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[Opinion] Just Don’t Change for the Worse . . .

Posted December. 15, 2001 13:16,   


Sometimes, North Korean media`s news reports on their economy amuse us. But when we understand that they are forced to make absurd arguments, we begin to feel sad for them. One feels that North Korea has gone into a well-guarded laboratory to show those on the outside the terrible economic cost of living behind locked a gate.

The recent article on the economy that appeared in `Labor News` is a case in point. The article, which stressed the specialization of factories and `businesses`, said, "It is a waste to use material and human resources to produce items that are not specialized. Only the items that the party has authorized must be produced."

This means that innovation and manufacturing new products through production experience are not permitted. Even if North Korea has little concern for the international economy, this will make it difficult for the country to survive. The article insisted, "This is the most important principle for improving and perfecting a socialist economy." but why does North Korea ignore the fact that this principle ruined other socialist nations around the globe?

The electronic company Sony put out a digital camera one day and threatened Kodak. Kodak, in turn, developed computer photo capacity and is competing with Compaq. Computer companies are seeking business solutions and entering the field of management consulting (Thomas Freedmun `Lexus and the Olive Tree`). This is one face of the fiercely competitive global economic world. According to the North Korean logic, Sony, Kodak, and Compaq must never change their business and produce only the permitted items, regardless of whether they will lose their competitive edge and go out of business.

If, at this point, we put the North Korean government alongside our own administration`s economic sector, the similarity in perspective is truly amazing. Our adminstration`s regulation which blocks businesses from moving into new domains is very much like the North Korean side. Conglomerate giants who are extending their influence like octopuses must be checked and we must be aware of their attempts to pressure the administration and dilute the reform policy. Yet, to keep this kind of unrealistic corporation regulations and tell the giants to keep quiet is too much.

The major American corporations Yahoo and Lycos are expanding their internet business across Korea while `Simmani` has been under fire because conglomerate giants have invested in it. World famous chain stores such as Carrefour and Walmart are sprouting up in regional cities but domestic shopping malls, which can compete with them, cannot set up new branch stores because they are large-scale corporations. How can this be explained? We are watching a strange game where we have to get in the ring with one hand tied behind our backs against a foreign opponent who is several times larger.

What country has regulations that restrict total investment or things like the 30 major group limit? The Korea Fair Trade Commission claims that these regulations block conglomerate giants from taking bank money to build insolvent businesses. Recently, however, they have led to an explosive increase in household loans while corporate lending has decreased. The Ministry of Finance and Economy is urging for more money spent on corporations but to no avail. President Kim Dae Jung said, "Insofar as banks decide the amount of loans for corporations based on their profit level, we have succeeded in liberalizing finances," but the reality denies this.

What is the difference, then, between insisting on these regulations and the North Korean`s emphasis on `specialization`? These regulations were introduced in 1987. The world has change a lot since then. The only thing that has not changed is the group of people in government who made the policies and have not changed their perspectives.

Digital technology has come on to the stage and the divisions between national economy, types of industry, and manufactured goods have all but disappeared. It is a tragedy that under a pro-capitalist, market economy administration there are still people who want to enjoy the power to impose such worn regulations. The economic damage reaped by the greed of conglomerates should be criticized, but this should not stop the government from changing perspective from the past era of development economy and turn to the brilliant globalized economy. If the present administration cannot actually make improvements, its primary task should be to refrain from making things worse and turn over its reins to the next administration.

Lee Kyu-Min kyumlee@donga.com