First things firstWilbur Ross was branded a ruthless pillager of Korea Inc. during the Asian financial crisis of the late 1990s. He ripped apart and gobbled up distressed corporate assets. Former bureaucrats who remember him almost fainted last week when he was named U.S. Secretary of Commerce by the incoming Donald Trump administration.
The founder of financial advisory group Rothschild flew into Korea in early 1998 when a grave liquidity crunch put many companies in deep distress. Ross was 60. He was well connected with policymakers in the Kim Dae-jung administration. President Kim sought advice from him often. He knew the weaknesses of the Korean system. He knew the media. He offered to invest $1 billion in Korea. He was touted as a savior and even earned an honorary medal from the president.
Korea was easy prey. Ross used Korean financial institutions skillfully. Although he pledged $1 billion in investments, he only needed to use $350 million of his own money and got the rest from the government restructuring fund or state-run Korea Development Bank. He ripped Halla Group apart. Halla Cement was sold off to Lafarge of France, Halla Pulp to Bowater of the United States and Halla Engineering and Heavy Industries to Ford. It was a typical play by a vulture fund. He pocketed 80 billion won ($69 million) from arranging the deals in just one year. He also advised on other major deals in Korea including the sale of Hanaro Telecom and Hyundai Trust Investment.
A former finance ministry official who dealt with him remembered Ross as being relentless. He used his connections with political powers to get what he wanted. “He was really nasty to deal with,” he said. With his handsome earnings from Korea, he created WL Ross & Co. in New York in 2000. His net wealth was $2.9 billion as of 2014. He had built his fortune in Korea.
The fact that he will soon head the trade department of the world’s largest economy is bad news for Korea. I have a bad feeling about his policy in regards to Korea. He could hardly bear any appreciation for Korea just because the country made him richer. Trump’s economic team has been composed of members who will be loyal to the billionaire-turned-president’s prized “America First” campaign on the external front.
Korea faces heavyweight protectionist champions on the trade front, and yet we have no experts to try to fight them. Trump’s transition team is said to have shunned the Korean government, claiming it is more or less an administration at death’s door. Tokyo has been pulling out of bilateral currency swap talks, saying it cannot know who is in charge of economic affairs in Seoul.
First things first: we need to restore the economic command center for our country as quickly as possible. The economy is on the brink of being swamped by perilous waves from all sides. The economy could be completely wiped out while the political realm is entirely engrossed with the impeachment. Current Prime Minister Hwang Kyo-ahn can hardly act on behalf of the disgraced president. He would not be able to confidently address offensives from the U.S. China and Japan as he comes from a failed administration and would be regarded as a member of the disgraced circle of President Park Geun-hye. Incumbent Deputy Prime Minister Yoo Il-ho as well as Yim Jong-yong, who had been nominated to replace Yoo, also would make poor substitutes.
Rival parties must first make a bipartisan agreement on the deputy prime minister in charge of the economy. Parties may not easily agree on a choice for the prime minister acting on behalf of the president waiting for impeachment because of political conflicts of interest. But a deputy prime minister for the economy should not be that difficult to agree on. He or she could navigate the ship on its rough seas for at least the next six months.
The reliever should be someone who is well-versed in international finance, has experience of managing in tumultuous times, is well-known to the international community, and without political baggage — and yet with the capacity to fully command a very shaken crew.
There are good candidates available. Veteran finance ministers like Kang Bong-kyun, Yoon Jeung-hyun, Lee Kyu-sung, Lee Hun-jai and Jin Nyum could sufficiently handle potential opponents like Wilbur Ross. But again, political conflict of interests could get in the way.
The economy is not separate from the military and foreign affairs of a country surrounded by global powers. When the economy is wrecked, our safety and very livelihoods would also be at risk. They can fight as much as they want, but politicians should give confidence to the people that they won’t jeopardize the national coffers. A nonpartisan deputy prime minister for the economy could help assure the people that their economy will be safe despite political unrest and regardless of who becomes the next prime minister or president.
The economy always takes revenge if it is ruined by politics. The political scene could entirely be overturned. Regardless of the outcome of the vote on the impeachment motion, the legislature must pick a captain to be in charge of the troubled economy.
JoongAng Ilbo, Dec. 8, Page 30
*The author is an editorial writer of the JoongAng Ilbo.