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Politics & Security

Author Says South Korea Cannot Forever Hide Japan’s Contribution to Its Industrial Revolution

The combination of Japanese assets left on the peninsula and Japan’s economic aid package upon normalization of relations formed a vital part of South Korea’s postwar “industrial revolution.”

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South Koreans protest war-era work for Japanese companies in anti-Japan fervor.

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Japan left assets worth $5.2 billion USD on the Korean Peninsula during the Japanese occupation of Korea (1910 to 1945), which equates to hundreds of billions of US dollars in present-day values.

South Korea took over a huge range of assets, from social capital to private property, such as railroads and ports. These assets formed the base for economic development in the country. Yet they were known as “enemy assets” and thereafter forgotten.

However, 82-year-old South Korean scholar Lee Dae-geun, professor emeritus at Sungkyunkwan University, conducted an empirical study of Japanese assets. He argues that these Japanese assets led to an “industrial revolution” in South Korea in his book Kizoku Zaisan Kenkyu, which has recently been translated into Japanese (Bungei Shunju, October 2021). 

The book challenges the sweeping anti-Japanese historical perspectives that are prevalent in South Korea.

Samsung Electronics Co. at its office in Seoul, South Korea. (AP Photo/Ahn Young-joon, File)

‘Vested Property’ Buried Deeply by South Korea

After World War II, the United States seized Japanese assets on the Korean Peninsula, with the US military referring to them as “vested property” that belonged to the victorious US.

At the time, this vested property accounted for about 80% to 85% of national wealth on the Korean Peninsula. The assets were subsequently transferred to South Korea in 1948, following the formation of a national government.

Specifically, the assets consisted of social capital, such as roads, railroads, ports, electricity, telephone, land reclamation, and water supplies. Public facilities, including government buildings, schools, hospitals, and temples, were included, along with industrial sites, such as farms, fishing sites, and mines. Banks, securities, insurance, real-estate, tangible and intangible assets, as well as private companies and housing, were all part of these assets.

Essentially, the vested property covered all assets in the modern national economy that had been formed on the Korean Peninsula under Japanese rule.

Once the war was over, Japanese people who had lived and worked on the peninsula were chased away and returned to Japan with little more than their clothes on their backs.

However, in South Korea, research into the role the vested property played within modern history — even its existence in some cases — has not been recognized accurately, even among the country’s intellectual classes.

The facts have disappeared from people’s minds as the postwar years have gone on, and people in South Korea have been unable to grasp the actual situation. “This is nothing but intellectual deception and ignorance of history,” says the book’s author.

Instead, with regard to the Japanese occupation, South Koreans have been uniformly taught that “Japan exploited and pillaged” their country.

In 1995, the Japanese General Government Building in central Seoul — a splendid building completed in 1926 — was torn down under the Kim Young-sam administration, to coincide with the 50th anniversary of South Korea’s freedom from Japan.

The author of Kizoku Zaisan Kenkyu is a leading expert on Japanese rule in relation to the history of South Korea’s modern economy. He is also a senior contributor in the group of contributors to the book Anti-Japanese Tribalism (Bungeishunju, 2019), edited by Lee Young-hoon, which became a best seller in Japan. 

When Lee Dae-geun retired from his university role at the age of 70, he decided to comprehensively research the subject of vested property. The academic gathered vast amounts of documents, conducted analysis, and then released his book Kizoku Zaisan Kenkyu in South Korea in 2015.

Status of Property in the Prewar and Postwar

The academic’s research looked into the situation before the Japanese occupation, and at what kind of assets were formed and left behind by Japan on the Korean Peninsula. It also looked into how the United States military administration handled these assets after the war and in their transfer to South Korea. Then it looks into how, after they were transferred, they disappeared from the historical limelight.

When the United States seized the assets from Japan after the war, a considerable amount of embezzlement, looting, and destruction of assets by Koreans took place amid the confusion.

There were also many deficiencies in the asset management system run by the US military administration, which wanted to repatriate Japanese residents as soon as possible. Factories became less productive, and production levels shrank.

Three years later, approximately 290,000 items of vested property were transferred to South Korea, and public property was sold to state-owned enterprises under the Syngman Rhee administration.

