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Opinion

Samsung offers South Korea a 'Succession' drama few are enjoying

President Moon must act to finally take the chaebol down a few pegs

| South Korea
Moon Jae-in appears to be avoiding disrupting the status quo out of fear of how it might play politically.   © Reuters

William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."

President Moon Jae-in has one job in 2021: deciding once and for all whether South Korea is a nation of 51 million people or an elaborate playground for a handful of coddled tycoons.

Judging from the garish leniency shown Samsung heir Lee Jae-yong last week, the family-run conglomerates towering over Asia's No. 4 economy are still running the show. And reminding us how little headway Moon made since May 2017 to create a trickle-up system that works for everyone.

Lee, South Korea's most powerful chieftain, got just 30 months in prison for a bribery scandal that also landed Moon's predecessor, Park Geun-hye, in jail. Prosecutors wanted nine years; Lee got two-and-a-half.

That Jan. 18 court ruling is part of a multiyear saga worthy of a spinoff to HBO's show "Succession." Lee's father, Lee Kun-hee, died in October after spending six years out of sight in a Seoul hospital. During that time, eldest son Lee Jae-yong, now 52, ran the family empire. And not always within the lines of propriety.

In January 2017, Lee the younger was arrested on accusations of "bribery, embezzlement and perjury" related to the father-to-son power shift after Lee Kun-hee's heart attack. Lee Kun-hee's incapacitation came the same year Forbes ranked him South Korea's most powerful person.

The scandal included then-President Park, who rose to office in 2013 also promising to rein in South Korea's family-owned giants, or chaebol. Instead, she got co-opted, impeached and sentenced to 25 years in jail. Lee Jae-yong spent a year in prison, winning release in February 2018. The Supreme Court ordered a retrial.

Lee gets credit for time served, reducing his latest punishment. Moon has harnessed discontent about the cozy ties between powerful chaebol groups and politicians. A harsher sentence would have communicated that South Korea is serious about leveling the playing field.

Moon does not wear a judge's robe, supporters say. No, but he can influence the zeitgeist. Most Koreans looking on with disgust support taking the chaebol down a few pegs and empowering small and mid-size companies to thrive and boost wages.

Sadly, Moon seems to have fallen into the same pattern as predecessors Park and Lee Myung-bak, president from 2008 to 2013. Both promised to recalibrate growth drivers but ended up bowing to the status quo.

Lee's fealty to the chaebol was unsurprising. Before a stint as the mayor of Seoul, Lee had been a CEO in the Hyundai family empire. Lee is in jail on bribery charges of his own.

Yet Park's acquiescence broke many hearts. Her father, Park Chung-hee, devised the chaebol system during his time leading South Korea from 1963 to 1979. It seemed poetic justice that the daughter would dismantle the antiquated system her dad championed. It was not to be.

This gets us back to South Korea's decision for 2021. One for Samsung's "Succession" drama: is it not time for the corporate face of South Korea, the nation's biggest entity by far, to be led by someone not named Lee? Yet the bigger challenge is Moon's. He appears to be avoiding disrupting the status quo out of fear of how it might play politically.

Samsung Electronics vice chairman Lee Jae-yong arrives at the Seoul High Court on Jan. 18: is it not time for the corporate face of South Korea to be led by someone not named Lee?   © AP

South Korea is growing again, perhaps as much as 3.4% this year. That is a product of Moon's government doing a solid job containing COVID-19. The pandemic, though, is still slamming South Korea's trade and technology-heavy economy, driving the jobless rate to an 11-year high in December.

Had Moon, Park or Lee worked to disentangle household income from the fortunes of a handful of oligarchs, South Korea might have a better shot of narrowing a rich-poor divide. This gap is being made worse by coronavirus fallout.

The nation's powerful business lobbies had been calling for leniency for Lee, arguing that the implications for major job creators like Samsung would be grave. The chaebol are getting their way, again, dimming hopes anew for the corporate governance upgrades.

The good news is that Moon has another 13-plus months in power to flip the script. There is also a new U.S. President more inclined to work with South Korea, not at cross purposes. Washington will not be intensifying the trade war or manipulating the dollar lower. By easing the pressure on Asia's supply chains, Joe Biden's White House offers Moon the chance at a reboot.

Moon must not make the Lee-Park era error of putting all his chips on the Bank of Korea. In December, the BOK came under pressure from lawmakers to expand its mandate to support growth. Fair enough. Seoul would get more mileage from tax and regulatory changes that democratize economic power.

South Korea's startup scene is indeed taking off. Not because of government policies, but in spite of them. Yet innovators need assurances that Samsung, Daewoo, Hyundai, LG, SK and other chaebol will not buy or smother potential rivals. It requires a level of antitrust activism Moon has yet to display.

South Korea has proved time and time again since the 1990s that it can manage to rise above a crisis. It has been less successful in altering its own power dynamics. Might Moon make good on his "fair economy" pledge these next 408 days? South Korea's 51 million people are still waiting for an answer.

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