PROBABLE DEVELOPMENTS IN THE REPUBLIC OF KOREA THROUGH MID-1957

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A007700020003-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 27, 2016
• Document Release Date: August 12, 2013
• Sequence Number: 3
• Publication Date: February 7, 1956
• Content Type: NIE

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NIE 4 2 . 1 ? 5 6
7 February 1956
WNW
LA)a-Pr'
NATIONAL INTELLIGENCE ESTIMATE
NUMBER 42.1-56
PROBABLE DEVELOPMENTS IN THE
REPUBLIC OF KOREA
THROUGH MID -1957
1 DOCUMENT NO.
NO CHANGE IN CLASS. L
DEC1. ASS!FIED
..,-?
CLASS. CHANG:.ID TO:. TS S C '-
NEXT REVIEW DA FE:
AUTH: HR 70-2
DATE: _217_14.71i REVIEWER: iel_CL2a.e4 la*
Submitted by the
DIRECTOR OF CENTRAL INTELLIGENCE
The following intelligence organizations participated in the
preparation of this estimate: The Central Intelligence Agency
and the intelligence organizations of the Departments of
State, the Army, the Navy, the Air Force, and The Joint Staff.
Concurred in by the
INTELLIGENCE ADVISORY COMMITTEE
on 7 February 1956. Concurring were the Special Assistant,
Intelligence, Department of State; the Assistant Chief of
Staff, Intelligence, Department of the Army; the Director
of Naval Intelligence; the Director of Intelligence, USAF;
and the Deputy Director for Intelligence, The Joint Staff.
The Atomic Energy Commission Representative to the IAC
and the Assistant Director, Federal Bureau of Investigation,
abstained, the subject being outside their jurisdiction.
NSW COPY NO. 2 4
ASSISTANT DIRECTOR,ONE
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PROBABLE DEVELOPMENTS IN THE REPUBLIC
OF KOREA THROUGH MID-1957
THE PROBLEM
To analyze the present strengths and weaknesses of the Republic of Korea and
to estimate probable developments and trends.
CONCLUSIONS
1. President Rhee, now over 80, will re-
tain his absolute political control as long
as he is physically able to hold office.
(Para. 18)
2. His primary objectives will remain the
unification of Korea under ROK control,
maintenance of US aid and support, and
opposition to Japanese resurgence. Eco-
nomic development will remain a sub-
ordinate objective. (Para. 48)
3. Rhee will probably continue to exploit,
and even generate crisis situations in an
attempt to maximize US support for his
objectives. (Paras. 49-50)
4. The chances of a Rhee-initiated attack
on the North appear to be slight during
the period of this estimate. Principal
ROK field commanders would almost
certainly stall, but would probably not be
able to avoid some implementation of a
Rhee order to march north. Rhee re-
tains the capability to initiate armed ac-
tion designed to provoke general hostili-
ties. (Paras. 52-53)
5. Maintenance of the ROK armed forces
depends almost entirely on US support.
The ROK army is superior in both offen-
sive and defensive capabilities to the
North Korean army alone, but the ROK
air force is inferior. Because of the great-
ly superior strength of available Commu-
nist forces in northeast Asia, ultimate
ROK security will continue to rest on its
Mutual Defense Treaty with the US.
(Paras. 40,44,46-47)
6. If US aid is continued at approximate-
ly present levels an appreciable increase
in production and some increase in con-
sumption is likely. Nevertheless, the
ROK has only a limited capability for
economic development. Even were there
no military establishment, maintenance
of the present low level of economic ac-
tivity would require substantial foreign
assistance. Rhee will probably continue
to be uncooperative at times with the US
in the administration of US aid and un-
willing to take many steps which could
1
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eiEgnarg
improve the ROK's financial and inter-
national trade position. (Paras. 25-38,
57-58)
7. Rhee's departure from office would
usher in a period of increased political
instability. However, the formal consti-
tutional succession will probably be ob-
served, with de facto leadership probably
passing to Rhee's chief lieutenant at the
time, currently Yi Ki-pung. Although
the possibility of a coup and one-man
rule will remain, a more moderate and
I. THE POLITICAL SITUATION
2
less authoritarian regime will probably
emerge capable of governing substantial-
ly as effectively as Rhee. (Paras. 19-21,
59)
8. Regardless of who succeeds Rhee, the
principal objectives of the ROK govern-
ment are not likely to change substantial-
ly. However, a successor regime would
probably be more cooperative with the
US, less intransigent in its dealings with
Japan, and more likely to accept the sta-
tus quo in Korea. (Paras. 60-61)
DISCUSSION
9. The Republic of Korea since its establish-
ment in August 1948, has been a semiauthori-
tarian state under the strongly centralized
control of its president, Syngman Rhee, whose
rule has often ignored constitutional proc-
esses. Rhee has been aided in. consolidating
his control by the lack of democratic and par-
liamentary traditions in Korea. Although at
least 90 percent of the voters usually partici-
pate in elections, there is little articulate pop-
ular interest in national political issues. Po-
litical parties are of recent creation and lack
mass bases. Candidates are elected primarily
on the basis of their personal or family pres-
tige and the support of government authori-
ties including the national police.
