con no.91
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PROSPECTS FOR SURVIVAL OF THE REPUBLIC OF KOREA
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PROSPECTS FOR SURVIVAL OF THE REPUBLIC OF KOREA
SUMMARY
The Republic of Korea, inaugurated on8 under UN observation, is faced with numerous pressing problems In the political, military, and economic spheres. Its prospects for survival may be considered favorable as long as it can continue to receive large-scale aid from the US.
The new government has been organized with widespread popular support, and despite Korean inexperience with parliamentary institutions and the tendency of the present constitution to concentrate excessive power In the hands of the President, the present administration is apparently making good initial progress in the development of responsible government. Furthermore, the Republic has good prospects forde jure internationalevelopment which will further stiengthen Its domestic position.
Following the withdrawal of US occupation forces the Republic of Korea will be faced with the threat of aggression from the north by thc Soviet puppet "Democratic People's Republic oit Is believed, however, that prior to USouth Korean army can be trained and equipped which will act as an effective deterrent to such Soviet-Inspired aggression. This army would, however, require continuing US material aid and technical advice if it were to retain Its effectiveness.
Although thc economy of the Republic is afflicted with certain critical shortages and problems at the present time, some degree of economic recovery can be achieved if US assislance is made available and if US advice is accepted and properlyThus far the new government hasillingness to accept US guidance in economic affairs, provided this advice Is offered inay that Korean nationalist sensitivities are not offended. Thc Republic of Korea can permanentlyits present deficit economic position only on the basis of multilateral trade with other Far Eastern countries and with the northern zone of Korea. Until such time as this development is politically feasible, the political stability of the new government will resteficient economic base, and its political survival will therefore depend in large part on continued US subsidization.
Note: The Information in tills report ts as ofeptember IMS.
SubstanUal contributions were furnished by the intelligence organizalloiis of tlicof State and of the Army. Those of the Navy and the Air Force also furnKl.ec; data. The Intelligence organizations of the Departments of State, Army, and the Air Force have concurred In this report:issent by thc Office of Naval Intelligence, see Entloiure A.
PROSPECTS FOR SURVIVAL OF THE REPUBLIC OF KOREA
I. Genesis or the New Government.
The Republic of Korea, Inaugurated In Seoul onas formed by the National Assembly which was elected In South Korea onay under the observation of the United Nations Temporary Ctornmlssion on Korea (UNTCOK) and In fulfillment of the UN General Assembly resolutions ofhese resolutions were intended torovisional government for all Korea,omplete Soviet boycott restricted the program to the southern zone only, making the relationship of the new government to the original UNGA resolutions uncertain. Thus the exact status of the regime will be determined largely through the actions of8 session of UNGA. Meanwhile thc US and the Plilllpplncs have accorded what may be con-sldered de /acfo recognition to the new government, while China has granted itrecognition.
a. Political Composition.
Although theay South Korean elections had strong popular support, they were boycotted by almost all organized parties except two of the large extreme rightistNational Society for thc Acceleration of Korean Independence (NSAKI) and thc Hankook Democratictheir affiliates. The Communists in South Korea,ery small minority of the electorate and actingolitical Instrument of the Soviet puppet North Korean regime, took an early stand against the election and even attempted to defeat it through revolution. Thc moderate factions under thc leadership of Klmm Kyuslk, and an element of the extreme right under Kim Koo Joined with the Communists In boycotting the election on the ostensible grounds that the election would lend to perpetuate the artificial division of Korea. However, there Is good reason to believe that they were actually motivated by thethat participation in the election would be politically disadvantageous because of their small popular following.
The one-sided political composition of the government is more apparent than real. Thc two extreme rightist factions which fully participated in thc elections are the only two parties that arc strong and well organized throughout the southern zone, and they appear to represent the political leadership of the vast majority of the people of that zone. Moreover, there is good indicationroup ofnaffiliated with either of thc two major parties, willtrong hand in the future conduct of affairs. This group consists largely of Kim Koo adherents who broke party discipline to participate in the election, and of unaffiliated Individuals of varying shades of political conviction who successfully overcame major-parlyin the elections.esult of the nearly equivalent strength of the NSAKI and the Hankooks in the elections, this group now finds itselfbalance of power"in thc National Assembly.
