Korea: Hyundai's Chung May Play KingmakerLaxmi Nakarmi
On July 21, veteran politician Kim Young-Sam and Hyundai founder Chung Ju-Yung huddled together under a national spotlight for the first time since becoming rival presidential contenders. The meeting could signal an important break in the political and economic paralysis that is gripping South Korea.
Neither of them would reveal the agenda of their two-hour tete-a-tete at a National Assembly restaurant, but many analysts believe they are mapping an alliance that will ensure Kim's election as President in December and give the wily Chung an important voice in economic policy and personnel matters. They could forge a formidable combination in boosting sagging business confidence. "The two have little difference in economic policy. Both call for less regulation and freer markets," says Cha Dong-Se, president of the Lucky-Goldstar Economic Research Institute.
Political neophyte Chung vehemently denies that he has any plan to end his candidacy or support Kim Young-Sam. "He is not the type of guy who quits," says Chung Mong-June, his son and political aide. But many political analysts predict that Chung will conclude that he has no chance of winning and throw the support of his year-old United People's Party to Kim. This would trump the remaining presidential contender, firebrand Kim Dae-Jung, whom some business interests see as a threat. "Chung will cut a deal with Kim Young-Sam," says Kim Kihwan, a noted economist, "because he should prefer him over Kim Dae-Jung."
MORE CLOUT. Until recently, Chung had been collaborating with Kim Dae-Jung. But now Chung, 78, a onetime mechanic who is now a billionaire, seems to have decided that he can have more impact by cultivating the ruling Democratic Liberal Partys more popular Kim Young-Sam. As a first step, Chung recently agreed to cooperate with the ruling party's efforts to convene the National Assembly, which the opposition has boycotted for several weeks.
Kim Young-Sam and Chung complement each other nicely. Chung's support could give Kim, whose base is in Pusan at the southern tip of the Korean peninsula, the clout he needs in Seoul and the central provinces. At the same time, Chung needs Kim's political patronage to bail out his beleaguered business empire. Since Chung went into politics early this year, Hyundai Corp. has come under tremendous pressure from politically inspired tax investigations and other harassment from President Roh Tae-Woo, whose term is expiring. Chung's fifth son, Mong-Hun, still languishes in jail on charges of tax fraud brought last April.
Beyond such expediencies, the two men could also combine their strengths to tackle economic problems ranging from 10% inflation and 20% interest rates to a growing trade deficit and flagging industrial investment. Kim has never been a strong policymaker, resting instead on his laurels as a nice guy and leading exponent of democracy in the 1970s and 1980s. But he is an extremely adroit tactician who spent 40 years in opposition before shrewdly joining forces with Roh two years ago.
Chung, on the other hand, has had trouble lifting his party beyond the 17% of the popular vote it won in the National Assembly election last March. But he has tough prescriptions that Kim could help sugarcoat. These include cutting bureaucratic regulation, opening domestic markets, eliminating credit restraints, and slashing interest rates. Frustrated with Rohs extensive intervention in the economy, the Korean public may well be in the mood for this medicine.