Seoul, Blue House.
In a dressing room inside the Presidential Palace, Kim Young-sam put on an old-school gray suit and asked a makeup artist to give her a carefully worn look before walking out of the room.
A staff member who chased him out of the locker room tried to put a windbreaker on Kim Young-sam, but was refused.
The current temperature in Seoul is already below zero, but the next thing to play is the sadness card. Being cold will definitely increase the effect.
In the outer living room, all cabinet officials and presidential aides stood up one after another when they saw Jin Yongsan's appearance, with solemn expressions on their faces.
Finally, he nodded slightly to everyone. He glanced at the screen on one side of the wall showing the huge crowds of people outside the Blue House. He took a document from secretary Jiang Xuanhao and read it while walking. Finally, he came to the temporary building outside the Blue House to face hundreds of thousands of people. podium.
There are two large screens on both sides of the podium, reflecting the figure of Kim Young Sam on the stage.
Offstage.
The crowd stretched for several kilometers, far exceeding the scale on October 18.
Jin Yongsan has obtained some inside information in advance. This time, there are also people instigating, but it is no longer a small team like last time, but mainly the chaebols in South Korea who have stronger mobilization capabilities in all aspects.
The time is the evening of November 20th.
The contents of the agreement announced at ten o'clock in the morning exceeded everyone's expectations. If the people were able to cope with it, the chaebols who sensed that their own interests were seriously threatened could not sit still.
The bailout package of up to 60 billion US dollars involves specific agreements, each of which makes the plutocrats feel that the coming days will not be easy.
For example, some of the core provisions.
First, South Korea needs to raise the bank's benchmark interest rate by 25% at one time.
The main problem facing South Korea during this financial crisis is debt, which is so huge that many companies need to continue to maintain cash flow through cyclical borrowing. The one-time increase in the benchmark interest rate by 25% will undoubtedly significantly increase the financing costs and difficulty of financing for Korean companies, causing many companies to completely break their capital chains and go bankrupt.
Second, open up trade and abolish import licenses and export subsidies.
The main reason for South Korea's rapid economic rise in the past thirty years is the national foreign trade system.
Since the Park Chung-hee era, the South Korean government has supported enterprises at all costs to earn foreign exchange through exports, including a large number of explicit or covert import protection and export subsidy measures.
This time, trade is completely opened, import restrictions are abolished, and export subsidies are cancelled. There is no doubt that the export competitiveness of Korean companies will not only be significantly reduced, but they will also face competition from a large number of overseas companies due to the abolishment of import barriers.
The first one to bear the brunt is the Korean automobile industry.
Previously protected by trade barriers and supported by export subsidies, four of the top ten chaebols in South Korea were mainly engaged in automobiles. Next, it is conceivable that all these protective measures will be cancelled, and the Korean automobile industry will face strong competition from automobile companies from all over the world.
Thirdly, and also the most fatal item in this agreement, Korean banks, securities firms and other financial companies need to be supervised by the IMF, and the financing, mergers and acquisitions of Korean consortiums need to be approved by the IMF.
This is a complete takeover of South Korea’s financial sovereignty!
Among the specific details involved, the Korean government’s subsequent interest rate adjustments, government bond issuance and other financial measures need to be approved by the IMF; South Korea’s foreign exchange inflows and outflows need to be approved by the IMF; as for the Korean consortium, of course, the IMF is not It oversees everything, but only supervises capital operations above a considerable scale.
However, the threshold for this 'considerable scale' is unbearably low.
1,000,000!
Within the IMF supervision period, large-scale Korean consortiums must report to the IMF for financing, mergers and acquisitions and other operations exceeding US$1 million, and can only be executed after receiving the signature of the IMF's chief representative in South Korea.
A mere US$1 million may not be a big deal to small and medium-sized enterprises, but for large consortiums, it is simply the level of supervision that requires them to take a breather.
How can the major chaebol families in South Korea accept this easily
So, what should I do if I disobey and violate
The final 291-page rescue agreement certainly did not ignore these details.
If any company is unwilling to comply, it is very simple. The IMF will work with the Korean government and overseas capital to recover all loans from the violating companies.
To put it bluntly, if you don’t want to abide by the rules, you can just pay off the debt.
That's the problem.
With the ultra-high debt ratios of more than 300% among major consortiums in South Korea, they simply cannot afford to pay them back. If you can't afford the repayment, and you are forced to recover, the only result is bankruptcy.
All in all, before contacting the IMF, the major financial groups in South Korea were very eager to seek rescue. However, when the agreement was finally finalized, they found that the agreement was too harsh and was like a noose that could hang them at any time. Wrapped around the neck and shoulders, the consortium suddenly became reluctant again.
