SNIE42
APPROUFD FOR RELEASE DfiTF0
special
national intelligence estimate
The Outlook for South Korea
DIRECTOR OF CENTRAL INTELLIGENCE
inNITED STATES INTELLIGENCE BOARD
A* indkaHd42
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Jhw following inWIifl.nc. orflonuafioni pa'tkipatud inprtporoiion <rf
ISa CmWhI Intaliga-eaand rK. inMlliamca organaoOni of mo Dopart-"nr.ii of Suns Dtfanto, rhe Amy,Navy, tho AWnd lh* Jolm Sio*.
Coocwvringi
Director of IntellWjance ood Sotaoreh, Department o< Stota Director, Defame iMalligence Agency
AadMM CKaf ol Sea* for latriBj-att.t aSoCW ofhief ofeMlliflance,
Director ol fia Nottonei Sacurrty Agancy
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Th.SlS, ond D* imW, FtoVolf..bMg ovtWde ot AM
l^iKUdion.
THE OUTLOOK FOR SOUTH KOREA
THE PROBLEM
To assess the prospects for political and economic stability in South Koreaith particular reference to the impact of major changes in the level and type of USand assistance.
NOTE
The last estimate on Korea wasThefor1 It dealt with the major trends and prospects in South Korea, with particular attention to the impact of North Korea on the south over the next two or three years. That estimate remainsvalid, in our opinion, and it should be consulted for the background of the present estimate.
The introduction to the present estimate is intended to bring1 up to date in the briefest possible manner. Parts IIssess the prospects for South Koreaart VI discusses thc probable impactubstantial reduction of South Korean armed force strengths and.ubstantial increase in the amount of US economic aid. For the purpose of this section it is assumed that US aid during the periodould be basedhased reduction of about one-third in present Republic of Korea (ROK) armed force strength and, concurrently, an increase in assistance for aand balanced economic development program on the order0 million per year.
CONCLUSIONS
s far as we can see at present, the political situation in South Korea during the period of this estimate will
ably be characterized by vigorous dissension and factionalism in both military and civilian circles. We believe that the military will continue to dominate the state, even though the government may be ostensibly civilian Occasional abrupt changes of leadership by coup d'etat may be in
Tne Auut.nl Chief ot SUIT,T. would slatelhe CWnraunm powrra tvllrvr that tne OS willKorea with Ihe kind and drfiM of fore* necenary QUJcilyol launch an overt
Tor Ihe petition* Di The Director, Defense IntelllEeace Agency- the AuUtani Chief of SUR lor Intelligence. Department of the army and the saaaaal Chief of Navalepartment ofr are the footnote to paragraph SL
The economic outlook is grim but notontinuance of US aid at approximately present levelseasonable degree of political stability, there willbe some improvement. An increase in the amount of US aid, if effectively used, could speed up the rate of economic growth and in the long run would probably contribute to political and social stability. At best, however, economicwill be slow. )
The Communist powers will continue their attempts to destroy the independence of South Korea by various forms of political warfare and subversion. The greatest threat to the country lies in the possibility that political dissension, economic stagnation, and social unrest will render itvulnerable to thia Communist effort )
As long as the Communist powers believe that the US will defend South Korea, ihey will almost certainly not launch an overt militaryccordingly, aof strength of the South Korean armed forces, byup to about one-third of present numbers, wouldnot in itself increase the likelihood of invasion from the north. It would, however, produce considerable politicalwithin the country, which would possibly be great enough to endanger any government initiating the)
DISCUSSION
INTRODUCTION
he military Junta under Oeneral Pak Chang-hu: istronger positron now than at any Lime in its career FacUooausm within its own ranks and among the military Incontinues toajor problem, buthave been kept under control and Indeed have diminished during recent months. Co-ope rati mi la good between General Pak and Colour) Kim Chong-ptl, head of the ROKIntelligence Agency, and the existence of the Agency, even though tt arouses public apprehension, is probably the most important deterrent to any violent overthrow of the regime. In general, the present leadership shows Itself to be well-intentioned as well as fairly competent and honest, though It lacks experience In political and economic matters and has antagonized important elements of the population by harsh and authoritarian measures.
