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| My Reflections on Roh Moo-hyun |
| [Opinion] His achievements and setbacks |
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Victor Foo (victorfoo)  |
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Published 2006-11-26 13:00 (KST) |
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Roh Moo-hyun was considered by many Koreans an unlikely presidential candidate during the 2002 presidential election. He did not have any special relationship to the elite, conservative politicians as his predecessors have. He came from a poor farming family and only completed high-school on scholarship. He studied law by himself and passed the bar exams on his fourth attempt. In this way, he is a self-made man.
His background have inspired hope among many young Koreans who have longed demanded for an end to old politics and usher in an era of new, clean politics. They mobilized the power of the internet to disseminate information about him faster than traditional media platform and encouraged others to participate in the election. As a result, he won the election. His victory represents a battle between "old politics" and "new politics."
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FROM THE SECTION |
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| His early challenges
When he was inaugurated as the president of Korea in 2003, he had many challenges to encounter. First, the burst of the credit card bubble created by his predecessor, Kim Dae Jung, has led to a stagnation in private consumption. Many Koreans including the poor are saddled with huge debts that they could not pay and must pay back. As a result, they stop consuming on goods and other services. The economy began to go through a slump.
Apart from that, the conservative politicians who did not like him from the beginning have always tried to find ways to challenge Roh or to reduce his power so he could not make any changes to would threatens many of these conservative politicians' special interests by using their domination of the National Assembly.
In his first year, numerous corruption scandals involving his close aides has been indicted. This began to undermine his presidency. The conservatives used this opportunity to reduce his power so that he will not have any chance to threaten their special interests. However, Roh stood firm and asked for a referendum whether he is fit to be the president of the country. The people gave him the second chance. It does not last long.
In 2004, he was impeached on charges of illegal campaign funding and violation of electorate laws by openly supporting the Uri Party. This created months of political vacuum. However, a fortunate event happened. Many Koreans especially the young opposed his impeachment and voted to send Uri Party a majority control of the National Assembly. Roh remained president. His party's control of the assembly gave him a free mandate to pursue his own reform agenda.
A turning point in Korean politics
Under Roh, the role of Korean political parties have deepened significantly and they have function as parties with distinctive platforms. Prosecutors have become much more open and independent to pursue any corruption cases involving major business leaders and politicians.
An important bill was passed to ensure chaebols (conglomerates) engaged in transparent management and to refrain from the old practices of accounting fraud and manipulation as well as protecting minority shareholders from any unfair treatment. In 2005, Korea launched the K-Pact which involved all walks of Korean society to work together to solve corruption voluntarily. As a result, the integrity level of public servants increased and corruption is declining steadily but surely partly due to the strengthened revision of the whistle blower system.
This system encouraged anybody who sees any unethical acts committed by public servants reports to the Korean Independent Commission Against Corruption. Korean parliamentary and local elections have become more transparent noticeably. Vote-buying, illegal political campaigning is disappearing rapidly. In fact, the 2004 and 2006 local elections are examples that Korean clean politics is taking root.
Apart from that, investigation into political corruption have been conducted at an unprecedented scale in both size and scope. Many powerful politicians were charged guilty of corruption. These signs of political events have signaled that Korea is serious about political transparency and will seriously punish the corrupt no matter how powerful he/she is. Notwithstanding though, the creation of a special investigation bureau that will investigate corruption cases of high-ranking officials are still pending and will ensure even greater transparency if passed by the national assembly.
Even in the business sectors, more conglomerates are beginning to pursue ethical management and to engage in more transparent management as they believe is the key to competitiveness in the global environment. The recent Hyundai flush fund scandal is a testament to Korea's strong commitment to root out or break the entrenched power of chaebols. I believe if the whistle blower system can be revised again as planned to include the private sector, corporate governance in Korea will be even more improved than now. In fact, many foreign media praised the Roh administration for having some success breaking the entrenched power of politicians and business leaders. This by no means is one of his greatest achievements as president so far. Korea's political landscape will undoubtedly become much cleaner in many more years to come.
However, political regionalism is somehow still deeply rooted in Korea despite Korea's maturing of its democracy. Many Korean voters still tend to vote their candidates based on regions rather than their visions and policies. Fortunately, the civic group has started to educate voters about their voting behaviors. Roh's success in mobilizing the power of the civic society will gradually overcome political regionalism. Solving regionalism takes time as it has become an embedded network of the old politics.