SFJfRET
Inexperience In parliamentary proceduresotley politicalhave combined to prevent the development of the "independent" bloc Into an organized minority opposition to the social and economic philosophies of the two major parlies. Thus far this group has restricted itself to taking advantage of the NSAKI -Hankook conflict In order to jockey for narrow factional, and even individual advantage. This lackealthy minority opposition basedeal divergence ofeal but understandable weakness of the new government.
b. Institutional Structure.
Although the greater Internal discipline and financial resources of the Han-kooks gave them an actual plurality In the Assembly, thc unpopularity of the party, originating In its association with the landholding class, frustrated Its hopes of gaining sufficient moderate "independent" support to secure control. The first test of strength Involved the issue of the form and organization of the government, and the Hankooksajor reverse.
The original draft of the constitution was written by men close to thc Hankook Democratic Party and providedarliamentary form of government. Rhee Syng-manand his followers in the NSAKI objected strenuously to this draft, however, andtrong executive system modeled after that of the US. Rhce's adherents, conscious of thc inevitability of his election to thc Presidency, and the Hankooks, anxious to curb his power, each advocated that form of government that would best Insure their own control of the state apparatus. In this struggle. Rhee was able to secure the support of the strategically placed "independents" and toevision of the draft which favored his position. This conflict, and the face-saving concessions made to the Hankooks in the course of Rhee's victory, serve to explain the unusual governmental structure established in thc constitution and organicstrong executive government in essence, but with certain superficial features of asystem.
The President possesses considerable power and freedom of action. He appoints Ihc Prime Minister with the approval of the Assembly, but the Prime Minister has no policy-making powers since his function is merely to assist the President. The President also appoints the Ministers of the various executive departments. These, togetherariable number of Ministers without Portfolio, constitute the State Council. None of these appointments requires Assembly approval. Technically,policy is formulatedajority vole of the State Council, but since thepower to appoint the State Council is unqualified, except in the case of the Prime Minister, the President has. In fact, complete control of the executive branch.
The present National Assemblyeats is to continue as the legislatureeriod of two years; after that, there is tonicameral National Assembly electedixed term of four years. The Assembly is capable of exercisinginfluence on the executive branch since its members may introduce legislation as well as approve or reject bills introduced by the members of the State Council. The
* See Appendix A.
SEifTtET
eventual role in thc government wiU largely depend, however, on how it chooses to exercise Its prerogatives In the next few months. There Is sufficientin the Constitution totrong President to reduce the Assembly to the statusrubber-stamp" organization and unless the Assembly reacts promptly and vigorously to any threatened Infringement of its rights this development may occur.
To date, the new Republic of Korea lias given evidenceuccessful start in the direction of responsible government. President Rhee, ln his appointments to the State Council, attempted to reverse the initial trend toward narrow factionalism; four of the eleven posts were given to members of the Hankook Democratic Party and two posts went tone oformer Communist. Considering thc human material available in Korea after forty years of Japanese oppression, most of the members of the State Council would appear to be relatively competent.there is reason lo believe that the President, despite his theoretically unqualified power of appointment, will shortly force the resignation of the one conspicuouslyMinister whose appointmenttorm of protest In thc Assembly and In the press.
2. Problems Conkkonting Tire New Government.
The internal and external political problems are virtually one. Because the government is of International origin, it requires reasonably widespread International recognition; because Korean nationalism requires trueseparate"of only half the country, supported bymall number of nations cannot hope to endure. Hence, the decisions of8 UN meeting on Korea will bein determining both the international and domestic moral and legalof the new government.
Soviet strategy at the UN will include furtherance of the North Koreanattacks on thc South Korean elections, and emphasis on portions of the UNTCOK report unfavorable to the US, all with an aim to delay decision on theAlthough it appears probable that the UN decision will be favorable, anyof the South Korean government, or even weak international support of it would seriously undermine its chances of success.
