[EDITORIALS]Policies, not bombshells

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[EDITORIALS]Policies, not bombshells

When the transition team of President-elect Roh Moo-hyun suddenly leaked a batch of unfiltered hardline economic reform policies, it triggered a strong reaction. The Federation of Korean Industries has already voiced its opposition to the transition team's policies on Korea's conglomerates, the jaebeol. Even though it is too early to argue over those policies, their hasty release was unnecessarily provocative. Nothing has been accomplished except to sow controversy.

The policies that the transition team drafted include some that the Kim Dae-jung administration hoped to carry out but could not, such as the introduction of cumulative corporate share voting, retroactive taxation on inheritances and prosecutorial powers for the Fair Trade Committee.

Since the 1997-1998 financial crisis, conglomerate reform has been an agreed national policy, but has not yet been completed. Few would dispute that transparency needs to be guaranteed to increase corporate competitiveness. But retroactive inheritance taxes may conflict with the principle of legal taxation, and as seen in other countries, may encourage capital flight. The transition team also wants to break up restructuring task forces at conglomerates, but because financial holding systems have not yet evolved, large business groups need an organization that governs and administers long-term strategies and coordinates subsidiaries.

The biggest goal for the Korean economy is to find the engines for more growth. If jaebeol reform is thought to be the only key to long-term competitiveness, only friction will grow.

Policies are not necessarily pursued for righteousness. The reform policies currently under discussion mostly need legal revisions -- and the National Assembly is led by the opposition party. Economic policies demand reality, and those that are not realistic must be dropped.

The transition committee must be cautious not to be seen as a bulldozer, and the president-elect must tell his team to be more prudent in its deliberations. The transition committee must be more faithful to its fundamental role, which is to review existing policies and develop new policy tasks.
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