South Korea and Japan to Swap Energy Resources.

• Takaichi Sanae (Japanese Prime Minister) met with Lee Jae-myung (President) in Andong, South Korea – Lee’s hometown.
• They agreed to strengthen supply chain cooperation against the energy crisis triggered by the US-Iran conflict.
• Subtle differences emerged in their framing. While Lee stated, “It is important for South Korea, China, and Japan to respect each other, cooperate, and seek common interests,” Takaichi excluded China, saying, “Let us promote peace and stability in the Indo-Pacific region.”
• The atmosphere was cordial. When Takaichi remarked, “I have parliamentary duties tomorrow and am unsure if I should drink,” Lee responded, “Shall I call and see if you can stay an extra day?”
• Related Link.

What Matters Now.

Tight Race in Seoul and Busan?

• Poll gaps are narrowing despite variations between surveys.
• The Democratic Party leads in all regions, but margins fall within error ranges – and considering turnout, actual election results could differ.
• Lee Jung-kye (Democratic Party Leader) appeared on Kim Eo-jun’s News Factory and said, “Daegu and Gyeongbuk are tough, Busan-Ulsan-Gyeongnam is winnable but difficult, and Seoul is also becoming increasingly challenging.”

Pyeongtaek: A Clash Between ‘New Lee Jae-myung’ and ‘Old Democrats’.

• Kim Yong-nam (Democratic Party candidate) and Cho Kuk (People’s Revolutionary Party candidate) are heading toward a head-to-head showdown.
• Cho Kuk attacked, “Kim Yong-nam is an undemocratic candidate,” while Kim retaliated, “Cho Kuk was never a Democratic Party member.”
• The two remain in a tight race within the margin of error, with Yoo Eui-dong (People Power Party candidate) polling around 20%.
• Related Link.

‘Shy Kim Bu-gyeom’ and ‘Shy Choo Kyung-ho’.

• Daegu is also close, but variables abound.
• There may be hidden supporters of Choo Kyung-ho (People Power Party candidate) not captured in polls, and analyses suggest there are also significant numbers of ‘shy Democrats’ reluctant to openly declare support.
• Ultimately, the winner will be decided by which side mobilizes more voters to the polls.
• As the election nears its end, conservative consolidation is gaining momentum.
• Related Link.

Last-Minute Coalition Variables.

• Pyeongtaek may see a coalition between the Democratic Party and the People’s Revolutionary Party. Observers note that Lee Jung-kye (Democratic Party Leader)’s remark, “We have no choice but to follow the public sentiment,” reflects a step back.
• Busan Buk-gap is more complicated. Jang Dong-hyeok (People Power Party Leader) is wary of Han Dong-hoon (Independent Candidate)’s parliamentary entry. Polls consistently show Han leading over Park Min-sik (People Power Party Candidate).
• Related Link.

“Allies Urge Restraint” as Iran Attack Paused.

• Qatar and Saudi Arabia have requested the U.S. to hold off on attacking Iran.
• TACO continues, but Donald Trump (U.S. President) warns, “If no deal is reached, we will launch massive airstrikes.”
• Iran has sent a new proposal, but it omits Trump’s demands, including halting uranium enrichment.
• The desperate side is not Iran—it’s Trump. His approval rating has dropped to 37% in a New York Times poll.
• Related Link.

10-Week War Costs 43 Trillion Won.

• The U.S. has spent $29 billion on the Iran war—a situation demanding an exit strategy.
• Brent crude futures surged to $112.
• All three major stock indices fell: the S&P 500, Dow, and Nasdaq dropped -0.67%, -0.65%, and -0.84% respectively.
• The Kospi index, which exceeded 8,000 last week, fell for three consecutive days, briefly hitting 7,200.

Presidential Residence Relocation Project Jumps from 1.4 Billion to 4.1 Billion Won.

• Originally, the suspicious entry of unqualified contractors was concerning—but the budget suddenly ballooned.
• Suspicions arose that the 21 Gram connection to Kim Keon-hee (President Yoon’s wife) was the cause.
• It was also revealed that Kim Dae-gi (then Presidential Chief of Staff) pressured the Ministry of the Interior and Safety to create and disburse additional funds.
• The special investigation unit has requested arrest warrants for Kim Dae-gi, Yoon Jae-soon (then Presidential Chief of Protocol), and Kim Oh-jin (then Presidential Management Secretary).
• Related Link.

Deep Dive.

Samsung Electronics Strike D-1.

