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The Political Economy of Corruption in Korea(3)


Corruption kills people; Corruption ruins the economy; Corruption violates human rights.


Joseph H. Chung (정희수), Ph.D., Professor of Economics at Quebec University in Montreal (UQAM)



(지난 호에 이어)

 The stage of the corruption community came in the 2000s during which the progressive government of Kim Dae-jung (1997-2002 and Rho Moo-hyun (2003-2008) governed the country.

 During this period,, the corruption community of conservatives had to slow down their activities of corruption. But, it invested money to widen and strengthen its network.

 However, since Lee Myong-bak took power in 2008 and Park Geun-hye succeeded him in 2013, the conservative government ruled for 9 years (2008-2017).

 During this period, the corruption community expanded and intensified its corruption activities.

 In fact, the degree of corruption during this period was even greater than that of the corruption under the military dictatorship of Park Chung-hee and Chun Doo-hwan.

 As a result of their crimes, Park Geun-hye is sentenced 25-year imprisonment, while Lee Myong-bak is judged for 15-year imprisonment and accused for additional crimes of corruption. Park Geun-hye is pardoned by President Moon Jae-in for her health reason.


3. Strategy of protecting the benefits of corruption

 The strategy of protecting the interests of the corruption community included the following.

 First, in order to silence the voice of opposition, the conservative government massacred a few hundred thousand innocent people under Rhee Sygnman, Park Chung-hee and Chun Doo-hwan.

 Second, the freedom of press was completely silenced either through the brutal police force or through bribe money. The sad situation is that majority of press cannot survive without Chaebols' advertising fees which are used as bribe money

 In Korea, there are three dominant national newspapers: Chosun Ilbo, Joong-ang Ilbo and Dong-ah Ilbo (Cho-Joong-Dong). These newspapers may account for more than a half of the circulation of major newspapers.

 Chosun Ilbo and Dong-ah Ilbo exited during the Japanese occupation of Korea (1910-1945) and they are known to be pro-Japan and pro-conservative; they have been suspected to play major roles in protecting the corruption community.

 Third, ordinary Koreans who were suspected for being a part of pro-progressive and anti-corruption force were the targets of false accusation for being North Korean spy by the intelligence services; they were victims of police harassment and other unlawful means of oppression.

 Fourth, authors of academic publications unfavourable to the conservative government were deprived of research funds.

 In Korea, there is a group of academics, called "the New Right" who justifies the Japanese invasion of Korea. They have revised the modern history book in which they have written that Japan had come to Korea for its economic development for Koreans.

 They deny the existence of the crime of sex slavery of 250,000 Korean teen age girls committed by Japanese soldiers during WWII.

 The New Right academics along with the conservatives have given themselves the role of criticizing the progressive force for being "Red" (Pal-Gaeng-Ie) in order to induce voters to vote for the conservative party.

 Fifth, about 10,000 artists, singer, movie actors and authors of novels who were not for conservative government were put on a black list and excluded from government grants. The director of the movie "Parasite" Bong Joon-ho was also on the black list along with his crew.

 Sixth, the corruption community provides money to several civic pro-conservative movements including the association of Korea War veterans and various organizations of the elderly. These people participate, in street demonstrations, to criticize the progressives. They are paid by Chaebols for their participation.

 Seventh, the intra-group marriage is another way of widening and strengthening the corruption community. The most visible cases are the marriages between families of leading conservative politicians and Chaebol families


4. Negative Impact of Corruption

 The major negative impact of corruption may be grouped into two groups: economic impact and moral impact.

4.1 Economic Impact

 In the short run, corruption can weaken the competitiveness of national economy, while, in the long run, it may bring decades-long deflation as it has happened in Japan.

 We may separate micro-economic impact and macro-economic impact.

4.2 Micro-economic impact my take various forms. The corrupted way of supervising competition may favour big businesses which may prevent the market from assuring fair competition leading to the loss of competitiveness of small- and medium-sized firms (SMEs).

The government's bailout operation of insolvent firms in exchange of bribery would simply prolong the life of insolvent firms and, as a result, it could weaken the competitiveness of the Korean industries.

The corrupted system of government procurement may result in buying services and goods of unreliable quality. Korea bought once a submarine which did not submerge in exchange of kick-back.

 The macro-economic impact of corruption is as bad as the micro-economic impact.

 The pro-export policy imposed upon by the oligarchy may make GDP increase, but exports do not create much the trickledown effects; it does not create jobs; it increases unemployment; it makes income distribution unfair and unequal.

 In Korea, 99.9 % of the total number of firms is small-and medium-sized firms (SMEs). They create 87% of jobs. But, the oligarchy has adopted pro-Chaebol and anti-SME policies.

 This policy has contributed to the increase in exports. At the same time, it has surely boosted the income of the Chaebols. The increase of Chaebols' income meant more bribe money available.

 Another feature of pro-Chaebol policy was the exploitation of the SMEs for the benefit of the Chaebols. The conservative government allowed the big companies to steal technologies developed by the SMEs, violate the contracts, delaying the payment due to the SMEs and cutting down unilaterally the price of products sub-contracted.

 The results of these policies are serious enough; they have prevented the development of the SMEs; they have destroyed jobs accessible to ordinary people. The worst thing was that these policies have delayed the development of domestic industries and increased the possibility of chronic deflation.

4.3 Moral impact

 The moral impact of corruption is even more destructive than the economic impact.

 In Korea, there is an old saying: "The downstream water becomes clean, if the upstream water is clean" (다음 호에 계속)




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