Chapter 244
Chapter 244
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Translator: crow
Chapter Title: World's Second-Largest Economy
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With the Soviet military lending a hand to the coup, the conspirators had no choice but to respond in kind to the armed forces.
“We will halt disarmament.”
That wasn't the only gift the plotters offered the military.
They also elevated the ranks held by generals within the Party.
Of course, the official positions held by the military were so minor that the Soviet military couldn't shake the Party to its core.
Still, the problem was that these changes restored the prestige of the Soviet military.
“Who would dare look down on the defenders of the Motherland, the Red Army!”
The bolstered status of the Soviet military naturally led to demands for increased military spending.
“Khrushchev's unilateral disarmament only gave the American imperialists the chance to mock our federation. Now we must ramp up arms spending and reclaim the prestige he squandered.”
The Soviet power brokers tried to push back against the military's logic, but this was a transitional period when no one knew who would end up on top.
In such times, nobody wanted to rile up the conservatives or the generals.
Even Alexander Shelepin, the real power behind disarmament, kept quiet and pretended not to notice when it came to military budgets.
Soviet military spending swung right back into expansion mode with the turn of the year.
“These guys tanked their growth rate with the 1962 drought, and now they're dumping cash into arms? They're insane.”
Pyongyang shook its head in disbelief at the Soviets staggering along while pouring money into the military.
As of 1963, the Soviet Union wasn't the world's second-largest economy.
According to January 1963 statistics, the world's second-largest economy was Korea.
That didn't mean the Soviets' mad arms race hurt Korea, though—not at all.
“It's actually good for us.”
Korea figured the Soviet arms buildup would derail any post-Cold War thaw, so they sent Moscow a proposal: they'd accept bond interest payments in the form of Soviet treasury bonds.
“We'll do that.”
Moscow had no room to maneuver.
Unless they cut military spending to under 10% of the national budget, the Soviets couldn't even cover their bond interest.
Korea watched the renewed arms race with delight and advertised to the entire nation that it had become the world's second-largest economy.
“With the Soviets in our rearview, America's next?”
Koreans, having witnessed their nation's meteoric success story, assumed America was ripe for overtaking too.
Of course, Korea's economic bureaucrats didn't indulge in such rosy optimism.
“The ceiling for the Korean economy is half of America's.”
Anything beyond that would require a bubble, and currency appreciation wouldn't do export-driven Korea any favors.
Instead, Korea had an ace up its sleeve.
EA.
The combined economy of unified Korea, China, and Japan had the potential to rival America's.
And at the pinnacle of that bloc sat its sole currency: the EA won, or more precisely, the Korean won.
There had been plenty of debate over the unified currency's name, but in the end, Korea's proposal won out, and it became the won.
Rather than featuring buildings or people, the bills showcased each nation's symbolic birds, animals, and flowers.
It was the Korean monetary authority's way of sidestepping internal EA tensions.
EA rocketed to 54% of the U.S. economy the moment the new won launched.
Korea's economy led the explosive surge, but China's and Japan's contributions couldn't be dismissed.
“EA's already overtaken half of us?”
America couldn't hide its shock at EA's blistering growth.
Even more terrifying was how unstoppable that momentum seemed.
Meanwhile, America was hobbled by its own massive military outlays.
The gap was closing, if not widening.
“Khrushchev shouldn't have fallen.”
The Kennedy administration tried backchannel contacts to negotiate arms control with the new Soviet regime.
But the Soviets' response was ice-cold.
“We have no time for that, and no interest either.”
With Soviet leaders tiptoeing around the conservatives and military, negotiations stayed lukewarm at best, and progress stalled.
If even working-level talks wouldn't fly, arms control was a pipe dream.
Korea read America's moves and smirked.
“They need a post-Cold War world to check us, but with that off the table, Kennedy must be sweating.”
Thanks to Khrushchev's fall, the post-Cold War vision receded by years.
By the time it arrived, how was Korea supposed to be contained after bulking up even more?
Pyongyang moved to flesh out that idea.
