“Daegu Must Lead the Rejection of the People Power Party.”.

• Kim Bu-gyeom (former Prime Minister) is running for Daegu mayor—a second bid since 2014. He said, “I want to overcome the wall of despair called regional extinction together with Daegu citizens.”
• In last week’s Gallup Korea poll, support for the People Power Party in Daegu-Gyeongbuk was 27%. The Democratic Party’s support was also 27%. Unaffiliated voters made up 42%.
• President Lee Jae-myung’s approval rating was 52%.
• Chosun Ilbo analyzed, “Judgment on the People Power Party is overshadowing ‘judgment on the administration.’” Some say, “You might think Daegu won’t fall, but it’s not safe to assume.”
• A citizen met by The Hankyoreh on Dongseong-ro said, “Do they think we’ll just vote for anyone they send? They call it innovation, but it’s nonsense.”
• Today’s Chosun Ilbo headline reads, “Are we a vending machine for the People Power Party? The shifting sentiment in Daegu.” The party’s accountability has emerged as an election variable.
• Historical Daegu mayoral elections show it’s no easy battle. Hong Joon-pyo (former Daegu mayor) won in 2022 with 79% of the vote. Since local elections began in 1995, no Democratic Party candidate has ever won. Will this time be different? Some polls suggest Kim Bu-gyeom leads all eight potential People Power Party candidates.
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What Matters Now.

“A Situation Serious Enough to Keep You Awake at Night.”.

• Lee Jae-myung (President) said, “We must swiftly transition to renewable energy.”
• “Switch to electric vehicles quickly, use heat pumps for heating—we have massive wind resources that are supposedly surplus. We need to accelerate the transition. The shift to electric vehicles is an emergency, yet progress is too slow. Even rental fleets must be overhauled more aggressively.”
• He also summarized several issues: On the undersea tunnel, he asked attendees to raise their hands, then remarked, “Most oppose it,” adding, “I agree.” Regarding the Jeju Second Airport, he stated, “Support doesn’t seem overwhelming.”
• Related Link.

Twin Shocks of Energy and Supply Chains Loom.

• The exchange rate has surpassed 1,520 won.
• The KOSPI dropped by 3%. Foreign investors have net-sold 32 trillion won worth of shares this month.
• International oil prices have exceeded $115 per barrel (Brent crude benchmark).
• Economic growth forecasts may need to be revised downward.
• Warnings of hardened logistics arteries emerge. Following the blockade of the Strait of Hormuz, the Bab el-Mandeb Strait could also face closure.
• U.S. stock markets are mixed. The S&P 500, Dow, and Nasdaq indices recorded -0.39%, 0.11%, and -0.73%, respectively.

General Bags Permitted if Pay-by-Weight Bags Run Low.

• An average of 2.7 million pay-by-weight bags are sold daily (Seoul standard)—four times the recent 3-year average of 550,000.
• The situation is not immediately critical. According to Kim Sung-hwan (Minister of Climate, Environment, and Energy), more than half of local governments have secured stockpiles for over six months.
• This means supply issues will not arise for at least a year. There are no plans for price increases either.
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Oil Panic and Warflation.

• Combining war and inflation. As naphtha prices surge, living costs are spiraling out of control.
• Solvent prices have risen, increasing laundry fees. Disposable cup prices jumped 15–20%, burdening cafes and restaurants. Lunchbox container manufacturers may need to cut production. Hospitals face shortages of disposable syringes, imposing purchase limits.
• Aviation fuel surcharges are also skyrocketing. For trans-Pacific routes, April bookings could exceed ₩250,000, May bookings ₩500,000 or more. Round-trip fares might require an additional ₩1 million.

“I Want Iran’s Oil.”.

• Trump’s words in a Financial Times interview. Childish.
• “They could blow up Kharg Island,” he warned. Overconfidence reveals underlying anxiety.
• “They don’t have defenses, we could take it very easily,” he claimed—but the situation is not that simple.
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Ground Troops Deployed, High Risk of Being Taken Hostage.

• Entering the Strait of Hormuz is like stepping into a trap. It would mean absorbing missile and drone attacks directly. “It’s akin to being trapped in a kill zone,” one analysis concludes.
• Ground troop deployment is no different. Even if uranium enrichment sites are identified, initial entry is difficult, and excavating heavy equipment would require significant time.
• Helicopter assaults are also far from straightforward.

