[Inside Chodong] The 'Candlelight Government' Also Failed to Oust the Gwanpia

Bureaucrats Appointed One After Another as Heads of Financial Public Institutions

Over 200 Former Bureaucrats Worked in Financial Institutions Over the Past 6 Years

Moon Jae-in's Promise to Prevent Parachute Appointments Turns Out to Be Empty Words

[Asia Economy Reporter Ko Hyung-kwang] "The current government, which launched with the public’s candlelight spirit fueled by disappointment over the past administration’s deep-rooted evils, seems to be nothing more than a 'candle flickering in the wind' in front of the 'Gwanpia' (bureaucrats + mafia)."

At the end of the year, the financial sector is abuzz with controversy over the 'Gwanpia' issue. Recently, the heads of financial public enterprises and related institutions whose terms have expired are being filled one after another by former bureaucrats. Among those at the center of the controversy are Jeong Ji-won, former chairman of the Korea Exchange and newly appointed president of the General Insurance Association (administrative exam 27th class), Yoo Kwang-yeol, president of SGI Seoul Guarantee Insurance and former senior deputy governor of the Financial Supervisory Service (administrative exam 29th class), and Son Byung-doo, former vice chairman of the Financial Services Commission and recently appointed chairman of the Korea Exchange just about a month after retirement (administrative exam 33rd class).

Jeong, the former chairman, began his public service career in 1986 at the Ministry of Finance (now Ministry of Economy and Finance) and served as a standing commissioner (level 1) at the Financial Services Commission, making him a career bureaucrat. After leaving public office, he served as president of Korea Securities Finance Corporation, one of the key positions available to level 1 officials from the Ministry of Economy and Finance, then took on the role of chairman of the Korea Exchange, a top capital market institution, and now has secured the position of president of the General Insurance Association. It is the first time since the 1970s that a bureaucrat has consecutively held three leadership positions in financial-related institutions. Yoo, who took office as president of SGI Seoul Guarantee Insurance earlier this month, previously worked at the Ministry of Economy and Finance, served as head of the Financial Intelligence Unit at the Financial Services Commission, standing commissioner of the Securities and Futures Commission, and senior deputy governor of the Financial Supervisory Service. Son, appointed chairman of the Korea Exchange, held key positions at the Ministry of Economy and Finance and the Financial Services Commission, served as vice chairman of the Financial Services Commission from May last year until his retirement early last month.

Even financial-related institutions currently undergoing recruitment procedures are widely expected to appoint former bureaucrats, following past precedents. For example, Choi Jun-woo, former standing commissioner of the Securities and Futures Commission (administrative exam 35th class), a bureaucrat, is a strong candidate for the president position at the Korea Housing Finance Corporation, whose application closed on the 4th. Also, with Kim Kwang-soo (administrative exam 27th class) elected as chairman of the Korea Federation of Banks earlier this month, the vacant position of chairman at NH Nonghyup Financial Group is also seeing names of former bureaucrats among the candidates.

The practice of appointing former bureaucrats to financial public enterprises or related institutions is nothing new. According to data from the Financial Supervisory Service obtained by Park Yong-jin, a member of the Democratic Party of Korea, for the National Assembly audit, over 200 former economic bureaucrats have worked in 117 financial institutions including banks, securities firms, and insurance companies over the past six years. Of course, this does not mean that bureaucrats should be excluded from appointments as heads of public institutions. If they possess professional insight, experience, and the ability to drive strong reforms, they are fully qualified. However, the wrongful practice of parachuting high-ranking former bureaucrats into public institution leadership positions solely because of their past status, ignoring internal regulations and procedures, deserves criticism. Parachute appointments tend to prioritize complacency over organizational innovation or development, and are likely to prioritize the interests of appointing authorities and their circles over the public, potentially skewing policy directions. As revealed in the Sewol ferry disaster, this can even threaten public safety. The Korea Exchange Labor Union issued a statement opposing the parachute appointment of Son immediately after his nomination as chairman, calling it a 'Gwanpia parachute appointment that led failed capital market policies,' and began a tent protest for this reason.

During his candidacy, President Moon Jae-in and the Democratic Party of Korea in opposition defined parachute appointments as 'deep-rooted evils.' They criticized the conservative government for tainting financial sector appointments with bureaucratic control. Shortly after his inauguration in 2017, President Moon pledged at his first meeting with the leaders of the four major parties that "there will be no parachute or reward appointments in public enterprises and other public institutions." In his inaugural speech that year, he declared that "we will boldly break away from the wrong practices of the old era," "opportunities will be equal, processes fair, and results just," and "we will create a world without privileges and unfairness," promising to build a 'fair society' free from past evils. However, by the end of 2020, the fifth year of his administration, such a world had not come to pass.

This content was produced with the assistance of AI translation services.