Minister of Economy and Finance and Deputy Prime Minister for the Economy Kim Dong-yeon met with Samsung Electronics Vice Chairman Lee Jae-yong on Monday when Kim visited its Pyeongtaek campus in Gyeonggi Province.
Kim reportedly asked Lee to take a leading role in building the nation’s growth momentum, while Lee said he would try to create jobs. But there was no disclosure of Samsung’s investment and employment plan. Their rare meeting ended in an event for show without an in-depth dialogue about investment strategy or deregulation.
Last week, news media reported that the presidential office passed on its concerns to Kim over his planned visit to Samsung, with a Cheong Wa Dae official saying “it is undesirable to be seen begging chaebol for investment and employment.” The media said that the ministry eventually decided not to announce Samsung’s investment and employment plan directly.
After Cheong Wa Dae showed concerns, Kim issued an uncommon statement saying that he has never interfered in corporate investment and employment plans.
Cheong Wa Dae admitted Monday there were differences with Kim over the method and timing of announcing Samsung’s investment plan, but denied it had mentioned “begging.”
It is regrettable that Cheong Wa Dae and Deputy Prime Minister for Economy were seen in conflict with each other when their united efforts are needed more than ever to revive the economy and stabilize people’s livelihoods.
Samsung is the fifth large company that Kim visited and the only one of the five for which Cheong Wa Dae interfered in his visit. The four other large companies had unveiled their investment and employment plans when Kim had visited them. This raises suspicion that Cheong Wa Dae still has unfavorable sentiment against Samsung, which was investigated in connection with corruption of the previous administration.
If chaebol try to escape from justice, they must be held responsible for their acts. However, if companies put off investment or employment due to government regulations, the government should bear its share of the blame.
It is quite natural that policymakers urge businesses to invest at home and hire more people. President Moon Jae-in asked Lee to invest in Korea when they met at a ribbon-cutting ceremony for the completion of a Samsung Electronics factory in India last month. Political leaders around the world, including US President Donald Trump, urge businesses in their countries to jack up their domestic investment and employment.
To keep the Korean economy on track for growth, communication between the government and businesses is essential. The government needs make the first move toward interaction with businesses. It must not look coldly at businesses, chaebol or not.
Governments in Japan, France and other major economies strive to ensure good communication with industries to listen to them and reflect their opinions in policies. However, it is questionable if the Moon administration has worked as hard to find solutions to economic problems together with businesses.
When it comes to investment and employment, Cheong Wa Dae officials have no excuse for the dire state of the economy. Despite their yearlong pursuit of income-driven growth, the unemployment problem is largely unresolved. Corporate investment in facilities declined four straight months to June for the first time in 18 years. Exports which have propped up growth are threatened by rising trade protectionism. Samsung Electronics is in crossfire in a trade war between the US and China, with the two countries taking up about 40 percent of its revenues last year. Washington is squeezing the company with tariffs, while challenges from China are looming.
Samsung Electronics is Korea’s largest company by assets and profits, and the world’s No. 1 semiconductor manufacturer. Many countries, developed or underdeveloped, offer all sorts of incentives to induce investment. If Cheong Wa Dae is truly serious about job creation which it vowed to pursue as top priority and given the seriousness of unemployment, it would spare no efforts in doing so. It should be willing to do more than beg.