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1 Copyright USF Center for the Pacific Rim The Occasional Paper Series of the USF Center for the Pacific Rim :: Pacific Rim Report No. 21, September 2001 Korea: Asia's Economic Phoenix by Patrick Lloyd Hatcher, Ph.D. We gratefully acknowledge the Kiriyama Chair for Pacific Rim Studies at the USF Center for the Pacific Rim for funding this issue of Pacific Rim Report. Patrick Lloyd Hatcher is Kiriyama Distinguished Scholar-in-Residence at the University of San Francisco Center for the Pacific Rim for Spring A military historian by profession, Hatcher taught in both the history and political science departments at the University of California at Berkeley prior to his retirement. One of Cal s most sought after guest speakers, he was honored with the MacArthur Award from the Institute of International Studies at Cal in 1987 and was the recipient of the UC Berkeley Instructor of the Year Award in Currently at work on his fourth book, America s Korean Odyssey, Hatcher is also the author of North Atlantic Civilization at War (M.E. Sharpe, 1999) and Suicide of an Elite: American Internationalists in Vietnam (Stanford, 1990) as well as numerous articles and other writings. He helped narrate the film Napoleon and Wellington and is often seen on KRON-TV (NBC) in the Bay Area as a national security specialist. Patrick Hatcher received his Ph.D. in history from the University of California at Berkeley. Prior to embarking on an academic career, he had risen to the rank of Lieutenant Colonel in the U.S. Army. From 1996 to 1999 Hatcher served as a judge for the Kiriyama Pacific Rim Book Prize and in 1999 he chaired the panel of nonfiction judges. He has taught at other Bay Area institutions, including St. Mary s College, UC Davis, and Golden Gate University. Hatcher has led educational tours for the Library of Congress, the Art Institute of Chicago, the San Francisco Museum of Modern Art, and the University of California Alumni Association s Bear Treks travel program. These remarks were extracted from Dr. Hatcher s forthcoming book, America s Korean Odyssey for the 2001 Kiriyama Distinguished Lecture which was presented on April 11, 2001 at the University of San Francisco s Lone Mountain Campus. Please note that Korean personal names and the spelling of place names in this article follow the new (2000) standards of the National Academy of the Korean Language. For reference, the traditional spellings of common places are shown in parenthesis where needed. We gratefully acknowledge the Kiriyama Chair for Pacific Rim Studies at the USF Center for the Pacific Rim for funding this issue of Pacific Rim Report. With archeological evidence dating back 5,000 years, the Korean peninsula has a history as rich as any place in Asia. During the last five millennia, Koreans borrowed furiously: Chinese Confucianism, Indian Buddhism, Arab mathematics, Southeast Asian rice, French fast trains, American baseball. But Koreans never lost their uniqueness; instead they Koreanized imports, later trading their own versions with neighboring states. As the wellspring for Japanese culture, Korea enriched her island neighbor. In fact, the interaction among China, Korea, and Japan dates back some 2000 years to the Han dynasty and grew as the Korean kingdom of Silla unified the country in 676 A.D. Silla s capital, Kyongu, known as the City of Gold, numbered nearly a million inhabitants. Visitors from Baghdad came as traders to its famous fairs; Indian Buddhists came as pilgrims to its special shrines. Almost a thousand years before Royal Academies appeared in Paris or London, a Korean king established Silla s Royal Confucian Academy. Korea s Emergence In 935 A.D. the Koryo kingdom replaced Silla and built on its foundations. For the next five hundred years Koreans continued to open their society to the greater Eurasian world. Trade with Song dynasty China brought luxury goods. Goaded to surpass Chinese porcelains, Korean artists created a sage-green celadon that set the standard for excellence, so much so that the Japanese kidnapped entire villages of Korean

