Sunday 24 Feb 2019 | 02:19 | SYDNEY
Sunday 24 Feb 2019 | 02:19 | SYDNEY

Sewol tragedy puts focus on Korean corruption, at last



13 June 2014 15:38

On 16 April, the South Korean passenger ferry Sewol capsized off the southwest coast of Korea. The ferry carried 476 people; at the time of this writing almost 250 are confirmed dead, with several dozen still missing. The Sewol was en route from Incheon port on the Yellow Sea, south to Jeju Island in the Korea Strait. Jeju is a popular island vacation destination in Korea. Well over 300 of the passengers, and the majority of the fatalities, were high school students on vacation.

The cause of the sinking is not yet fully known, but it is clear that events came together to aggravate what might have been far less deadly sinking: the ship was grossly overloaded and unstable; the crew did not know who to call or what to do as events spiraled out of control; the Coast Guard response was slow and confused; the passengers were pointlessly kept in their rooms long after the ship was clearly sinking fast; the lifeboats failed, raising the problem of ordering the passengers into cold water; and most egregiously the captain and crew were among the first to leave, seemingly oblivious to the horrible cost of their ineptitude and dereliction of duty.

The aftermath of the sinking has seen unprecedented social and political upheaval in Korea and a major backlash against the Park Geun Hye Administration.

Park has forced her prime minister and other officials to resign. Grieving parents have screamed at government officials on camera. Candlelight vigils have taken place in Seoul for weeks protesting the government response. Memorials have sprouted all over the country with yellow ribbons tied and dedicated to the deceased (see photo). Parents have marched on the Blue House, the seat of the Korean presidency. Critics on the left have even begun calling for President Park to resign.

So desperate have pro-Park Korean conservatives become that they have taken to accusing Sewol critics of being North Korean sympathizers, or that their focus on the issue has hurt the Korean economy or national image. Economic activity has indeed contracted mildly since the sinking, as people cancelled trips, vacations, and other entertainments out a sense of responsible grieving.

To stem the rising tide of vitriol, Park gave a major national address on Sewol on 19 May. And to her great credit, she took the high road. There was no red-baiting. She apologised more fully than her earlier, ad hoc confused reactions. She even teared up at the end of her speech (although the majority of my university students – I teach in Korea – thought she was faking). This has calmed the waters somewhat, but more importantly, she laid out a major push to clean up Korean politics and economics. If she follows through, this could be a watershed.

Corruption is one of Korea's biggest medium-term economic problems (two other large ones are demographic collapse and a stubborn emphasis on manufacturing at the expense of the service and information economy). I have written about some of these issues before (also here and here), but it is worth reiterating that Korea's Transparency International score is a disturbingly high 46 out of 177. Korean business leaders routinely get in trouble for bribery or fraud. Almost every Korean president has been investigated after leaving office for irregularities like kickbacks. Indeed, an investigation of that type is why former President Roh Moo-Hyun killed himself.

In her post-Sewol remarks, Park has referred to corruption as an 'evil' which she has not fought hard enough, and that she will now crack down on the 'bureaucratic mafia' that undercut safety regulation and led to the Sewol tragedy. And there is more to come, as the Sewol investigation will almost certainly turn up regulatory irregularities, collusion, and corruption.

Park is now promising to create greater distance between state regulators and businesses. Specifically, she wants to prevent retired civil servants from working in businesses related to those which they regulated – a Korean version of America's notorious revolving door between regulators and regulated. She also promised an investigation of the Sewol involving the opposition.

But the next step is a much more serious root-and-branch attack on corruption.

Korea is modern, wealthy, well-educated state. There is no obvious reason for such a high TI score other than bad habit. Japan, which is very similar to Korea in social and economic structure and just 100 miles away, has a score of 19. Korea can achieve this, but it needs a depoliticised effort, and one not solely focused on the ferry tragedy.

Korea needs a national anti-corruption drive with political distance from the government, corporations, and political parties – the entities most likely to subvert it. Instead of letting the fox police the chicken coop, a real anticorruption committee in Korea would include outsiders like civil society activists, NGOs, journalists, academics, and small-business owners. All these constituencies have either suffered from or previously targeted Korean 'networking' for reform. And such a committee should have the political independence akin to a special prosecutor in the US, so that the members could not be bullied by vested interests.

Sewol may be a turning point in Korean corporate governance and the legacy of cronyism. Park is an unlikely reformer, but it is now tragically obvious that Korea's second-world levels of corruption are incompatible with the first-world expectations of its citizens and investors.

The structural causes of the Sewol sinking are almost certainly nepotism and regulatory looking-the-other-way. If Park moves seriously against this, she will leave a major mark on Korea's economic development, pulling the country into healthier, safer, cleaner growth – not just more growth. If she does not, Sewol may very well be the first line of future histories of her presidency.

Photo by Flickr user screenpunk.

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