[EDITORIALS]Little will to reformThe government plan for privatizing the railroads and power generation and gas industries has essentially been scrapped. The plan to merge the Korea Housing Corporation with the Korea Land Corporation has also been discarded. The restructuring plans designed to streamline public sector industries are coming to a halt without reasonable explanations or alternatives.
The government says it decided to re-examine the plan to merge the housing and land corporations because the effects of integration are questionable and other reasons to keep them separate have emerged. But the merger has been promoted for five years and there have been no changes in circumstances nor management improvements that could justify a cancellation. The two corporations have 20 trillion won ($16.5 billion) in debts. They find it hard to pay the interest on those borrowings. There is ample reason to say that the Ministry of Construction and Transportation abandoned the plan to cater to the interests of the new regime and labor instead of fostering national competitiveness.
The privatization of public industries was decided following a national consensus that management there should be improved. Eight of 11 corporations have been privatized. As can be seen at POSCO and KT, the results were successful. Persuasive reasons or alternatives should be presented for stopping now. The government plans to put railroad operation under a public corporation. But the plan is not transparent and there is no plan to deal with the 600 to 700 billion won annual deficit. The power generation sector has been split up on the assumption that privatization would follow. If the plan is scrapped now, a lot of time and money has been wasted.
Privatization was decided upon after 10 years of work. Without a change in public opinion, this action by a new administration appears capricious. And what of foreign investor confidence? For international competitiveness, the public sector needs reform. It is a symbol of ineffectiveness with parachute appointments, militant unions and political influence. Giving up privatization amounts to giving up national competitiveness.