By Yoon Ja-young
Economy and Finance Minister Kim Dong-yeon is in a dilemma over his scheduled visit to Samsung Electronics today.
Kim's planned visit to the nation's largest conglomerate may illustrate his sense of urgency about falling corporate investment but this is seemingly not shared by Cheong Wa Dae and the ruling party.
While conservatives are criticizing that the government is pressuring conglomerates for investment, supporters of the administration who are pushing for chaebol reform are concerned that this might lose momentum.
The presidential office's inconsistent policy on conglomerates is also adding to the confusion
The country's top economic policymaker is scheduled to visit the company's site to listen to business difficulties and regulatory issues onsite, according to the finance ministry.
The visit is drawing much attention as it is Kim's first visit to the country's top chaebol since his inauguration in June last year.
He has met four tycoons so far _ LG Group Vice Chairman Koo Bon-joon, Hyundai Motor Group Vice Chairman Chung Eui-sun, SK Group Chairman Chey Tae-won, and Shinsegae Group Vice Chairman Chung Yong-jin.
As each conglomerate announced massive investment and hiring plans following Kim's visits, there have been estimates that Samsung will present a 100 trillion won investment plan at the minister's meeting with Vice Chairman Lee Jae-yong.
Kim has been looking into ways to encourage businesses as worsening economic indices mean that their investment and job creation efforts are more necessary than ever.
The central bank recently lowered its economic growth outlook for the year to 2.9 percent from the previous 3 percent, but most private think tanks say even 2.9 percent will be hard to attain. Facility investment has faltered for four consecutive months, while youth unemployment has soared to a record-high.
Cheong Wa Dae, however, is reportedly putting a brake on Kim's move.
The progressive local Hankyoreh newspaper reported that the presidential office told Kim that it was undesirable for the government to appear to be "begging" Samsung to increase investment and employment. It added that Samsung Electronics would not reveal its investment and hiring plans as the other chaebol did.
"Some suspect that the administration might be stepping back from its chaebol reform efforts. They seem to be especially sensitive about Samsung," said Choi Pae-kun, an economics professor at Konkuk University.
The sensitive reaction by Cheong Wa Dae, however, is contradictory since President Moon Jae-in has also urged Samsung Electronics Vice Chairman Lee to invest and hire more in Korea when visiting the company's new smartphone plant in India last month. Lee responded that he would make more efforts to do so.
Prof. Choi said that the fuss over the meeting reflects Korea's peculiar chaebol-dependent economy.
"I haven't heard of an economic control tower visiting a specific company in developed countries. Businesses invest and hire when they need to, not because of request by the government,"
Regarding the Hankyoreh article, the finance minister issued a statement expressing discontent on the recent controversy over his meeting with chaebol leaders.
"I have continued efforts to communicate with the market, including holding about 40 onsite meetings. I mostly met with SMEs and startups. This is aimed at listening to what economic players have to say."
Kim stressed that he never "interfered" with the investment or employment plans during meetings with the four conglomerate heads.
"I want to make it clear that the government has no intention or plan to resort to the conglomerates for investment or employment as it did in the past. Such decisions are left in the hands of the businesses."
He added that the government will continue to push for chaebol reform.
"Regardless of investment or jobs, the government will continue efforts to improve the governance structure and stop unfair trading by conglomerates."
Economy and Finance Minister Kim Dong-yeon is in a dilemma over his scheduled visit to Samsung Electronics today.
Kim's planned visit to the nation's largest conglomerate may illustrate his sense of urgency about falling corporate investment but this is seemingly not shared by Cheong Wa Dae and the ruling party.
While conservatives are criticizing that the government is pressuring conglomerates for investment, supporters of the administration who are pushing for chaebol reform are concerned that this might lose momentum.
The presidential office's inconsistent policy on conglomerates is also adding to the confusion
The country's top economic policymaker is scheduled to visit the company's site to listen to business difficulties and regulatory issues onsite, according to the finance ministry.
The visit is drawing much attention as it is Kim's first visit to the country's top chaebol since his inauguration in June last year.
He has met four tycoons so far _ LG Group Vice Chairman Koo Bon-joon, Hyundai Motor Group Vice Chairman Chung Eui-sun, SK Group Chairman Chey Tae-won, and Shinsegae Group Vice Chairman Chung Yong-jin.
As each conglomerate announced massive investment and hiring plans following Kim's visits, there have been estimates that Samsung will present a 100 trillion won investment plan at the minister's meeting with Vice Chairman Lee Jae-yong.
Kim has been looking into ways to encourage businesses as worsening economic indices mean that their investment and job creation efforts are more necessary than ever.
The central bank recently lowered its economic growth outlook for the year to 2.9 percent from the previous 3 percent, but most private think tanks say even 2.9 percent will be hard to attain. Facility investment has faltered for four consecutive months, while youth unemployment has soared to a record-high.
Cheong Wa Dae, however, is reportedly putting a brake on Kim's move.
The progressive local Hankyoreh newspaper reported that the presidential office told Kim that it was undesirable for the government to appear to be "begging" Samsung to increase investment and employment. It added that Samsung Electronics would not reveal its investment and hiring plans as the other chaebol did.
"Some suspect that the administration might be stepping back from its chaebol reform efforts. They seem to be especially sensitive about Samsung," said Choi Pae-kun, an economics professor at Konkuk University.
The sensitive reaction by Cheong Wa Dae, however, is contradictory since President Moon Jae-in has also urged Samsung Electronics Vice Chairman Lee to invest and hire more in Korea when visiting the company's new smartphone plant in India last month. Lee responded that he would make more efforts to do so.
Prof. Choi said that the fuss over the meeting reflects Korea's peculiar chaebol-dependent economy.
"I haven't heard of an economic control tower visiting a specific company in developed countries. Businesses invest and hire when they need to, not because of request by the government,"
Regarding the Hankyoreh article, the finance minister issued a statement expressing discontent on the recent controversy over his meeting with chaebol leaders.
"I have continued efforts to communicate with the market, including holding about 40 onsite meetings. I mostly met with SMEs and startups. This is aimed at listening to what economic players have to say."
Kim stressed that he never "interfered" with the investment or employment plans during meetings with the four conglomerate heads.
"I want to make it clear that the government has no intention or plan to resort to the conglomerates for investment or employment as it did in the past. Such decisions are left in the hands of the businesses."
He added that the government will continue to push for chaebol reform.
"Regardless of investment or jobs, the government will continue efforts to improve the governance structure and stop unfair trading by conglomerates."
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