The Chaebol Returns To The Presidency 1967 [EN]: Chapter 102

102. Oil Shock!

The President wielded the sword of justice mercilessly against the privileged class.

As a follow-up measure, the National Assembly passed a law imposing taxes on religious facilities exceeding a certain size.

Meanwhile, the President stamped his seal on the 8/15 special amnesty list.

The new Minister of Justice announced:

“Political and economic offenders have been excluded from this special amnesty. The amnesty is for 870 petty offenders.”

* * *

– A few years ago –

Mediterranean Sea. Monday morning.

Swoosh-

Sixteen Israeli aircraft flew at a low altitude of 50 meters above the sea, heading towards Egypt.

They bypassed the 23 Egyptian radar bases by detouring far into the Mediterranean.

Although the U.S. and Soviet fleets, sensing the tension in the Middle East, were on standby in the Mediterranean, none of the aircraft were detected by radar due to their low-altitude flight.

Israeli fighter jets appeared like ghosts through the hazy morning mist rising from the Nile River.

The choice of Monday morning was to exploit the gap when the Egyptian army briefly turned off the early warning system after completing their night shift.

An Egyptian control tower worker spotted the aircraft.

“Huh? What’s that?”

Pyoong~

The sixteen Israeli fighter jets mercilessly bombed the Egyptian air force base.

Bang! Kwah-kwang!

Shells exploded on the runway, and Egyptian fighter jets were shattered, engulfed in red flames.

The Israeli forces first attacked the runways of 11 air bases in the three targeted Arab countries (Egypt, Syria, and Jordan).

Then, they systematically destroyed the grounded aircraft and interceptor missile bases.

It took only an hour for the Israeli forces to complete the first attack, return to base, and sortie again, demonstrating their immense training.

In this way, just 16 aircraft created the effect of 160.

Over 400 fighter jets from the three Arab countries were destroyed on the ground without even taking off.

Israel seized air supremacy in one fell swoop.

On the ground, over 600 Israeli tanks advanced.

The Arab coalition forces, hampered by a lack of integration due to differing religious and customary backgrounds between officers and soldiers, failed to effectively utilize their superior tank models and were unilaterally defeated by Israel.

In just six days, Israel successively defeated the armies of the three countries, occupying the Sinai Peninsula, the east bank of the Suez Canal, and the Golan Heights, acquiring new land almost six times its original size, leaving behind the legend of the ‘Six-Day War’ (Third Middle East War).

However, this led the oil-producing Arab countries to seek a different kind of war.

The shadow of the oil shock was looming more than two years earlier than in Chairman Wang’s era.

Wolsong Nuclear Power Plant.

The completion ceremony for Wolsong Unit 1 was held grandly, attended by the President, relevant government officials, Canadian engineers, Korea Electric Power Corporation, and President Jung from Hyunse Construction, the construction company.

It was a timetable advanced by several years compared to Chairman Wang’s era.

In a year, Units 2 and 3 would be completed simultaneously.

The President and attending dignitaries cut the tape.

President Jung’s eyes welled up. More than anyone, President Jung’s emotions were extraordinary.

In his previous life, he had met a violent end just before energy and security independence could be achieved.

Vroom~

The President took President Jung in his car on the way back.

It was to offer him an important position.

“President Jung knows why I insisted on the expensive heavy water reactor, right?”

“Hahaha, of course. It’s easy to localize fuel, and it’s also because of 890 [a secret project or technology].”

“The 890 leadership has been formed separately. We’ve divided the processes and assigned them, so neither the budget nor the organization is visible. Learning from that time, we must become an 890-possessing country this time.”

“This life is really something to look forward to, Your Excellency.”

“And we will create a sovereign wealth fund: Korea Investment Corporation.”

“Ah, it’s finally being launched.”

“The reason the United States is a superpower is because of the dollar and weapons. You need both money and power. The Soviet Union disintegrated in 1990. They had weapons, but they lost in money. There’s a limit to commands and ideology. Humans are active individuals who live on freedom. In a capitalist society, there’s nothing like money for motivation.”

“The most surprising thing among the future stories you told me before was the collapse of the Soviet Union. I became convinced of liberalism.”

“Yes, we are riding a solid historical trend. In that sense, would you like to come as the president of the investment corporation, President Jung?”

“Me?”

He was quite immune to the President’s surprising remarks, but he couldn’t help but be surprised again by the sudden proposal.

“President Jung, you said that private company work doesn’t suit you, right?”

“…….”

“The sovereign wealth fund is public funds. No one pays attention to it now, but when oil money accumulates, it will become the country’s granary.”

“I like that it’s public, but I have no talent for finance or investment. Frankly, I’m weak with numbers.”

“Don’t worry. An investment committee will be formed, and you can buy and sell important stocks as I tell you. I’m originally a merchant. Besides, I know the future 50 years.”

“Ah….”

“Operation is important, but we desperately need someone who will conscientiously protect the granary.”

“If I can help the country, I have to do it. Except for politics.”

“You’ve agreed!”

“Yes!”

Vroom~

Middle East, Sinai Peninsula.

Taking advantage of the Israeli soldiers’ vacation, Egypt sent 8,000 commandos as advance troops and began airstrikes.

They advanced into Israel with thousands of tanks, Soviet-made missiles (SA-6) [surface-to-air missiles], and a large force of 750,000 Arab coalition troops.

Krrrr-

The Yom Kippur War (Fourth Middle East War) began with a preemptive strike by the Egyptian army, which had been sharpening its knives for revenge.

Bang!

“Ugh!”