The USSR and the North Korean government are capable of using force to implement their present Intention of insuring the downfall of the Republic of Korea. While it is considered very unlikely that the Kremlin will authorize aggressive action against the southern zone as long as US forces remain in occupation, it is probable that current Soviet plans call for an attempt to overthrow the South Korean regime Immediately following US withdrawal.
Current information indicates that any such attempt would be initiated by-major civil disturbances provoked by local Communists Such disturbances, based on real social and economic grievances aggravated by Communist agitation, would be
SHcliET
aimed either at tho direct overthrow of the government ox at coercion of Its leaders Into some form of negotiation for Korean unity with the Democratic People's Republic in North Korea. These disturbances would probably be accompanied by theof People's Army troops or personnel of the North Korean Department of Internal Affairs, cither as units In civilian clothes or as Individuals, for the purpose of reinforcing local elements. The resultant civil warfare in South Korea would tax to the utmost the combined forces of the South Korean National Police and Constabulary in their attempt to restore order. These forces might moreover be seriously handicapped In their endeavors by their long-standing political rivalry. The Police, staunch defenders of the present regime, have frequently clashed with the Constabulary, an organization which hasrime target of Communis'. Infiltration. Attempts are being made to screen existing personnel and new recruits In the Constabulary, but this is aprocess, and the loyalty of at least certain elements will probably remainfor some time to come.
Thus, even though Communist disorders might eventually be suppressed, the South Korean security forces would be seriously weakened. In this event, the North Korean People's Army might consider an invasion, probably In responseequest from South Korean Communists to restore order.equest would becomeertainty If thc President were assassinated in the course of the insurrection,evere government crisis would Inevitably result.ove is already on foot In the Assembly to amend the Constitution, not only does the present form of government concentrate power in the President's hands; but there Is at present, no political leader who could serve as an adequate replacement for Rhee Syngraan.
Thc existence of an adequate native security force in South Korea would serve as the only real deterrent to Soviet-inspired aggression. Thc problems involved In the creation oforce would bet is believed, nevertheless, that in the period prior to the withdrawal of USouth Korean Army and small air component could be trained and equipped which would be competent to deal with any external threat short of open Invasion by the Red Army proper. Since, however, thc North Korean People's Army has the capability of augmenting Its strengththe initial efforts in the organizationouth Korean Army would have to be indefinitely supplemented by the workS military mission following the withdrawal of US occupation forcesission might well serve, by itseterrent to North Korean aggression.
In the light of these considerations. It Is believedormal Invasion by the People's Army, whilerobability, willenacing possibility.
c. Economic.
The major eccnomic problems confronting the new Korean government result from the artificial division of the country into two zones of occupation and from the loss ot Japanese trade on which Korean economy was formerly dependent. Moreover, the postwar influx of repatriates and of refugees from North Korea has resulted in a
See Appendix n.
SEQJTET
rapid population Increase which Isevere strain on the diminished economic resources of South Korea. To attain economic independence, Korea must rehabilitate and expand Its present production faculties and Its agricultural and mining resources. US .aid will be prerequisite for the accomplishment of these tasks.*
The chances for stability and survival will, within the coming twelve months, hinge more on the question of food supplies than on any other single question of an economic nature. Solution of this problem will largely depend on the ability of thc government to maintain an efficient grain collection and distribution program and to supplement domestic grain supplies by Imports from the United States and from other areas.
Low yield per acre, one cause of the shortage, can be raised throughof fertilizers. Korea's Ashing Industry can be utilizedich source offor local consumption and for exports if Its equipment is rehabilitated.
The shortage of electric power caused by the shutting off of deliveries from the North is seriously retarding South Korea's industrial recovery. Rehabilitation ofpower plants and increased Imports of coal must be depended on to restore aof the power requirements. Imports of coal, petroleum products, raw cotton, raw rubber, and salt are needed to maintain operation of the Korean transportationand industrial faculties.
A lack of skUlcd administrators and managers wiU seriously complicate thc executionrogram of controls of various kinds, especially controls of prices,currency, and foreign exchange transactions. It is even more doubtful that the Korean government can find experts to plan and formulate the policies necessary to insure economic stability. This lack Is so critical that the survival of the Koreanon economic grounds wilt inevitably depend as much on outside aid Inand administration as on outside material assistance.
