Kim may well win Korean election

LONDON: The Republic of Korea (ROK)'s 73-year-old veteran opposition figure, Kim Dae-jung, may well win the country's presidential election on Dec. 18, 1997. Kim Dae-jung's chances of success at the polls have improved since he forged a political alliance with Kim Jong-pil's conservative opposition party, the United Liberal Democrats (ULD), and because of the disarray within the ruling New Korea Party (NKP). That disunity has intensified following President Kim Young-sam's resignation from the NKP on Nov. 7, 1997.

Despite Kim Dae-jung's long political career, the economic policies he has traditionally advocated will not resolve the ROK's current economic problems. Furthermore, while he has the requisite political skills to improve relations with the Democratic People's Republic of Korea (DPRK), he is not declaring publicly how he would do so.

The ROK undoubtedly suffered from a lack of strong political leadership during Asia's financial crisis that began in October 1997. Whoever wins the December election will have to fulfill this role if he is to solve the ROK's economic problems and improve its relations with the DPRK.

The first democratic presidential election since Gen. Park Chung Hee's victory at the polls in 1971 was held in 1987. If Kim Dae-jung wins the forthcoming December elections, it will be the first time an opposition candidate has done so in modern Korean history. Moreover, it would signal a further decline in the military's influence over ROK politics.

However, Kim Dae-jung's victory is not certain. Political opinion polls suggest that the NKP, if it united around a single candidate, could still win the election. NKP presidential contender Lee Hoi-chang -- a former judge, who previously headed the government's anti-corruption drive -- began his campaign promisingly.

But revelations that his two sons had avoided military service have damaged his chances of becoming South Korea's next president. In an attempt to revive his political fortunes, Lee has distanced himself from the unpopular Kim Young-sam.

As Lee's election prospects have diminished, NKP efforts to find an alternative candidate to represent the Party have increased. Some NKP members have even switched their support to Rhee In-je, a successful young regional governor whom Lee defeated for the NKP nomination in July 1997.

As a result, Rhee left the NKP in September to set up his own conservative New Party, appealing to voters keen to see a younger generation controlling Korean politics.

He has, however, avoided any clear statement of his policies. With a growing reputation for opportunism, Rhee -- like Lee -- is trailing behind Kim Dae-jung in the opinion polls. Although Rhee and Lee are splitting the conservative vote, thus giving Kim a stronger chance of winning, neither show any willingness to join forces. Rhee may well calculate that he is better off politically by campaigning on his own, rather than by entering into a weak partnership with Lee Hoi-chang.

Kim Dae-jung is closer now to winning the presidency than at any time in his political career. Kim is from the Cholla region in south-western Korea, a relatively disadvantaged area that guarantees him approximately one-third of the vote in every national election.

Since Kim narrowly lost the 1971 poll to Gen. Park, he has been characterized by successive ROK military regimes as a subversive radical soft on North Korea. He has survived kidnapping and assassination attempts, as well as arrest and a treason verdict after he was falsely blamed for plotting the Kwangju uprising in 1980.

Since 1987, a divided opposition has prevented Kim Dae-jung from succeeding at the polls. But even if he had won, the military may have prevented such a 'radical' from taking office.

The fact that the military is not expected to exert such influence in the December election indicates the declining political role of the armed forces. Kim Dae-jung is also hedging his bets by expressing his support for a strong military and advocating the release of two jailed former presidents, Generals Chun Doo-hwan and Roh Tae-woo.

In October 1997, Kim Dae-jung enhanced his position by establishing a political alliance with another longstanding ROK political figure, Kim Jong-pil. Kim Jong-pil is reported to have masterminded Gen. Park's 1961 military coup, under whom he became prime minister. He was responsible for Kim Dae-jung's arrest in 1973, and was an unsuccessful presidential candidate in the 1987 elections.

By splitting the vote with Kim Dae-jung and Kim Young-sam, Kim Jong-pil contributed to the victory of former Gen. Roh Tae-woo. The links between Kim Jong-pil's right-wing ULD and Kim Dae-jung will help allay lingering suspicions of Kim Dae-jung's leftist identity.

For his part, Kim Young-sam is supporting Kim Dae-jung on the understanding that if he wins, Kim Young-sam will become prime minister. Although this alliance could win the election, it is unlikely to survive in the long term.