10. Rhee's attainment of dominance in ROK
political life has also been aided by his posi-
tion as a recognized international figure and
by his personal prestige as a symbol of the
aspirations of most Koreans: independence
and unification. To his lifd long record of op-
position to the Japanese occupation of Korea,
Rhee has added a decade of crusading against
the Communists. Since obtaining the presi-
dency in 1948, he has extended his constitu-
tional powers to establish unchallenged con-
trol over ROK governmental and political ac-
tivity. He has successfully assumed a pos-
ture of superiority to partisan politics, private-
ly defining his relationship to the people as
that of "a father to his children."
11. President Rhee maintains close control
over all executive agencies of the government
and armed forces, but he evidences a special
interest in control of the internal security
forces and the police. He also commands the
allegiance of a broad range of political sup-
porters united only by common loyalty to
him and increasingly centered in the Liberal
Party. The 48,000-man National Police Force
serves both as an effective organ of internal
security in the ROK and as an active political
arm of Rhee. The leading security officials
are completely loyal to Rhee and have used
their agencies to turn out the vote, to harass
opposition forces, and to report on local po-
litical trends. Rhee's main political vehicle
is the Liberal Party, which he has controlled
since its creation in 1951. Rhee also com-
mands the support of organizations of
farmers, women, laborers, and youth, all of
which are linked through their top leadership
to the Liberal Party. Rhee also occasionally
makes use of terrorist groups to enforce his
will.
12. Rhee controls the cabinet and generally
dominates the legislature. He has tended to
appoint weak men as his principal cabinet
ministers and overrules them at will, often
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using them as scapegoats. Rhee has had a
more complex problem in extending his con-
trol over the constitutionally separate Na-
tional Assembly. However, by 1954 Rhee had
limited the capacity of the Assembly to op-
pose his power by forced revisions of the
constitution and repeated intimidation of
Assembly members. The Assembly still serves
as a forum for opposition forces but the basic
question of control of the government has
been decided in Rhee's favor.
13. Despite Rhee's dominance and the sur-
face stability of Korean politics, factionalism
continues to prevail among both his followers
and his opponents. His paternalism has cre-
ated resentment among many ambitious po-
litical figures; and his tendency to play off
subordinate groups and leaders against one
another has encouraged factionalism and
rivalry. Although apparently in good health
for a man of his age, Rhee is over 80, and
secondary leaders have been increasingly con-
cerned with succeeding to Rhee's power.
With popular elections for president and vice
president scheduled for the summer of 1956,
men with political ambitions have temporarily
focused their attentions on the vice presi-
dency, currently held by an ineffective 85-
year-old, Ham Tae-yong.
14. Although the Liberal Party controls about
130 of 203 seats in the National Assembly, its
present strength is based more on govern-
mental and police pressures in the Assembly
elections of 1954 than on voluntary popular
support. In spite of some organizational im-
provements since 1951, the Liberal Party is
factionally divided. The group which has
been dominant since early 1954 is headed by
Yi Ki-pung, who is chairman of the National
Assembly and currently Rhee's chief lieuten-
ant in the party. Yi Ki-pung's rise to promi-
nence from a position as Rhee's private
secretary appears to have been based largely
on his loyalty to Rhee, his unassuming but
competent performance, and the close friend-
ship of his ambitious wife with the influential
Mme. Rhee. Since assuming responsibility for
implementing Rhee's program in the National
Assembly and for key party appointments, Yi
Ki-pung has strengthened his political posi-
3
tion and has established close personal ties
with key figures in the military and appar-
ently in the police. Yi has shown skill in
organizing the Liberal Party bloc in the As-
sembly and in strengthening the party's
national organization, but since Rhee con-
tinues to monopolize all effective power, Yi's
capacities at a higher level remain largely
untested.