2 potters. Unfortunately, swift moving Mongol horsemen ravaged both China and Korea, forcing the Koreans, master shipbuilders then and now, to construct fleets for the invasion of Japan. By 1316 Mongol power collapsed as swiftly as it had come. The Yi dynasty built a new Korean kingdom, Choson, which ushered in a golden age. Koreans had moveable type before the Europeans did, even printing medical encyclopedias. Science and the arts flourished. Korean timepieces included a cuckoo clock with an Asian call. Trouble returned in the form of a Japanese invasion. They, like the Mongols, ransacked the country. Help arrived when a Korean naval engineer designed the world s first ironclad ships. Korea s Admiral Yi Sunshin employed these turtle ships to decimate the low-tech Japanese fleet. Japan withdrew. That southern invasion came in the sixteenth century. In the seventeenth century Manchu invaders struck from the north. By the eighteenth century Korea had partially recovered and world literature gained an epic love story, Chunhyang, in the process. Unlike Shakespeare s lovers, the Korean Romeo and Juliet, while suffering, live to see justice triumph. In a century in which Napoleon codified French law, Korean literati amplified China s Ming Code for Korea. The nineteenth century deconstructed most of this rebuilding. At one time the throne had no king, with three Dowager Queens conniving for power. When King Kojong finally ascended the throne ( ), he became the last of twenty-six Yi monarchs to rule an independent Korea. By then the peddler-predators of the West had set their imperial eyes on the one remaining Asian door they had not forced open. Even the United States played at gunboat diplomacy. In 1866 the uninvited armed schooner General Sherman steamed up the Taedong River to Pyeongyang. Unwelcomed by the locals, the crew unloaded their muskets into these civilians Pearl Buck replaced by G.I. Joe. The dispersed crowd waited for their ally, a fast moving low tide. Once it grounded the vessel, they surrounded the Sherman, killed its crew and burnt the ship. Secretary of State William Seward did not take kindly to this naval immolation. It took time, but by 1871 an American Asiatic Squadron steamed toward Korea on what the New York Herald called the Little War With the Heathen. America almost lost, so fierce did Korea s tiger warriors fight. Having captured only one island near Inchon s harbor, the United States began peace talks. The Koreans prolonged the discussions to the point where the ever impatient Americans withdrew in disgust to go gunboating elsewhere. Even after this bitter encounter, King Kojong and his reform-minded advisors saw no choice but friendship with the United States, hence the Korean-American Treaty of By then a failing Qing China, a rising Meiji Japan, and an ossifying Czarist Russia all placed pressure on northeast Asia s main land bridge, Korea. Kojong hoped that the United States would replace China as Korea s protector. He hoped in vain. The dreamed of ally failed the first test. Kojong requested a military advisory team. The Commanding General of the United States Army, Philip Sheridan, sent his West Point classmate, William Dye, to lead a four-man team. Dye had terrible judgement in men: of the three he brought along, none had military experience of note and two hated Korea, where they spent their time drinking and carousing. Finally the Koreans dismissed them. Such was the fiasco of America s first Korean Military Mission. Worse followed. While the United States dallied, Japan, determined to colonize Korea, bested China in the Sino-Japanese War (1894) and then Russia in the Russo-Japanese War (1905). Asia s Britain had arrived. This western Pacific war attracted President Teddy Roosevelt who tilted toward Japan. He offered his services to end the war and had his Secretary of State sign the Taft-Katsura Memorandum, a deal in which Japan would respect American interests in the Philippines in return for American recognition of Japanese interests in Korea. Russia lost a war, Japan won a colony, Korea lost its independence, and Roosevelt won the Nobel Peace Prize! Korea s Embattlement Drained of resources by forty years of Japanese occupation, divided unnaturally at the end of World War II, and devastated by the Korean War, a damaged Korea bled its way through the first fifty years of the twentieth century. Even the world peace of 1945 eluded war-weary Koreans. Instead, they inherited an internal struggle between two Korean camps, a blood feud. Those who had collaborated with the Japanese, especially the land-rich yangban [scholar/official] elite, faced off with those who had fought against the Japanese, especially nationalists on the left. Why such fierce hatred of the Japanese occupation? Four World War II examples suffice: Japan took Korea s rice, forcing Koreans to eat Manchurian millet; Japan forced Koreans to speak Japanese, take Japanese names, and worship at Shinto shrines; Japan used over 200,000 young Korean women and