Deep Dive.

Next Year’s Budget: 800 Trillion Won?

• This year’s 728 trillion won will be increased to 764 trillion won. With supplementary budgets, projections suggest it could approach 800 trillion won.
• The JoongAng Ilbo warned in an editorial, “Concerns are growing that the government is falling into fiscal addiction.” “In times of crisis, the pitfalls of fiscal overdrive must be guarded against, and government spending must prove its effectiveness,” it argued.
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Mandatory Spending Cuts: A First-Time Target.

• Next year’s budget aims to cut mandatory spending by 10% each. The Dong-A Ilbo editorial called it “a highly difficult task.”
• Mandatory spending accounts for 54% of the total budget, with projections suggesting it will soon exceed 60% due to rising elderly welfare costs. Calls to decisively terminate entrenched temporary and sunset projects have grown, but such cuts require immense resolve.

“A Sense of Balance Is Crucial.”.

• Some interpret Lee Jae-myung (President) as responding to Yu Si-min (author)’s ABC theory.
• Yu Si-min said, “A century ago, Max Weber (sociologist) divided politicians into those who live for politics (A) and those who live by politics.”
• Yesterday at a town hall meeting in Jeju, Lee Jae-myung stated, “I don’t think politicians should experiment with their beliefs and values” and added, “If decisions are made based on the people, what does ideology, values, or personal inclination matter?”
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“Lee Jae-myung Must Be Named the Main Culprit” Debate: A National Investigation Is Needed.

• Prosecutor Park Sang-yong (Seoul Central District Prosecutors’ Office) did indeed tell Lee Hwa-young (former Gyeonggi Province Vice Governor)’s lawyer, “Lee Jae-myung must confess to being the main culprit for her bail to be possible.”
• The Democratic Party claims the Ssangbangwool North Korea remittance case was fabricated by prosecutors. Park Sang-yong countered, “I was explaining that the Lee Hwa-young side had proposed a sentence-reduction deal.”
• The Kyunghyang Shinmun editorial concluded, “It is still too early to judge whose claims are correct.” If prosecutors pressured false testimony while offering a plea bargain, it would constitute a serious crime. Instead of verbal disputes, a truth investigation is necessary.
• The Hankook Ilbo analyzed, “The goal is ultimately to force a prosecution withdrawal.” A senior lawyer formerly a presiding judge, interviewed by the Hankook Ilbo, said, “If prosecutors merely asked the suspect to clarify their statement, it’s hard to justify dropping the indictment.”
• The Chosun Ilbo editorial insisted, “The full transcript must be made public.” “If the transcript proves a false confession, there’s no reason to delay its release,” it argued.
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Another Take.

Metropolitan Area Grows 1.9%, Honam Contracts -0.7%.

• Last year’s regional gross domestic product (GRDP) statistics were released. The overall growth rate was 1.0%—the sum of final output value newly created in each region.
• Daegu-Gyeongbuk stood at 0.0%, while Jeju saw -2.0%. The Chungcheong region recorded 0.7%.
• The metropolitan and Chungcheong areas benefited from the semiconductor boom, but other regions suffered heavily from construction sector stagnation. The Honam region contracted due to slumps in petrochemicals and shipbuilding.
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Youth Suicide and Self-Harm Cases Surge Sevenfold.

• Statistics compared to 10 years ago. The rate rose from 2.0 to 12.8 per 100,000 adolescents.
• Reasons included depression (42%), conflicts with family or friends (21%), and other psychiatric issues (15%).

Ulsan and Yeongdeok for Large Reactors, Gyeongju and Gijang for SMRs.

• Results of the nuclear power plant site public offering. Korea Hydro & Nuclear Power plans to finalize the decision by June.
• SMRs (small modular reactors) target completion by 2035, while two large reactors are scheduled for 2037–2038.
• Special subsidies are provided at 2% of construction costs, with base and operator subsidies paid over 60 years based on power output (80 years for SMRs).

Why Did OpenAI Abandon Sora?

