Sell-Off of Public Enterprises Could Be Accelerated

Reforms in the public sector, which have been criticized for their lethargic pace, could pick up with the sale of key public enterprises to privately owned companies.

Newly appointed Minister of Planning and Budget Jeon Yun-chul said as much in an informal meeting with the press on August 10, "Public enterprises are competing with private companies in many industries. From a national economic viewpoint, the competition is both inefficient and wasteful."

"To reinforce the competitiveness of public enterprises, the government will place some public companies under private management as soon as possible," he added.

Accordingly, Pohang Iron & Steel Corporation (POSCO), Korea Telecom, Korea Heavy Industries, Korea Electric Power Corporation (KEPCO) and Korea Tobacco and Ginseng Corporation will supposedly sell their shares to private firms or seek strategic alliances.

The minister added that "the government is currently monitoring market conditions in an effort to raise the value of public enterprises and prevent the sale of these companies at a low price."

As for continued downsizing at public enterprises, the minister said, "By the end of last year, a large number of employees retired voluntarily, but beginning this year, there will be more mandatory dismissals."

He said that the government is also examining a system that would coordinate the movements of various ministries in order to carry out reforms in the public sector smoothly.

Regarding the issue of public funds, the minister pointed out that the funds set aside for restructuring at financial institutions are wholly supported by public taxes and that this fact should weigh heavily with the authorities in charge.

by Lee Gye-young