Business leaders are expected to ask for investment deregulation and convey their concern about the political circle‘s move to restrict power of major shareholders when they meet with President Park Geun-hye on Wednesday.
Attention is being paid to the Cheong Wa Dae luncheon meeting, the first of its kind, as it comes at a time when tax authorities are stepping up probes into big firms that have been accused of exercising unfair trade activities, and as political parties are seeking to pass “economic democratization” bills.
Since her inauguration in February this year, Park met business leaders twice outside of Cheong Wa Dae during her visits to the United States and China, but heads of small and mid-sized firms were included in those two meetings.
The participating business executives will be from Samsung, Hyundai-Kia Automotive Group, SK, LG, Lotte, Hyundai Heavy Industries, GS, Hanjin, Hanwha and Doosan. POSCO and KT were excluded as the planned meeting is for heads of chaebol, or Korean family-controlled conglomerates, Cheong Wa Dae officials said.
Samsung Electronics chairman Lee Kun-hee, who had been hospitalized for pneumonia until last Friday, and seven other chaebol owners, including Hyundai Motor chairman Chung Mong-koo, will join the luncheon. High-ranking officials from Hanwha Group and SK Group will attend in place of the conglomerate owners, who are currently behind bars.
Cheong Wa Dae said last week that the luncheon was organized to listen broadly to views of leaders from the top 10 business groups about the administration‘s key economic policy agenda: investment revitalization, job creation and transformation into a creative economy.
President Park also wanted to listen to pending issues from the top chaebol, whose influence on the entire economy is growing. For this purpose, all participants reportedly will be given a chance to make a three-minute-long speech during the meeting.
The main opposition Democratic Party and labor unions, however, criticized the get-together, claiming that the rare luncheon may signal a shift in the government’s economic policy agenda from economic democratization to economic revitalization.
“The meeting was set up after big business circles issued a joint statement on Aug. 22 against the proposed revision of the Commerce Law. We are concerned that the government could drop the economic democratization initiative for chaebol-driven economic revitalization,” an official from the opposition party said.
The revision of the Commerce Law, which is supposed to be deliberated in the regular session in the National Assembly in September, includes limiting the voting power of the largest shareholder by up to 3 percent when electing an auditor member of the board. The Federation of Korean Industries, a big-business lobbying group, has opposed the revision, saying the new bill would hamper the managerial right of the chaebol.
The escalating dispute between management and labor over whether to include a bonus in normal wage calculation is expected to become another main topic during the talks with the president.
”With economic growth stagnating, it might be difficult for Cheong Wa Dae to push for anti-chaebol policies, ignoring the influence of chaebol on investment and job creation,’’ a market watcher said.
The top 10 chaebol’s investment fell 8.2 percent in the first half of this year from a year ago, according to an FKI survey.
Nonetheless, chaebol’s influence on the Korean economy has been increasing. The 10 largest business groups by asset accounted for 75.6 percent of GDP last year, up 20.6 percentage points from 2008. The government has sought economic democratization policies to put a brake on abuse of power by chaebol to protect small and mid-sized firms.
By Seo Jee-yeon (email@example.com