Chapter 218
Chapter 218
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Translator: crow
Chapter Title: Economic Growth
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The gold convertibility issue was a burden Washington would have to carry indefinitely unless it outright declared the dollar inconvertible.
It might take as long as five years of agonizing like this.
The longer the deliberation dragged on, the more delayed the shift to petrodollars would be.
‘Even if they started preparing right now, a smooth transition is off the table anyway, thanks to the groundwork we’ve already laid.’
Iraq and Egypt had already agreed to a proto-petro-won system, receiving won-denominated assets directly from the Bank of Korea.
Saudi Arabia was taking physical payment for its oil exports to Korea, and Kuwait and Syria were on the verge of doing the same.
In this setup, could America seriously push for petrodollars?
It wasn’t going to be easy.
Especially not after they’d wrecked the Bretton Woods system and were now coming hat in hand.
“You arbitrarily declared the dollar inconvertible, tanking its value—but trust us anyway.”
Who would readily accept a currency whose value had been unilaterally trashed?
Not when there were more stable alternatives like the won and physical barter.
Of course, considering America’s political clout and sheer size, the oil producers would eventually swallow petrodollars.
But forcing that agreement would cost the U.S. dearly.
Suck honey out of a single deal like we did with the won?
Fat chance.
With this backdrop, some bureaucrats had even floated the idea of pushing the won as a key currency once Bretton Woods collapsed.
“Excellency, why not bide our time until Bretton Woods falls and then aim for key currency status ourselves?”
I shot down such talk decisively.
“That’s impossible. We’re not big enough to handle it.”
For the won to become a key currency, Korea would need to run chronic deficits like America.
That required a massive domestic market, which was unrealistic given Korea’s population.
Regardless of GNP—the national income haul—the real domestic market size, even combining all of EA, didn’t reach half of America’s.
Realistically, semi-key currency status was our ceiling.
And even if we could dream bigger, drooling over such petty gains would be foolish.
We could sit back and sweetly lap up the honey dripping from dollar hegemony. Why toss that prime spot and pick a fight with America in some exhausting power play?
Proof that our position was right lay in the reports piling up.
“Excellency, Korea’s merchandise exports for the first half of the year hit $9 billion.”
“Nine billion?”
An insane figure.
Even America, the world’s top dog, lagged far behind Korea in merchandise exports.
The U.S. was exporting around $15 billion annually right now.
If the first half was this strong, the second half would only ramp up.
“The Economic Research Institute is projecting $10 billion.”
So a yearly total of $19 billion?
Last year’s $15 billion made this growth explosive.
“We’ll have to buy a ton of U.S. Treasuries.”
No joke.
We’d need to snap up at least $10 billion this year.
“If we keep buying Treasuries at this rate, Washington will start watching us closely soon enough.”
Obviously.
That was the whole point of the purchases—to make them hesitate to check us.
‘Washington and Moscow must be panicking by now.’
Korea was outpacing their expectations at breakneck speed.
Export trends suggested growth could top 11 percent.
At this rate, we might surpass the Soviets not in 1963, but mid-1962.
Trusting the high-growth projections, I summoned the economic ministry bureaucrats.
“We’ll need to draw up a supplemental budget for the second half. Don’t worry about the costs.”
“Where do you plan to allocate it?”
“Just like the Economic Research Institute report—more infrastructure investment in EA.”
We’d invested conservatively based on prior forecasts, but with the economy flooring it, dithering didn’t fit.
When surging ahead, you poured on the fuel.
“The Institute report—railroads, sir?”
“They offer the best bang for the buck.”
Japan and China both had low vehicle penetration.
Their main transport was ships and trains.
“Even investing now, the unbuilt sections will have lower returns than existing ones, so capital recovery will take ages.”
The profitable stretches in China and Japan were already laid.
The rest were low-economy routes pushed back for later.
But I was willing to eat the economic hit.
The priority was boosting EA’s growth rate.
“Bumping EA’s growth by even 0.1 percent justifies the investment.”
I pushed ahead with EA infrastructure.
There was good reason for such aggressive spending.
While America was distracted by gold convertibility, we needed to balloon EA’s scale so Washington wouldn’t lightly move against us.
We kept pouring money to rev EA’s growth engine nonstop.
“Uh, you’re really giving loans to us too?”
“You supply parts to Korean conglomerates, right? Bring the paperwork, and the loan’s yours. No worries.”
Any subcontractor feeding Korean firms got loans, even if run by Japanese or Chinese owners.
Some bureaucrats raised eyebrows.
“Do we really need to lend to Japanese or Chinese operators too?”
Yes.
How much did their cheap subcontracting labor boost Korean conglomerates’ edge?
Long-term, Korea had to offload all low-wage industries to China and Japan anyway.
Despite the concerns, I kept the loans flowing.
I also began tweaking the industrial structure.
“The textile industry will be obsolete soon. Shift it to Japan or China.”
Not handing over the whole sector—just moving the factories.
Korean firms wouldn’t get eaten alive there.
Given Korea’s dominant sway in EA, factories in China or Japan versus Korea made little difference to their status.
And relocating industries brought side benefits.
“Our headline profits might look a bit slimmer.”
“That’s true.”
Even if we were hogging the pie, it looked ugly.
So we needed to fine-tune surpluses using China and Japan.
If that failed, we could always shift to the Republic of China kill shot.
Anyway, with all this honey from EA, voices in China and Japan grew louder that joining was the right call.
Even scholars and politicians who’d once opposed EA hardest flipped, now shouting:
“EA is a blessing and an opportunity.”
“Let’s go with EA.”
Conversely, voices in Korea griped about money flowing out to EA.
“Why build factories and railroads for those poor, uncivilized Chinese and Japanese? Better spend it helping our own poor.”
The opposition did weaponize it.
“If EA vanished, individual Koreans would get 10 percent more benefits. Koreans first! Korea First!”
Not entirely wrong.
EA outflows did mean less for our people.
But rulers couldn’t fixate on the visible.
Korea earned equal-superpower treatment from America and the Soviets thanks to EA.
How do you quantify intangible prestige like great-power status in dollars?
I ignored the opposition’s jabs.
Still, I looked into the complaints’ roots.
Soon, the intelligence agency reported.
‘Urban poor discontent, in the end.’
City slum dwellers had grounds to gripe.
Sidelined from growth perks, watching national resources flow abroad—fair enough.
The shadow of economic growth.
A nagging issue for me.
Slow the pace, carve out slack, and we could aid them.
But I couldn’t pick relief.
‘This nation, Korea, is in a hurry every minute, every second.’
A minute now was worth an hour in ten years.
While America floundered, this unchecked golden window decided if we leaped to number two—or not.
Hesitate for welfare or redistribution, and we’d face America’s check in the form of a deadlier blade.
Thus, I had to betray those who trusted and backed Leader Lee Sung-jun.
A ruler like Lee Sung-jun had to be a utilitarian prioritizing society’s net gain.
Frankly, such choices left a bitter taste.
I silently pulled out a cigar and lit up.