[Editorial] Sales decline

About 4 in every 10 units of the nation’s top 10 conglomerates saw their sales fall during the first half of the year.Data from the Korea Exchange showed that 26 of 68 listed firms, or 38.2 percent, of the 10 business groups suffered a drop in sales on-year.On a consolidated basis, five of the 10 groups reported decreases in revenue. SK topped the list with 6.8 trillion won ($6.1 billion), followed by POSCO with 6.6 trillion won, Hyundai Heavy Industries with 4.1 trillion won, LG with 1.4 trilli

Aug. 19, 2016

[Editorial] Time for restructuring

The Korean business community is abuzz with talk of corporate restructuring, as a special law took effect last week to help companies suffering from an oversupply in their industrial sectors reorganize their businesses.The Special Act on Corporate Revitalization, commonly called the “one-shot act,” is designed to encourage companies to make voluntary and pre-emptive restructuring efforts before their businesses go from bad to worse.It provides a wide range of benefits to companies whose restruct

Aug. 18, 2016

[Editorial] Unstable regime

North Korea’s deputy ambassador in London has defected to South Korea with his family, suggesting the growing instability of the North’s regime under a ruthless and reckless young leader.The Unification Ministry on Wednesday confirmed domestic and British media reports that Thae Yong-ho, a minister at the North’s embassy in London, has defected. The ministry said Thae and his family arrived in Seoul, denying media reports that they were seeking asylum in a third country. Thae is one of the highe

Aug. 18, 2016

[Editorial] Crooked bench

There is no doubt that the judiciary should have the highest ethical standards. The corruption scandal involving the founder of the Nature Republic cosmetics firm shows that it is not the case in Korea. Prosecutors are investigating a senior judge who allegedly kept suspicious ties with Jung Woon-ho, the central figure in the scandal that has already sent a former senior prosecutor and a former senior judge into custody. Prosecutors said the senior judge, with the help of a plastic surgeon who a

Aug. 17, 2016

[Editorial] Hard to change

Two recent events gave clues as to what is on President Park Geun-hye’s mind. The first one is her latest Cabinet appointments and the second one is her Liberation Day address. On Tuesday, Park replaced three Cabinet ministers and four vice minister-level officials, which, as opposition parties pointed out, fell far short of public expectations. It is true that unlike most of her predecessors, Park refrained from using appointments of senior officials for political purposes -- like defusing a cr

Aug. 17, 2016

[Editorial] Rally’s continuation

The US’ three major stock price indexes including the Dow Jones industrial average reached an all-time high last week in the wake of brisk operating performances of major US businesses.The noteworthy American rally is fueling expectations that the Korea’s benchmark Kospi -- which is also a bull market -- could break through the physiological barrier of 2,100 points in the coming weeks.The Kospi, which peaked at 2,104.41 on July 3, 2015, has ranged between 1,830 and 2,030 over the past year. But

Aug. 16, 2016

[Editorial] Eleventh in GDP ranking

South Korea regained its position as the world’s 11th-largest economy in 2015. Its gross domestic product ranking had peaked at 11th place in 2006 but dropped to 13th in 2007 and 15th in 2008. It was 14th from 2009 to 2013 and 13th in 2014. 　However, the higher ranking is not that meaningful as the country’s competitors face unusual economic situations.Russia (10th in 2014) and Australia (12th in 2014) suffered slowdowns in due to the big drop in raw materials prices, one of their main growth en

Aug. 16, 2016

[Editorial] Unprotected data

The Korea Communications Commission has imposed 180 million won ($163,000) in fines on Lotte Homeshopping for selling the personal information of its customers to other companies.But the fines were too small compared to the revenue Lotte earned through the sale of customer data. The home shopping channel earned 3.7 billion won between 2009 and 2014 by selling 3.24 million pieces of customer data to insurance companies.The fines were small because they were levied for a fraction of the personal i

Aug. 15, 2016

[Editorial] Cash allowances

Disputes are escalating between the central government and the Seoul Metropolitan Government over the provision of cash allowances to job seekers. The row was ignited by the city government’s scheme to provide 3,000 young job seekers with 500,000 won ($450) a month for up to six months.The central government opposed the plan, calling it a typical populist program. It argued that the scheme could not be seen as an employment promotion program as it allowed the recipients to use the allowances for

Aug. 15, 2016

[Editorial] Record high rating

Standard & Poor’s has raised Korea’s sovereign rating by one notch to AA from AA-. The upgrade is surely welcome news, but it should not lead to complacency.　The rating S&P awarded to Korea, which is the third highest on the agency’s rating table, is a record high for Korea. It is equivalent to the Aa2 rating that Moody’s Investors Service gave Korea in December 2015.　The upgrade places Korea on the same level as the United Kingdom, France and Belgium, and two levels higher than Japan. Only six

