Following is the fifth in a series of articles on President-elect Park Geun-hye’s key policies. ― Ed.
Political parties, regardless of their political inclination, have called for better protection of neighborhood mom-and-pop shops, namely those who are struggling to compete against franchise stores owned by large conglomerates.
After numerous failed attempts by past and present governments, President-elect Park Geun-hye has also come up with diverse measures to support small businesses.
In a series of meetings with businesspeople, Park vowed, “Through economic democratization, I will make all the fruits of growth be shared by all stake-holder groups. I’ll become a president for smaller companies.”
In Korea, there are some 7.2 million small-business owners, almost one-third of the nation’s economically active population. Many complain that the relentless expansion of large companies’ franchises poses a further threat to their already-struggling businesses.
As part of the incoming government’s policy for shared growth between large and smaller firms, Park has pledged to resolve what she sees as three key issues: an unfair market system, unfair trade practices and unfair competition.
However, she prioritizes self-regulation among businesses, rejecting drastic changes in the existing laws and regulations.
The government will play only a minimal role by creating a more transparent system and toughening surveillance on illegal and unfair activities, she said.
One of her key pledges is the planned adoption of a new system, under which companies are required to report the opening of a new franchise store in advance and hold a community meeting for public discussion.
In order to revive traditional markets losing customers to price-competitive discount stores operated by retail giants, the new government plans to share more costs necessary for modernization to ease the burden on individual merchants.
Park also hints at revitalizing the almost nominal business mediating system, which allows the government to intervene in discussions between large and smaller companies when they discuss whether a specific business area should be allocated to smaller firms only.
“President-elect Park is expected to carry out a shared growth policy under a broader, longer vision. The incoming government would strengthen control and surveillance of competition rules rather than intervening in specific issues directly,” said an industry source.
Another source said, “With current laws and regulations remaining the same, the new government will protect mom-and-pop stores by encouraging self-regulation and strengthening follow-up monitoring.”
Under her presidency, the Fair Trade Commission is expected to see its authority weakened as its role is shared by other government offices for toughened monitoring of anti-competition cases.
The state-run watchdog has maintained an exclusive right to file a complaint to the prosecution against unfair business activities.
Park, however, pledged during her campaign to abolish the exclusive right and strengthen surveillance and following punitive measures against violating companies.
Her other antitrust pledges include a ban on new circular shareholding among conglomerates, tougher punishment for crimes by chaebol owners and tightened monitoring on in-house businesses between affiliates at large companies.