conomic conditions have substantially improved since the sharp contraction ofactivity foUowing the1 coup. Gross National Product (GNP)1ercent higher than Signs of recovery were evident in important parts of the industrial sector, particularly in power, mining, and chemical production. Through most of the year price rises were remarkably well restrained. As the junta eased some of :ts rigorous early measures, the businessbecame less apprehensive and appears now to be awaiting further developmentscommitting itself to full participation ln the regime's economic program. Thc Junta, Indeed, Is aware of the economic problems which face South Korea, and it has acted promptly and vigorously to deal withdifficulties.
one of this means, however, that South Koreas basic economic problems are on the way to solution. Scarcity of naturaldeficiencies in technical andskills, and overpopulation impose severe limitations. The rise in GHP1 was mainly attributable to favorable weather condiuons, which Increasedoutput. For the second successive year, moreover, there was no per capita gain.and underemployment arc Inflationubstantial threat.
S. The regime has not gained widespread popular support. General Pak personallya remote figure and none of the other Juitia leaders has established an appealing public image. Most South Koreans agree with the Junta's stated alms, particularly the elimination of corruption, the regeneration of Korean society, anticommunism, andgrowth, but they see Utile evidence of progress toward these objectives. Thewhich greeted the revolution of0 has evaporated, and the general public attitude seems to be one of passive acceptance of the existing situation. Farmers feel some gratitude for government efforts to help them, but they retain their traditional distrust of all central authority. Civilian politicians are unenthusiastic and havebeen shaken by the promulgationaw which could be used to bar them fromactivity for up to six years; President Yun has resigned in protest against this law. Students and intellectuals arc in large part hostile, alienated by drastic repression in the early nostcoup period and continuingon their activities.
II. POLITICAL PROSPECTS
he Pak Junta has promised to restore civilian government and has announced a
r
calling for resumption of political activity at the beginningew constitution before March, and general elections In May. There seems totrong public desire forransition. Indeed, popular acceptance of the presentappears to have been obtained on the understanding that military rule Is to beAny action to postpone the return to civilian government would provoke serious unrest within the country, and it appears to us that the Junta will have to make atlausible pretence of fulfilling its promise.
his undertaking to return the country to civilian rule may prove to be one of the most important causes of friction within theleadership. As the time to fulfill the promise approaches, disagreements overtactics and political alliances wit]become acute within the junta. If the group splits over theoup or coupby one of the major military factions is probable.
11 Moreover, the occurrence of diplomatic, economic, And political setbacks will inc..M< the likelihood of serious dissension within the ranks of the Junta and will encourage rival elements seeking power. Even if the junta were to be spared failures, the persona!and ambitions of its members would almost certainly lead, in tune, to politicalwithin the group and probably to coup plotting. The makeup of the junta willchange from time to time as the fortunes of individuals or groups rise and fall. other military elements with political and economic aspiration* will probablyin time, lo challenge the monopoly of power now held by the Pak group. Tbe Junta Is wary of plots, however, and well protected by its internal security apparatus Wethat the threat which other militarycould pose would probably be serious only in certain contingencies, such as: (a) the assassination of Pak Chong-hui followed by assumption of leadership by more radical elements;rolonged power struggle within the junta; (c) undue prolongation of military rule with consequent extreme public dissatisfaction; or (d) pronounced economic setbacks.
ven In the short run, therefore, the political outlook is uncertain, and for the longer period It cannot be very favorable The basic institutions of government are not firmly established either In law or insuch stability as they had begun to achieve has been undermined by thechanges of the past two years. Clearly the military leadership is planning towhatever new government emerges or,inimum, toatchdog role from positions of strength within the armed forces. Some officers expect to participate in the new government, and it appears that Pak himself (who is now Acting President) may be acandidate; he has indicatedresidential systemtrong executiveingle legislative chamber.
ew civilian government is formed on the basts of elections, and if it provesto the Junta, another military takeover is almost certain, fn fact, there is very little chance that any government made up ol civilian politicians would survive long if It proved unsatisfactory to the South Korean military, now that the psychological barrier to military intervention in state affairs has been broken Thus, we believe that the most probable long-term outlook Is for continued dominance of the state by military elements even though the government may becivilian. If the military were genuinely united behind the present leadership we could feel fairly sure that their control would be prolonged and that it might be effective in meeting South Korea's problems. As far as we can see. however, vigorous factionalism is likely lo plague both military and civilianon the political sceneong time to come, and further abrupt changes ofby coup d'etat may be In prospect.
