In South Korea, the year has kicked off with a bang. On January 8, the South China Morning Post reported that President Moon Jae-in had made some drastic changes in his administration. Moon, who was scoring big in the polls in the months after his inauguration in May 2017, has seen his popularity erode along with his country’s economy.
How to turn things around? Fire some people. Moon has dismissed his chief of staff, his senior political affairs secretary, and his senior press secretary. No sign, however, of him doing what he actually promised to do when he took office – namely, tame the chaebols, the corrupt, family-run business empires that are at one the engines and the anchors of the South Korean economy.
On January 10 came another tidbit of news from the Blue House (which, of course, is Seoul’s answer to the White House). While Trump was slashing taxes and regulations, reported the Australian Financial Review, Moon was trying to cure his country’s economic ills by doing the opposite. Surprise! “So far,” wrote Michael Schuman, “it has not worked out as planned.”
Joblessness is up. Growth is down. Wages are flat. Both employers and employees are restive. And small businesses are suffering. Their costs are rising, but they’re not in a position to pass those costs on to buyers. Consequently, they’re shedding employees and finding other ways to cut corners.
All this might have been prevented if Moon had kept his promises and tackled the Great White Whale – the chaebols. But he chickened out. He would probably reject that characterization, pointing out that his budget for 2019 contains policy changes that are intended to reduce the power of the chaebols and help out smaller enterprises.
Others might argue that these initiatives are too little, too late. That Moon, take him for all in all, is essentially kicking the ball down the field. And allowing the South Korean economy to continue experiencing the consequences of his relative inaction.
Then, on January 11, Choe Sang-hun of the New York Times reported on a unprecedented development in South Korea. Yang Sung-tae, a former justice of the Supreme Court, had been confronted by prosecutors over charges that he had “conspired to delay a case that could upset relations with Japan.”
The case was brought by a group of South Koreans who, during the Japanese occupation, were subjected to forced labor by such firms at Mitsubishi. Yang will probably be indicted – a first in the voluminous annals of modern South Korean corruption.
Moon’s government, then, is on shaky ground. The South Korean judiciary has experienced a major embarrassment. The country’s small businesses are even more precariously positioned than they were a couple of years ago. And the ordinary citizens of South Korea are having more and more trouble making ends meet.
But amid all this loss and insecurity and scandal, the chaebols, as always, continue to stand strong.
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