Compensation talks with the ‘slow cow’
But for over a year, the two sides remained locked in a stalemate over the terms of diplomatic normalization, specifically, the amount of compensation Japan owed for its occupation of the Korean Peninsula.
Before I was to depart for the United States in October 1962 - I was scheduled to have a talk with my Japanese counterpart on my way back home from the U.S - Park and I invited Yu Jin-oh, a renowned intellectual who participated in the drafting of Korea’s first Constitution.
He was also the head of a Korean delegation for the fifth round of negotiations seeking to normalize diplomatic relations under the Chang Myon administration.
Park asked him how much he thought we could gain in compensation from Japan. His answer was not promising. Not more than $30 million, he said.
It was an estimate we could not accept in our negotiations.
After Yu left the meeting room, Park said, “Some suggest we need to be compensated $3.6 billion, calculating $100 million for every year of Japan’s 36-year colonial rule. And some say we have to receive at least $1 billion.”
Then Park murmured, $800 million.
“Kim, how about $800 million? People may not be totally happy with that figure. But at least that money would enable us to build a steel maker and a complex factory line. Let’s do it with $800 million.”
Park commanded me to get that figure from my Japanese counterpart in negotiations.
On my way back to Seoul from the United States, I stopped by Japan to have a talk with Japanese Foreign Minister Masayoshi Ohira, who was 16 years my senior.
Japanese media nicknamed him the “slow cow,” meaning that he appeared slow initially, but soon got charged up and achieved his objectives once he set them in his sights.
Encountering my negotiating partner face-to-face, I soon found out why he was nicknamed the slow cow. He did not speak out hastily, and it took some time for him to open his mouth. But once he did, everything he said embodied logic and reason.
On Nov. 12, 1962, I sat facing Ohira in his foreign affairs office in Tokyo, feeling the growing tension between us. I asked him directly: “How much are you willing to compensate us?”
Ohira did not respond outright. After some mumbling, he said $30 million. I inquired how he had come up with such a figure. He replied that it was his own estimate as a foreign minister.
I asked him again if he had consulted with his boss, Prime Minister Ikeda, to come up with a $30 million settlement. He said, “The prime minister thinks $30 million is more than we need to pay.”
The gap in the settlement was too wide to narrow down, so I stood up from my chair and walked around his office. It was already dark outside, as the meeting had already lasted three hours by then.
Then I said, “Mr. Ohira, why is it that I am not even offered a cup of coffee?”
Ohira had his secretary bring one. When the door was opened, I could see there was a throng of about 30 reporters just outside the door, waiting for our words on an agreement.
As I had my coffee, I said, “Tell me honestly how much Japan can compensate.” After some pause, Ohira replied $50 million ? just $20 million more than his initial proposal.
It was still far short of what was needed to seal the deal. I brought up the suffering that had been inflicted upon the Korean people under colonial rule, which lasted between 1910 and 1945.
“The extent of the exploitation and damage Japan inflicted on Korea’s resources and manpower during your colonial rule can never be overestimated,” I said.
We had also just gone through a war, which could have been avoided if Japan had acted with more prudence. “How do you expect us to accept $50 million in compensation? What do you think Korea can do to develop its economy with that money?” I snapped.
After taking some time, he said that deciding on the amount of compensation was not something he could do alone.
Judging that I needed to change the mood, I cited an old tale from Japan’s warring states period (1491-1565), a chapter of its history marked by social upheaval and near-constant military conflict to control Japan.
“I am very well aware of the histories of Oda Nobunaga, Toyotomi Hideyoshi and Tokugawa Ieyasu during the 100-year warring states period. The three men brought an end to this era and laid the way for the Tokugawa Shogunate, which lasted 300 years.
Let me remind you of this famous Japanese tale: How the three men answered how they could make the cuckoo sing”
Ohira looked stunned as I mentioned one of Japan’s most well-known historical tales, drawn into what I was about to say.
“Oda Nobunaga said, ‘I will kill the cuckoo if it does not sing. Toyotomi Hideyoshi said, ‘I will make the cuckoo sing.’ And Tokugawa Ieyasu said, ‘I will wait until the cuckoo sings.’”
Then I reflected on the tales of the three men in my talk with Ohira. “So as you and I are sitting here trying to figure things out, what can we both learn from the three warlords? Shouldn’t we take Toyotomi’s approach to make the bird sing? Then how can you come up with $50 million? Wouldn’t it make sense to you if you were standing in my shoes?”
Apparently stunned to have heard what I just said, he asked me how I learned of the tale of the three men. I said, “I learned Japanese at a very young age and read Japanese history books in Japanese. I am very familiar with your country and its history.”
After a few minutes of silence, he said, “We actually considered compensating $500 million in total. Of that $500 million, $200 million would be entirely for the compensation settlement, while the other $300 million would be provided in cooperation funds under our plan.”
That was the breakthrough in our three-hour meeting. Japan’s plan was to provide $500 million. We were near sealing the deal.
I proposed, “Let’s settle compensation at $300 million and have another $200 million in loans and grants. And let’s have the private sector contribute another $100 million.”
Ohira snapped back, saying he could not accept the private sector’s $100 million contribution. But the tide was already on my side. We reached a tentative agreement on $300 million in compensation and $200 million in loans and grants in addition to $100 million from the private sector.
At the time, Japan had $1.4 billion in foreign reserves in the midst of its recovery from World War II. Japan’s hands were also tied during the Seoul-Tokyo talks.
On the memo - the Kim-Ohira memo - we jotted down what we had so far agreed upon.
In it, we wrote: “$300 million in compensation, $200 million in loans and grants in the form of cooperative funds and another set of $100 million from an export-import bank in addition to other contributions from the private sector.”
After we wrote the memo, Ohira said he changed his mind to accept my demand after I told my rendition of the old Japanese tale, laughing out loud.
I responded, “My position in negotiations with you over compensation could ignite strong protests back home because of anti-Japanese sentiment. I am in this talk because I already put my life on the line for the success of the May 16 revolution [coup].”
Our joint memo was later finalized at $800 million in total. With the compensation settlements in our hands, we established the Pohang Iron and Steel Company that is now Posco, which cost us $130 million to build.
We also built the Gyeongbu Expressway and the Soyanggang Dam. Posco played a pivotal role in Korea’s rapid economic growth and is now the backbone of Hyundai Motors and the world-class shipping industry.
It is my great honor to have contributed to Korea’s rise by taking part in crucial negotiations with Japan.
COMPLIED BY CHUN YOUNG-GI AND KANG JIN-KYU [email@example.com]