|For Immediate Release||November 21, 1998|
PRESIDENT CLINTON: Thank you. First of all, I wouldlike to thank all of you for coming here today to meet with us.I wanted to have an opportunity while I was in Korea to heardirectly from some people who are living through these changesand who have different views and different experiences that Iwould hope you would share with me, because I want very much tounderstand how what is happening in Korea today and where you aregoing actually affects the lives of the people here in thiscountry.
And so that is why I wanted to do this. I thank youfor being brave enough to come here and do this. Thank you forhelping us. And I want to thank Senator Baucus and AssistantSecretary Koh for joining me -- he's coming home. And SenatorBaucus and I feel at home here. And I want to thank myAmbassador. So maybe you guys could come around and we couldbegin the meeting. I think we're through with the photos.
Q Mr. President, you spoke earlier of youradmiration for the resolute spirit with which Korean people areresponding to what President Kim Dae-Jung has described as themost serious crisis in Korea since the Korean War. And I thinkwe're fortunate to have a group of people around this table thisafternoon who can give you some insight into how Korea ishandling this crisis, what does the future look like here, andhow individual Koreans and individual Korean companies areresponding to what is happening here.
And I don't have any particular order. If you care tosay anything to begin, other than what you've already said, or ifperhaps some of our guests would care to speak and we can havewhat I hope will be a conversation.
THE PRESIDENT: I would only like to make two points.First of all, that all over the world today, even where there isa good economy, in the places where this financial crisis has nothit, even there, there is a tension between getting the benefitsof the global economy and the information revolution, andpreserving, if you will, the social contract, the stability oflife that honors work and family and community.
And so one of the great challenges that we face is howto get the benefits of this emerging economy and still preservean appropriate level of social cohesion and stability. And it'seven an issue in the wealthiest countries of the world, you know,the ones that have not had any.
The second point I wish to make is that if you look atwhat has happened in Asia, in every case there are reasons whichare unique to the country. That is, there are some problems thatare particular to the country, but there are also common problemswhich cross the lines of country and which warn us very clearlythat there must be -- at least in my opinion -- a global responsenot only to the present crisis, but to the long-term need toadapt the financial system of the world to the realities of the21st century, so that we do not have this kind of thing occurringagain, sweeping across national lines.
And I think there are some things that we have done andsome things we can do to do that. So what is important for me --of course, I want you to say whatever it is you would like to sayto me, but what I am trying to do is to understand exactly whatis happening here, your perspective on it, how it happened, why,and what you think either should be done further in Korea or whatyou believe the United States should do or advocate.
Q Good. Who would like to begin? Professor Sohn,would you like to start?
DR. SOHN: You just talked about two issues that youwould like to talk about. First, if I may recap it, that theadvanced countries and the emerging markets all share the sameproblem, that we need a social safety net. And also you talkedabout that although each country has its unique problems, we allshare a common problem as well.
I would like to address the second issue first, if Imay. Korea is a small country. Although we have accomplishedeconomic growth, our size is relatively small. And we have mademany efforts for reform, and like other East Asian countries wehave had some fruits of these efforts, we have reaped somefruits. However, there are problems that Korea cannot resolvealone. Like you talked about, the international financial crisisis not something that we can do alone. Especially in this era ofopen environment in terms of economy, there are things that Koreacannot do alone.
When we talk about national stability we have to looktoward international organizations such as the OECD or IMF oreven the United States. And for the international economic andfinancial market to be stable we need some measures to be put inplace by these organizations. Unless that happens it's verydifficult for countries like Korea to maintain a very open andliberalized economy. Of course, there are many internal problemsthat caused the current economic crisis.
However, when we look at what actually triggered ourcrisis we believe the unstable characteristics of theinternational financial markets had some input into it.
PRESIDENT CLINTON: I agree with that. Who would liketo go next?
MR. PARK: Yes, I am from the Federation of KoreanTrade Unions. There are three Park here so I think theinterpreter has kind of got us mixed up. Like Professor Jung*just mentioned the cause of the economic and financial crisis canbe somewhat found inside Korea, the conglomerate problems and thepolitical problems. However, we do have to realize that theinternational financial market does play a role.