The ROK well deserves its place as one of the five 'Asian Tiger' economies. It has experienced a period of sustained growth since the 1970s to become the world's eleventh largest economy and a member of the Organization for Economic Cooperation and Development (OECD).

Preferential loans have allowed the country's conglomerates -- or chaebols -- to become the driving force for economic growth. A disciplined labor force and job security have further contributed to rising productivity.

The state has strongly influenced the ROK's economy and financial markets, as well as strictly controlling foreign investment. But the benefits of this protective approach have now been overshadowed by market inefficiencies.

By mid 1997, the economic signals were mixed. Seoul had progressively devalued its currency -- the won -- to remain competitive with Japan, and, in June 1997, the ROK secured a US$98 million trade surplus -- its first in two years.

At the same time, however, vulnerable chaebols began to liquidate. Hanbo Steel declared bankruptcy and, in October 1997, 0Kia Motors was taken into government ownership. In addition, eight of the top 40 chaebols have been unable to repay their debts. Since the government does not want banks or chaebols to collapse so close to the election, it has maintained its poor economic management.

The buffeting of Asia's financial markets in October and November 1997 has severely affected the ROK, reducing its growth rate to below 6 percent. There is a growing sense that the ROK may, like Thailand and Indonesia, need International Monetary Fund (IMF) intervention to stabilize its economy.

The financial crisis is having a strong downwards effect on the won. The won fell from 890 to the U.S. dollar in mid-1997 to 960 to the dollar in October. Analysts predict that it will fall further to below 1,000. The ROK share market has also suffered losses, although not on the scale witnessed in Hong Kong. An upturn in interest rates is adding to the ROK's economic problems, with Moody's and Standard & Poors adjusting their credit ratings downwards.

Kim Dae-jung's previous economic statements do not indicate his suitability to take the hard decisions necessary to cope with the ROK's problems. He has publicly identified with the economically disadvantaged sections of ROK society especially the trade unions -- and has so far opposed any policies that undermine their interests. Furthermore, earlier in 1997 his opposition to the ill-fated labor-law reform legislation was a determining factor in the decision to water it down.

Kim Dae-jung has been careful in his statements on North Korea, suggesting that he sees no need for a new approach. He has said that he will meet DPRK leader Kim Jong-il, that existing agreements need to be implemented, and that change will only occur once North Korea introduces political reforms and opens up its economy to foreign investment.

The ROK government, for its part, has exploited the threat of a DPRK military attack to its electoral advantage by portraying Kim Dae-jung -- like previous opposition leaders -- as being soft on the North. Moreover, by causing occasional incidents in the demilitarized zone between the two countries, the North itself has exacerbated that threat perception.

The DPRK leadership has hitherto been unwilling to deal with Kim Young-sam. This does not mean, however, that Kim Jong-il would agree to meet with Kim Dae-jung were he to become president. Indeed, the North may prefer a reactionary rather than a radical South Korean president.

Shortly before former DPRK President Kim Il-sung's death in July 1994, he told former U.S. President Jimmy Carter that he would meet Kim Young-sam, but died before that meeting could take place. Although Kim Jong-il will be under pressure to meet the new ROK President, he will avoid a meeting if he so chooses.

The DPRK's rejection of the proposed agenda for the four-party -- U.S., China, North and South Korea -- talks on the status of the Korean Peninsula suggests that the DPRK is conscious of its weak economic position and is reluctant to engage in substantive dialogue. It is in the ROK's interest for the DPRK to resolve its economic crisis effectively. The alternative might be a military attack on the ROK by the North, or an implosion that would require a massive relief operation.

Whether a new South Korean president can deal successfully with the North will continue to depend on Pyongyang's willingness to engage in a constructive dialogue. This willingness is yet to be demonstrated. A new ROK president will also need to build on the country's growing political and economic relationship with China to minimize misunderstandings over respective interests in the North, and to reach a stronger understanding of preferred outcomes.

The ROK is in urgent need of strong leadership to resolve its economic problems, many of which result from past government failings. If Kim Dae-jung is elected president in December, he will need to change the state's economic policies in order to resolve the crisis.

Steady leadership will also be essential in managing the ROK's policy towards the DPRK. The new president will need to be alert both to the threat of a military attack from the North, and to the opportunities that may arise for a more constructive relationship. Patience will be a key element, but having won the economic competition with the DPRK, time is now on the ROK's side.

Window: If Kim Dae-jung is elected president in December, he will need to change the state's economic policies in order to resolve the crisis.