Reform of conglomerates
President Moon Jae-in has named Kim Sang-jo, a progressive university professor, to lead the anti-trust agency. “The president tapped Kim as the right person to carry out proposed reform policies for big businesses as chairman of the Fair Trade Commission,” said a senior presidential aide.
Kim, dubbed the “chaebol sniper,” won fame for his shareholder activist movement, spearheading lawsuits against family-run conglomerates. In particular, he criticized Samsung’s dubious transfer of father-to-son managerial leadership.
He helped draft Moon’s chaebol reform pledges during his campaign. After his nomination was announced Wednesday, he rightfully told reporters, “I will do my best to rebuild fairness and order in the market to revitalize the economy.”
Kim’s appointment reflects Moon’s strong determination to rein in chaebol, which have grown rapidly by amassing wealth over decades. He is expected to focus on curbing the power of the country’s four biggest conglomerates — Samsung, Hyundai Motor, SK and LG.
On his campaign trail, Moon vowed to mitigate the concentration of economic power in the hands of large conglomerates and improve their governance structure to boost transparency and fair competition. Specifically, the former human rights lawyer promised to strengthen the anti-trust regulator to crack down on unfair deals and cozy relations between politicians and big business. Moon’s policy direction is right, given that removing these cumulative evils in the corporate sector will help reignite our waning growth momentum.
The problem is that the new liberal government’s blind anti-chaebol policy might hamper the progress of Korea Inc. This could put a damper on exports which have been gaining momentum recently thanks to a global economic recovery.
It’s valid if one claims that competition cannot revive and innovation cannot start without taming the conglomerates reasonably. But the stark reality is that chaebol still form the backbone of our economy. Kim was realistically right when he said in a press interview that “I don’t think chaebol reform will be achieved overnight merely with government regulations.”
Despite all their problems, the conglomerates are assets to Korea Inc. that offer decent jobs. We hope that Kim will deal with the issue with a down-to-earth perspective.