But when we talk about the recovery of the Koreaneconomy per se, we have to look to the United States because Ibelieve the United States must maintain a stable economy. But ifwe look at it in this perspective, the United States recentlylowered its interest rates and were very happy about that. And Ibelieve that provides a very good opportunity. However, I'm surethe United States has your own position. And also, by loweringyour interest rates I think you were trying to help othercountries.
However, when you look at the trade relations with theUnited States for the past three years, we have actually markednot a surplus. And the Korean market is very unstable. We havebankruptcies -- and although the country is trying to work veryhard, I believe that many people in the United States believethat the Korean government is unfairly subsidizing the steelindustry.
However, you have to understand that we have about100,000 people working in the steel industry. For instance,Pasca (phonetic) which is the major steel industry in Korea, iscurrently discussing plans for privatization. Then, after theKorean economy recovers we will continue to -- we will have toimport raw material in order to continue our exporting.
Then it means that because we have to import our rawexports, in the end the United States will have an upper hand.So I believe we just shouldn't look at the short-term numbers,saying that the Korean steel industry is exporting too much or etcetera. We have to be very cruel, we have to look at thesituation very cruelly, meaning that if the United States helpsus now and thinks of Korea as a partner, in the long run Koreawill recover and that will be good for the United States as well.And then we will be able to develop hand in hand.
So I would like to ask you, Mr. President, that whenyou go back if you could try to explain to your people ourperspective. We believe that the United States and Korea arevery good friends and we have had long relations. So if theUnited States people can be a little bit more patient about oursituation and look at the long-term, we would appreciate it verymuch.
THE PRESIDENT: Maybe I could respond just for aminute. I would like to save my answer to Professor Chang untilalong toward the end because I want to talk more about thefinancial issues then. But I would like to just answer the steelquestion and the import question.
First of all, when Asia began to have such difficulties-- about a year ago now, I remember, it was really getting bad --on our Thanksgiving holiday, which is next Thursday, last year, Ispent three or four hours working on the problem in Indonesia.It became obvious to us that this problem would affect a lot ofAsian countries and Russia. And so we made a decision, ourgovernment did, that we would first try to stop the problem fromspreading. Second, we would try to help individual countriesrecover. And, third, we would look at the long-term causes ofthis and the long-term changes in the world economic system thatneeded to be made.
Now, we made a deliberate decision that we would makeevery effort to keep our markets as open as possible, even thoughwe knew our trade deficit would go way up. For example, in thecase of Korea, Korean imports into the U.S. are up and U.S.exports to Korea this year are about one-half what they were lastyear, about $12 billion or $13 billion less. But that'sunderstandable because of the economic problems.
I say that just to tell you, sir, that what we'retrying to do is to help all the Asian economies and the Russianeconomy and others by keeping our own economic growth going, butalso keeping our doors open so we can buy products in tough timesand help our trading partners.
Now, here is the problem. If we have a big increase inour overall trade deficit and it's evenly spread, that'ssomething we can live with for a year or two. But as a practicalmatter, if it's all concentrated in one or two areas, then ourindustries, which are in normal times quite productive, could beput out of business and they could find a very hard time gettingback in business when the economy improves, because of the costof starting up.
We went through a big restructuring in our steelindustry in the 1980s. We cut employment a lot. It was verypainful for our union members and for our executives. And wehave been doing pretty well. And you have to see the Koreanexperience, which is basically about 140 percent increase, 120percent increase in exports to America in steel this year,against the background of what's happening from other countries.
In Japan there is a 500 percent increase in hot-rolledsteel products; in Russia, 300 percent increase. A big increasefrom Brazil.
So we have the American steel industry saying, okay, wewant you to buy more products from other countries. We want youto help them in this tough time. But if it's all coming at ourexpense, when in normal times we are quite competitive, then whathappens when normal times recover and we're not around anymore?
So that's what I'm trying to -- we're trying to balancethat. So I guess what I'm saying, President Park, is, I agreewith you. The United States should keep our markets open to therest of the world and help our friends deal with this crisis.But we have to be sensitive if the price of doing that would beto basically erase a big part of our economy which then could notcome back when normal times recovered. So we're trying tobalance two difficult things.
Q Dr. Sohn, would you like to respond to some of thePresident's questions?
Q I'm not an expert in economics and I've beenworking for the political rights of women. However, since theIMF crisis, as we call it here in Korea, has occurred I believewomen in Korea are suffering the most. Because people have to befired and naturally, if I may say so, women are on the top of thelist, because they don't believe women are the breadwinners ofthe household. So they say that, "Well, you have your husband,"or, "You have your father so you should leave the company."
