Koreans to Roh: What's the Plan?


By Moon Ihlwan South Korean voters undoubtedly aspired for change when they elected maverick human-rights lawyer Roh Moo Hyun as President in December, 2002. His promise to clean up corruption struck the right chord with an electorate disgusted by money's influence on politics, democracy, and decision-making. And Roh's mandate appeared to have been reaffirmed in April, when his ruling Uri Party snatched parliamentary control from the conservative opposition, which had enjoyed two-thirds majority. For the first time in South Korea's history, both the presidency and the National Assembly are controlled by liberals.

As promised, Roh has delivered changes. But his approval rate was just 26% in a recent survey by Gallup Korea, only five months after pulling off his second come-from-behind election victory. The reason: Roh's failure to convince the public of his agenda. In fact, Koreans still don't know what his vision is. The President has been brilliant in upsetting vested interests but weak in presenting ideas for the future.

"Roh is determined to destroy the old order," says Kang Won Taek, political scientist at Soongsil University in Seoul. "What's really missing is 'then what?'"

WEAKENING THE WEALTHY. Roh insists that he's doing away with the distorted institutions and practices put in place by those who collaborated with the military dictators who ruled since the early 1960s and the Japanese colonialists who occupied Korea before its liberation in 1945. But his policies are deepening ideological and generational rifts between the young liberals and older conservatives. Indeed, the President and his ardent followers are preoccupied with weakening the wealthy, connected conservatives. That's worrying because Korea must focus on improving its competitiveness against a rapidly industrializing China, and a polarized nation won't be able to do that.

The latest issue obsessing the political elite: Roh's call for a sweeping parliamentary inquiry into who may have benefited or suffered from working or refusing to work with the Japanese colonial rulers and military dictators who pursued economic development at the expense of democracy and civil rights. The Grand National Party -- the main conservative opposition -- sees the investigation as an attempt to undermine its leader, Park Geun Hye. His father, Park Chung Hee, came to power through a 1961 military coup after earlier serving as a junior officer in the Japanese military.

There's nothing wrong with Roh's intent to shake things up. Korea has never addressed its past properly. The question is one of priority. These noisy, furious confrontations push to the back burner such important issues as Korea's diminishing manufacturing industries, losing jobs to Chinese workers, how to care for an aging population, making Korea a regional business hub, and improving personal wealth. The President's hostile attitude toward the Establishment makes it impossible to work with the conservative opposition. They were in power from 1961 to 1998, and they're largely the targets of his reforms.

SHIFTING GEARS. To be fair, Roh's drive to correct past wrongs has resulted in some significant changes. State prosecutors and the Agency for National Security Planning, formerly called the Korean Central Intelligence Agency, have become fairly independent and no longer serve the President's political purposes. The Uri Party also sets its own agenda, a departure from the customary practice of the President dominating party politics.

But the emphasis on looking to the past raises questions about Korea's future. Consumer confidence has been shattered, and businesspeople refuse to make investments, citing uncertainties.

In the past economic policies were in the hands of bureaucrats who had excessive control but at least were consistent. In Roh's 18 months in office, policy has shifted according to his administration's political and economic needs. Roh first talked about the need for continued reforms, which foreign investors welcomed. Months later, his economic team switched gears, saying stability, not radical changes, was needed. Then Roh stressed growth, citing the need to double per capita income to stay ahead of China. Now the mantra is fairer distribution.

"DELAYING RECOVERY." Confusion persists on other issues as well. Roh's administration launched months-long debates aimed at improving efficiency of the Financial Supervisory Commission and its policy-implementing body, the Financial Supervisory Services. The goal: to lessen their dependence on Korea's Finance Ministry, which has often pressured them -- successfully -- to bend principles to minimize ripples in the financial markets. A plan announced in August, however, will let the Ministry go about its business as before, which ensures its continuing influence over the watchdogs.

"This zigzagging expands uncertainties, worsening business confidence and delaying recovery," frets Korea University business professor Jang Ha Sung.

That's an indulgence Korea can ill afford. Roh must act presidential by presenting a clear direction and rallying people around a convincing vision. Waging a political battle with the conservative elite will likely deepen fears for the economy. Too much is at stake in the remaining 3 years of his term for him to keep experimenting. Roh has a chance to capitalize on the opening up of the Chinese market, provided he can turn Korea into a flexible economy that's able to generate jobs as fast as it loses them.

If Roh doesn't, he risks reducing Korea to an insignificant economy in Northeast Asia that merely sits between giant powers China and Japan rather than takes its place alongside them. Moon is BusinessWeek's Seoul bureau chief


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