15. Yi Ki-pung's position of apparent pre-
eminence under Rhee is challenged by many
of Rhee's followers who regard Yi as a new-
comer to politics and a weak leader. Older
elements in the Liberal Party are embittered
by Yi Ki-pung's rapid rise and continue to
conspire for a realignment of forces in the
party. The most determined opposition to Yi
Ki-pung of those still professing allegiance to
Rhee comes from the so-called National Youth
Corps faction led by Lee Bum Suk (Yi Porn-
sok) who at one time enjoyed considerable
prestige and served as Rhee's principal politi-
cal lieutenant. Apparently seeing in Lee
Bum Suk and his followers a potential
challenge to his own position, Rhee disbanded
Lee's National Youth Corps in 1949, rejected
him as the preferred candidate for vice presi-
dent in 1952, and expelled Lee and his fol-
lowers from the Liberal Party in 1953. Al-
though Lee Burn Suk has been in retirement
since 1953, in 1955 many of his followers be-
gan efforts to form a new party under his
leadership. Admired by many Koreans who
regard him as a patriot and man of strong
will, Lee Burn Suk is inclined toward authori-
tarian methods and has strong political am-
bitions. At present, the new party movement
suffers from internal divisions and Lee ap-
pears to lack strength. -
16. Organized opposition to Rhee was weak-
ened by his victories in the constitutional
crisis of 1952 and the elections of 1954, and
there are now about 73 non-Liberal seats in
the Assembly. Thirty-three of these seats are
held by the chief opposition group, the Dem-
ocratic Party, which was formed in September
1955 largely from the small Democratic Na-
tional Party (DNP). Dominated by conserva-
tive, land-holding interests of the Southwest,
the DNP never enjoyed widespread popular
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support. However, the DNP maintained and
passed on to the new Democratic Party the
only opposition organization in the ROK
which operates at the local level. The Dem-
ocratic Party has, however, been plagued with
factionalism and has not proved a rallying
point for opposition forces largely because
of the dominance of former DNP members
and the exclusion of a strong opponent of
Rhee, Cho Pong-am. Although anxious to
avoid frontal conflict with Rhee on major
issues, the Democrats and other opposition
factions have become increasingly active in
recent months.
17. The largest and most cohesive organized
force in Korean life is the ROK army, and it
could determine the outcome of major politi-
cal conflicts including that of succession. The
likelihood that leaders of the armed forces
will increase their participation in political
affairs is indicated by their growing conscious-
ness of political-military problems and of the
army's position in ROK society. Since 1953,
military leaders have gradually modified their
traditional aloofness from politics and ex-
tended their ties with civilian politicians be-
low the level of Rhee. In particular, the army
chief of staff, 38-year-old Chung Il-kwon,
seems politically ambitious and has probably
entered into a political understanding with
Yi Ki-pung and National Defense Minister,
former Vice-Admiral Sohn Won-il.
18. We believe that Rhee will retain his con-
trol over the ROK as long as he is physically
able to hold office. President Rhee will al-
most certainly be re-elected to a third term
in 1956, and whatever candidate he eventually
favors for vice president will almost certainly
win. Until after the elections Rhee will con-
tinue to maintain steady pressure on the op-
position, making use of the police and other
action groups. Rhee will probably continue
his present tactic of identifying political op-
ponents with a "third force" which allegedly
seeks neutralism in the cold war and accom-
modation with "Communists, pro-Japanese,
and other subversionists."
19. If Rhee should die before the presidential
election scheduled for the summer of 1956,
de facto leadership would probably pass to
Rhee's chief lieutenant at the time, with the
aged vice president remaining as a figurehead.
Although Yi Ki-pung is currently chief lieu-
tenant, Rhee could replace him at any time
with any one of a number of other leaders in-
cluding Sohn Won-il and Lee Bum Suk. The
ability of the de facto successor to consolidate
his position and to control the presidential
elections would depend largely on his success -
in gaining the support of the National Police
and military leaders. If Yi Ki-pung were the
successor, his chances of gaining army sup-
port would be good in view of his present close
relations with the army chief of staff and the
minister of defense.
20. If Rhee should die following his re-elec-
tion, the succession would depend to a con-
siderable degree on the strength of the vice
president. If the vice president were an ex-
perienced figure such as Yi Ki-pung, who now
appears to be Rhee's most likely choice for
the 1956 elections, he would probably be able
to consolidate power through the presidency.
Initially, Yi Ki-pung, at least, would enjoy
the support of influential military leaders, of
his well-entrenched followers in the Liberal
Party, and even of the moderate established
opposition which would be anxious to prevent
the emergence of a more authoritarian re-
gime.
21. The chances for a seizure of power follow-
ing Rhee's death after the elections would be
greater if Rhee again chose an ineffectual vice
president. Such a successor would have diffi-
culty consolidating his control, and a leader
such as Lee Bum Suk might attempt to lead
a coup. Army leaders could prevent such a
coup; and if they saw no prospects for a stable
civilian political leadership acceptable to the
US, they would probably assume a more direct
political role, with General Chung their most
likely leader.
22. The capabilities of the Communist regime
in North Korea to subvert the ROK have been
at a low ebb for the past two years. Guerrilla
forces responsive to direction from the Com-
munists have fallen from a high of over 10,000
in 1951 to some 100 die-hards who have no
reliable communications with the North and
are constantly harassed by ROK security ele-
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ments. The Communist Party in South
Korea (the Labor Party) has been illegal since
1949, and its remnants have been almost com-
pletely uncovered and destroyed. The anti-
Communist attitude of the ROK people is
rooted in personal experience of Communist
rule in the North or during the occupation of
South Korea in the summer of 1950. Most
Communist agents and sympathizers in the
ROK surfaced at that time and subsequently
fled north or were killed. Small cells prob-
ably persist in the major population centers,
but no higher echelon capable of controlling
or coordinating such groups is believed to
exist inside the ROK. Underground agents
from North Korea have improved their oper-
ating methods since the armistice, but most
missions are low-level.
