Corruption, petty politics still hurting Korea

Business Asia, Sept 30, 1999 by Cameron Cooper

Eliminating corruption and reforming the political sector are prerequisites for sustainable economic growth in South Korea, according to President Kim Dae Jung.

While the need to restructure the nation's economy and debt-laden conglomerates has been well documented, Kim claims reforms must go further.

"Economic reforms alone are not enough, and we have turned our attention to non-economic areas as well," Kim told the CEO Summit conference in Auckland as part of the APEC talks.

"I have made the fight against corruption an on-going part of my administration ... The political leadership of my government is clean, but there is still much decay in the officialdom. I know all too well that no country with a high corruption index has joined the ranks of the advanced countries."

A pay-for-favours system is endemic across Korea in areas ranging from politics, school-teaching and journalism. Under this system, white envelopes containing money are dispersed in order to get preferential treatment.

During his state visits to New Zealand and then Australia, politicians from both sides were full of praise for Kim, who was labelled Asia's "preeminent democrat" by the ALP's Laurie Brereton. Kim said social and political reforms were an on-going challenge for his administration.

"We are trying to change the regionally divisive way in which political parties are organised and run, so as to open the way for nationally based political parties. We will strengthen public management of elections, and amend the political funds act for greater transparency in the raising and use of political funds," he said at APEC.

The President is well versed with Korea's system of political regionalism. Analysts often contend that his rise to office was delayed by his origins in the Cholla province, which is often the subject of ridicule or scorn in other areas of the nation.

Kim also called on APEC economies to actively "reform the global financial architecture", eliminate non-tariff barriers, promote knowledge-based economies through e-commerce and "e-education", and address economic and social disparities.

He pointed to achievements under his regime designed to make the economy more competitive, including:

* the review or abolition of thousands of government rules and regulations;

* opening the way for hostile mergers and acquisitions;

* lifting the limit on foreigners owning real estate; and

* the implementation of the foreign investment promotion act to attract more foreign capital, technology and know-how.

On an economic front, Kim predicts the country will grow by 5 to 6 per cent in 2000. Korea's gross domestic product expanded 7.3 per cent in first six months from the same period a year earlier and most government and private estimates expect annual growth to reach about 8 per cent in 1999.