In addition to the previous case on October 18, then it will happen again.
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If the authorities are incompetent, let some people see that the Korean people are not easy to mess with. If everyone makes a fuss, even if they cannot completely overthrow the IMF agreement, they still hope to obtain certain concessions.
"... Citizens, I do not deny that this crisis is a painful lesson for the Republic of Korea. Although it is extremely painful, we have to accept this lesson because it is the result of many blind and reckless economic reforms of the Republic of Korea in the past thirty years. The consequences of the policy..."
"...If it rejects the IMF's rescue, South Korea will become the first developed country to declare bankruptcy. The wealth accumulated by its citizens over the past decades will be wiped out with the continued sharp currency depreciation. The Republic of Korea will have an economy similar to that of the United States in the 1930s. In a Great Depression like the collapse, a large number of companies closed down, countless people lost their jobs, and the unemployment rate may reach over 30%. Perhaps our entire generation will lose their future as a result. This is an outcome we cannot bear... "
"... Citizens, at this time of crisis, I just hope that everyone can unite and overcome the difficulties together, instead of deliberately creating differences and dragging the Korean nation into a darker abyss... "
"… please… "
As Kim Young-sam took a deep bow, the crowd that had been noisy during the president's speech finally gradually quieted down.
Jin Yongsan knew very well that this was a good start, so he had to calm down a little. After he straightened up, facing the cold wind with a temperature of sub-zero, he offered with a sad expression that some media reporters, labor union representatives, etc. on the scene could discuss the issues they were concerned about. Open questions will be asked and he will answer them live.
In the gradually falling dusk, lights began to light up outside the Blue House.
The microphone was passed around and the first questioner soon appeared.
"Mr. President, this is Noh Chan Hyuk, a reporter from Chosun Ilbo. I would like to ask, the authorities have signed a seven-year agreement with the IMF. Do we really have to accept seven years of financial supervision from an international financial organization? "
Hearing the tragic questions from the loudspeaker, Jin Yongsan felt happy in his heart.
This is a question that the staff team has rehearsed in advance.
After calming down, Kim Young Sam’s tone remained heavy and he replied: “This is exactly what I want to explain to the people. The total amount of the IMF bailout agreement is US$60 billion, but this does not mean that South Korea must bear the entire US$600 billion. With a US$100 million loan, we only need to withdraw the funds needed by the country in batches, so it requires the joint efforts of all citizens. Similarly, the 7-year agreement is not fixed. As long as we can use our own efforts to reduce the withdrawal of funds as much as possible and repay it as soon as possible, then , the day South Korea repays its IMF loan will be the moment we get rid of IMF supervision."
Whether it was the hundreds of thousands of people at the scene or the countless people in front of the live TV broadcast across South Korea, they couldn't help but breathe a sigh of relief when they heard Kim Young-sam's explanation.
That's the way the human heart is.
When there is room for change in something that was thought to be absolute, the tit-for-tat mentality will inevitably fade a bit.
Immediately afterwards, another union representative raised a question: "Mr. President, the IMF agreement requires the authorities to change the current labor system and allow companies to conduct large-scale layoffs. Don't you think this clause is too harsh?"
"This is indeed a very harsh clause." Contrary to many people's expectations, Jin Yongsan did not deny it. He still looked heavy and said into the microphone: "However, it is a result that we have to bear in a short period of time. I As I just said, this is a disaster for the Republic of Korea. No one can escape. Therefore, I can only guarantee that the authorities will be the first to bear the consequences. Whether it is me or the person who signed the IMF agreement The three presidential candidates will push the government to carry out large-scale downsizing in order to save the country’s budget expenditure. Moreover, I believe that the difficulties are only temporary. As long as the country gets through the difficulties, employment can also return to its previous level.”
The layoffs started from the government, and such a promise once again eased the emotions of countless people.
The microphone passed again.
Someone else asked: "Mr. President..."
“…”
As the questions continued and Kim Young-sam patiently responded, the mood of public opinion shifted from anger at the authorities signing an agreement that was a loss of power and humiliating the country to a kind of shared hatred of the enemy.
The public lectures and interactions finally came to an end until darkness completely enveloped the city.
Finally, Kim Young Sam reminded everyone in the gentle tone of an elder to disperse in an orderly manner to avoid being trampled, and finally returned to the Presidential Palace surrounded by his escorts.
Return to a lounge inside the Blue House.
This time, Jin Yongsam, who was really tired, sat down on the sofa, looking at the TV screen that was still broadcasting live footage of the crowd outside the venue, and slowly drank a cup of hot tea, until General Affairs Secretary Jiang Xuanhao came to report again, saying that the crowd had begun to disperse. Go and finally breathe a sigh of relief.
However, it's not over yet.