Location: The Blue House (Presidential Palace), Seoul / Bank of Korea Headquarters.
Date: End of May 1996.
Viewpoint: Omniscient (Sliding focus on the South Korean executive).
The underground bunker of the Blue House, the official residence of the South Korean head of state nestled against the granite foothills of Mount Bugaksan, had been designed to withstand a tactical nuclear strike from the North. But faced with the invisible collapse that had just engulfed the peninsula in the space of four days, the thick concrete armor proved utterly useless.
Around the vast oval table, the atmosphere was no longer one of martial gravity. It was one of pure terror, the kind that grips statesmen when they feel the ground of their nation giving way beneath their feet.
The President of the Republic of Korea, his face ravaged by insomnia, stared at the head of the intelligence services (the NIS) and his Minister of Commerce.
Operation Exynos, conducted in secret for months, was intended to be the crowning achievement of the national industrial strategy. In the minds of Seoul's strategists, the calculation was perfectly cynical, forged in the Chaebols ' doctrine of survival.
Stealing the architecture of the VESLA 2370 chip from Volta SA's Chinese factories represented a quantum leap. They were going to burn through ten years of research and development overnight.
Of course, they had anticipated a response. They expected Lazare Bonaparte to howl with rage. They had prepared for furious complaints to the World Trade Organization (WTO), for interminable international lawsuits before arbitration tribunals in Geneva or The Hague.
At worst, the Korean state would end up paying a fine of a few tens of millions of dollars, a pittance compared to the hundreds of billions of won that the Asian microprocessor monopoly would bring them.
It was the calculation of the bureaucrats. The classic reasoning of an emerging nation accustomed to pirating the patents of old Europe, convinced that France, isolated and weakened in the face of the American hyperpower, could only retaliate with indignant diplomatic notes.
They had forgotten that they hadn't just stolen from a French industrialist. They had desecrated the sanctuary of the man who held the world economy hostage.
« Chinese customs refuses to lift the embargo, » announced the Minister of Commerce, his voice trembling, breaking the silence of the bunker. « Freight trains from Hebei are stuck at the border. Ships of raw, primary silicon are stuck in the ports of Shanghai and Tianjin.
Beijing isn't even responding to our diplomatic calls. Their officials are citing so-called 'urgent health inspections' of rare earths. »
The minister wiped away a drop of sweat that beaded on his temple. «Our mega-foundries in Suwon are completely empty, Mr. President. Samsung can no longer produce a single chip, not even standard memory modules.
The national production capacity is paralyzed.» The head of state closed his eyes. Beijing's betrayal was a resounding slap in the face, but it was nothing compared to Washington's stab in the back. «And the Americans?» asked the President, hoping for the impossible.
« The U.S. Department of Commerce has sealed its borders, » the Minister replied. « Dozens of our container ships, loaded with televisions, components, and appliances, are currently being seized by federal customs in Los Angeles and Seattle on suspicion of 'concealing wartime goods.' But the worst has come from the Pentagon. »
The head of the intelligence services opened a thin black shirt. «The US Secretary of Defense sent us a 'strategic reflection note,'» murmured the head of the NIS. «It raises the possibility, given federal budget constraints, of reducing the military personnel of the 2nd US Infantry Division stationed along the demilitarized zone of the 38th parallel by twenty-five percent.» The Blue House wavered. The threat was apocalyptic in its clarity.
The United States was not attacking South Korea; it was threatening to deprive it of its military shield against the North Korean army. «They're handing us over to Pyongyang to avenge a Parisian enterprise?» the Minister of Commerce choked. «It's madness! Why are America and China joining forces to protect Bonaparte?!» « Because we were abysmally stupid, » the President declared, the cold lucidity of failure hitting him full force.
« We believed the world was divided into two blocs, and that Bonaparte stood alone. We didn't understand that the Ogre of Ivry had taken the White House and the Chinese Communist Party hostage. If he falls, America loses its main supplier of spare infrastructure after Intel's collapse, and China loses its factory of the world.
