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Rivals clash over chaebol reform

Three candidates pitch economic democratization, welfare policies

Presidential candidates Park Geun-hye of the Saenuri Party and Moon Jae-in of the Democratic United Party participate in the second television debate hosted by the National Election Commission at a KBS studio in Yeouido, Seoul, Monday. (Yonhap News)
Presidential candidates Park Geun-hye of the Saenuri Party and Moon Jae-in of the Democratic United Party participate in the second television debate hosted by the National Election Commission at a KBS studio in Yeouido, Seoul, Monday. (Yonhap News)

Three presidential candidates squared off over the conglomerate-led Korean economy in the second television debate Monday, as their campaigns revolve around economic democratization and government accountability, which are considered key to helping low-income citizens.

Park Geun-hye of the Saenuri Party and Moon Jae-in of the Democratic United Party locked horns over whether the worsening polarization, growing household debt and squeezing of livelihoods were the result of the former Roh Moo-hyun administration or the incumbent Lee Myung-bak government.

Park, a former chairwoman of the ruling party, continued to distance herself from the Lee administration, while Moon, former chief of staff to Roh, said he accepted the shortcomings of the past government but that he was ready to do a better job this time.

Lee Jung-hee of the left-wing Unified Progressive Party butted heads with both Park and Moon with her radical policies, headlined “dissolution of chaebol,” and also took repeated shots at the nation’s conglomerate owners, including Samsung Electronics chairman Lee Kun-hee and Hyundai Motor Group chairman Chung Mong-koo, as a source of corruption beyond the control of the law.

The mood started off on a calmer note than the first debate on Dec. 4, with each candidate sticking more closely to the subject matter and keeping to the allotted time.

Apparently aware of the controversy that the previous debate entailed due to bold attacks deviating from the designated subject of the debate, the moderator repeatedly urged the candidates to stick to the topic.

But their free discussion session toward the end grew more heated as Park and Moon unleashed attacks against each other over their plans to fund their welfare pledges. Park and Lee also exchanged barbs over Lee’s demand that Park clarify her tax records and Park’s denouncement of Lee’s pledge to increase taxation as unrealistic.

The 100-minute debate organized by the National Election Commission as the second installment of three invited the candidates from the three political parties with at least five seats in the National Assembly. The next debate ― on the low birthrate, aging society and science and technology ― will be held on Sunday.

The candidates opened with two-minute keynote speeches, in which the three vowed to prop up people’s livelihoods and expand the middle class.

The question and answer session between the candidates concerned the economic slowdown, economic democratization and job creation and stability.

“The real estate price surged to record highs as polarization aggravated and (college) tuition also surged to record highs during the Roh administration. The problems faced by the Lee administration were mostly the extension of such problems,” Park said to Moon’s question on whether she should be responsible as the ruling party candidate for the “failed policies” of the current administration.

Appearing prepared for Lee’s bold offensives, Park struck back when she was prodded to spell out the current and next year’s minimum wage, criticizing Lee for her approach to the debate.

“You come to a debate and ask me questions as if you’re playing a game of 20 questions, hoping to embarrass me if I happen not to know something. Such way of questioning is not a desirable way of debating,” Park said.

Moon emphasized his readiness to deliver a better administration.

“The Roh administration has already been judged for its shortfalls. It is also commonly understood that the problems intensified during the Lee administration. This year’s election in 2012 is the judgment of the five years under the Saenuri Party,” Moon said to Park’s question on Moon’s pledges that she said was a repeat of the Roh government.

Moon, in the meantime, criticized Lee’s pledge as “idealistic,” suggesting a rapid increase in taxation could negatively impact the economy.

Macro economics

Regarding measures to tackle the global slowdown, Moon focused on reviving the domestic market by supporting people on low and moderate wages and small- and medium-sized enterprises.

“The effect of the government’s economic policies should be spread all around. That is the way to create a positive feedback loop in which spending is stimulated, leading to a revival of the domestic market and then to revival of the economy,” Moon said.

The DUP candidate also said that the financial burden placed on low-income groups needed to be reduced through measures including an interest rate ceiling and repayment period extensions.

Park said that economic policies should be divided into short- and long-term measures, with the main focus of the short-term plans being placed on addressing the increase of household debt, which stands at about 938 trillion won. Under Park’s plans, a 18 trillion won fund will be set up to reduce the burden on the 3.2 million people who are unable to pay back their loans.

“In the long term, the economy’s fundamentals need to be changed. One method is to apply science and technology, information communication technologies to all industries,” Park said.

“By making large scale investments, (I will) transform the economy from being a follower to becoming a leader.”

