Government Reversal on Reform

Does the government have the will to carry out reform? As we examine the contents of the agreement between the Korea Financial Industry Union and the tripartite committee composed of labor, management and government to resolve bank strikes as well as at the labor-management agreement at Korea Telecom, it appears as though the government has agreed to abandon its reform plan. Is the government only intent on solving labor disputes immediately at hand? More than anything else, the government must make policy priorities clear.

Regarding the strikes by six banks, what the government agreed to in a midnight negotiation session is farfetched. The four banks ?Kwangju, Kyongnam, Peace and Cheju ?decided to withdraw their strike decisions on conditions that render us speechless. The tripartite committee has agreed to maintain the systems and functions of the four banks until June 2002. Their logos, employees and branches will remain intact, while the reorganization of functions and layoffs will be decided upon through labor-management negotiations. In short, the government has promised to pay wages and branch operation fees with taxpayers'' money. The cabinet ministers who signed this agreement are utterly irresponsible, as is Kim Sang-hoon, president of the Kookmin Bank, who put the brakes on a merger discussion and has acted spineless since. Unionists of the Kookmin Bank and of the H&CB, having observed the government''s weak-kneed stance, have gone on strike, demanding an unequivocal pledge that there will be no merger. Things are no better at Korea Telecom. As if slashing the size of layoffs were not enough, its management has promised to consult with the union on everything from future restructuring to privatization.

If things continue this way, reform will be impossible even if a much larger amount than the currently pledged 40 trillion won ($32.3 billion) is poured in. This is why some people say that it would be more beneficial to the national economy if the problem of the ailing banks were settled by selling them off. The government is to blame for the current fiasco; it overturned principles and went back on the reform plan. This chaos can no longer be solved by replacing a ministers. We are now at a point where we have to worry about the overall absence of governance. The government must tackle financial reform directly or return to square one to draw up a new restructuring plan.

by Noh Jae-hyun