South Korea's new leader may look to keep chaebols in check
By Cho Ji-hyun , The Korea Herald/ANNSEOUL -- South Korea's President-elect Park Geun-hye rubbed shoulders with the nation's corporate sector last week, in a crucial meeting which many said was held in a tense atmosphere due to her economic democratization pledges.
January 1, 2013, 12:59 am TWN
For the corporate world, especially the big-scale conglomerates, it is good news that Park will be the next president rather than her liberal rival Moon Jae-in, who pledged tighter reins on chaebol.
The incoming Park administration is looking forward to promoting “economic democratization” in a bid to realize a fair-competition economy that protects the market and smaller firms as well as consumers from strong economic forces like Samsung and Hyundai Motor Group.
The measures are also focused on fostering the growth of small- and mid-sized enterprises and checking the monopolistic position of large family-owned businesses.
While pledging to end discrimination between regular and irregular workers, Park also said stricter penalties — such as jail sentences — would be introduced for chaebol owners for embezzlement or business malpractices.
With such measures announced, Park's economic democratization drive will most likely have an impact on her relationship with the country's large businesses as was shown during her visit to the Federation of Korean Industries (FKI) last Wednesday.
A total of 17 business leaders gathered to greet the soon-to-be first female president.
Unlike current President Lee Myung-bak, who visited the FKI ahead of other economic organizations, Park had already paid a visit to the Korean Federation of Small and Medium Businesses earlier in the day.
Another factor that differentiated the two conservative presidents was that President Lee stresses economic-friendly measures such easing of regulations and more investments for the big companies.
President-elect Park also said the government will not hold back investments to make future growth engines and more jobs, but she requested that the conglomerates refrain from layoffs and restructuring.
“There was a lot of support and sacrifice of the people and the government for the firms to scale up to today's size, which indicates that the conglomerates should represent the people at large,” she told the business leaders. “I therefore believe that large conglomerates should not be fixated on maximizing company profits but further seek co-prosperity in the entire community.”
Park also asked them to guarantee employment until retirement age, take a step back from injecting excessive investments in real estate, and also protect the neighborhood mom-and-pop shops for shared growth.