Lazare Bonaparte isn't a boss; he's the keystone of their equilibrium. And we wanted to saw through the keystone. »
The sense of powerlessness was overwhelming. The Republic of Korea, believing it could pull off an industrial coup, had trapped itself in a perfect geopolitical vise. The country was militarily threatened by the West and industrially starved by the East.
However, the horror was only just beginning. The final blow would not come from the Ministries of Defense or Commerce.
The massive doors of the crisis room flew open. The Governor of the Bank of Korea (BoK), a man usually known for his unwavering Confucian composure, burst in. He didn't even bother to bow to the head of state.
His tie was askew, his face contorted with a panic bordering on clinical madness. «Mr. President, we must declare an immediate state of financial emergency!» the nation's finance minister practically shouted, throwing a printed report onto the table. «The economy is collapsing!» The President sat up, stunned. «Calm down, Governor!
Samsung will pay the fines, we're going to cancel the Exynos...» « You don't understand! It's no longer a question of processors! » the Governor interrupted, with the despair of a captain on a sinking ship.
« It's macroeconomics! Lazare Bonaparte has just lit a fuse in a powder keg that we ourselves filled! »
The Governor leaned heavily on the table, pointing to the graphs that depicted an asymmetric free fall.
Lazare Bonaparte, in his vengeful genius, had unleashed a cataclysm whose magnitude he himself did not foresee. He had used the lever of geopolitics to strangle a company, but he had underestimated the extreme volatility of Asian capitalism in the late 1990s.
The Builder had forgotten—or superbly ignored—the systemic flaw in the South Korean model.
« Our chaebols —Samsung, Hyundai, Daewoo—are oversized, » the Governor explained, his voice trembling. « To finance their hypergrowth over the past ten years, they've taken on astronomical debt. But they haven't borrowed in won.
They've borrowed billions in foreign capital on international markets, with very short-term debt denominated in US dollars! »
The Minister of Commerce suddenly turned pale, realizing the fatal chain of events that had just been set in motion.
« When the Clinton administration threatened to close our borders to exports and withdraw its troops, Western rating agencies panicked, » the central banker continued, sweat beading on his brow. « Wall Street and the City of London immediately downgraded us.
Foreign investors understood that our exports would collapse and that our companies would no longer be able to repay their debts. »
The butterfly effect was taking its cruellest form.
« There's total panic. It's a massive capital flight. Hedge funds, investment banks, private investors... everyone is pulling their money out of the country at the same time.
They're selling off our assets en masse and getting rid of their won to urgently buy dollars and flee the country! »
The Governor brandished the latest teletype machine from the foreign exchange market.
« The selling pressure is unprecedented. To prevent the currency from collapsing, I ordered the Bank of Korea to intervene in the markets. We bought our own won to maintain the exchange rate.
We burned through our foreign exchange reserves to defend the national currency! »And where do our reserves stand?« asked the President, sensing the absolute void opening up beneath his country. »
The silence of the Central Bank Governor was more terrifying than an air raid. «They're destroyed, Mr. President. I've burned through ten billion dollars of reserves in forty-eight hours.
The state coffers are empty. We no longer have enough foreign currency to meet our own sovereign debt obligations at the end of the week. The won has just plummeted.
It's in freefall.» Reality fell upon the Seoul bunker like a death sentence.
In the space of a few days, Lazare Bonaparte's ultimatum had not only brought Samsung to its knees. The psychological contagion effect had shattered international confidence. Without foreign currency to support its currency and without access to the American market to replenish the coffers of its conglomerates, the Republic of Korea had, in effect, found itself in a situation of sovereign default.
With a simple move on the geopolitical chessboard, Lazarus had precipitated the Asian financial crisis more than a year ahead of historical time, and with tenfold violence.
« Korean commercial banks will go bankrupt one after another by the end of the month, » the Governor finished, his heart laden with despair. « Thousands of businesses will close, millions of workers will be laid off.