The biggest challenge to Korea's democracy though is to upgrade it to the level of democracy and dialog. For instance, the concepts of political coalition is still seen by Koreans to be act of collusion and secretive ties. However, many countries including U.S or Japan have coalitions. So, Korea's democracy have come a long way since the end of dictatorship in 1987 and is now in its final stage. Roh's political achievements have so far been quite unprecedented.
Roh's economic reforms
Roh is, by no means, a long-term oriented president if analyzed from an economic point of view. Unlike previous predecessors, Roh stood firm by principles by not resorting to short-term measures that would only invite burden to its economy in the long-term.
A good example would be the outburst of the credit-card bubble. Former president Kim would like to stimulate private consumption by encouraging the use of credit cards madly without proper supervision. In the short run, the economy will boom and it might win the support of the people. However, the economy had slumped as predicted by some economists in the longer run. Roh understood the important implication of sustainable economic growth in the long-run. He solved the credit card crisis by implementing a program that allows credit card defaulters a specified time period to pay back its debts on a gradual basis. As a result, credit card defaulters have declined steadily.
The Korean economy had started to get itself out of a slump in 2005. Private consumption started to increase but at a slow pace. However, the economy had not performed well so far throughout his period due to high oil prices and rapid strengthening of the won. These two external factors have made more costly for businesses and reduces their competitiveness and consumers' confidence in the economy had remain sluggish.
Nevertheless, the Roh administration have pursued a number of diplomatic policies with oil-rich nations to ensure a steady supply of oil to Korea. In the short run though, Korea will be able to absorb much of the external shocks better. In the long run, Roh had devised a policy to increase the use of alternative clean energy resources and to develop clean energy technology. With regards to the won, Roh's financial foreign exchange liberalization policy is to go to effect in 2009, two years earlier than 2011 as planned. Thus, should his policies being implemented as planned, Korean economy will be much less vulnerable to external shocks.
Currently, his administration is focused on resolving economic polarization comprehensively. Boost corporate investment as he believes is the key to create jobs and income. Recently, his government has announced a program which includes easing the limit the construction of factories in Seoul and its metropolitan areas, variety of tax breaks and incentives for small and medium enterprises (SME) and startups. Also, loans to SME have been expanded recently.
In fact, the formation of SME and conglomerate partnership is a positive features of his economic policies. Conglomerates provides the financial, technological, management know-how to SMEs. In return, these know-how gained by SMEs will be used to create innovative parts and material inputs for conglomerates. This is a win-win partnership which SMEs is expected to play a more important role in Korean economy.
The government has already decided to abolish limits on investment ceiling cap by chaebols. Now, what is left is when will the abolishment of the cap be passed through the national assembly. One important feature of his administration is vocal training. Already, the governments' employment service agency has committed to provide accessible and affordable training especially to low-income workers to upgrade their skills. So, they can earn higher income in the future.
Already, these economic policies might not produce immediate effect in the short run. Currently, the regulations that are deemed as unfavorable to Korean business sectors are what hinders the nation's economy. Fortunately, the government will carry out a large-scale deregulation program to ensure a favorable business environment. Apart from these economic policies, the government has in fact nurtured 10 new technologies growth engine by ensuring increased R&D investment starting in 2003 until 2013 to ensure Korea has a new competitive edge technologically over its neighbors and ensure a potentially large exports markets for these new technology industries. Undoubtedly, its long-run effect of these policies will gradually be felt by Koreans at large as it ensure large job creations and sustainable growth in income.
One major issue that Koreans should not overlook is the long-term negative impact of the aging population issue that the government is seriously dealing now. The government has reached an agreement to work together with all walks of society to raise the nation's birth rate to 1.6 by 2020. This target is difficult. However, the government's recent measures to improve the quality of child-care centers, financial incentives to encourages companies to hire working women and women to give birth to two or more children represent the strong commitment the government has to resolve the potential negative effect of an aging society.
Apart from that, the government's latest initiative to extend the retirement age of the elderly and to train them new skills to provide them jobs can help to ease the burden of the pension funds. Should these measures be implemented smoothly, child birth rate will increase, elderly will work longer and retire later. Then, more tax revenues will be available from younger labor forces driven by higher birth rate to finance the growing number of elderly retired from the labor market after their extended retirement period in the longer run. The latest good news is that television drama writer are voluntarily creating a TV drama to depict that it is good to have a family of its own with children. This will result a significant positive impact on how the young viewed towards having family. Gradually, problems of aging population will be resolved.