girls as prostitutes comfort women for its soldiers; Japan dragooned almost 2,000,000 Koreans to work in the worst jobs in Japan, women down into mines, men into heavy industry. Yet some Koreans noted that Japan modernized their country, building Korea s first railroads. But this, and other industrial achievements, did not erase wartime atrocities. From 1945 to 1950 Korea s internal conflict grew from a guerrilla into a civil war. On June 25, 1950 Pyeongyang upgraded hostilities into a conventional war, its northern army attacking the southern army. Two days later the United States committed its forces, thus turning a national struggle into an international war under United Nation s mandate. Modern warfare made Korea a wasteland. Seoul fell four times, first to the North Koreans, then to the Americans, then to the Chinese, then back to the Americans. By recapture number four nothing worth capturing remained standing. Meanwhile, bombers blasted North Korea back to the Stone Age. After three years and one month of fighting, casualties numbered almost four million, half of them civilians. Before this Korean Armageddon, Northern leaders imposed a command economy directed by a Leninist elite; after the war Southern leaders imposed a capitalist economy directed by a militarist elite. With the armistice of 1953, if not before, both halves of Korea took on the properties of independent states allied to opposing sides of the globe-girdling Cold War, Seoul to Washington, Pyeongyang to Moscow. Initially the northern economy recovered faster; it inherited the natural resources on which to rebuild plus the large hydroelectric dams on the Yalu River. In the 1930s Korea s gigantic Suiho Dam had only one rival Boulder Dam. And the Korean-based Nippon Chisso chemical complex ranked as the second largest in the pre-world War II world. Korea was not a poor Third World nation. It took World War II, the temporary division in 1945, and the Korean War to make it one. The

3 convenient demarcation line along the 38th parallel, above which Soviets and below which Americans took the surrender of Japanese troops, froze with the onslaught of the Cold War. (In 1945 a Washington Committee gave two US Army colonels thirty minutes to recommend where to divide Korea. Working from a National Geographic map, they picked the 38th. One of the colonel-pickers was Dean Rusk.) While the northern economy struggled, its southern cousin suffered. South Korea could feed its people for its strength rested on agriculture. As Korea s rice basket, it needed to find additional means to emerge as a First World trading economy. Truncated, each part required some of what the other part had. How to develop? Seoul s leadership had problems. Americans brought from exile their Korean nationalist, Dr. Syngman Rhee. A good Christian for the job or so thought the Americans he became president of South Korea in In the immediate postwar years Americans tried to sanitize former enemy states and their colonies Germany, Italy, Japan insisting that no fascists, militarists, or collaborators could return to positions within those restructured political economies. For two years Washington reconstructed the defeated; denazification was a prime example in Germany. War crimes trails took some players off the world stage but only the obvious ones. After the full arrival of the Cold War in 1947, Washington lowered the bar. Former enemy bureaucratic and business elites resurfaced within governmental and corporate structures. Rhee s government in Seoul quickly filled with such folks. Rhee, a cosmopolitan civilian with an Austrian-born wife and a Princeton Ph.D., could not conceal his dictatorial manner. In the early days of the Cold War, happenstance placed two of America s early Asian allies, Syngman Rhee of South Korea and Ngo Dinh Diem of South Vietnam, in New Jersey. Devout nationalist and authoritarian personalities, both returned to rule the truncated souths of their respective nations. Soon Seoul and Saigon turned into battle capitals locked in a frigid war between Moscow and Washington. With time America tired of these two demagogues. Unlike Saigon, where the Kennedy administration orchestrated the coup that led to Diem s murder, in the case of Seoul a group of Korean Army officers, without consulting Washington, staged their bloodless putsch. Rhee had earlier flown off to exile in Hawaii, which became the retirement state of choice for several Asian strongmen. A modernizing military elite took over the destiny of South Korea and worked an economic takeoff. How? Korea s