Economic Democratization and a Prepared President

EAI has sought institutional measures for the desirable role, authority, and responsibilities of the president in the post-democratization era through projects such as "Conditions for a Successful Presidency" in 2002 and "Conditions for a Successful Presidential Transition" in 2007, responding to the era's demands arising from Korea's democratic progress. Now, there is an urgent need to establish stable institutions that can accommodate the increasing demands for political participation and communication within the changing political environment due to the spread of SNS technology.

Accordingly, EAI planned "Conditions for a Successful Presidency in 2013" to examine the performance and methods of state administration by past governments and to explore the conditions for forming governability and successfully fulfilling the presidential duties in line with the new political environment.

On June 21, 2012, the 5th roundtable was held, inviting Chairman Kim Chong-in of the Korea Economic Development Strategy Institute, who assisted President Kim Young-sam as Senior Secretary for Economic Affairs during the civilian government. The main points of the meeting are summarized as follows.

The Problem Lies with the President Himself

The biggest problem that led to the failure of past presidents was the person who became president. They possessed a strong desire to become president but lacked preparation or concrete ideas on how to govern the nation as president. Churchill stated that a national leader must have the ability to judge people and an understanding of history to know how a nation's rise and fall occur. A president must recognize the most urgent issues to be resolved in the given circumstances, but past presidents since democratization have lacked this. Consequently, they ended up relying on the bureaucracy to complete their terms.

In a rapidly changing international landscape and with constantly shifting public opinion, it is impossible to effectively manage state affairs relying solely on a conservative bureaucracy. Even a prepared president faces difficulties when confronted with reality; thus, those who make impromptu pledges during election campaigns and become president without any concrete plans are forced to depend on the bureaucracy. It is absurd to attempt reform with the bureaucracy. In a presidential system with a single five-year term, if a proper agenda is not set and communicated to the public within the first year of the term, smooth state administration cannot be expected. The failure of President Kim Young-sam was also due to the lack of his own agenda. After taking office, he managed state affairs by reacting to public sentiment based on political intuition. Bureaucrats tend to follow the president, even when problems arise. This kind of irresponsible state administration ultimately led to the IMF crisis.

We Must Break Free from the Park Chung-hee Complex

Various socioeconomic problems accumulated during the 25 years of military rule, including 18 years under Park Chung-hee and 7 years under Chun Doo-hwan. However, the structural conflicts have not been resolved during the 25 years of democratic political processes since democratization in 1987, under the governments of Roh Tae-woo, Kim Young-sam, Kim Dae-jung, Roh Moo-hyun, and Lee Myung-bak. This is because all past presidents focused solely on economic growth, using President Park Chung-hee, who laid the foundation for economic development, as their model. The IMF crisis was a golden opportunity to reform Korea's distorted economic structure, but the Kim Dae-jung administration chose the easy path of economic recovery through public funds to bail out the chaebols, which ultimately resulted in strengthening the power of the chaebols.

The Roh Moo-hyun administration was no different. Lacking preparation for state administration, it implemented economic policies that relied on policy ideas from chaebol-affiliated research institutes. This is why Samsung Chairman Lee Kun-hee praised Roh Moo-hyun as the vision and hope for Korea in the 21st century. Ironically, during the ten years of left-leaning governments, the power of the chaebols grew, and polarization in our society deepened. All of this stemmed from the inability to break free from the dogma of state administration that sought to overcome President Park Chung-hee's economic achievements. The "Economic President"

proclaimed by President Lee Myung-bak can be seen as the most faithful follower of the Park Chung-hee model. The phenomena of Mayor Park Won-soon and Professor Ahn Cheol-soo should be understood in this context. While democratization has progressed with the development of public consciousness, the socioeconomic contradictions of the Park Chung-hee era remain unresolved. If the severe polarization issue is not properly recognized and addressed, the success of the next president cannot be expected.

