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South Korea aims for military independence as Asia threats rise

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When Kim Il Sung’s troops stormed into Seoul in the early days of the Korean war, scores of South Korean soldiers scrambled atop the advancing Soviet T-34 tanks to detonate explosives and grenades.

Although mostly futile in slowing the North Korean advance, the bravery of those suicide squads — fighting before international support arrived to the peninsula en masse — demonstrated the sacrifices South Koreans were prepared to make to save their country.

Today, after almost seven decades of relative peace under the blanket of US security, military planners in Seoul are again readying for the possibility of defending South Korea alone.

President Moon Jae-in has embarked on military reforms aimed at rapidly improving the armed forces’ technological prowess while simultaneously preparing for far fewer conscripts as the country’s rapidly ageing population declines thanks to low birth rates.

The sweeping changes, according to former military officials and analysts, will have implications across the region.

South Korea is broadening its focus from the singular challenge of deterring attacks from North Korea’s nuclear-armed Kim regime. It is also reducing its long-held dependence on American troops. The shifts tacitly acknowledge the dual threats of waning US commitment and China’s military expansionism. The strategy also reflects the lingering wariness over territorial and historical disputes with Japan.

“What they are trying to do is have a stronger, independent capability that better prepares them for contingencies vis-à-vis North Korea but also potential US abandonment, the rising China threat and increasing suspicion about militarisation in Japan,” said S Paul Choi, principal at Seoul-based political risk advisory StratWays Group.

South Korea’s annual defence bill is already high compared with those of many countries of a similar size and wealth. Military spending as a percentage of government expenditure was 12.7 last year, according to Stockholm Peace Research Institute data, ahead of 9.2 per cent in the US and the UK’s 4.5 per cent.

The defence ministry is set to spend a further Won300tn ($275bn) in 2021-25 — annual increases of about 6 per cent.

Seoul has also unveiled big-ticket armaments, including plans to build a $1.7bn aircraft carrier, enabling South Korea to “proactively respond to threats from all directions”.

South Korean defence spending outpaces rivals

The changes follow several years of trepidation in both Washington and Seoul that Donald Trump would make good on threats to reduce the US military footprint in the region, potentially pulling out some of the 28,500 American troops stationed in South Korea.

In Seoul, fears of a sudden US withdrawal have even reignited discussions over whether South Korea should have its own nuclear weapons as a deterrent against Kim Jong Un’s arsenal.

“If North Korea does not co-operate with nuclear talks and keeps its nuclear weapons . . . we have to rethink about arming ourselves with nuclear weapons,” said opposition party leader Kim Chong-in.

Fears of immediate American abandonment have subsided with the election of Joe Biden, who has vowed to strengthen US alliances.

But Mr Trump’s treatment of long-term allies — including demands from the White House that Seoul quintuple its payments for American security — refocused attention on the long-term trajectory of the US-South Korea relationship.

US remains the big troop presence in Asia-Pacific

Many experts believe South Korea’s military expansion was inevitable.

“The South Korean people need to be grateful for 70 years of solid support that the United States has provided us,” said Lieutenant General Chun In-Bum, a retired South Korean special forces commander. “But I don’t expect another 70 years of unilateral support. We need to be more independent, just to be a good ally.”

According to General Vincent Brooks, the retired four-star general who led the combined US Forces Korea from 2016-18, the US alliance structure in Asia will have to “change its orientation” to support peace across the Indo-Pacific region in the face of the growing challenge from China.

“This is another dynamic that is happening. I think it is on the horizon, maybe not the next two to three years, but the next 10 to 20 years,” General Brooks said.

But as South Korea reinforces its military capabilities, new problems will emerge, experts warned. The build-up could send unintended signals of aggression or weakness, inviting miscalculations or adventurism from countries including North Korea, China and Russia.

There are also concerns that the South Korean military is developing its technological capabilities before addressing more fundamental flaws.

Lt Gen Chun said that while the increased budget was encouraging, he was “not comfortable” as long as basic shortcomings, including equipment and logistics, remained unaddressed.

“High-tech weapons are no replacement for people,” he said. “South Korean forces need to focus on the basics for the individual soldier . . . I’m talking about a good rifle, a good first aid kit.”

