Privatization disappoints

The Lee Myung-bak administration has released its plan for privatizing public corporations, a project that it has pursued ambitiously. The plan is called the first “plan for advancement” of public corporations. However, it has turned out that the plan’s content is truly disappointing. First of all, the number of public corporations to be privatized has been reduced significantly, from around 50 to 27. Targeted for privatization are small public corporations or companies that used to be private but later were supported with public capital and came under government management. As the administration left untouched large public corporations whose labor unions are likely to resist or where serious controversy is likely to emerge, only a small number of companies are left. From the first step, the plan lacks substance. One only wonders where the administration’s plan for privatization of public corporations will be headed.

The government said more work would be done through the second and third plans but it is hard to expect that a plan which has shrunk from the first step would suddenly become powerful.

There was a sign for such a retreat when the administration earlier said that each minister would carry out the privatization of public corporations. With each minister quietly privatizing public corporations, instead of confidently announcing reform plans for all public corporations, the government revealed that it has lost its determination and willpower to forcefully push for privatization of public corporations.

Some public corporations are to be merged or their functions will be adjusted, instead of being privatized. These plans are also disappointing. After long disputes, it has been decided that the Korea National Housing Corporation and the Korea Land Corporation are to be integrated.

However, there is a talk about moving each office of the corporation to the Jinju Innovation City and the North Jeolla Province Innovation City, respectively, as different departments. After the transfer, the corporations will be restructured, according to this plan. That means integrating the two corporations on the surface but managing them as separate bodies. There is no point in integrating them.

If privatization of public corporations were compromised in fear of labor unions and political circles, it is better not to do it at all. The government must withdraw its meaningless plan for advancement of public corporations and re-examine its privatization plan from square one.