix.

How 21 Rent Fraud Victims Recovered 2.9 Billion Won in Two Years.

• There are many articles about rent fraud victims forming cooperatives to recover their losses, but the key lies in the details, not the outcome.
• In May 2023, a rent fraud case worth 17 billion won erupted in Dongtan, Hwaseong, Gyeonggi Province. Out of 145 victims, 21 formed a cooperative.
• The operational structure of the TanTan Housing Cooperative is as follows.
• Imagine a house worth 100 million won with a deposit of 120 million won, a typical “can” rent.
• Step 1: Victims contribute 10,000 won each to form a cooperative and secure a 10% stake in the house.
• Step 2: The cooperative takes over the property from the landlord (fraudster) and signs new lease agreements with the members (victims).
• Step 3: A fund is created to convert the remaining 90 million won into monthly rent. (3.5% annual interest)
• Step 4: The deposit is reduced to 50 million won, converting it to a half-deposit plus monthly rent, and the deposit difference is returned to the members.
• Step 5: Rent income is used to repay the principal and interest. (At this stage, if a victim wants to leave, they can be given the remaining deposit, and a new tenant can be brought in.)
• Victims can recover 90% of their losses and leave immediately, or reinvest 50% as a deposit and continue living while paying rent.
• The key is to create a fund at a low interest rate to reduce the deposit and generate cash flow. From the cooperative’s perspective, they can recover losses while owning the property by securing just over half of the loss amount.
• In the case of the TanTan Housing Cooperative, the total building value was 2.77 billion won, while the total deposit (loss amount) was 2.93 billion won. The 21 victims pooled 260 million won to establish the cooperative, raised 1.86 billion won to acquire the building, and converted it to a half-deposit with a 910 million won deposit. The fund’s financial cost was 2.7%, and the conversion rate from deposit to rent was 5.7%.
• The fund’s interest cost was 42.93 million won annually, while the 21 officetels generated 90.48 million won in annual rent income. Currently, 94% of the losses have been recovered.
• Looking back two years, the situation was bleak, with homeowners in jail and properties under seizure, leaving victims with the prospect of eviction or inheriting their rented homes.
• There are several lessons.
• First, the problem was the deposit system. Even a half-deposit significantly reduces risk. Transitioning through half-deposit to orderly monthly rent is necessary.
• Second, it was possible because there were no senior claims. Public funds entering as subordinate claims could also solve senior claim issues.
• Third, joining a guarantee insurance could have reduced costs, but it was rejected because the landlord and tenant were the same.
• Fourth, a low-interest fund enabled cash flow. Social support is essential. Choi Kyung-ho (Auditor of TanTan Housing Cooperative) pointed out, “If the government allocates just a portion of its housing support budget, sustainable public rentals can be increased.”
• Related Link.

Helicopters Can’t Extinguish Every Wildfire.

• In Korea, over 500 wildfires occur annually, with helicopters extinguishing more than 70%.
• Korea’s forest stock increased from 130.4㎥ in 2011 to 168.7㎥ in 2021. Dense forests become fuel during fires. Adding more helicopters isn’t the solution.
• Ko Ki-yeon (President of the Korean Society of Wildfire Science) emphasized, “We need to establish a prevention model led by local residents.” The idea is to shift residents from being seen as protection targets to key players in disaster response.
• Related Link.

Life of Surviving Workers.

• 287 workers have died from industrial accidents in just the first half of this year.
• The suffering of those who survive such accidents is as heavy as death. Only 29% return to their previous jobs, and the reemployment rate is a mere 27%. Industrial accident insurance covers only 70% of the average wage. Some even say, “It would have been better to die.”
• Yoo Young-kyu (National Editor, Hankook Ilbo) analyzed, “Industrial accidents shake not just the individual but the entire family’s life.”
• Related Link.

Luxury Pool Villa Near Nuclear Plant.

