[VIEWPOINT]True Liberalization Means Hands Off!

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[VIEWPOINT]True Liberalization Means Hands Off!

In the 1980s, the chairmen of industry, economic and state associations were virtually government-appointed. Since the "People's Government" came to power with the election of Kim Dae-jung - demanding a market economy and democracy - it has promoted economic and political liberalization through corporate restructuring, liberalization of bank interest rates and autonomy of university operations. Such policies become synonymous with the "People's Government."

But this drive has turned out to be only an outward liberalization. In practice, everywhere in our society we see that old habits of government order still survive. For example, in the case of so-called "big deals" between Hynix Semiconductor and LG Electronics, and between Daewoo Motor and Samsung Motors, the government made cash-thirsty firms acquire parts of cash-affluent companies; by forcing firms to lower their debt-equity ratios to 200 percent, it induced affiliated companies to make intracompany investments. The companies achieved their targets in name only - by issuing new shares and allowing their affiliates to buy them. Autonomy in university operations is no more than a limit set on the guidelines provided by the Ministry of Education. The government still orders universities to recruit new students this way and to decide student quotas that way.

These days, candidates for the position of president of a state-run company are put forward by the company's recommendation committee. President Kim's directive to ministers not to intervene in personnel issues in state-run firms led to a surprising event in that someone selected without government influence took the office of president of the Korea Tobacco & Ginseng Corp. in March. But in most cases, such a miracle is unlikely. The recommendation committee is composed of outside directors and members of the private sector, and puts forward the names of two or three candidates. One of the candidates is usually someone favored by the government, and it is a foregone conclusion that this person is appointed. Then labor unions protest the government-controlled appointment and use it as an excuse to object to corporate restructuring. Privatization is very difficult in such circumstances.

The financial sector is in a similar situation. Though interest rates are said to be liberalized, banks must raise or cut rates following government guidelines. It is said that a bank presidency is no longer an enviable position because whoever takes the post must toe the government line; most banks are insolvent and depend on government support. It is natural that president of the relatively solvent and thus autonomous Korea First Bank is an object of envy. The government has raised a sword named tax audit and a whip named regulation on newspaper advertising and sales in the cause of media reform. The media sector indeed has faults. The introduction of an Audit Bureau of Circulation would enable advertisers to know better the reach of their ads by providing reliable newspaper circulation figures. And newspapers must indeed put a stop to the underhand tactics they use to increase subscriptions. But if the rumors are true that the government intends to tame the media to shut the mouths of the influential Chosun, JoongAng and Dong-a dailies before next year's presidential election, their sharp sword and stinging whip will become a blunt axe and a fly swatter.

If the government's aim is innocent, readers will stand by the government. But the regulation of advertisements and sales of newspapers is something else, not self-regulation. It is self-regulation imposed by the government. Something imposed is no longer voluntary.

The market economy is a free-will system. If the market prospers, it attracts money and talent. Competition and creativity are born, and civilization progresses. A truly liberalized society will emerge if the government rises above its own self-interest.


The writer is a co-chairman of the Citizen's Coalition for Better Government.

by Park Jong-kew

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