Enrichment Known as the Miracle on the Han, that river corridor cradled Korea s infant economy as this Asian Tiger bounded from cub to cat in one generation. Military midwives managed this miracle. On May 16, 1961, supported by a group of colonels, Park Chung Hee rid Korea of the months of chaos that followed Rhee s departure. But Korea s man on horseback came with collaborationist credentials. Born into a peasant family, the ambitious and upwardly mobile Park sidestepped Korea s class system by joining the Japanese army. Before and during World War II Park trained at an officers school in Japan, served with Japan s Kwantung Army in Manchuria, and received a gold watch for his services from Emperor Hirohito. After World War II, with the country under US occupation, Park graduated with the second class of the Korean Military Academy in Yet he sided with the Yosu rebels against Seoul for which the government arrested him as a communist! [The Yosu army mutiny of April 1948 pitted disaffected Korean troops against Rhee s government and its American backers.] Chameleon survivor, yes; communist sympathizer, no. Economically the Han River colonels had great good luck, both internally and externally. Internally they did not have to face competition from returning western multinationals such as Michelin in French Indochina or Royal Dutch Shell in Indonesia because for forty years Korea had served as an exclusive economic zone for Japanese businesses. Japan s defeat freed nascent Korean firms. Modeled somewhat on giant Japanese zaibatsu, these family-run Korean chaebol now had their day in the sun. Externally the Han River colonel-capitalists came into their own just as a group of Charles River political economists moved into the Potomac River corridor. Filling the policy positions in the Kennedy administration, activist academics those who wanted to test their modernization theories marched in. From Harvard came Samuel Huntington with his influential Political Order in Changing Societies nations undergoing rapid industrialization need strong governments, sometimes of a military nature. From M.I.T. came Walt W. Rostow with his seminal The Stages of Economic Growth modernizing nations require substantial savings, forced if necessary, to achieve economic takeoffs. Park s first book after the coup, Our Nation s Path, Koreanized the Charles River academics, calling for a military-managed, fast-paced modernization for Han River nation-building. Between theory and practice, Potomac Han serendipity prevailed. But an even more momentous Washington decision impacted South Korea s emergence within the global economy. The critical moment for postwar economies came when American leaders, operating in their nation s self interest, decided to transform the American market from a protected enclave into an open emporium for all those who sided with Washington against Moscow, creating economic containment of the Soviets. No matter that allies closed their markets, their goods could enter the United States, the world s largest center for selling and buying. In the Truman administration this made sense due to the war s destruction. Where else could any trader trade? Who but the United States would loan, or give, capital with which to get started? As Europe and Japan recovered, the Eisenhower administration used the same bait to hold less developed states to an anti-communist course. Inasmuch as this worked for others, South Korea rode in with a tide of free riders. To jump start trade, economic assistance came in many forms Truman s Point Four and Eisenhower s Food for Peace. Finally the Kennedy administration housed it all in one institution, the Agency for International Development. And to monitor and manage the world s economy, the United States assumed early leadership of the World Bank and the International Monetary Fund. In addition to economic help, if a state felt threatened, it could obtain military support. Large American military missions appeared abroad. South Korea received one, its second since the disaster of King Kojong s times. Known as the Korean Military Assistance Group or KMAG, it influenced its host counterpart. American bases within Korea assured Seoul that it could modernize its military with the latest equipment furnished free or purchased depending on circumstances. The Republic of Korea s Armed Forces soon looked like a carbon copy of its

