SEOUL - PRESS BULLETIN; August 04, 2009

UNCLAS SECTION 01 OF 05 SEOUL 001224

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; August 04, 2009

TOP HEADLINES
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Chosun Ilbo
Cable News YTN President Gu Bon-hong Offers
Sudden Resignation

JoongAng Ilbo
ROK Companies to Supply Car Batteries for BMW and GM


Dong-a Ilbo
ROKG Pulls Plug on Badly Run Small and Midsized Businesses, Supports
Blue-chip Midsized Enterprises

Hankook Ilbo
Another Clash between Police and Ssangyong Motor Labor

Hankyoreh Shinmun
Fraternal Feuding within Kumho Asiana Group Is Not Over; Fired
Brother Takes Legal Action to Fight His Dismissal

Segye Ilbo
Rapid Increase in Foreign Direct Investment in ROK
Boosts Economic Recovery

Seoul Shinmun
Childcare Leave Has Yet to Take Root among Civil Servants


DOMESTIC DEVELOPMENTS
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The ROKG is moving to tighten financial rules to freeze funds
related to terrorism and weapons of mass destruction, which
observers say could target North Korea. (JoongAng, Dong-a, Seoul,
Segye)

According to the Ministry of Unification, the ROKG will spend 3.57
billion won of inter-Korean cooperation funds to finance ROK aid
groups' humanitarian programs to the North. (All)

ROK nuclear envoy Wi Sung-lac left for Hawaii yesterday to discuss
the North Korean nuclear issue with U.S. Special Envoy for the
Six-Party Talks Sung Kim. (Segye, MBC, VoiceofPeople)


INTERNATIONAL NEWS
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Regarding the recent AP story that China has declined Washington's
suggestion to discuss a North Korea contingency plan, China's Global
Times reported that the U.S.'s proposal is a tactic to drive a wedge
between China and North Korea, adding that the moment China begins
discussing the plan with the U.S., Sino-North Korean relations will
end. (Chosun)

A North Korean defector who was granted refugee status by the U.S.
this June said on July 30, "The U.S. is only pretending to accept
North Korean defectors" and urged the USG to take more active steps.
(Chosun)

The Pentagon is seeking to speed deployment of an ultra-large
"bunker-buster" bomb on the most advanced U.S. bomber as soon as
July 2010, amid concerns over perceived nuclear threats from North
Korea and Iran. (Chosun, Seoul, Segye, all TVs)


MEDIA ANALYSIS
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-North Korea
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Right-of-center JoongAng Ilbo and conservative Dong-a Ilbo reported
that the ROKG is moving to tighten financial rules to freeze funds
related to terrorism and weapons of mass destruction, which
observers say could target North Korea.

All newspapers reported that the ROKG decided yesterday to resume
humanitarian aid to the North by allocating 3.57 billion won of
inter-Korean cooperation funds to finance ROK aid group programs.

JoongAng Ilbo carried an editorial about a nuclear connection
between North Korea and Myanmar. It said: "North Korea is assisting
Myanmar's nuclear development, presumably for various reasons.
North Korea may want to obtain food in return for its nuclear
cooperation, or may intend to provoke the U.S. by fuelling suspicion
over nuclear proliferation. What is most worrisome is that North
Korea is developing additional nuclear programs indirectly through
Myanmar. This could pose a direct threat to us. Also, nuclear
development by autocratic Myanmar, which neighbors Thailand, Laos,
China, India and Bangladesh, could jeopardize the stability of the
entire Asian region."

Regarding the recent AP story that China has declined Washington's
suggestion to discuss a North Korea contingency plan, conservative
Chosun Ilbo picked up a story by China's Global Times, a sister
paper of the People's Daily. The story said that the U.S. proposal,
which the ROK backs, is a tactic to drive a wedge between China and
North Korea, adding that the moment China begins discussing the plan
with the U.S., Sino-North Korean relations will end.

