Chapter 581: Chapter 581: The Core Issue Lies with the Substance
Jang Seong-taek flinched at my proposal to build the Ryugyong Hotel.
"If we don't address that eyesore of the Ryugyong Hotel standing in the heart of Pyongyang instead of the West Sea Barrier, how will we save face?"
The construction of the Ryugyong Hotel was initiated by Kim Jong-il's ambitions, but officially, it was attributed to Kim Il-sung's directive.
"Are you saying you'll build the Ryugyong Hotel?"
I nodded. Then I casually dropped a statement that would surely pique Jang Seong-taek's greed.
"This is the center of North Korea. We can't just leave an eyesore like that here, especially with the world's eyes on us."
"…But it's an enormous expense. The Republic can't afford to complete the Ryugyong Hotel right now."
"That's exactly why I'm offering to take care of it. At a time when the Republic is making great strides, a gesture like this is a must. I'll transfer ownership to the North Korean government, but the operational rights will go to a company of my choosing."
"Is that really true?"
"Have I ever spoken nonsense? Once I say something, I take full responsibility. Nobody knows that better than you, Vice Chairman."
Jang Seong-taek's face brightened instantly.
"If we can complete the Ryugyong Hotel and showcase it to the people of Pyongyang…"
Muttering softly, Jang Seong-taek started tapping his fingers, lost in thought.
He was probably busily calculating in his head.
As I waited for him, I finished off my vodka.
The fiery rush of alcohol sliding down my throat cleared my mind.
I never expected Kim Il-sung's symbolic weight to be this significant. This is beyond my expectations.
It's been a decade since Kim Il-sung passed away, and I didn't foresee the level of his influence after ten years.
Even declaring intentions to dismantle just one of his buildings elicits such a strong reaction.
Well, that must be thanks to how Kim Jong-il deified Kim Il-sung instead of diminishing his legacy for his own legitimacy.
"Boss Kim Mu-hyeok."
How much time had passed? Finally sorting through his thoughts, Jang Seong-taek called for me.
"Yes, Vice Chairman."
"Do we really need to dismantle the West Sea Barrier?"
"Yes, aside from the function of a floodgate, it's essentially useless."
"But it's also a crucial land route connecting Hwanghae-namdo and Nampo. If we dismantle it now, there will be immediate traffic issues. We'd have to cross the Daedong River and reach Pyongyang's Loyalty Bridge, which you know is highly inefficient, right?"
Jang Seong-taek raised the point that the West Sea Barrier also served as a land transportation route.
Of course, in North Korea, where land transportation is fragile, that role was quite significant. As Nampo Port developed, the importance of bridges increased.
But that was something that could be solved with a few new bridges.
It was unreasonable for there to be only one Loyalty Bridge over the Daedong River, which is comparable to the Han River.
"A few new bridges would resolve that issue."
"…That all costs money. The reality is that under the current financial status of the Republic, even building one bridge is a challenge."
"Is the national budget really that bad? Are we having to worry about building just a single bridge?"
"There's no source of income. Right now, the trade with China or sending workers to Russia and China is the Republic's main source of income, but all that has dried up, hasn't it?"
Once, North Korea had far stronger economic power than South Korea, but it fell into complete ruin from several economic policy failures and the Arduous March.
The power lineage from Kim Il-sung to Kim Jong-il focused on maintaining the regime rather than economic growth.
While they had earned foreign currency through trade with China, as China pushed for reform and opening, they could no longer afford to support North Korea properly.
In the end, Kim Jong-il declared self-reliance, leaving many citizens struggling in poverty.
As I pondered this, I had an inkling of what Jang Seong-taek was going to say next.
"Are you suggesting I build a bridge for you?"
"Can you?"
This is why you shouldn't offer kindness without reason.
"No. The only gift I can offer is constructing the Ryugyong Hotel. Even the cost of that hotel is several hundred million dollars for the major construction project. And you want me to build a bridge too? Isn't that a bit unreasonable?"
There's no such thing as a free lunch in business. I needed to clarify what I could and could not provide.
Doing something without anything in return was the job of a philanthropist, not a businessman.
And he was just exaggerating; it's not like North Korea has absolutely no way to make money.
"I've heard rumors about Kim Jong-il having a large sum of money in his slush fund. Haven't you been able to locate it?"
Actually, the exact amount of Kim Jong-il's slush fund remained unknown.
However, intelligence agencies from the U.S. and South Korea estimated that his slush fund was at least over one billion dollars, potentially reaching up to five billion.
"Hmm…"
Jang Seong-taek cleared his throat and averted his gaze.
"If that money could be used for economic development, it would relieve so many pressures. What's wrong? Haven't you found it yet? Didn't Kim Jong-il spill the beans?"
"…"
"The slush fund deposited in Switzerland's 'Room 39'. Isn't that managed by Ri Cheol in Bern? You should call him to hand over the slush fund."
Mentioning Kim Jong-il's treasurer finally prompted Jang Seong-taek to turn back to me and speak.
"That slush fund should be used for political funding. Without money, I can't fully control the Party and the Army."
"Using slush funds for politics like this has limits when trying to achieve an open economy. Genuine reform ultimately lies in political reform."
"I understand. You know I traveled to South Korea as part of the economic inspection team, right, Boss Kim?"
Jang Seong-taek's voice fell low as he started reminiscing about his visit to South Korea as part of the inspection team.
