ROK-U.S. Alliance Cracks and Korean Economic Crisis: Yang Il-guk's Column

It was emphasized that only great powers can dictate the overall international society, and small powers are under the influence of great powers in international society, a core tenet of realist international political theory. Critic Yang Il-guk argued that South Korea must recognize that its division and unification issues also depend on U.S. interests. Criticism also arose that unification movements advocating anti-Americanism are contradictory, as they fail to understand these basic principles of international politics.

The international political reality that small powers cannot adjust the interests or benefits of great powers was reiterated. It was pointed out that one cannot defy the rules set by great powers, and the U.S. expressing dissatisfaction with South Korea regarding Middle East issues demonstrates that the ROK-U.S. alliance is not merely a friendly relationship. Therefore, a realistic approach emphasized that South Korea must consider U.S. sentiments and engage in diplomacy carefully to protect its national interests.

It was noted as a serious error in international politics to not reflect the possession of nuclear weapons when evaluating a nation's power. Despite nuclear weapons being a decisive factor in national security and international influence, overlooking them in military strength rankings distorts reality, critics argued. Using the analogy of not considering a man's economic power in matchmaking, the urgency of an objective assessment of national power was stressed.

It was emphasized that alliances are not based on intimacy or affection between nations, but rather on strategic relationships formed when there is a common external enemy. Thus, the ROK-U.S. alliance aims to counter common adversaries like North Korea and China. The essence of alliances was explained with the logic that if South Korea were to ally with China, it would be akin to designating the U.S. as an enemy.

Former U.S. President Donald Trump's demand for allied nations to contribute 5% of their GDP to defense spending and his emphasis on protecting U.S. interests are entirely normal behaviors in international politics, according to critic Yang Il-guk. He pointed out that self-preservation is the basic rule in international society, and the mindset of taking free aid for granted must move beyond the Joseon Dynasty or medieval perspectives. He explained that these U.S. demands reflect the harsh reality of modern international politics. He stressed that relationships among allies in international politics constantly change, and each nation prioritizes its own interests, so unilateral sacrifices should not be expected even from allies. Critic Yang suggested that South Korea should not view U.S. demands simply as pressure but rather as an opportunity to strengthen its independent defense capabilities and re-establish diplomatic strategies in response to a changing international environment.

Citing statistics that 66 out of 207 countries worldwide disappeared between 1816 and 2000, the danger of South Korea's security reality as a buffer state between the U.S. and China was emphasized. It was pointed out that peace is a blessing, not a right, and the absence of war is maintained abnormally. The importance of security awareness was highlighted through a warning that a nation could disappear without constant vigilance and effort.

It was pointed out that despite 60 ministerial-level officials from around the world gathering in Washington for a U.S.-led conference on transnational extreme-left terrorism, South Korea was the only country excluded. Critic Yang Il-guk interpreted this as a clear expression of U.S. sentiment and a warning to South Korea. Concerns were raised that this could be a sign that the U.S. does not trust South Korea in sharing information on extreme-left forces, and that subtle cracks are appearing in the ROK-U.S. alliance.

Analysis suggests two main reasons for the government's push to integrate the three military academies: First, the current government does not view the traditional homogeneity, community, and influence of academy graduates positively, and intends to eliminate them fundamentally. Second, political calculations to gain votes in the Chungcheong region may have played a role. It was also suggested that the intention to develop the Taereung site could be a complex factor. Concerns were also expressed that this integration effort could lead to a decline in military morale and damage combat effectiveness.

More urgent issues than the integration of the three military academies were emphasized: increasing the salaries of junior officers and resolving poor housing conditions. It was pointed out that it is difficult to maintain the morale of junior officers and keep them in military service when the salaries of an Army sergeant and a non-commissioned officer in charge of administration and supply are the same. It was argued that addressing these issues first is more important for strengthening military power and is the correct order of priorities.

A strong warning was issued that the domestic stock market, especially KOSPI leverage products, is virtually no different from a gambling den or casino. Leverage investment inherently carries structural risks where profits and losses are reflected twofold, and betting on the fluctuations of individual companies with leverage is fundamentally different from true investment based on in-depth analysis and insight into companies. Concerns were raised that such speculative tendencies could hinder the sound development of the capital market.

