Slamming populism

Business lobby chief attacks talk of lower tuition, fuel prices

By Kim Tae-gyu

The head of Korea’s largest business lobby has protested such attempts as halving university tuition and cutting gasoline prices under government initiatives, branding them ``populist policies.’’

Federation of Korean Industries (FKI) Chairman Huh Chang-soo, also the head of energy-oriented conglomerate GS Group, made the comment Tuesday at his first press meeting since his inauguration as FKI leader in February.

``Initiatives like trying to halve tuition seem to be improvised without in-depth research,’’ the 62-year-old said. ``In the case similar populist policies emerge during next year’s general elections, we will voice our strong opposition.’’

At a glance, it appears strange that the head of a business lobby is taking issue with college tuition, which has outgrown inflation to anger the general public of late.

But his remarks make sense in consideration of the fact that many FKI members are involved in running ivory towers. The Samsung and Doosan Groups virtually own Sungkyunkwan and Chung-Ang University, respectively.

During the first decade of the new millennium, the rate of increase in tuition hovered between 5 and 10 percent while inflation was in the vicinity of 3 percent on average.

This means college students and their parents have been struggling with the average annual tuition increasing to as much as 10 million won, generating public uproar and prompting some politicians to come up with pledges to substantially reduce the amount.

Doosan has come under fire after Chung-Ang University was found to have jacked up tuition by 6.9 percent annually since 2008, when the heavy industry chaebol took over the college, compared to the national average of 3.6 percent.

According to the Korean Council for University Education, Sungkyunkwan has also cranked up its tuition by 4.6 percent over the past three years, inviting criticism that cash-rich conglomerates have been spearheading the tuition hike.

Asked about whether the government should keep encouraging oil refiners to slash prices at the pump in order to tame inflationary pressures, Huh was also negative. His rationale: ``Enough is enough.’’

Huh went on to say, ``Domestic refiners have suffered big losses due to these measures. I think that they’ve done enough. Instead of giving benefits to all consumers, the government needs to devise ways of helping those in the low-income bracket.’’

In early April, the country’s four major refiners cut the prices of gasoline and diesel by a uniform 100 won per liter under strong pressure from the Lee Myung-bak administration.

Some claimed that the government twisted the arms of the refiners to come up with such an unprecedented measure, which is supposed to expire early next month. But some countered that the step should continue.

Market watchers point out that the extension of the price reduction would be a hard pill to swallow from Huh’s perspective because the flagship of GS Group is GS Caltex, the country’s second largest oil refiner.

``As the head of the FKI, he might up the ante against any money-guzzling populist policies. But I am not sure whether he is in a position to say something about tuition. In addition, his comments on refiners might be misunderstood since he is the boss at a group which runs a major refiner,’’ said a Seoul industry analyst.