[Donga Plaza] Disappointment of An `Americanist`

I belatedly discovered during my recent visit to Australia that a group of Japanese landed on Oceania in the 14th century, some 400 years before James Cook declared it a British territory. It is also interesting that there are traces of Chinese having lived there in the 18th century.

How could the people living next door to us have dared set sail in search of Australia so long ago? In light of our past, when our ancestors maintained a closed-door policy and devoted themselves to partisan strife, I cannot but admire their spirit to quest for a new world.

Some centuries have passed, but the situation remains virtually unchanged at a time when openness is particularly necessary in the economic sphere. I have been stressing the need for openness at various gatherings and frequently engage in disputes with nationalistic people. Sometimes, I am regarded as an `Americanist` but I have never thought it bad because I experienced the American tendency toward humanitarianism and balanced rationalism when I lived in the United States.

However, my impression of America began to change recently as the U.S. government threatened South Korea over Korea Development Bank¡¯s swift takeover of corporate bonds issued by Hyundai Electronics Industries (HEI). The U.S. claim, in short, is that the government should not support any private enterprise. If so, I¡¯d like to ask it, "Why do you advise foreign countries not to support private firms, when you are doing the same thing?"

The U.S. government stood security for $1.2 billion in debts to prevent Chrysler, a private firm, from going bankrupt in 1979, virtually the first time the government had offered such large-scale aid to a private corporation in American economic history. When the U.S. faced a serious financial crisis due to a series of bankruptcies of loan cooperatives (like mutual finance and trust companies in Korea) in 1984, the administration of then President Ronald Reagan helped them survive by subsidizing billions of dollars in loans. It is also a well-known fact that the U.S. government poured exorbitant amounts of money into Citibank when it was on the brink of bankruptcy under a huge amount of nonperforming loans in Latin America in the early 1990s.

We need not to go back to the distant past. Just last year, when Long Term Capital Management, originator of the hedge fund, failed, the U.S. government made desperate efforts to resuscitate the firm, and there are lots of witnesses across the nation to prove it. Furthermore, there have been numerous cases of the government providing assistance to private companies classified by state governments.

It is also bizarre that the U.S. government seems unwilling to take issue with the tens of millions of dollars in subsidies offered by the Welsh government in Britain to attract foreign enterprises. And why does it keep silent about the cash subsidies our government provided to Korea First Bank, which was later turned over to a U.S. company?

U.S. congressmen who took issue with the HEI case are mostly from Idaho and Utah, where the plants operated by Micron Technology Co., a rival of Hyundai, are located. And it is an established fact that each of them received tens of thousands of dollars in political donations from Micron Technology. I have not the slightest intention of blaming the congressmen¡¯s efforts to protect the enterprises in their constituencies, but they cannot help but lose persuasive power when their claim lacks rationality.

It is absurd that they used the term "illegal" in the written congressional proposal about HEI. How could they say the Korean company violated the law without holding a trial? It is also confusing as to which country¡¯s law it violated. I cannot accept their unilateral description of HEI as a "bankrupt enterprise. " It would add $600 million to its total sales if the price of semiconductors rose by just $1. If companies were declared bankrupt due to a lack of liquidity at a specific time, few companies in the world would survive.

They claim that Korea breached our promise -- made to the International Monetary Fund (IMF) during the 1997 currency crisis -- that we would "let insolvent firms go bankrupt. "But the IMF concluded that the Korean government¡¯s actions were the right ones. I wonder why the U.S. government ignores the IMF¡¯s opinion. Does the U.S. have the right to defy and ridicule the decisions of international organizations?

If the experts are right and there is a high possibility that the U.S. House of Representatives may adopt the resolution because it was proposed by fellow representatives, these politicians would be making an irrational decision on the basis of irrational claim. We will be closely monitoring whether the U.S. chooses to maintain or jeopardize its relationship with Korea. If "Americanists¡¯¡¯ turn their back on the U.S., it may suffer much bigger losses than the profits it would gain by selling more semiconductor chips after forcing a rival out of the market. The U.S. government should understand this.

Lee Kyu-Min, Editorial writer

kyumlee@donga.com