And even though the woman's husband is unemployed,indicating the husband is unemployed, it's the housewife thatsuffers the most because she has to make ends meet. And withmany people, both men and women going out of work today thetraditional family values of Korea are being eroded. And so weall hope that the current crisis, the IMF bailout package, willgo away soon and so that the situation can be reversed.
There are many problems but I believe the mostimportant issue that we have to talk about is the politicalcorruption in Korea that was actually one of the main causes forthe economic problem. The weak banks received favorable loansand we all know this was one of the main reasons for thefinancial crisis. So this leads to the political corruptionissue in Korea.
So I'm very interested in this issue and I believewomen are also very interested in the economy as well. A strongeconomy is a necessary factor for democracy, I believe, andbecause of this, if the economy continues to deteriorate Ibelieve the democracy that people have worked so hard to build upfor decades and decades will suffer. And the deterioratingeconomy will act as a barrier to further democratic development.Thank you.
Q Chairman Park, you are one of the representativesof the corporate sector here. As I indicated earlier you havethe distinction of having headed a corporation that startedrestructuring even before the crisis began. I wonder if youwould like to share some of your thoughts on the points thatPresident Clinton raised.
MR. PARK: Yes, thank you. I think I am therepresentative of the business sector in Korea here today. Andlet me talk about my company. Dusan (phonetic) embarked on arestructuring project because we needed to. People are saying,"Why did you being before everybody else?" We started in 1995and actually 1996 is the 100th anniversary of the establishmentof our company so we talked to the people at MacKenzie (phonetic)Consulting and said we survived for 100 years how can we go onfor another 100 years. And the people at MacKenzie told us,well, if you don't restructure, you won't be here in 100 years.So we realized that was very important. It was very hard, verypainstaking.
We sold many assets, many companies. But I'm stillhere and I think that restructuring effort made this possible.
Before I came here this afternoon, I listened to thepress conference and I heard about the restructuring thatPresident Kim Dae-Jung talked about as well. In my opinion,during the past 30 years, Korea focused only on growth. Butsince last year and the IMF crisis, people are realizing thatthis is a big crisis, and they don't know what to do becausewe've only been developing and growing for the past 30 years, sowe're at a loss now.
But fortunately, President Kim is now our President andhe has a very firm, strong commitment. And he understands thesituation that Korea must strengthen its internationalcompetitiveness. And I believe the President also understandsthe importance of mergers and acquisitions as well, and he ispushing for further restructuring.
The business sector, I believe that when we startedrestructuring three years ago, we felt that it would be a veryhard process, and indeed it was. It took one year to convinceeverybody in the company that we needed restructuring. So forone year, we talked to people, we held discussions, and weconvinced the people. And then we made plans.
And on the third year, we finished our restructuringproject. The government is saying that we have to hurry and wehave to be more quick in restructuring. But from my personalexperience, I think it will take time, because if we go to fast,there are risks. And if we really want a good restructuring, notjust any restructuring project, we have to look at the experienceof other companies -- companies from advanced nations.
And in terms of investment policies, we have a lot tolearn from the advanced countries and the corporations ofadvanced countries. People say good things about me and about myrestructuring program, but, very frankly, I did it to survive.Thank you.
THE PRESIDENT: Can you tell us exactly what you did?In the restructuring, did you change the organization of yourcompany, did you reduce the layers of administration, did youreorganize the way the workers were working? How did yourestructure your company? What were the two or three mostimportant elements of your restructuring?
MR. PARK: One of the first things wedid was we invested a lot jointly with American companies. With3M, Eastman-Kodak, we held joint ventures -- and Nestle andCoca-Cola. Coca-Cola bottling used to be our company, but wesold that because we needed the cash. And selling off all thosejoint ventures helped us to increase our cash flow. And also, wesold off a lot of real estate. And after we did that, we madesure that all the employees were retained after we sold off thecompanies.
We used to have 20,000 employees, but after therestructuring, we only have 9,000. But we didn't fire anyone.What happened was, we implemented early retirement programs orstrengthened our pension programs in order to provide incentivesfor people to leave.
