Usually, the country’s economic vulnerability was determined by applying the debt-to-GDP ratio. That was why each country was trying to lower its debt-to-equity ratio out of fear of a fall in its credit rating. But the debt-to-equity ratio was ignored when the 2008 financial crisis hit the world.

Since each nation was about to go bankrupt, being in debt no longer seemed to be a big deal. As the U.S. used its key currency status to issue large amounts of dollars, euro countries and Japan increased liquidity by conducting deficit finance. China was no exception. It released unlimited funds into the market, which flowed into the real estate stock market.

Then China’s real estate business began to drive everything with a frightening momentum. It was the beginning of a bubble economy and national debt from excessive development snowballed.

Youngho was already preparing himself, but when Eriksson mentioned it again, he was bent on how to repay the national debt at an early date. The size of Kazakhstan’s economy market was small, so there would not be a major blow, but because Kazakhstan was taking baby steps now, any small waves should be avoided.

The answer was to preemptively respond to the economic blow. So, he flew to Astana in a hurry. He was now engaged in a heated debate with Cabinet ministers.

“There is another financial crisis coming, so we need to find a way to respond in a preemptive manner. That’s why I want to pay off any foreign debts early.”

“Your Highness, Kazakhstan’s foreign debt is 110 billion dollars, and the total amount of foreign debt is less than 100 percent of GDP, so it’s not too much to worry about. And we have a solid financial stability as the private sector’s foreign debt accounts for 70 percent of the total.”

The finance minister replied to Youngho as if it was nothing. It may not be a big deal in terms of statistics, but the reality of Kazakhstan was different.

“It’s not a big deal? If we have a strong economic structure like that of advanced countries, it won’t be a problem even if it’s over 200 percent, but for a developing country like us, over 40 percent is said to be a dangerous level. Will our private companies be able to withstand the financial crisis? I’m worried that if private companies collapse, there will be a lot of unemployed people.”

“The new government has been changing the structure of our economy, but it hasn’t been so easy as it’ll take some time.”

“When entrepreneurs organize and sell their personal assets, they will be able to pay off foreign debts. Please tell them that if they don’t lower the ratio within this year, they’ll be at a disadvantage,”

“If we push too hard, they could leave the country. Most of them are Russian.”

“I understand that in the meantime, we’ve been even suspending tax investigation for Russian businessmen for fear of them leaving the company. There won’t be such a practice from this year where there is income, there must be a tax. If they want to live in Kazakhstan, they’ll have to fulfill their duty as a citizen.”

“That will ruin the industrial cities in the north.”

“Don’t worry, they’ll never leave Kazakhstan. Our country is a democratic country and Russia is a socialist country. There is no better place to do business than Kazakhstan.”

“Please let entrepreneurs across the country know in advance that there will be a financial crisis soon. If they don’t try to reduce your debt, they won’t have any government support. We don’t have enough finance to cover up for companies that don’t try.”

“Your Highness, if they’d be willing to sell their companies, why don’t we consider buying it from the state?”

“You’re saying we should make state-run companies.”

“Yes, until now, the state-run company had been neglected, but they’re doing well since the new government.”

The state-run industry should be limited to such as electricity and railroads.

It had been a global trend to transfer other categories of business to the private sector. Since all the executives of state-run companies had been reshuffled since the start of the revolutionary government, they had been returning to normal, but before then, there were countless state-run companies that had more than 300 percent debts in lax management. The government was undergoing intensive restructuring, as such negligence in state-run companies was the main culprits of eating away at the state finances of the nation.

However, it was against the new government’s policy direction to turn large-scale mines and heavy industries into state-run companies.

“I’m not saying I don’t know the importance of public enterprises, but don’t forget that the economic crisis in China resulted from excessive business at public corporations.”

“Your Highness, the royal businesses are not like that, aren’t they?”

“The business we run in the royal family and the public corporation has a completely different characteristic.”

“What if the royal family were to run mines and factories sold by Russian businessmen?”

“The business we do in the royal territory is the national defense industry, and we don’t seek profit.”

“I’m only telling you because there is no entrepreneur in Kazakhstan who is capable of acquiring and running a giant company.”

Here again came the weakness of Kazakhstan was revealed.

There were no big businessmen. In other words, since there was no one to take over the companies that would be sold, the royal family should buy them. It was quite frustrating to hear that. Youngho did not want to start a huge domestic business now. It was questionable whether all Kazakhs would regard the royal move naively, even if it was to make a profit and return it to the people.

