The government and ruling Uri Party are again taking the strength out of the investment restrictions on conglomerates. On Monday they ended up agreeing to further relax the proposed revision sin the implementation ordinances for the Fair Trade Law. The asset level for on cross-investment will be raised from five to six trillion Won, and conglomerates with debt ratios of less than 100 percent will have one more year added to the grace period of the new ordinances. The result will be that while 17 conglomerates had the restrictions apply to them last year, this year the number will drop to around ten. The range of exceptions to the restrictions has been widened. The situation is one in which the framework of investment restrictions, something necessary for jaebeol reform, is being shaken.
You have to ask whether the government and Uri Party have any desire to carry through with jaebeol reform. They recently said they would largely relax the effects of the securities class action lawsuit process. If they were going to hurt the effectiveness of investment restrictions like they are doing now, why did they work so hard at revising the Fair Trade Law during the last ordinary session of the National Assembly? Did they not decide among themselves to significantly weaken the ordinances, then fix the parent law to make it look like they are interested in reform? For the last two to three years they have said they were going to make the ordinances reflect changes in the scale of the economy, but that was just a desperate defense. All that does is make people think that they lack consistency in the area of economic policy, particularly regarding jaebeols. Maybe they have taken a turn with the overall tone of economic policy, towards complete pragmatism, as some observers are suggesting.
Jaebeol reform is an absolute necessity for making Korea's economy an advanced one. There remains a lot of road to cover before arriving at that goal. If the government and ruling party are not unaware of the importance of jaebeol reform they need to change their approach. Measures that shake at the framework of cross-investment restrictions must be halted. Is it not the case that they can increase investment in the purest sense, the kind that stimulates the economy, even though restrictions on jaebeol are being eased? Cross-investment regulations should not be meddled with before other policies useful in jaebeol reform are adopted first.
The Hankyoreh, 15 February 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Any Desire to Enact Jaebeol Reform? |