• Residents of Naari, Yangnam-myeon, Gyeongju, where the Wolsong Nuclear Power Plant is located, used 6.7 billion won in compensation to build a luxury pool villa pension. They even took out an additional loan of 2.8 billion won due to insufficient funds.
• The villa has eight rooms, with a nightly rate of 960,000 won. Despite many bookings, no profit was made. Rumors circulated that they were deliberately running at a loss, and the village head was replaced, but ultimately, they couldn’t repay the loan, and it was auctioned off for 4.1 billion won.
• It was said, “Not a single 10-won coin was touched, and 10 billion vanished into thin air.”
• About 500 million won remains in the village account.
• Residents call the support funds “blood money.” Kim Jeong-hye (Korea Daily reporter) pointed out, “Despite living with the risk and fear of radiation leaks, it’s common for tens to hundreds of billions of won distributed annually to be squandered.”
• Related Link.
• Related Link.

ICYMI.

Are Car Tariffs Now 25%?

• Trump has yet to sign the executive order. Korean cars are paying 25%, while Japan and the European Union (EU) are at 27.5%.
• Hyundai and Kia are holding out without raising prices, reducing profits instead. Toyota’s second-quarter losses reach $3 billion. Hyundai and Kia recorded losses of $600 million and $570 million, respectively.
• Yoo Myung-hee (former Trade Minister) said this: “Negotiations are never truly over. In this new era, endless negotiations may continue. We face the difficult task of producing concrete results and details.”
• Related Link.

Morning with Kim Eo-jun, Afternoon with Choi Wook.

• Forbes Korea’s list of the top 100 power YouTubers in Korea ranks Choi Wook’s Maebul Show and Kim Eo-jun’s News Factory at 31st and 33rd, respectively. The ranking is based on estimated earnings.
• Concurrent viewers are around 240,000 for News Factory and 220,000 for Maebul Show. Subscribers number 2.75 million and 2.23 million, respectively.
• Jeong Cheol-woon (Editor-in-Chief of Media Today) pointed out, “Before dismissing them as ‘Democratic Party broadcasts,’ the media industry needs to understand the context of News Factory and Maebul Show’s growth.”
• View counts or subscriber numbers do not necessarily correlate with earnings.
• Related Link.
• Related Link.

Fewer Births Than North Korea.

• 230,000. That’s the number of babies born last year. China had 9.5 million, the U.S. 3.6 million, and even Japan had 720,000.
• Even North Korea had 320,000 as of 2023.
• Kang Cheon-seok (Chosun Ilbo Advisor) emphasized, “It’s not the number of robots, but the number of people designing robots that reflects a country’s capability.” Population matters, but the quality of the population is crucial.
• For reference, North Korea’s total fertility rate in 2023 is 1.7, while South Korea’s is 0.7. North Korea’s under-five mortality rate is 19.5 per 1,000 births. South Korea’s is 0.5.
• Related Link.
• Related Link.

Salt Bread Cost Controversy.

• “Bread prices are going wild.” YouTube channel Shuka World criticizes ‘breadflation’ by opening a pop-up store selling bread for less than half the usual price.
• Salt bread costs 990 won, white bread 1,990 won, and campagnolo 2,990 won.
• Hankyoreh points out, “Mass production and cost reduction using fandom are impossible for small business owners,” adding, “Rent, utilities, and labor costs must be considered.” Some criticize it as behavior akin to cyber wreckers.
• There are claims that the cost of raw salt bread dough alone for franchise bakeries reaches 1,400 won.

Worth Reading.

Isolation and Disconnection, the Manosphere of Hatred.

