ID :
204843
Fri, 09/02/2011 - 09:39
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Shortlink :
https://oananews.org//node/204843
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Tycoons urged to join anti-polarization drive
(EDITORIAL from the Korea Times on Sept. 2)
Prospering together
President Lee Myung-bak's meeting with 30 tycoons Wednesday was an occasion to review the role of Korea???s unique conglomerates. Despite their locomotive role in the economy, they have become the focus of public cynicism.
In the meeting, they pledged to hire 124,000 employees, more than 10 percent of their total payrolls through 114 trillion won in investment this year, an amount equal to one third of the national budget.
Chung Mong-koo, chairman of the Hyundai-Kia Motor group, pledged 500 billion won (about $462 million) to a charity fund. His younger brother and owner of Hyundai Heavy Industries Rep. Chung Mong-joon and his brothers also committed to a 500 billion won donation. Other groups are also considering following suit.
The announcements should be the start of their move toward promoting social cohesion and harmony. Ironically, the more the economy grows, the more people become angry. The conglomerate-led growth has not produced a corresponding hike in jobs and investment. Many small-and medium-sized firms get marginalized, and the unemployment rate remains high. Their unprecedented growth has little trickle-down effect. Much of their hiring and investment has taken place outside Korea.
Tycoons have their own complaints. The government seeks to socialize profits by twisting their arms. In a capitalist society, there are winners and losers. They argue that a win-win strategy is possible only in textbooks. The government attempts to pass its role of boosting investment and increasing jobs to private companies. It is wrong to pick winners as scapegoats.
However, few could underestimate the seriousness of the polarization. Business groups are partly responsible for this. They are the main beneficiary of the Lee administration's pro-business policy. The government has kept the local currency cheaper apparently to keep exporters competitive globally. The high won-dollar rate has been a tax on consumers as it makes imports expensive, pushing the inflation rate to the 5-percent range, above the annual wage hike.
Their commitments have sometimes been just lip service. No system is working in monitoring their commitments. They do not say where the new hiring and investment occurred. Many tycoons are greedy mercantilists. They create new entities to boost intra-group trading, virtually blocking access to others. This exclusionary expansion is a trick of transferring wealth to family members.
President Lee was candid in acknowledging that the government has limits in reducing the polarization. He implored tycoons to join the anti-polarization drive. Lee???s new motto of ???ecosystemic development,??? namely prospering together among economic players, merits a serious review. The orthodoxy free capitalism and the Keynesian pump-priming steps are no longer working even in the Western countries, including the United States and the EU.
It is risky to predict class warfare. Korea cannot rule out the possibility of the socially alienated resorting to extreme acts. We should learn from the recent street protests, vandalism and looting in other countries.
Unless conglomerates take preemptive steps, voters might force them to do so in the two crucial elections next year.
Prospering together
President Lee Myung-bak's meeting with 30 tycoons Wednesday was an occasion to review the role of Korea???s unique conglomerates. Despite their locomotive role in the economy, they have become the focus of public cynicism.
In the meeting, they pledged to hire 124,000 employees, more than 10 percent of their total payrolls through 114 trillion won in investment this year, an amount equal to one third of the national budget.
Chung Mong-koo, chairman of the Hyundai-Kia Motor group, pledged 500 billion won (about $462 million) to a charity fund. His younger brother and owner of Hyundai Heavy Industries Rep. Chung Mong-joon and his brothers also committed to a 500 billion won donation. Other groups are also considering following suit.
The announcements should be the start of their move toward promoting social cohesion and harmony. Ironically, the more the economy grows, the more people become angry. The conglomerate-led growth has not produced a corresponding hike in jobs and investment. Many small-and medium-sized firms get marginalized, and the unemployment rate remains high. Their unprecedented growth has little trickle-down effect. Much of their hiring and investment has taken place outside Korea.
Tycoons have their own complaints. The government seeks to socialize profits by twisting their arms. In a capitalist society, there are winners and losers. They argue that a win-win strategy is possible only in textbooks. The government attempts to pass its role of boosting investment and increasing jobs to private companies. It is wrong to pick winners as scapegoats.
However, few could underestimate the seriousness of the polarization. Business groups are partly responsible for this. They are the main beneficiary of the Lee administration's pro-business policy. The government has kept the local currency cheaper apparently to keep exporters competitive globally. The high won-dollar rate has been a tax on consumers as it makes imports expensive, pushing the inflation rate to the 5-percent range, above the annual wage hike.
Their commitments have sometimes been just lip service. No system is working in monitoring their commitments. They do not say where the new hiring and investment occurred. Many tycoons are greedy mercantilists. They create new entities to boost intra-group trading, virtually blocking access to others. This exclusionary expansion is a trick of transferring wealth to family members.
President Lee was candid in acknowledging that the government has limits in reducing the polarization. He implored tycoons to join the anti-polarization drive. Lee???s new motto of ???ecosystemic development,??? namely prospering together among economic players, merits a serious review. The orthodoxy free capitalism and the Keynesian pump-priming steps are no longer working even in the Western countries, including the United States and the EU.
It is risky to predict class warfare. Korea cannot rule out the possibility of the socially alienated resorting to extreme acts. We should learn from the recent street protests, vandalism and looting in other countries.
Unless conglomerates take preemptive steps, voters might force them to do so in the two crucial elections next year.