"Of course, I know, since I was the one who pushed for it."
"There's one thing I realized during that trip. Do you know what it is? I was shocked by the incredible economic growth in South Korea. South Korea has a robust economy that doesn't pale in comparison to China, Russia, or any European nation. And the smiles on the faces of the people enjoying those benefits were always bright."
What kind of point is he trying to make going off on such a tangent?
"I envied that. And I vowed that someday, the Republic must achieve the same. However, the Republic can't simply emulate South Korea. That's due to the Republic's inherent limitations."
This issue is independent of whether it follows communism or adopts democracy.
The Soviet Union has collapsed, and Russia transitioned to a democratic system with a free economy.
But they also failed at democracy. Ultimately, Russia produced a dictator disguising as a democrat.
"So, the core issue lies with the substance."
"Exactly. No matter how actively I push for reform, if I turn all the vested interests into enemies, I will ultimately fail. I need substantial political funds to win their loyalty. Without slush funds, governance is impossible."
He was droning on about not intending to offer up the slush funds.
At the same time, I stifled a laugh at his audacity to demand money from me.
"But surely the amount in the slush fund must exceed several billion dollars."
"I haven't determined the exact amount yet."
If the slush funds can't be used, they'd have to seek economic support from other countries.
For that, this was a direct shot. Just ask Japan for compensation for colonial rule.
"Then demand reparations from Japan for colonial rule."
The economic miracle of the Han River in South Korea was greatly aided by compensation from Japan through the Claims Agreement.
However, the problem was that the South Korean government received far too little compensation at that time.
The Philippines, which was under Japanese rule for three years, secured 550 million dollars, but despite being ruled for thirty-six years, South Korea only negotiated for a mere three hundred million in grants, plus two hundred million in loans, and one hundred million in private loans.
There are still many discussions regarding the amount, but South Korea used the Claims Agreement for economic development.
However, North Korea hasn't received even a penny in compensation from Japan.
"Are you suggesting the Claims Agreement?"
"Yes. South Korea used that to secure the seed money for economic development back in 1965. Although it's been criticized as a hasty and humiliating negotiation, nobody can deny that money laid the foundation for economic development."
Countries colonized like the Philippines, Myanmar, Indonesia, and South Vietnam.
Many nations that suffered from colonialism funneled most of that compensation into the pockets of their leaders.
But South Korea didn't waste that money and ultimately achieved astonishing economic growth.
"If we were to request reparations now, I would estimate that Japan would offer around 20 billion dollars."
"20 billion?"
Jang Seong-taek's eyes widened at the larger-than-expected compensation amount.
While I thought that was still insufficient, it was certainly a tempting sum for him.
"If negotiations go well, we could demand over 30 billion dollars."
"30 billion dollars…"
North Korea's GDP was about 10 billion dollars.
The thought of potentially receiving 30 billion dollars, three times that amount, lit up Jang Seong-taek's eyes.
"I will handle the behind-the-scenes negotiations for that."
"You will negotiate on our behalf?"
"I have experience in previous negotiations regarding the Claims Agreement, though it hasn't gone well."
Kim Jong-il had also sought reparations multiple times. When I asked, Jang Seong-taek nodded solemnly.
"That's right. We had several meetings, which ultimately led to a summit, but it still didn't work out."
The crux of the problem was the significant gap between the two sides' positions.
Japan, just like it did with South Korea, did not acknowledge its colonial rule, while North Korea demanded an outrageously high sum.
"The lack of progress was due to the divergences in each side's perspective. I'll help align those views."
"Hmm…"
"Let me assure you of one thing. If I handle negotiations, I can guarantee at least 30 billion dollars."
"Let's hold that discussion for later."
Jang Seong-taek seemed reluctant for me to get involved in this matter.
If I stayed out and he took charge of the negotiations, receiving more than 20 billion dollars would be tough.
It was clear he'd eventually come back to me, but I let it slide.
"Understood. But keep in mind there may not be a better way than the Claims Agreement. North Korea's national credit is nearly nonexistent."
"I admit that. It's the consequence of its history."
"However, if we abandon our nuclear ambitions, both the U.S. and South Korea will provide economic support. Ultimately, that will only be enough to put out urgent fires."
Jang Seong-taek nodded. There were limits to free aid.
"China and Russia will also offer economic assistance. They won't sit idly by watching the U.S. strengthen its influence in North Korea."
China and Russia couldn't afford to let North Korea fall into the hands of the U.S.
In the end, they would have to promise economic support on par with that from the U.S.
This way, they could gather enough seed money to start economic development.
With that foundation, I detailed the general flow predicted from the moment Jang Seong-taek abandons nuclear development.
We shared a long conversation over drinks.
Jang Seong-taek asked me questions intermittently, and I provided enough explanations for his curiosity.
After a lengthy discussion, we reached a conclusion.
"Alright. Let's dismantle the West Sea Barrier and build a new port."
In the end, Jang Seong-taek agreed to dismantle the West Sea Barrier.
"But I'll decide on the timing."
"It shouldn't take too long."
"After the summit in Seoul and once the sanctions against the Republic are lifted, I'll inform you then. It won't take long."
That was sufficient. I nodded. It would be safer to have some insurance in place.
"Sounds good. However, if there's undue delay, I will proceed with the dismantling on my own."
With the major issue resolved, our remaining discussions flowed freely.
As our conversation began to wind down, the sun was rising outside the window.
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