• Final negotiations begin today. A significant portion has already been agreed upon.
• Samsung Electronics sent an official letter to the union, stating that 7,087 workers must report for normal shifts daily. Even if the strike proceeds, they insist on maintaining normal production lines per the court’s injunction.
• The union countered by demanding non-union workers be prioritized for deployment.
• The final sticking point is equity between semiconductor and other divisions. The union insists on allocating 70% to semiconductor departments and distributing the rest based on performance, while the company has proposed 60%.

Can Starbucks Be Saved?

• The Tank Day controversy has escalated into a boycott movement.
• Chung Yong-jin (Shinsegae Chairman) quickly issued an apology, but the backlash shows no sign of subsiding.
• Suspicions persist that this was intentionally orchestrated by Chung Yong-jin from the start.
• This is not a situation that can be easily swept under the rug. A thorough investigation and follow-up measures are essential.
• In an editorial, Kyunghyang Shinmun warned, “Unless the conglomerate leadership changes their mindset, corporate activities will face ongoing turbulence.”

Household Debt Enters the 2,000 Trillion Won Era.

• Household debt grew by 14 trillion won in the first quarter, reaching 1,993 trillion won.
• A 3.5% increase over the past year.
• Housing-related loans surged by 8.1 trillion won.
• The rise also reflects increased “debt investing” (borrowing to trade stocks).

Another Take.

Swing Voters Are Shaking Up the Game.

• Seoul, Daegu, Busan, and Gyeongnam all have undecided voters hovering around 20%.
• Han Gyu-seop (Professor, Seoul National University) noted, “If undecided voters account for 20% in polls dominated by politically engaged respondents, their actual share among all voters is likely higher.”
• Park Sung-min (CEO, Political Consulting Min) remarked, “In a climate where ‘shy conservatives’ have multiplied since the martial law crisis, whether these voters turn out could be a decisive factor.”
• Related Link.

Baemin Is Uber’s Grandchild.

• Germany’s Delivery Hero owns 99% of Woowa Brothers (the corporate name behind Baemin).
• Uber became the largest shareholder by acquiring additional Delivery Hero shares. It holds a 19.5% stake and an option to purchase an additional 5.6%.
• Rumors persist that Uber and Naver will jointly acquire Woowa Brothers.
• Globally, the food delivery market is shaping up as a duopoly between DoorDash and Delivery Hero.
• Related Link.

Renewable Energy Roadmap for the Next Decade.

• 10% renewable energy share will be raised to 30%.
• Solar power will expand from 30.8GW to 87GW by 2030, onshore wind from 2.1GW to 6GW, and offshore wind from 0.4GW to 3GW.
• According to the Ministry of Climate, Energy, and Environment’s plan, greenhouse gas emissions could be reduced by more than a quarter.
• The goal is to halve renewable energy generation costs. Solar power costs will be reduced to 80 won per kWh by 2035.
• Balcony solar panels will be distributed to 2 million households.

The Fix.

Coal Power as a ‘Security Power Source’? Blocking Renewables and Leaking 10 Trillion Won.

• Coal power is being designated as a ‘security power source’ under a ‘Special Act on Support for Coal Power Phase-Out’ awaiting National Assembly approval.
• The rationale: use coal while it’s still viable, given immediate power shortages.
• The biggest obstacle to the 100GW renewable energy target is the 19GW capacity of 21 coal plants. Rigid coal infrastructure dominates the grid, leaving no room for new renewable energy.
• Despite its name, the ‘phase-out support act’ lacks a timeline for actual decommissioning. If the 21 plants operate until their remaining design lifespan, the government could owe 10.7 trillion won in capacity payments.
• Ironically, labeling coal as a ‘security power source’ while obstructing renewable transition could undermine energy security itself.
• Lim Jang-hyeok (Climate Solutions Researcher) argued, “Energy security cannot be achieved by clinging to imported-fuel-based coal power. A clear roadmap for coal phase-out, renewable expansion, and grid infrastructure transition must be presented.”
• Related Link.

Immediate Response Team for Daily Civil Complaints.

• Yeongyang County in North Gyeongsang Province has 16,000 residents, with 54% single-person households and 43% aged 65 or older.
• The county’s Immediate Response Team for Daily Civil Complaints—now in its 7th year—has handled over 15,000 cases. They fix insect screens, replace light fixtures, repair sinks, and even inspect wheelchairs.
• Yeongyang County provides free material costs (up to 100,000 KRW) for basic livelihood recipients and single elderly households aged 65 or older.