To ensure stability — according to Gen Brooks, Lt Gen Chun and Mr Choi — it will be vital that significant changes in US or South Korean military posture are clearly communicated between the allies, and not one side making a unilateral decision.

“People need to understand that this little piece of land is critical to the balance of north-east Asia,” said Lt Gen Chun. “Before money or anything else we need to talk so that we understand each other.”



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Turkey bans crypto payments for goods and services

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Turkey has barred the use of cryptocurrencies to purchase goods and services in an effort to protect consumers against volatility and illegal activity, threatening a boom in the country’s fast-growing digital money markets.

The central bank published a regulation in its official gazette on Friday that prohibits the direct and indirect use of crypto assets as payments. The anonymous use of virtual money “may cause non-recoverable losses” and “undermine the confidence in methods and instruments used currently in payments”, a statement from the bank said.

Turkey has the largest volume of cryptocurrency transactions in the Middle East and ranks 29th out of 154 countries worldwide, according to a report last year by Chainalysis, a US-based blockchain analysis company.

Turks have poured money into digital money in recent years to hedge against double-digit inflation and a 34 per cent drop in the value of the lira against the dollar since the start of 2019. The lack of regulation and taxation has also made the asset popular, and the trend mirrors a global surge in crypto investments.

The new measures come during a time when many countries are grappling with how to regulate digital currencies, which often fall between different national watchdogs and stretch through international boundaries. In the US, for example, tax authorities have this year sought information from exchanges about users executing large transactions.

Bitcoin, the word’s dominant digital coin, hit a record of almost $65,000 earlier this week, while Coinbase, one of the biggest crypto exchanges, listed on US public markets and is now valued at about $64bn.

The Turkish boom poses “significant risks” when crypto is used for payments, the central bank said, citing the lack of regulatory oversight, excessive volatility, the potential for use in illicit activities, theft of digital wallets and the irrevocable nature of transactions required.

The ban, the first of its kind in Turkey, comes after the financial authorities signalled regulations were in store. Last month the Treasury ministry said it was concerned about the level of growth.

The regulation does not prohibit ownership of crypto assets for investment but the new rules are unclear about when a purchase of these assets constitutes a payment, said Wolfango Piccoli, co-president of Teneo Intelligence. Banks are excluded, which means users may still transfer money from their bank accounts to crypto exchanges.

“Turkish authorities have been trying to keep a tight grip on the payment ecosystem for some time,” he said, pointing to the five-year ban on PayPal, the US-based online payment system.

President Recep Tayyip Erdogan has urged Turks to sell their vast foreign currency holdings to prop up the lira, particularly after he sacked the central bank governor last month and sparked a sell-off in financial markets over worries about his meddling in monetary policy.

The latest central bank move “may be aimed at protecting the value of the national currency and directing investment to the bourse”, said Enver Erkan, chief economist at Tera Securities in Istanbul, referring to the country’s regulated Borsa Istanbul financial exchange.

“Crypto has emerged as a very serious alternative because [Turkish investors] are afraid of the stock market, the exchange rate is unpredictable and gold is expensive,” he added.



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Korea’s Coupang hands cash to bereaved families at workers’ funerals

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When Park Mi-sook held a funeral ceremony for her late son Jang Duk-joon in Daegu, South Korea, last October, managers from his former employer Coupang gave her an envelope containing Won3m ($2,600) in cash.

According to handwritten funeral registries, the ecommerce company, which listed in New York last month with a valuation of $80bn, also handed cash to the families of at least two other recently deceased workers.

The payments have done little to assuage the families’ grief over the deaths, which they attribute to overwork. The bereaved families of the three people, who previously worked at logistics centres owned by Coupang, are considering suing the company and its subcontractors. 

“We are seeking an apology, preventive measures and compensation for my son’s death but have been unable to have talks with the company in earnest,” said Park. “We are considering a lawsuit in the US.”

Her son Jang, 27, was found dead in his bathtub in October after finishing his night shift at Coupang’s warehouse in Daegu.

Coupang initially denied responsibility for Jang’s death but an official investigation by the Korea Workers’ Compensation and Welfare Service (KCOMWEL) found that he died of a heart attack because of overwork. 

