PUBLISHED ONJanuary 03, 2016 7:00 PM
In South Korea, where a small number of family-owned conglomerates dominate the economy, calls for curbing the influence and power of big businesses continue to grow every year.
Amid concerns that chaebol are granted privileges and preferential treatment, fueled by a string of controlling family members who have displayed questionable behaviour, "anticonglomerate" sentiment pervades Korean society today.
Mindful of such criticisms, the chairman of the Korea Chamber of Commerce and Industry, the country's largest business association, expressed concern over escalating animosity toward big business that could cloud objective judgment as well as hamper the growth of the economy.
Park called for a realignment of public perceptions of conglomerates, saying "a line needs to be drawn between antibusiness sentiment and animosity toward (individual) businessmen" in a New Year's interview recently held ahead of 2016.
"When that happens, I believe that disdain for big businesses will greatly decline," he said, suggesting the public should refrain from translating their disapproval of a few big business officials into general antagonism for conglomerates as a whole.
In 2015, a number of owner family members among the nation's conglomerates came under fire for their misbehavior, most notably former Korean Air vice president Cho Hyun-ah's "nut rage" case and the continuing feud over ownership over Lotte Group by the two sons of group founder Shin Kyuk-ho.
The latest figure to draw public criticism is SK Group chairman Chey Tae-won, who announced a public plea for divorce and admitted to an extramarital affair just last week. The remarks came mere months after the chairman was released from prison through a presidential pardon last August.
The KCCI chairman further called upon politicians to ease their inherent mistrust of conglomerates, referring to a pending bill aimed at relaxing regulations governing corporate restructuring processes. The bill currently remains at an impasse due to controversy over its potential to benefit big businesses.
"The 'one-shot act' is clearly drawn to leave no room for conglomerates to abuse the policies. Then the government and opposition should reciprocate by treating business bodies with more maturity," said Park, also the chairman of Doosan Group.
"(For instance) if the law tries to exclude the top 10 conglomerates, then the 11th-largest company will say 'let's not join that circle,' even if there is opportunity for growth. That is actually happening right now, including among some small and medium-sized enterprises," he said.
Among others, the KCCI chairman also raised concerns about the widespread view that the "key to the growth of SMEs is to repress the growth of big businesses," and that the "growth of one side comes at the cost of the other."
"Though conglomerates themselves did play a part in perpetuating such perceptions, I do not think it is right to view the entire segment under such (a one-dimensional) viewpoint," he said, adding that big businesses as well as the chamber are making continued efforts to bring changes.
Forecasting another year of economic stagnation in 2016, Park said "every sector will continue on a path of gradual recovery based on very little growth," propelled by a basket of continuing "global risks" that mandates careful economic planning, deterring bold investments.
The continued downturn of the Chinese economy, a forthcoming US fed interest hike as well as decoupling linked to diverging economic policies among countries are the three major risks perpetuating economic uncertainties globally, according to Park.
At the same time, the KCCI chief emphasised that many internal risks can be lifted by the "swift passage" of a set of economic bills aimed at relaxing regulations on business activities, which "can eradicate a sizeable amount of uncertainty for local businesses."