When Will the Critics Be Heeded?More and more domestic and international experts are pointing out the problems with the government''s reform policies for the Korean economy.
Recently, private-sector economists participated in briefings on the Korean economy in four North American cities - including Los Angeles and Vancouver - at the request of the Korean Ministry of Foreign Affairs and Trade. Many present at those briefings remarked on the lack, in government circles, of a true will to reform.
Also a few days ago, the Korea Development Institute strongly criticized the government''s drive for corporate and financial restructuring, dismissing it with the comment that it has been a "practical failure."
Certain international news media, including the Financial Times and The Economist, recently published similar observations. When the Korean economists sought to publicize Seoul''s achievements at briefings, cynicism was all that greeted them. If things were not so dire, would the government-run KDI have come forward to criticize the government''s policies? Before it is too late, the government must accept its criticisms and reflect that acceptance in its policies.
The common points in this domestic and foreign criticism are that government has not exhibited a firm resolve for reform, and no consistent standards exist for measuring progress toward it.
During the overseas briefings, many participants reportedly pointed out that the success of restructuring could be judged by whether ailing conglomerates were allowed to fail. Some comments were cynical: "If Hyundai is anything to go by, real reform would seem to be impossible."
The KDI report also put its finger on the flaws in the government''s Nov. 3 announcement of a measure enabling some struggling companies to be liquidated - a measure aimed at allowing Hyundai Engineering and Construction Co. to survive subject to its coming up with a rescue plan. In the KDI''s opinion, this measure was downright wrong and has contributed to the slump in the government''s credibility.
During the international briefings, some participants evidently questioned the reckless management of public funds. As one warned: "In the long term, the supply of public funds to ailing companies and banks is set to become the biggest hurdle facing economic policy."
Of course, such remarks are nothing new. Yet the words in which they are clothed are growing steadily more virulent, leading to further mistrust of the Korean government and gravely undermining the Korean economy. When the government refuses to heed such opinions, the problem has reached grave proportions, and it is lamentable that government policy should generate so much mistrust.
We find ourselves beset with worry as we contemplate future scenarios. At this juncture, only one solution presents itself: To recover credibility at home and abroad, the government''s most pressing task is to establish persuasive first principles and advocate them strongly and consistently, even at the risk of opposition.
As the KDI has argued, unhealthy companies should be closed and their proprietors held to account, along with any politicians and bureaucrats involved in their demise.
Additionally, the government should adopt some essential measures as soon as possible. In the management of public funds, transparency must be enhanced, and the supervisory system must be bolstered.
This opportunity must not be lost; Korea will not get another chance.
by Chang Dal-joong