South Korea cabinet offers to quit

Move comes amid protests against US beef imports, increasing pressure on president.

    Lee's popularity has taken a severe beating over the US beef import deal [Reuters]

    Han Seung-soo, the prime minister, tendered his resignation along with other government ministers to the president, according to the Blue House and the prime minister's office.


    Eight senior presidential secretaries already offered to quit last week to take responsibility for the beef dispute, but Lee has not decided whether to accept their resignations.


    Massive protests


    The beef crisis has sparked massive demonstrations in Seoul in recent weeks with tens of thousands of protesters demanding the import deal be scrapped or renegotiated.


    Protesters say they cannot trust assurances
    that US beef is safe [EPA]

    The deal to resume US beef imports has come under fire amid widespread public perceptions that it fails to offer sufficient protection from possible mad cow disease by allowing imports of beef from older cattle, considered at greater risk of the brain-wasting illness.


    A delegation of South Korean legislators has travelled to the US to renegotiate the deal and seek an assurance that the US will not export beef from older cattle.


    Both Seoul and Washington say that US beef is safe, citing the Paris-based World Organisation for Animal Health but protesters say they cannot trust Lee's assurances.


    South Korea banned American beef after the first case of mad cow disease was reported in the US in late 2003.


    Last month, Lee made a public apology over the government's handling of the sensitive import deal, vowing to press ahead with reforms and overcome a looming political crisis resulting from the resumption of US beef imports.


    The crisis has contributed to his approval rate plunging to 20 per cent during his first 100 days in office.


    'Resource crisis'


    Adding to the pressure, the embattled president said on Tuesday that South Korea was facing serious problems over rising inflation and slowing growth.


    "We are faced with a resources crisis coming next only to the oil crisis in the 1970s and the financial crisis in the 1990s."

    Lee Myung-bak, South Korea's president

    "We are faced with a resources crisis coming next only to the oil crisis in the 1970s and the financial crisis in the 1990s," he said.


    "International crude oil prices have doubled over a year and grains and raw materials prices are also rising sharply.


    Accordingly, our economy is faced with a serious difficulty, with prices rising and the economy gradually slowing," Lee said in a prepared speech for a ceremony to mark the 21st anniversary of a pro-democracy protest rally.


    South Korea relies almost wholly on imports of most energy, food and raw materials, making it especially vulnerable to currently skyrocketing prices around the world.

    Lee's headache grew on Tuesday as a labour union representing 13,000 lorry drivers and transport workers voted to strike over high oil prices.


    The vote came despite the government's announcement on Sunday of a $10.2bn spending package to help ease the burden of energy costs on the poor, small businesses and lorry drivers.


    South Korea's inflation rate shot up to a seven-year high of 4.9 per cent in May, and the finance ministry is widely expected to lower this year's economic growth target, set at 6 per cent, next month.

    The central bank's chief said last month the country's economy would be lucky if it could achieve growth of 4.5 per cent, having expanded 5 per cent last year and 5.1 per cent in 2006.

    SOURCE: Agencies


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