President Park Geun-hye implored top conglomerates Wednesday to increase investment and hiring so as to help spur South Korea's slumping economy, promising to address business concerns about her push for "economic democratization" and other issues.
Park made the remark during a lunch with the chiefs of the country's 10 largest conglomerates, the first of its kind since she took office in February. The meeting was seen as an effort to reach out to key economic players who have been wary of Park's "economic democratization" drive centering on reining in their influence.
Park has repeatedly stressed that she will place top priorities on re-energizing Asia's fourth-largest economy and creating more jobs in the second half of the year. Cooperation from conglomerates, also known as chaebol, is key to such efforts.
"It appears that signs of economic recovery are emerging little by little, but there are still many difficulties," Park said during the meeting. "Now is the point where each company is required to make active and leading investments. Job creation, which our people yearn badly for, can happen only when businesses, not the government, are willing to do so."
Park said she understands the business concerns over her government's "economic democratization" campaign and promised to make sure the drive won't turn into repression of conglomerates or excessive regulation.
"Economic democratization," one of Park's key campaign promises, calls for creating a level playing field for every economic player amid widespread perceptions that conglomerates have abused their market dominance to prey on smaller firms.
Business lobbies have expressed concern conglomerates could be discriminated against.
Park also said the government will conduct a careful review of a government-proposed revision of the Commercial Act in consideration of business concerns. The revision calls for, among other things, limiting the voting power of the largest shareholder to 3 percent when electing an auditor member of the board.
The invited conglomerates are Samsung, Hyundai-Kia Automotive Group, SK, LG, Lotte, Hyundai Heavy Industries, GS, Hanjin, Hanwha and Doosan. Officials said POSCO was excluded as the planned meeting is for purely private conglomerates.
Concerns have grown that South Korea's economy might be falling into a prolonged low growth phase as uncertainty persists at home and abroad. The gross domestic product grew less than 1 percent on-quarter for the eighth straight quarter until this January-March period.
The economy grew 1.1 percent in the second quarter from three months earlier.
The government has worked hard to stimulate the slowing economic recovery by expanding fiscal spending and front-loading its budget. In May, the National Assembly endorsed a 17.3 trillion won ($15.5 billion) extra budget, weeks after the government drafted the proposal to jump-start the economy. (Yonhap News)