“We were devastated by his sudden death but there was no word of apology from them, let alone admitting that my son’s death was due to overwork,” Park told the Financial Times. 

Labour lawyers and union officials allege that eight Coupang workers, including two subcontractors, have died from overwork over the past year. 

The ecommerce company, which is backed by investors such as SoftBank, Sequoia and BlackRock, vehemently denies responsibility for the deaths, saying only one has officially been acknowledged as work-related. But it is facing increasing political pressure over the incidents.

The family of Park Hyun-kyung, 37, who died in June after working as a subcontractor at a cafeteria in Coupang’s facility in Cheonan, has filed a criminal complaint with the labour ministry against the ecommerce group and two other contractors for allegedly violating the country’s industrial safety law.

Her husband, Choi Dong-beom, said the companies had rejected his requests for meetings. Choi has filed a claim with KCOMWEL for compensation. The state-run Occupational Safety and Health Research Institute is looking into the cause of the death, according to KCOMWEL. 

South Korean companies pay insurance fees to KCOMWEL, which then compensates workers if their injuries are recognised as work-related.

“She had suffered from constant headaches and coughing for months before her death,” said Choi. “But the companies have shown no interest in her death, passing the buck to each other.”

Coupang has countered that a police investigation determined the company was not responsible for Park Hyun-kyung’s death. It said she worked for Dongwon Homefood, a food services conglomerate that provided goods and services to 7,000 companies nationwide, including Coupang. 

Park Mi-sook, the mother of the deceased worker Jang, accused Coupang of not being co-operative in providing work-related information needed to file compensation claims. “I felt humiliated in the process of seeking information from the company,” she said.

According to data provided by ruling party lawmaker Im Jong-sung, workers at Coupang Fulfillment Services, Coupang’s logistics arm, filed 239 claims of work injuries to KCOMWEL for compensation last year. 

Im said Coupang denied 28.5 per cent of claims as work-related, a rate three times higher than the average for Korean companies. However, KCOMWEL has said only 15 of these cases were not work-related.

“If the employer doesn’t admit to work injuries, claimants have to experience a lot of difficulties and pain to prove their injuries are work-related,” said Im.

When asked by the FT about the Won3m in cash payments at the funerals and potential compensation claims, Coupang said it offered support for bereaved families of employees regardless of the cause of death, “including group accident insurance, financial support for the funeral, and condolence money”.

“Any death is a tragedy, regardless of the reason,” Coupang said. “As is customary in Korea, it is our practice to visit the funeral of former workers, give condolences and provide support for families.” 

The company said that of the eight deaths, two were not Coupang employees but on-site contractors and these were not accident-related.

Of the other six deaths, Coupang said, three occurred at home or during vacation and three at work. The three on-site deaths were heart attack-related and none were due to accidents. All of the workers in question worked under 52 hours a week, it said.

“The union is trying to portray as work-related all heart and coronary-related incidents including those that occur at home or on vacation,” the company said. “Cardiac and cerebrovascular disorders are the second and fourth leading causes of death in Korea, and Coupang’s rate of both disorders are lower than the national average in Korea.”

Coupang is not legally obliged to compensate the families of deceased workers unless it loses lawsuits filed by the bereaved, according to South Korean labour laws.

Labour researcher Jang Kwi-yeon said the offer of cash at funerals did not mean the company was admitting legal liability. But she added: “It should be seen as an expression of their moral responsibility.”



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Putin’s sabre-rattling wins west’s attention and Biden summit

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If Vladimir Putin’s decision to deploy tens of thousands of troops to Ukraine’s border in the past few weeks was driven primarily by a desire to get the west’s attention, he did not have to wait too long for his reward.

Hours after his defence minister on Tuesday admitted Russia had mobilised two armies and three paratrooper divisions to positions close to the conflict-wracked frontier, US President Joe Biden phoned the Kremlin with an offer of a bilateral summit: a long sought-after prize for Putin who craves a seat at the world’s highest negotiating table.

By then, Moscow was only confirming what satellite imagery, social media footage and increasingly frantic statements from Kyiv had indicated: Russia had massed more troops on its western border than at any time since its 2014 invasion of Crimea.

