Cooperation Sought Among Large and Small Businesses

Rep. Kim Young-hwan as chairman of the Knowledge Economy Committee chastises unfair practices in subcontracting

Rep. Kim Young-hwan, chairman of the Knowledge Economy Committee of the National Assembly in a written interview with NewsWorld said he will try to wipe out unfair practices in the business world including in the area of subcontracts that reduce the total contract value to less than 82 percent of the main contract value, some as low as 50 to 60 percent of the main contract value. He also pledged that he would try to give hope and happiness to the people through his actions as committee chairman.

Question: It¡¯s been eight months since your selection as head of the committee. How do feel about the job?
Answer: The Knowledge Economy Committee has 68 organizations under its charge with policy responsibilities ranging from the protection of SMEs and small business owners, energy, international trade and whatnot ¡ª truly diverse matters. My shoulders feel heavy with those responsibilities. I tried to visit the jobsites as often as possible to learn firsthand what is truly happening out there. In October, last year, I was named an excellent committee chairman of the NGO monitor team that selected about 1,000 of its members. I felt that it was an award meant for me to continue to do the job well. But the committee has been known as a model committee in terms of its activities at the parliament, mostly because it did not have many issues or cases involving politics. I intend to seek out the industries with great potential, but have been ignored due to the lack of professionalism and support on the part of MKE officials.

Q: Can you please tell us about your plans for running the committee this year?
A: We did not have a good start for this year due to the special hearings for minister nominees. But I plan to do my best for the committee despite the hearings. Many issues were pointed out and taken care of during the last government parliamentary audit, thanks to the committee members with outstanding professional knowledge and philosophy. The biggest issue was the SSM, which the committee approved in April, but was delayed for seven months due to problems raised by the ruling Grand National Party. The SSM penetrated the alleys where small stores are located and put those store owners into hard times, with some of them even having to close their shops due to the loss of business.
The government declared its intentions to support large and small companies to get along well. But they were nothing but words and subjects for table discussions that didn¡¯t result in real measures such as those linking supply product prices and the domination damage reimbursement system.
We pointed this out. This year, the government should come up with ensuing measures for SSM and really effective policies for the mutual survival of both SSM and SMEs. The government should do more for resources diplomacy to secure natural resources abroad with truly workable policies. Government officials should try to find industries with great potential and give them big support. I will urge the government to do so.

Q: The voices for supporting the mutual survival between large corporations and SMEs have been rising lately. Can we expect good results?
A: As one can see from the public reaction over the chicken sale at Lotte Mart last year, the public perception of the mutual survival idea has changed and those big firms stepping on SMEs in the path of their growth will be criticized. Here is an interesting story on the mutual survival issue. A dying king told his five princes to break five arrows in one try, but no one could do it. Then, the king gave the arrows one by one to the princes and they broke them easily. As shown in the fable, if each business tries to go it alone, it can be easily put out of business during crises, thus they should cooperate with one another during a time of crisis in order to overcome it and survive together.
Germany had been a leading export nation surpassing even the United States and China. Its main force was not large firms, but over 1,000 small and medium-sized businesses working like a fish net and cooperating with large firms. In our country, too, if we can nurture many small and medium companies, it will not only help the general public and job creation, but large firms benefit from it due to their strengthened competitive power. In Germany, those small and medium-sized companies are sometime called ¡°hidden champions¡± because of their huge contributions to the national economy, particularly in international trade. If we nurture many SMEs like Germany has, it will help employment and also the general economy, while sharpening the competitive edge of large firms. The government should stop making noises with slogans and start tours of worksites and try to solve problems such as technologies stolen by big firms from SMEs and workers and the use of pressure to supply unit prices on SMEs and subcontract firms so that its policies are truly working.

Q: You have pointed out something with regard to subcontracts in the construction industry. Can you please tell us what was the problem?
A: Since I worked at construction sites myself in the past, I know very well the unfair practices that go on. I pointed out unfair subcontracts in the pipe laying projects by Korea Gas Corp. (Kogas) during the parliamentary audit. The problem was main contractors should sign subcontracts for more than 82 percent of the original project value, but usually they conclude the subcontracts to levels as low as 50 to 60 percent. Such unfair subcontracts are subject to scrutiny by the project owners, in this case Kogas. I had Kogas and the main contractor get together and let them conclude a new subcontract for the sake of the reform of contract culture. In two months, I had them investigate the subcontract practices at worksites to correct them. I also had large and small builders declare a statement of mutual survival in a meeting, which was very significant to the construction industry. I plan to tour jobsites of such government-run companies as Korea Electric Power Corp. and Korea District Heating Corp. in a bid to wipe out unfair practices in subcontracts at worksites, not just mouthing the words ¡®mutual survival.¡¯ I will also visit a number of jobsites of private construction companies to stop unfair practices that are going on at those worksites. I am determined to wipe out all those unfair practices in subcontracts while I am heading the committee.

Q: Can you say a word or two for our readers as we face the Year of Rabbit this year?
A: This year is the Rabbit Year on the lunar calendar, an animal from ancient times known for its sharp eyes. I feel deep regret as a politician for the political community not living up to public expectations last year, although I feel that politics should give hope and happiness to the people. As chairman of the committee, I will try my best so that legislative activities could be satisfactory to the people this year, not just the mouthing of slogans such as ¡®harmony¡¯ and ¡®mutual survival.¡¯
I hope every reader of NewsWorld will come up with new ideas and a creative power of thinking to go forward this year.nw

Rep. Kim Young-hwan, chairman of the Knowledge Economy Committee of the National Assembly.

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