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Park urges conglomerates' aggressive investment
Publication Date : 29-08-2013
South Korean President Park Geun-hye on Wednesday urged the country’s top conglomerate owners to pursue aggressive investment and expand employment to rev up the country’s slumping economy.
In return, Park said the “economic democratisation” regulations will not aim to damage the businesses with excessive control, and that the government will “carefully review” the controversial Commercial Law revision that the businesses claim will impair their managerial right.
“Now more than ever is the time for each business to make aggressive and pacesetting investments,” Park said in her luncheon with the top 10 chaebol owners at Cheong Wa Dae.
The luncheon, the first of its kind, invited executives of the top 10 private conglomerates including Samsung, Hyundai-Kia Automotive Group, SK, LG, Lotte, Hyundai Heavy Industries, GS, Hanjin, Hanwha and Doosan.
High-profile attendants included Samsung Electronics chairman Lee Kun-hee, Hyundai Motor chairman Chung Mong-koo, LG Group chairman Koo Bon-moo, GS Group chairman Huh Chang-soo and Doosan Group chairman Park Yong-maan.
Sitting face-to-face with the executives, Park aimed to quell widespread discontentment among the business circle against the government’s regulatory moves. The chaebol, on the other hand, came with a mission to dissuade Park from tightening regulation on conglomerates, and to reconsider the Commercial Law revision that aims to curtail the voting right of major shareholders.
Park had emphasised reining in on chaebol’s excessive market dominance and abuse as part of her “economic democratisation” pledge, which earned wide support from moderates in her successful presidential election last year.
As the economy showed signs of lacklustre growth with uncertainties at home and abroad, Park has begun to highlight in the second half of this year the need to revitalise the economy with wider investment and more job opportunities instead.
“Each time our economy faced difficulties, bold and pacesetting investment always raised the businesses’ competitiveness and acted as the momentum for resurrecting the economy,” Park said in her opening remarks.
“Job creation that is ardently desired by the people can only happen when the companies, not the government, has the intention to do so.”
Offering an olive branch in exchange, Park said, “(The administration) will further accelerate moves to introduce a negative regulatory system, and see to it that no additional unreasonable regulation is introduced.”
Addressing the conglomerates’ rising concern over economic democratisation measures, Park added that they will not be used to suffocate or excessively control the large companies.
Indicating that there is room for flexibility, Park also touched on the Commercial Act, and said “the government will carefully review and listen to extensive opinions before pushing it.”
The business circle issued a joint statement on August 22 against the proposed revision of the law pushed by the political parties. The revision calls for large firms to introduce concentrated voting that will give smaller shareholders wider voting opportunities, and separate appointments of auditors and directors, among others.
In a response speech, Huh, who chairs the Federation of Korean Industries, promised efforts to achieve this year’s investment plans but urged for government support for the businesses to lead the economic revitalisation.
“It is hoped that (the government) pays attention to the businesses’ views so that our annual yearly investment and employment schemes can be conducted without problems.”
The participants each delivered three-minute speeches on their views and demands that included wider government support to develop electric vehicles, stronger resources diplomacy, deregulation for the tourism industry, and continuity in technology development for the defence industry.
Doosan’s Park Yong-maan also discussed the ongoing controversy between labour and management over whether to include quarterly paid bonus in normal wage calculation, calling it an “issue of co-destruction.”
Lee Kun-hee, on his turn, said deregulation has been of great help for the businesses and promised to foster outstanding individuals in software, facilitate basic science and develop convergence technology.
Park promised to remove barriers and provide legal and systematic support through closer discussion and cooperation among relevant ministries and urged for their continued support. She said the matter of exporting nuclear power plants, for instance, inevitably requires governmental and financial support, adding that she believed she could provide substantial help.
Park also highlighted the recent opening of a website on creative economy for people to submit ideas and share information, and encouraged the business leaders to help promote the site as the window for individuals’ creative ideas to materialise.
Park then urged the chaebol to assist smaller businesses in advancing overseas using their expertise and experience.
Citing throngs of economic and regulatory bills being presented by political parties, Park said they should aim to help revitalise the economy and not to put a damper on it, adding that the bills should be reviewed to spot any business-stifling clauses.
“As I have promised, I plan to begin my sales diplomacy in earnest so that our businesses and economy can spread around the world, and my participation at the G20 summit and visit to Vietnam will be the starting point,” Park said, referring to her presidential trip to Russia and Vietnam next week.