The massive privatization of public enterprises will probably be one of the biggest battles President Lee Myung-bak, left, faces in his five-year term, affecting a quarter million workers in what have been sarcastically called ``God-blessed'' jobs. At right a forest of banners with workers protesting Lee's plan in Yeoido, Seoul, Saturday. / Korea Times |
Over 300 Public Enterprises Up for Overhaul; 70,000 on Payroll to Be Shown Door
By Yoon Ja-young
Staff Reporter
Because of job security and good welfare, public enterprises were often seen as dream workplaces for many. Once called ``a workplace even God would envy,'' these days these same public businesses seem to be forsaken by God. Faced with a massive lay-off plan by President Lee Myung-bak's administration, public enterprise workers are now having sleepless nights.
President Lee's plan to streamline the nation's public organizations has faced a strong backlash from a public alarmed at the speed in which it is being carried out, with some believing the reason is to help finance the government's canal project, one of Lee's key pledges during his election campaign.
Lee, who pledged a small government, considers slimming down or privatizing the public sector as one of his key tasks. Under the envisioned restructuring plan, out of 305 public enterprises, around 50 will be privatized, 40 will be merged, while 10 will be forced to sell part of their businesses ― the remaining firms and agencies will be unaffected.
The new administration plans to cut over 70,000 civil servant positions from the current 258,000, and raise some 63 trillion won through privatization and restructuring. A concrete plan on public sector reform will be announced next month. The massive restructuring plan, however, is making public sector workers uneasy.
The Korea Tourism Organization (KTO) workers joined a rally held by public enterprises in Yeouido, downtown Seoul, Saturday. The organization is set against the government's plan to offload its profitable businesses, such as golf courses and duty free shops.
``When these profitable businesses are sold, non-profit making sectors such as Korea tourism promotion will also face restructuring as there will be no money available to fund such unprofitable businesses,'' said a KTO employee at the rally.
On top of partial privatization, the government urged the organization to reduce its number of workers to below 500 from over 750. KTO had already experienced large layoffs during the Asian financial crisis.
She said her colleagues were very uneasy about the plan. ``Since the restructuring is so large, even young workers won't be safe.''
Workers at the Korea Land Corporation (KLC) started an all-night sit-in in opposition to the government's plan to merge it with the Korea National Housing Corporation (KNHC). The merger will give birth to a mammoth organization, combining KNHC's 4,000 employees and KLC's 2,700. Since the two organizations have some businesses that overlap, large layoffs are expected to follow.
``They say that one out of three will be forced to leave their job,'' said an employee at KNHC. President Lee Myung-bak, former CEO of a construction company, is eager to privatize the two state-run organizations.
The employee said many young workers are considering switching jobs. ``Young people are uneasy as there are rumors that it will be the rookies who will be laid off first. They are preparing for exams to get licenses or studying English to help find new jobs.'' Both KLC and KNHC have no recruitment plan this year.
The Federation of Korean Trade Unions (FKTU), which has been on friendly terms with the new President, claimed that Lee is trying to use the public sector workers as scapegoats to escape his falling popularity following protests against American beef imports. The union said fight would be the only choice for them if the restructuring plan is carried out without thorough analysis or consultation with workers.
It is true that some public enterprises have been squandering taxpayers' money through reckless management. However, some are raising concerns that privatization is not a cure-all.
The government is pointing out poor performance in the public enterprises, using this as a reason for why they should be privatized. However, public enterprises, which exist for the benefit of the public, aren't supposed to generate big profits. Moreover, their profitability is likely to worsen once they sell the few profitable businesses they have.
For example, the government is urging the KTO to sell a public golf course. ``It would make profits once privatized since the new owner would raise fees, but it would eat into the welfare of the people,'' an employee at the KTO said.
The KNHC is often blamed for huge debts, but its profitability is expected to worsen once it gives up its apartment sales business, something the government wants. KNHC has been using profits to build apartments to be leased by low-income households, which the private sector considers unprofitable.
Some point out that they had to hire people at the request of the government. For example, the tourism organization hired highly-qualified people for the tourism development department. Now, the new government demands that it shouldn't be doing so anymore. ``Some talented people deserted high-paying jobs in leading conglomerates, attracted by the job stability here. Now what they will face is layoff,'' the KTO official said.
Some are pointing out that the government is pushing the privatization too recklessly. ``There needs to be transparency in implementing the privatization plan. The government doesn't seem to have prepared enough,'' Samsung Economic Research Institute researcher Jung Ho-sung was quoted as saying by the Yonhap News Agency. He said the Japanese government prepared for around four to five years before privatizing the post office. Another expert pointed out that airports in Incheon or Singapore, some of the best in the world, are public, while London's Heathrow Airport, notorious for poor services, is run by a private business.
chizpizza@koreatimes.co.kr
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