Those 50,000 extra soldiers, scores of tanks and other heavy weaponry spooked Kyiv and other European powers, and sparked a hurried response from Nato and the US amid fears over a potential outbreak of fighting between the two countries. 

But while Russian officials have warned of a conflict that would “end” Ukraine, so far only a barrage of warlike rhetoric has crossed the border, with Russia’s troops merely lurking with intent.

That has led experts to conclude Moscow’s intention was to merely scare its neighbours, test the level of support for Ukraine among Biden’s new administration, and remind the White House of Russia’s leverage in European security.

“Russia sent a clear signal that in the current context of the deterioration of US-Russia relations, Moscow is not prepared to make any more concessions regarding Ukraine,” said Ruslan Pukhov, director of the Centre for Analysis of Strategies and Technologies, a Russian defence think-tank. “The message was: we either stop where we are now, or we will move forward.”

Ukrainian soldiers near Marinka in the Donetsk region of Ukraine
Ukrainian soldiers hold a position on the frontline with Russian-backed separatists near Marinka in the Donetsk region of Ukraine © AFP/Getty Images

Since Russia’s 2014 invasion and annexation of Ukraine’s Crimea peninsula, pro-Russian separatists have fought against Ukrainian forces for control of Donbas, the Ukrainian region on the border with Russia, killing more than 14,000.

Kyiv accuses Moscow of stoking the conflict with weapons, military support and irregular troops. Moscow denies direct involvement but says it has a duty to protect the Russian-speaking population who live there. 

Both sides accuse the other of failing to adhere to the Minsk agreements, a 2015 peace deal, and of constant provocations across the line of contact. Many see frustration at Kyiv as the major factor behind Moscow’s decision to remind its neighbour of its significantly larger military might.

“With the current state of Russia-Ukrainian relations, we have no other tools to influence Kyiv except the threat of force and the use of force. The other diplomatic tools are really limited,” said Pukhov, who is also a member of the Russian defence ministry’s public council.

“Russia does it not because it is cruel by nature, but because it is the only way to exert any pressure or influence on them,” he added.

Sergei Shoigu, Russia’s defence minister, on Tuesday said the troops had been deployed as part of “appropriate measures” in response to threats from Nato, which he said was preparing to move 40,000 troops and 15,000 weapons to the Russian border.

The Russian troops were conducting exercises “at present”, he said, but “show full readiness and ability to fulfil tasks to ensure the country’s military security”.

Dmitri Trenin, head of the Moscow Carnegie Center, suggested that western support for Kyiv had increased the stakes in the Russia-Ukraine conflict by making it increasingly the focal point of broader tension between Moscow and Nato, and thus forcing the Kremlin to take a belligerent stance.

“Thanks to the uncritical and automatic support that Ukraine invariably gets from the US and its allies, Kyiv has the ability to put Russia in what Germans and chess players call Zugzwang,” he said. “Any move a player can or has to take only worsens the player’s position.”

In a move seen as an initiative to calm the situation, Biden on Monday used a telephone call with Putin to “propose a summit meeting in a third country in the coming months”, according to the White House readout of the conversation.

In the call, Biden also “voiced our concerns over the sudden Russian military build-up” and “emphasised the United State’s unwavering commitment to Ukraine’s sovereignty and territorial integrity”.

The summit format will also please the Kremlin by effectively cutting Kyiv out of any negotiations, and allow Putin to project the image of two global superpowers deciding the future fate of the conflict.

But a long-term settlement appears unattainable at present, with both sides failing to comply with the terms of the Minsk agreement and wary that any moves to de-escalate could be seized on by the other as an opportunity to extract more leverage. 

Russian and Nato warships have been dispatched to the Black Sea and the western alliance is preparing a number of large military exercises in eastern European states this summer, a move likely to keep tensions simmering. 

“Instead of making Russia behave, the west is adding to the dynamic which might ultimately lead to collision,” said Trenin. “There will be no second coming of Mikhail Gorbachev.”

“Let’s face it: regional war in Europe is again thought of as a possibility on both sides, and this should not make anyone happy. Even in the US, because such a war will not be limited to the Old Continent,” he added. “Fasten your seat belts.”



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