Urgent Surgical Operation Bold Restructuring of Ailing Firms Is Best Stimulus Even as some U.S. officials expressed cautious optimism about the economy, others are driving General Motors toward a "surgical" bankruptcy. Similar things should happen in Korea, too. Encouraged by some positive signs, including soaring stock markets, a strengthening currency and eased money flow, expectations are rising about a premature recovery. A Bloomberg columnist's favorable comment that "good news springs p in Korea" might have buoyed up such a mood further. But now is the time to remain calm and do what's needed most - a painful surgical excision of ailing industries. So our expectations are rather directed toward the creditor band-led restructuring of 45 conglomerates starting later this month. One must not expect too much of the domestic banks, however, as shown by their poor track record in the similar restructuring of the construction and shipbuilding sectors recently. They should not repeat this nominal restructuring to avoid the short-term burdens of taking over bad assets. The long-term result of their failure to do so could be fatal blows to the entire economy. It's like what one sees in some horror movies, in which a group of zombies attacks normal people to turn everyone else into the walking dead. Firms with extremely poor financial health hurt their lenders, other businesses and then pull down the entire economy along with them, which is what happened here 12 years ago. Even now, about 130 listed companies should be called "corporate zombies," unable to repay interest on their debts with the profits they make. Korea's big businesses neglected corporate restructuring during the booling years of the 1980s. And if the luster of the semiconductor boom had blinded business executives and economic policymakers to make reasonable judgments in 1997, a similar danger is lurking in foreign exchange rate-aided export now. Some conglomerates have recently repeated the same mistake of more than decade ago, bent on only expanding corporate size amid aggravated profitability and financial structures. Except for the five largest conglomerates - the Samsung, Hyundai Motor, LG, SK and POSCO groups - most others have one problem or another. So the creditor banks and financial regulators need to be sterner than ever in diagnosing their financial health and prescribing remedies to make them focus on selected core units. It can hardly be denied that some government officials' confusion between investment in productive activities and equity investment of expanding corporate scale has contributed to these larger but shakier conglomerates. It is regretful in this regard that the government is still gripped with a mistaken notion that their lifting of chaebol's equity-ceiling would be of help for the national economy. Again, what matter is not how big the businesses are but how solid and focused they are. If the government, financial institutions and the businesses themselves learn some lessons and awaken from the deception of bubble growth, the ongoing crisis could turn into opportunities for them. Economic recovery depends on the sentiment of various economic players, including businesses and consumers. The government's role is to restore their confidence by removing economic uncertainty. And the best wat to do this is harsh corporate reform. if they fail to do so, Korea's economy might lapse back into a crisis, regardless of the global economy. A second reading of the Bloomberg column shows how perilously close Korea went to the brink only several month ago.