HE ECONOMIC OUTIOOK
The mililary junta has recently set forth its long-range economic goalsraft five-year economic development plan for thc2he principal plan goals are: (u) an average annual economic growthercent, compared; (b) an Increase In employmentillion0 toillionhich would tower therate fromoercent;ear doubting in the rate of fixed capital formation, and (d) expansion in exports of goods and services7 million01 millionnvestment ts to be concentrated on the expansion of electric power, coal, and agricultural production, on construction of roads, flood control andfacilities, and on the development of such import-replacing industries as cement,and synthetic fiber.
This plan Is almost certainly overopu-mtstlc and It lacks concrete provisions for implementation. However, ll doesense or directionet of operational priorities for developmental efforts It is the first significant etTortouth Koreanto plan seriously for the longerfuture, and the effort aloneavorable development in the preoccupations of ROK loaders. The choice of primaryfor Investment is sound though many of the targets are unlikely to be attained.
key to even partial fulfillmentplan is thc amount of foreignwill be available. Dp to thethe level of foreign aid fromthan the US and the amount ofinvestment flowing to Southbeen extremely low because of thepolitical instability and poorAt present there ore prospectsfrom sources in WestItaly More important would beettlement with Japan,not only facilitate Increased trade and Japanese Investment in South Korea, but would probably Include financial assistance from the Japanese Government throughof some of the Korean claims together with grants or long-term loans. We believe there is an even chance thatouth Korean agreement with Japan will be achieved within the next year or two
ll prospects for economichowever, depend on variousof which the most important are the level and nature of US aid and the effectiveness of the ROK Government. The limitationsby scarcity of natural resources and overabundance of population are grave, but they do not make the situation inherently hopeless We think that if the contingencies just mentioned are not unfavorable, the South Korean GNP wilt almost certainly Increase substantially faster than the population, though not as fast as is called for In the junta's five-year plan. It seems to us probable, though by no means certain, that thesituation in general will not be bad enough to cause significant popular unrest. On the other hand, it is extremely unlikely to be good enough to contribute markedly to political stability, and certainly It will not, in thc period of this estimate, improve so far that It ceases to require substantial foreign
IV. ROK-US RFIATIONS
IS. With the assumption of power by the Junta. South Korea's relations with the USew phase. After an Initial period of suspicion and mistrust, the leadership now emphasizes the closeness of Its ties with the US. Nevertheless, It is intent upon exercising full control of Korean affairs There is an element of uHranationalism and Korean xenophobia underlying this attitude,among the younger junta members Moreover, to enhance Its prestige at home and
abroad, the regime seeks to demonstrate that It is no mere puppet of the Americans
esult of these conflicting pressures, the junta's responsiveness to US guidance has varied considerably. Occasionally It hasIts position, at least partially into US influence. On the otheras carried forward Its political purge trials and. more recently, has chosen to pushtatus-of-forces agreement despite clearthat both courses will create US-ROK friction. The early actions of the military junta upset relations with the UN Command in South Korea and compromised CINCUNCs operational authority The junta has since accepted the principle of the subordination of the South Korean armed forces to the UN Command, but Its willingness fully toagreements on the command structure cannot yet be taktm for granted. Forthe recent trial and conviction of Major General Kim Ung-su, who was first charged with having acted In accordance with UNC orders, definitely impaired the principle of CINCUNC operational control and put ROK commanders on notice concerning the possible consequences of obeying ClNCt.'nc lnrelated to domestic politics.
