Kim Blasts Regimes That 'Lie'
By Kevin Sullivan
Washington Post Foreign Service
Friday, January 9, 1998; Page A01
"Many of the leaders of Asian society have been saying that military dictatorship was the way and democracy was not good for their nations," Kim said in a wide-ranging 90-minute interview at his home in this suburb of Seoul.
"They concentrated only on economic development," he said, without singling out any nations but referring to "Asian-style democracy," in which governments are built around a strong leader who controls economic policy. "I believe that the fundamental cause of the financial crisis, including here in Korea, is because of placing economic development ahead of democracy."
Kim, a crusader for democracy and human rights who was imprisoned, exiled and sentenced to death, and who survived assassination attempts at the hands of South Korea's previous military dictators, also said he hopes his life will inspire his nation's youth.
"If parents can tell their kids, `Look at Kim Dae Jung: Live upright, put your effort into a good cause and you will be successful,' then I think my life would be very meaningful," said Kim, who won the presidency last month on his fourth attempt in a quarter-century.
Kim also reaffirmed his "100 percent commitment" to the $57 billion bailout of his country's crippled economy by the International Monetary Fund. Although the IMF is requiring tough reforms that are expected to lead to unprecedented layoffs and corporate bankruptcies, Kim, who has close ties with the nation's militant labor unions, said he believes he can negotiate a deal to avert massive strikes, which would hamper the recovery of the world's 11th-largest economy.
Kim described South Korea's relationship with the United States as "mutually beneficial" on matters of economic trade and security. He supported the continued presence of 37,000 U.S. troops to deter aggression from Stalinist North Korea.
And Kim, who is seen as far more moderate toward the North than outgoing President Kim Young Sam, said he will move "aggressively" to provide emergency food aid to the famine-stricken North. Kim Dae Jung said that his hopes to engage the Pyongyang government more openly, perhaps even through a meeting with reclusive leader Kim Jong Il, were well known to the North Koreans and "we are just waiting for their response."
Two days after his 74th birthday, Kim Dae Jung appeared rested, robust and confident as he discussed the triumph and tragedy of his life and the severe problems facing the nation he will lead after he is sworn in on Feb. 25.
Kim spoke over a breakfast of hot cereal, eggs, ham, sausage and fruit in the dining room of his two-story stone house, nestled into a community of comfortable, single-family houses 20 miles north of Seoul. Kim's house is just 10 miles from the tense Demilitarized Zone separating the two Koreas; the highway to his town is lined with a fence topped with coils of barbed wire to keep North Korean agents from coming ashore from the Han River.
Outside Kim's house, uniformed security guards stood on every corner for several blocks in each direction. Security officers were also stationed inside the house, where a small downstairs room has been turned into a communications center, linked to a large, temporary command center that was built on the lot next-door immediately after the election.
Kim laughingly noted that the security agents resemble those stationed outside his home in the 1980s, when he was under house arrest in Seoul. "These people are now protecting me; before, they were trying to contain me," he said. "The thought of doing this for five years in the [presidential] Blue House makes me a little uneasy, even embarrassed."
Kim spoke at length about the financial crisis facing South Korea, arguing that the nation needs a thorough reform of government and of the corporate financial structures that have led it to the brink of insolvency.
"In order to rejuvenate the Korean economy, I believe we have to do two things," Kim said. "The first is to increase our export volume, and the other is to induce foreign investment. We will be very aggressive on both.
"Our new administration is going to take all these policies not because of the requirement by the international community or the IMF, but we will take this opportunity to reform our economic system so that we can be competitive in the world economy."
Kim said he believes the problem in South Korea has been a lack of the transparency in government and finance that befits a fully functioning democracy. The Asian crisis that swept from Indonesia, Thailand and Malaysia to South Korea, and which now threatens Japan, resulted from a failure to install a vibrant democracy to keep governments and markets accountable, he said.
"If we had true democracy in Korea, then the collusive intimacy between business and government and corruption would not have been as great here. And the wealth would not have been allocated to only a few people. Usually the dictatorship or authoritarian style of government lies to people.
"We've been told we are very wealthy, and we have been told to spend dollars abroad because we had too many of them. We had approximately $40 billion of deficit when President Kim Young Sam came in, and now we have $150 billion of deficit. So, basically, we've been living well off the loans that we've been given; the people have been deceived, and that's why we have this financial crisis."
Kim dispatched a team of advisers to New York and Washington this week to meet with U.S. officials and international bankers who are considering ways to help South Korea out of its financial mess. Kim said South Korea's immediate problem is that it has $90 billion in short-term loans coming due in the next few months. The bankers in New York, representing some of the world's largest financial institutions, are trying to devise ways to roll over those loans or find other solutions to give Seoul more breathing room on its short-term debt.
One proposal is for the banks to extend the maturities on some of the debt in exchange for the South Korean government's guaranteeing of some debt now held by banks or other private institutions. While the notion of the government putting itself on the hook for private debtors has been controversial, officials at the Finance Ministry have said it may in fact do so.
"If that becomes the only choice, I will consider it," Kim said. "I think it is necessary to make the rollover, and it is important to make the creditors feel safe."
International financier George Soros visited Kim this week and told reporters later that a government guarantee of private debt would not solve South Korea's problems. Soros also strongly advised the government not to borrow more money to pay off loans that are coming due. But the government is reportedly planning to do just that; media reports here say it plans to borrow as much as $35 billion to pay off loans, turning debts due now into debts due later.
The ultimate solution to South Korea's problems, Kim said, is increased investment, especially by foreigners. He said Seoul is moving quickly toward removing limits on foreign ownership of stocks and real estate, as well as upgrading South Korea's murky accounting practices, which make it virtually impossible to assess the health of a company -- or the government. "We want to induce investment by making foreign investors feel they have no problems here," Kim said.
During the election campaign, Kim alarmed foreign investors and analysts by suggesting that Seoul should renegotiate the IMF deal. Today, he conceded that he initially did not "understand the full depth" of the financial crisis, and he blamed outgoing President Kim for misleading him and the South Korean people. "The current government had been telling everybody that the economy was doing well, and that we were the 11th-largest economic power, and the per capita [GDP] was over $10,000 and we did not have any problem with the dollar [exchange rate]. So I did not fully comprehend the situation; nor did any of the Korean people."
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