President Kim Sangcheol glared, pressing them for an answer, but not a single fool opened his mouth.
Strictly speaking, the problem was the supplementary budget.
Trying to expand fiscal spending without raising taxes meant there was no choice but to issue more government bonds. Freezing electricity rates for the sake of people’s livelihoods naturally meant more KEPCO bonds as well.
“Why is no one answering me? Are you all saying none of you did anything wrong?”
In truth, the answer had been decided ten years ago.
They had to either raise taxes or raise public utility fees. Otherwise, the issuance of Treasury bonds and KEPCO bonds would only continue to increase.
“...Mr. President. I apologize.”
When the atmosphere in the State Council meeting reached its peak, the Minister of Economy and Finance rose and bowed his head.
“This is all our fault.”
“What happened? Is our country’s fiscal deficit truly so severe that we’ve reached the point of default?”
“No, sir. Even compared to the United States, Japan, and Europe, Korea’s fiscal soundness is in relatively good shape.”
“Then?”
“The recent situation arose because of the issue of protecting the steel industry.”
The finance minister confessed everything that had happened as if making a confession.
The prime minister and the other ministers already seemed to have guessed, but for the president, who had only just returned after finishing his UN schedule, it was unfamiliar news.
“So right now... the pension fund requested an anti-dumping team? So we could prepare against Chinese steel?”
“That is correct.”
“Then why did the Ministry of Economy and Finance refuse? From what I hear, the pension fund’s request does not seem unreasonable.”
“There is no long-term outlook.”
“Outlook?”
“Yes. Of course, part of the reason Chinese steel can wage a low-price offensive is because it has the backing of government subsidies, but even setting that aside, it is true that China has surpassed our domestic competitiveness.”
“...”
“I hesitate to say this, but it is overwhelming. Currently, Korean steel’s global market share is around four percent, while China’s is around sixty percent. The performance is similar, but the price is almost half. Domestic steel is just barely defending production volume with a premium steel strategy, but this premium steel market is not one where we possess an insurmountable technological gap.”
“You mean... that too can be caught up with easily enough?”
“That is correct.”
The finance minister continued with a face that begged for understanding.
“We could not readily decide on support when we had no idea how much of the budget it would consume. On top of that, are we not already facing heavy backlash from many farmers after opening the agricultural market?”
“...”
“If we help one specific industry, another controversy over fairness will arise. When the pension fund suddenly made an issue of KEPCO bonds, we truly found ourselves in a difficult position.”
Kim Sangcheol turned his head with a dark expression.
“What do the other ministers think?”
Everyone remained silent.
Truly, goodwill comes from a full granary, and resentment from an empty barn.
Steel was, of course, a market they could not abandon, but if asked what money they would use to rescue them, there was nothing to say.
Had the government’s debt-to-GDP ratio not soared steeply over the past dozen years?
“I see. I understand your intentions well. Everyone, leave us.”
After dismissing them, the president asked the prime minister, who remained alone.
“Prime Minister, is all this uproar truly because of the pension fund’s stubbornness? Is everything the Ministry of Economy and Finance said correct?”
“It is not wrong... but that does not mean it is all right, either.”
“Tell me. What haven’t you told me?”
“...Recently, as the steel market grew precarious, we also instructed the pension fund to buy. Because of that, the pension fund’s stake in the domestic steel industry increased by about eightfold. But the pension fund must also be aware of the outlook for domestic steel.”
“So that is what they are ultimately dissatisfied with?”
“Yes... They seem to be acting this way because they kept investing, yet there was no response at the government level. From what I have heard through various channels, if only a national countermeasure is established, the pension fund is willing to make additional purchases as well.”
When the president sighed, the prime minister quickly continued.
“In truth, though they said nothing in that meeting, the ministers of Science and ICT and of Trade, Industry and Energy have different views.”
“Different views?”
“Yes. Unlike the Ministry of Economy and Finance, they believe steel must be protected. Increasing the stake in Pasko was also a decision made after consulting with the ministers of Science and ICT and Trade, Industry and Energy.”
“Then why did they say nothing earlier?”
“If they spoke up about saving the steel industry, the Ministry of Agriculture would not stay quiet... Since many controversies were expected, I told them to restrain themselves.”
The president smiled bitterly and said,
“Then what do you think, Prime Minister? We opened up rice, but is it right to protect steel?”
“...I believe so. Given Korea’s geopolitical characteristics, even if rice is impossible, I think steel can be saved.”
“...”
“In truth, what the pension fund wants is not for us to guarantee Pasko’s market share from ten years ago. They are saying we should at least provide price subsidies so domestic companies can prioritize using domestic steel.”
“Even that alone would require a budget in the trillions, would it not?”
“That is also true...”
Kim Sangcheol rose from his seat, walked to the window, and looked up at the sky.
The future was pitch-black. They had barely managed to break their support base and open the agricultural market, yet the United States was still making unreasonable demands, and China was threatening domestic industries. Then what country were they supposed to rely on?
In truth, now that the United States had turned out that way, there was no country left to trust.
Just as Baidon had inherited most of the policies of Donald’s first administration, even if the Democratic Party took power, reshoring would not change. In such circumstances, he absolutely did not want to imagine China getting its hands on Korea’s steel lifeline as well.
“Then let’s do it.”
The president said with a bitter smile.
“Let’s just do protectionism too.”
“Then...”
“In the end, the problem is the budget, yes?”
“Yes...”
“In my view, the smoking rate among the public seems to have grown far too high lately. Drunk driving and alcohol-fueled violence are serious problems as well. I suspect alcohol prices are too cheap.”