Labor-management relations
Korea has always suffered from constant labor strike. This has somewhat caused many businesses to move to countries where labor are cheaper and more flexible. Since 1987, wages have risen much higher than productivity which has led to high business cost and thus reduced competitiveness. Having recognized this serious impediment, the Roh administration has worked hard to establish advanced labor management relations based on dialog and compromise though met with constant labor management dispute.
Recently, labor issues have made quite a tangible progress. One of the two large labor union groups, Federation of Korea Trade Union has agreed to work together with the government to create favorable business environment to ensure steady and healthy economic growth. This is a radical departure from past labor practice. On Sept. 11, government, labor unions and business have agreed on the framework of the labor reform bill. The bill is now pending in the assembly. However, it has met considerable resistance from the other labor union group. It has engaged in violent protests of the bill.
Now, the government should also ensure that this group agrees fully with the framework of the bill. Otherwise, the labor reform bill will not be passes successfully. There is only a little more than a year left before the Roh administration ends. If the government can engage in a peaceful dialog with this opposing group to overcome disagreement, the labor reform bill will be passed successfully. This will herald a new chapter of labor-management relationship in Korean history. An advanced labor-management relations based on a culture of compromise, dialog and mutual trust will begin to take root. Roh in turn will be remembered for his contribution toward improving labor-management relations which has always been militant and violent. Korea's international image will greatly improve. The international community will see the dynamism of the country instead of remembering it for its violence and militant labor union.
Roh's challenges
Roh Moo-hyun often cannot speak in a language that ordinary people can easily grasp. Often, the message that he intends to portray is being received wrongly by the people. So, there is often a misunderstanding between the public and people. Many politicians and the conservative media often attacked him for being pro-welfare, anti-business and anti-American. Roh somehow has not been so successful in getting rid of this image.
Recently, many conservatives attacked Roh for being anti-American and putting his nation in danger by transferring the wartime operational wartime control to the Korean territory sometime by 2012 at the latest. They argued that it would increase the threat posed by the North. However, they argued without any logical sense. If the threat from the North is indeed great, why would the U.S. military officers agreed to transfer the operational control to South Korean hand.
In fact, this idea has been first proposed by former president Roh Tae-woo as early as the 1980s. What Roh should explain to the people is how would the transfer of control will not affect any possibility of the North's invasion of the South in order to garner their support.
Not only that, the recent government's probe into Lone Star case has ignited a foreign investors backlash in the country. Many investors claimed that the investigation is politically motivated. However, I do believe that the government does not intentionally discriminate foreign investors there. It is conducting the case according to the rule of law and principles.
Again, the problem is that the government has yet to come up with an explanation that can help to explain to foreign investors that the investigation is not politically motivated. The government must provide clear explanation if it were to prevent foreign investment from dwindling in the nation.
The way Roh portrayed himself to the business community is the partly the unintentional causes of Korea's low economic growth rate. The investment of the ceiling cap was created in the aftermath of 1997 financial crisis to prevent conglomerates from expanding recklessly that had led to the crisis. In his early years, Roh believed the cap should be abolished in many more year to come.
However, this ceiling cap has unintentionally put the nation into slow economic growth and stagnant job growth rate during his years. Chaebol leaders claimed they cannot make new investment in promising new industries. What Roh should do before he won the election is to propose a plan to abolish the investment ceiling cap that can boost competitiveness without undermining the economy just like the 1997 financial crisis.
Also, the limitation of construction of factories in Seoul and its metropolitan areas has also forced many factories to relocate to lower-wage nations. Thus, unemployment rate rise and income growth has stagnated. Private consumption has a whole declined. What has driven the Korean economy in recent years is strong exports and that is the key driver of corporate investment. If private consumption can be boosted alongside exports, unemployment will decline even further and Korea will post higher economic growth rate. The government's argument for its limitation is to pursue a more balanced growth rate so that more factories will be relocated to other provinces and contributes to economic development there.
Balanced development growth takes long time to realize. The current government's balanced development plan to nurture key industries based on key competitiveness of each province will gradually and steadily allow businesses to relocate their factories there when government provides the necessary financial support, subsides and other crucial infrastructures to these industries. It is unrealistic to expect businesses to suddenly relocate to outside Seoul area once the limitation has been put into effect. So, these underlying two factors are what made the current Roh administration's approval rating dropped to an all-time low level as unemployment rate particularly among the youths reach all-time high alongside the lagging income growth posted by the nation.
