Shadow of the alliance
The author is an editorial writer of the JoongAng Ilbo.
The summit in Washington between South Korean President Moon Jae-in and U.S. President Joe Biden brought back the memory of a poignant scene from December 1964 in the Ruhr region of Germany. President Park Chung Hee (1917-79) delivered an emotional speech at a city hall in front of Korean miners and nurses who moved far away from their poverty-stricken home to make money. “My heart aches as the president of the Republic of Korea. But let’s save our children from these agonies. Let’s leave them a wealthier country.” The crowd in the hall was awash in tears. Park had to stop time and again to clear his throat. Under Park, over 20,000 workers were sent to West Germany from 1963 to 1977. Applicants rushed to take advantage of the Germany government’s migration work program. At the time, 2.5 million out of the 24 million population of Korea were without jobs. The miners and nurses worked hard.
Park flew from Tokyo and made seven stops to get to West Germany. People in Korea were going hungry and there not enough factory jobs at the time. Few governments offered to lend money. Korea had to rely on migrant workers to earn foreign currency. The rags-to-riches tale often dubbed the Miracle on the Han began with the sweat and tears of migrant miners and nurses in West Germany.
After nearly six decades, President Moon Jae-in received red-carpet treatment from the leader of the world’s most powerful country. Korea entered into an economic alliance with the No. 1 economy with a promise of $39.4 billion investments in the U.S. by Korean enterprises. Moon gloated about a “best-ever state visit and summit.” Biden exalted that the two leaders and their countries could “do great things together.” Biden asked the chiefs of four companies — Samsung Electronics, Hyundai Motor, LG Energy Solution and SK Innovation — to stand up during a live press conference and cried out, “Thank you, thank you, thank you!” Korea has never gotten such a reception.
Those four companies are pillars of Korean manufacturing power. Semiconductors, batteries and electric vehicles are high-tech manufacturing sectors. The U.S. is struggling to rebuild its manufacturing prowess as it lacks competitiveness in batteries, semiconductors and nuclear reactors. In the face of the fast ascension of China, America has turned to allies to restore its manufacturing capacity.
Despite their reputations overseas, Korean manufacturers are struggling at home. To build a power line for its semiconductor complex in Pyeongtaek in the face of local residents’ opposition, Samsung Electronics had to fight five years and spend nearly 400 billion won ($361 million). Its chief executives are embroiled in legal troubles connected to the power abuse of imprisoned former president Park Geun-hye.
Smaller companies are in a worse state. Hankuk Carbon, a mid-sized company producing composite materials, held an opening ceremony for its new office building in Daejeon. The company has gotten a boost from the Korea-U.S. summit. The removal of restrictions on Korea’s missiles could accelerate its foray into the defense industry. The opening ceremony was attended by executives of defense-related companies like Hanwha and LIG, as well as defense experts from the Agency of Defense Development and the Defense Acquisition Program Administration, and other experts in the materials and equipment industries, including from the Korea Advanced Institute of Science and Technology (KAIST).
Hankuk Carbon Chairman Cho Moon-soo spoke of the “economic significance” of the summit for Korean manufacturers. Materials are essential to missile and space industries. Korea learned a hard lesson in the importance of materials when Japan slammed export curbs on IT materials to Korea.
But hopes are one thing, reality another. The company had to give up expanding its factory in Miryang, South Gyeongsang, because it could not solve a problem with industrial waste water. It had to find another location: Boeun in North Chungcheong. The company had to build a factory in Vietnam to compete with cheap products from China. Korean manufacturing has survived in just such a harsh habitat in the past. It is a miracle that Korea’s status has come so far. Korea must pay more attention to the challenges of the manufacturing sector at home, which is buttressing the economy and national pride.