Korea, Republic of - Domestic policy



A major domestic issue that Roh must address is how to redefine the relations between government and business. In the past, close ties between the public and private sectors assisted chaebols (large conglomerates that dominate the economy) in evading economic accountability. The government protected their inefficient ways and encouraged loans without regard to profitability. The chaebols, in return, supported military involvement in politics and, more recently, funneled large sums of cash into political campaigns. Such a system undermined Korea's young democracy and stifled new and smaller corporations from emerging.

Many economic and political analysts point to these factors as a root cause for recent economic turmoil. Roh is expected to restrain the economic and political influence of the chaebols. At the same time he needs to relieve the concerns of the chaebols about his ability to manage a complex economy while maintaining cordial relations with labor unions, and Roh's experience as a defender of labor rights will play a role in this regard. Without the cooperation of the chaebols, economic revitalization would prove next to impossible. Roh has said, however, that the government should place a ceiling on chaebols' investment in accordance with their assets, and to regulate corporate dominance of financial institutions.

Roh is expected to continue the economic reforms begun by his predecessor Kim Dae Jung but with emphasis on the disadvantaged. He has said it is important to "harmonize economic growth with the distribution of wealth." He has also attempted to link relations with North Korea to South Korea's future economic growth. Roh stated: "Based on inter-Korean rapprochement and cooperation, we have to build the nation into a new Asian business hub. So North-South reconciliation should be achieved."

Upon being elected, Roh said he would target corruption and cronyism in government, and would begin reforming the MDP. He attempts to do this by bringing younger individuals into politics and making the MDP a pan-national organization in doing away with regional interest groups within the party. He stated his willingness to work with the opposition.

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