Korea's Next Challenge: Clean Up Rotten Politics

South Koreans rightly brag about their economic prowess these days. But even as the economy and society mature, the nation's political system and bureaucracy remain stuck in a time warp. Money politics still distorts democracy and decision-making. Bureaucrats continue to accept payoffs for business favors. And politicians spend more time currying favor with their party bosses than addressing quality-of-life issues. Summing up the feelings often expressed by his compatriots, former World Bank director Chung Hoon Mok says: "The role of the chaebol has changed, the power of labor has faded. But the government is as bad as ever."

South Koreans had high expectations that President Kim Dae Jung would clean up the political system. And to his credit, Kim managed to halt the multimillion-dollar kickbacks involving the chaebol. Yet his administration, too, has been tainted by corruption. While the President has not personally been linked to any impropriety, in May prosecutors charged his youngest son, Kim Hong Gul, with accepting a $1.2 million payoff from a business pal looking for a government license. He has apologized but not responded to the charges. A second son is under scrutiny in an influence-peddling scandal; he denies taking bribes. And nearly a dozen Kim appointees have either been convicted of graft or resigned under a cloud. Partly as a result, Kim's approval rating is hovering around 20%, forcing him to concede: "Politicians in Korea have failed to win the trust of the people."

So if the chaebol have been largely forced to clean up their act, who is paying the bribes? Observers say the entrenched culture of corruption has simply co-opted the smaller companies and venture capitalists that have risen from the ashes of the Asian crisis. That has prompted a crackdown. Last year, for example, Jin Seung Hyun, chief of the venture-capital firm MCI Korea, was jailed for paying bribes to derail a probe into financial irregularities at his firm.

Korea's new business class finds plenty of sympathetic ears inside Seoul's powerful civil service. Poorly paid compared with their private-sector counterparts, Korean bureaucrats are often keen to supplement their income. Streamlining the bureaucracy would allow the government to hand out raises, but the administration has failed to overhaul the civil service. This remains crucial, not only to stem corruption but also to improve professionalism in the ranks. Bureaucrats are still recruited on the basis of a single entrance exam that gives little consideration to the specific requirements of different state agencies. As a result, much of the civil service is out of sync with Korea's rapidly changing society.

Then there is the political system. Korea's major parties maintain big staffs in the capital as well as party organizations in 227 local districts. These patronage machines are great for turning out the vote but expensive to run: It costs some $16,000 a month to operate a local campaign office---once you factor in all the gifts sent to voters. Thanks to the high overhead, politicians must find other, illicit ways to fill their war chests. "Lawmakers walk a tightrope between jail and Parliament," says Gong Sung Jin, head of the Hanbek Foundation, an independent think tank. "Few are free of legal violations because they need money beyond the [campaign-contribution] limit allowed by law."

Though reform has largely failed, President Kim hasn't ignored calls to reduce corruption. His administration set up an antigraft commission and outlawed the laundering of political funds. This year, Kim's party set a new standard by introducing primaries for presidential elections. In the past, party bosses chose the candidates; now, party rank and file pick their standard-bearer. The result: less opportunity for party potentates to cut sleazy deals behind the scenes.

Cleaning up Korean politics is arguably the biggest challenge facing Kim's successor. It's hard to sell a society on transparency, economic competition, and fair play, as Kim has tried to do, if everyone thinks the government is corrupt and all politicians are on the take.

By Moon Ihlwan and Brian Bremner in Seoul

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