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Picking Up the Pieces. South Korea's progress has been economic as well as military, but the ECA officials who watch Korea's economy have not performed as effectively as the Military Advisory Group. Until last January ECA and the State Department mission did little but cluck disapprovingly at the financial shenanigans of the South Korea government. Meanwhile inflation ran rampant, and most of the republic's industry, government-run since its confiscation from the Japanese, lay unproductive. By the beginning of this year the Korean won, valued at 15 to the dollar in 1945, had dropped to a black-market rate of 4,700 to the dollar.
At last, strengthened by blistering notes to the Korean government from Paul Hoffman and Dean Acheson, ECA men started to pick up the pieces of South Korea's economy. They put the government on a balanced budget, increased taxes and restricted commercial loans.
Slowly the brakes of the U.S. Government's standard model deflationary program (for export only) began to grind and squeal. By April, skyrocketing retail prices began to descend. Currency in circulation dropped from a 75 billion won high in January to a May 19 figure of 57.7 billion. Government departments and government-run factories trimmed down to economy size to fit the new budget.
South Korea's production has also taken a turn for the better. The republic, which in 1946 and 1947 imported 450,000 metric tons of cereals, is exporting 100,000 tons cf rice to Japan this year. Light industry, even though cut off from power sources in North Korea, has increased production by about 50% in the last year. New power sources are still badly needed, however; so, too, are plants to provide fertilizer for South Korea's agriculture.
Mao Tse-tung Is Missing. The political development of the republic lags notably behind its military and economic progress. Understanding of democracy comes slowly to a tradition-bound, largely rural people with a background of centuries of absolute rule.
Police terrorism, a heritage from the Japanese, has abated in the last year, but is not yet ended. Korean police cr.n still make the average citizen's life a misery of forms, identification cards, curfews and rigid interrogations. The tricky job of making the police behave is in well-intentioned hands, however. Dr. Sung Wook Paik, the Home Minister, cracks down hard on any of his cops in whose districts the people are not properly maintaining a Buddhist temple. Says Dr. Paik to his police: "Every man must first come to an understanding of spiritual reality. And all of us must order our actions as if Shakya-muni [Buddha] were on the earth."
Still dominating the entire South Korean scene from his heavily guarded residence is 75-year-old President Syngman Rhee. Shrewd, immovable Syngman Rhee has played an important role in taking a new nation through its difficult infancy. Rhee, however, is justly accused of dictatorial tendencies, and has repeatedly violated the constitution to suit his own convenience. The press does not dare to criticize him, but the rambunctious National Assembly delights in doing so. One of the major campaign issue in this week's election was a proposal for constitutional revision which would strip the President of much of his power.