And in terms of our organization, we focused on thecross-guaranteeing system that's really a big issue in Korea --the cross-guaranteeing of loans for subsidiaries. We establishedDusan Corporation and we merged nine separate companies under theDusan Corporation title. And that means we had nine accountingleaders so we would have to reduce the number. So we had someproblems, but that's the overall story.
Q You are leading a company that in many ways Ithink represents much of the economic hope of Korea. One of theinevitable consequences of restructuring is that the number ofjobs declines. And for Korea to overcome its unemploymentproblem new companies have to create new jobs in industry andinternational he services sector. I wonder if you might share afew thoughts with us on how you see this particular question.
Q First of all, Mr. President, I would like to relaya greeting from my son who is third grade, because when I toldhim that you invited me he was very excited and he told me to sayhello, how are you, in English. So before I talk I would like totell you this -- because I promised my son, so I have to go backand tell him that I said so.
I am the president of a small company and I don't havea lot of experience in managing a company. However, since theIMF situation we had to conduct some restructuring and somereforming in order to enhance the funding of our company, andlike Chairman Park talked about we did have some painstakingefforts as well. Let me talk about this.
I believe one of the main causes for the IMF situationis the resources, the financial and human resources of Korea havenot been effectively utilize. Many of the financial and humanresources have been focused on big companies. But when we lookat this in the terms of market economy this is not natural. Wehave to focus the human resources and financial resources oncompanies that can actual reap added value. However, that hasnot been the case. And this vicious cycle has been going on fordecades and I believe this is one of the main reasons for the IMFsituation.
However, I would like to say that I have strongconfidence in the Korean government. There are manyrestructuring programs being proposed, but I believe the mostimportant are the programs that deal with diversifying thedeployment of financial and human resources. And the financialrestructuring program of the government, I believe, is on theright track.
So, in the future, I believe companies like my companyor other venture companies will be able to be the driving forcebehind the further growth of the Korean economy in the future andwe will contribute to the creating of added value. If I may addone more point.
Recently Motorola, one of the biggest telecommunicationcompanies in Korea invested in our company. I am the largestshareholder and Motorola is the second largest shareholder.People say I am the richest man in his thirties in Korea but Idon't know if this is true. Anyway, so I want to talk aboutthis. And I believe the fact that one of the biggesttelecommunications companies, Motorola, invested in our companyis very good. It gives us the opportunity to venture into theinternational market. And after the Japanese occupation between1910 and 1945 we had President Park as our president and hereally forced the economic development. And he, I believe, heimposed the current political system, the democratic system, ofthe United States on Korea. There were bad things and there weregood things and I believe that in the future that Americancompanies and companies like my company have much to do together.Thank you very much.
Q Dr. Yoo, do you have some thoughts you would liketo share with us?
DR. YOO: Yes, thank you. I've been listening to whatpeople have been saying but I have a little bit different angleof approach. Like you pointed out, Mr. President, there areunique characteristics to each individual country, and Korea isnot an exception.
And in that line, I believe the unique characteristicof the Korean economy is the conglomerates. And as Mr. Parkpointed out, the problems of the conglomerates is one of the mainreasons for the current crisis.
However, I think we have to realize that the Koreansociety is like a pendulum. It swings back and forth. Duringthe past 30 or 40 years, when we look at the method of thedevelopment, we looked only to the conglomerates. They were ourmodels. But now, all of a sudden, if we overnight try to saythat the conglomerates are wrong, I believe this could lead to anidentity crisis in a way. The United States government, the IMF,the IBRD, and other international organizations are saying to theKorean government that the conglomerate restructuring and reformsare too slow, that they are unsatisfactory, and they're sayingthis very openly.
However, if such influential opinions continue to flowinto Korea, there might be a conflict in Korea. I'm not sayingthat we should stop the information, but I'm saying that therecould be a conflict.
The Korean government has many programs, and I believemaybe 70 or 80 percent of the programs are very good and are onthe right track. But if we continue to criticize them too muchand if we focus too much on anti-competitive methods, saying thattrying to bring down the conglomerates competitiveness overnightin the long-term this could have some bad effects. For instance,would could restructure all the conglomerates and even kill themarket in some parts. But in the end it might even strengthenthe power of the government or the officials, they might takeover the economy.
This is very ironic. We've been trying to get awayfrom the government and the officials for so long, but that mightcome back. So I would like to ask international organizations orthe United States government to maybe try to understand theKorean situation and maybe try to compliment the Koreangovernment on what they're doing right and criticize what they'redoing wrong -- not just criticize it and say that the governmenthas to speed up the conglomerate, period.