Public Rental Housing Residents: 2.7x More Likely to Marry.

• Time until marriage: 4.3 years for public rental, 4.7 years for private rental, 6.1 years for homeowners.
• Analysis suggests urgency to marry due to lighter mortgage burdens.
• Park Jin-baek (Korea Research Institute for Human Settlements researcher) proposed, “Rather than pushing people to buy homes via policy loans, it’s better to use public rental housing as a housing ladder—helping residents transition to homeownership in their late 30s.”
• Related Link.

ICYMI.

Entrepreneurship for All, 62,944 Applicants.

• 5,000 will be selected from this pool. It’s the largest government competition to date.
• Applications mentioning AI as a keyword accounted for 30%.

Starbucks Global Apologizes.

• Starbucks Global spokesperson stated, “This should never have happened,” adding, “We are fully aware of the profound pain and wounds this has caused to those mourning the victims, bereaved families, and all who dedicated themselves to South Korea’s democratization.”
• Reuters, BBC, The Guardian, and other international outlets also covered the story.

Worth Reading.

Don’t Confuse Excess Tax Revenue with Surplus Budgets.

• Kim Yong-beom (Blue House Policy Director) faced massive backlash after proposing that excess tax revenue be distributed as a national dividend.
• However, excess tax revenue does not automatically become surplus. Excess tax revenue simply means more taxes were collected than budgeted—if government bond issuance is reduced by the same amount, no surplus may arise.
• Lee Sang-min (Narasalim Research Institute researcher) emphasized, “The key is not excess tax revenue but increased tax revenue.” The fact that more was collected than budgeted is not the point. If tax income has risen, the budget must be restructured accordingly.
• If AI is the keyword, additional investments could be made in energy infrastructure. It could also be spent on welfare, education, and youth entrepreneurship.
• Lee Sang-min noted, “Rather than hastily judging total amounts through partisan biases, each case should be examined individually.”
• Related Link.

Did Samsung Electronics’ Union Overstep Management Rights?

• Lee Jae-myung (President) noted, “Protecting corporate management rights is also necessary.”
• Management rights include the authority to negotiate with workers and determine compensation.
• Jeon Seong-in (former Hongik University professor) stated, “The Samsung Electronics union did not order a wage increase but proposed negotiating the level of wage hikes,” adding, “This is not a seizure of management rights but a call for their proper exercise.”
• The controversy over the Samsung Electronics strike stems partly from its scale, but “the Constitution also protects the rights of workers who earn enough to live.”
• The argument is that even “aristocratic unions” have the right to strike, and government intervention could set a dangerous precedent.
• Related Link.

A Whale in a Fishbowl: The National Pension Service’s Trap.

• The National Pension Service is printing money. Last year alone, it earned 230 trillion won; this year, over 250 trillion won in profits.
• Naturally, this is cause for celebration—but the pension’s earnings are merely paper gains. When the time comes to sell stocks, the market could swing by the same magnitude.
• Even now, its holdings exceed the 15% limit by over 10 percentage points.
• Ha Hyun-ok (JoongAng Ilbo columnist) noted, “While the pension, conscripted into propping up the stock market, has swollen its coffers, prudent distancing is needed to avoid a mutually destructive trap.”
• Related Link.

From “Dog Daughters” to “Ants.”.

• Stock investors grew from 6.19 million at the end of 2019 to 14.56 million at the end of last year. Samsung Electronics has 4.2 million shareholders, SK Hynix has 1.18 million.
• This is an era where conglomerate chairmen are revered as “Jae-Dragon,” “Tony,” or “God Eui-sun.”
• Jeong Woo-sang (Chosun Ilbo columnist) pointed out, “The aristocratic unions demanding ‘N% of operating profit as performance bonuses’ can no longer be political allies to ‘dog daughters’ turned small shareholders.”
• “Democratic Party supporters who became small shareholders might prefer the president and government to be ‘fund managers’ maximizing investor profits rather than guardians of ideology. (Omitted) Unlike the ‘dog daughters’ armed with blind fandom, the ‘ants’ diving into stocks coldly calculate their economic interests.”
• “The Democratic Party and Lee Jae-myung growing increasingly uncomfortable with unions—unfamiliar, but this itself is change. Whether supporters awakened to markets and capital will change Lee Jae-myung, or whether Lee will betray them, remains to be seen.”
• Related Link.