by Pablo Velasco
South Korean trade unions have forced President Roh Moo-hyun to scrap part-privatisation of the railways after threatening strike action.
The Korean Railway Workers' Union argued that privatisation would result in mass layoffs, fare increases and cancellation of routes. Korean National Railroad (KORAIL) reported 219.5bn won (£116.6m) in net losses in 2002, blamed on poor management. The union organises 24,000 of KORAIL's 30,000-strong workforce.
The government agreed at the end of April to retreat from its privatisation plan and made other concessions. It agreed not to operate trains with one engineer per train and to take on 1,500 additional railway workers. The union had initially demanded more than 4,700 additional workers, but settled as the management agreed to rehire 45 union activists who had been laid off. KORAIL will make an announcement in May to hire new employees and start recruiting in June, according to the agreement.
The move has sent shivers through Korean financial markets, which now fear other privatisations could be delayed or dropped. Roh, elected in December was expected to follow the policies of predecessor, Kim Dae-jung. Kim eagerly pursued IMF policies for restructuring the economy in exchange for a $58bn (£37bn) bailout in late 1997.