In a related editorial, Chosun Ilbo said: "In the event of a North
Korea contingency, observers speculate that China is more likely to
resolve the situation through the UN Security Council than to
intervene in North Korea militarily... Since North Korea is also a
UN member state, it will not be easy for the ROK to gain priority
status over the North Korean region just because the two Koreas
share the same history and ethnicity. At the UNSC, China and Russia
have veto power, which means that they can reject any change if it
does not suit their national interests. In the end, the best way to
prepare for a post-Kim Jong-il future is to strengthen our relations
with the U.S. and China at the same time."

Iran
Conservative Segye Ilbo replayed a story by the online version of
the U.K.'s Times, which quoted sources as saying that Iran completed
a research program to create weaponized uranium in the summer of
2003 and that it could feasibly make a bomb within a year after an
order from its Supreme Leader.


OPINIONS/EDITORIALS
--------------

ROK SHOULD DEVELOP ITS OWN ATTACK HELICOPTERS
(Seoul Shinmun, August 4, page 31)

There is a controversy over whether the ROK should introduce
next-generation attack helicopters from overseas or should develop
its own indigenous attack helicopters. Major attack helicopters
such as the 500MD model introduced in 1970 and the AH-IS Cobra
deployed in 1988 will become too decrepit to be deployed for
operations between 2015 and 2018. Moreover, the last remaining
battalion of 24 Apache helicopters, which plays a key role in
deterring North Korea, allegedly will be pulled out of the ROK by
2012, when wartime operational control (OPCON) of troops will be
transferred to the ROK. Therefore, the ROK should urgently make a
decision in either direction.

Confusion arose when the Defense Ministry and the Defense
Acquisition Program Administration expressed their interest in
introducing used Apache helicopters. Their logic is that if the ROK
seeks to develop its own attack helicopters, it will be hard to
deploy them within 10 years, potentially posing a danger to national
security. The problem is that (used) Apache helicopters provided by
the U.S., whose unit price is 21.6 billion dollars, are 25 years old

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and the ROK should purchase by bulk 500 kinds of discontinued parts
that cover 30 years. This led the ROKG to review its plan (to
purchase the used helicopters) from the scratch.

The ROK is the world's third largest importer of weapons following
China and India. We import more than 70% of our weapons from the
U.S. The ROK, which owns more than 600 helicopters, is the world's
seventh largest possessor of helicopters but does not produce
indigenous ones. This is an outflow of national wealth and (an
unnecessary) technological dependence. Product prototypes of the
Korean utility helicopter "Surion," which have been developed for a
cost of 1.3 trillion won, came out last month despite (initial)
opposition and doubt. 90% of the Surion helicopter's parts
reportedly can be utilized to develop attack helicopters. There is
no reason to import used helicopters when the ROK can manufacture
more than 200 helicopters by 2012 and can export them to overseas.



WE SHOULD BE CAUTIOUS ABOUT NUCLEAR CONNECTION BETWEEN NORTH KOREA
AND MYANMAR
(JoongAng Ilbo, August 4, page 34)

There is mounting suspicion that North Korea is helping Myanmar
develop its nuclear programs. In 2003, U.S media reported that
North Korean technicians were actively working in Myanmar. In 2006,
suspicions were raised at a U.S. Senate hearing that North Korea and
Myanmar were cooperating (in nuclear development). This June, a
U.S. Senate hearing addressed the same suspicion and last month U.S.
Secretary of State Hillary Clinton expressed concerns over military
cooperation between North Korea and Myanmar at the ASEAN Regional
Forum (ARF). An Australian newspaper reported on August 2, citing
the evidence of defectors, that Myanmar is building a nuclear
reactor with the help of North Korea, which is expected to be
completed in 2014.

(Suspicions over) a nuclear connection between the two countries
have not yet been confirmed. However, given North Korea's past
record, there seems to be a high possibility (of a nuclear
connection.) It is considered a fact that North Korea has
cooperated with Iran and Pakistan in developing nuclear and missile
programs. Also, it is almost an established fact that North Korea
helped Syria build a nuclear reactor. In particular, it has been
confirmed that North Korea introduced uranium enrichment technology
and some equipment to Pakistan.