• There was a time when everyone was scrambling to create Studio Ghibli-style memes, but Sora was a failed model. The Wall Street Journal called it “a shocking ending.”
• Video models cost more than language models and generate no revenue. Plus, the world is shifting toward agents. Beyond memes, the challenge became productivity innovation. Already lagging behind Anthropic’s Claude, carrying a non-profitable model would have been a burden.
• At its peak, it had over 1 million users, but that dropped below 500,000, with daily losses reaching $1 million.
• Discontinuing Sora also halted a $1 billion investment negotiation with Disney.
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Mr. Kim, the Middle Manager, Vanishes.

• Today’s lead story on the front page of the JoongAng Ilbo. In companies these days, highly paid junior developers are the top priority for voluntary retirement. There was a time when headhunters lined up in Pangyo to meet developers during lunch breaks, but the world has changed. It’s an AI-driven employment shock.
• The proportion of involuntary unemployment among those in their 20s–30s rose from 27% in 2015 to 38% last year.
• The number of people in their 30s who are “resting” has increased to 310,000.
• Samsung Electronics has more employees in their 50s than in their 20s. The proportion of employees in their 20s fell from 31% in 2022 to 24%. SK Hynix saw a drop from 30% to 15%.
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The Fix.

2,950 Dermatologists, 15,000 Skin Clinics.

• Eight out of ten clinics are run by general practitioners, not specialists. Only 1,516 clinics are operated by certified dermatologists.
• There is a way to distinguish: clinics run by specialists are labeled “○○○ Dermatology Clinic,” while those run by general practitioners are labeled “○○ Clinic, Specializing in Dermatology.”
• The Korean Dermatological Association argues for a license system for opening clinics.
• Conversely, some advocate diversifying qualifications for cosmetic medical procedures—allowing licensed nurses, estheticians, or laser therapists to perform treatments, even if they are not doctors.
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How Far Will the State Cover Essential Medical Accidents?

• An amendment to the Medical Dispute Mediation Act, limiting criminal penalties, is nearing National Assembly passage. Critics argue the criteria for gross negligence remain unclear.
• The aim is to reduce judicial risks in essential care and prevent workforce attrition.
• Hong Soon-chul (Korea University Anam Hospital professor) emphasized, “The state should bear compensation for essential medical accidents.” Kang Hee-kyung (Seoul National University Hospital professor) noted, “Criminal penalties should focus on the process, not just outcomes.”

Whose Money Is the Retirement Pension?

• Everyone has a different view. The government wants to use it as a policy tool, financial companies eye the fee market, and unions care about governance. All claim good intentions, but workers’ voices remain weak.
• Min Joo-young (Shinyoung Securities Executive Managing Director) proposed the Dutch Collective Defined Contribution (CDC) model as an alternative, where labor and management jointly oversee the fund while the government stays as a facilitator. There is also a need to adopt the “arm’s length principle,” maintaining distance like Canada’s Pension Plan Investment Board (CPPIB).
• Min Joo-young suggested four criteria:
• First, a return-centric approach. All decisions must link to long-term real returns.
• Second, clarifying fiduciary responsibility. Clear accountability for failure creates incentives for success.
• Third, role separation. Management, oversight, policy, and execution should not be mixed.
• Fourth, guaranteeing individual choice. Collective efficiency must not infringe on individual rights.
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ICYMI.

Ministry of National Defense Returns to Yongsan.

• The relocation will cost 17.9 million USD.
• Since April 2022, the Ministry has shared a building with the Joint Chiefs of Staff.
• If the Ministry moves into the former Presidential Office building by July, its directly controlled units will relocate in a chain reaction.

National Museum of Korea to Reintroduce Admission Fees Next Year.

• It charged 2,000 won until 2008 before switching to free entry. The timing and amount of any increase have not yet been decided.
• Last year, it recorded over 6.5 million visitors, ranking 4th globally.

Corrupt Inner Circle? All Financial Group CEOs Secure Re-election.

