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CAN MR. HYUNDAI BECOME MR. PRESIDENT?
Chung Ju-Yung isn't from Texas, but the 77-year-old founder of the $50 billion Hyundai Group has a Ross Perot knack for shaking things up. Both are self-made tycoons turned political mavericks. But South Korea's Chung is proving to have even more muscle than his U.S. counterpart. His two-month-old Unification National Party scored a major victory in elections late last month. Now, Chung is angling to become Korea's next President. If he pulls it off in December elections, he is promising a brand-new political and economic era.
Chung's jump from business to politics comes at a time when Korea seems primed for change. President Roh Tae Woo is under fire as inflation soars to 15% and Korea's industrial competitiveness slips. And with Korea running a $10 billion trade deficit, charges are flying that Roh is failing to move industry up the technological ladder. Enter Chung, a fresh face amid shopworn politicos. "Before, Korea used to be one of the four dragons," he said at a recent rally. "But after Roh came to power, the dragon became a tadpole."
Chung has seen the change firsthand. His Hyundai Group was a leader in Korea's emergence as an economic dynamo in the mid-1980s, enabling him to amass a personal fortune worth $4 billion. But now the conglomerate is suffering as the country's problems intensify. In an interview with BUSINESS WEEK at his party's headquarters in Seoul, Chung spoke of his reform program: "Our foremost priority is to shift from government-controlled politics, economics, and social policies toward private, civilian-controlled policies." That would include further opening of domestic markets.
EASIER MONEY. Korean conglomerates, or chaebol, would be released from credit restraints and other government fetters that hinder their global competitiveness. At the top of Chung's hit list are interest rates, now running as high as 30%. "Unless we move toward internationally competitive interest rates, this economy can't bounce back," he says. With easier money, Chung argues, the chaebol could spend much more aggressively on research and development and automation. "His new vision is very attractive in terms of revitalizing the economy," says Koo Suk-Mo, vice-president of the business-backed Korea Economic Research Institute.
Even if he doesn't win, Chung has helped reframe the debate about Korea's future. Thanks largely to his party, last month's elections were the first to focus more on the economy than on security and human rights. Governed by authoritarian generals or ex-generals for decades, most post-cold-war Koreans are ready for the removal of the military from politics. "The vacuum has to be filled, and maybe the chaebol will be the next decisive factor," says Bin Sohn, executive vice-president of Asset Korea Ltd., a fund management firm.
That sentiment has touched off a raging debate about the role of Big Business in government. Some executives, such as Yoon Young-Suk, president of Daewoo Corp., fear that Hyundai would be favored if Chung succeeds. Lim Dong-Sung, president of Samsung's economic research institute, agrees that Hyundai's rivals will worry about its gaining an unfair advantage. But, he says, "the UNP can better express conglomerates' interests, so we can expect the government to start paying more attention to our needs."
Korean voters may ask themselves if they want a President who will be an octogenarian for most of his one five-year term. Chung doesn't look any worse for wear after an intense campaign in which he made 189 speeches in two weeks.
HOPING FOR A SPLIT. While Koreans like many of Chung's policy prescriptions, most remain deeply suspicious of the power and motives ef any chaebol. Stunning as the UNP's performance was, the party garnered just 17% of the popular vote, or 10% of the National Assembly's seats.
Chung still remains a dark horse in the presidential race. In response to his clean-government platform, opponents are bound to dredge up stories of purported improprieties in his personal and business affairs. But as the election nears, there's a good chance the ruling party will break up into rival factions, each with roughly equal support.
That could play into Chung's hands. "He's hoping the ruling party will split, which would create the opportunity for a coalition," says Suh Sang-Mok, a senior policymaker for the Democratic Liberal Party. "Then he could wield some power." Even in a three-way race, Chung's party could determine who wins. "He is potentially the most powerful person in this country," says Park Ungsuh, president of Samsung Petrochemical Co. Chung's bid may sound like a long shot, but considering that he wasn't a politician two months ago, no one is ruling him out.Robert Neff and Laxmi Nakarmi in Seoul