4 American ally s military. Some states snuggled in closer, getting under the American defense umbrella, even its nuclear shield. Seoul snuggled. In like manner, a version of the American Central Intelligence Agency grew into the Korean variant, the KCIA. Differing from its American model, the KCIA included a domestic national police, a Korean Federal Bureau of Investigation. Seoul s combination of J. Edgar Hoover and Allen Dulles was the powerful KCIA director, Kim Chongpil, a graduate of the Korean Military Academy in 1949 and a nephew by marriage of Park Chung Hee. All in the family, Korean style. With strong organizations in place, Park s government chose not to follow the South American and African examples of military rule where a recently installed group squeeze the same resources that its predecessor had squeezed, resulting in no net gain. Instead, Park s group determined to enlarge that which Rhee and Company had squeezed. Old cronies abounded; more importantly, hungry new capitalists appeared. Both worked with Park and Company to make South Korea the developmental state par excellence, achieving growth through cooperation. Taking the phoenix by the wings, they took off, economically. One biography tells the tale. In 1915 a poor farmer s wife in today s North Korea gave birth to a son, Chung Juyung. At eighteen this rural lad stole a cow, sold it, and ran away to the city. For a few years he delivered rice by bicycle and worked on the docks. Then he opened an auto repair shop. When Americans replaced Japanese, Chung s translator-brother got him construction contracts. By the 1960s Chung s company built projects in Southeast Asia and the Middle East. In the 1970s President Park picked Chung and other Korean entrepreneurs to launch heavy industries. With no experience, technology, or even a dry dock, Chung chose shipbuilding. He went on a global search for capital without success, until London. In front of amazed bankers at Barclays he told the seafaring Brits that Korea, not Britain, had built the first ironclads, whipping out a 500-won bill featuring the famed 16th century turtle ships. Bemused, Barclays loaned him $50 million, and a Greek shipper ordered two 260,000-ton oil tankers. Today Chung s company, Hyundai, ranks as the world s biggest shipbuilder. Hyundai means modern ; and visitors to Korea find its green triangle stamped on rows of company apartments, cars, appliances, computers, and office towers. Before the Asian economic crisis of 1997, Hyundai Group s annual sales topped $90 billion, with Chung as Korea s richest man, worth $6 billion. From farm to fortune. Success has an underside. On October 26, 1979, President Park dined at a KCIA safe house in Seoul. The host, Kim Chaegyu, had graduated from the military academy with Park in Kim, now head of KCIA, discussed the disturbances then rocking the country. They argued, Kim shot Park s bodyguard, then Park. Pandemonium: where would Korea find another smart dictator? Dummies came by the container full, but smarties were scarce. While the Carter administration pondered they dispatched an aircraft carrier and Secretary of State Cyrus Vance a second night of the colonels occurred. Chun Doohwan and Roh Taewoo installed themselves along with their classmates from the 1955 graduating class of the Korean Military Academy. Cadets of 1946 out, cadets of 1955 in. The outs used underground tunnels to flee to the American Eighth Army Headquarters. Anger flared in the cities, especially in the southwest. Gwangju (Kwangju) erupted. Seoul s soldiers moved south, mowed down Gwangju s workers and student protesters, and Chun made himself president, visiting the Reagans in the White House. Those who went along got along; Richard Holbrooke of Carter s State Department and later Clinton s administration accepted a wellpaid consultantship at Hyundai. In fact, Hyundai got along as colonels came and went. But colonels can cost. While Chung had created his company, the colonels created conditions. Chung s longtime collusion corresponded with that of most chaebol chiefs. In 1992 Chung ran for the presidency, lost, and found himself indited for campaign finance violations. Guilty of diverting $81 million in Hyundai money to his campaign, he received a three-year sentence, suspended due to his age. But two dozen involved Hyundai officials went to jail. Chung tried to regroup. Under President Kim Daejung he has spearheaded investments in North Korea. Unfortunately, none showed a profit. At a personal level he made North Korea a gift of 1,001 cows in return for the one he stole in By 2001 his empire teetered on the brink. Afraid to let it fail, the government funneled loans its way. Run as a mom and pop store, the entire Chung clan