activos de Deuda Pública

The third phase of the Park Chung Hee era began in 1972. The transition was triggered by the Nixon Doctrine in 1969.41 _{As noted, Park Chung Hee somewhat conflicted with the} Kennedy Administration because of his accumulation strategy and then enjoyed a honeymoon period with the Johnson Administration for reasons and benefits noted above. In this context, the Nixon Doctrine signified that the new US Administration violated the prior agreement between the Johnson Administration and Park Chung Hee. In particular,

41 _{The Nixon Doctrine was nonetheless a proximate cause for a transition into a totalitarian regime.} For Park Chung Hee had laid a foundation for such a totalitarian regime in the 1960s.

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the Nixon Administration decided to downscale the United State Forces Korea. This prompted Park Chung Hee to secretly organise a task force team in the Blue House (the executive office and official residence of the President of South Korea), and then order it to prepare a plan for a nuclear weapon in 1971 or, at latest, early 1972 (Jungangilbo Teukbyeolchwijaetim 1998, 260-1; see also Eom Jeongsik 2013; Jo Cheolho 2000). This military project was linked to his new accumulation strategy. For the task force team planned the project for heavy-chemical industrialisation as a preparatory stage for the military strategy. It was linked to a plan for the development of a surface-to-air missile system and, of course, this was expected to be linked to a nuclear weapon. The leader of the task force team was O Won Chol and, although he was not an economic expert, he continued working as a senior presidential secretary for economic affairs until Park Chung Hee’s assassination. After reading chemical engineering science at university, he served as a technical officer in South Korea’s Air Force until he was promoted to major. After that, he worked as a plant manager at an automobile company until Park’s military junta summoned him to work for it. In particular, in the first phase of the Park Chung Hee’s era, he took responsibility for formulating the chemical side of the heavy-chemical industrialisation strategy. He then drew Park’s attention again in 1970 when the latter was searching for a method to development a munitions industry. O Won Chol, who was as a secretary to Vice Minister in the Ministry of Commerce and Industry, proposed a plan to build parts factories for the development of such an industry, and it was accepted by Park Chung Hee. In this context, he was appointed in the next year as the leader of the task force team for a heavy-chemical industrialisation strategy associated with the munitions industry. It therefore happened that Park Chung Hee’s economic strategy in phase three was led by a second generation of his backroom boys. Yet, before announcing the new economic plan, Park Chung Hee waged a self-coup.

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In July 1972, North Korea and South Korea abruptly announced that Kim Il-Sung and Park Chung Hee agreed on three principles for the reunification of two Koreas: first, independence; second, peace, and; third, national coherence. It was the first joint communiqué of the two Koreas since their division in 1945. Three months later, Park Chung Hee dissolved South Korea’s national assembly and promulgated martial law. Simultaneously, he announced the revision of the Constitution on the pretext of preparing for reunification and defending national security. Park Chung Hee declared this political measure as Yushin. It was a Korean pronunciation of Ishin (restoration). The new Constitution authorised him to invalidate even the new Constitution itself. It gave him absolute power and, in this regard, it has been argued that it resembled the failed military coup of the Imperial Way faction in the Army of Imperial Japan, that is, the Showa Ishin. For the latter was a project to provide Tennō (Emperor of Japan) absolute political power (Han Honggu 2012a; Kim Dŏngnyŏn 2015). Before the official announcement of Yushin, Park Chung Hee twice informed North Korea of his plan. In contrast, the US was notified of his decision 24 hours before the announcement (Park Myŏngnim 2011). For the 24 hours, the US remonstrated with Park Chung Hee, especially as it learnt that hist manifesto for the October Yushin contained strong criticism of the foreign policies of Japan and, particularly, of the Nixon Administration. The Administration accepted it as ‘offensive’ and asked Park to meet the US Ambassador before the announcement. Park declined even the visit of the US Ambassador to the Blue House. Although, because of the remonstration of the US, Park removed criticisms on the US’s foreign policies, he still announced the October Yushin. Immediately after Park’s proclamation, the Nixon Administration declared it was irrelevant to the US (for on the 24 hours before Park’s announcement of Yushin, see Hong Seokryul 2013, 38-47). Thereby, Park transformed South Korea’s political regime into a totalitarian

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one. Three months later, Park proclaimed his projects for “heavy-chemical industrialisation” and “the scientification of all nationals”.