Although economic recovery will necessarUy be dependent on US advice and assistance, thc political composition and social outlook of thc groups participating In the new government Indicate the possibility of resistance lo certain US proposals for dealing with urgent economic problems. For example, it is known that thegrain collection and distribution program is vigorously opposed by some of the landowners represented in the Hankook Democratic Party since it promises toprofiteering in hoarded rice rents. Similar objections are raised against the increased taxation which must result from any attempt to increase governmentAlthough the various parties represented in thc present government have pledged themselves to thc rc-distrlbution of thc formerly Japanese-owned "vested"program Initiated by US Militarythey appear unwilling to divide large Korean-held estates. With the distribution of vestedargeof Korean farmers will gain title to land that they formerly cultivated as tenants The effect on social stratification in Korea cannot be estimated as yet. but it would appear to be of greatest importance to the stability of the government to continue and
Appendix C
SEBRET
SECRET
lo expand this program of reformeans of broadening the social base of itssupport, thus counteracting Communist agitation.
Beyond US assistance, the economic problems of the new Korean government can be solved only In close cooperation with other Far Eastern countries. Revival of foreign trade between Korea and China and between Korea and Japan, and theof the trade between the northern and southern part of the country are required for any long-range stabilization of the South Korean economy, even though they may not be politically feasible at the present time. This trade will depend largely on the export of marine products, tungsten, and graphite.
3. Conclusions.
As long as the present Soviet policy In the Far East continues unchanged. It must be assumed that the USSR will not be satisfied with lis present hold on North Korea and will exert continuing efforts to establish eventual control over all Korea. Under such circumstances, the Republic of Korea can survive only,on the basis of large-scale US military, economic, and technical aid over an indefinite period Thc extent of US aid required to maintain the Republic against internal and external threats to its existence will be Increased considerably, however, If the present political leadership loses the force of moving toward unified government and insists, against US advice, on acting in its own selfish class Interest, thus narrowing its popular base of support andIts vulnerability to Soviet-Inspired subversion and aggression.
At the present time, thc Republic of Korea appears to have good prospects for gaining widespread International recognition and foreasure ofgovernment sufficient lo secure the loyalty of the South Korean population. Thus, as long as US aid Is forthcoming in sufficient quantities lo help solve the regime'seconomic and military problems, the prospects for survival of the Republic can be considered favorable.
SE#RET
APPENDIX A
PERSONALITY OF RHEE SYNGMAN
Rhee Syngmanenuine patriot acllng In what he regards as the best Interests of an independent Korea, He tends, however, to regard the best Interests of Korea as synonymous with his own. It Is as If he, in his own mind at least, were Korea.
Rhee has devoted his life to the cause of an independent Korea with the ultimate objective of personally controlling that country. In pursuing this end he has shown few scruples about thc elements which he has been willing to utilize for his personal advancement, with thc Important exception that he has always refused to deal with Communists. This accounts for the fact that Rhee has become the symbol of anti-Communism in the Korean mind. He has also been unscrupulous In his attempts to thrust aside any person or group he felt to be in his way. Rhee's vanity has made him highly susceptible to thc contrived flattery of self-seeking Interests in the US and In Korea. His Intellecthallow one, and his behavior Is often Irrational and literally childish. Yet Rhee, In the final analysis, has proved himself toemarkably astute politician. Although he has created for himself the combination role of Korean Moses and Messiah, he has very rarely permitted himself to forget thc hard political realities of his position.
Rhee has spent most of his life in exile, largely in the US.e was elected first President of the Korean Provisional Government, located In Clilna, and later served as its diplomatic representative In the US and at the League of Nations. During World War II he used his position as head of the Provisional Government's Koreanin Washington to promote his own interests and toersonal lobby which has proved extremely valuable to him.
Rhee returned to Korea inpparently expecting that inof his lifelong devotion to Korean independence, and in deference to what hehis incontestable position as the leading Korean statesman, he would bea pre-eminent roleorean state, unhampered by foreign interference. The Moscow Agreement of5 provided instead for continued foreignthe Joint US Soviet Commission, and eventual four-power trusteeship. Thus it postponed indefinitely the day of united Korean Independence.
