By Kim Jong-chan
Political Editor
Reform often takes years or ends in failure. Whenever a change of government takes place, the new administration comes out with reform plans. This time is no exception. President Lee Myung-bak, a conservative who took office under the catchphrase of pragmatism after 10 years of rule by two liberal governments, has many ideas for making things better.
With only about four months in office, the CEO-turned-President faces a major hurdle whether he can turn about 320 public firms into more efficient and profit-oriented organizations. Included in the plan is the privatization of about 30 enterprises and merging or restructuring 270 others.
But the governing camp may lose momentum to push ahead with reform measures as protests against a deal to resume imports of U.S. beef have dealt a blow to Lee who saw his popularity plunge to a record low of less than 20 percent. Some protesters were trying to take advantage of the street gatherings to thwart the plans. They were shouting slogans, ``objections to privatization," in addition to ``no American beef." The government originally planned to make public measures to overhaul public firms late last month.
When the street rallies drew large numbers of people, including mothers with their children and pregnant women, the governing party showed signs of backing off from its stance to put a high priority on plans to transform public enterprises into organizations armed with more competitiveness. It triggered speculation that the plans might be delayed or undergo a drawdown. In other words, few things may ultimately happen in the end as was often the case during previous governments. The government has already dropped plans to privatize public utilities, such as piped water, electricity and medical insurance.
Chief Policymaker Lim Tae-hee of the governing Grand National Party (GNP) attributed the ruling camp's weakening determination for reforms in part to the worsening economic situation caused by soaring oil prices. The administration already scrapped the massive cross-country canal project, amid concerns about the project's economic effect ― the initiative will require a large amount of money with low returns ― and possible environmental destruction.
President Lee said he believes that he would be able to succeed only when he brings about changes and reforms in his first year in office ― a must for a new government since reform triggers objections from interest groups, particularly from those directly involved in it. As time goes by, it will become more difficult.
This is partly because the nation's single presidency tends to make a President an early lame duck. Lee's predecessor, Roh Moo-hyun, sought to change the Constitution to allow a President to seek reelection. But he had to drop his proposal as the two largest political parties, with months ahead of the presidential race, agreed to postpone holding debate on constitutional change until after the inauguration of the next government. Roh made the offer in the fifth and last year of his five-year tenure. The then main opposition GNP called Roh's proposal a plot for his governing camp, which had seen its support rate fall to a record low, to turn the tide ahead of the presidential election last December.
Reports say three in 10 public enterprises have long suffered deficits. As a result, the privatization plan will consume a large amount of taxpayers' money. According to the Korea Economic Research Institute, productivity of public firms accounts for only a half of that of private businesses and 20-30 percent of that of 30 conglomerates. But salaries for their employees are much higher than those of private companies. In addition, they are given job security and various welfare benefits. It has created the word, public firms are workplaces awarded by God.
A latest survey said about a half of the people support the early implementation of the privatization plan, though President Lee's popularity fell. What is required for the government is not to miss the time for reform. Raising the efficiency of public enterprises will help breathe new life into the economy as Lee pledged to do first if elected president during his campaigns. One in two people are calling on him to do it or risk failure.