Politicians should listen to and solve industrialists' complaints
Democratic Party of Korea (DPK) lawmakers visited the Federation of Korean Industries (FKI) Wednesday for the first time since the Moon Jae-in administration took office. Present at the meeting were senior FKI officials and top managers of the nation's largest business groups ― Samsung, Hyundai Motor, SK and LG.
The governing party legislators listened to difficulties facing Korea's best-known companies caused by a set of adverse factors, including the global business slowdown, protracted U.S.-China trade standoff and Japan's trade retaliatory steps against Korea for political reasons. It was desirable for the ruling party politicians to visit the FKI, the business lobby for large conglomerates, from which they had shied away because of its involvement in the corruption of the previous Park Geun-hye administration.
Korea's economy is undergoing multiple crises, indeed. According to government data, exports in August dropped 13.6 percent year-on-year because of the slowing global economy and slumping demand for semiconductors. The outbound shipments are also dropping by more than 20 percent this month.
Investment and consumption remain in doldrums, which is reflected in dismal corporate performances. In the second quarter, Korean companies' sales edged down 1.1 percent from a year ago, following a 2.4 percent fall in the first quarter. The operating profit ratio slid from 7.7 percent to 5.2 percent while total borrowings and bonds against assets rose from 22.8 percent to 24.1 percent. In short, Korean businesses are experiencing setbacks in growth, profitability and stability.
This notwithstanding, the governing camp is moving to raise the corporate tax rate and revise commerce and fair trade laws to tighten its grip on businesses. The government's push to ratify the International Labor Organization's convention is also imposing considerable burdens on Corporate Korea. At Wednesday's meeting, lawmakers promised to find solutions, but their remarks should not end up as lip service. To reinvigorate the economy, politicians should remove obstacles standing in the way of business investment. No less urgent is the need to widen the access to new industries that vested interests are blocking.
Democratic Party of Korea (DPK) lawmakers visited the Federation of Korean Industries (FKI) Wednesday for the first time since the Moon Jae-in administration took office. Present at the meeting were senior FKI officials and top managers of the nation's largest business groups ― Samsung, Hyundai Motor, SK and LG.
The governing party legislators listened to difficulties facing Korea's best-known companies caused by a set of adverse factors, including the global business slowdown, protracted U.S.-China trade standoff and Japan's trade retaliatory steps against Korea for political reasons. It was desirable for the ruling party politicians to visit the FKI, the business lobby for large conglomerates, from which they had shied away because of its involvement in the corruption of the previous Park Geun-hye administration.
Korea's economy is undergoing multiple crises, indeed. According to government data, exports in August dropped 13.6 percent year-on-year because of the slowing global economy and slumping demand for semiconductors. The outbound shipments are also dropping by more than 20 percent this month.
Investment and consumption remain in doldrums, which is reflected in dismal corporate performances. In the second quarter, Korean companies' sales edged down 1.1 percent from a year ago, following a 2.4 percent fall in the first quarter. The operating profit ratio slid from 7.7 percent to 5.2 percent while total borrowings and bonds against assets rose from 22.8 percent to 24.1 percent. In short, Korean businesses are experiencing setbacks in growth, profitability and stability.
This notwithstanding, the governing camp is moving to raise the corporate tax rate and revise commerce and fair trade laws to tighten its grip on businesses. The government's push to ratify the International Labor Organization's convention is also imposing considerable burdens on Corporate Korea. At Wednesday's meeting, lawmakers promised to find solutions, but their remarks should not end up as lip service. To reinvigorate the economy, politicians should remove obstacles standing in the way of business investment. No less urgent is the need to widen the access to new industries that vested interests are blocking.
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