▲ Residents and landlords of the new town planned for a press conference requesting the dismantling of LH.ⓒ Yonhap News
As a result of the first investigation of the Korean Land and Housing Corporation (LH) employees’ suspicion of land speculation in the third new city, a joint government investigation team revealed seven additional suspicious cases, and the LH dismantling theory is expected to intensify. Prime Minister Jeong Sye-gyun said, “We will promote LH innovation with the level of dissolution.”
However, experts point out that disorganization is not the essential solution to the LH collective speculation. He warned that the reorganization could be a water splash that obscures the nature of the reorganization, so that we must find a solution to commit corruption through a punitive penalty of an unimaginable level.
On the 11th, the government announced that it had decided to request an investigation after it was confirmed that 20 LH employees were suspected of committing speculation as a result of a first thorough investigation of the Ministry of Land, Infrastructure and Transport and LH employees regarding the alleged speculation of land in LH’s third new city.
As the Moon Jae-in government has pointed out that LH, which should perform public development work fairly and transparently, is being pointed out as a speculative force, there is a growing voice that the enlarged LH should be dismantled. Prime Minister Jeong Sye-gyun said at a briefing that day, “LH and its executives and employees will have to answer the public’s criticism about the need for an institution anymore.”
When asked how to innovate LH, Prime Minister Chung said, “I will really promote the deconstruction level of deconstruction,” and said, “We will innovate by gathering opinions from experts and civil society centered on the Deputy Prime Minister of Economy.” Prime Minister Chung pointed out that there is no organization in charge of developing new towns other than LH. “LH is not alone in supplying housing. (2·4 real estate measures, etc.) Housing supply is promoted pan-governmental with the Deputy Prime Minister as the command tower. “I will make LH play an important role (in supply countermeasures), but (for now) we are facing a crisis of trust. On the one hand, we will strive to continue to play a role in the housing supply issue, on the other hand while promoting innovation. “I replied.
Previously, Minister of Land, Infrastructure and Transport Byun Chang-heum said, “We are considering re-establishing the role of LH” in the National Assembly’s National Land Transportation Committee’s pending questionnaire on the 9th. Minister Byun argued that the Justice Party lawmaker Sang-Jung Shim “dismantles the LH and creates a separate ministry to provide housing to the common people, and the LH should be left as a developer.” “I think the role of LH will be re-established with the introduction of (a new type of residential welfare system) such as public self-housing or residential new deal this time. Please help institutionalization.”
However, some experts question the theory of LH deconstruction. The dissolution of LH is not the essential solution to this situation. Lee Eun-hyung, a senior researcher at the Korea Institute for Construction Policy, said, “Segmenting a large monopoly is to reduce the harm of monopoly,” he said. “If you release the LH function and give it to the private sector, (corruption) can be worse.” Researcher Lee said, “There is an opinion to select functions such as residential land development and make them independent. If so, the number of targets to be monitored will be reduced, so management and supervision will become easier.” “However, corruption like this will not be eradicated. The stock market is a good example. “He said.
He said, “For foreign countries, strong punitive compensation is made, but even if there is a system in Korea, it is not actually operated. Even if you look at the construction industry, there are many small and medium-sized construction companies in Korea. When a judgment is received to compensate the company, the company must close. That is why the judges do not well hold the punitive liability for compensation,” he added.
Su-yeon Sue, a professor of economics at Jeju National University, said, “I hear a talk to create a tentatively named Housing Administration, but removing the attached organization again does not solve the problem. The essence of the problem is that the transparency of our real estate transaction market is low. If the market is transparent, it becomes difficult to obtain a market margin.” Professor Jeong explained, “In the United States or Europe, who owns the land and the name and address of the buyer are all disclosed. It is less speculative because the eyes of others are scared.” Professor Jeong emphasized, “Even in the United Kingdom and the United States, it is easier for public officials to access development information than the general public,” he said. “The key is the level of disciplinary punishment when corruption occurs.” In the case of the US, for example, if a case like this LH occurs, the development plan is canceled at all and all persons involved are immediately resigned so that the market cannot see any profits, Professor Jeong explained.
He said, “LH employees will be calculating all future profits. Even if a cotton bat is punished and resigned, they can earn billions of billions of profits, but who will not commit corruption?” “The essence of this situation is the corruption of public officials. “We have to find a solution in the direction of making sure that corruption is embarrassed if we commit corruption with a strong punishment that transcends the level of corruption, and if we approach it by creating a new organization after dismantling the organization, we will only get rid of it.”
▲ LH condemnation press conference.ⓒ Yonhap News
LH was launched in 2009 by combining Korea Land Corporation (Earth and Construction) and Korea Housing Corporation (Jugong). As of the end of last year, it is a dinosaur organization with 9500 employees and an asset of 184 trillion won.
