Korea Inc. adrift

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Korea Inc. adrift


At 9:25 a.m. on April 16, 2014, Jindo Vessel Traffic Services received an emergency call from the Sewol ferry saying it was in trouble in rough waters off Jindo County, South Jeolla. The bridge broadcast that a rescue boat from the Coast Guard would arrive in 10 minutes. Students who comprised most of the 476 passengers on the ship that capsized on its way to Jeju island let out sighs of relief as they waited in the halls with life jackets on. The ship by then was listing 52.5 degrees. If the crew had evacuated the passengers, the Sewol’s end would not have had a tragic toll of 295 deaths and nine missing.

The life-and-death golden moment was in the hands of the Sewol’s crew and captain, Lee Jun-seok. But instead of alerting the passengers, who had been told to stay below deck, the crew members were the first to abandon the ship and they got on the first lifeboats that arrived. All of the 15 full-time crew members were saved, including the captain, who discarded his uniform to hide his identity.

Accidents involving large numbers of passengers can happen anywhere and anytime. They can end up in a dramatic story or tragedy, depending on the crew and their leader, whose responsibility becomes heavier and a matter of life and death in an emergency situation. It is a valuable and painful lesson that the country learned from last year’s Sewol debacle. Or we hoped we had learned.

But we are dejected to find ourselves no different than before the Sewol disaster. The entire country is engrossed with Sung Wan-jong’s list that names the political bigwigs paid off for years by the former head of Keangnam Enterprises. The prime minister, who should be acting on behalf of the president who is away for a Latin America tour, has lost all authority, having turned into a laughingstock as evidence pointed to his shady connection with the construction tycoon despite his repeated denials.

Meanwhile, Korea Inc. is sinking fast, with no navigators to be seen. The economy has been caught up in the midst of unprecedented deep and rough waves. Jobs are essential. Stimuli are useless if they don’t create jobs. The rebound of stocks and home prices is dangerous when jobs remain scarce. It is like giving morphine to an emergency patient who needs surgery right away.

The Korean economy is in such a critical state. Its blood vessels are all choked, there is no economic activity generating jobs. Companies that are required to extend the legal retirement age to 60 and expand the scope of base salary are restructuring instead of hiring. Trade unions in large companies are busy trying to keep their permanent and vested benefits intact and have little concern for young people without jobs and irregular workers who live under fear of losing their jobs every day. The baby boom generation has begun to retire. During the next 30 years, more than 800,000 people will join the retired population.

Deficits at exclusive pension schemes for government employees and teachers are snowballing. The red figures the state must compensate for from tax revenues amount to 643 trillion won ($594 billion), eclipsing total public debt of 530 trillion won at the central and local governments. The country could be headed toward bankruptcy. Korea could become a troubled zone like some Latin American and southern European countries. Yet labor unions and government employees are stubbornly resistant to any type of reform. They stand behind militant umbrella union groups. A radical labor overhaul must take place before election season arrives. This year is the golden time for any labor and pension reforms because the next two years will likely be dominated by elections.

The Sung Wan-jong bombshell landed at a critical time. The presidential office and public opinion are at the mercy of the Pandora’s box opened up by a spiteful businessman who tried to get his revenge against politicians before committing suicide after falling from grace. The president at the heart of the turmoil as the list involves most of her key aides, including the prime minister, hurriedly left for a 12-day trip to Latin America. Even as the heads of the state and cabinet are absent (with the latter more or less forced to keep low profiles), Deputy Prime Minister for Economy Choi Kyung-hwan left for Washington to attend the annual meetings of the International Monetary Fund and G20 finance ministers.

The main opposition party head, who pledged before the people that his party would work to revive the economy, recently has been preoccupied with the scandal windfall. The ruling party shamefully is attempting to bring the opposition party into the scandal by demanding that the probe be extended to the administration of former President Roh Moo-hyun.

The captain of Korea Inc. is the president and politicians are her crew. No reform initiative is possible without the support of the opposition. The ship has capsized. If everyone is busy looking after their own interests, how are they any different from the crew of Sewol, who had abandoned their ship and passengers to die in a sinking boat?

JoongAng Ilbo, April 17, Page B8


*The author is the business news editor of the JoongAng Ilbo.

by Jung Kyung-min

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