The controversial policy direction toward achieving a fairer market has come under the spotlight again, as President Park Geun-hye referenced “economic democratization” during her inaugural speech Monday.
The term of economic democratization, aimed at weeding out unfair practices of big enterprises, was not included in the list of five major policy goals unveiled by the Park government last week.
While opposition parties and civic groups criticized Park for omitting her campaign pledge from the list, Park again highlighted the term at the inaugural ceremony.
Park stressed that the economic development pursued by the new administration would be achieved “by rooting out a variety of unfair practices and rectifying the misguided habits of the past which have frustrated small business owners and small and mid-sized enterprises.”
Economic revitalization will be propelled by a creative economy and “economic democratization,” she said.
Despite her pledge to exercise strict antitrust rules, there are skeptical views in the market over the new government’s authenticity as to whether Park will take the initiative in revamping the conglomerate sector by taking epoch-making actions.
While liberal candidates had pledged to overhaul the family-owned ownership structure of major conglomerates such as Samsung Group and Hyundai Motor Group, Park from the ruling Saenuri Party prioritizes tough application of the competition laws rather than big player-reform itself.
During the early stages of the presidential race, Park was an instigator of the economic democratization wave despite the term’s ambiguity and complexity, vowing to lean more liberal.
However, several weeks before the Dec. 19 presidential election, she excluded a drastic action plan ― blocking conglomerates’ business units from holding a certain portion of shares of their affiliates under cross deals ― from her pledges.
Though the Park government said it would restrict further cross deals in the conglomerate sector, the current shareholding structure is not the target of sanction.
Park’s decision drew wide interest as the scrapped plan to penalize the circular shareholding structure had been suggested by her key economic policy adviser Kim Chong-in.
Her economic democratization measures feature fostering growth of small and mid-sized enterprises and restraining the monopolistic position of large family-owned businesses. She also underscored that big business groups’ positive roles in fueling growth and creating jobs must be maximized.
She has pledged to remove discrimination between regular and irregular workers, limit conglomerates’ advances into areas better fit for smaller businesses, and curb large retailers’ abuse of power against smaller suppliers.
Meanwhile, her inaugural speech also featured prioritization of science technology and information technology.
“I will raise our science and technology to world-class levels. And a creative economy will be brought to fruition by applying the results of such endeavors across the board,” said the President.
She noted that the new administration’s Ministry of Future Planning and Science would be tasked to lead the emergence of a creative economy in tandem with this new paradigm.
By Kim Yon-se (firstname.lastname@example.org