Al once Rheeitter protest against trusteeship and demanded someform of Korean self-government. These were the two principal themes of Rhee's political campaign up lo thc announcement of the general elections ofRhee guessed that the Joint Commission would fail; he certainly distrusted the USSR from thc outset. He knew that the very word "trusteeship" was anathema to the Koreans andemand for self-rule would be widely favored.67 Rhee kept up his campaign, varying its intensity and bitterness according
to the current situation. He. personally and through his Washington lobby, bombarded thc US government, other sympathetic governments, the UN, and the US press with
for abrogation of the trusteeship agreement and for immediate elections. In South Korea at least. Publicly he demanded the removal of occupation forces; but when the USSR proposed Joint withdrawal, Rhee was the first to proclaim It to be the duly of the US to retain Its troops in South Korea until that area was able to defend itself. Sub rosa, he proposed that the US setovernment In South Korea, granting It military and economic aid and securing UN recognition for It. Further evidence that Rhee counted on US support, despite his talk of government by Korean efforts alone, was his suggestion to General Draper that he would be pleased to see the USaval base on Chejudo.
Rhee seems to have felt that the US should at least have continued to accord him thc preferential treatment he received In the first few months following his return to Korea, but when it became apparent that he could no longer hope for special status, he evidently concluded that General Hodge, in violation of US policy, was personally responsible.artial explanation for this conclusion may be found In messages from Rhec's Washington office, the Korean Commission, which gave the Impression that thc Department of State was giving high regard and consideration to Rhee'shus Rhec's vlndlctlvcncss at thc unfavorable turn of events was directed especially against General Hodge. Rhee waged an almost unceasing rumor campaign against the General, capitalizing on any US Military Government errors, charging that Hodge refused to obey directives from Washington and that he was putting Communists In control In South Korea. Rhee's organization spread his accusations outside Korea, to General MacArthur, to the Department of State, and to members of Congress.
Rhee's tactics in the past three years have been basedemarkably accurate estimate of popular attitudes and prevailing political conditions. Although Rhee once went so far as tooup against the Interim Government in South Korea, he has usually been astute enough to avoid any absolute stand impossible of achievement. On one occasion only did he really seem ln danger of going too far. When he returned from his trip to the US, he stated that the US Government had promised him Immediate electionsarge loan. His prestige suffered considerably when his statements were refuted by US authorities, but he managed to extricate himself from the difficulty with minimum adverse effect.
Rhee carefully built up the Illusion, Inside Korea, that his opinions carriedweight with high US officials and that internationally he was regarded as thc spokesman for the Korean people.hort time following his return, Rhee became the only Korean leader with any sort of popular following, and his name was spread throughout Korea as the champion of Korean independence. Rhee has been able to maintain his position of pre-eminence by clever politics and by default; no other leader has appeared lo challenge him. saveuh Woon Hyung who was assassinatedhee has succeeded In settingolitical machine, the National Society for the Acceleration of Korean Independencehose numerous branches extend outward from Seoul as far down as the county level. He is the only political leader in South Korea who has been able to set upachine. NSAKI consistsather loose amalgam of rightist groups whose allegiance to Rhee has been far from constant. He Is not only an avowed enemy of Communists but he has had little
ic
with liberal intellectuals of leftist and moderate persuasion. The latter have neither political influence outside of Seoul nor financialonsideration of great Importance to Rhee. Many petty rightist politicians have adhered to Rhee In the hope of rising with him to political eminence, but Rhee's mulish insistence on always playing the leading role and his high-handed methods have made it difficult for many leading conservatives. Including the wealthy Hankooks. to work with him. They dare not overthrow him but must maintain an uneasy coalition with him since they need his political prestige. At the same time, since he requires their money and ability, he cannot ignore their demands.