breakfasted together at 6:00 a.m. But Chung could not forcefeed management talent into his seven sons. Mismanagement they learned on their own, with family members accountable to no one. At Chung s death in March 2001, the Korean media reported on The War of the Princes, as seven siblings fought for control of a Seoul dynasty. A likely outcome after Chung s passing was the accelerated breakup of Hyundai into five smaller sets of companies. The top chaebol founders have departed, their generation now history. Amongst them only Chung channeled capital northward. And communism came to capitalism with condolences at Chung s death. On March 24, 2001 Song Hokyong led a four-member group from Pyeongyang to Seoul, carrying a personal message from Kim Jongil and a wreath two meters high. Forgiveness for the cow? Korea s Empowerment Captains of industry to some, robber barons to others, how did these chaebol-chieftains and capitalist-colonels create the Miracle on the Han? In 1950 South Korea s annual per capita income had fallen to under US$150; in 1997 it had risen to over US$10,973. Amazing, yes; impossible, no. First, a literate peasantry moved from country to city in increasing numbers, tempted by better paying jobs. (Literacy in 1999 was 99 percent.) Well-disciplined, hard-working, group-oriented, they filled labor-intensive jobs in export-oriented industries. Second, while crafty, Park was not a crook. He fired thousands of corrupt civil servants and jailed many civilian profiteers. You could get rich, but you had to earn it within Park s system. Third, to control this system, Seoul created a super-ministry, the Economic Planning Board. It reigned at the apex of the economy; imports came, exports went, as it, and it alone, allowed. Fourth, South Korea s Trade Promotion Corporation identified foreign markets, making chaebol offers they could not refuse. Fifth, the government nationalized most commercial banks, then took over the Bank of Korea, the country s central bank. This was a cozy yet creative way to fund an industrial policy. But even miracle makers make mistakes; in this case, big ones, first internally then externally. Internally, they allowed the chaebol to grow stronger than the state itself. Externally, in 1989 they failed to note that, the Cold

5 War over, the United States had imposed new global economic rules, Wall Street style. Economic containment ended without notice. A new buzz word appeared the global economy policed by the World Trade Organization, capitalism s best friend. With a take it or leave it attitude, the fattened First World took, leaving little for the famished forgotten world. Hence the Asian financial crisis of Not that Asian mismanagement had not helped. It had. Fault aplenty stretched around the Pacific Rim. Before the crisis of 1997, Korea suffered through the crisis of The 79 fix came with higher value-added manufacturing Barbie dolls and T-shirts out, computer chips and designer jeans in. But the big fix remained unfixed; the chaebol grew too strong, squeezing out small and medium-sized industries from capital markets. This too big to fail syndrome held the government hostage, a clientelistic cabal. Park s successors knew this and tried to tame these tiger-titans. A new over-the-counter stock market provided funds for small-to-medium firms and venture capitalists. The state toughened laws against insider trading and sold its shares in commercial banks. Chaebol chiefs cringed, then countered. Through intermediaries, they bought the government s banking shares. By 1987 the five largest chaebol still comprised 75% of manufacturing. The government fumbled again, urged on by the World Trade Organization. No longer would Seoul require reporting on shortterm loans. Eureka! The chaebol rushed in to avoid the loan controls then still in effect for long-term borrowing. But the Panic of 97 stampeded owners of short-term capital who wanted their money back immediately. This the chaebol could not do. All this happened under civilian leaders as Korea in the early 1990s meticulously rid itself of military mandarins, the colonels closeted back in barrack cubicles. President Kim Young Sam s administration led the change ( ). By then Seoul had heard Washington s clarion call for globalism. Korea tried to adjust under a Koreanized blueprint, segyehwa. Unfortunately, this tempted chaebol like Daewoo to borrow huge amounts of foreign capitol for risky investments in Eastern Europe and the successor states of the former Soviet Union. Daewoo sank $US3.5 billion into Uzbekistan Daewoo Motors in Where