[NOTEBOOK]When Politicians Should Stop Talking

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[NOTEBOOK]When Politicians Should Stop Talking

The Korea Development Bank, the major creditor of the trouble-ridden Daewoo Motor Co., issued an unprecedented page-long press release on Tuesday while announcing that the bank was to begin official negotiations with General Motors on the sale of the Korean car company.

The press release, written in the name of Jung Keun-yong, the governor of the Korea Development Bank, made "a request that the media cooperate and exercise self-restraint when reporting on the Daewoo Motor story."

The release said that Daewoo Motor Co. and the creditor banks had agreed to keep secret any details of the sale negotiations with General Motors until the final contract was signed. It emphasized the need for the media to respect the sensitivity of the talks and restrain themselves from making details of the talks public.

However, this plea to the press came too late for some to heed. Kang Un-tae, a key policymaker of the ruling Millennium Democratic Party had already let some of the details of the negotiations slip - even before the negotiations themselves were officially confirmed at 3 p.m.

This occurred at 10 a.m. on the same day, at a meeting of key figures in the ruling party at its headquarters. At this meeting, Mr. Kang mentioned that from June 4 the Daewoo Motor negotiations would start, not in Korea, but in a third country. This was news to the journalists in attendance, who duly reported it before the request for "media self-restraint" came from the creditor bank.

That he made known these important details in contradiction to the wishes of the parties to the negotiation illustrates the increasingly reckless power of Mr. Kang. Some in government are now saying that, in effect, there are two deputy prime ministers - the real one, economic minister Jin Nyum, and Mr. Kang, who has taken to wielding his power by making presumptuous announcements on major policies.

Mr. Kang has been the author of confusion in various ministries by announcing major government polices prior to their official announcement by the related government ministry.

Whenever he says something about important government policy, he leaves a ministry perplexed.

Some examples: Mr. Kang announced that all-inclusive taxation of donations and inheritance would be introduced within the year, but the finance-economy ministry denied ever having being consulted on the policy and suggested it would be impossible to introduce it so soon; Mr. Kang said maritime, general trading, construction and shipbuilding industries would be exceptions to the principle that companies should not exceed a debt-equity ratio of 200 percent before there had been any official announcement to that effect; Mr. Kang mentioned that the ceiling on large conglomerates' equity investment in other companies would be applied flexibly, an assertion again backed up by no official announcement and which left the related ministry wondering why it had not been consulted; and Mr. Kang apparently unilaterally increased the ceiling on credit card expenditure subject to reduced tax to 5 million won.

It is not unheard of for the ruling party to make announcement on decisions before an official announcement - as long as the ministries have been consulted and all are in accord.

However, it is a problem when a key policymaker like Mr. Kang does such things as tactlessly mentioning details of Daewoo Motor negotiations, and especially so because there is an international relationship at risk. Daewoo has already undergone painful aborted talks with Ford Motors.

An official close to the creditor banks said it was not helpful at all for a third party, least of all a politician, to comment on the negotiations.

A ruling party executive should not show off what he knows. His priority must always lie with the health of the economy and the nation.


The writer is an economic news reporter of the JoongAng Ilbo.

by Song Sang-hoon

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