Reforming chaebol is risky: KCCIBusiness leaders urged the political circle to tread carefully yesterday in trying to reform large conglomerates under the banner of “economic democratization” given the shaky foundations of the global economy.
The move comes shortly after three presidential candidates - Park Geun-hye of the ruling Saenuri Party, Moon Jae-in of the main opposition Democratic United Party, and independent Ahn Cheol-soo - rolled out some of their business platforms.
Although the candidates’ economic policies vary slightly, economic democratization has become a key buzzword ahead of the Dec. 19 presidential election as they all agree on the need to put a lid on widening inequalities in Korean society and chase sustainable growth for both large companies and SMEs.
“We agree on the need to minimize the polarization of wealth, but rapidly changing economic policies by hastening the enactment of legislation related to economic democratization will merely weaken the base of growth in general,” the five heads of the Seoul chapter of the Korean Chamber of Commerce and Industry (KCCI) said in a statement.
They said they fear the political campaigns may become staunchly anti-chaebol to appease voters burdened by rising consumer prices and a tighter job market.
“The role and achievements of conglomerates need to be evaluated in an appropriate way,” the KCCI said. “The ideal way to resolve the problem of social polarization is to have conglomerates fulfill their corporate social responsibilities by expanding investment and creating more jobs. Society must also provide the necessary conditions to [support large companies].”
The meeting was attended by 13 business leaders including Sohn Kyung-shik, chairman of the KCCI, LG Chem Vice Chairman Kim Bahn-suk, Hyundai Motor Group Vice Chairman Kim Eok-jo, and Lotte Group Vice Chairman Lee In-won.
The five leaders also reacted negatively to the idea of extending the age of mandatory retirement - proposed in reflection of Korea’s graying society - and the notion of improving job security for irregular workers.
“Companies can discriminate less against regular workers and irregular workers,” the KCCI said. “But the political circle needs to delay legislating the extension of the retirement age and guarantee more flexible forms of employment.”
Regarding the presidential candidates’ moves to increase taxes, the KCCI warned that this could deter companies from seeking to grow, which would also harm tax revenues.
“We are not completely opposed to economic democratization,” said Lee Dong-geun, executive vice chairman of the KCCI. “But instead of rushing through new policies, we need to overcome the economic downturn and then discuss these issues thoroughly.”
By Kim Mi-ju [email@example.com]
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