23. Nevertheless, the Communists retain some
potential for disrupting political developments
in the ROK by exploiting _economic griev-
ances, political factionalism, government cor-
ruption, and the popular desire for Korean
unification. Communist influence is strong
among the estimated 700,000 Koreans in Ja-
pan who may increase their presently limited
capability for subversive activity in the ROK.
Within the ROK, refugees from the North, dis-
charged servicemen, laborers, and intellec-
tuals, who often have grievances against the
ROK regime, may prove increasingly suscepti-
ble to Communist penetration.
24. The ROK will continue to counter sub-
version largely by means of the 48,000-man
National Police Force, the 1,500-man Army
CIC, and the 500-man Provost Marshal Gen-
eral Command and the action groups re-
sponsible to it. These agencies will probably
remain generally effective in enforcing in-
ternal security. However, they may suffer
increasingly from lack of over-all direction,
involvement of their leaders in political dis-
putes, and low salary levels which make se-
curity officials susceptible to bribery.
II. ECONOMIC SITUATION
25. The backward and primarily agricultural
economy of South Korea has a per capita GNP
about one-third that of Japan. The partition
of Korea denied to the ROK the major mineral
5
resources and most of the heavy industry of
the peninsula which are concentrated in the
North. The limited natural resources within
the ROK are only partially exploited. Labor
productivity is low. Despite the limitation of
economic resources, ROK economic policies
have placed great emphasis on a large combat-
ready military establishment and a rapid in-
vestment program for development. This
emphasis has created an inherently unstable
economic situation which has been further
aggravated by inadequate and at times un-
wise budgetary and monetary policies. Mere
maintenance of present levels of economic
activities and military force levels requires
continued massive US economic aid.
26. About 23 percent of the ROK's 38,000
square miles is arable and almost all is in-
tensively cultivated, though by primitive
methods. Per acre productivity in the domi-
nant rice crop is about two-thirds that of Ja-
pan. Overcutting of forests has reduced Ko-
rea's once ample supply of wood to less than
present requirements. The ROK has only
partially exploited the rich fishing grounds
surrounding the Korean peninsula. There
are significant deposits of tungsten, graphite,
and low-quality anthracite. Other minerals
have been found, but are in uneconomic
quantities for exploitation. Modern tech-
niques have been unevenly applied in explora-
tion and exploitation of mineral resources.
27. By 1954, South Korea's population had
reached almost 22 million, a density of some
580 people per square mile, or four people per
acre of arable land. The population is in-
creasing rapidly at an annual rate of 1.7 per-
cent. About 72 percent of this population is
literate, but only a very small percentage has
had access to higher education or technical
training. Some 68 percent of the 9.6 million
people in the labor force is engaged in agri-
culture, and only two percent (200,000 people)
is employed in mining, manufacturing, and
construction. There is considerable under-
employment, and according to official ROK
statistics there are about one million unem-
ployed.
28. The ROK government controls important
sectors of the nonagricultural segment of the
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economy. The government owns the major
banks, and controls bank credit and the sale
of foreign exchange. It owns and operates
transportation, communications and ship-
building facilities, mines, and a large number
of small formerly Japanese owned firms. It
also operates monopolies in salt, cigarettes,
and ginseng. Civilian and military govern-
ment workers constitute 10 percent of the
labor force and produce eight percent of the
GNP.
29. During the Korean War the ROK econo-
my was seriously crippled by damage to irri-
gation facilities, mines, power and communi-
cations systems, and the fishing fleet, and by
destruction of much of its housing and capi-
tal equipment. Some 1,500 bridges were de-
stroyed as well as 70 percent of the capacity
of the cotton textile industry, the principal
industry of the ROK. Extensive rehabilita-
tion of the civilian economy has been accom-
plished by using a substantial part both of
the one billion dollars of aid extended almost
entirely by the US, since 1950 and of the $400
million of additional material turned over to
the ROK by US/UN forces.
30. The ROK's high quality rice and other
agricultural and marine products make the
ROK virtually self-sufficient in foodstuffs and
account for 52 percent of GNP. Particularly
good climatic conditions and increased avail-
ability of fertilizer have in the past two years
raised production of rice ? the traditional ex-
port commodity of South Korea ? to levels
comparable to the average yields of 1948 and
1950. But because of increased domestic de-
mands and restrictive policies on trade with
Japan, the ROK is not currently exporting
rice. If weather conditions continue to be
favorable, the ROK could have about 100,000
metric tons of rice annually available for ex-
port in 1956 and 1957, with a potential foreign
exchange value of as much as $17 million.