The junta probably Intends toarge degree of independence In itsof South Korean forces, particularly in peacetime This desire for greaterin military matters may take several forms, including requests for renegotiation of basic operational agreements with CINCUNC. attempts toOK General appointed Deputy CINCUNCeorganisation of the ROK Army command structure with aIn the number of troops subject to UNC operational control. We do not think It likely that there willomplete withdrawal of ROK forces from the UN Command, but there is almost certain tourther erosion of CINCUNCs authority over the ROK forces.
V. THE EXTERNAL THREAT TO SOUTH KOREA
North Korea will continue to pursue Ihe goal of reunification of thc country under Communist control and this objective will be supported, as in the past, by both the USSR and Communist China. Nevertheless, as long as the Communist powers believe that the US will defend South Korea, overt militarywill be highly unlikely. At present the Communists almost certainly estimate that the US would defend Korea with whatever force was necessary, and might not hesitate, this time, to carry the conflict to Communist China itsdf.
It is by political, psychological, andmeans that the external threat to South Korea will be operative during theof this estimate, and the magnitude of thc threaL will depend primarily on thcwithin South Korea itself. Thereatural and strong desire among Southfor reunification of the country. This desire is now largely offset by the wartime legacy of hnstiiity to Communists, but It will gain force if North Korea continues in thc future, as It has in the past, to outstrip the south in economic development, or Ifand maladministration should bein South Korea to such an extent as to cause large elements of thc population toseriously disaffected. The Northfor their part, haveeries of reunification gestures includingproposals for economic exchanges which appeared highly beneficial to the south. They have also called for the renewal ofrelations and postal exchanges, and under conditions substantially free otinhis call metighly favorable response among studentand socialist groups in the south.
As for subversion and infiltration, the North Koreans have thus far made littlewith such methods in South Korea. Any substantial deterioration of the political, so-
cial, and military situation would open tlie way for greater success, however, and the Communists would take advantage of such delerloraUon to step up their efforts. They probably believe that Ihe South Koreanwill eventually be favorable for theseand perhaps for guerrilla operations as well. More recently the North Koreans have de-emphasized the theme of peacefult^m, but we expect them to play upon it again ln their propaganda and politicaland to make some headway with It, as the passage of time dulls the South Koreans' memories of Communist excesses.
VI. CONSEQUENCESAJOR CHANGE IN US AIDhe South Korean militaryIs nol only the fifth largest ln thel is also the most competent and powerful organisation in the state and Its intluer.ee within the country is pervasive in economic and political as well as security matters. uable proportion of the male populationsome measure of technical training and political indoctrination in Die armed forces, while many of the ablest men in South Korea are ln the officer corps The people at large appear to respect their armed forces, despite the earlier record of political andcorruption among senior officers. Thus
'Be* NOTF at beginning of the estimate NOTE: The oolj Important change In North Korean or South Korean military strengths Dace the publication ofThe. Outlook fors In the air force* South Koreanl an additional aqua drat ofKD fighters Ine-evaluaUon of intelligence concerning the North Korean Air Pore* indicated that their FRISCO DaU-weaiher) Inventory is greater by approximately IS aircraft, thatdditional FARMERS havebly been added, and that inert are nowBO rather than SO BIAOLXfl. Thus, the North Korean Air Force has further unprovedlready substantial capability for launching aattack on South Korea and UN military and loglsUcs Installations.
any substantial reduction of personnel strength would have profound repercussions, extending well beyond purely milltnry
outh Korean armed forcesart In deterring the Communist powers from overt military Invasion of South Korea, and they certainly contribute substantially to aof national security among South The chief deterrent to Invasion,is not these forces but the general US commitment to defend its ally. It Is possible that the circumstances of the force reduction would be such as to persuade the Communists that this commitment had become less firm, but the US could take steps to prevent this interpretation. Therefore, wc do not believe that the assumed reduction in South Korean military strength would appreciably Increase the likelihood of invasion. It would, of course, reduce the capabilities of the South Koreans lo resist such invasion If it did occur, and wouldx>rrespandlngly greater burden on US forces.1 Reduction of cspabililles could be partly offset, however,urtherof the reduced South Koreanrocess which would be expensive. Wethat the capabilities of South Korean forces to maintain internal security would still be adequate after the reduction, but If internal upheaval were widespread themight be undermanned while the army
AatMtant Chief of Staff.F. would state the fourth and fifth sentences as foUowi: Therefore, we do not believe that the assumed re-ducUon la South Korean military su-engih would appreciably increase the likelihood oframun1<la had some reason to believe that the UB would not respond with the kind and degree of force necessary quickly u> defeat the aggression Nevertheless, the assumed reduction would, of course, lessen the capabilities of the South Koreans to resist such Invasion If it did oeear. and wouldorrespondingly greater burden on UB forces.