We Must Push Forward with Economic Democratization

Korea has the worst income distribution in the world after the United States. The results of government-led economic management have led to today's severe 20:80 polarization society. Since the Kim Young-sam administration, during the process of political democratization, deregulation, market opening, the demise of state-controlled finance, and the increasing dependence of political parties on chaebol funding have weakened government power. Meanwhile, the influence of chaebols has concentrated and strengthened, reaching a point where state policy functions are overwhelmed by market power. They also influence the legislative process through lobbying. It is no exaggeration to say that the economic forces in Korea have become so powerful that they effectively dominate society as a whole. Therefore, unless the state regulates the excessive tyranny of economic forces, the problems of deepening polarization cannot be resolved.

The essence of the conflict structure in Korean society lies with the chaebols. Chaebols must exercise self-restraint. However, human nature's inherent greed makes this difficult. Therefore, what the invisible hand (the market) cannot do, the visible hand (the government) must do. Economic democratization is about establishing institutional safeguards to control such greed. It is similar to creating rules like yellow or red cards in a soccer game. During the process of pursuing economic democratization, economic forces will strongly resist, so a president with absolute public trust must bring about change through the power of the people. President Roh Moo-hyun appropriately grasped the situation of the times and advocated for resolving economic polarization and achieving social integration, but he ultimately failed due to a lack of concrete policies and personnel. In this regard, a prepared president with a clear vision for economic democratization and concrete policy capabilities is necessary.

We Must Create a Prepared President

There is an argument for constitutional amendment to a four-year, two-term presidency as an institutional condition for a successful presidency. However, it is not an issue of the system. There is no guarantee that a four-year, two-term presidency would be successful. In the current political reality, changing to a four-year, two-term system would only serve as a preparation period for an eight-year presidency. If policies and personnel are prepared before assuming the presidency, five years is by no means a short period. If a president presents a national agenda that responds to the times and gains public support, they can sufficiently achieve what they aim to realize.

To become a successful president, one must accurately understand the nation's reality and prepare policies and talent to address it. As universal conditions for success, a president must understand national security, the economy, and education for the future, and possess diversity in response to changing times. Accordingly, one must prepare in advance who will be appointed as Minister of Foreign Affairs and Trade and Minister of Education, and who will oversee the economy. In particular, the Chief of Staff of the Presidential Office is a crucial position that determines the success or failure of a president, serving as the brain of state administration. The problem with past governments has generally been the appointment of individuals from election campaigns who lacked administrative capability. This highlights the importance of appointing talented individuals. Problems are inevitable when someone unfamiliar with the nation's operating system becomes Chief of Staff. Furthermore, the fragility of Korean democracy lies in the fact that it does not have a system where parties take root and govern. Parties are repeatedly formed and dissolved around influential presidential candidates or incumbents. Consequently, unlike in the United States, there is a limitation in that competent individuals who can faithfully carry out government positions are not provided through political parties. This suggests that competent politicians require training through the political process.

Additionally, there are points to be cautious about for the successful execution of presidential duties. First, one should not excessively rely on appointments of close associates. To become a successful president, one must possess the ability to identify and recruit talented individuals. Moreover, as past presidential failures have shown, one must not be excessively greedy and should maintain a clean entourage. In particular, one must be completely free from the influence of interest groups or economic forces.■

Chairman Kim Chong-in earned a Ph.D. in Economics from the University of Münster, Germany, and served as a professor of Economics at Sogang University from 1973. He served as a four-term member of the National Assembly from 1981 to 2004, and held positions as Minister of Health and Social Affairs in 1989 and Senior Secretary for Economic Affairs at the Blue House in 1990. He is currently the Chairman of the Korea Economic Development Strategy Institute.

Moderator

Lee Sook-jong, Director of EAI, Professor at Sungkyunkwan University

Participants

Kang Won-taek, Professor at Seoul National University

Park Hyung-joon, Professor at Sungkyunkwan University

Yoon Sung-yi, Professor at Kyung Hee University

Lee Gon-soo, Senior Researcher at EAI

Lee Nae-young, Professor at Korea University

Lee Jae-yul, Professor at Seoul National University

Jang Yong-seok, Professor at Yonsei University

Jeong Won-chil, Senior Researcher at EAI

Jeong Han-ul, Senior Researcher at EAI

Han Kyu-seop, Professor at Seoul National University