was the market? As of June 1997, Daewoo had investments in 380 projects in eightyfive different countries. After the Panic of 97 Daewoo fell into bankruptcy, its CEO, Kim Woochoong, an exile wanted for fraud. This too will pass; the world s eleventh largest economy has grown too big to fail. Hence the International Monetary Fund loaned Seoul an unprecedented $US57 billion. Why did they bet on Korea? Partially because the problems with Korea s economy rested in the chaebol structure; fix it and you help fix the problem. After all, Korea had used its deficits for investments, not for consumption. In fact, Korea s secret for rebounding remained a concentration, with big ticket infrastructure items dominating the government s capital budget. Their motto Always improve. Boats, planes, and trains reinvent themselves, Korean style. Before these came roads. Build them and they will drive, and they did Koreans owned 10.5 million autos by In 1970 the government completed an expressway from Seoul to Busan (Pusan), passing by Daejeon (Taejon) and Daegu (Taegu), major inland cities. They paved what had historically served as southern Korea s main supply route (MSR) or line of communication (LOC). Italy had built the closest example in the West, its Autostrada del Sol. As happened in Tuscany, the later Korean version tunneled through mountains and bridged high above valley floors. Roads ran on land, ships on sea. Not only did Koreans build supertankers for others, they built container ships for themselves. Koreans never saw a container they couldn t fill with export items. Ulsan s global port, Korea s busiest with million tons passing through in 1998, loaded products packaged in iron boxes the size of boxcars. Twenty-eight other ports along the long, indented coastline followed Ulsan s shipping lead. In 2001 glamorous infrastructures served planes and trains. Seoul wanted an air-hub that would rival Schipol in the Netherlands, a Northeast Asian version of that Western European terminus. On March 29, 2001 a Korean Airlines flight inaugurated Seoul s dreamed of Winged City Airport. San Francisco s Bechtel Corporation built the Koreans an airdrome six times the size of Kansai International Airport near Osaka, Japan and twelve times the size of Chek Lap Kok International Airport in Hong Kong. Flattening Yongjong and Yongyu Islands in Inchon s shallow harbor, connecting them with four runways, building a fast-train system to Seoul (2007), and spending US$5.5 billion, Seoul plans to load and off-load 27 million passengers in By 2020 it expects the figure to grow to 100 million. Seoul s sonic subways scheduled growth to meet this influx. To speed multiple millions around the nation, Korea bought the French fast train, the TGV. In a ferocious French fight, Paris gave way to Seoul. France builds half the trains and shares the technology so that the buyers can Koreanize the product for home use and overseas sales. Heavier than other TGVs except the Paris-London-Brussels Eurostar, the Korean model will speed from Seoul to Busan at almost two hundred miles per hour (350 km/h), with 38 percent of the trip through tunnels. The price tag grew to over US$13.4 billion; nevertheless, Seoul set an opening date for the first section in 2001, last section 2003, with each train carrying 935 passengers and a new train leaving every four minutes! The TGV even came with its own scandal, a reported US$11 million commission to Ms. Ho Kichum and friend. After the payment, Ms. Ho married her trophy husband, the Frenchman who headed the TGV sales force. The Korea Times labeled such cases Scandals Hatched Under Skirts. Skirt or no skirt, to keep ahead globally Korea built a new technology district, Songdo Media Valley, between Inchon and Seoul. Korean techies pride themselves that their nation ranks as the most wired and wireless place in Asia. The Internet has made their homeland cybercrazy. But they, too, watched the dotcom bubble burst. Korea s high-tech KOSDAQ stock exchange tumbled 80% since its peak in March 2000 steeper than NASDAQ s quantum fall. Where does the required energy for all these projects come from? With Siberian winters and Sumatran summers, Korea needs to heat and cool itself as well as feed its future energy-intensive industries. It imports 97 percent of its power sources. To reduce pollution, Korea has turned to liquefied natural gas (LNG) and electricity, 32% of which comes from nuclear plants. Nor has Seoul reneged on the Kyoto agreements to reduce greenhouse gases. To meet these goals it has invested in solar and wind power.