The nation's economy has just been disintegrated. »
The President slumped in his chair. His mandate, the economic miracle of his people, decades of sacrifices and hard work since the ashes of the Korean War... all of this swept away in a few days by the revenge of a twenty-seven-year-old industrialist holed up in the Parisian suburbs. «There is only one solution left to avoid the total shutdown of the country and famine,» murmured the Minister of Commerce, his head bowed, not daring to meet his boss's gaze. «Say the words,» ordered the President in a subdued voice.
« We need to call Washington. We need to formally request an emergency bailout from the International Monetary Fund. »
The IMF. The tutelage. The absolute humiliation for the Asian dragon.
Accepting IMF loans meant surrendering the country's economic sovereignty to the Bretton Woods bureaucrats, who would impose brutal restructurings, the piecemeal sale of national crown jewels, and total submission to Anglo-Saxon capitalism.
The Blue House had just lost the war before it could even forge its first weapon. The hubris of technological theft was being paid for at the cost of the entire nation. And while Seoul teetered on the brink of financial collapse, the CEO of the country's largest conglomerate, the man responsible for the whole mess, was about to receive a call from his executioner.
Location: Director's office, Volta SA factory (Ivry-sur-Seine) / Samsung President's office (Seoul).
Date: End of May 1996.
Viewpoint: Internal (Lazare Bonaparte).
In the air-conditioned dimness of Level 4, the control screens no longer displayed lines of code or lithography furnace temperatures. The immense display wall was completely saturated with international financial news and Asian foreign exchange market charts.
Édouard Renault-Tessier, his face pale, had just placed the latest OECD report on the mahogany desk.
The green line representing the South Korean won's exchange rate was falling vertically. It was a freefall, a pure and simple monetary disintegration.
Lazare Bonaparte watched the collapse, his hands clasped behind his back. Lazarus, the man who spent his life modeling networks and predicting the clock cycles of his chips, felt an intellectual thrill at the immensity of the butterfly effect he had just triggered.
He had orchestrated a geopolitical pincer movement to punish industrial theft, and without having assessed the structural fragility of the country's short-term debt, he had precipitated the ruin of an entire nation. The specter of the IMF and bankruptcy now loomed over Seoul.
« Their banks are collapsing one after another, Lazarus, » Edward murmured, his voice choked with emotion, both fascinated and terrified by the fire. « The liquidity crisis is total.
The president of Samsung has been trying to reach you for twelve hours. He's mobilized all his diplomatic contacts… »
Lazare didn't flinch. He walked around his desk and sat down in his hefty leather chair. His analytical mind was already churning away at the speed of a supercharged processor.
If he let South Korea collapse and fall under the control of the IMF, American investment funds, those Wall Street vultures, would buy up Samsung and the other chaebols for a song. America would reclaim the Asian production engine.
It was an unacceptable strategic error. He had to stop the bleeding before victory turned into a gift for Washington. «Give it to me,» he ordered simply.
Six thousand kilometers away, in the Seoul night, the office of the president of the Samsung conglomerate resembled a mausoleum. The strongman of Korean industry, his tie loosened, his features ravaged by the humiliation of having to beg for the survival of his empire, leaped onto the flashing telephone.
« Mr. Bonaparte, » he began hastily, his voice trembling in perfect English. « Thank you for taking this call.
The macroeconomic situation is out of control. My government is ready to intervene. We are prepared to find an immediate solution.
I am offering you colossal financial compensation, billions of dollars in reparations… »
« Be quiet. »
Lazarus's voice was not shouted. It was of an abysmal flatness, charged with a mineral contempt that instantly froze the Korean patriarch's plea.
« Keep your virtual billions, » Lazarus murmured from his Parisian bunker. « You no longer have the money to pay for them. Your currency is worthless, and your state is bowing down to the IMF.
I didn't call you to negotiate a bad check. I called you to explain the extent of your stupidity. »
The silence at the other end of the line was that of a man awaiting execution.