Real estate and free trade with the U.S. are very controversial issues. The government has been pursing anti-speculation real estate policies for eight times. Despite this, real estate prices in wealthy Seoul areas have risen and puts strain on hopes of ordinary people in Korea to own their homes. This is also a strong contributor for the current president's low approval ratings.
The latest policy to increase the supply of homes and rental units for low-income citizens dramatically over the next five years and to suppress demand by restricting mortgage and household loans on home purchases remains to be seen. Some analysts have casted doubts about the policy. However, I believe the latest increased reserve requirement ratio put forward by the Central Bank might make a difference this time in suppressing demands for loans in the real estate market.
Again, this remains to be seen. However, I do hope Roh's commitment to resolve this problem in cooperation with the Central Bank can lead to a decline in real estate prices. Then, ordinary people will have again hopes of owning their homes. One thing for sure though is that the beneficial effect of this policy will not be felt for at least another five years provided the latest anti-speculation package is successful.
Another contentious issue is KORUS-FTA. Several months of discussion have made slow progress in concessions in many sectors. The Korean sides want agriculture to be excluded but rejected by its American counterparts. It has also met considerable resistance from labor unions and farmers as they claim that it will put their economic conditions in jeopardy. However, the Korean government is right in pursuing this free-trade agreement as it will benefit the overall economic growth of the nation. It will boost growth through creating more jobs to sectors such as automobile, ships and others at which Korea is competitive at. It ensures a large free market for Korean goods.
The negative effects will likely be felt through agriculture and other service areas at which they are not competitive at. It will result in job loss. However, this free trade agreement provides a platform to enhance the competitiveness of Korea's service industry. In fact, the government has already announced important packages by providing generous financial and technological support to help these industries. Despite this, violent protests against KORUS-FTA continued. The Roh government should include these people in dialog to reflect their opinions about this free-trade agreement. He must also explain how his package can alleviate the impacts of the agreement to these vulnerable groups of people if the agreement is to proceed smoothly.
One area where Roh Moo-hyun administration can improve is to establish a culture of peaceful protests. Violent protests in Korea have escalated in recent years. The Korean publics grew at large tired to see violence. Roh should engage in a cooperative dialog with civic society and the governments to work out a framework of peaceful protests. This is crucial to enhance the image of Korea in the international world. Perhaps, Roh can take some ideas from several civic organizations who have their own ideas of peaceful protests for the government to pass it as a bill if the government is serious about zero tolerance for violence as stated over a recent violent protest against KORUS-FTA.
Conclusion
I have always admired Roh Moo-hyun's wisdom and his ethical principles to do whatever he believes is right for the country. He is not afraid to face up to the pressure of special interest groups. It is this courage that makes Korea today a much more open and cleaner country in the political atmosphere compared to several years ago.
Most importantly, his long-term oriented thinking is what makes me optimistic about Korea's future. He always pursued a balanced of healthy and sustainable economic growth based on friendly pro-market and equal income distribution. His vision for Korea will take place in the future.
Should his policies be implemented as planned, Korea will be ranked as one of the major leading economic power in the future. Also, I remember in his 2005 New Year speech that an advanced country must have elements of advanced economy, politics and society. With respects to society, Roh's relentless efforts to create a society of compromise and peaceful dialog will present himself a challenge that he must overcome if it were to succeed. As I've mentioned, engaging people in dialog and get them to renounce violence is a must if Korea is to become a mature democratic nation.
Roh must be perceived as a strong and effective leader by the people. He must start to speak in a language that people can grasp easily.
Roh is a man that does not always overlook his mistakes. The economic setbacks that his administration has unintentionally created is now being analyzed carefully by him. As a result, Roh's decision to abolish the investment ceiling cap and to ease the limit of construction of factories in Korea to boost competitiveness is a signs of welcome to the business community.
The other thing is that he is willing to pursue a policy based on friendly labor-management relations is a serious departure of his labor style of his early political career. Roh has undoubtedly matured throughout his tenure as a politician. His willingness to learn his lessons in combination with his strong principals will help turn Korea into an advanced country and an important role model in its economy, politics, society for many countries to follow and learn from. I have no doubt that this goal will come true within a decade as his policies are now being implemented.
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©2006 OhmyNews
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