Rhee has used diverse methods for obtaining political funds. Dollars have been secured by direct contribution from his Korean following In Hawaii and In the US and by certain dubious exchange manipulations ln Korea. His US backers haveto his cause in the hope of obtaining economic concessions in Korea upon Rhee's rise to power, or of gaining social prestige through their connection with Rhee, or becauseish to encourage anti-Communist regimes wherever possible. Many humble Koreans have been persuaded, by one means or another, to contribute won to Rhee's cause, and wealthy Koreans have donated large sums on the basis of promises of favors or position on Rhec's coming Into control, or because of Rhee's "influence" with the US authorities.
Today Rhee has gained his end. He is the President, with extensive powers, of an independcnl Korean regime. His government is eligible to receive US military and economic aid, and probably UN recognition Although he wants as little interference wilh his plans as possible, he undoubtedly recognizes that his government's very existence depends upon aid from the US and that the US cannot be expected to grant that aidonsiderable voice in how it shall be used. Thc danger exists,that Rhee's inflated ego may lead him lo action disastrous or at least highlyshn; to the new Koreanid to the interests of the US.
One factor which may, nevertheless, restrain him is the National Assembly. Probably to Rhec's great consternation, lie is learning that he cannot ignore or ride rough-shod over the Assembly which has thus far refused torubber-stamp"
HE MILITARY SITUATION IN KOREA
Korean Sicurnr Forces.
Present South Korean security forces include the National Policehe Constabularytrengthnd the Coast Guardhc Coast Guard is designed to furnish routine off-shore law enforcement, Is not trained or equipped for naval or amphibious operations, and Is known to be infiltrated byelements. There is no air arm In the South Korean security forces nor has any native air defense system been established.
Because of its rapid expansion0 in8 to Itshe South Korean Constabulary requires considerable training and is still short of most of its planned equipment. Modern Korea has had no army and therefore lacks both military tradition and experienced military leaders and administrators. Somehave served in foreign military forces, including those of Japan, China, and the USSR. Virtually none, however, has had experience in handling large units. This shortcoming will delay the development of effective armed forces in South Korea. South Korea lacks the industries necessary toodern army and Is not expected to develop such Industries In the foreseeable future. Because of thisall weapons, ammunition, and equipment must be supplied by sources outside the country, probably by the US. Either rone of Koreaufficiently largepool to supply recruits for armed forces of reasonable size without dislocation of the civilian economy. The generally low level of education, however, and the lack of mechonlcal experience of the average Korean will hamper training in thc technical phases of military Instruction. The average Korean Is Inured to hardship, however, and will respond to forceful leadership by what he regards as duly constituted authority.
Korean Security Forces.
It Is estimated that the North Korean People's Army could put into the field, for an operation in the near future against Southotal of0 troops, of which the main combat elements would be two Infantry divisions and an independent mixed brigade. These troops would be well armed with obsolete butSoviet weapons and would be well equipped and well trained on the battalion level. The leadership for this training has been furnished largely by Koreans who have had previous military experience, either with the Chinese Communist forces or with the Red Army itself. In addition. Instructors, both officers and enlisted men. have been furnished by the Soviet forces In North Korea lo the Peoples' Army. Soviet instructors have been identified down to and including the battalion level, and at latest report these instructors are still serving with the People's Army.
All strength figures are as ofugust.
lo western standards, the People's Army would be lacking in medium and heavy artillery support, mechanized forces, and motor transportation. Although leaders and troops would be Initially Inexperienced ln large-unit operations, the People's Army has the capability, as tune passes, not only of Increasing Its present strength but also of training Its commanders and units In operations above battalion level.
In addition to troops of the People's Army itself, it Is believed that not more0 troops of the Lee Hong Kwang Detachment In Manchuria would be available for an attack on South Korea This unit Is reported, however, to be presently engaged in active operations against Chinese Nationalist forces. It Is therefore probable that the problems Involved in disengagement and transport would tend to delay Itsin operations against South Korea.
Backing up the People's Army ln the event of an attack on South Korea would be0 men in the seral-mllitarlzcd forces of the North Korean Department of Internal Affairs. Allhough some issue of Soviet weapons has been made, these forces are armed In the main with Japanese weapons. While It is unlikely that these police-type forces would be employedombat role, they would be capable ofrear areas of thc People's Army and mighteserve of partially trained personnel.