Just speed and the big deals that we've been seeing inthe newspapers, I think they're too fast and they're being forceda bit also. Many people are very keen on the issue of thecodevelopment of democracy and economy. This is a bigproposition in Korea. I believe that democracy has to do withdoing good and the growth of the economy has to do with doingwell.
But it's not as easy as these words. It's verydifficult and there are conflicting aspects, as well. Democracyand economy does not always go hand in hand. In Korea we're notaccustomed to this conflict and we're taking it back. We'retalking about the corruption or abuse of power of the politicsand economy. But when this conflict actually occurs, I don'tthink we have the experience or the know-how of how to deal withthese issues.
So if we just talk about democracy and marketcapitalization as a political slogan, this could have somenegative effects. And some people are thinking it's a very easything to do -- which it isn't. And I believe the United Stateshad experience of labor issues and big businesses and every time
these issues occurred I'm wondering what happened to the UnitedStates, how that was harmonized or balanced with the politicaldemocratization of the United States. So maybe we could shareour experiences in these aspects in the future as well.
Thank you very much.
THE PRESIDENT: Well, first of all, I would like to sayin response to the last comments that you made, that it is bothmy experience over the last 25 years and my observation of ourhistory and global economic history that there is no economicmodel that succeeds forever -- not in a business or in a country-- because the very nature of the economy is the dynamic.
So I think that Korea should not, in effect, rewriteits own successful history. This country has done some verygreat things in the last few decades since the end of the KoreanWar. And no economic model succeeds forever. I mean, keep inmind, today people come up to me and they say, all over theworld, oh, America is doing so great. Well, you know, 10 yearsago people were saying, oh, America is in decline and they can'tdo anything right. Things change. So the trick is how to makethe necessary changes and preserve the purpose of economicactivity, which is to advance the quality of life, to liftpeople's lives.
So that's just a general observation. Now, I thinkChairman Park made a very valuable point, which is that it takestime to change an organization if you wish to preserve theintegrity of the organization and you want it to work, and alsoif you don't want to hurt a lot of people. He cut the size ofhis operation by 50 percent, so if you want to do that it takestime.
From my point of view, my impatience on therestructuring of the big five, I would say it should take timeand we should be patient, but they should begin -- they shouldbegin. That's what we're interested in, are they going to begin.
From the point of view of President Park over here whowas talking about his new business and his partnership withMotorola, I believe that one of the things that we should be verysensitive to in the United States, particularly dealing withKorea, since we have been through a lot of this, is if your bigcompanies are going to restructure and reduce employment toincrease profitability and their ability to compete, then I thinkit is very important that there be systems in this country thatencourage the creation of more new companies. That's what youwere talking about.
In the U.S., one of the most important parts of oureconomy is the so-called venture capital economy, where we havenew companies being created all the time, or smaller businessesbeing expanded all the time. And so I think it's important, eventhough there have been a lot of bad bank loans and people areworried about bad bank loans and everything, we have to realize,when all this is said and done, you must still have a good creditsystem here where people who have something to do should be ableto borrow money to do it. I think that's very important.
The last point I would like to make is that -- justabout what all of you have said - is to go back to what Dr. Sohnsaid about the women. The more rapidly an economy or a societychanges, whether it's going up or going down, but especially ifit's going down, the more strains will be put on family life.
Now, I believe at least, the most important work of anysociety is the raising of children. And in a funny way, we haveopposite problems. Many people believe in America too many ofour parents are in the work force, so nobody is home with thechildren. But in most Asian societies it's a good thing if youcan have more opportunities -- job opportunities for women sothere can be some more balance and more income to raise thechildren.
So I think it would be a very good thing -- I don'thave the answers to this. What I have seen, though, in our ownexperience, is that there is no perfect answer, but there is agood process. And a good process is one that takes full accountof the interests and feelings and ideas and opinions of the womenof the society.
That is, what would be the best answer for Korea wouldnot be the best answer for Thailand, would not be the best answerfor the United States. But there is a good process, and in toomany places in the world today women are used economically whenit's convenient, and then discarded when it's not, and theirvoices aren't heard. And I think that's a mistake. So I thinkwhat you're doing is very important.
I wonder if Senator Baucus or Secretary Koh would liketo say anything.
