The National Assembly and the government asked 15 large companies, including Samsung Electronics, Hyundai Motor and LG Electronics, to contribute to a fund for the mutual growth of private companies and farming and fishing villages.
The Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee of the National Assembly called senior executives of the companies to a meeting it held on the mutual growth of companies and farming and fishing villages last week.
The committee reportedly selected the participants without prior consultation and gave them a unilateral notice.
Minister of Agriculture, Food and Rural Affairs Lee Gae-ho and Minister of Oceans and Fisheries Kim Young-choon also attended the meeting.
Officially, it was an informal meeting, but in substance, it was a typical occasion for twisting businesses’ arms to coerce them into contributing to the fund.
The fund was launched in March 2017 to support farmers and fishermen expected to suffer losses due to the government’s free trade agreement with China, which can export agricultural products and seafood cheaply.
The government and the National Assembly agreed to establish the fund with contributions from expected beneficiaries of the trade accord, such as companies. They set the target amount at 1 trillion won ($883 million) and planned to raise 100 billion won each year for 10 years starting last year.
If contributions were made as scheduled, they should have amounted to about 150 billion won as of last month, but only 50.5 billion won has been collected. More than 90 percent of it came from public enterprises.
Last month the National Assembly called executives from five major companies as witnesses to its session to inspect government agencies, and grilled them on their meager contributions to the fund.
In the meeting on mutual growth of companies and farming and fishing villages, lawmakers and ministers said that contributing to the fund was voluntary, but few executives could have believed those words.
A lawmaker on the committee said, “We assure you that you will not stand trial for contributing to the fund even if the regime changes.”
Business tycoons had faced legal investigations after contributing to culture and sports foundations set up by a confidante of President Park Geun-hye. So their reluctance to contribute to the mutual growth fund comes as no surprise. If businesses make contributions as a result of coercion, it will cause trouble later.
The lawmaker’s words, though apparently spoken half-jokingly, are dumbfounding. Can he take responsibility for what he said?
Generally, South Korea’s free trade agreements are known to benefit large exporters, while damaging the incomes of farmers and fishermen.
In light of this, it is understandable that part of the gains in national wealth from free trade agreements should be used to compensate farmers and fishermen for the resulting losses.
But it is a matter of consideration whether it is fair for businesses to shoulder the burden of supporting farmers and fishermen in this way. Also, there is a limit on how well the gains and losses from a trade accord can be assessed for each firm or sector.
If the government and the ruling party want to help farmers and fishermen, it is right to spend government money. It is a government’s job to support farmers and fishermen.
The total operating profits of Kospi-listed firms increased 7.88 percent year-on-year for the first three quarters of this year, but the gains are not evenly shared. When excluding the figures for two booming semiconductor manufacturers -- Samsung Electronics and SK hynix – profits decreased 9.94 percent.
This shows most companies are struggling to survive amid difficulties at home and abroad.
Nonetheless, the government and lawmakers are trying to twist the arms of large companies.
A committee created by the ruling party to improve relations with North Korea is pushing for its members’ visit to Pyongyang next month together with about 100 businesspeople.
A visit to North Korea is not advantageous for businesses when the US has sanctioned companies doing business with the North.
How many times more should business executives come when politicians call?
If companies have to be wary of lawmakers and government officials, economic revitalization can hardly be expected.