« You mobilized your secret services, bribed officials in China, and risked your own country's bankruptcy to steal etching masks… » Lazarus thundered, each word striking like a guillotine. « You could have simply picked up the phone and asked for a license.
AMD did it. Even the biggest Japanese conglomerates did it; Sony, Toshiba, and Mitsubishi are authorized to make their own chips under license. We could have dominated the world together. »
Lazare paused, letting the dizzying weight of the missed opportunity crush his interlocutor. «No, no,» Lazarus concluded with chilling disdain. «You thought you were untouchable. You acted as if the world ended at the borders of Korea.
Bunch of idiots.» In his Seoul office, the Chaebol chairman took the blow hard. The insult pierced him, not because of its harshness, but because of its absolute accuracy. They had thought themselves cunning predators by stealing a trade secret.
They realized they had just refused the key to a kingdom that the master of the house was nevertheless willing to share with his vassals. The theft of the Exynos chip was the most pathetic strategic blunder in their history.
« We sinned through pride, Mr. Bonaparte, » the Korean leader managed to stammer, breathless, abandoning all pride. « We are brought to our knees.
Are you going to seize our factories? Are you going to dismantle us? »
Lazare leaned back in his armchair, his gaze fixed on the curve of the won. This was the moment of decision. If he utterly humiliated them, if he expropriated them for a symbolic won, he would create a deadly enemy, a generational resentment that would inevitably turn against Europe.
A wounded and cornered animal is dangerous. A grateful animal is an ally.
« I am not a plunderer, » Lazare replied, his voice losing its venom and adopting the coldness of a diplomat. « If I expropriate you, your people will hate me and the IMF will buy you up piecemeal.
I need your functioning factories, not your ruins. »
He dictated his conditions, laying the foundations for the new asymmetrical pact.
« First. Within twenty-four hours, I want the physical and documented destruction of every prototype of the Exynos Alpha chip . You are abandoning the central processing unit market. Permanently. »
The Korean closed his eyes, accepting the death of their dream of logical independence.
« Secondly. You will become masters of memory and display, but under my aegis, » Lazare continued.
« You are signing a ten-year preferential exclusivity contract. Samsung will manufacture the CELLA memory and the flat panels for our computer screens at cost price plus a fixed markup that I will determine.
You will make billions in profits, you will save your factories, but your production lines will live and die according to the orders of Volta SA. » « It's... it's industrial receivership,» sighed the Samsung president. «
But what about our banks? The country is collapsing from a lack of liquidity. Even with this contract, we won't make it through the month without foreign currency.» A smile of Machiavellian purity stretched across Lazarus's lips.
« That's where the third condition comes in. »
Lazarus stood up, dominating Paris from his bay window. «You will not call the IMF. You will not open South Korea to American pension funds. Volta SA will replace the International Monetary Fund.
I will immediately release fifteen billion euros from our sovereign treasury and inject it into the Bank of Korea as a low-interest loan. I will lift the Chinese embargo within a minute. Europe saves Seoul from bankruptcy.» The Korean leader dropped his pen.
The direct financial rescue of a sovereign nation by a European private company was beyond comprehension. This was no longer economics; it was imperial geopolitics.
« In exchange for this loan, » Lazare concluded, « the debt of Samsung and the Korean state no longer belongs to Wall Street. It belongs to me.
You keep your factories, you save your national honor in the eyes of your people by avoiding American control, and you become profitable again. But never forget who turned the lights back on. »
He didn't give the Korean time to express his astonishment or gratitude. He hung up the massive receiver on its base.
Lazare turned to Édouard Renault-Tessier, who had just witnessed the most audacious operation in the holding company's history. By pardoning the enemy while simultaneously buying back its national debt, Lazarus hadn't created a martyr thirsting for revenge; he had just acquired the most powerful, most devoted, and most heavily indebted industrial partner in Asia.
The Volta Empire was no longer destroying nations; it was becoming their ultimate creditor.