“Then shall we proceed with raising the liquor tax and tobacco tax?”
“Yes. Have the Minister of Health and Welfare test public opinion a little. With the budget secured this way, let’s support steel first.”
The prime minister bowed his head.
“Understood. Then we will also look into protectionism that does not stand out. If it is R&D support, tax reductions, or interest-free loans, it will be difficult for other countries to take issue with it.”
“Yes, please look carefully into the methods.”
Just as he was about to leave, the president called the prime minister back.
“Oh, and one more thing. Who was it that made this problem bigger?”
“Yes. It was Lee Seongjun, the Director-General of the Tax Office at the Ministry of Economy and Finance.”
“Is he the person who was supposed to inherit my district in this by-election?”
“Ah, yes. We selected him after much deliberation. When he worked in the Budget Office, he cooperated very well with our side.”
Kim Sangcheol put a cigarette in his mouth.
“Pass the word to the party. Tell them to put it on hold.”
“...Pardon?”
“He’s clumsy. Too clumsy to hand him a nomination so readily.”
A murderous glint flashed in Kim Sangcheol’s eyes.
“When people work, there are always bastards who insist on pushing their own way until a problem finally blows up. Tsk, tsk.”
“Th-that is true.”
“It seems he does not yet have the ability to enter politics. Tell him to broaden his vessel and wait for the next opportunity.”
“Understood... Then what should we do about the pension fund?”
“Did that man apply for a nomination as well?”
“Ah, no, he did not.”
“Then let’s wait and see for now. It is impudent, but it would not look good for the government to meddle with the pension fund... Instead, please make it clear to them that if they do not resolve the government bond issue within this week, independence or not, they can expect no mercy.”
Lee Chanho bowed his head.
“Understood. I will make sure it is wrapped up within this week.”
*
The fears of a Korean default that had struck the public were suppressed in an instant.
The day after the closed-door State Council meeting. For unknown reasons, the pension fund repurchased Treasury bonds and KEPCO bonds, and also bought back the massive volume of public corporation shares it had been dumping.
Countless questions poured in over the pension fund’s overnight change in behavior, but Director Oh’s answer was always the same.
—I bought them because they were cheap. There is no meaning beyond that.
Under ordinary circumstances, such unprincipled behavior would have deserved criticism, but the returns the pension fund had recently achieved made everyone forgive it.
Following last year, it was achieving a thirty-percent return this year as well. Because of that, public resentment turned more toward the Ministry of Economy and Finance, which was overissuing government bonds, than toward the pension fund, which was pushing back the point of depletion.
“Th-this makes no sense, Prime Minister!”
Lee Seongjun, Director-General of the Tax Office, bowed his head with a face that looked ready to burst into tears.
“This cannot happen. You truly cannot do this.”
“Director Lee.”
“When I was in the Budget Office, do you know how much I cooperated with the Minguk Party’s policies? There is probably not a single lawmaker from Honam who has not owed me a favor.”
Lee Seongjun truly felt tears coming.
He had been a budget fixer. After the general election, he had poured money into regional budgets, and after the presidential election, he had poured money into airports. When district lawmakers could not secure budgets because of KDI, he had even kindly taught them how to obtain exemptions from preliminary feasibility studies.
And that had earned him his titles. Director-General of the Tax Office in his early forties. A nomination in a safe district, no different from a proportional representation seat...
Yet now, one minor mistake was about to turn his lifelong dream into nothing.
“Look, why are you acting so unlike yourself? I’m not telling you not to go into politics. I’m saying the by-election has become a bit difficult, so let’s look to the next opportunity.”
“This is truly unfair... What did I do so wrong?”
Lee Chanho, who had been gently placating him, was slowly beginning to grow irritated. If he was told he could not have it, he should understand that he could not have it, but he had far too many complaints.
“You didn’t do anything wrong? After blowing the matter up this much!”
“Prime Minister, that was the pension fund...”
“If the pension fund did that, then you should have bowed your head! Or reported the problem upward! Do you know what politics is? It is bowing your head to the opposition party. It is asking opposing factions for cooperation. From the moment you pin on that gold badge, there will be countless things you will have to ask for while swallowing your pride. So why is your neck so stiff?!”
“Prime Minister, that’s not...”
“This bastard is still running his mouth? Hey, do you think all 190 lawmakers share the exact same thoughts with one heart and one mind? Do you think that’s why they keep their mouths shut?”
Lee Seongjun had made a brief mistake, but he soon regained his reason.
If he whined even one more time, even the promise of a next time would be gone.
“I apologize, Prime Minister. I was short-sighted.”
After huffing and puffing for a while, the prime minister calmed his anger somewhat when Lee Seongjun flattened himself.
“Honestly, why make me out to be the bad guy for no reason?”
“I apologize. It seems I am lacking in this area. As you said, I do not seem to be ready to enter politics right now. I will be more prudent.”
Lee Chanho had many more things he wanted to unleash, but decided to stop there. After all, the ruling party lawmakers owed this man quite a lot in budgets.
“I’ll say just one thing. In my thirty years of political experience, you are someone with the makings of becoming very big. I know that much well.”
“...Thank you.”
“Think of it as one step back for two steps forward. Understood?”
Lee Chanho left behind that insincere consolation and quickly departed.
Left alone, Lee Seongjun shed the tears he had been holding back.
For a man who had never once failed to be promoted, it was his first taste of life’s bitterness. To think he had to endure this wretched bureaucratic life for another four years!