These earnings will be realized only to the
extent that trade with Japan is free from
ROK-imposed restrictions. Over-all output
in agriculture and fisheries could be raised
considerably if key supplies, equipment, and
facilities were available in greater quantity.
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31. Manufacturing and mining account for
15 percent of GNP. Light and consumers'
goods industries account for about four-fifths
of total industrial output below the 38th par-
allel. By 1955 production in most light in-
dustries had approximated or surpassed 1949
levels, but production continued to be handi-
capped by poor equipment, insufficient oper-
ating and investment funds, and lack of
trained managers and technicians. Output
of cotton textiles is now close to 1949 levels,
although still slightly short of domestic re-
quirements and not fully competitive with
imported goods. Domestic coal output in
1955 (1.25 million tons) still covered only
about one-half of domestic requirements, but
tungsten (2,900 tons of concentrates) and
graphite (95,000 tons of amorphous graphite)
account for a large share of the ROK's small
export total.
32. Shortage of power continues to be a major
limiting factor on ROK economic develop-
ment. Although available power in 1955 ex-
ceeded that of the previous peak year, 1947,
when power was still being received from
North Korea, power is still rigorously rationed.
Present equipment is overloaded and in need
of repairs, with transmission losses close to
twice the normal level. There is little poten-
tial for expansion of hydroelectric power,
which in 1955 provided 55 percent of total
power generated. Thus, further power in-
creases could come only from new thermal
units, which under present circumstances
would require expensive imports of fuel.
Plants now under construction will begin sup-
plying additional power in 1956 and 1957.
Although this increased production will prob-
ably satisfy minimum needs, it will not sup-
port industrial expansion.
33. Since the end of hostilities, the ROK
budget has shown a consistent deficit despite
vast US aid. The limited resources of the
ROK have been overtaxed by simultaneously
maintaining a large military establishment
and rehabilitating the economy. Moreover,
the situation has been aggravated by corrup-
tion and inept management. The ROK
practice of financing the discrepancy between
budgeted programs and fiscal resources by
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overdrafts on the government's account with
the Bank of Korea led to a substantial in-
crease in the money supply and has been a
major factor in sustaining inflationary pres-
sures. The official budget for FY 1954/1955
(April 1?March 31) is as follows:
(In billion hwan)
Expenditures
General government
34.7
Military establishment
85.1
Economic rehabilitation
and devel-
opment
67.3
Others (net)
5.3
Total
192.4
Revenues
Taxes
37.3
Customs
13.1
Others (net)
19.6
Deficit (exclusive of US-
financed aid)
122.4
Total
192.4
Deficit (after US- -
financed aid)
29:
34. The ROK has been in the grips of an in-
flationary spiral in which prices have in-
creased about 1,500 times since the end of
World War II. The inflation has been greatly
accelerated by the Korean War and the size
of military and economic efforts since 1953,
and has been further aggravated by low pro-
duction levels, shortages of consumers' goods
and raw materials, inadequately controlled
credit expansion, and chronic budgetary defi-
cits. Until August 1955, the government did
little to arrest inflation. At that time, under
considerable US pressure the hwan was de-
valued from 180 to 500 to the dollar. Since
then the ROK government has had consider-
able success in stabilizing the price level and
the exchange rate. However, the limited na-
ture of its success is suggested by the con-
tinued decline in the free market rate of the
hwan from 700 to the dollar in August 1955
to 940 in mid-January 1956.
35. The chronically heavy trade and pay-
ments deficit of the ROK has been financed
by US and UN assistance and by foreign ex-
change derived from expenditures by US and
UN troops in Korea. In 1954 Korean com-
mercial exports paid for only nine percent,
and in 1955 only about five percent, of the
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total value of their imports. More domestic
products will probably become available for
export (notably rice, graphite, and marine
products) but exports will probably increase
only moderately, and reach no more than $30
to $40 million annually. Even this limited
expansion of exports can be realized only if
the ROK government changes present policies
by lifting restrictions on trade with Japan and
making export prices competitive internation-
ally.
36. With the rise in domestic production of
foodstuffs since 1953, the major import com-
modities have become capital goods of all
varieties for rehabilitation, commercial ferti-
lizer, coal, and raw cotton. Coal imports
have declined slightly because of increased
domestic supplies.
37. The most important trading partners of
the ROK are the US, Japan, and Hong Kong.
Trade with Taiwan is insignificant. ROK
price policies and the embargo on trade with
Japan established in 1955 have deprived Korea
of a traditionally important export market,
although the ROK announced a limited re-
sumption of trade with Japan in January
1956.