was dealing with disturbances in Ihe rest of the country."
he reduction in force strength would greatly upset various important vestedMilitary officers would rcart against what they would regardutilation of the forces in which they have made their careers, and against the personal prospects of unemployment and hardshipountry where otlier opportunities are Limited. An important segment of the businesswhich profits bolh honestly andfrom ihe supply ol goods andto the armed forces, would have lo make commercial adjustments. Conservativewould be alarmed and segments of theould amplify their objections. Among the general public, there would probably be considerable apprehension that the military reductionsrelude to the withdrawal of US protection However, if concurrentin economic assistanceontinuing US commitment in Korea, the reductions would be approved by mostand intellectual groups, and probably would be acceptable to significantpolitical elements.
an economic point of view, theof the reduction would beecrease of Southexpenditures, which now amountsSO percent of thc governmentas the hwan saved from militaryapplied to economic development,would be beneficial, particularlycurrency for developmental projectsOn the other hand, cuts in thewould tend to aggravate theproblem and the socialtherefrom unless counteractingtaken.
for the increase In economic aid.of course, leadigher rate ofand hence to acceleratedFor most of the time since theWar, US economic aid has been usedlarge degree for alleviation ofimportation of consumers'other stop-gap measuresto long-term economic advance. Itthat the present government, andfollow, will cooperate with the USfruitful programs; certainly there Ispublic recognition of the needsustained development effort If thisit is probable that increased USfor economic development plansthe flow of private Korean funds
into investment, and perhaps alsoreater readiness In other foreign countries to help underwrite economic development AD this would depend, of course, upon tbe maintenance of reasonable political stability within the country,
The beneficial effects of long-rangearc. of course, slow to be felt by the genera) public, and It ts far from certain that the South Koreans will be content to wait. Certainly it cannot bo asserted that increased economic aid for long-range deve.opment would guarantee social and political stability In the years immediately ahead.
The Junta would be somewhat lorn between different views of the schemehole. It would almost certainly oppose the military reductions, in part because Itsare military men themselveslear interest In maintaining large armed forcesrofessional concern with the country's militaryajor reason for the junta's objection, however, would be thepolitical problems that the proposed reduction would bring on. The politicalIs already precarious in South Korea, and the junta so assailed by factions andthat it would have no desire to add this divisive issue to its troubles. We would expect it to argue most vigorously against the military reductions- It could, if it wished, effectively resist theya larger proportion of the nnttonal budget to military purposes, or by simplyto cooperate.
n the other hand, the junta Is well awurc of the crucial importance of economic
development for its own fortunes and those of tho countryhole. Its leaders realize that the success of their revolution Isajor degree conditioned upon their ability to develop the sense as well as the substance of economic progress and hope for the future. If they were persuaded that only through the suggested scheme could US economic aid be increased, their willingness to undertake force reductions would be significantly Increased.
if the arguments for aUS aid were forcefully presentedmaintained. Chairman Pak andwould probably conclude thatand risks of the forcehave to be accepted. They wouldupon US assistance in dealing withpolitical and economicthe force reduction would cause,emphasizing US actions whichassurance that the defense andSouth Korea were not being jeopardwould also be alert to any evidenceIndecision which might onaWe themadditional economic aid whilereductions.
South Korean Oovemmentcurry out substantial trooptrouble and difficulty. It IsmillUry elements outside thewoulde measureoup. It is certain, asnoted above, that the reductionattended with some degree of politlcaJand short-term economicif the government got throughphases of the measure, thesesubstantially lessen.
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