Wagging tailsIf it takes a long time to sell public corporations to the private sector, Kang Man-soo, minister of strategy planning and finance, said the government should consider allowing private companies to manage public corporations ― even if the government retains shares in the corporations.
Kang is studying Singapore’s Temasek Holdings in which the government owns public corporations but private companies manage them. He says that identifying measures to increase efficiency in public corporations is more urgent than finding out to whom and in what ways public corporations are to be sold.
He is implying that public companies must become more efficient before they become privatized.
Small government and public corporation reforms are the major principles that President Lee Myung-bak advocated during his presidential campaign. Past experience shows that such reforms fail if they are not promoted in the early stages of an administration.
Kang’s remarks can easily create confusion. When handling an important issue, such as public corporation reform, Kang must consult other officials in related government offices, such as the head of the financial services commission.
But we get the impression that Kang made his remarks without proper consultation or evaluation, as the new head of the financial commission had not been officially appointed at the time of Kang’s remarks.
In response to Kang’s comments, some people are wondering if the new administration is already retreating from its plan to privatize public corporations. Some think the government might be trying to continue to influence public corporations; in which case, privatization will be a sham.
Those public corporations that compete against the private sector must be privatized first. Inefficient public companies must be reformed. This is what the people want, as confirmed in the last election.
The Kim Young-sam administration tried to let the government own shares while letting private companies manage them, but that policy failed. As Kang said, we need to think carefully about the ownership of public companies after privatization and the potential of excessive expansion of the jaebeol.
But the fear of consequences must not undermine the principle in privatization. The tail shouldn’t wag the dog.
Everybody is listening carefully to Kang’s words, feeling nervous.