Aug. 12, 2016

[Editorial] Fiscal discipline

The government is pushing to enact a law aimed at preventing the national debt from rising too rapidly. The move is well advised, as fiscal principles need to be set in stone if they are to be strictly followed.A draft bill disclosed by the Finance Ministry proposes to make it a rule for the central government to keep its debt below 45 percent of gross domestic product.It also proposes to set the ceiling for annual budget deficit at 3 percent of GDP. The ministry’s proposal also includes the pay

Aug. 12, 2016

[Editorial] Good for nothing

Judges retiring from public service -- like other civil servants -- are subject to restrictions when they seek reemployment in the private sector, including at law firms and commercial companies. The regulation is necessary to prevent a revolving door between the court and private sector, which breeds corrupt ties between judges and their former colleagues. Korea’s anti-revolving door rule under the Public Service Ethics Act stipulates that high-ranking public officials, including judges and pro

Aug. 11, 2016

[Editorial] Hopes and doubts

The election of Lee Jung-hyun as the new leader of the Saenuri Party has both positive and negative implications for politics within and beyond the conservative ruling party.  The first thing that should be noted is that Lee, a third-term lawmaker from Gokseong, South Jeolla Province, is the first politician from the southwestern region to take the helm of the Saenuri Party, which for decades has been deeply tied to the southeast. Lee said that his election would help ease antagonism between the

Aug. 11, 2016

[Editorial] Vested rights

The nation’s two major opposition parties have jointly proposed a bill on setting up a new state agency that would specialize in investigating corruption cases involving senior government officials.While the probe targets include former presidents, incumbent prime ministers, lawmakers, ministers and judges, the bill on launching an independent entity has come after a series of scandals involving incumbent and former prosecutors.As the Justice Ministry and prosecutors’ office had not been active

Aug. 10, 2016

[Editorial] Intensifying trade war

The U.S. government continues to impose heavy penalties on Korean steel exporters.Last Friday, the U.S. Department of Commerce announced it would impose duties of a staggering 61 percent on hot-rolled flat steel products from South Korea’s POSCO.The penalties broke down into 3.89 percent in anti-dumping duties and 57.04 percent in countervailing duties. If the department’s decision is endorsed by the U.S. International Trade Commission, it will deal a harsh blow to Korea’s leading steel exporter

Aug. 10, 2016

[Editorial] Unending corruption

Fresh allegations of accounting fraud have surfaced at Daewoo Shipbuilding & Marine Engineering, this time involving the troubled company’s incumbent management.Prosecutors have already questioned Kim Yeol-jung, the shipbuilder’s chief financial officer, over the suspicions that he had manipulated the company’s financial statements to reduce its 2015 operating losses by 120 billion won ($108 million).Investigators suspect that Daewoo’s incumbent president Chung Sung-lip had been aware of the all

Aug. 9, 2016

[Editorial] Electricity rates

As the scorching heat wave continues, complaints are growing about the current electricity pricing system. Many grumble that they cannot keep their air conditioners on due to concerns about high electricity bills.　The power bill for a household that consumes 200 kilowatt-hours of electricity per month is 25,000 won (about $20). But the rate would soar to 250,000 won if it consumed 600 kWh by running an air conditioner eight hours a day throughout the month. While the amount of power consumption

Aug. 9, 2016

[Editorial] Driver’s licenses

It is relatively easy to obtain a driver’s license in Korea and this has led to various problems over the past five years, such as traffic accidents, raising the need to toughen the driving test requirements. In July 2011, the government eased driver’s license rules to allow individuals to save time and money.The number of hours for mandatory driving lessons was reduced to 13 hours from 60 hours. Evaluation criteria was also reduced to six items from the original 13. A license can be obtained by

Aug. 8, 2016

[Editorial] Extended slowdown

A local think tank has warned that South Korea will suffer deterioration of growth potential in the coming decade, predicting a 1 percentage point drop or more by 2030.The nation’s potential growth rate posted 3.2 percent per annum between 2011 and 2015. Hyundai Research Institute projected that the rate will continue to fall to 2.7 percent between 2016 and 2020, 2.3 percent between 2021 and 2025 and 2 percent between 2026 and 2030.Korea’s potential growth rate was 3.9 percent between 2006 and 2

Aug. 8, 2016

[Editorial] No cure

The confrontation between the Seoul Metropolitan Government and the central government over the municipality’s cash subsidy program for young jobless people offer a few things to ponder.   First, would it be effective to improve the life of the nation’s young people who are struggling with the toughest job market in decades? The answer should be negative. The plan devised by Mayor Park Won-soon calls for the city government to provide a monthly cash subsidy of 500,000 won ($450) to 3,000 unemplo

Aug. 7, 2016