By Kang Hyun-kyung
The club for the nation’s largest business conglomerates celebrated its 50th anniversary Wednesday at a time when they are facing mounting pressure to correct self-serving business practices.
In a statement, the Federation of Korean Industries (FKI) claimed its role as a key player that helped Korea achieve the dramatic rise from an impoverished war-torn nation to one of the world’s most resilient economies.
Lim Young-jae, a senior fellow of the state-run Korea Development Institute, said the path forward will not be the same that the business organization has taken over the past five decades.
“Just like Japan, Korea achieved industrialization based on a state-business partnership. The partnership helped the country come this far, in terms of its economic status. But there will be a fundamental change in the relationship between the two entities in the future,” Lim said.
His remarks came against the backdrop of mounting social demand facing chaebol or business conglomerates.
Businesses benefitted hugely from state sponsorship when borrowing money from foreign financial institutions during the industrialization period. But they are now facing pressure to use their capital for the well-being of the general public.
In a speech to a reception to commemorate the anniversary held at a Seoul hotel Wednesday, Huh Chang-soo, the FKI chairman, emphasized the role of businesses for the industrialization.
Huh, who also concurrently serves as chairman of GS Holdings, said the economy was so impoverished in the 1960s that feeding people was a daily concern facing policymakers.
Korea was one of the world’s poorest nations five decades ago, but now, it has risen to the world’s 12th largest economy, Hur noted.
“Over the past 50 years since the FKI was created, there were good things and bad things for which the organization was responsible. We have to look beyond what we have achieved so far to make the economy leap forward,” he said.
Joining the celebration were business leaders, National Assembly Speaker Park Hee-tae, distinguished guests and prominent lawmakers.
During the reception, the FKI unveiled a vision to achieve a nation where everybody is happy.
Under the plan, the club of large businesses pledged to strengthen communications with the citizens to make their voices heard in their business practices.
The FKI also pledged to make efforts to achieve per capita income of $100,000 and be the world’s 10th largest economy by 2030.
The large businesses here and outside the country face mounting calls to stop corporate greed.
President Lee Myung-bak put pressure on chaebol to be more active in spending their fortunes to serve the community such as job creation for high school and college graduates.
Domestically, corporate greed has become a buzzword since Lee delivered his message on Aug. 15 Liberation Day.
Lee called on businesses to shoulder a social burden as the public sector has limitations in dealing with soaring demand for social services at a time of global fiscal crisis.
In the speech, Lee stressed, “The existing market economy must evolve.”
“What is now being demanded is a new model of the market economy that evolves from greedy management to ethical management: from the freedom of capital to the responsibility of capital; and from the vicious circle of the rich getting richer and the poor getting poorer to mutual prosperity.”
Lee suggested what he called “ecosystemic development” as an alternative approach to fix the negative social impact of greedy capitalism.
“We have to come up with a new development mechanism through which the preservation of the global environment can go hand in hand with economic prosperity, growth with an improvement in the quality of life, economic progress with social cohesiveness and national progress with individual progress.”
The protests against corporate greed in Wall Street have almost coincided with Lee’s call for change in corporate activities.
The Occupy Wall Street rallies began in mid-September in protest against corporate greed. The New York City authorities arrested 700 people on the Brooklyn Bridge over the weekend and this sparked supporting rallies in other American cities.