Is Kospi 200 Moving to Pusan to Win Election Votes?Oh Sung-hwan, Seoul National University professor, has emphasized that, "The most important feature of government economic policy must be that it is foreseeable." The object of his statement is the prevention of unexpected or inconsistent government policy which can wreak havoc in the stock markets.
Finance and Economy Minister Lee Hun-jai's comment on March 21 is greatly at odds with this view. He announced plans to move the Kospi 200 Futures to the Pusan Futures Exchange.
Most importantly, Minister Lee has backtracked on a previous statement. Lee, while working as the governor of the Financial Supervisory Board (FSB), assured us on January 2, 2000, that "there are no plans to transfer the Kospi 200 Futures to Pusan, as its operation with the Korea Stock Exchange has been successful." A source from the KSE remarks cynically that "we are really purplexed - the minister has managed to reverse his opinion in only three months."
The announcement that Kospi 200 was to move to Pusan was also made at an inappropriate time. Lee confirmed the plan at a meeting with leaders of the Pusan Chamber of Commerce and Industry, and we can never discount the possibililty that the announcement was made with full awareness of the upcoming general election. After all, Lee, as top official, holds responsibility for the entire government economic policy.
Lee, former FSB governor, expressed his intentions "to reform the market in 2000, and to promote market competition in the right direction" in an interview with JoongAng Ilbo on December 23, 1999. His original plan viewed the Pusan Futures Exchange as an operation seperate from and in competition with the Korea Stock Exchange.
This original statement of intention was far more logical and reasonable than Lee's current counter pronouncements. Moreover, it is clear that the initial plan would, at least, have been foreseeable.