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More 'Intolerable U.S. Pressure'?

Published: 05 Jan. 2003, 12:39

Our attention is drawn to suspicions that have been aired that the course of privatizing public firms swerved because of U.S. coercion. Tuesday a National Assemblyman said, "Evidence has been unearthed that the United States exerted influence on the privatization of Korea Electric Power Corporation, Pohang Iron and Steel Co., Korea Gas Corporation and Korea Telecom." He charged that the government originally planned to maintain the ceiling for foreign ownership in some electricity and natural gas business lines, but those plans were changed during Korea-U.S. investment negotiations because of U.S. pressures. If he is right, it is no small matter.

We do not completely believe the charge. Since one of the reasons to privatize public firms lay in quickly securing foreign exchange in the wake of the foreign exchange crisis, it is difficult to interpret the lifting of the limitations on foreign shares as solely due to U.S. muscle-flexing.

However, we cannot dispel concern that Washington took advantage of Korea's urgency. What we would like to point out, specifically, is that such suspicions seem to have gained currency in Korea. The government's secretive diplomacy is the main culprit for this pervasive mood. Until now, the government has stuck to a position that it cannot make things public while negotiations are under way. In addition, it has failed to disclose fully even declassified official documents. It is often the case that national interests should be sought in the process of negotiations with the help of public opinion. Why is the government unwilling to do so?

Instead of brushing off the allegations as unfounded rumor, the government should first reveal the details of the negotiations. It should carefully look whether unfairness marked the talks, and if so, it is right to rectify them even now.

At this juncture, it is necessary to correct discrimination against domestic companies in privatizing Korean public firms. Although the ceiling for foreign investment has been lifted, domestic firms are saddled with regulations. The justification of curtailing the conglomerates' dominance is understandable, but why is reverse discrimination in place for Korean companies? What is important in privatization is building a competitive system. Inducing competition by breaking up firms into components is worth consideration.