REAL HOUSEHOLD INCOME DROPS IN Q1

REAL HOUSEHOLD INCOME DROPS IN Q1

[Anchor Lead]
In the face of rising inflation, real household income for the first quarter of this year fell by 1.6 percent compared to the same period last year. Most notably, real earned income saw a nearly 4 percent decline, the sharpest drop for a first quarter since such records have been kept.

[Pkg]
According to Statistics Korea, the median monthly household income for the first quarter of this year recorded slightly over 5.12 million won, or around 3,800 dollars, 1.4 percent higher than the corresponding period last year. However, given the 3-percent inflation rate, real household income declined by 1.6 percent. It's the largest decrease for Q1 inflation-adjusted income in seven years. Earned income, in particular, has shrunk by 1.1 percent despite high inflation. The real earned income was down 3.9 percent, the sharpest decline for the first quarter on record.

[Soundbite]
Lee Jin-seok (Statistics Korea): People in the top-20 percent income bracket saw their bonuses decrease. Some large corporations cut their employee bonuses.

Average monthly household spending in the first quarter recorded around 3.98 million won, or 2,900 dollars, up 2.5 percent on year. Net consumer spending, which excludes interest payments and social insurance fees, has increased 3 percent. However, inflation-adjusted spending remained unchanged. The increase in spending is not significant, but the income increase rate is even lower, meaning the household surplus has declined by 2.6 percent on year. The bottom-20 percent income bracket was the only one to post household deficit -- minus 360,000 won, or 260 dollars -- showing it remains difficult for low-income earners to make ends meet.

S.KOREA-JAPAN-CHINA SUMMIT

[Anchor Lead]
The leaders of South Korea, Japan, and China are set to meet for a summit in Seoul on May 26 and 27. This summit, resumed for the first in over four years, will host Japanese Prime Minister Fumio Kishida and Chinese Premier Li Qiang. According to the presidential office, the meeting is poised to rejuvenate trilateral cooperation among the three nations.

[Pkg]
President Yoon Suk Yeol, Japanese Prime Minister Fumio Kishida and Chinese Premier Li Qiang will hold summit talks in Seoul on May 26th and the 27th. It's the first three-way summit in 4 years and 5 months since the last 8th session took place in Chengdu, China in December of 2019. No follow-up summit was held thereafter amid the COVID-19 pandemic and strained relations between South Korea and Japan and between China and the U.S.

[Soundbite]
Kim Tae-hyo (Principal Deputy Nat'l Security Adviser): The summit will be a turning point for the three nations to fully restore and normalize their cooperation.

The upcoming meeting will discuss ways to restore trilateral trust, spur economic development and improve quality of life. Expanding the scope of three-way cooperation to the Indo-Pacific region and global arena will also be addressed. It also remains to be seen whether the joint declaration at the end of the summit will include the North Korea issue.

[Soundbite]
Kim Tae-hyo (Principal Deputy Nat'l Security Adviser): The three sides will exchange views on responding to complex global crises and contributing to peace and prosperity.

It will be Chinese Premier Li Qiang's first visit to South Korea since taking office last year. President Yoon will also hold one-on-one talks with Fumio Kishida and Li Qiang separately. A wide range of topics such as economy, security and cultural exchanges is expected to be discussed. Talks with Japan may also touch on the recent controversy involving Line Yahoo. Then on Tuesday right after the trilateral summit, the president of the United Arab Emirates Mohammed bin Zayed Al Nahyan will also make a state visit to South Korea. Seoul's top office said it will welcome the president with utmost respect fitting the status of being the first leader of the UAE, a key ally in the Middle East, to pay a state visit to Korea.

FX RATE SURGE IN N. KOREA

[Anchor Lead]
After sealing its borders for over three years, North Korea reopened them last year, yet continues to face severe economic challenges. In efforts to revitalize their planned economy, the North Korean authorities have prohibited unauthorized commercial activities and foreign currency transactions. However, these measures have inadvertently led to a surge in exchange rates and ongoing price instability.

[Pkg]
North Korea shut its borders due to the COVID-19 pandemic for more than 3 years, even halting contraband trade with China. As a result supplies ran short and prices skyrocketed in the regime.

[Soundbite]
Choi Eun-ji (alias) (Fled N. Korea in Oct. 2023 (VOICE MODIFIED)): Chinese clothes that cost 50,000 won (USD 55) shot up tenfold. Condiments costing 20,000 won (USD 22) surged to 400,000 won (USD 444) per kg.