38. Both the economy and the military estab-
lishment of the ROK are critically dependent
on US aid. Recent US aid appropriations
were as follows:
USFY USFY USFY
Economic aid and
1954
1955
1956
(In million US dollars)
technical assistance
280
272
302
Military
335
420
380
Total
615
692
682
1 Estimated civilian aid deliveries including small
amounts of UN aid were only about $186 million
in calendar year 1954, and $220 million in calen-
dar year 1955.
If US economic aid is continued at approxi-
mately current levels, an appreciable increase
in production can be expected during the
period of this estimate, although consumption
will probably only slightly exceed 1949 levels
by 1957. However, it is doubtful that the
Rhee government can be induced to take the
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necessary steps to prevent further inflation.
In any case, prospects for a level of economic
development which would significantly reduce
the ROK's heavy dependence on external aid
during the period of the estimate will remain
dim.
III. ROK ARMED FORCES
39. The experience of the Korean War, the
exposed location of the ROK, and the desire
of its leaders to prepare for unification have
led to ROK emphasis on maintaining a strong
military establishment. President Rhee is
commander in chief of the three armed forces.
The minister of defense is directly subordi-
nate to Rhee, and though technically in the
channel of command between Rhee and the
services, actually has only administrative con-
trol. Whenever Rhee so desires he issues
orders directly to the individual service chiefs.
The JCS, composed of a permanent chairman
and the three service heads, was established
by presidential decree in February 1954, as
the military advisory agency of the Ministry
of National Defense, with the mission of
preparing policies for national security and
coordinating matters of interservice interest.
In practice it has little military function and
serves mainly as a mouthpiece for Rhee's
defense policies.
40. The US is deeply involved in the mainte-
nance and direction of the ROK armed forces.
US support has been indispensable in training
and equipping the ROK army for modern
warfare and the US/UN command continues
to have over-all operational control of the
ROK army, navy, and air forces. The Korean
Military Advisory Group (KMAG) advises and
assists ROK commanders and staff officers in
organization, training, operations, and supply.
Through these close formal and informal con-
tacts the US has exerted a major influence on
the professional views of ROK military per-
sonnel.
41. Army. The ROK army of approximately
650,000 men is currently organized into a field
army, a logistics army, and a training com-
mand. The First Field Army is composed of
16 infantry divisions, each with a strength
of approximately 13,000. Four additional
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8
ROK divisions are attached to the US I Corps
(Group). ROK army divisions together with
one ROK marine division occupy some 90 per-
cent of the UN positions along the demili-
tarized zone. Separate nondivisional. units
including 9 infantry security battalions, 10
tank battalions, 3 heavy and 30 medium ar-
tillery battalions, and 1 AAA brigade, have
been organized and are in varying stages of
training.
42. The Second Army, activated in February
1955, is a logistical organization designed
gradually to assume the functions of the US
army ? Korean Communications Zone Com-
mand. The Korean Army Training Command
is designed to become an integral part of the
country's defense system and will eventually
incorporate all training schools, including
centers for replacement training.
43. During 1953 and 1954 President Rhee
pushed strongly for an expansion of the army
to a strength of 35 divisions. He was unable
to obtain US support for such an expansion
but agreement was reached on a reserve pro-
gram which provides for the formation of 10
reserve divisions, a reinforcement reserve, and
a standby reserve. Each division already has
its planned cadre of 2,500 active army per-
sonnel, and the balance of the 13,000 author-
ized personnel are to be reservists performing
35 days of active training annually with their
division. These reserve divisions will also pro-
vide 35 days annual training for the 95,000-
man replacement reserve which will be made
up of men recently released from active serv-
ice. All reservists who have completed their
compulsory service in the army or the active
reserve will remain on call in the inactive
reserve until they have completed a total of
18 years service.
44. The ROK army is capable of maintaining
internal security, and is superior in both of-
fensive and defensive capabilities to the North
Korean army alone. The ROK army is hand-
icapped by the lack of a strong corps of
officers and noncommissioned officers, and
will remain unable to sustain logistically-
large-scale operations without outside help.
Moreover, to retain its present level of effec-
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ifinigOrelgt, 9
tiveness, the ROK army will continue to re-
quire US professional advice and leadership
for at least the period of this estimate.
45. Navy. The ROK navy of 90 vessels is
capable of conducting small escort, patrol,
and minesweeping functions in home waters,
and against light resistance could support an
amphibious assault on the scale of a rein-
forced regiment. The navy is composed of
28 combat craft (4 escort vessels (DE) and
24 other patrol vessels) , 10 mine vessels, 16
amphibious craft, and 36 auxiliary and service
vessels. There are 15,000 naval personnel of
whom 4,000 are assigned billets on ships. The
27,000-man marine corps is subordinate to
the navy. A marine division of about 18,000
is attached to the US I Corps (Group) at the
front and most of the remaining marine units
are in the West Coast Island Defense Force.