6 While Korea has never suffered a forced diaspora, Koreans have gone global. In music, film, literature, sports, dance, fashion, cuisine they star. The Winter 2001 concert series at Carnegie Hall sold out the night Korean soprano Sumi Jo sang Puccini and Gershwin. The preceding year South Korea s film industry introduced world cinema to director Im Kwontaek s masterpiece Chunhyang, one of over 90 films by this venerable artist. In the 1990s, a Korean-American novelist, Chang Rae Lee, gave readers two bestsellers, Native Speaker and A Gesture Life. In Los Angeles the starting pitcher for the Dodgers is often Park Chanho, and Korean women have won more Olympic Gold Medals in archery than all other nations combined. In California, the Cleveland San Jose Ballet turned to Choi Kwangsuk to dance Prince Siegfried in Swan Lake. In New York, veteran fashion designer Lee Younghee presented a recent collection of traditional and modern apparel. And for global taste buds, annual exports of kimchi in 2000 exceeded 20,000 tons a feast of fermented cabbage. For global politics South Korea has a galactic president in Kim Daejung. His peace offensive led to an historic meeting in Pyeongyang with North Korea s leader, Kim Jongil. This sunshine triumph occurred on June 13, Since then a series of steps, some forward, some backward, have slowed but not stopped this Korean détente. The biggest obstacle remains US policy. In search of an enemy, post Cold-War America targeted poverty-ridden North Korea, demonizing its leaders. The Clinton administration used Korea for two of its moral disasters: the refusal to sign the landmine treaty and the testing of a Star Wars sequel. In the first disaster Clinton officials maintained they could not sign because they needed land mines to defend South Korea. This decision put Americans in an exclusive club that included the Buddhabusting bandits in Kabul who also refused to sign. Even though land mines have now killed more children than soldiers, the issue remains off the Bush administration s radar. In the second disaster Clinton apologists saw in North Korea s Taepodong missile an armed rogue state readying a blow at North America, hence the need for a space shield. This decision put Americans in an exclusive club of one. Even though world leaders warn of an arms race into space, the Bush administration s radar conjures an even greater missile threat than his predecessor s. Now the US has a Space Command at Peterson Air Force Base, Colorado and the Air Force surpasses NASA in space funding. Woes rocket in when wisdom wanders. In all of this the Pentagon continues to view South Korea as a permanent military base. This will not stand the test of time, but a peninsula reunification will, first and foremost on Korean terms. To make sure of that, Kim Daejung has his own Unification Minister, Lim Dongwon While awaiting that future reunion, President Kim Daejung has balanced foreign concerns, especially Russian, Chinese, Japanese, and American with his domestic agenda peace with the North and recovery for the Southern economy. A juggler extraordinaire. South Korea s unemployment soared to 6.8 percent in 1998, labor unrest turned violent at places like Daewoo factories that tried to downsize, and gross national income in 1998 plummeted 7.9 percent. This too Kim addressed. He also found time to do some writing, devastating the cryptofascist argument that Singapore s former prime minister Lee Kuan Yew made in the journal Foreign Affairs. Lee confused Confucian order for authoritarianism, suggesting that Asian cultures cry out for strict leaders. In the same journal, President Kim turned this western democracybe-damned thesis on its head with the following. There are no ideas more fundamental to democracy than the teachings of Confucianism, Buddhism, and Tonghak (a native religion of Korea). Most importantly, President Kim s government has turned the economic corner. In 2000 the South Korean economy grew at 8.5 percent with predictions that it will grow at least 5 percent in 2001, a year of little growth in the world economy. The Asian financial flu has fled from the Land of the Morning Calm. Careful, reform-oriented leaders will hopefully keep it at bay. The Korean economic phoenix flies again. The University of San Francisco - Educating minds and hearts to change the world - since 1855

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