Against the backdrop, North Korea's ministry on public security, equivalent to South Korea's national police agency, announced a statement last August vowing to tighten economic controls. This reportedly included a ban on unauthorized commercial activity between individuals and companies as well as foreign exchange transactions. Also at the time, North Korean leader Kim Jong-un is known to have ordered officials to rein in on the North Korean won-dollar exchange rate by all means. However, the measures prevented dollar circulation in the market which in turn further raised the exchange rate. One U.S. dollar traded in the nine-thousand won range in North Korea's currency in August last year. The rate surpassed 10-thousand for the first time ever in November and continued to rise to hover above 12-thousand as of March.

[Soundbite]
Choi Ji-young (Korea Institute for Nat’l Unification): Restrictive, intervening policies reduce circulation as people hold on to foreign currency. This raises the exchange rate, depreciating the North Korean won.

According to sources familiar with North Korean affairs, Kim Jong-un, realizing the gravity of the situation this year, sacked some of his senior economic officials and since March, and once again allowed commercial activity and foreign currency transactions. However following the reversed ban, pent up demand exploded. And the won-dollar exchange rate at one point in early April topped an all time high of 14-thousand won. In the 8 months since the August statement, the exchange rate surged more than 60%. It's said that amid chaos caused by poor policy making, even working-level officials are doubtful of their higher-ups' fiscal management capabilities.

GOV'T SEMICONDUCTOR AID PACKAGE

[Anchor Lead]
Recently, the quest for semiconductor supremacy has intensified among major nations, including the United States. In response, the South Korean government has rolled out comprehensive support measures to bolster its stake in this global competition.

[Pkg]
Earlier this month, the Korean government had announced a financial assistance program amounting to 10 trillion-plus won for the semiconductor industry. The government again presented an all-around subsidy plan for the semiconductor sector yesterday. The plan exceeds all expectations, adding up to 26 trillion won, nearly 19 billion US dollars.

[Soundbite]
Yoon Suk Yeol (President): Countries are staking their fates on semiconductors. It’s directly related to people's lives, assisting the semiconductor industry is for the good of all.

The key to the subsidy plan is comprehensive assistance for finance and research and development. The largest portion of the subsidy, about 18 trillion won or over 13 billion dollars, will be allocated to industry financing. Chip makers will be allowed to borrow from a fund of 17 trillion won, nearly 12.4 billion dollars, at a special rate...so that their large-scale facility investment load will be lightened. Also, a 300-billion-won semiconductor ecosystem fund formed to support startups and small enterprises will be enlarged to 1.1 trillion won, or more than 802 million dollars. The construction of a semiconductor mega cluster in the southern Gyeonggi region will be sped up. The government plans to help build infrastructure such as power and water facilities. Five trillion won, about 3.6 billion dollars, will be invested to cultivate key components of semiconductor development such as research and manpower. However, some critics note that the assistance may not be enough compared to the United States or Japan which provides direct subsidies in the excess of several billion dollars.

[Soundbite]
Choi Sang-mok (Deputy Prime Minister for Economy): Investment grants are provided mainly for the countries without existing manufacturing facilities to give incentives.

The Korean government said more than 70% of the planned subsidies are for the benefit of small and medium enterprises. The government added that detailed strategies will be announced soon for the relatively less competitive system semiconductor sector.

"EX PRES. ROH, SLUSH FUND TO SK"

[Anchor Lead]
Roh So-yeong, the daughter of former president Roh Taewoo has alleged that a slush fund worth tens of billions of won, was transferred to SK Group in the early 1990s by his father, under his presidency. Currently embroiled in a divorce and asset division lawsuit with Chey Tae-won, the chairman of SK Group, Ms. Roh claims this fund facilitated major acquisitions and expansions within the conglomerate.

[Pkg]
The marriage between the daughter of an incumbent president and the son of a business tycoon back in 1988 had won the nation's attention. Following his retirement in 1993, however, ex-President Roh Tae-woo was jailed for creating a slush fund and joining the December 12th military coup in 1979. Meanwhile, SK Group's mobile communication business had propelled the company to the second highest spot in the corporate world. But their seemingly perfect marriage fell apart. In 2015, SK Group Chairman Chey Tae-won suddenly announced that he has an illegitimate child and wants a divorce. In the first divorce trial held in December 2022, the court ordered him to pay his wife 66.5 billion won, roughly 48.6 million U.S. dollars, in division of assets. In the second trial, Roh Soh-yeong fought to prove her contribution to the accumulation of Chey's assets estimated to be more than 5 trillion won or over 3.6 billion dollars.

