Seoul moves to invigorate industry
International trade analysts are closely watching for results of recent moves by the South Korean government to bolster its private industry. Until 1980 many of the country's products and services were turned out by large conglomerates. And many Korean companies, according to Commerce Ministry officials, have been closely controlled at the top. Now, one the new government regulations stipulates that these financial groups must spin of any commercial activities not related to the principal business.
This action, it is expected, will allow free market expansion of smaller individual companies as well as present a clearer picture of medium-size business conditions. Until now one of the cricitisms of corporate strength has been the heavy investment in land that the firms have then left unused. One of the government's reforms for aiding business liquidity sets up a plan for the Central Bank to purchase the excess land from companies and hold it for future development. Over 1,200 Korean companies are being surveyed to find the best use for their excess-land inventory.
Other recent business reforms decreed by the Korean Government to aid the private sector include:
* Writing a new antimonopoly law.
* Requiring use of auditors from outside company ranks.
* Restructuring six industrial sextors, including automotive output.
Heavy industry in particular has come in for close scrutiny, largely because it is undercapitalized, which government analysts say could lead to future underdevelopment, too little planning, and even to bankruptcy. To remedy this, a government corporation, Korean Heavy Industries, has been established with a capitalization of $500 million (US). The corporation will get funding from the government and government-controlled banks and will become the country's largest government corporate structure.