“ASEAN? You're saying we should create an organization like that? What good is a club of poor countries?”
“Oh, it'll be plenty useful. We'll back it.”
“Pardon?”
“We'll provide ODA, official development assistance, and low-interest loans through the Asian Investment Bank.”
Korea would pump money into nurturing Southeast Asia.
In return, Korea would wield monopoly power over the grown markets.
It was straight out of the old Japanese playbook in the region.
“Uh, how much funding are we talking?”
“Fifty billion dollars to start.”
A scale no other country could dream of—but Korea could pull it off.
Korea was the world's richest nation, swimming in dollar reserves.
This was how Korea secured emerging markets.
“Don't just sell cars—push motorcycles and bicycles too.”
Beyond opening markets for companies, the Korean government provided market analysis through its intelligence agencies.
With this tailored support, Korean firms swam into emerging markets like fish in water.
“For Latin America, don't take cash payments—barter for commodities.”
“Pardon? Commodities?”
“If cash is tough, take what you can get. Worst case, snag fishing rights or something. The government will handle it.”
Korea knew how to squeeze profits even from dollar-poor emerging nations.
Lee Seong-jun ran the Korean economy with this aggressive flair.
“This year's growth rate needs to top 10%.”
“Of course, sir.”
The ferocious rise wasn't limited to growth rates.
Fertility rates climbed steadily too.
“Have lots of kids. Lots of kids means patriotism.”
The Lee Seong-jun regime's slogan was always about multiplying.
By early 1960, the indoctrination paid off in record numbers.
By 1962, Korea's population broke 67 million.
Unprecedented baby boom for an advanced nation.
The Korean Bureau of Statistics projected that at this rate, the population would hit 100 million around 1985.
A hundred million by '85 would match bubble-era Japan's scale.
Add in all of EA, and it'd be around 400 million—nothing to fear from America.
But Korea's future outlook wasn't all sunshine.
“If China gets too big, won't it challenge our leadership within EA?”
That was Korea's biggest worry.
Japan wasn't much of a threat, really.
The Japanese commonwealth was less a single nation and more a loose confederation.
Sixty-eight splinter states weren't likely to unite against Korea.
The real issue was Nanjing.
Nanjing was a single nation outmassing Korea in population.
If it kept growing, surpassing half of Korea's scale would be child's play.
Even at that size, controlling Nanjing would strain Korea.
“Nanjing is our partner—and our rival.”
Lee Seong-jun kept that firmly in mind, never letting his guard down.
That's why Korea prepared controls for Nanjing.
The flagship was the study-abroad policy.
“We'll let Chinese students study here cheap.”
Pyongyang offered scholarships and encouraged bright Chinese prospects to come study.
Once here, the government lined up part-time jobs and supported their stays.
“Now I see why Korea's advanced.”
Chinese students who studied in Korea came away viewing the government favorably.
To them, Korea was a generous nation that gave without strings.
Korea cultivated Sinophiles this way and nurtured ties with them.
Over twenty years, the government managed Chinese students through study abroad.
The payoff? In Nanjing, Pyongyang's word often carried more weight than the Executive Yuan's.
Of course, Korea didn't rest on pro-Korea cultivation alone.
“Research on the intimate history between Korea and China?”
“We'll fund it generously, professor.”
Through private foundations, Korea funneled grants to co-opt Chinese humanities scholars.
Then it had them periodically spout tales of Korea-China friendship.
“Nanjing thrives because it bends to Korean hegemony. Look at Chongqing, battered by storms after breaking away.”
Like this, Korea poured massive unseen efforts into maintaining dominance.
The result was today's number-two power, the Republic of Korea.
No one could shake that position.
Not even the world's top economy, America.
No matter who tried, Korea's foundations were too solid to drop a rank.
But to Lee Seong-jun, it wasn't enough.
He felt his sights—and ambitions—set higher than settling for this.
“One more step.”
Lee Seong-jun murmured his longtime mantra.
Last year's overtaken Soviets were beneath notice.
His gaze fixed on the world's number one: America.