Kicking the Ladder
"Yes, Grandfather. It's about something else…"
Yoo Jae-won felt a slight cringe as he answered Jeon Myeong-heon's question. A grown man calling someone "Grandfather" still felt awkward at times. Still, he quickly regained his composure, recalled why he had called, and began speaking.
—Me, execute Roh Tae-woo? Who on earth is spreading that kind of talk?
"Do you know who came to see me a few days ago? It was Chairman Ha Tae-won of Seonkyung Group."
—Ha Tae-won?
"Yes! He suddenly showed up and begged me to spare his father-in-law."
—Hah, honestly. He should be worrying about his own company instead of bothering you from so far away.
Jeon Myeong-heon's tongue-clicking sound came through clearly. It was obvious he had no intention of carrying out the death sentence on former President Roh Tae-woo.
"Exactly. Even so, he was anxious enough to come find me. So I told him that if he paid off all the fines, you might look on it favorably. After all, with the country already struggling financially, a large sum of recovered fines would help, wouldn't it?"
—Ah, so that's why. I was wondering what Roh Tae-woo had eaten to suddenly cough up all that slush fund money. It was because of what you said.
Jeon Myeong-heon's reaction was grumbling, yet clearly amused. It made sense—Yoo Jae-won had only managed to extract a modest additional amount from TG Mobile for radio frequency usage fees that had already been paid to the state. Nothing had been taken directly from Roh himself. Jeon Myeong-heon, however, was different. He was a living legend of the Korean business world and a recurring figure in stories of political-business collusion and corruption. During the military dictatorship, he had served as the regime's piggy bank. Now that the tables had turned, he seemed to be feeling a complicated mix of emotions.
—Understood. I'll handle that matter myself.
"Yes, I understand."
Yoo Jae-won felt he had said enough about his conversation with Ha Tae-won and fell silent.
—Ah, right. You know about tomorrow's meeting with the business community, don't you? Do you have anything else to tell me?
This time Jeon Myeong-heon turned the conversation to his own situation. As president-elect, his actions closely resembled those of Kim Dae-jung after his own election victory. Given the IMF crisis, economic matters naturally dominated his schedule. Negotiations for funding with the World Bank and the Asian Development Bank had already been completed, and talks with the visiting IMF delegation still needed to be held. Moody's, the global credit rating agency, had even downgraded Korea's sovereign rating to Ba1, a junk status. At this stage, Yoo Jae-won had begun converting the 10 billion dollars he had sent to Korea back into won, since the exchange rate had surpassed the 1,600-won mark he had been targeting. He released the dollars gradually—50 million or 100 million at a time—rather than dumping everything at once. Each release caused noticeable fluctuations in the exchange rate. It would dip briefly, then climb again, eventually stabilizing in the low 1,800-won range. Originally, the rate had been on track to break 1,900 and push toward 2,000, but Yoo Jae-won's intervention had prevented roughly 180 won of additional depreciation.
At this point, Yoo Jae-won tilted his head slightly. He had given George Soros, chairman of the Quantum Fund and a temporary ally, advance notice that he would begin intervening from the 1,600-won level. Normally, Soros would have taken that as a signal to start selling dollars, yet he continued holding his position. To Yoo Jae-won, it looked quite precarious—though one could also argue that such boldness was precisely what it took to run a massive hedge fund.
In any case, with the economy in such a fragile state, the new president's top priority had to be economic reconstruction. Therefore, meetings with business leaders—specifically the owners of the top ten chaebols—before the inauguration were only natural.
"Yes, I've already sent you everything on that."
Yoo Jae-won had nothing more to add. He had already explained his restructuring plan for the IMF era to Jeon Myeong-heon in detail long ago—an A-to-Z roadmap so thorough that Jeon Myeong-heon had given it his full approval. If Jeon Myeong-heon had been an ordinary politician, external pressures would have forced constant revisions, but his bulldozer-like personality meant that once he was convinced of something, he pushed it through to the end. Yoo Jae-won's restructuring plan had resonated deeply with him, so unless another crisis of IMF proportions struck, it would not change.
—Then I'll call you again later…
"Ah, one more thing!"
Just as the call was about to end, Yoo Jae-won remembered something he had almost forgotten.
—What is it?
"When you meet with the business leaders, please meet with labor leaders right afterward as well."
—Huh? Those troublesome union people?
The only thing that ever drew visible resistance from Jeon Myeong-heon was labor unions. It was understandable—his battles with the unions at Mirae Group were legendary. Because Mirae Group had a heavy industrial focus, workplace fatalities were far higher than at other companies. Poor treatment despite dangerous work had led workers to organize around the metalworkers' union, whose solidarity was extraordinary. Even Jeon Myeong-heon had eventually thrown up his hands. He had once declared that, out of fear of union membership growing, any new Mirae Automobile plants would be built overseas. After entering politics, his aversion to unions had softened somewhat—Mirae Group's heavy-industry complexes were concentrated in Ulsan, a core support base for the Tongil National Party.
