Pardoning tycoons for economic growth

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Pardoning tycoons for economic growth

The government is suspected of turning soft on corporate tycoons, hinting that imprisoned chaebol chiefs could be released early if they meet parole standards. The justice minister was the first to mention the possibility of these pardons, although the ministry last year declared that no high-ranking government or corporate official would be given parole in order to establish a zero-tolerance stance toward white-collar crime. The deputy prime minister for the economy supported the justice minister, arguing the need for special pardons in order to stimulate sluggish corporate investment and domestic demand. But President Park Geun-hye would inevitably risk losing face for casting aside another major campaign promise to end lenient treatment of business corruption and irregularities, and eliminate favorable treatment for chaebol owners.

Top government officials have suggested releasing jailed businessmen early as a way to restore corporate morale and investment. They argue not for a special favor, but a parole review appropriate for any well-behaved inmates who have served at least a third of their term. And the economy needs emergency action.

Exports have been driving the economy as domestic demand steadily erodes. Corporate and consumer spending remains depressed. Gross domestic product rose 0.5 percent in the second quarter compared to the preceding three months, the slowest growth in 21 months. The corporate sector scaled down its fall hiring, and households have little to spend due to income stagnation and rising debt.

The government has been trying everything in the book to stimulate domestic demand, but its fiscal and monetary stimulus plans will be of no use if they fail to move companies and consumers to spend. The corporate role, in particular, is essential for sustainable recovery. Due to our structural dependence on chaebols, large-scale business projects and investment by big companies could provide much-needed traction to the slow-moving economy. But large companies have been dithering on investment plans due to uncertain global and domestic economic prospects.

Major business decisions and investment plans have been put on hold in companies without leadership. These corporate ships had been on autopilot because their captains are absent. In family-run companies, only the owners can make fast decisions on investments large enough to move the national economy.

Corporate owners currently serving jail terms should be let out early so they can provide aggressive business leadership. It could be a different kind of onus on them to make them atone for their misdeeds by contributing to re-energizing the economy. In the industrialization period, former President Park Chung Hee pardoned businessmen to have them make amends by spending their resources on helping to build the national economy.

Any consideration for imprisoned businessmen should be based on reasonable judgment. Justice Minister Hwang Kyo-ahn said businessmen, like any other well-behaved inmates, should be eligible for parole or a review if they meet the criteria. His comment was based on the rights bestowed upon all citizens who have committed a crime.

Businessmen must be punished if they have broken the law, but they should not be denied their rights just because they are businessmen. The business sector has complained of excessively harsh punishment and reverse discrimination. Corporate chiefs are denied parole or probation despite their eligibility or are excluded from the review list. Discrimination is as bad as favoritism.

Joseon-era war hero Adm. Yi Sun-sin led victories in battles against the mighty Japanese naval force because he won over his crew through engagement rather than strict punishment. The recent box-office hit “Roaring Currents” centered on the historic Battle of Myeongnyang in 1597, where the admiral faced hundreds of Japanese warships with just 12 ships under his command. Yi was left alone to fight because others fled. When one of his fleet commanders disobeyed his orders and returned, Yi cried out, “You are subject to military punishment of the highest degree, but you will atone through victory.” Any other commander would have executed his subordinate for disobedience in battle, but Yi was no ordinary leader. Instead of persecution, he gave the commander another chance to demonstrate loyalty to his country and countrymen. All of his soldiers were united under the strong belief of their leader and helped to defeat 133 Japanese warships.

Many would not be happy about letting off corrupt businessmen before they serve their full terms. But these businessmen can best serve their country through what they do best - business - if they are allowed a second chance.

Translation by the Korea JoongAng Daily staff

*The author is the vice president of the Korea Economic Research Institute.

by Bae Sang-kun

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