Newly elected President Park Geun-Hye - 'One of my critical economic goals is to ensure that everyone who works hard can stand on their own two feet and where ... small- and medium-sized enterprises... can prosper alongside large companies.'
South Korean President Park Geun-Hye ran on a ticket of 'economic democratisation'. An ambiguous term that was thrust into prominence during Park's campaigning. The term has earlier roots but has blossomed into importance as Park made it a key component of her campaign.
South Korean 'Economic democratisation' is crudely defined as an attempt to curb the power of the all encompassing business conglomerates that have driven the nation's economic expansion for the past few decades. The Korean business titans have many toes dipped in a tremendous amount of ponds. Ranging from electronics to energy, from transport to telecoms. Familiar names such as Samsung, Hyundai & LG are principal players.
The grip these companies have over Korea has been called into question. These family controlled multi-national powerhouses traditionally have a long history of government support. The conglomerates, known as chaebols in Korea, are interwoven into the fabric of South Korean life. Calls however are being made to 'democratise' the domestic economic field of the once hermit kingdom. Demands are being made for a fairer and more equal system with less favours to the overbearing chaebols. Korean papers conveying the plans expertly through images.
Interestingly it was President Park's father, the late dictator Park Chung-Hee, who ushered in a period of rapid economic growth & industrialization that laid the foundations for these companies to thrive. Now the attention has turned to his daughter to strip them down and give more opportunities to those being crushed under the weight of big business.
Their remains public apprehension despite Korea's recent economic successes. Growing concerns over high-level corruption and the dissatisfaction of seeing rising costs of living without wage increases are causing unrest. Ben Lee of the APYO neatly summarised the Korean public opinion as follows; "Collective jadedness and anger towards the government has been gaining momentum simultaneously over the years. In response to conglomerate-friendly economic policies, increasing disparities between wages and the Consumer Price Index (CPI) and corruption in politics, 'economic democratisation' has become the keyword for Presidential candidates as of late.. While companies such as Samsung post strong financial results, the people feel they are not receiving the benefits of such success". Income disparity and worries over the lack of jobs continue to be a factor that has caused political candidates to refer to the need of 'economic democratisation'.
Conservative Park may not be the best candidate to make such sweeping changes despite the support for the idea. New statistics released by the WTO reflect well on Korean trade but they again highlight the role of chaebols and the growing disparity in Korea between big business and small to medium sized companies.
A government official declaring "Although we have become a country with the world's eighth-largest trade volume, the discrepancy of trade volume between large and small companies has intensified as small and medium companies (SMEs) have been not very successful in international trade". Therefore the evidence for change seems rife but some have questioned Park's commitment. Some have criticized her camp of already dropping the term, and most importantly the aspiration, in order to focus on more broader goals. Criticism is already appearing that she has weakened her position and is not the candidate who will passionately fight for those who need it most against businesses that wield too much sway in domestic politics. The conglomerates are not likely to give up their grip on power so easily and will lobby against any drastic changes that cut at their power and profits. The Korean Chamber of Commerce has already voiced its reservation on the proposed desire to 'democratise', "It's not a good idea to strengthen regulations against conglomerates because they play an important role for the country's economic growth... Instead, the government needs to ease regulations, expand tax benefits for corporations and build more flexible labor environment to boost their growth potential." Putting tighter restrictions on corporations may indeed hinder growth and innovation and Song Won-Geun, a senior researcher at the Korea Economic Research Institute (KERI), has already staunchly critiqued the plans suggesting that government interference into markets could lead to "another form of totalitarianism masquerading as democracy".
President Park continues to call for the need of a "creative economy" and fundamental to these plans still contain elements of an 'economic democratisation'. She has encountered problems recently in forming her cabinet, this is causing her roadwork's in her political endeavours and stalling her ambitious plans. In the coming weeks once her cabinet is settled it will be fascinating to see her moves to tackle the might of chaebols.Experts don't plan to see radical adjustments in the short-term and will consider her attempts to be a medium to long-term goal as democratising the economy is "not a straightforward undertaking". How Park will 'democratise' her economy remains to be seen with many pessimistic of how committed she will remain to such a noble cause.