By Kang Hyun-kyung
Controversy is flaring since President Lee Myung-bak Wednesday asked leaders of the nation’s major business groups to shoulder more responsibility to overcome such policy challenges as deepening social inequality.
Lee’s request ignited a debate on whether it was appropriate for the head of state to put pressure on the private sector to join the effort to fight social problems.
Economist Philip Levy remained skeptical Thursday on the idea of a government trying to share the burden with the private sector.
“I find this to be problematic,” said Levy, a resident scholar of the American Enterprise Institute for Public Policy Research.
“Governments are the entities we elect to address economy-wide issues. Private firms are not representative in this way. If they try to be, the risk is short-changing their shareholders, in whose interests they are supposed to act.”
Levy said he had not seen the details of Lee’s proposal and therefore he couldn’t offer a specific assessment.
“(But) President Lee is not alone in encouraging businesses to address social problems. There is a movement in the United States to promote corporate social responsibility, for example.”
Levy remained suspicious of the efficacy of the initiative to share social burdens with the private sector.
Analysts say it is a global phenomenon that governments have a hard time coming up with policy responses to the social consequences of globalization.
“Some effects that are commonly attributed to globalization, such as the decline in manufacturing employment, may be more properly linked to distinct phenomena, such as technological change and enhanced productivity in manufacturing,” he said. “It can be difficult to disentangle these effects.”
Levy made the remarks a day after Lee met with business tycoons for a luncheon to explain what he had in mind when he first proposed “ecosystemic growth” in a speech on Liberation Day, Aug. 15.
Lee convened the Wednesday meeting to ask business leaders to join hands with the government to fight the negative fallout of a free market economy.
His request comes against the backdrop of a daunting task facing the government during a global fiscal crisis.
Policymakers need to meet the soaring demand for social programs as decent jobs are disappearing, the labor market situation is worsening and as a result the economic reality facing working-class families is becoming tougher every year.
At the same time, the government has to draw up an austerity budget to prevent the economy from falling victim of the deleterious effects of the global fiscal crisis.
Mentioning the tricky nature of the policy challenge, Lee said the government alone will be unable to meet soaring demand for social services without help from the private sector.
The President reportedly wants business leaders to invest more, create more jobs and put the practice of equal opportunities for underprivileged job candidates in place.
During the gathering, corporate leaders pledged to hire record numbers of new employees this year and some announced to donate part of their wealth to enable children from low-income families access to education.