Nothing has changedA skewed view of large companies still hampers our economic recovery. Despite a need for the government to create an amicable environment for corporate investment in Korea, it is bent on pressuring companies. A bigger impediment is government regulation of conglomerates, even when they decide to increase domestic spending. Two typical examples are construction of the second Lotte World complex in Jamsil, southern Seoul, and a Korean Air hotel near Gyeongbok Palace in central Seoul.
The two construction projects, when completed, can generate a number of jobs in the service sector. Lotte Group estimates 20,000 permanent jobs will be created - in addition to a myriad of part-time positions - when the 123-story skyscraper, a core building of the development project, is completed. Considering the hiring of a meager 79,000 people in the entire manufacturing sector last year, the Lotte project will have a tremendous positive effect on domestic employment by hiring thousands of workers.
Apart from the main building under construction, more than 1,000 businesses already housed in Lotte World Mall are still waiting for the Seoul city government’s permission to open for business. Considering that 70 percent of them are small and midsize businesses, the second Lotte project is about more than just big corporations. Yet Seoul city is reluctant to issue business licenses for fear of public outrage over several sinkholes allegedly caused by the massive construction work.
A seven-star hotel that Hanjin Group, owner of Korean Air, plans to build near Gyeongbok Palace, faces a similar fate - this time due to its location adjacent to a girls’ high school. Although the government eased construction regulations and proposed a revised bill on the tourism promotion law two years ago, no one knows when the bill might be passed, as the opposition cries that “it amounts to a special favor for chaebol.” Once the revised bill passes, however, small and medium enterprises or individuals will be able to build 38 other hotels across the country, which would create 17,000 jobs. Otherwise, despite a remarkable 25 percent increase in their numbers annually, Chinese tourists will have no place to stay.
A hostile attitude toward conglomerates - encapsulated by the equation between big business investments and the government’s preferential treatment - also is being consolidated due to a lack of a trickle-down effect. But you can’t deny that business investment leads to more jobs and economic revitalization, as evidenced by the persistent efforts by Barack Obama, Xi Jinping and Shinzo Abe to attract domestic and foreign investment even if it requires hefty tax benefits. But our National Assembly doesn’t care about easing malicious regulations, and local governments nonchalantly jump on the bandwagon. President Park Geun-hye stressed in March that such an anachronistic mind-set constitutes “a vice detrimental to creating more jobs for our young generation.” But since then, nothing has changed.
JoongAng Ilbo, Sept. 2, Page 34
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