SENATOR BAUCUS: Mr. President, I think you've hit uponsomething, and I'd just like to ask a question of our Koreanhosts here. I have very strong faith in the Korean people. Ithink Koreans are tough, they're hard-working, they've gonethrough a lot, they're terrific people. I mean, after the war,the society that Korea has built up -- the trees that are plantedand the Korean people contributing gold to help raise the country
-- it's incredible. And I don't know another --
THE PRESIDENT: It's amazing. There's no other placein the world --
SENATOR BAUCUS: It is. There is no other place.There is no other country in the world where one could find that.And when I sat in the Congress when President Kim addressed thejoint session of Congress, I was so proud of him and of Korea.That was one of the best speeches I've heard anyone give. Evenas good as one of yours, Mr. President. It was very, very good,because it symbolized the strength and purpose and resolve andfor the goodwill of the Korean people.
And obviously what we're trying to do here is findsolutions that help our people, and that's why all of usbasically do what we do. And I'm wondering if one way to helpassure the kinds of restructuring we want and the correctinvestment for value that we're talking about and women's rightsand to reduce corruption, et cetera, is for still more democracy-- even more, say, in Korea.
I get the sense -- and correct me if I'm wrong -- tosome degree the government sort of helps producers --restructures to help producers, et cetera, and I'm wondering ifperhaps the government ought to not only be concerned aboutproducers, but also about consumers, and give consumers morepower and more rights, because when consumers -- voters -- havemore power and more rights, it's going to force more competitionand it's going to force the kinds of investment choices that we
want, because people will want the best. They want the bestproducts. They want the best benefits. They want what's bestfor their life.
And I'm just wondering if somehow there might be someway Korea could help empower consumers, but in the Korean way, sothat there is a dialogue within Korea as to how best to do this,but empowering consumers more and empowering shareholders orempowering voters a bit more, if there is a way to do that, tohelp speed up this process and accomplish the objective thatwe're looking for.
Secretary Koh, do you have anything you would like toadd?
SECRETARY KOH: I'm just struck by the differencebetween the mood now and when I came to Korea in the summer of'74, which was a similar period of economic hardship. In thatsummer everyone was talking about the need for export-led growthbut controlled by an authoritarian government and the feeling was
until we reach a certain standard of living we can't afforddemocracy and freedom. And I remember at the end of that summerthere was an assassination attempt on the President's wife and atabout the same time Kim Dae-Jung had just been kidnapped and wasunder house arrest, and at that same time I was here watchingPresident Nixon give up his office.
And I called home and I said to my father, how can itbe that the most powerful country in the world can surrender --change power when Korea has never had a peaceful transition ofgovernment. And he said to me, the difference is, in the UnitedStates if you're a President the troops obey you, in Korea if thetroops obey you then you're president.
Now, when I see where we are now, and what we'redescribing, we've now had a peaceful transition of governmenthere. We now have a commitment to democracy. There is now faithin democratic institutions and the feeling that market solutionscan be found by various kinds of private initiatives -- forexample, partnership with Motorola, voluntary restructuring,talking about the social safety net, worrying about human rights.There is a new commitment here to do it with democracy, not to goback. That is what I think is an inspiring message even in thisvery difficult time.
Q President Park, I've been signaled to draw theroundtable to a conclusion. Do you have some final remarks?
MR. PARK: Thank you very much. I have to say thatwe're very honored to have this opportunity to talk to you, Mr.President. In June we went to Geneva and we talked to manypeople there. But like many people mentioned, the Kim Dae Junggovernment was born out of our past.
In the past we had a military and authoritariangovernment but the Kim Dae Jung government has broken away fromthis past. In the past our political system was just verychaotic and many people say that the labor unions in Korea aretoo strong -- used to say that we were too strong or tooaggressive, but I believe the situation has changed now. Andeverything that we experienced in the past has provided for theenvironment for us to develop our democracy and to maintain theeconomic growth.
However, when we look at the neo-liberalism likeProfessor Yoo pointed out, the democracy -- to pursue democracyand economy all at once is really a very difficult thing. Justperusing economic growth turns to put some shadow on democracyand vise versa. However, in the perspective of the laborers, ofthe workers of Korea we believe that democracy is very important
for the development of economic growth. So it's a balancing act,it's a seesaw, it goes back and forth and I believe many that'swhy the people of Korea lack some confidence of what thegovernment is trying to do because of our unfortunate past.
