By Kim Tong-hyung
There are enough things to worry about as a CEO in South Korea. But it seems a new, young, third-generation despot emerging in North Korea isn’t one of them, at least not yet.
It has been a dismal year for the South’s export-driven industrial giants, struggling to cope with subduing global demand amid heightened uncertainty surrounding European debt problems and sluggish recovery in the United States.
Firms aren’t expecting 2012 to be smooth sailing either as the heady mixture of negatives affecting the world economy is expected to run deep into next year.
Add this to the typical craziness anticipated in an election year, with voters picking the country’s next lawmakers and president, and it’s all but assured that business executives will be at the edge of their seats for the next 12 months.
However, following the death of bouffant-haired Stalinist Kim Jong-il, it’s hard to find any CEO sweating over possible geopolitical instability. Needless to say, North Korea’s future under the control of an ultra secretive regime with a rookie in charge who is not yet 30 warrants close monitoring from the rest of the planet from here on, let alone its adjacent southern neighbor.
But, as always, it’s hard to get CEOs thinking beyond the next quarter.
``The subduing demand resulting from the eurozone debt crisis and the fluctuation in the value of the risk-sensitive Korean won directly impact profitability, so companies are more interested in these factors than potential risks posed by North Korea,’’ observed Kim Yun-ki.
``And different companies will be affected differently by the results of the parliamentary and presidential elections, so they will be keeping a close tab on politics next year as well.’’
Technology giant Samsung Electronics, Korea’s undisputed corporate kingpin has the eurozone crisis, foreign-exchange market movement and poll results topping its list of things to watch in 2012. And sharing that list is domestic rival LG Electronics.
Hyundai-Kia Automotive Group is chiefly concerned about the economic sluggishness in Europe affecting the demand for cars in the region, and admitted that the North Korea factor hasn’t influenced the shaping of its business strategies for next year.
POSCO, a leading steelmaker, is more worried about lessening demand from Southeast Asian countries than whatever will happen in Europe, while Samsung Corp., a construction heavyweight with great activity in the Middle East region, has its eyes glued on fuel prices.
Banking groups like KB Financial and Shinhan Financial will focus primarily on the health of the country’s economy and changes in its political landscape, which could lead to step changes in financial regulations. KT, the telecommunications giant, is apprehensive about the sliding value of local currency increasing the financial burden from its foreign debt.
SK Group is too busy scrambling over the corruption scandal surrounding Chairman Chey Tae-won, who could be the next local tycoon sent to jail for abusing corporate wealth.
``Our business is swayed by global economic activity,’’ said an official from Hyundai Heavy Industries, the world’s largest shipbuilders. ``The death of Kim Jong-il doesn’t affect global economic activity.’’