Experts say economic democratization won’t solve real economic problems


Policies laced with political ideology will fail to offer any comfort for the real problems people grapple with every day, experts said at a think tank discussion on Wednesday, referring to the election pledges from top presidential candidates.

“It’s simply too abstract for solving the real problems of real people,” said Chang Yong-geun, a law professor at Hongik University.

Mentioning issues such as the rapidly spiraling debt of Korean households, Chang pointed out that policies must deal with specific issues, armed with specific solutions.

“For instance, to resolve household debt, we need better tax policies. We also need more measures to reduce income disparity,” Chang said. “This is not to say that the chaebol (conglomerates) can do no wrong, but economic democratization cannot have all the answers.” 

The Korea Economic Research Institute on Wednesday held a panelist discussion to better understand the concept of economic democratization.

Economic democratization has become a new talking point on the campaign trail after all three leading presidential candidates ― Park Geun-hye of the Saenuri Party, Moon Jae-in of the Democratic United Party and independent Ahn Cheol-soo ― adopted it as a campaign initiative.

But rather than elaborate on what it means to them, the candidates have been focusing mainly on issuing highly publicized anti-chaebol policies, the experts said.

“Economic democratization must be redefined based on the principles of democracy as written in the Constitution, combined with real market forces. That’s the only way that policies related to economic democratization can promote economic growth, and not hamper it,” said Shin Seok-hoon, a research fellow of the Korea Economic Research Institute.

Meanwhile, the corporate sector expressed discontent over the negative campaigning against them.

“Economic democratization must be pursued with much caution in order to prevent negative results, such as an anti-business climate,” the Korea Chamber of Commerce’s executive members said during a meeting on Wednesday.

Companies claimed that corporate and economic growth must precede any and all kind of distribution or redistribution committed in the name of democratization or welfare.

“Our discussion was mostly on how this is a matter of survival. Talk about distribution should come after there is growth, and not before,” said Lee Dong-geun, vice chairman of the chamber.

Companies raised concerns that should the conglomerates be hindered by the new policies, the negative spill-over would affect smaller and mid-sized companies as well, since many are contracted by the bigger firms.

By Kim Ji-hyun (jemmie@heraldcorp.com)