Chaebol Will Further Tighten Their Belts in 1999

The financial sector will be tightening their belts much more in 1999 due to the lengthy economic recession.
Businesses will reduce employment and investment while freezing salaries and continue large-scale restructuring in every facet of operations. The fate of next year's economy is still up in the air despite recent optimism.
The government's strong commitment to boost domestic consumption and reconfigure chaebol groups has enough obstacles and unknown side effects to likewise be anyone's guess how effective the measures will be.
According to a JoongAng Ilbo report released on December 25, out of 15 big business groups, 12 including Hyundai, Samsung and Daewoo will keep curtailing investment money next year.
Samsung, Daewoo, SK, Kumho, Hansol and POSCO in particular will reduce investment anywhere from 20 to 50 percent while Hyundai is considering freezing investment altogether.
The top five chaebol have not decided on their final management plans for 1999 owing to a host of complex variables.
Director Kim Tae Il of the Federation of Korean Industries(FKI) commented on December 25, 'Foreign exchange rates, interest rates and the international economic situation are still unkowns and most domestic companies will be concentrating on staying afloat instead of daring aggressive management strategies.'
Only Daewoo and LG are thinking of recruiting employees in the new year. Furthermore, most business groups predict the economic turning point might be after the year 2000.