Professor Lee Dae-geun stresses that assets from the days of Japanese rule, including vested property, not only had economic value but were also linked to people’s state of mind, values, academia, and the legal system. “Putting good and bad aside, we have to look at these assets as a colonial legacy,” the author says.

When Japan opened up, it quickly set about translating Dutch, English, and German into Japanese, as it tried to understand western concepts. These new terms and concepts were introduced into South Korea as part of a modernization process, and a private property system and market economy were established during the era of Japanese rule. Parts of former Japanese firms that were seized and passed on to South Korean companies went on to become Korean zaibatsu.

During negotiations to normalize diplomatic relations between Japan and South Korea after World War II, Japan provided the latter with an economic cooperation package totaling $500 million USD. Professor Lee believes that the combination of the vested property and the economic cooperation package formed a vital part of South Korea’s industrialization, and he uses the term “industrial revolution.”

He adds that the vested property that supported South Korea’s economic foundation in the 1950s “disappeared quietly in the vestiges of history” due to the normalization of diplomatic relations in 1965.

The Author Speaks

Regarding this latest research, Lee Dae-geun talks about having a sense of mission. “We cannot keep closing our eyes to the truth,” he says. When asked why South Korea has ignored the Japanese assets, he first makes it clear that the answer will be ironic. He continues:

“If the era of Japanese rule is evaluated for what it was, there would undoubtedly be allegations of selling out from the rest of Korean society, resulting in miserable circumstances.

“Therefore, everyone has pretended not to know the truth. Historians, the government, and the mass media have portrayed a particularly ethnic view of the country’s history, while ‘losing the will to correct any historical distortions.’”

As a result, a culture of “hiding Japan” has emerged with regard to Japanese assets, and the truth has been replaced with a distorted history of “what should have been.” The author adds that the entire nation has consequently become “history blind.”

With this in mind, is it possible for South Korea to change its anti-Japanese historical stance?

The author is somewhat pessimistic. This is because “anti-Japanese sentiment” runs deep and wide in South Korean society.

For example, some South Koreans have changed the reading of Japan to mean “small country” – referring to Japanese people as “small people” in the process.

Some South Koreans find it shameful that they were once ruled by these “small people” who are smaller than themselves. “This distorted way of thinking is deep-rooted within a number of South Koreans,” explains the author. 

Some also look down on Japan because Chinese Confucianism went through the Korean Peninsula before it reached Japan, arguing that Japan is a latecomer in terms of civilization.

Nevertheless, this superiority complex changed completely under the period of Japanese rule because the period was managed so well. Rich people sent their children to study in Japan. However, such people were suddenly persecuted overnight as “Japanophiles” after the outcome of World War II.

Commenting on the Japanese occupation, the author says: “Some aspects of the past were unfortunate, but the occupation may have been destiny for both countries.”

“Right now, South Koreans should take on a more mature stance and stop blaming other countries within the global community,” the academic adds. 

Kizoku Zaisan Kenkyu, by Lee Dae-geun

Reflections on Japanese Translation of the Book 

Katsuhiro Kuroda, visiting editorial writer for the Sankei Shimbun in Seoul, supervised the translation of Kizoku Zaisan Kenkyu into Japanese. He added his reflection in the following comments:

The extent of Japanese assets left in South Korea and how they were handled after the war are subjects that are not particularly well known. This book makes the reality of these assets clear for the first time. It provides an empirical counter-argument that challenges the “Japan hiding” culture of intentionally ignoring Japan’s contribution to the South Korean economy.

It is an academic research thesis on the theory of colonial modernization. It has not changed the official view of aggression and deprivation, but it is gaining attention among young researchers and intellectuals. However, it is deliberately being ignored by the South Korean media.

Strictly speaking, the way in which people of the defeated nation had their personal assets seized after the war goes against international law. The book could act as a good “brain teaser” if it enables people to think about issues such as individual compensation for those forced to withdraw after the war.

(Read the Sankei Shimbun report in Japanese at this link and at this link.)

Author: Ruriko Kubota, senior staff writer

Read additional reports on Korean issues by the Ruriko Kubota at this link, and by Katsuhiro Kuroda at this link.