The ROK coast guard of 600 men and 12
vessels is used almost exclusively for prevent-
ing encroachment on fishing grounds claimed
by the ROK. It was established outside of
military channels to circumvent UN command
opposition to the use of the ROK navy for this
purpose.
46. Air Force. The small ROK air force of
184 aircraft is now capable only of limited air
support for ground operations. Its aircraft
strength is markedly inferior to that of the
North Korean air force, and this numerical
disparity will not be essentially changed by
the present US assistance program. Forty-
eight F-51's based at Taegu constitute the
present combat-ready strength of the ROKAF.
There are 27 additional F-51's, 23 F-86 F's,
16 C-46's, and 59 trainers (including 10 T-33
jet trainers) , and 11 liaison aircraft. The US
has scheduled delivery of a total of 85 F-86 F's
by mid-1956 and 2 more C-46's by December
1956. Of the 27 airfields in the ROK three
can support sustained operations of heavy
piston and jet light bombers, and eight others
are capable of sustained jet fighter operations.
Total personnel strength of 16,500 includes
about 275 trained pilots of whom some 50
have received training in jets. As a result
of the US assistance program, however, the
ROKAF will have the nucleus of an effective,
modern air force by mid-1957.
47. The ROK armed forces are dependent on
the UN Command for virtually all supplies
and equipment. There is a shortage of tech-
nical and supply specialists in all services.
If present levels of US support are main-
tained, the ROK armed forces by mid-1957
will be at about their present levels but will
have increased in effectiveness. Because of
the greatly superior strength of available Com-
munist forces in northeast Asia, the ROK's
ultimate security will continue to rest on its
Mutual Defense Treaty with the US.
IV. NATIONAL POLICIES AND PROSPECTS
48. Rhee's principal objectives have been the
unification of the Korean peninsula under the
ROK government, the maintenance of US
support, and the obstruction of Japanese re-
surgence. Domestic concerns such as the
development of the economy have been sub-
ordinated to these objectives.
49. President Rhee's method of advancing his
objectives basically is to exert every possible
pressure on the US to compel its support of
ROK policies. Rhee's maneuvers for US sup-
port apparently are founded on the premise
that the US commitment in South Korea pre-
cludes US abandonment of Korea under any
conditions. His technique of pressuring the
US was illustrated in the late summer of 1955
when international tensions were relaxed by
the Summit Conference and the commence-
ment of ambassadorial talks between the US
and Communist China. Fearing that US sup-
port for his position might be waning and
concerned to a lesser extent with the con-
current increase in domestic opposition ac-
tivity, he sponsored demonstrations against
the Neutral Nations Supervisory Commission,
and reiterated demands that the truce be
scrapped and that ROK jurisdiction be ex-
tended to at least all areas south of the 38th
parallel. He attacked US policies and leaders
for alleged "carpetbagging" by US business-
men in Korea, for "deficiencies and failures"
in the economic aid program, and for protec-
tion afforded the Neutral Nations Inspection
Teams.
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10
50. With the apparent failure of the October
Foreign Ministers' meeting in Geneva, Rhee's
uneasiness about the developing international
climate partially subsided. He modified the
tone of criticisms of US policy in the officially
controlled press, and directed that an arti-
ficially stimulated tax controversy be settled.
He agreed to suspend the demonstrations
against the NNSC, and beginning in the fall
of 1955 a more cooperative attitude in aid
matters became evident. But, despite these
moves and recent public statements designed
to improve US-ROK relations, we believe that
Rhee will not adopt a more cooperative atti-
tude towards the US on matters of disagree-
ment.
51. Unification. Unification of Korea under a
strong non-Communist government has been
Rhee's long-standing objective. Thus, the
North Korean regime and its Soviet and
Chinese Communist allies are viewed by Rhee
and all other ROK leaders as their primary
international enemies. Believing that unifi-
cation cannot presently be achieved by peace-
ful means, Rhee opposed the armistice and
the 1954 Geneva Conference on Korea and
has consistently called for a resumption of
hostilities.
52. Despite Rhee's frustration with events and
his desire to unify Korea before he dies, the
chances of a unilateral ROK attack on the
North appear to be slight. The strong US
antipathy for such a course of action has
become known. ROK military leaders gen-
erally recognize that the ROK cannot alone
achieve unification through military action,
and many have come to believe that the US
would not support a unilateral ROK attack.
Under present circumstances, senior ROK
field commanders would almost certainly stall,
but would probably not be able to avoid some
implementation of a Rhee order to march
north. The presence of US forces in Korea
has increasingly encouraged ROK military
leaders to cooperate with the US, and the
fervor of popular interest in unification
through military action does not appear to be
great.