Before its official announcement, the project was unknown to any of the Minsters in the Park Administration. The project was not contained in the third five-year plan (1972-6). It was a secret project inside the Blue House. Approximately 20 days after the announcement, Park summoned the Ministries to the Blue House. In front of them, O Won Chol gave a four- hour briefing about the details of plan. In response, Nam Duck-woo pointed out the difficulties of financing. Yet, according to O Won Chol (2006, 149, 215-27), Park Chung Hee interrupted Nam by saying that, “I am not telling you that I am going to declare war; nevertheless, are you saying that you can’t help me?” Nobody felt able to disagree with Park Chung Hee. Park ordered Nam Duck-woo and others to find methods to obtain money- capital and the meeting ended. From then, more loans were introduced, and simultaneously, forced savings implemented. Hence, the heavy-chemical industrialisation as the key accumulation strategy in the third phase of the Park Chung Hee era was, indeed, propelled by a consideration for not ‘comparative advantages’ nor ‘economic validity’, but ‘technological necessity’ and ‘technical possibility’ (Kim Hŭnggi 1999, 217, 267).

Based on the heavy-chemical industrialisation, the South Korean economy continued to grow rapidly during the 1970s as well (see figure 6.1). But this came at a cost. It generated a serious inflation, which the government tried to moderate, even as the oil crises in 1973 and 1979 aggravated the high inflation. For instance, the wholesale price index in 1974 rose by 42.2% (Song Hŭiyŏn 2003, 66). In 1979, the PCHM itself fell into a crisis and the IMF intervened in the South Korean economy for the first time (see figure 6.1). Also, Park Chung Hee’s political, economic and military strategies increasingly exacerbated his relation to the Nixon, Ford and Carter Administrations. For example, Donald Gregg, who served as an CIA agent in Japan (1964-73) and South Korea (1973-5), and was later appointed as US

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Ambassador to South Korea (1989-93), said in October 1976, that: ‘[I]f President Park runs for another six year term, as he is expected to do, he will probably not live to serve out his term’. That is, in the late phase of his era, Park Chung Hee was regarded as one of the targets of CIA’s ‘murder policy’ in the 1970s (McGuire 1976, 34).

Figure 6.1: Growth Rate (Korea, 1961-2013)

Source: Economic statistics system, the Bank of Korea

Here we can discuss briefly on South Korea’s chaebols (the large industrial conglomerates of South Korea, such as Samsung, Hyundai, LG and the like). The making of

chaebols commenced with heavy-chemical industrialisation, though some already existed from the 1950s. That is, the businesses, which survived into the industrialisation, were later transformed into chaebols. An intriguing point here is that, just as Yushin is a Korean pronunciation of Ishin, chaebol is a Korean pronunciation of a Japanese term zaibatsu. That is, Yushin and Ishin are different pronunciations of the same Chinese characters, which mean “restoration”; and, similarly, chaebol and zaibatsu are different pronunciations of the same

-10 -5 0 5 10 15 20 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 The first economic crisis of

South Korea (the first intervention of the IMF)

The Asian economic crisis (the second intervention of the IMF)

