President Kim Young Sam and his interpreter are jogging every morning at 5:15 to get ready to run with President Clinton in Washington during a visit beginning July 25. In advance of his trip, Kim, 67, spoke with BUSINESS WEEK World Editor William J. Holstein and Seoul Correspondent Laxmi Nakarmi for 75 minutes in the official Blue House.
Q: Will you qualify to join the Organization for Economic Cooperation & Development by next year?
A: Yes, we think we can meet the guidelines of the OECD. Within this year, our per capita income will reach the $10,000 mark, and our economy is already the 11th-largest in the world. If the economy continues to grow at its current rate, by the beginning of the 21st century our per capita income will have risen to $20,000, with a gross domestic product surpassing $1 trillion.
After the Korean War, the destruction was almost total. The U.S. helped us a lot. The U.N., too. Now, it is our turn to contribute to the world by helping developing countries in need. We will upgrade
Q: How are you controlling your country's big conglomerates, or
A: The problem of the chaebol acting like an octopus with their tentacles stretching throughout the economy should not continue. We need a better balance between big and small companies. We cannot just let the chaebol grow by taking over small businesses. I have sought to restrict their reckless expansion. We've used antitrust laws and reformed our tax system to regulate them. We have cracked down on illegal insider trading. Had I not taken these measures, the chaebol would have gotten even bigger.
Q: So why are you allowing Samsung [group] to enter the auto business, and others in telecommunications?
A: These are not cases where there is a one-sided monopoly but rather several companies competing. There has been no specific favor to a specific company. Regarding autos, Korea is already the fifth-largest auto manufacturer in the world. Given our rising status, we should upgrade our technology. We let Samsung into the industry after carefully considering all the pros and cons. We have to introduce more competition for the sake of quality and technology development.
Q: What about North Korea?
A: North Korea is in an extremely difficult situation, with shortages of energy and food. Because of these difficulties, we're helping the people. We're starting to deliver 150,000 tons of rice. We want them to become stable as early as possible. There will be important dialogue between the Koreas in coming months. Kim Il-Sung died only two weeks before I was scheduled to have a summit with him last year. Now, there is no alternative to Kim Jong-Il. If he becomes leader, peace can be promoted.
Q: Are you pleased with the way the U.S. managed the nuclear power accord with the North?
A: I have been consulting very closely with President Clinton about this. We have had four summit meetings and 10 phone conversations to discuss it. The final agreements are exactly what we wanted to see. [South] Korea will play a central role in the design, manufacturing, construction, and supervision of the light-water reactors. U.S. companies will participate as subcontractors.
Q: Is the U.S. moving too fast to develop relations with the North?
A: The U.S. approach to the North should be based on the extreme significance of intra-Korean relations. This is an issue between the two Koreas. If there is genuine and sincere dialogue, and a change of attitude [in the North], then--and only then--the U.S. should improve relations with North Korea.
The U.S. should realize that its relations with [South] Korea are very important in trade and defense. It should consider the weight of those relations vs. its insignificant interests in the North. Right now, there is no comparison.
Q: Do you anticipate more trade disputes with the U.S.?
A: Overall trade relations are very good. The size of the two-way trade flow has grown from $40 billion last year to approximately $50 billion this year. Yes, there are some problems in autos, financial markets, intellectual property, and agriculture. But we can reach agreement on them. We are actually in trade deficit with the U.S., about $3.1 billion up to May. So I don't think there is a need to create a serious issue, given the trade surplus the U.S. enjoys.
Q: Who do you think your successor should be?
A: The person should be very honest, very sincere. In terms of morality, he should be straightforward. He must be very strong. One other thing is crystal clear: An overwhelming majority of the people desire a generational change in political leadership. Given that desire, it is my responsibility to make it