• The Manosphere is a portmanteau of Man and Sphere.
• Political nihilism became mainstream through GamerGate in 2015 and Jordan Peterson’s (psychologist) Channel 4 interview in 2018. Korea followed a similar path, establishing a vast Manosphere.
• Kim Nak-ho (Drexel University professor) describes the Manosphere as a discourse space where a pseudo-scientific worldview, claiming men are oppressed and must overcome women, is accepted as truth. He notes that to support this pseudo-science, various theoretical nonsense about genetics and sociological conspiracy theories about male oppression have become a cultural norm.
• Men in the Manosphere are unlikely to be happy.
• “The tragedy is that while they self-destruct, most are somewhat aware of their own decline into ruin but refuse to acknowledge it, failing to reflect on themselves. They project their unfulfilled satisfaction and deficiencies onto others, especially women and social minorities like migrant workers, perpetuating this vicious cycle. Hating someone and expressing it explicitly can sometimes provide an intense, primal pleasure. This pleasure can momentarily help them endure their own desolation. They generally view the world through a zero-sum game mindset, believing ‘we’ lose because of ‘them,’ and try to fill their void with exclusivity and hatred. Of course, that void remains unfilled.”
• Kim Nak-ho suggests two solutions. First, more role models are needed, and second, the anti-discrimination law must be passed. A powerful societal narrative is needed, embedding the idea that embracing and kindly treating diverse individuals is a fundamental value of our society, not just a platitude but institutionalized.
• Related Link.

500 Protest Messages for Kim Moon-soo.

• When asked, “Who would you nominate between Jeon Han-gil (Jeon Han-gil TV CEO) and Han Dong-hoon (former People Power Party leader)?” he answered ‘Han Dong-hoon’ and lost a chunk of votes.
• The Democratic Party and the People Power Party have 5.12 million and 4.44 million members respectively, but only 630,000 and 350,000 actually voted in the party leader elections. This suggests that around 10% of hardcore members are shaking the parties.
• Kim Seung-ryeon (Dong-A Ilbo Editorial Director) pointed out, “Hundreds of thousands paying 1,000 won in party dues are meddling in the lives of tens of millions of voters.”
• “The grand premise that party members are the owners of the party seems plausible but has a trap. (…) If we find an easy way for anyone, member or not, to vote in party elections, we could move closer to an American-style primary. If 5 million people could vote in the presidential candidate primaries and party leader elections, whether for the Democratic Party or the People Power Party, it could prevent the overrepresentation of the Democratic Party’s 630,000 and the People Power Party’s 350,000.”
• Related Link.

Journalists Allowed, Documentary Directors Not.

• On January 19, JTBC reporters present at the Seoul Western District Court disturbance received awards.
• At the same scene, Jung Yoon-seok (documentary director) was fined 2 million won and is appealing.
• Many rioters claiming to be YouTubers were present. The court stated, “Jung Yoon-seok is clearly distinguishable from other defendants,” yet convicted him for “trespassing on a controlled court premises.”
• Hong Jin-soo (Kyunghyang Shinmun Social Affairs Editor) criticized, “Recognizing freedom of expression based on affiliation with a media company is clearly anachronistic.” The boundaries of media have blurred, but it’s a reminder not to lump different things together from the start.
• Related Link.

Fiscal Trilemma.

• Korea’s national debt-to-GDP ratio is projected to rise from 49.1% to 51.6% next year, reaching nearly 58% by 2029.
• The pace is fast, but the G20 average is 83%.
• Ahn Sun-hee (Hankyoreh Editorial Writer) warns of a potential fiscal trilemma, saying, “There’s no need to panic.” It’s impossible to maintain a low national debt ratio, high welfare levels, and low tax burdens all at once. Either welfare must be sacrificed, taxes increased, or the government must bear the debt.
• “What is the most desirable choice in terms of sustainability and fairness? Faced with an unavoidable fiscal trilemma, both the government and the public must come together to address this issue.”
• Related Link.

Fiscal Addiction: A Greater Threat Than National Debt.

• If you can borrow, then do so. Just repay diligently. The problem is the mindset of “I’ll borrow until this year and start saving next year.” Dependence leads to addiction.
• Tax hikes face backlash, but borrowing and spending are seen as something that will somehow work out. No Won-myung (Maeil Business Newspaper Editorial Writer) warned, “We must fear debt.”
• “When deficit spending becomes a habit, you turn into France or Greece overnight. Even when crisis hits, if citizens addicted to fiscal spending shrug it off, the next stop is South America.”
• Related Link.