The North Atlantic financial crisis

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characters, which literally mean “financially powerful family or faction”. In Japan, the term originated from the Meiji period. Then, the first generation of zaibatsu grew up with the first Sino-Japanese War and the Russo-Japanese War. Its later generation emerged with Manchukuo’s industrialisation. In this context, zaibatsu were closely linked to the Military of Imperial Japan, and for this reason, immediately after the end of the Second World War, The Supreme Commander for the Allied Powers (SCAP), which occupied Japan, attempted to dismantle the zaibatsu system by confiscating its assets. In brief, then, Park Chung Hee attempted to create in South Korea in the 1970s what the US had disorganised in Japan in the late 1940s. For this reason, chaebols had had a similar system for corporate governance42 _and, likewise, although Samsung, Hyundai and LG are known as companies that manufacture mobile phones, cars, home appliances and the like, they have been simultaneously logistics companies.

6.9 The State Form of the PCHM: Chimerical Warfare Pre-National State

Based on previous work, here I offer a state-theoretical and regulationist form-analysis of the PCHM. Similar analyses of North Atlantic Fordism define the state form as Keynesian welfare national state (KWNS). Also, according to them, such a state has been tendentially transformed into a Schumpeterian workfare post-national regime in a post-Fordist era (see, e.g., Jessop 2002). From the same perspective, the East Asian newly industrialised economies of the Cold War era, such as Hong Kong, Singapore, South Korea and Taiwan are viewed as East Asian Exportism. In the same context, the state form of the Exportist model is defined

42 _{In this context, chaebol’s corporate governance was one of the key issues in the policy programme} that IMF suggested as a reply to the East Asian economic crisis in 1997-8. That is, what was dismantled in Japan in the late 1940s was reformed in South Korea in the late 1990s.

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as a Ricardian or Listian workfare regime. Specifically, the state form of South Korea and Taiwan is regarded as a Listian workfare national regime (Jessop and Sum 2006, 152-85). My work, too, is based on the SRA-based state theory and the RA and, insofar as it concerns the South Korean economy, that is, a variant of the East Asian newly industrialised economies, it basically resonates with the non-Eurocentric regulationist analysis of Exportism. Yet, in this thesis, I have attempted to concretise the analysis of the South Korean model by taking a supranational scale of social relations into account. In other words, I have attempted to put the model in its place in an imperialist system within variegated capitalism in a world market and, thereby, to offer a relatively concrete and complex understanding of the model.

Table 6.2 The Chimerical Warfare Pre-National State Distinctive set of

economic policies

Distinctive set of

social policies Primary scale

The relation between state and market

• Inscribed by a libertarian and trade-oriented strategy for an economic takeoff • Anchored on autarky-aspired and fascist- militaristic developmentalism • The subordination of economic policies to the strategies for military aggrandizing • Familial, work-

oriented and asset-

based • The subordination of social policy to economic policy, subordinated by military policy • A “mobilisation” regime in a “garrison” society • Relative primacy given to national scale • Not national- territorial state in a strict sense, because of North Korea and USA

• Continuously aiming to complete the building of a nation- and national state • Not a mixed economy between state and market

• The state-led nurturing of controlled markets • Impaired sovereignty of the state, because of militarily, economically and intellectually special liaison with the US

Chimerical

(Autarkic/Rostowian) Warfare Pre-National State

Source: My own

In this context, I re-define the state form of the PCHM as an Autarkic/Rostowian warfare pre-national state. On this basis, I simplify it as a chimerical warfare pre-national

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state (CWPS). Thus far, I have sufficiently illustrated why the macroeconomic policy of the PCHM can be referred to as chimerical. In the first phase of his era, Park Chung Hee was quite unaware of the economic effects of export expansion. In its second phase, his autarky- aspired strategy was supplemented by the libertarian and trade-oriented economic strategy. In this third phase, Park Chung Hee himself tried to combine autarky-inspired heavy- chemical industrialisation with the export-oriented strategy. This seems to reflect his direct experience of the beneficial influence of export growth on the South Korean economy.43 _For this reason, it seems evident that the PCHM was evolving into a chimerical model. Yet, why should its social policy be viewed in terms of warfare?