***

Youngho’s biggest concern was that the foreign exchange reserves in Kazakhstan were only 40 billion dollars.

To resolve this, the priority was to form a currency swap agreement with other countries. The former government had only formed it with China and Russia.

The first things that came to mind were Denmark, a country of in-laws; Sweden, where Basten’s Information Agency was; and Britain, a country of military alliance.

Youngho targeted them because he thought they would feel less burdened by Kazakhstan’s long-term foreign debts.

“Eriksson, I wonder how the Swedish government would react if Kazakhstan wanted to have a currency swap with Sweden.”

“It won’t be so difficult. The Swedish government will believe in the Kazakh royal family more than the Kazakh government, so it will agree to it.”

“How much are Sweden’s foreign exchange reserves?”

“We have 125 tons of gold. Combined with euro and dollar we have, it’d be about 53 billion dollars.”

“What? Sweden has global companies. Does it make sense that the government only keeps that much amount?”

“Companies and countries are different entities. Saab’s own cash alone is more than 30 billion dollars. In that sense, the Swedish currency report is astronomical.”

“I guess Denmark and Britain would have about the same reserves.”

“Denmark has about 60 billion dollars, and UK has about 130 billion dollars for its foreign exchange reserves.”

“The U.S. and China would have the most reserves, don’t they?”

“China is the largest holder of foreign exchange reserves in the world, which is about 3.7 trillion dollars. Would you believe that the U.S. that actually makes dollars has only about 140 billion dollars? But the private companies of the United States have a huge amount of cash reserves.”

Ten U.S. companies, including Apple Inc., had 602 billion dollars in cash reserves. Apple alone held $205.5 billion in cash.

What was notable here was the amount of gold held around the world. The U.S. had 8,100 tons, several times more than China’s 1,760 tons.

Kazakhstan, on the other hand, did not have much foreign exchange reserves compared to other countries and their companies. Kazakhstan’s gold holding was quite impressive as it was one of the world’s top ten gold reserves. With 480 tons of gold that Youngho had and 220 tons of gold at the Central Bank, the total amount of gold held by Kazakhstan was more than 700 tons.

***

Youngho did not have to visit other countries to sign currency swap agreements.

“The documents have arrived from the Swedish, Danish, and British central banks.”

“Wow, that was really nice of them. Usually, I’d have to visit each country myself to achieve this.”

“They would’ve agreed because of the royal family’s money.”

“Hey, even so, the currency swap is not so easy to agree?”

“And they said that it’s unlimited without a price tag.”

“It’s probably because Kazakhstan’s foreign debts are all long term.”

“Wouldn’t it be because they’re attracted to our country because of our gold reserves?”

“The Kazakh central bank has only 220 tons of gold.”

“But the royal family has quite a huge amount of treasures, isn’t that true?”

“What are you saying? That’s nonsense. Where did you get that idea?”

“Last time I visited the Danish royal family, I heard chatter among servants. Princess Isabella is said to have been given a huge amount of gold by the Serbian Archduke family as a wedding gift. There was a rumor that the Archduke family’s inheritance is astronomical.”

“Do you believe that?”

“How can I not trust it? All the businesses that belong to the royal family told me that’s got to be true.”

“All the money I spent on the royal property of Arirang is what I earned from my hard work. Just know it has nothing to do with the inheritance of the Archduke family.”

“I know you’ve earned astronomical amounts of money with bare hands, but it’s my calculation that it’s impossible to do this much work in such a short time without the inherited money.”

“I don’t know how you calculated, but you can’t say that to me since I worked hard for it.”

“You must have a special ability to pop up here and there instantly. There’s no other explanation except to say that you’ve been stealing money from different places at night with your ability. That’s how you gained such wealth in a short period of time.”

“Oh, jeez. How can you make up such a story, Min-seok? How old are you?”

Although Youngho said it as if it was ridiculous, he was stunned as Min-seok’s words were right. He used to sell arms, information, and gold bars through Eriksson whom he was acquainted with when he was a CIA agent. Later, he siphoned off slush funds of President Nazarbayev and his family, so it was definitely stealing.

“It’s because it’s impossible to actually mobilize such amount of funds. Your Highness was known as a veiled man.”

“Where else did you hear that?”

“Is there anyone in the world who, like you, has been a businessman who could deal with presidents of other countries at an equal level? Surely it’s impossible without a superpower.”

“What kind of shaman or ghost am I?”

“There’s no one in the history of the world who’s built this much in such a short period of time.”

“Oh, you’ve determined to flatter me today. What is it that you need? Stop beating around the bush, and just say it.”