Where hard decisions are made

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Where hard decisions are made

West Wing meetings of economic policymakers at the Blue House peaked under President Kim Dae-jung. Kang Bong-kyun, Kim’s first senior secretary on economic affairs, proposed such a gathering in early 1998. At that time, the country had been pressured by the International Monetary Fund to restructure bloated industries and companies as part of the austerity measures included in the multi-billion-dollar international bailout following the currency and liquidity crisis of late 1997. The business climate was like the Wild West, brimming with uncertainty and the insecurity of not knowing who would be gunned down next. Kang proposed that a command center was needed as the country had entered uncharted waters. He suggested senior policymakers meet regularly but discreetly without being hounded by journalists. The West Wing conference room at the Blue House was decided as the meeting site.

The title of deputy prime minister for the economy did not exist under Kim following the international bailout. Yet the president agreed that a top executive on economic affairs was needed. He welcomed Kang’s idea. Regulars at the meetings were finance minister Lee Kyu-sung, financial supervisory commission chairman Lee Hun-jai, planning and budget minister Jin Nyum, Fair Trade Commission chief Jeon Yun-churl and Bank of Korea Gov. Chun Chul-hwan.

Mega-scale restructurings were expedited without much trouble largely because of the coordination arranged at those meetings in the Blue House West Wing. Conflicts of interest among industries, companies and workers were ironed out behind closed doors. Some messy and even brutal work was discreetly carried out. A united front by those powerful men helped to push for interest rate cuts even as the IMF insisted on killer interest rates of over 20 percent. Once very difficult topics were tackled after lengthy discussions, the ministers all signed onto the decisions reached. Ministers returned to their offices with their assignments and commanded their staff to carry them out, promising that all the responsibility would be accepted by them. Such assurances were necessary to persuade bureaucrats to accept highly risky orders that involved streamlining of workforces.

The West Wing conference rooms were base camp for an assault on the pinnacle of Korea’s economy. Kang Bong-kyun called in the Daewoo Group president and Samsung Group chief to arrange mergers of Daewoo Motor and Samsung Motors. They could not go home until they signed onto the deal. Even chaebol bosses could not endure the pressure of the Blue House environment.

West Wing meetings have lately come under fire as back-room wheeling and dealing by policymakers. The conference room has become the scene of the crime in which a bailout package for Daewoo Shipbuilding and Marine Engineering was cooked up on Oct. 22. Policymakers are criticized for arranging a 4.2 trillion won ($3.6 billion) rescue program for the shipbuilder even after knowing of the management’s cooking of the company’s books. They dumped accountability on the Korea Development Bank. The opposition is demanding a parliamentary probe and an end to the West Wing meetings.

I personally do not agree. I believe there should be more emergency coordination meetings at the Blue House. The economy faces multiple challenges on both the domestic and external front. A wave of protectionism and isolationism is spreading following the British decision to leave the European Union. We cannot foresee how far the repercussions will go. We are again entering uncharted waters. A command center must be reinforced. The government must summon all possible wisdom available.

We also need the West Wing meetings to stir more proactive thinking from bureaucrats. Restructuring can turn into a merciless battlefield. The decisions made now can spark probes by the Board of Audit and Inspection, prosecutions and punishment. If the West Wing meetings are scrapped, who would become responsible for the painful process of restructuring, which by definition generates more blame than it does credit?

Is it the job of the president? Then why do we have senior government officials?

Choi Kyung-hwan headed the October meeting as the deputy prime minister for the economy. If he had been a career bureaucrat and not someone from the ruling party, would the opposition have been so critical? If they were not happy with Choi, they should just attack him. If the secretive and non-transparent nature of such meetings is the concern, they could have the meetings recorded. The attendees should also sign the minutes of such meetings for later accountability. The meetings themselves are necessary.

JoongAng Ilbo, July 7, Page 30


*The author is an editorial writer of the JoongAng Ilbo.

Yi Jung-jae
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