An intriguing crusade against ‘interest cartels’
Ha Hyun-ock
The author is an editorial writer of the JoongAng Ilbo.
The government in its third year under Yoon Suk Yeol presidency is warring with “cartels” with self-indulgent goals to keep their vested interests. The concept has been popularly used under the prosecutor-turned-president’s rule. The cartels refer to any groups trying to monopolize their influence and profit to keep away competition that can eat away at their share. The government’s warfront is extended to labor unions, banks, telecom operators, builders, private education institutions, science and technology fields and even doctors.
In economic terms, “cartel” refers to an association of independent businesses or organizations or individuals bound in an agreement for the purpose of exerting restrictive or monopolistic influence on the production or sale of commodity. The act comes under legal scrutiny for impairing fair competition and disrupting market order. Under the Yoon administration, however, it takes a broader meaning to refer to any forces or groups that go against the will of the government — quite reminiscent of the former liberal administration’s methodical crackdown on “past evils.”
President Yoon affirmed its “anti-cartel” identity. During a luncheon with vice ministers last July, he demanded they wage a “relentless” battle with cartels to fit the identity of an “anti-cartel” government. He stressed that if totalitarianism and socialism are external threats to a democracy, corrupt cartels are an inner threat.
(서울=뉴스1) 오대일 기자 = 윤석열 대통령이 18일 오전 용산 대통령실 청사에서 열린 제29회 국무회의를 주재하고 있다. (대통령실 제공) 2023.7.18/뉴스1
The following day, the president laid out specific guidelines and directions on how to weed out cartel groups. “What should come down is the structure that feeds and shares prerogatives through cartels instead of earning profits and interests through a fair and just reward system,” he said. “The cartels of interests may look legitimate on the surface, but they are exploiting people through an easy, convenient and persistent manner.” Then he urged all government officials to “tackle them without any fear or hesitance.”
Cartels that ferment society should be razed so that they can make way for healthier replacements. But the warring mood can cause side effects. One example is the cut in this year’s government spending on basic science and technology research and development. The government shaved the R&D share by 14.8 percent for this year’s budget under the pretext of doing away with cartels in the field. Although the fall ended up smaller than the originally-proposed 16.6 percent, the fallout is far-reaching. The steep axing in the budget, which didn’t even happen during the Asian financial crisis, caused a chain suspension in R&D projects at universities and research institutes. The brain drain also has begun. Some people found jobs overseas or went back to study medicine for greater income and job security.
The government is trying to make amends for its premature mention of the R&D cartel it failed to identify. It hurriedly launched an R&D center for innovation and promised to sharply increase the budget for R&D next year without any limit. During a hearing with the people, the president promised to subsidize living allowances for postgraduate students in the engineering and science field. The subsidy will be a minimum 800,000 won ($600) per month for those pursuing a master’s degree and a minimum 1.1 million won for those pursuing a Ph.D. The generosity implies the government’s embarrassment from the pratfall of burning down a house to catch a bedbug.
The cartel practice in private education through collusive arrangements between teachers at public and private schools was indeed identified in an investigation by the Board of Audit and Inspection. But the crackdown on private educators and academies generated various side- and balloon effects. According to the Ministry of Education and Statistics Korea, household spending on private education hit a new record of 27.1 trillion won last year, up 4.5 percent from two years before. The ratio of students relying on private education also showed a historic high of 78.5 percent. Secondary and tertiary STEM (science, technology, engineering and math) education is being shaken by voluntary dropouts to retake the state-administered college entry exam to try for medical schools after so-called “killer questions” were removed from prep and college entrance exams upon the president’s order. The removal of killer questions in the first move to break up the cartel practices in private education only caused confusion in the college admission system and an expansion of cram schools.
The plan to increase the enrollment quota for medical schools to build medical infrastructure in rural areas and bolster primary medical divisions has pit the government against the cartel of doctors. The government remains steadfast in its plan, citing the public role of physicians, despite the worsening dysfunction in large general hospitals and university hospitals after the massive walkout by trainee doctors. It accepted the resignations of junior doctors and vowed to block their private clinic opening or search for new jobs, as well as banning those who had not completed their military duties from leaving the country.
Tilting at windmills or barking up the wrong tree in a war with cartels can cause more harm than good. The government may be fighting for immediate results instead of trying to explore the fundamental problems. Bad moves in the war against cartels can lead to a greater social cost.
with the Korea JoongAng Daily
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