Korean Roadblocks

Wearing identical light tan Stetson hats and the eager look of junketing politicians, three U.S. governors clambered off a MATS Constellation at Seoul city airport last week. Pennsylvania's John S. Fine, Colorado's Dan Thornton and Texas' Allan Shivers had been sent to Korea by President Eisenhower to see how the U.S. aid program for Korea was coming. What they found was not calculated to encourage an optimistic report.

In the next five years the U.S. will spend $1 billion, at the rate of $200 million a year, to rebuild Korea's economic rubble. But to the 153 U.S. businessmen trying to sell goods in Seoul, and the 25 to 30 more arriving each week, the task sometimes seems almost impossible. For months President Rhee refused to sign any agreements which would give U.S. officials a hand in spending Foreign Operations Administration funds earmarked for Korea. Said Rhee: "Give us the money outright. We know best how to spend it." To get the program rolling, FOA Coordinator C. Tyler Wood finally compromised by giving Korea's office of procurement and the Bank of Korea 60% control over how the money should be spent, U.S. agencies 40%. The result: enough roadblocks to discourage even the most enthusiastic U.S. businessman.

Sovereignty & Contracts. Besides such obstacles as arbitrary--and often sky-high --customs charges, U.S. businessmen find that few Koreans have enough experience to find their way through the complicated maze of international trade. For years Japanese experts handled all Korea's international affairs. Now Korean businessmen and government agents are struggling with such matters as credit, refinancing and shipping charges. Usually, they know little about the products they are buying, often sign up for inferior products because the price is lower.

But the biggest roadblock is Korea's President Rhee and his proud, inflexible notion of Korean sovereignty. In Seoul's Chosen Hotel one harassed U.S. businessman reported an interview in which he told Rhee that his company was anxious to do business, but that it wanted some kind of guarantee. Answered Rhee:

"I thought you Americans were coming here to help us rebuild. What do you need guarantees for?"

That ended the meeting. The businessman advised his company to wait a while before doing business in Korea.

Loans & Insurance. Other U.S. businessmen have found it just as hard to do business in Korea. During the recent election campaign President Rhee ordered the Bank of Korea to postpone all but a few loans for fear that the money would be used for election funds by his opponents. Rhee has also ordered that all shipments to Korea must be covered by insurance written exclusively by Korean firms, but there are only nine in the business, with a total capital of $500,000, less than the value of one shipload of Cuban sugar. The, result is that many FOA shipments go out uninsured. And finally, Rhee flatly refuses to use any products from Korea's nearest and usually cheapest source of. supply, Japan.

Controls & Customs. To solve these problems, U.S. businessmen want FOA Coordinator Wood to tighten up on Korea's economic controls, institute a fair tax and custom system, talk tougher to President Syngman Rhee, and for the time being at least, let U.S. agencies handle most of the procurement program. But Wood believes that Koreans will only learn by doing. Says he: "If they get stuck with something they can't sell, they will learn not to make the same mistake again."

Wood hopes that this approach will straighten out Korea's problems, argues that every aid program starts off as something of a mess. After looking over the reconstruction projects, the three touring U.S. governors said little, but they were convinced of one thing: that U.S. funds should not be funneled into Korea any faster than they are already being spent, despite Syngman Rhee's insistence on a speedup. Said Colorado's Governor Thornton: "A speed record won't help Korea. Getting more for our dollars is what will help Korea and that takes time." As the governors flew back to the U.S. last week, the painfully evident fact was that unless reputable U.S. businessmen are able to do business in Korea soon, the aid program may fall apart entirely.

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