Mutual Growth of Large and Small Firms

Pres. Lee meets with heads of five economic organizations to stress need for shared growth of large and small businesses



President Lee Myung-bak, 3rd R, talks with heads of five business associations including Chairman Huh Chang-soo of the Federation of Korean Industries, 2nd R, Chairman Sakong Il, 1st R, of the Korean International Trade Association,President Sohn Kyung-shik of the Korea Chamber of Commerce and Industry, 3rd L, and Lee Hee-beom, chairman of the Korea Employers Federation, among others, on May 3 at Cheong Wa Dae, the Presidential Office.

President Lee Myung-bak held a meeting with the heads of five business association at Cheong Wa Dae, the presidential office, on May 3 to assure them that the government is still pursuing market-oriented and business-friendly economic policies.
Hong Sang-pyo, chief presidential press secretary, said the meeting extended for some 40 minutes, although it was scheduled to last for an hour and 10 minutes, to cover various subjects besides the economic policies including social issues. Attendees included President Sohn Kyung-shik of the Korea Chamber of Commerce and Industry; Chairman Huh Chang-soo of the Federation of Korean Industries; Chairman Sakong Il of the Korea International Trade Association; Chairman Lee Hee-beom of the Korea Employers Federation; and Chairman Kim Ki-mun of the Korea Federation of Small and Medium Businesses.
President Lee also called for greater efforts by the business community to address the sluggish job market and boost the country’s economic growth potential.
He also stressed the importance of a strong partnership between small and large firms to spur the recovery, saying the government will take all available measures to support their sales activities at home and abroad.
The remarks appeared to be aimed at addressing concerns among conglomerates here that the Lee administration is toughening its stance on chaebol amid weak corporate investment and a growing income gap with smaller partners.
“Our efforts to support business activities will continue,” Lee said. “I’m also very thankful for what you have done to improve your partnerships with small-and mid-sized enterprises (SMEs). Let’s keep in mind that the co-prosperity of small and big firms is crucial for sustainable economic growth.”
In recent weeks, Lee’s aides have openly criticized chaebol for lack of cooperation with the government’s plan to nurture small businesses, triggering a backlash from the family-controlled conglomerates.
Speculation has mounted that the CEO-turned-president is trying to redefine government-chaebol relations in order to incite their investment and assume more social responsibility.
The lobbying groups for chaebol expressed concern last week after a presidential council chief suggested that the national pension and other public funds actively exercise their shareholder rights to check the power of chaebol owners.
Chairman Chung Un-chan of the Commission for Shared Growth for Large and Small Companies called for joint ownership of excess profits of businesses, causing a stir in the business community. Cheong Wa Dae officials said Lee wanted to make the business community feel that his idea is different from that of Chairman Chung, but he wanted to urge the business leaders to work for shared growth between large and small companies. The president urged business leaders to perform their social services in order to be loved by both the market and the people.
Kwak Seung-jun, head of the Presidential Council for Future and Vision, said during an economic forum that the move will help counterbalance the powerful conglomerates, such as Samsung Electronics, and ensure that their corporate governance is more transparent and help them better carry out their social obligations.
Mindful of the controversy, Lee stressed at the meeting that his pro-market and pro-business policies won’t change. His office has downplayed the idea of raising the voices of pension funds in chaebol’s decision-making processes as Kwak’s “personal” view.
Many observers, however, agree that the government’s chaebol policy has reached a critical turning point amid growing international calls to enhance transparency in their governance structure.
The family-controlled conglomerates also have long been accused of unfair treatment of subcontractors, prospering through huge exports and growing domestic market shares while the SMEs suffered from financial troubles. nw

Photo on Courtesy of the MCST