North Korea is assisting Myanmar's nuclear development, presumably
for various reasons. North Korea may want to obtain food in return
for its nuclear cooperation, or may intend to provoke the U.S. by
fuelling suspicion over nuclear proliferation. What is most
worrisome is that North Korea is developing additional nuclear
programs indirectly through Myanmar. Even though North Korea has
detonated nuclear bombs in the past, the characteristics of
plutonium require that their explosive capability should be tested
again every 10 years. However, North Korea reportedly cannot
produce stable plutonium for the long term because the Yongbyon
nuclear reactors are too old. Therefore, North Korea may want to
conduct these types of tests through a proxy such as Myanmar.
Moreover, North Korea may seek to cooperate with Myanmar to build a
uranium nuclear bomb, which is easily manufactured, does not require
a nuclear test and can be possessed for a long time. This could
pose a direct threat to us. Also, nuclear development by autocratic
Myanmar, which neighbors Thailand, Laos, China, India and
Bangladesh, could jeopardize the stability of the entire Asian
region.

The ROKG should pay keen attention to the moves made by the two
countries by thoroughly exchanging information with the
international community. If this nuclear connection is confirmed
true, we should put the international coordination system in place
to immediately punish and neutralize (the two countries.) The ROK
should not let North Korea become a breeding ground for
international nuclear proliferation.


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HOW CAN SEOUL FIND A HEARING OVER N. KOREA?
(Chosun Ilbo, August 4, 2009, page 31)

Senior officials of the Obama Administration asked China on several
occasions to discuss a contingency plan in case the North Korean
regime collapses following the death of Kim Jong-il. But as it did
during the Bush Administration, China refused.

China's position is that such discussions would only agitate North
Korea. Beijing also appears to feel that there is still not enough
trust in its relationship with Washington to discuss such sensitive
issues. But the mere fact that the prospect of a North Korea
without Kim Jong-il keeps being tabled in discussions between the
U.S. and China is extremely significant. It means that the fate of
Korea could again become an issue of discussion between two outside
powers.

In a front-page article on Monday, Chinaview, a sister publication
of the People's Daily, reported that the ROK was behind the U.S.
government's efforts to press China to form a contingency plan in
case of Kim's death. It claimed that this is part of an effort to
drive a wedge between China and North Korea, adding that the chances
of a North Korean regime collapse are slim.

It may be unrealistic to expect the North Korean regime to collapse
as a result of international sanctions or blockades. But the
consequences of the death of its supreme leader are extremely
difficult to forecast even for China, especially in a country like
North Korea where the head of state is treated as a virtual deity.
North Korea watchers say Kim's illness is likely to recur in the
coming years. That mean a major storm is brewing on the Korean
Peninsula.

While it refuses to discuss the issue, it is unimaginable that China
has not researched or prepared a contingency plan in case of Kim's
death. Beijing has been steadily increasing troops deployed along
its North Korean border, which can only be seen as part of a plan in
case of sudden changes in the North.

For now, there is a strong possibility that China may block any
attempts led by the ROK to reunify the Korean peninsula. Moreover,
Chinese military intervention in North Korea, using a mutual
assistance treaty with Pyongyang as an excuse, is probably included
among Beijing's options. For us, this is the worst-case scenario.
If that happens, then our only choice would be to deal with the
situation by turning to our alliance with Washington.

In the event of a North Korean contingency, observers speculate that
China is more likely to resolve the situation through the UN
Security Council than to intervene in North Korea militarily.
According to foreign diplomatic sources in Beijing, China views the
UNSC as the most viable option in case of a regime collapse in North
Korea. Since North Korea is also a UN member state, it will not be
easy for the ROK to gain priority status over the North Korean
region just because the two Koreas share the same history and
ethnicity.

At the UNSC, China and Russia have veto power, which means that they
can reject any change if it does not suit their national interests.
The ROK is neither a permanent nor a non-permanent member. Japan is
elected as a non-permanent member each time. Out of the 15 member
nations in the Security Council, how many would be willing to go
against China and side with the Republic of Korea?

In the end, the best way to prepare for a post-Kim Jong-il future is
to strengthen our relations with the U.S. and China at the same
time. We must gather all our diplomatic capabilities and at the
same time come up with our own contingency plan for North Korea.

(This is a translation provided by the newspaper, and it is
identical to the Korean version.)



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STEPHENS