“It’s a surprise attack!”

Eeee-

The Israeli army suffered devastating blows, with 17 brigades annihilated within 48 hours of the start of the war due to the large-scale surprise attack by the Egyptian army.

The Arab coalition forces surrounded Israel and bombarded it for 30 days until it surrendered.

The Arab countries were already intoxicated with victory.

Isolated, Israel fought to the death but was on the verge of collapse.

However, the situation changed rapidly.

The United States carried out a whopping 5,566 aerial transport operations to support isolated Israel.

Backed by U.S. support, the Israeli army launched a counterattack, indiscriminately bombing Syria’s Golan Heights.

Shoosh-

Kwah-kwang!

Boom~

In the counterattack, the Syrian army suffered damage with 867 tanks and over 3,000 vehicles destroyed.

The Arab countries’ momentum was broken, and the tide turned in an instant.

The cornered Arab countries toyed with the idea of weaponizing oil.

But they hesitated.

During the Third Middle East War, OPEC [Organization of the Petroleum Exporting Countries], led by the Arab countries, had raised oil prices but failed.

At that time, they had even taken oil embargo measures.

However, the Arab countries, which lived off the money from selling oil, gave up first when the money ran out.

They broke the embargo promise and sold crude oil here and there, eventually failing.

At the time, Saudi Arabia’s oil minister, Ahmed Zaki Yamani, predicted that the embargo would eventually fail, and he was right.

His prediction came true, and it became an opportunity for his influence to grow.

In the Fourth Middle East War, Minister Ahmed again brought up the card of weaponizing oil.

His analysis was as follows:

As the 20th century began, large oil fields were developed everywhere, leading to overproduction, and crude oil prices plummeted from $13 per barrel in the 1920s to $1.60 in the early 1960s.

However, the situation changed in the 1970s. As oil consumption increased rapidly due to industrialization, a supply shortage occurred in the oil market.

Between 1949 and 1972, U.S. oil consumption tripled, Western Europe’s increased 15-fold, and Japan’s increased a whopping 137-fold, making it impossible to cope with the increase in consumption.

He spoke at OPEC.

“Demand is exploding. Therefore, OPEC can cause a major shock to the market even if it unites and reduces production by only 5% each month, rather than an embargo.”

OPEC issued an official statement.

“Until the Israeli army withdraws from the occupied Arab territories and the rights of Palestinians are restored, OPEC will reduce crude oil production by 5% each month and suspend oil exports to countries that support Israel.”

Libya raised oil export prices by 28%, and Iraq raised them by a whopping 70%.

Minister Ahmed’s analysis of partial production cuts was accurate.

Because it was not an embargo like during the Third Middle East War, it was possible to lead to the united participation of OPEC member countries.

The shockwave of the oil shock began like this.

Crude oil prices, which were $2.9 per barrel, soared fourfold to $12 in just a few months (converted to 2000 dollar value, it soared from $14.5 to $55).

A hell gate was wide open for the world economy.

The oil shock hit not only Wall Street but also the global financial market.

During Chairman Wang’s era, most developed countries fell into stagflation [a period of slow economic growth and high unemployment while prices rise], with double-digit inflation and negative growth overlapping due to the shock of soaring crude oil prices.

Korea, which was in a transition to heavy and chemical industries that consumed a lot of oil, was also hit hard.

The inflation rate, which was 3.5%, rose vertically to 24.8% in one year, and the growth rate plummeted from 12.3% to 7.4%.

The trade deficit also increased significantly from $1 billion to $2.4 billion.

The oil shock changed the world’s hegemonic map.

It triggered a global panic, ending the golden age of capitalist smokestack industries, and the U.S. hegemonic system could no longer be sustained.

Middle Eastern countries, Venezuela, Gabon, and other oil-producing countries enjoyed a historic boom, and the Soviet Union, one of the world’s largest oil producers, also made huge profits.

Experiencing the oil shock, the United States and other Western countries realized that they could not control Arab oil with money alone and had to resort to active intervention policies using political and military power.

It was also at this time that countries around the world, including the United Kingdom and Norway, began to search for new oil fields with their eyes wide open.

This time, the Arab countries forced the following on oil-importing countries:

– Issue a statement condemning Israel’s invasion and supporting the Arab countries.

(Oil supplies will be suspended if this is refused.)

During Chairman Wang’s era, Korea participated in criticizing Israel to avoid retaliation from the Arab countries.

But they still had to buy expensive oil.

In this era when Chairman Wang has returned, the fate of Korea is quite different from that time.

President’s office.

The President was on the phone with U.S. President Kennedy.

– It seems like it’s time to announce that Korea has become an oil-producing country. Oil prices have already doubled. If they cut production again next month, it will quadruple.

“We will announce it within a few days. However, although the reserves are substantial, the daily oil production is still insignificant as it is in the early stages of extraction. It will not have a significant impact on oil prices.”

– Yes, I have been briefed and I am aware. But the market is psychological. We need to promote psychological stability, even if it’s an exaggeration.”

“I understand what you mean. Please wait three days.”

– Yes, the United States can breathe a sigh of relief because of the Korean oil fields, but I am worried about other countries.”

The United States’ oil consumption was so high that the initial oil production was insufficient.

But it was enough to use as a card for diplomatic security, not just for our country.

Before the declaration of an oil-producing country, citizens with jerrycans were lined up in front of gas stations.

Limited refueling was in effect, selling only one can per household.

Buses became packed as vehicle operation was cut in half.

Private car operation was suppressed, and neighborhood watch members patrolled at night, shouting to turn off the lights.