During the time allocated for debate between the candidates, however, the two main candidates scrapped over the failures of past and current administrations. Park attacked Moon, placing the blame for the current slowdown at the feet of the Roh Moo-hyun administration, while the DUP candidate returned fire, saying that related developments seen during the previous five years would be judged in the upcoming election. 

On economic democratization

The three candidates each championed their own versions of economic democratization.

Park described her version as a way to create a transparent and fair market where anyone who tries hard can receive due compensation and realize one’s dream and purpose.

She also mentioned that she would strictly curb conglomerates’ unfair trade, advancement into businesses better fit for smaller merchants and illegal activities.

“As one newspaper judged, my policy may appear to be the weakest among the candidates, but it is the most effective and realistic,” Park said.

Moon described his vision as a way to reform chaebol and to fight an unfair market economy, and to maximize the benefits of a market economy for the economic community as a whole to grow together.

“I believe that chaebol must be reformed, but not to an extent where it would hurt the proper function of conglomerates and their global competitiveness. My purpose of chaebol reform is to ensure that they can be loved by the people,” Moon said.

The two also butted heads over the investment ceiling, which Moon pledges to revive, and how to deal with existing cross-shareholding, which Moon vows to start dissolving after a three-year grace period.

Moon also targeted Park over her reported discord with her key economic democratization policymaker Kim Chong-in, saying that her tax-cut pledges favored the conglomerates.

Park, in response, said economic democratization was not only about dissolving cross-shareholding, which she said would require huge investment that may negatively affect the economy.

Lee, in her part, said her economic democratization would be realized if Lee Kun-hee and Chung Mong-koo “returned from their throne that is placed beyond the Constitution to become ordinary citizens that are equal before the law.” 

On employment and labor conditions

On boosting employment and stabilizing labor conditions, the DUP candidate took the lead in the talks, underlining his slogan of “employment president.”

“Good jobs are the best welfare plans and sustainable growth engines for the nation,” Moon said.

“Only by creating high quality jobs can we increase income, promote consumption and stimulate the domestic economy.”

He went onto say that he would create 400,000 new jobs and that the working hours will be reduced as part of the efforts to improve the labor environment.

Moon also pledged to gradually halve the number of irregular workers during his five-year term.

“I will set the example in the public sector by starting with public organizations, and also reinforce the legal requirements for layoffs,” he said.

The opposition candidate moved on to blast his conservative rival’s employment policies saying that Park’s chaebol-centric policies were not viable when 88 percent of the country’s jobs were provided by SMEs.

Park, on the other hand, underlined the importance of employment training and a punitive system to stop corporations from job discrimination.

“To solve the issue of youth unemployment, I suggest a system which focuses on the employee’s passion and capabilities,” she said.

“I will also provide the older generations with an education system so that they may prepare themselves for re-entry to employment before retirement.”

The right-wing candidate, too, agreed that the initiative should be taken in the public sector, before being expanded to the private sector.

She then criticized Moon’s plan to halve the number of irregular employees, claiming that it would create a vicious circle in employment.

“Companies, when faced with reinforced regulations, will reduce new employment or even fire their employees,” Park said.

Moon, however, refuted that the changes would be made through the government’s financial and systematic support, not through punitive regulations.

“My plan is about offering benefits such as tax cuts to firms, based on their rate of converting irregular jobs to regular ones,” he said.

On welfare

On welfare issues, Moon reemphasized that inclusive growth was key to rebuilding the middle class and job creation.

“Investment in welfare is the state’s duty and a growth policy for all. We should focus on welfare policy at a time when the economy faces risks,” he said. The liberal politician pledged to increase state subsidies and halve the costs of child care, education and medical services for the elderly.

His welfare package would create 400,000 jobs including day care teachers, caregivers and social workers, Moon added.

Park stressed that she would introduce a comprehensive welfare system tailored to all age groups and build stable welfare financing system.

“I will secure 60 percent of (welfare) resources by reducing the government’s inefficient spending and the rest by expanding tax revenue,” she said. Her government would create 27 trillion won a year or 135 trillion won over the next five years to implement comprehensive welfare policies, she said.

Park criticized Moon’s plan to expand insurance coverage for all inpatients by 90 percent would increase taxpayers’ financial burden.

Moon fought back, criticizing her plan to cover costs for people receiving treatment for only four classes of illness including cancer and cardiovascular disorders. He said it abandoned patients suffering from other serious diseases.

Moon said her plan would cover only 15 percent of 3.5 million patients those who pay more than 5 million won of medical costs a year.

Park argued that she would gradually expand insurance coverage for other diseases by checking the government’s capability to cover additional expenses. 

By Lee Joo-hee

Cho Chung-un, Choi He-suk and Bae Hyun-jung contributed to this article.

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