Transparency of State-Owned Enterprises in South Korea

During the period of rapid economic development in South Korea from the 1960s to 1970s, state-owned enterprises (SOEs) played a critical role in the economic growth of the nation. SOEs invested in the kind of infrastructure, including Social Overhead Capital (SOC), where the private sector had difficulty in justifying an investment. At that time, SOEs were completely under the control of the State bureaucracy. The sole purpose was industrial development. There was no transparency or participation; their activities were out of sight and out of control by the public. A dramatic change occurred in 1997, as the financial crisis shocked the Korean economy. At that time, many attempts were made to renovate the whole country. In line with this effort, transparency and public participation were emphasized in the realm of SOEs. This article evaluates the current situation of SOEs in Korea discusses some implications and outlines some directions for the future.