"You're the president-elect now. Every move you make carries meaning. If you only meet with business leaders and skip labor, people will assume your policies will favor the chaebols."
—I see what you mean. But I just have to listen, right? I shouldn't go spouting whatever comes to mind?
"Good grief, we still need to prevent unnecessary misunderstandings."
Jeon Myeong-heon understood Yoo Jae-won's explanation immediately, though he did not forget to grumble until the very end.
—Understood. Call me again next time.
"Yes, I'll talk to you later."
Yoo Jae-won ended the call.
"Hmm, I wonder if he'll manage. They're all people he knows personally."
After hanging up, Yoo Jae-won felt a twinge of unease. It was not about external pressure—the people Jeon Myeong-heon would meet tomorrow were Korea's leading chaebol leaders, but they were also his personal acquaintances. Some were rivals, others collaborators. Yoo Jae-won wondered whether Jeon Myeong-heon would project the proper presidential dignity and whether the chaebol owners would accept President-elect Jeon Myeong-heon. He would have liked to observe the meeting himself, but that was impossible, which was a shame.
Ding!
—Chairman, we've received a reply from the IMF.
The ID Talk message from Vincent Greenhill, president of ID Investment, pulled Yoo Jae-won out of his thoughts.
"What did they say?"
Yoo Jae-won replied immediately.
—They view our proposal very positively. However, Managing Director Camdessus wants to meet you in person before making a final decision. It seems he would like to hear your thoughts directly regarding the scale of our available funds and Korea's restructuring plan.
"Understood. Please arrange the meeting. Any date or location is fine."
—Yes, Chairman.
The exchange with Vincent Greenhill ended there. A few days later, the meeting with IMF Managing Director Camdessus was confirmed. It would take place at IMF headquarters, so Yoo Jae-won would have to fly to Washington, D.C. The thought left him slightly irritated. Normally, when borrowing money, the borrower goes to the lender. By rights, Camdessus should have come to San Francisco. Yet somehow the situation had been arranged as though the IMF held the upper hand. This was because Camdessus had already discerned Yoo Jae-won's intention to leverage the IMF's name to expand his influence in Korea. Yoo Jae-won had never instructed anyone to hide that motive during the negotiations, so there was no need to credit Camdessus with extraordinary intuition. They were simply cooperating out of mutual need. The IMF wanted to resolve the East Asian currency crisis before it spread to the United States or Europe, while Yoo Jae-won sought more active intervention in Korea through the IMF to carry out the national overhaul he desired.
According to Vincent Greenhill, who was leading the IMF negotiations, Camdessus hoped Korea would embrace neoliberal policies more fully, and Yoo Jae-won was expected to help make that happen. The very word "neoliberalism" made Yoo Jae-won shudder. What Korea needed was to excise the rotten flesh of reckless borrowing, political-business collusion, and polarization. What the IMF was prescribing was to merely treat those cancerous elements while performing brain surgery. The aftereffects of the IMF's misguided prescriptions for Korea had lingered until the day Yoo Jae-won died in his previous life. This time, that absolutely could not be allowed to happen. As he prepared for the trip to Washington, D.C., his heart felt heavy.
Yet that slight heaviness was quickly dispelled the next day by news arriving from Korea. Although Yoo Jae-won had already confirmed Jeon Myeong-heon's intentions during their phone call, the actual steps taken exceeded his expectations.
The following evening, President-elect Jeon Myeong-heon met with the heads of the top ten chaebols at the restaurant of the Seoul Hilton Hotel. The gathering was unusual. Even under the IMF regime, the sense of crisis among the top ten conglomerates was still far smaller than among smaller firms. Unlike small and medium-sized enterprises struggling with cash shortages, the chaebols could still hold out. Their problem was obtaining dollars, not won—they had plenty of the latter. Recently, the 10 billion dollars Yoo Jae-won had brought into Korea had also eased the foreign-currency squeeze somewhat. Even with the exchange rate nearing 2,000 won per dollar, the situation was actually beneficial for export-heavy chaebols, as their price competitiveness improved without any effort on their part. And if anything went wrong, they could always rely on public funds—the magic wand of the Korean economy. The go board term "too big to fail" applied to the chaebols as well. That was why this meeting had not been initiated by the chaebols requesting an audience; it was Jeon Myeong-heon, the president-elect, who had called them together.
"Chairman Koo, have you heard anything?"
"What about you, Chairman Kim?"
"If I had heard something, I wouldn't be asking."