It is known that an air arm of the People's Army Is ln process of development It Is believed that this force is designed to furnish air support to People's Army ground forces and that It may consist of as many asighters, andround attack, aircraft These aircraft are reportedly obsolete conventional types of Soviet and JapaneseThe effectiveness of this force assumes significance only when It Isin relation to the complete absence of any offensive or defensive air capabilities of the Repubbc of Korea.
Allhough the North Korean Coast Guard ofen has Increased Its armament and equipment in recent months, there Is no evidence that it is being trained in other than normal coast guard duties or thai it would be capable of taking part in amphibious operations.
SECRET
APPENDIX C
CRITICAL REQUIREMENTS OF THE SOUTH KOREAN ECONOMY
According lo expertotaletric tons of grain (brown rice equivalent) must be lmported for the first half of fiscal9 if the daily food ration for non-*clf-suppliers Is to be maintained This ration was reduced In86 calories)0nless scheduled imports or grains can be met In full and an effective system of grain collection can beurther reduction will shortly be Inevitable which will seriously endanger the stability of Ihc government. Importation of fertiliser would raise production sufli. ciently within one year lo supply the required quantity of grains under the present rationing scheme, provided that weather conditions are favorable. On this basis an export surplus of rice would be possible within two or three years.
Products.
The Korean fishing Industry could provide an Important supplement to the Korean diet and also yield an exportable surplus if properly developed but. In order tothe fishing industry, fishing boats and equipment, which are at present in short supply and in need of repairs, would have to be imported, and storage andfacilities would have to be constructed. Moreover,etric tons of salt would have to be imported for the preservation of the catch for the corning year.
Power.
With the culling of power supplies from North Korea onouth Koreaf normal sources ofapid development of additional sources of power and repair of existing facilities Is, therefore, necessary for the rehabilitation of the Korean economy. Importation of repair parts andontinuous flow of bituminous coal from Japan are required for maximum utilization of existing power facilities. US technical aid and equipment would be required for any construction of new hydroelectric generators designed to reduce Korean dependence on expensive coal imports. Moreover, If continued operation of the expanded power system is to be assured, Korean personnel would have to be trained.
South Korean coal requirements for the production of electric power, lorand for industrial purposes amount to about one million tons annually, at the cost ofillion. Korean anthracite production Is sufficient for local needs but cannoi al present be fully exploited because of the shortage of bituminous coal needed for the means of transportation that must move the anthracite Various methods have
15
SETOET
been studied that will permit thc briquetting of anthracite. If the vicious circle In coal production can be broken. It is hoped that Imports of bituminous coal, at present obtained from Japan and financed by the US. can be reduced. Additionalof hydroelectric power facilities will also reduce the need for bituminous coal Imports The biggest problem appears to be the raising of presentmproved mining procedures may make available an0 tons. To obtain additional tonnage would require capitalof existing mines or the opening of new mines. Both methods necessitateof expensive equipment.
5. Other Raw Materials.
Next to foodstuffs, coal, and power. Korea needs petroleum products most urgently for the maintenance or its transportation system, raw cottoninimum ofillion poundsnd rubber. While the trade balance of South Korea Is at present heavily unfavorable because of thc wide variety of needed Imports, development of South Korea's mining and agricultural production wotld provide the exportableneeded to balance Ils trade. This potential could be developed by proper economic policies and careful planning.
SEC,
ISSENT OF THE OFFICE OF NAVAL INTELLIGENCE ONI dissents withecause tt believes that;
of the Republic of (South) Korea Is discussed almost wholly incontinued US aid and thus presents an optimistic view which Is not warranted.should be examined in the light ol basic conditions without regard toaid policies. The probable effects of foreign aid could then be givenbearing In mind the difficulty in attempting to predict the resultsaid. as an example of which the current Greek and Ctilnese situations can
Republic of (South) Korea docs not have good prospects for securingrecognition (see pageond pageines. In viewrecognition of the Democratic People's Republic of (North) Korea by the USSRof her satellites, the possible clash of two different Korean delegations beforeGeneral Assembly and probable Russian compromise proposals designed toUN, prospects for International recognition of the Republic of (South) Koreauncertain.
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Original document.
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