Quantitative expansion in slowing economy could cause distortion in growth, says Kim
Kim In-ho, chairman and CEO of Korea International Trade Association, on Monday urged the government to end its cozy ties to businesses, amid intensifying allegations that President Park Geun-hye lobbied chaebol leaders.
Asked of his view on the scandal involving Park and her long-time friend Choi Soon-sil, Kim said he believes that the time is ripe to end such practices and take this as an opportunity to shift into a completely free market economy.
“The current government is not the only one. Although there are differences in the extent of (collusion), every administration has done the same,” he said at a press conference held to celebrate the 53rd annual Trade Day that falls on Wednesday.
“It could end now … The businesses no longer have to seek the government’s power if the government comes up with predictable regulations that obligate every company to abide by the law.”
KITA Chairman Kim In-ho (KITA)
The remarks came amid the prosecution’s investigation into allegations that President Park asked conglomerate owners to provide massive funds to private organizations set up by Choi and her associates. The Federation of Korean Industries, one of the nation‘s five business representatives, is also involved in the scandal. Kim didn’t comment on the FKI, except to say that raising their voices together to represent the interests of businesses could have been accomplished in the past, but not anymore. KITA is also one of the five groups.
Meanwhile, KITA released a report estimating the nation’s trade to reach $901 billion this year, sliding down two notches from the world’s sixth-largest export to the eighth.
Due to external factors, such as the rise of protectionism and the slowing global economy, it will be difficult for the nation to reach the $1 trillion mark next year. KITA expected the trade volume to grow 3.9 percent to $950 billion next year.
The number is not important, Kim said, stressing that the nation needs to be more flexible to changes, and urged the government to stop seeking expansionary policies to boost the market.
“We should go with the flow of the world economy. Seeking quantitative expansion could only distort (the nation’s economic) growth,”
Kim added that the problem with the Korean export is in its dependency on selective export items such as petrochemicals, displays, IT devices and steel.
“This is why we should pay attention to positive signs of Korean trade, such as the growing portion of consumer goods related to hallyu, expanding trade relations with Vietnam and new export items, such as cosmetics, OLED and e-commerce.”
KITA has been under a restructuring process this year to strengthen its duty as the nation’s largest trade organization representing 70,000 export companies. KITA has pulled out from managing the COEX mall and handed operation rights to Shinsegae Property, the chairman said. The organization has also submitted a proposal to form a consortium over a major development project in Jamsil, southwestern Seoul, he added.
Kim served as senior presidential secretary on economic affairs during the late Kim Young-sam administration.
By Cho Chung-un (firstname.lastname@example.org)