53. The possibility of a unilateral ROK attack
or of an incident which might precipitate
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fighting will remain at least as long as Rhee
retains power. Rhee has the capability to
initiate armed action which could incite Com-
munist counteraction and result in large-
scale fighting in Korea. Small-scale attacks
by air, naval, or small ground units could be
used to provoke the Communists into counter-
action. Moreover, the action groups of the
Provost Marshal Command, which are directly
controlled by Rhee, have a continuing capacity
to initiate agitation and violence. Hoping
to gain eventual US support, Rhee might not
be deterred by the improbability of success,
by US countermeasures and surveillance, or
even by the reluctance of ROK military com-
manders.
54. Even the current military leaders might
be less inclined to exercise their restraining
influence if the US announced substantial
cut-backs in military aid and consequent re-
ductions in the ROK forces. They might
become persuaded that military action was
necessary before ROK military strength was
seriously reduced. In this situation Rhee
might seek to launch an attack or even
threaten direct negotiations with the North
in order to coerce American support. How-
ever, the possibility of actual negotiations on
unification between North and South will re-
main remote, although sympathy for some
measure of increased economic and cultural
relations with the North may increase.
55. Opposition to Japan. Rhee's animosity
towards Japan is rooted both in historical
experience and in the fear that a resurgent
Japan might dominate Korea and become the
exclusive center of US interest in the Far
East. The most acrimonious of many ROK-
Japanese issues is the fisheries dispute in
which large numbers of fishermen have been
seized for fishing inside the "Rhee line." This
line, which the ROK unilaterally proclaimed
in January 1952, defines the area in which
the ROK claims sovereign control over marine
resources. The predominance of neutralist
and pro-North sentiments among the 700,000
Koreans resident in Japan has been an irritant
to the ROK. The conclusion of an unofficial
North Korean-Japanese trade agreement in
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the summer of 1955 has increased the inten-
sity of Rhee's anti-Japanese feelings and may
have helped precipitate the recent increase of
ROK seizures of Japanese vessels within the
Rhee line.
56. Rhee's campaign against Japan appears
designed primarily to promote US mistrust
of Japan and to establish a pattern of equality
in ROK-Japanese relations. While opposi-
tion to Japan will continue, it will probably
decrease as a factor in policy when Rhee dies.
57. Relations with the US. Rhee bases his
hopes for internal strengthening on the main-
tenance of a high level of US aid, and he has
sought to sustain ROK military and economic
expansion without sufficient regard to the in-
flationary effects and consequent risks of
increased domestic instability. The fiscal poli-
cies and administrative practices of the ROK
government, which have often disregarded
economic realities, are not likely to be
changed. The ROK government will continue
to rely heavily on US aid and to use the
economic instability of Korea as a bargain-
ing point to obtain further concessions from
the US.
58. In his relations with the US, Rhee will
almost certainly continue to insist that coun-
terpart funds developed from US financed
imports be used for purposes which the US
considers inflationary. He will probably con-
tinue efforts to gain greater freedom and in-
dependence from US supervision in all matters
concerning the civilian economy, particularly
in procurement policies and in the distribution
of aid between investment and anti-inflation-
ary expenditures. Rhee probably will not
alter his position on the need for a perma-
nently fixed exchange rate, even though the
rate becomes increasingly unrealistic because
of internal price rises. Governmental dis-
couragement of trade with Japan and of the
activities of foreign businessmen and inves-
tors in the ROK is unlikely to decrease sub-
stantially as long as Rhee retains power.
11
V. PROSPECTS FOR A SUCCESSOR
REGIME
59. In the event of Rhee's death, the general
public would probably continue passively to
accept the regime in power whatever the lead-
ership. However, no leader would be able to
gain the degree of positive loyalty and control
which Rhee has enjoyed, and the new regime
would probably generate increased opposition
and instability in the process of consolidating
its authority. A new regime would probably
be less forceful than the present government
in pursuing its policies, but a government
would probably emerge capable of governing
substantially as effectively as Rhee.
60. The principal objectives of a successor
government are unlikely to differ from those
of Rhee, but significant changes in approach
are probable. The current drift among Ko-
reans generally towards an acceptance of the
status quo with respect to division of the
peninsula would probably be hastened. New
leadership would almost certainly follow
Rhee's general anti-Communist line, but
would probably not seriously threaten uni-
lateral action. Relaxation on the unification
issue and on the intensity of anti-Communist
activities would probably have the effect of
increasing the ROK's vulnerability to Com-
munist subversion.
61. A successor regime would continue to
press the US for aid and support but would
probably cooperate more readily with aid pro-
grams and put less emphasis on belligerent
bargaining. A successor government would
continue to reflect Rhee's basic position re-
garding Japan, but would be inclined to per-
mit the gradual evolution of normal relations.
The successor government would probably
make more serious efforts than has Rhee to
promote monetary stability, trade with Japan,
and foreign investment. At least initially,
it would probably exhibit greater willingness
to accept expert advice on economic policies,
but at the same time would probably seek
increasing freedom of action from detailed
US supervision.
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