Park urged to stimulate economy

FKI Chairman Huh Chang-soo

KCCI Chairman Sohn Kyung-sik

By Kim Yoo-chul

Major Korean companies have called for President Park Geun-hye to inject new vigor into the sluggish economy and strengthen growth potential through stimulus policies such as expanding fiscal spending.

The Federation of Korean Industries (FKI), the nation’s largest business lobby group said Monday in a statement that it expects the new government to increase the growth potential of key businesses in the face of growing external and internal challenges.

"We are seeing many negative factors such as a slowdown in the global economy and sluggish consumer demand. The time is crucial for the new government to revitalize the growth potential of Korean industries,’’ the statement read.

``We hope President Park can help industries increase investment and meet various calls from society by implementing business-friendly policies,’’ the FKI said.

The Korea Chamber of Commerce and Industry (KCCI), another business lobby with a focus on smaller firms, identified six key issues for the Park administration ― resolving polarization, looking for new growth engines, expanding investment incentives, alleviating regulations, service industry innovation and energy price stabilization.

"Korea is seeing a deepening disparity between sectors and generations. The nation is also being asked to find new growth engines away from its heavy dependence on traditional cash-cows. The government should answer which sectors could be the next growth engines,’’ the KCCI stressed.

The two business lobbies pointed out that Korea is losing momentum in business segments where the nation has so far found success as China is on an expansionary track to threaten Korea’s lead in shipbuilding, telecommunications, automobiles, electronics and steel.

"That’s why we want the government to pay much more attention to the rise of emerging countries, definitely including China,’’ the KCCI said.

Korea has the world’s top three shipbuilders in Hyundai Heavy, Samsung Heavy and Daewoo, while Samsung Electronics is the world’s biggest technology firm by revenue with Hyundai Motor a top-tier car manufacturer. POSCO is competing with Mittal to become the global leader in steel manufacturing.

The yen’s slide against the won, which has gained about 23 percent against the Japanese currency in the past six months, is adding to the government’s challenges by aiding Japanese rivals to major Korean companies.

Samsung Electronics didn’t release an official statement but officials contacted by The Korea Times said the company hopes Park remain consistent in pushing pro-business policies.

"We will do our very best to support the government. But the one thing that we don’t want is to see too many policy-related hurdles in investment. More pro-business policies means increased hiring and corporate tax,’’ said one senior Samsung executive by telephone.

"Tough situations lie ahead for us. The government should revitalize slowed momentum in major businesses and seek balanced growth with SMEs through executing customized policies,’’ said KCCI Vice Chairman Lee Dong-keun.

The government is saddled with an economy that has underperformed for a prolonged period, increasing the allure of stimulus spending that could undermine the nation’s fiscal strength.

The Korea Federation of Small and Medium Businesses (KBIZ), which represents the interests of the nation’s SMEs, welcomed the new government. However, the organization asked Park to push her initiatives for ``economic democratization.’’

"The government needs to boost productivity in the services industry, aid small businesses and increase female participation in the labor force. We are ready to cooperate but only if Park moves to implement balanced policies between conglomerates and SMEs,’’ said a KBIZ spokesman.