There has been a rapid increase in proposals and discussion relating to the country's conglomerates that can be interpreted as signs of change in jaebeol policy. Financial Supervisory Commission chairman Yoon Jeong Hyun says it is time to give new consideration to the principle of separation of industrial and financial capital. Fair Trade Commission chairman Kang Chul Kyu hints that he might consider easing conditions and requirements for cross-investment and holding companies, though he did include the premise that it would have to happen "within the basic framework of the roadmap for market reform." The ruling Uri Party is said to be contemplating giving incentives for holdings company conversions.
Regardless of the validity or lack thereof in recent commentary, one worries about how the overall tone leans more towards accommodating jaebeol demands than proceeding with jaebeol reform. The question of jaebeols is such that you cannot discuss just one of their many complex and difficult parts. No one disagrees with the fact that they are ethically lax and lack transparency, as seen in problems such as the disconnect between their ownership and control structures, the taking of company profits by tycoon families, and the way many pass stakes from one generation to another by cutting corners. The problems are not being fixed because the jaebeols occupy such as significant part of the whole economy and so it would be hard to go about upsetting them carelessly, and because a program for resolving one of the problems they present could lead to negative side effects elsewhere. The question of whether or not to relax regulations on jaebeols simultaneously needs measures to prevent negative effects and observation of changes in their physical makeup.
When government officials or politicians make comments without careful consideration or prior internal review, it is irresponsible and could lead to controversy. The Participatory Government has long maintained the principle that financial and industrial capital need to be kept separate because of the problems created when industrial capital controls financial capital, so it cannot be taken lightly when government functionaries take issue with certain aspects of the regulations by their lonesome. Are not the politicians already divided along the lines of those who sympathize and those who oppose their ideas? Officials need to be prudent. It must be remembered how there is much concern about the possibility that jaebeol reform policy may start to be rescinded as the current government approaches the end of its time in office.
The Hankyoreh, 13 February 2006.
[Translations by Seoul Selection]
[Editorial] Irresponsible Comments About Jaebeol Policy |