[Soundbite]
Roh Soh-yeong (Director, Art Center Nabi (April)): Both sides presented their defenses on all points.

Roh's key weapon was the slush fund of her late father, ex-President Roh Tae-woo. She claimed that her father had given 34.3 billion won, approximately 25 million dollars, to the Cheys - 30 billion won, nearly 22 million dollars in today's exchange rate, to former SK head Chey Jong-hyun and 3.2 billion won, or about 2.35 million dollars, to his son-in-law. She provided as proof a promissory note and a memo from the late SK chair Chey given to her father in return for the money. She said that 30 billion won from her father's slush fund was used to take over a securities firm in 1992, an undertaking that had cost 63.7 billion won, over 46.5 million dollars, in total. Roh Soh-yeong also claimed that when Chey Tae-won bought up SK shares in 1994, her father had given one billion won, roughly 730,000 dollars, as dowry, and sent 130 million won, or 95,000 dollars, to pay gift tax for the stock purchase in 1997. She reportedly emphasized her father's presence by saying that the late former president had waited for a visit from his son-in-law in his sickbed. She claimed that her family had contributed to the growth of SK Group during their 36-year marriage and Chey's position as an ex-president's son-in-law had played a big part in his rise to the SK Group chairmanship. Consequently, she demands a fair share of her husband's cash asset amounting to over two trillion won, or over 1.4 billion dollars.

SEOUL BATTLING MAYFLIES

[Anchor Lead]
Recently, swarms of oriental mayflies, endearingly nicknamed 'Tinkerbell,' have overrun the streets of downtown Seoul, causing significant discomfort far beyond their delicate appearance. The early surge of mosquitoes has also prompted emergency pest control measures across the city.

[Pkg]
Seongsu-dong, one of the most popular destination in Seoul frequented by young people. Underneath street lamps, there are swarms of insects. It's the oriental mayfly, also known as "Tinker Bell" because of its large wings. People try to chase them away with their hands. Some just run away.

[Soundbite]
(Seoul resident): It's so bad that I got scared eating. How did they end up here.

This repeatedly unpleasant situation is causing a lot of inconvenience to the public and local vendors.

[Soundbite]
Lee Jong-soon (Vendor): It almost looks like snow. It hurts the business because it deters customers who are scared of the bugs.

Quarantine workers try to fight the bugs by sprinkling water at night and pesticides during the day.

[Soundbite]
Lim Tae-shik (Seongdong-gu Dist. Public Health Center): The mayfly lives in grade 2 water. They don't pose harm to people and are attracted to light at night. We use pesticides at daytime when they sleep.

Meanwhile, mosquitos, another unwelcome guest in summertime, are also showing their presence even before the start of summer. Because of the early hot spells, the mosquito activity index in Seoul surpassed 60 this week, climbing to the Attention level. That's nearly double the number recorded a year ago.

[Soundbite]
Lee Seung-chan (Seoul Metropolitan Government): It rained a lot this spring, creating good conditions for larvae. Temperatures were also higher than in previous years.

The Seoul Metropolitan Government and other local governments will install more insect traps and continue to remove larvae from water-purifier tanks.

SCORCHING SUMMER EXPECTED

[Anchor Lead]
Just one week after a heavy snow warning in Gangwon-do Province, intense heat has gripped the region. Along the coast, where temperatures have soared above 33 degrees Celsius, beaches are swamped with tourists seeking to cool off.

[Pkg]
The Baekdudaegan Mountain Range is blanketed in snow. The first-ever heavy snow warning was issued in the area in mid-May. Exactly one week after the heavy snowfall, it's hot summer in the coastal areas. People dive into the ocean to enjoy the early start of summer.

[Soundbite]
Chung Jin-ho (Suwon resident): It was too hot, but after swimming I feel refreshed and cooled down.

A motor boat with tourists navigates the ocean, and the beach is crowded with holiday makers trying to escape the heat.

[Soundbite]
Lee Ji-eun (Goyang resident): It was very humid and hot these days, but here it's nice and cool.

Daytime highs in Gangneung soared to 33.3 degrees Celsius on Thursday, 9 degrees higher than in previous years, marking the hottest day this year. Summer is in full swing at the beaches. In cities, people try to stay cool by wearing short sleeves and using parasols. At bus stops, cooling equipment is already on.

[Soundbite]
Kim Ha-neul (Seoul resident): It's still May, but it's already scorching outside. It's probably going to be unbearable in August.

Meteorologists say because of the early hot spells, this summer is predicted to be hotter and rainier than in previous years.