Parties air concerns on exit of insolvent enterprises

Ahead of the government's announcement on the liquidation of insolvent enterprises, the ruling and opposition parties rarely raised a concerted voice. They asserted in unison that the insolvent businesses should be weeded out resolutely but added that the government must take thorough steps to minimize negative aftereffects such as massive layoffs and a chain of bankruptcies on the part of subcontractors.

The ruling Millennium Democratic Party expressed concerns over creditor banks becoming non-viable due to increased bad loans, increased injections of public funds, deterioration of unemployment, chain collapses of affiliate firms and other negative effects.

Rep. Hong Jae-Hyong of the MDP, ex-deputy premier for economic planning, proposed that countermeasures be taken to grapple with the worsening unemployment. In addition, Rep. Park Sang-Kyu of the MDP demanded that the government monitor the process of settling bills between the main enterprises and their affiliate companies.

Chung Sye-Kyun, director general of the Policy Coordination Committee, stated that it is urgent for the National Assembly to endorse the use of public funds to cope with the potentially insolvent banks, adding that prompt action is required for enterprises that could be revived through the debt workout programs.

The opposition Grand National Party claimed that the imminent eviction of non-viable businesses should not end up as an empty gesture. Rep. Lee Hahn-Koo, the GNP's second policy coordination committee chairman, stressed that the government needs to present a comprehensive program to minimize unemployment and the collapse of industrial foundations in consideration of the repercussions of the liquidation on related businesses.

Both the ruling and opposition parties also expressed reservations with fairness and balance in the coming business exit orders. MDP spokesman Park Byeong-Seug said following a meeting of the party supreme council that the screening of the insolvent firms subject to exit must be transparent. The GNP's Lee also emphasized that there should be no contentions over the fairness of the liquidation.

Nonetheless, the parties share the view that the exit orders are inevitable despite some negative impacts. Rep. Hahn Hwa-Kap, the MDP's supreme council member, said that the government must push ahead with the original plan in accordance with market principles. Rep. Yoo Sung-Min of the GNP, director of the Youido Research Institute, claimed that the market had already declared certain companies non-viable, saying that these firms should be resolutely liquidated in spite of chain bankruptcies and defaults.