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(EDITORIAL from The Korea Herald on Jan. 17)

All News 07:03 January 17, 2017

Signs of populism
: Potential presidential candidates make enticing, yet costly promises

The presidential race is showing signs of populism. Some pledges by presidential hopefuls from the opposition camp seem to be unrealistic and costly or simply designed to appease the populace by tackling elites or chaebol.

Among populist promises are forfeiture of private assets from chaebol, closure of the nation's most prestigious Seoul National University and distribution of 1 million won ($848) in annual "basic income" to 28 million people.

Lee Jae-myung, the mayor of Seongnam, a city near Seoul, said via Facebook on Thursday that the candlelight protesters demanded the breakup of the chaebol system as well as the ouster of President Park Geun-hye. He argued Samsung Electronics Vice Chairman Lee Jae-yong had pocketed "illegal proceeds" in the process of inheriting managerial control over Samsung Group.

He estimated illegal proceeds could reach up to 10 trillion won and argued that the government should seize them all. He also urged the arrest of Lee Jae-yong for his role in the scandal that has led to the presidential impeachment, and argued all chaebol should be dismantled.

Front-runner Moon Jae-in has prioritized chaebol reform in his election promises. In his proposals for chaebol reform, Moon pledged to form a special agency to look into business practices by chaebol and punish them severely if their wrongdoings were discovered.

Lee expects to compete with Moon to become the candidate for the main opposition Democratic Party of Korea.

The grounds of their claims for chaebol reform are completely understandable. Still, the potential candidates need to carefully consider the challenges facing Korea at home and abroad.

The Korean economy is in the doldrums. The number of unemployed people topped 1 million last year for the first time, with the youth unemployment rate hitting an all-time high of 12.5 percent. The Bank of Korea has revised down its forecast for Korean gross domestic product growth for this year from 2.8 percent to 2.5 percent. It was the fourth downward revision.

Seoul Mayor Park Won-soon, one of three presidential hopefuls from the party, proposed his educational reform plans at a recent forum. He pledged to shut down Seoul National University, integrate all national and public universities and halve their tuition fees. His pledges describe Korea's top university as the villain who has caused all these complex educational problems.

The closing of the university may please those who harbor ill feelings against academic elites. But the idea that all problems related to university entrance will disappear only if the coveted university alone is closed is misleading. His promise to halve tuition fees might sound tempting to the working class, but it is infeasible without cuts in other budget or welfare expenses or tax increases.

The 1 million-won basic income system has taken a populist tone, too. Seongnam Mayor Lee argues that it is possible to raise 50 trillion won a year through fiscal restructuring and tax hikes. Part of the money would then be distributed to 28 million people, 1 million won for each person per year. The pledge is quite revolutionary. The proposal is well intentioned, but sufficient and in-depth debate would be needed before adoption of the costly system.

UK research house Oxford Economist predicted in a recent report that populism will shape the global landscape over the coming years. Its analysis suggests that outside of the US, the countries most likely to elect a populist government in 2017 are Brazil, Mexico, the Netherlands and South Korea. Considering the enticing promises by opposition candidates-to-be, the Oxford Economist prediction does not sound far-fetched.

Ban Ki-moon, who returned to Korea from New York on Thursday after finishing his two terms as UN secretary-general, is expected to announce his campaign pledges around the end of this month. His pledges will likely spur his rivals into rolling out more tempting promises.

The winds of populism will blow harder, as the election nears. Populist slogans sound appealing, but they are often unrealistic and costly. A thorough vetting of pledges is needed.

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