This study examines the progress of public corporations in Korea, and discusses the directions for future development.
During the Japanese occupation of Korea, railroad, communication, and power industries were established and operated by Japanese public enterprises. After liberation, the projects maintained their status as public corporations. In the 1960s and 70s, during the period of the National Economic Development Plan, strategic industries such as the import substitution infrastructure industries were established and operated as public corporations. In the 1980s, as the national economy stabilized, public corporations scaled back their physical growth and geared towards qualitative advancement. Management developed towards privatization and responsible management systems.
Following these changes, the presence of public corporations in Korean citizens’ lives has increased. Early in their development, public corporations lead economic development to achieve the key objectives of the Economic Development Plans in the 1950s and 1960s. The role and importance of public corporations in the national economy increased remarkably. The share of gross national yield was increased from 6.8 percent in the 1960s to 9.1 percent in 1986. Also, their contribution domestic fixed capital was approximately 30 percent from 1963 to 1981. The average percentage of public corporations in the public sector was 51.5 percent from 1980 to 1984. The inter-industry relations of public corporations in Korea show high forward linkage effects and a high tendency of capital concentration.
Financially, public corporations were highly dependent on government finance due to quantitative growth and the expansion of facility investments in the 1960s and 1970s. However, as management stabilized by 1984, public corporations, in turn, began to contribute to government finances, during which financial assets were transferred to the government.
The intervention of external management agents directed the management of public corporations in the 1960s and 1970s, as functions of resolution and execution were not separated in terms of organization management. However, since 1984, the responsible management and the autonomous management systems were introduced, which were bilateral systems in which the operation of resolution and execution functions were separated.
The public corporation privatization policy has been actively pursued when government intervention is unnecessary, in line with government’s privately-led economic operation policy after 1980, or when private operation is more efficient. Particularly, the national-stock-selling type of privatization of POSCO and the Korea Electric Power Corporation (KEPCO) after 1988, and the KRW 5 trillion privatization plan of 1992 was evaluated to be an innovative measure.
The chronology of public corporations demonstrates that the percentage of public corporations in the national economy will be emphasized, will not burden government finance, and that management policies will become autonomous responsible management systems. Therefore, it is desirable to pursue the privatization of public corporations. Furthermore, the role of public corporations in social and public service sectors should be reinforced.
우리나라 공기업부문의 역사적 변천(Chronology of public corporations in Korea)
|Series Title; No||정책연구시리즈 / 90-10|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Entrepreneurship|
|Holding||KDI; KDI School|