The core of 'Korea Discount' as pointed out by Bloomberg was identified as the phenomenon where foreign investors sell Korean domestic shares and buy American Depositary Receipts (ADRs). This analysis suggests that it doesn't imply doubt about the future growth potential of Korean companies like Samsung Semiconductor or SK Hynix, but rather that corporate values are undervalued due to Korea's political risks. It was also noted that controversy over government policies to reclaim corporate profits through excess tax revenue is further exacerbating this discount phenomenon.

Defense-related policies such as the integration of the three military academies or the creation of semiconductor industrial complexes on military bases were emphasized as crucial issues that must be closely coordinated with the U.S. There are clear physical and temporal limitations to relocating military bases, and various variables arising from the relocation of underground security facilities and ammunition depots must be considered. Concerns were raised that hasty implementation could damage trust with the U.S. military.

It was pointed out that the reports submitted to the U.S. Congress every 90 days during the OPCON transfer process risk publicizing the Republic of Korea military's shortcomings and deficiencies. This could lead to unnecessary security losses, increase the administrative burden on the Ministry of National Defense, and force public relations battles. It was emphasized that discussions on OPCON transfer must be approached cautiously, as the exposure of military weaknesses to external parties could pose a serious threat to national security. Analysis suggested that this reporting system could expose the weaknesses of the Korean military to potential adversaries, possibly fostering skepticism about OPCON transfer.

The media and government's attitude of consuming news about North Korea's latest warship commissioning as a mere phenomenon rather than a threat to South Korean security was criticized. It was pointed out that North Korea's pursuit of military modernization through close military ties with Russia stems from their survival logic, yet this reality is not properly recognized. It was warned that evaluating only military buildup while excluding the human rights situation and forced mobilization issues of the North Korean people is a dangerous view that distorts reality.

There have been cases of North Korean defectors who appeared on South Korean broadcasts re-entering North Korea, raising the possibility of blackmail or persuasion by North Korea. Analysis suggests that North Korea likely threatened or negotiated by holding family members hostage. This case was interpreted as demonstrating how North Korea's system of guilt-by-association continues to pose a risk to defectors.

According to a Barclays report, it was argued that the National Pension Service's failure to rebalance its portfolio caused the exchange rate to rise. Analysis suggested that as the National Pension Service did not rebalance its assets, foreign investment funds that had invested in Korea proceeded with rebalancing, leading to a massive outflow of dollars and a surging exchange rate. However, the Ministry of Health and Welfare refuted this, stating that the causal relationship has not been sufficiently confirmed, continuing the controversy. Voices are calling for in-depth analysis of the possibility that foreign pension funds' rebalancing caused dollar outflows in the domestic market and affected the exchange rate.

Skepticism was raised regarding the President's statement on the exchange rate issue, 'Time will solve it.' It was argued that the exchange rate is like blood sugar, reflecting the health of the economy, and simply interpreting it as something time will solve is insufficient. Concerns were voiced that without easing corporate regulations, dollar inflow would be difficult, leading to continued exchange rate deterioration. It was argued that fundamental solutions require removing corporate shackles, such as inheritance tax and corporate tax, to allow companies to be competitive and earn dollars.

Various foreign media outlets, including Bloomberg, are strongly criticizing the Korean ETF market, especially leveraged ETFs. Foreign media describe the Korean ETF market as not properly reflecting valuations, with KOSPI in complete disarray, likening it to a 'gambling den' or 'casino.' The market's view is that the combination of government policies and the high volatility of leveraged products is transforming the Korean stock market into a speculative one.

A Bloomberg expert criticized the Korean government for excessively intervening in corporate profits earned through painstaking R&D and investment under the pretext of 'excess tax revenue.' This raises concerns that it could infringe upon corporate autonomy and deter investment. Analysis suggests that the reason ADRs (American Depositary Receipts) are more popular in the U.S. than the original shares of semiconductor companies is not unrelated to the uncertainty surrounding these government policy interventions in Korea.

The problem with establishing a semiconductor industrial complex in the Honam region was not the plan itself, but that it was being pushed too hastily. Relocating military security facilities and underground structures like ammunition depots takes considerable time, and rushing it could damage trust with the U.S. military. It was emphasized that proceeding with military facility relocation, which is directly linked to national security, without sufficient discussion could pose significant risks.