Big parties make lurch to the left to win elections

Park Geun-hye, Han Myeong-sook

To woo voters ahead of the April 11 general election, both of the big political parties are turning in the same direction: to the left.

Both the conservative ruling Grand National Party and the liberal opposition Democratic United Party are resorting to conglomerate bashing - blaming the business giants for growing income inequalities - promising more welfare and education benefits and also saying they will be more willing to engage North Korea.

The Grand National Party’s emergency leadership endorsed Monday a platform of policies as a part of an attempt to overhaul its image with voters. Government intervention, more regulation of conglomerates, wider welfare benefits and free education are some of the key concepts.

“We have created a whole new platform and policies, far more than a simple revision,” said Representative Kwon Young-jin. The GNP’s interim head, Park Geun-hye, said Monday was the day the GNP changed its foundation.

The Democratic United Party presented even more progressive policies, including taxes on conglomerates that attempt to expand the number of their affiliates, and higher taxes on the super-rich, those in the top 1 percent income category. It also wants to resume equity investment ceilings on the top 10 conglomerates.

Both the GNP and the DUP are particularly focused on forcing changes on conglomerates in the name of so-called economic democratization. The term “democracy in the economy” was popular with candidates in the recent DUP leadership election. The candidates quoted clause 2 of Article 119 of the Constitution, which says, “The state may regulate and coordinate economic affairs in order to maintain the balanced growth and stability of the national economy, to ensure proper distribution of income, to prevent domination of the market and the abuse of economic power and to democratize the economy through harmony among the economic agents.”

The GNP followed suit and gave the idea prominence in its platform.

“We will reinforce the role and function of the government to realize the democratization of economy,” it said.

This is a 180-degree turn from the party’s long-standing position that government intervention in the market should be minimized. The GNP used to promote a vision of “a larger market, a smaller government.”

“We will try to strengthen the government’s role and functions to strictly prevent unfair trade and abuse of power by the conglomerates to foster fair competition,” Park explained.

How the two parties’ policies want to achieve “democracy in the economy,” however, differ. The DUP’s key pledges were heavier taxes on conglomerates with larger numbers of affiliates, which is a new area of attack. The GNP criticized the idea.

“There should never be a tax targeted at a specific class,” said Kim Chong-in, a member on the GNP’s emergency council and a former presidential aide known for liberal views. In the early 1990s, Kim introduced the concept of public land ownership through which conglomerates’ holdings of real estate would be limited, but he disagreed with the idea of an almost punitive tax for business expansion.

The ruling and opposition parties also differ on how to increase income tax on the rich. While the DUP wants to impose a higher tax on the top 1 percent income tier, the GNP was reluctant to sign on to the idea. Kim said the GNP agrees with the intention of imposing higher taxes on the rich, but said, “The tax system alone cannot control greed.”

The parties are also competing to offer more welfare to attract voters. The GNP removed a reference to “selective welfare programs” from its platform and replaced it with programs for “anyone and every one of the people.” A party official said the vision was to provide wider welfare programs, but not to give benefits unconditionally.

The DUP inherited the vision of wider welfare benefits from its predecessor, the Democratic Party. Since January 2010, the Democrats pledged to provide free school lunches, free childcare, medical insurance and a 50 percent cut in college tuitions. Last August, they also promised more jobs and housing subsidies.

Six welfare promises were adopted by the newly formed DUP, now the largest opposition party, and it wants to pay for them from higher taxes on the rich.

The increasingly left-leaning policies of the ruling and opposition parties have prompted some concerns about the effects on the economy.

In a cabinet meeting yesterday, President Lee Myung-bak said the politicians were fueling anticorporate sentiment and trying to whittle down companies will never help the people, Blue House spokesman Park Jeong-ha said. “It is undesirable to bash the companies and demoralize them,” Lee was quoted as saying. “Although the companies need to correct their unethical business practices, we also need to support them so they can operate normally.”

“Heavy taxes and regulations that are beyond the international norm, such as the DUP’s proposal of a conglomerate tax, will only lower the competitiveness of Korean companies in the global market and discourage foreign investments,” said Finance Minister Bahk Jae-wan in a meeting with foreign journalists on Monday.

Kim Chung-ho, president of the Center for Free Enterprise, said politicians are twisting the issues simply to gain votes. “The fundamental problem of our economy is the gap between the export-driven companies and the domestic demand-oriented firms,” Kim said. “The politicians are distorting the situation as if it were an unfair competition between conglomerates and small firms.”

The ruling and opposition parties are also making pledges of more education benefits. The GNP replaced its vision of “education with higher competitiveness and excellence” with “education that will guarantee a fair start and fair competition.” It also added a pledge of free high school education.

The DUP also promoted free high school education along with the 50 percent cut in college tuition.

Both parties are also promising softer North Korea policies, emphasizing more inter-Korean dialogue. The ruling party is distancing itself from the North Korea policy of the Lee Myung-bak administration and edging closer to that of the DUP.

In its new platform, the GNP removed expressions that could annoy the North, such as desiring North Korea to become a liberal democracy. Now the GNP says, “We will restore the homogeneity of the Korean people and increase mutual benefits through various dialogues, exchanges and cooperation between the two Koreas.”

The DUP said it will uphold two agreements between the two Koreas from the 2000 and 2007 inter-Korean summits.

By Kim Kyung-jin, Ser Myo-ja [myoja@joongang.co.kr ]