MEETING WITH KOREAN DEPUTY PRIME MINISTER LEE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00100R000300020019-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 21, 2016
• Document Release Date: June 10, 2008
• Sequence Number: 19
• Publication Date: February 20, 1980
• Content Type: MEMO

Approved For Release 2008/06/10: CIA-RDP83B00100R000300020019-2
Participants: Korea: Lee Hahn-been, Deputy Prime Minister,
TREA has not
reviewed.
Processed
IAW CIA
TREA
arrangement .
letter dtd
4/11/08.
(also Director of Economic Planning
Board)
Tchah Hwa-june, Assistant Minister for
Economic Cooperation, EFP
Chung In-yong, Assistant finister for
International Finance, ministry of
Finance
Kim Yong-hick, Ambassador, Embassy of
Korea
U.S.: G. William :filler, Secretary of 'the
Treasury
C. Fred Bergsten, Assistant Secretary
for International Affairs
Erland Hegir:botham, Deputy Assistant
Secretary for East Asia
Date and Time: Wednesday, February 20, 1980; 5:15 P.M.
Subject: Meeting with Korean Deputy Prime Minister Lee
Distribution: Treasury--Messrs. Bergsten, Nachmanoff, Pelikan,
Barreda, and Simmons
State--Messrs. He inbotham and Porter U. S. Ambassador
exCC_ de 1w~~ e E + 6A~jrteeij
SECRETARY MILLER opened the discussions by asking
Deputy Prime Minister Lee for a briefing on Korea's economy.
DPM LEE replied with a sweeping summary of Korea's economic/
political history from 1952 to the present. He said this
extraordinary period could be summed up in two concepts:
education and economic development, or the beginning of
industrialization. He pointed out that Korea has gone
through three periods of pain during that time span. The
first was 1.952-56 following the war and the second was
1960-61 during the student unrest and presidential transition.
(LOU)
Korea is entering the third period, Lee said. After
twenty years of high growth rates, the ROKG is adopting
growth restrictive policies to curb unacceptably high rates
of inflation. After stating inflation was 24 percent last
year he pointed out that when the direct and indirect effects
of oil prices are removed, the CPI would have been only
10 percent. In 1980, he said, the ROKG will maintain the
stabilization policies begun last year and other measures
have been adopted. The won was devalued by about 20 percent
on January 12 and positive interest rates were restored
when interest rates on time deposits were raised to about
25 percent. Lee said the ROKG was hoping the economy would
C1azsif;-2dby R. G. Pelikan
Q; Crc fy ^ 1ir:ic . for
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begin to rebound later this year or early next, but the
timing depended on two important unknowns; i.e., public
reaction to austerity and economic growth in the U.S. and
Japan. (LOU)
Lee then mentioned the political dimension associated
with the present period of pain and pointed out that the
"enthusiasm of the people was underpinning the orderly
constitutional process". He also said the purpose of his
visit to the U.S. was to explain this painful period of
political and economic adjustment to U.S.G officials and the
private community and seek their support during the
transition. (C)
SECRETARY MILLER gave a concise and comprehensive
presentation on the U.S. economy, its situation and
outlook and a rundown on measures the Administration is
pursuing against America's number one economic problem --
inflation. He pointed out that, unlike Korea where
inflation may be licked quickly, the U.S. has no quick-fix
measures because inflation is now deeply embedded with
roots going back 15 years. In addition to macro economic
policy measures, which he explained in some detail, he said
the Administration is trying to build a "constituency" to
support what he believes will be a long battle against
inflation. Secretary Miller also reviewed the global and
domestic energy situation. He concluded by saying-the outlook
for the U.S. economy in 1980 is a slow rate of real growth
and the Administration does not intend to unleash stimulus
until the rate of inflation is down. (LOU)
MINISTER LEE said that Korea's current economic
policies are based on the assumption of a recovery in
global markets late this year. He said that Korea will need
to export more to the United States and requested that, at
least for 1980, the U.S.G. "buy more goods from Korea" (read
ease up on trade restrictions). (LOU)
ASSISTANT SECRETARY BERGSTEN said that part of our
effort to combat inflation is to combat protectionist
pressure, which the U.S.G. wi-111 continue to do. In this
connection, he said it would be very useful to be able to tell
members of Congress that Korea is playing by the rules of the
trade game and has signed the Subsidies Code in Geneva. He
said we are ready for Korea to sign the Code as soon as
practicable. (LOU)
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MINISTER LEE said that Korea was ready to sign the Code.
At this point he was interrurptec: by one of his eolleacnues
who conducted a brief dialogue with him in I:orea:';.. when
this dialogue was completed, the Minister said Korea "would
sic;n the Code sometime this year" but "don't press uc next
month". (C)
The meeting ended. (U)
Approve:
R. G. Pelikan
non 25186
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