However, I believe if the United States and othercountries assist us to balance this seesaw we can succeed in ourend and also there are many American forces stationed here inkorea, they're working very hard for our country. And we have15,000 Korean people, Korean nationals working for the U.S.forces.
However, because of the cut in the U.S. armed forcesbudget people are saying that about 2,000 Korean nationalscurrently working for the U.S. forces might be fired. But ifthat happens, that is very unfortunate because Korea as a wholeis suffering because of the unemployment. But if 2,000 morepeople become unemployed due to changes in the U.S. forcessystem, maybe that could aggravate the situation.
So maybe if you could look into this matter, Mr.President. And also if the United States government tries tohave a clear perspective of the workers and the government andthe businesses I believe we can all work together and we wouldreally appreciate your assistance. Thank you very much.
DR. SOHN: Like I said, I worked for the enhancement ofwomen's political rights. And, Mr. President, I would like tosay that I'm very happy that the Secretary of the United Statesis a woman. I was very happy to see that happen. I think thatsends a very strong message. It's not just for the United Statesthat you're Secretary of State is a woman -- it influences othercountries, like Korea. So if you could continue to go down thispath and have more women working for you in your Cabinet it wouldbe very good.
We are at a very transitional stage. We're on thebrink of the 21st century. Korea is trying to change from astate centralized system to a civic system. And in thisenvironment the role of the non-government organizations, NGOs,become even more important, I believe, for the growth and thedevelopment of this civil society and the growth of the NGOs. Ihope that you continue to have keen interest in these areas, Mr.President. Thank you.
THE PRESIDENT: Thank you. She has done quite awonderful job, our Secretary of State. And we have six women inthe Cabinet now, including the Attorney General and the Secretaryof Health and Social Services, the Secretary of Labor, the headof the Environmental Protection Agency, and the head of the
Council of Economic Advisors, and our Trade Representative --seven women in the Cabinet -- our Trade Representative. We'rebetter for it, they're very good. Thank you.
Q Mr. President, do you have any concluding remarksyou would like to make?
THE PRESIDENT: Does anyone else want to speak?
Q Mr. President, in the beginning you said thatfamily values are very important for all countries in the world.Since the economic crisis and during the process of restructuringthe family structure of Korea is suffering, especially our middleclass is suffering.
Of course, many Korean people -- most of the Koreanpeople, the majority of the people have strong confidence in themarket economy, in democracy. And people were also very worriedabout the labor union issues after the IMF situation began. Butthat worry, that concern turned out to be false. Everybody isworking together. However the middle class is suffering and thefamily values are suffering in Korea.
So I just wanted to make two points. First, the WorldBank and the IMF and the United States government is providing alot of assistance to us and we appreciate that. However, when welook at the unemployment issue of Korea we have some area forimprovement and I would like to ask for your assistance to theKorean government in their unemployment policy, also.
Like Chairman Park pointed out there are companies thathave succeeded in restructuring, however, the workers andlaborers of Korea are suffering. They are willing to share theburden. Our workers are willing to share the burden, however,the conglomerates don't seem to budge and the smaller companiesare actually succeeding in the restructuring but when we look atthe overall restructuring efforts of the conglomerates they'renot providing much benefit to the everyday lives of the people.And also, this has much to do with the accountability ofcorporate governance.
The Korean government is in the position to continue topursue the open economy which is good. So, I would like to askfor your assistance in this area as well. Thank you very much.
PRESIDENT CLINTON: Anything else?
Q If I may, Mr. President, I would like to say thatthe Korean economy is closely linked to the economy of the UnitedStates, imports, exports, and I believe we're one of the topthree export-import partners of the United States. So the growthand the recovery of the Korean economy is good for the UnitedStates and vice versa. So, as we know, the Federal Reservelowered the interest rate to assist countries like us and I thinkthat was very good, however. I have actually lived in the UnitedStates. I studied there. And I personally am very fond of theUnited States. And I believe our economic growth has much to dowith the assistance of the United States. So my last remark is,we would appreciate it greatly if the United States continues toextend such support and assistance. Thank you very much.
