Hong stresses growth; FKI chief says existing rules enough


Politicians’ latest calls for “economic democratization,” or efforts to promote balanced growth, prevent market domination by a select few and abuse of economic power, are drawing critical responses from policymakers and business leaders.

Both ruling and opposition lawmakers have tabled a number of economic democratization bills to toughen regulations on large conglomerates ahead of the Dec. 19 presidential election.

Knowledge Economy Minister Hong Suk-woo said Saturday that economic democratization should not be about pounding on big businesses.

“Since conglomerates have greatly contributed to our economy and will continue to do so, I oppose indiscriminate attacks on the big business groups,” Hong said in an annual forum hosted by the Federation of Korean Industries, or the lobbying group for the nation’s largest businesses, on Jeju Island.

“It is true some large conglomerates and chaebol groups have provided reasons for chastisement by not properly paying their contractors or delaying payments. They should be wise enough to refrain from such practices.”

Noting that balanced growth among large, medium and small companies was the first path to reaching $2 trillion in annual trade, Hong underlined the government’s shared growth policy. 

“The definition of economic democratization varies from person to person, but I believe it is about enlarging the size of our economy while seeking balance among different economic entities,” he said.

Huh Chang-soo, chairman of the FKI and GS Group, criticized the calls for economic democratization a day earlier in the same forum, saying the term was too ambiguous.

“The definition of economic democratization is unclear; I don’t really know what it means,” Huh told reporters Friday.

“I believe existing laws are enough to resolve the conflict between social classes, which is the purpose of the politicians’ push for economic democratization.”

It is the first time the FKI has officially spoken against the latest political move.

“Large conglomerates should be admired by the people, and it is a pity that they aren’t in reality,” Huh said.

“It is regrettable that big business groups are viewed negatively because of wrongdoings by some companies, which should be corrected.”

Finance Minister Bahk Jae-wan was the first senior government official to open fire earlier this month by saying “excessive calls for economic democratization could narrow our views.”

Bahk said some of the proposed policy measures for economic democratization can be criticized from abroad for trade protectionism.

“Taxing conglomerates for giving most of their orders to affiliates or companies run by relatives has a cause, but anything more than that could provoke other countries,” he said.

“We shouldn’t push for narrow-minded policies like North Korea when we live on trade.”

Fair Trade Commission chief Kim Dong-soo also said he was against the opposition parties’ proposal to reintroduce a cap on conglomerates’ equity investment in other companies.

Korea Chamber of Commerce and Industry chairman Sohn Kyung-shik had expressed concerns over economic democratization earlier, stressing that it shouldn’t denounce or discourage large firms.

By Kim So-hyun (sophie@heraldcorp.com)