After winning the elections in December, the first thing President Lee Myung-bak did was visit the Federation of Korean Industries, a chaebol lobby. He needed the cooperation of the family-run conglomerates more than anything else to make good on his campaign pledges of attaining 7-percent growth and creating 350,000 jobs a year.
He called in the owners of major chaebol to Cheong Wa Dae to make similar requests on Monday. The situation has since become more urgent, as shown by the revised targets for economic expansion and employment to 6 percent and 200,000 jobs, respectively. Lee vowed to remove all corporate regulations toward this end, and business leaders responded with a promise of nearly 100 trillion won ($100 billion) in new investment in 2008.
For most Koreans, it's deja vu. Whenever economic circumstances turn bad, all Korean presidents have turned to big business for new investments with various incentives, and chaebol made promises. Few people know, however, whether their words were kept.
Most of the exactly 98-trillion won investment promised by chaebol chairmen that day were actually this year's installments in their respective long-term investment programs. The Samsung Group, which recently underwent managerial change, was the only chaebol that substantively increased its yearly investment, by nearly 5 trillion won, or 25 percent.
President Lee, himself a product of chaebol, seemed to know the illusory nature of these investment plans reported at Cheong Wa Dae, saying, ``I hope you're not presenting these plans for the sake of presentation but would make real investments."
The situation shows the present dilemma of Korea Inc., in which the CEO of the nation, like it or not, or knowingly or not, has to ask for the benevolence of chaebol, which accounts for 40 percent of the $960-billion economy.
This is problematic in at least two ways ― anachronism and inefficiency. Freeing chaebol and making them invest no longer expands the economy and helps create jobs as it once did in this era of a global economy. It's the small businesses that account for 99 percent of the nation's business corporations and hire 88 percent of its workers.
New Samsung Group Chairman Lee Soo-bin, after announcing the investment plan and apologizing for the social stirs, complained about what he saw as an anti-business atmosphere among Koreans.
A 2007 Korea Development Institute survey, however, shows Koreans are pro-business, particularly toward small businesses and professional managers. In contrast, they had antipathy toward chaebol owners' irregular and immoral activities as well as their heavy-handedness toward smaller firms and workers. The survey also said Koreans show ambivalence toward chaebol, which they view both as a source of national pride and as corporate tyrants.
If and when chaebol learn to live with their smaller suppliers and the rest of the nation, the anti-business or anti-chaebol sentiments would dissipate. President Lee should rectify economic imbalance and reshape the nation's industrial landscape through strict law enforcement and ensuring common prosperity of big and smaller businesses.
A business-friendly country is surely one where hard-working, innovative firms, large or small, can be rewarded for their efforts rather than one where only big businesses can make easy money.