Another look at the FKI
The author is an editorial writer at the JoongAng Ilbo.
At a welcome banquet for the Belgian king in a state visit to Korea in March, guests were introduced in turn. When the name of Huh Chang-soo, head of the Federation of Korean Industries (FKI), was called according to the preordained order, there was an air of tension at the head table where host President Moon Jae-in was seated. Key aides of the Blue House were unaware that the FKI, the lobbying group for the chaebol, was included among guests at the state dinner.
The blunder stemmed from miscommunication between the Blue House and the Foreign Ministry. The Foreign Ministry included the FKI, co-host of the Korea-Belgium Business Forum, on the list out of politeness and the staff at the Blue House in charge of ceremonies failed to check. The business community tried to find meaning in the glitch, but a presidential spokesman brushed it off. But he did admit that the government saw no need for the FKI in the government’s communications with the business sector.
The administration under President Moon Jae-in has nearly completed half of its five-year presidential term. Yet the government remains cold toward the FKI, which came under fire after it served as a go-between between the administration of former President Park Geun-hye and large business groups. The FKI, which has lost the membership of many big corporations including Samsung, has been excluded from annual new year’s gatherings at the Blue House and presidential tours overseas. The FKI did not receive an invitation from the Blue House when Moon had a meeting with business organization leaders on Oct. 4. Some of the ruling party’s lawmakers had to apologize the following day after visiting the FKI office in Yeouido, western Seoul. Because of its involvement with the past government, the FKI became persona non grata at the Blue House.
The Moon administration remains skeptical of the FKI’s identity. The organization announced that it will reform itself and end any involvement in collusive ties between the business and public sectors. The group closed down the division on social contributions that more or less served as the channel for collusion between business and the government. It vowed to change its name and change its policy-making system. But the Blue House has not been happy with the slow progress of that transition. In fact, its organizational changes have been delayed due to a reshuffle at the Ministry of Trade, Industry and Energy, which officially supervises the FKI.
It remains to be seen how much the FKI will transform or rehabilitate itself. But that alone should not be a reason to shun a legitimate business group for so long. The FKI has suffered a lot after it was implicated in the impeachment and removal of the past president. The big four conglomerates left the group, leading to a reduction of its budget and staff by half. Salaries to existing staff were cut by more than 30 percent. Given its shrunken state, it may be best for the organization to close down altogether.
But shutting down a business group that has represented important components of the Korean economy for the last 60 years cannot bode well for an economy in disarray and in search of a path forward. The FKI could play an important role in mending ruptured ties with Japan. The group has been keeping up an annual business conference with its Japanese counterpart, Keidanren, or the Japan Business Federation. The group was warned of possible economic retaliatory action by Japan through its network with Keidanren. Yet nobody from the FKI was invited to a joint government-business meeting to address Japan’s export restrictions on core materials for the semiconductor and display industries in Korea.
The Japanese business group also has been under fire for its role in business-government collusion. Reform was demanded every time a conservative cabinet lost elections. But it has survived and been playing an active mediating role between the government and business by offering its advice on taxes and future growth. It should not be a role model for Korean businesses because the group still remains an important political funding source. Yet one can’t help but feel envious to see the government and business in such a cooperative relationship.
It seems that the liberal Moon administration has turned more open to the corporate sector as economic woes deepen. Still, the business community is not entirely trustful as it cannot know when the government may suddenly change its mind. The FKI cannot please the government since its values are the opposite of the liberal administration’s ideology. It must stay critical of government policies or lose any genuineness. But if the government continues to ignore critical voices, it cannot win the confidence of businesses and the market.
JoongAng Ilbo, Oct. 11, Page 34