Most of the chaebol heads seated around the round table remained silent, though a few who knew each other exchanged idle chatter. Chairman Kim O-jung of Daeho Group and Chairman Koo Han-il of Geumseong Group were among them. Kim O-jung spoke casually to the younger Koo Han-il, and Koo Han-il, who was more familiar with Kim O-jung than with the others, found it easier to converse with him. In any case, each of them was a major figure in Korea with their own information networks, yet none could figure out why this meeting had been arranged. Still, none could refuse a summons from Jeon Myeong-heon, who was now the confirmed next president and a towering presence in the business world.
"By the way, Chairman Choi's expression is something else."
Chairman Choi Hyun-hee of Ilseong Group, whom Kim O-jung pointed out, was no exception. Unlike the others, however, Choi Hyun-hee looked extremely uncomfortable. While the rest appeared somewhat tense but not visibly distressed, Choi Hyun-hee's face was completely rigid and showed no sign of relaxing.
"Of course it is. We're all in a similar position, after all."
Koo Han-il's remark drew a nod of agreement from Kim O-jung. Though no one said it outright, the chaebol heads had, as usual, contributed election funds during the presidential race. They had pooled money and distributed it across both the ruling and opposition parties according to their individual judgments. The amounts involved were enormous—hundreds of billions of won per company. Yet there was one man who had refused their money: Jeon Myeong-heon. In the political arena, Jeon Myeong-heon was an anomaly. Politicians were always short of funds and relied on wealthy businessmen to fill the gap. Once elected, they repaid the favor with favorable policies. Jeon Myeong-heon, however, was already wealthy enough that even several more presidential campaigns—the most expensive endeavor imaginable—would not have dented his fortune. That was why he had run this election without accepting help from others. If he had lost again, everyone would have been happy. But an upset had occurred, and Jeon Myeong-heon had gone from candidate to president-elect. Given what he had done during his time as prime minister, it was clear he paid no heed to convention or custom. Now that he was president, it would not be surprising if something unprecedented happened at any moment. Anticipating this, Choi Hyun-hee had provided the largest campaign contributions in history to anyone except Jeon Myeong-heon, reasoning that anyone would be better than Jeon Myeong-heon. He had tried to establish a connection with Jeon Myeong-heon as well, but Yoo Jae-won—universally acknowledged as Jeon Myeong-heon's closest ally—had been firmly at his side, leaving no opening.
"Have you all been waiting long?"
While everyone was lost in their own thoughts, Jeon Myeong-heon arrived with his entourage, exactly one minute before the appointed time.
"I have gathered you here to ease the anxieties of those of you leading the Korean economy ahead of the new government's launch, and to ask for your cooperation in overcoming this crisis."
Once seated, Jeon Myeong-heon dispensed with formalities and went straight to the point. Although the men present were all younger than him, he used honorific language, maintaining the dignity of the president-elect. At the same time, this display of formality felt fresh—even strange—to some of the chaebol heads. Even Jeon Jae-gu, now chairman of Mirae Group, was no exception.
"What I can promise you is that, no matter what happens, I will never come begging you for slush funds."
At the same time, Jeon Myeong-heon remained as unconventional as ever. Not a single person in the room had expected him to openly mention slush funds at this gathering. Even his son, Jeon Jae-gu, looked utterly taken aback.
"To be frank, I've run companies myself, so I know exactly how irritating it is to have money squeezed out of you for one reason or another. I also know that you sometimes had to resort to illegal means just to refill what had been taken. That kind of thing will never happen under the new government. Ah, though I suppose some officials in the new administration might not have broken the habit yet. If anyone demands bribes, don't hesitate to report them. I'll make sure they get a proper thrashing. Understood?"
The chaebol heads answered in dazed voices.
"In return, what I ask of you is very simple: conduct your business honestly. Given the difficult economic situation, the burden you will bear will be enormous. The new government has prepared extensive support policies for businesses. So please do not lose courage or hope—keep working hard. That way, you can create many good jobs and pay your taxes properly."
Jeon Myeong-heon casually tossed out an enormous challenge. The effects of the IMF crisis were only beginning, yet he was already demanding employment and tax revenue. They had braced themselves for something unconventional, but this went further. Jeon Myeong-heon's speech was not finished, however.
"That said, I have particularly high expectations for Chairman Choi Hyun-hee."
At the mention of his name, every eye in the room turned to Choi Hyun-hee. Everyone wondered what Jeon Myeong-heon expected from him.
"I cannot tell you how impressed I was by Chairman Choi Hyun-hee's bold preparations for inheritance. After all, Ilseong is Korea's second-largest conglomerate. I am very much looking forward to seeing how much inheritance tax will be paid. It will surely be a great help to the country in these difficult times."
A sudden silence fell over the room at Jeon Myeong-heon's blunt words.