THE PRESIDENT: You may be sure that we will do that.I think that we have to do more in many ways. We just announceda U.S.-Japan Asian Economic Initiative to try to work with theWorld Bank -- I mean the IMF -- to help restructure some debt incountries where you have to restructure corporate and businessdebt, longer-term repayments, do things that will keep employmentup. We have more active presence of our Export-Import Bank andour Overseas Private Investment Corporation to try to facilitateeconomic activity in Korea. I think all this is important.
But I also believe it's quite important, if you'regoing to get into this restructuring of the conglomerates, you
have to also say, where are the jobs going to come from? Andpart of what Senator Baucus was saying, that means you have tohave a strong consumer ethic in the country, as well as a savingsethic.
But I believe some real attention needs to be given --and I would support this -- toward analyzing whether the bankingsystem has adequate for businesses like yours -- for start-ups,for expansions, for going on, because the Korean people are soinnovative, they work so hard, they're so gifted at economicthings naturally, that if the system is open properly, I thinkyou could have quite a quick recovery. So I think that ought tobe looked at.
I just want to say one final thing about this. Ihaven't mentioned it and we don't have time to talk about it now.But the rest of us -- the United States and Europe, Japan, andKorea as an OECD member -- we have responsibilities to deal withthe problems that would be there if you solved all these issues.If there were none of these issues we just talked about,fast-growing countries would still be vulnerable to the kind ofsuffering you've seen because of the way money moves around theworld today.
You talked about to me about the trade issue in steel.Now, steel -- let's just take steel, for example, any product.It's traded across the world under a set of rules governed by theWTO that basically re-adopted the last system in 1995 -- or '94,I guess, December of '94, the present WTO -- in the UnitedStates, at least, we did. But it's essentially an outgrowth of a50-year-old system. From end of World War II, we establishedthese institutions for trade in goods and services -- the IMF,the World Bank, the trading rules -- and to help countries thatwere struggling and like that.
Money has to be able to move around the world if you'regoing to trade in goods and services. But one big problem isthat now $1.5 trillion is traded every day in currency --trillion dollars. And money can move very rapidly. So if theKorean conglomerates or Korean banks, you know, well they have abig demand for money, the money comes in. And there is a lot ofenthusiasm because Korea has been growing for 30 years and noproblem, you know.
Then the problems come up and, boom, the money goesaway. And if people lose money, then maybe they have to takemoney out of other countries, too, to cover their losses. Tomake matters more complex, a lot of this money is traded or movedon a very small margin, sometimes only 10 percent.
Now, there are no rules in the global economycomparable to the trading rules that govern our business in steeleventually -- let's suppose we have this big argument aboutsteel, eventually we have to go back to the rules. And whateverthe deal is, it's limited, there's some limit on both sides so wecan go on and do our business.
In this area, there aren't that many rules and it hascreated a serious problem that makes every country --particularly the Asian countries because you've got so much moneycoming in -- highly vulnerable to all the money going out. Andwhat we have to do is to find a set of rules about, well, what dopeople have a right to know when they get loans, how are theseloans going to be priced, should there be margin requirements onthe derivatives and the hedge funds and all this sort of stuffand all these things.
We don't have time to get into the details. The onlypoint I want to make is I would recommend that you focus veryclosely on what you should be doing in Korea, both within yourown area and in the society at large. But don't be fooled, when$1.5 trillion is moving around the world every day, then thepossibility for instability is great and we need a set of rulesthe will enable the financial system to grow in the same way thatthe trading and investment system has grown.
So you can high levels of growth, but still some limitsto avoid a big collapse. And that's one of the things we'retrying to do. And you should not blame yourself for that,because the situation here is worse than it would have beenbecause of the volatility and size of the financial crisis. Thesame thing is true everywhere. We have to keep the moneyflowing, but we have to figure out how to keep it from gettingout of hand.
Q Mr. President, I think you've just given us thesubject for our next roundtable. (Laughter.)
I want first of all to thank our Korean friends forjoining us here this afternoon. I want to thank you, Mr.President, for giving us all the opportunity to have such astimulating discussion. And I want to thank Senator Baucus andSecretary Koh for joining us as well. I want to thank you, Mr.President, in particular for giving me the opportunity to serveas your representative in this country at this fascinating time.It is truly a life experience. PRESIDENT CLINTON: I envy you. It's a good job.Thank you all very much.
Speeches on November 21, 1998
President Clinton Speaks To Korean Community Leaders
President Clinton and President Kim Dae-Jung Exchange Toasts At A State Dinner
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