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South Korea parliament to reopen but reforms uncertain

South Korea's parliament opens a new session on Friday where the ruling party will try to pass reforms to boost Asia's fourth-largest economy, while opposition MPs have already begun blockading the chamber to halt debate.

President Lee Myung-bak has proposed a raft of reforms he says are needed to steer the export-driven economy through the global economic downturn but has seen measures delayed in previous sessions due to demonstrations and scuffles among MPs.

South Korea's financial markets, used to the political polarization and delays in parliament, have not set their hopes too high on any major reforms being implemented quickly.

The ruling Grand National Party is placing high priority on changing a law that sets employment terms for contract laborers, who can be employed for up to two years before firms must decide whether to hire them as permanent workers or let them go.

The GNP, with a majority in the National Assembly, hopes to double the term to four years, which would give companies more flexibility during uncertain times and mean contract workers may have more chance of being retained for longer.

“We're looking at mass layoffs under these tough economic times,” GNP's chief policymaker Kim Seong-jo said at a party strategy meeting. “We can't sit back and let that happen.”

Economists said businesses should expect further delays in reforming a labor market that many believe needs greater flexibility in order not to lose ground to low-cost manufacturing centers in Asia.

“Lawmakers are just trying to buy time so there probably won't be a change in the hiring market any time soon,” said HI Investment and Securities' economist Park Sang-hyun.

Opposition Democrats earlier this week began physically blocking the parliament chamber to stop the session from going ahead. It is the third time in recent months they have used sit-in protests to try to bring the legislative process to a halt.

The liberal Democrats have seen their support rate increase in recent weeks after many in the public blamed Lee and the GNP for a graft probe of former President Roh Moo-hyun that may have led to the suicide of the former left-leading leader last month.

An emboldened opposition delayed the start of the June session where several key reform bills were up for debate including tax cuts, privatization of state-run firms and a media ownership bill the Democrats have called “evil.”

A bitter fight is expected over the media bill, proposed by the ruling party, to allow new broadcasters to be set up and permit the cross-ownership of newspapers and broadcast companies.

The opposition said it will give major firms the license to establish news companies with pro-business and conservative bias.

The GNP disputes the premise and says the current line-up of three TV networks, supported by public funds, is a remnant of authoritarian leaders' attempt to keep media in check that now only limits viewer choice. (Reuters)