Geopolitics

North Korea Vows Preemptive Strike Against US Ahead Of Sanctions Vote

KCNA (North Korea), AP, REUTERS, CNN

Worldcrunch

PYONGYANG- With the UN set to vote on imposing sanctions against North Korea for its recent nuclear test, Pyongyang issued perhaps it's most virulent threat to date, saying it would exercise the right to pre-emptive strikes against Washington.

“Since the United States is about to ignite a nuclear war, we will be exercising our right to preemptive nuclear attack against the headquarters of the aggressor in order to protect our supreme interest,” read a statement from a spokesman for the North Korean Foreign Ministry, which was carried on the official KCNA news agency, according to Reuters.

High Contrast

Experts say Pyongyang does not have the capacity to carry out a nuclear strike against the U.S. However, it is believed to have enough nuclear fuel for several crude nuclear devices. Still the specificity of the latest threat raises the stakes in a showdown that reignite open conflict on the Korean peninsula, and beyond.

The United Nations Security Council is meeting today to consider its response to the third nuclear test carried out by North Korea on February 12, reports the AP. The proposed resolution would make it significantly harder for North Korea to transfer funds, strengthen existing sanctions and inspections of goods exported by and imported to the country.

China -- North Korea's key ally -- reportedly reached a deal with the U.S. on the wording of the draft resolution, which means the sanctions are likely to get the required unanimous approval at the U.N. Security Council on Thursday.

North Korea sees U.N. sanctions as part of an aggressive, U.S.-led conspiracy against it writes CNN.

UN Security Council Assembly via Lowlova

In anticipation of this resolution, earlier in the week the North threatened to scrap the armistice that stopped the Korean War in 1953 and carry out strikes against the United States and South Korea, which are in the midst of military drills in the region says CNN.

The AP reports that a spokesperson for Australia’s Foreign Minister said on Thursday that the proposal for a North Korean embassy in Canberra would be on hold as the UN Security Council makes a decision.

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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