• No surprises. Jin Ok-dong (Shinhan Financial Group Chairman), Im Jong-ryong (Woori Financial Group Chairman), and Bin Dae-in (BNK Financial Group Chairman) all succeeded in their re-elections. Despite President Lee Jae-myung’s strong criticism that a “corrupt inner circle is taking turns to devour,” they smoothly passed board and shareholder meetings.
• Ultimately, it depends on foreign shareholders and proxy advisory firms (ISS).
• KB Financial’s foreign shareholder stake is 76%. Hana Financial is 67%, Shinhan Financial 61%, and Woori Financial 47%. Even if authorities intervene, re-election is not difficult if ISS approves.
• Shin Jang-sik (Lawmaker, People’s Party for Nation Rebuilding) criticized, “A long-term power structure is solidifying where specific individuals progress from bank president, subsidiary head, to financial group chairman. Structural issues—opaque governance, weakened board/shareholder control, hiring corruption, familial favoritism, and unfair loans—are recurring.”
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Worth Reading.

Prosecutorial Disempowerment vs. Police Monopoly.

• Short for [Complete Stripping of Prosecutorial Investigation Authority] and [Complete Monopolization of Police Investigation Authority].
• The Hankyoreh has persistently argued in columns that even supplementary investigative powers must be entirely stripped, but lawyer Kim Kyu-hyun has countered.
• Kim Kyu-hyun pointed out, “The Hankyoreh columns never address what recourse remains for prosecutors without supplementary investigative powers when police—who control public security, intelligence, physical force, and case-closure authority—cover up or investigate passively.”
• “The dogma of religiously pursuing prosecutorial disempowerment will create gaps in criminal justice, and weary of those gaps, the public will again yearn for a strong authority that eradicates crime,” he argued.
• Kim Kyu-hyun emphasized, “True reform lies in meticulous design that removes emotion and dogma, blocks abuse, and still achieves the original purpose of protecting the people.”
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Can the Democratic Party Monopolize Standing Committee Chairs?

• It may be a pressure tactic by Lee Jae-myung (Democratic Party Leader), but it is a clear breach of promise and an overreach.
• The Democratic Party and People Power Party received 51% and 45% of the vote in the last general election, respectively. The vote margin is about 6%, but the seat count difference is stark: 175 vs. 108.
• Sung Han-yong (Senior Hankyoreh Reporter) proposed two conditions.
• First, the majority party must pledge to claim all standing committee chairs in the 2028 general election.
• Second, they must win the election.
• The argument is that they must proceed with legitimacy.
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Lessons from the Pandemic Supply Chain Shock.

• The global economy, though it experienced the COVID-19 pandemic, may never fully return to its pre-shock state. We are transitioning from an era of free trade to one of industrial security—a shift far beyond mere panic-buying of toilet paper.
• Kim Hyun-soo (Dong-A Ilbo Industry News Section 1 Chief) emphasized, “A strategic one-team approach, combining private-sector manufacturing capabilities and government diplomatic power, will be key to navigating the waves of the energy-industrial security war.”
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The Trump Pain Index.

• The index combines the S&P500, U.S. Treasury yields, mortgage rates, gasoline futures, and presidential approval ratings. The logic: if stock prices and approval ratings fall while rates, inflation, and oil prices rise, Trump suffers.
• Is this really the case? Trump’s malignant narcissism has been described as reaching the level of personality disorder. He even claimed, “I can attack just for fun,” and has launched unprovoked attacks.
• Will a rising pain index push him to TACO again?
• NH Investment & Securities analyzed, “The diminishing impact of Trump’s verbal bombs themselves signals the depletion of his trust capital.”
• The Trump Pain Index has risen to its highest level since his inauguration. While the market’s fear gauge (VIX) peaked last April, the Trump Pain Index is now at its highest. Over time, the pressure to TACO grows stronger.
• Lee Sang-eun (The Korean Economic Daily Washington correspondent) pointed out, “The prerequisite for TACO trade is market dominance.” “Last year, the world focused on Trump’s mouth during tariff negotiations because he held unilateral authority—but war doesn’t grant him that power,” he explained. Trump losing his grip means greater global uncertainty.
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People Power Party’s Chance to Escape the Yoon Again Trap.

• The Dong-A Ilbo’s proposal: A constitutional amendment to limit the president’s authority to declare martial law has emerged. It would nullify the declaration immediately if the National Assembly does not approve it within 48 hours.
• An uncontroversial clause, yet if People Power Party opposes it, passage becomes impossible.
• In an editorial, the Dong-A Ilbo stressed, “By participating in the amendment, People Power Party could create an opportunity to break free from Yoon Suk-yeol’s shadow.”
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