[Column] Ending the blame game

Lee Sang-ryeol

The author is an editorial writer at the JoongAng Ilbo.

How are Koreans responding to the jump in their heating bills? Polls can offer some hint, although political bias may influence. A Realmeter poll conducted shortly after the Lunar New Year holiday on Jan. 22 showed approval rating for President Yoon Suk Yeol at 37 percent, a 1.7 percentage point drop from the previous week.

In a Gallup Korea poll for Jan. 31 to Feb. 2, the positive rating for the president was 34 percent, a 2 percentage point decline from the previous week. Negative rating was 56 percent. Economy, livelihood condition and prices were the biggest reason (15 percent).

The spike in heating gas charges is deemed to have played a part. The surveys did not ask which government (incumbent or the previous) was more to blame for the increased utilities burden. But one thing is for sure. The people are not happy with the way the conservative Yoon administration deals with the energy crisis.

The Yoon administration may have been falsely accused. Import prices of liquified natural gas (LNG) soared in the wake of the Russia-Ukraine war throughout last year. Korea Gas Corporation’s losses ballooned as it could not timely reflect the spikes in imported LNG prices during the Moon Jae-in administration. The liberal administration even increased the share of LNG fuel for power generation because of its persistent nuclear phaseout policy.

In fact, the Moon administration kept the lid on gas rates although international prices soared from March 2021. It hurriedly raised gas prices in April 2022, only a month after the presidential election in March. Since then, gas rates shot up by a whopping 38 percent. The bill piled up during the exceptionally cold winter. War and climate certainly are external conditions. But if the gas rates had incrementally reflected international prices, Koreans would have been less shocked by their shocking bills at the peak of winter.

The first year can be tough for any new administration as the fallout from policy missteps in the previous government is rolled over to the next one. There is a term called “big bath,” a technique of exposing the poor results of the previous administration or management to make them appear worse so that future performance can look better. It is a shrewd method of new managers blaming their poor performance on their predecessor and taking credit for improvements in the coming years.

Former president Kim Dae-jung who came into office at the height of the Asian financial crisis declared “the coffers are empty” to have a big bath effect. A special parliamentary hearing was held to find the accountability for the country’s foreign exchange crisis that led to an international bailout.

Utility bills packed into the mailbox of an “officetel” apartment in Seoul, Jan. 1. Residents are shocked to see a sharp rise in gas and electricity charges in the second year of the conservative Yoon Suk Yeol administration. [NEWS1]

Former president Park Geun-hye’s government set a growth target more conservative than other institutions to emphasize the bad economic conditions she inherited from Lee Myung-bak. President Moon, who was elected mostly thanks to the impeachment of his predecessor Park Geun-hye, carried out a clampdown on any past wrongdoings and pushed with unorthodox policies of income-led growth, a nuclear phaseout, and raising the maximum corporate tax rate from 22 percent to 25 percent.

The big bath strategy of Yoon was less conspicuous. It was not clear how much of a deficit our state utility companies had to suffer from Moon’s nonsensical policies. His effort to seek understanding from the people after telling them about the higher energy cost they have to pay also was insufficient. Yoon’s administration was either naïve or inexperienced.

Populist polices of the Moon administration have left serious side effects. Its debt-financed stimuli measures stretched national liabilities by a whopping 400 trillion won ($318 billion). But the government didn’t do what it must do. As it froze utility rates too long, public utility companies have turned nearly delinquent. Korea Electric Corp. incurred operating loss of 30 trillion won last year and Korea Gas Corp. also booked 9 trillion won in deferred payments, which will most likely turn into a loss.

The increase in utility charges is a process of normalizing what had stayed abnormal too long. But pain is inevitable when the anesthetic effect from populism wears off. Normalizing gas rates is necessary. But the government should have taken a subtler approach so as not to make the working and poor class shiver in extremely cold weather. Public rage originated from the insensitivity of the Yoon administration.

The big bath usually takes place during the early months of a new administration. The longer it is delayed, the more the new government provokes suspicion over it evasion of accountability. That means the big bath also has the statute of limitations. A plethora of fallouts from the Moon administration’s defense, labor and pension policies are spilling over.

But the Yoon administration cannot continue blaming the previous one. From now on, it’s Yoon’s responsibility.